South Africa’s Constitutional Court has fundamentally changed the country’s marriage law, making it fairer to people who are married “out of community of property” when their marriages end. In these marriages, the estates of spouses are kept separate. They do not combine what they own into a joint estate.
The change applies to people who got married after 1 November 1984 when their marriages end in divorce; or who got married before or after 1 November 1984 and whose marriages end in death.
The apex court’s judgment of 10 October 2023, in the case of EB v ER, will benefit spouses, mainly wives, who find themselves in financially vulnerable positions when their marriages out of community of property without accrual end in divorce or death. This includes stay-at-home mothers, who take care of the family home or raise the children full time. Their non-financial contributions to the marriage, including unpaid labour in the home, are now valued as much as any financial contributions to the marriage.
Before 1 November 1984, there were only two legally recognised matrimonial property regimes applicable to marriages in South Africa. They were marriages in community of property and out of community of property.
Marriages in community of property are those in which the estates of both spouses are combined. When the marriage ends through divorce or death, the parties each have a 50% claim against the joint estate.
In the case of the out of community of property regime, the estates of the spouses are at all times kept separate. Neither spouse has a claim against the other spouse’s estate even if they contribute to the maintenance or growth of the other’s estate.
The change
On 1 November 1984, the Matrimonial Property Act 88 of 1984 entered into force. It introduced a third matrimonial property regime: the accrual system.
The accrual system allows spouses who are married out of community of property to share in the growth of each other’s estates while still maintaining their separate estates.
Both spouses retain separate estates when they enter the marriage and during the marriage. At the end of the marriage through divorce or death, the spouse with the smaller accrual or no accrual has a claim against the spouse with the bigger accrual. The claim is for an amount equal to half of the difference between the accrual of the respective estates of the spouses.
For example, a wife and husband each enter the marriage with R1,000. At the time that they are married, both spouses are working. During the marriage, they decide that the wife should stay at home and take care of the house and children while the husband will continue working and be the breadwinner of the family.
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Suppose that at the end of the marriage, the wife’s estate is valued as R3,000 and the husband’s estate is valued as R10,000. The accrual in the wife’s estate is R2,000. The accrual in the husband’s estate is R9,000. Half the difference between the accrual of the spouses’ estates is R3,500 (R9,000 minus R2,000 equals R7,000, divided by two equals R3,500.) Since the wife’s accrual is smaller than her husband’s accrual, she has a claim of R3,500 against her husband’s estate.
The above crude example illustrates that even though it may not have been intended, the out of community of property with accrual regime recognises that even though parties retain separate estates during the marriage, they may contribute indirectly to the maintenance or growth of each other’s estates, like the wife did through her unpaid labour in the home.
The judgment
When the accrual regime was created, section 7(3) of the 1979 Divorce Act was amended to allow spouses who were married out of community of property before 1 November 1984 (who therefore did not have the option of accrual), and who were undergoing a divorce, to apply to a divorce court for a redistribution order.
Through a redistribution order, a court can transfer the assets of one spouse to the other spouse if it is just and equitable to do so. This applies in instances where one spouse contributes directly or indirectly to the maintenance or growth of the other spouse’s estate including through the rendering of services.
In its judgment of 10 October 2023, the Constitutional Court found section 7(3) of the Divorce Act, among others, to be unconstitutional and invalid to the extent that it did not include a) spouses who were married out of community of property without accrual after 1 November 1984 if the marriages were dissolved through divorce, and b) spouses who were married out of community of property without accrual before or after 1 November 1984 whose marriages ended through death.
These parties could not claim a redistribution order if they contributed to the maintenance or growth of their spouse’s estate.
Significance of the judgment
The court’s judgment will provide much needed financial relief to spouses whose marriages out of community of property without accrual end regardless of when the parties were married or how the marriage ended.
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The judgment will also benefit spouses in Muslim marriages. These were legally recognised when the Constitutional Court, in a 2022 case, Women’s Legal Centre Trust v President of the Republic of South Africa, declared that the common law definition of marriage and section 7(3) of the Divorce Act, among others, were unconstitutional to the extent that they did not include Muslim marriages. Now, spouses in Muslim marriages that are out of community of property without accrual, which dissolve through divorce or death, may apply to court for a redistribution order to transfer the assets from one spouse’s estate to the other.
Next steps
The advisory committee of the South African Law Reform Commission Project 100E on the Review of Aspects of Matrimonial Property Law is reviewing existing laws that deal with matrimonial property regimes.
In light of the Constitutional Court judgments in the Muslim marriages’ and accrual cases, the advisory committee could most likely recommend amendments to, among others, section 7(3) of the Divorce Act to enable all spouses married out of community of property without accrual to apply to court for a redistribution order when their marriages end in divorce or death.
In its discussion paper 160, the commission recommends that a court should retain discretion to ensure a just and equitable result when granting a redistribution order.