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Constitutional Court Ruling on Asset Redistribution in Accrual Regime Marriages
In this article, we discuss the Constitutional Court ruling in the case of EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others [2023]
Introduction:
On October 10, 2023, the Constitutional Court of South Africa delivered a significant judgment in two separate applications seeking confirmation of orders declaring section 7(3) of the Divorce Act 70 of 1979 invalid and unconstitutional. The cases, CCT 364/21 and CCT 158/22 centred on the issue of whether parties married under an accrual regime may be awarded redistribution of assets by a court, regardless of when they were married, or whether the marriage ends through death or divorce.
Discussion of the Case:
CCT 364/21 – Dissolution of Marriage by Death:
In CCT 364/21, the case revolved around divorce proceedings initiated by Mrs. B against her late husband, Mr. B, who were married under an antenuptial contract that excluded community of property. During the divorce process, Mr. B passed away, dissolving the marriage. The primary constitutional challenge was the alleged discrimination in section 7(3) of the Divorce Act, which only applied to marriages ending in divorce, not death. Mrs. B argued that this distinction was unconstitutional, as it unfairly discriminated against spouses married before November 1, 1984. The High Court found this distinction unconstitutional and ordered an amendment to the Divorce Act, including redistribution in cases of marriages dissolved by death.
In a unanimous judgment, the Constitutional Court affirmed the High Court’s decision. It found that section 7(3) created an unjustifiable differentiation between spouses married before and after November 1, 1984, based solely on the date of their marriages. This differentiation was deemed irrational and unconstitutional. The Court ordered an interim reading-in of an analogous provision and granted Parliament 24 months to address the issue comprehensively.
CCT 158/22 – Marriages Before and After November 1, 1984:
In CCT 158/22, Mrs G sought a redistribution order under section 7(3) of the Divorce Act after her 30-year marriage broke down. However, she was disqualified from its provisions due to the limitation that it applied only to marriages out of community of property concluded before November 1, 1984. Mrs. G argued that this limitation was unconstitutional as it arbitrarily discriminated against spouses married before and after the mentioned date. The High Court ruled in favour of the government, citing the importance of honouring contractual agreements.
In the Constitutional Court, Mrs G continued her challenge against section 7(3), alleging that it unfairly discriminated against spouses in different types of marriages, particularly marriages concluded after November 1, 1984. The Court upheld her challenge, finding that the differentiation based on the availability of the accrual regime was rational but created indirect discrimination against women. The Court ordered the suspension of the declaration of invalidity for 24 months and an interim severance of the offending differentiation in section 7(3)(a) while granting Parliament time to address the constitutional issues.
Conclusion:
In both cases, the Constitutional Court has declared section 7(3) of the Divorce Act 70 of 1979 invalid and unconstitutional, allowing for the potential redistribution of assets in marriages governed by the accrual regime. These rulings have far-reaching implications for spouses married before and after November 1, 1984. The Court’s decision emphasizes the need to rectify gender-based disparities and grants Parliament time to enact legislative changes to address the constitutional issues. These rulings mark a significant step towards achieving greater fairness and equity in marital property matters in South Africa.
EDITOR’S NOTE:
The Constitutional Court has extended the relief in Section 7(3) of the Divorce Act to marriages entered into after November 1984, and to marriages dissolved by way of death.
A look at Greyling v Minister of Home Affairs
Before 1984 there were only two matrimonial property regimes, a marriage in community of property and one out of community of property (excluding community of property, community of profit and loss and accrual sharing in any form). The Matrimonial Property Act, 1984 (“MPA”) introduced the concept of accrual sharing.
Section 7(3)(a) of the Divorce Act, 70 of 1979 (“Divorce Act”) states that a court granting a decree of divorce in respect of a marriage out of community of property –
(a) entered into before the commencement of the Matrimonial Property Act, 1984, in terms of an antenuptial contract by which community of property, community of profit and loss and accrual sharing in any form are excluded may… on application by one of the parties to that marriage, in the absence of any agreement between them regarding the division of their assets, order that such assets, or such part of the assets, or of the other party as the court may deem just be transferred to the first-mentioned party.”
Mrs Greyling, an estranged wife, married her wealthy farmer husband in March 1988, out of community of property, excluding the accrual system. She contended that it was unconstitutional that couples married out of community of property, excluding the accrual system, and after the commencement of the MPA, were precluded from petitioning the court to exercise its discretion in granting an order for redistribution of assets.
The Gauteng High Court in Pretoria was not called upon to decide whether Mrs Greyling was entitled to a redistribution order but rather to determine whether section 7(3)(a) of the Divorce Act (which deprived her from such relief) was constitutional.
Mrs Greyling argued that section 7(3)(a) of the Divorce Act was unconstitutional in that it infringed section 9(1) of the Constitution for arbitrarily and irrationally differentiating between people married before and after 1 November 1984 when the MPA commenced, and violation of section 9(3) of the Constitution in that the cut-off date has disproportionate consequences for women.
The Court declared section 7(3)(a) of the Divorce Act, 70 of 1979 (“Divorce Act”) unconstitutional. The order was referred to the Constitutional Court for confirmation in terms of section 172(2)(a) of the Constitution, 1996. The Concourt has not yet heard the matter.
The finding that section 7(3)(a) was declared constitutionally invalid, to the extent that its operation is restricted to marriages out of community of property entered into
before the commencement of the MPA, does not grant an automatic entitlement to a redistribution order. Instead, a court will need to assess the evidence presented concerning the direct or indirect contributions made by each spouse towards the estate during their marriage. Subsequently, the court will make an order that is both fair and equitable.