How this ConCourt ruling altered asset distribution in non-accrual marriages

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Spouses who conclude an antenuptial contract may choose to include or exclude the application of the accrual system and where spouses choose to exclude the accrual, this results in a complete separation of estates. Essentially, parties operate under a "what is mine is mine, and what is yours is yours" system.

While this system works for some couples, it often leads to unfair outcomes, especially where one spouse makes years of financial or caregiving contributions that don’t reflect in their own estate and they are left with nothing to show for it after a divorce.

Getting married before 1 November 1984

Section 7(3) of the Divorce Act 70 of 1979 (Divorce Act) allows a court to grant a redistribution of assets if one spouse made contributions to the estate of the other spouse. However, there was a catch: until recently, this section only applied to couples married out of community of property without accrual before 1 November 1984.

This date is significant in that it is when the Matrimonial Property Act 88 of 1984, which introduced the accrual system, came into effect and provided spouses married on or after this date with the option to have the accrual system apply to their marriage.

Our lawmakers envisaged that anyone tying the knot after 1 November 1984 now had the option to choose the accrual system to apply to their marriage if they wanted a fairer split upon dissolution of the marriage. However, this had the unfortunate effect that spouses married after 1 November 1984 without the accrual system, perhaps due to pressure from the other spouse to exclude accrual or simply because they did not understand the consequences of their antenuptial contract, were not entitled to a redistribution order.

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This changed with the landmark decision of the Constitutional Court in EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others in October 2023. The Constitutional Court struck down the 1984 cut-off date as unconstitutional, saying that it violated the right to equality and dignity in that it differentiated unfairly based on the date a couple got married.

The effect of this judgment is that anyone married out of community of property without the accrual system, regardless of the date on which they were married can ask for a redistribution of assets, provided they can show that they made substantial contributions to the other spouse's estate.

The facts of MS v ES

The case of MS v ES involved a couple married out of community of property without accrual, and who had commenced divorce proceedings in 2021, before the landmark Constitutional Court judgment regarding redistribution was handed down. At that stage, the wife ("MS") had no right to claim a redistribution of assets and she filed her divorce pleadings accordingly.

After the change in the legal landscape and in October 2023, MS gave her husband ("ES") notice that she intends to amend her counterclaim to include a redistribution claim as a result of the significant financial and non-financial contributions she made to ES's estate.

ES objected to the amendment on procedural technicalities, arguing that it was late, procedurally flawed and would result in prejudice to him, leading MS to launch the application to amend her counterclaim, which the High Court was tasked with adjudicating.

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Contributions to ES's estate

In order to be awarded a redistribution of assets under the newly amended section 7(3) of the Divorce Act, a spouse must prove that they made contributions to the other's estate. Our courts recognise direct contributions, such as contributing a portion of one's salary to family and household expenses, as well as indirect or non-financial contributions, such as being the primary caregiver of children, allowing the other spouse to pursue their career and further increase their estate.

MS alleged that she had contributed to ES's estate by working in his lodge for 18 years without pay, undertaking unpaid labour that would otherwise have been costly to outsource and being the primary caregiver of their children while managing the household, freeing ES to focus on building a property portfolio of considerable value.

Was MS allowed to amend her counterclaim?

Our courts have a wide discretion in determining whether an amendment to a pleading should be permitted, and as a general rule, an amendment will be allowed unless it will cause injustice to the other party which cannot be cured by the awarding of legal costs. Generally, amendments are allowed in order for the real issues or disputes between the parties to be properly ventilated and set out before the court.

One of ES's arguments was that the application to amend MS's counterclaim was filed late. Rule 28(4) of the Uniform Rules of Court provides that a litigant seeking to amend a pleading or document may within 10 days lodge an application for leave to amend. In this case, MS advised ES that she intends to amend her counterclaim on 6 June 2024 and only lodged the application to amend her counterclaim on 3 October 2024.

The court held that rule 28(4) provides that a litigant may, and not must, issue such an application within 10 days of providing notice of their intention to amend. The court was also satisfied that the delay was not excessive and did not cause any prejudice to ES as the trial date for the divorce had not been allocated.

ES also argued that MS's application for leave to amend her counterclaim did not disclose a triable issue. The court disagreed, finding that the application was clear, did disclose a triable issue (being the division of the joint estate) and sought to add a remedy MS could not possibly have included in her pleadings earlier as it did not exist at the time.

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The interests of justice

The High Court then turned to consider whether it would be in the interests of justice to allow MS to amend her counterclaim. The Constitutional Court opened the door to spouses married out of community of property without accrual to pursue a claim for redistribution in all future proceedings as well as in ongoing divorce proceedings.

Naturally, MS would not have included a redistribution claim in her pleadings as it was not available to her, and she sought to do so now after becoming aware that she is entitled to pursue such a claim.

The court also considered a similar Bloemfontein case, where the regional court dismissed a litigant's application to amend her counterclaim to include a claim for redistribution. On appeal, however, the High Court found that the applicant did not try to withdraw any admission that the parties were married out of community of property without accrual but sought only to introduce a claim for a redistribution order, and the applicant was ultimately allowed to amend her counterclaim.

Similarly, in the matter of MS v ES, the High Court found that it would be in the interests of justice for MS to be allowed to amend her counterclaim to seek relief that was not available to her at the time when pleadings closed.

It further found that such an amendment was not in bad faith as the trial had not commenced, the amendment would not prejudice ES in that it did not seek to change any of the essential averments in the original counterclaim (but only added a redistribution claim), and further that MS would still be required to prove that she is entitled to a redistribution at trial before being awarded a redistribution of assets.

The court accordingly granted MS's application to amend her counterclaim and even ordered ES to pay MS's costs in bringing the application. The court emphasised that the wife did not seek to withdraw admissions made regarding the matrimonial property regime or alter her antenuptial contract, but simply invoked a newly available relief provided to her by the Constitutional Court.

Conclusion

Our courts are alive to the ever-evolving nature of family law and enjoy a wide discretion to ensure fairness in divorce proceedings, particularly in recognising the value of caregiving and unpaid contributions in marriage.

For spouses married out of community of property without accrual, the Constitutional Court ruling, and its application in cases like MS v ES, opens the door to new possibilities. If you are married without accrual but you can prove that you made contributions to your spouse's estate, you may be entitled to a claim for redistribution, even where your divorce proceedings are already ongoing.

This case also demonstrates the type of documents and detail required to be able to submit a redistribution claim, and the type of comprehensive record keeping spouses are required to keep for a successful redistribution claim.