In a significant legal development, the Constitutional Court of South Africa has recently declared Section 7(3) of the Divorce Act 70 of 1979 to be unconstitutional. The court’s ruling determined that this particular section was in conflict with the Constitution and therefore invalid, as it resulted in unjust discrimination, particularly concerning marriages conducted “out of community of property.

What is the Divorce Act section 7?

The South African Divorce Act Section 7 delineates the authority of the court when it comes to granting a divorce decree.

Under Subsection (1), the court is authorized to issue an order concerning the payment of spousal maintenance, as per the terms outlined in the parties’ written agreement.

Subsection (2) confers upon the court the authority to conduct any necessary investigations and summon any person to appear before it. Furthermore, the court retains the discretion to mandate the parties, or one of them, to cover the expenses related to the investigation and the required appearances.

Subsection (3) grants judges in divorce cases the discretionary power to apportion the assets of individuals in marriages conducted out of community of property before November 1, 1984. This provision specifies that in cases of divorce for a marriage out of community of property that was entered into prior to the enactment of the Matrimonial Property Act 88 of 1984, the court can direct the transfer of assets to one party when there is no prior agreement addressing the division of assets.

The Genesis

Section 7(3) of the Divorce Act pertains to the division of assets for couples who have chosen to marry out of community of property. In the typical scenario, if a couple is married out of community of property without accrual, an individual cannot make a claim against their spouse’s estate in the event of divorce.

However, under the Divorce Act Section 7(3), a special redistribution order may be issued by the court if it can be demonstrated that a significant non-financial contribution was made to the estate. It is worth noting that this section did not apply to marriages conducted after 1984 when the option of marriage out of community of property with accrual was first introduced in South Africa.

The case’s applicant was married in 1988 and is currently in the process of divorce, facing the possibility of receiving nothing. They contested the validity of the cut-off date, arguing that it should not be applied to their situation.  The Pretoria High Court issued a declaration on May 11, 2022, stating that Section 7(3)(a) of the Divorce Act, is in conflict with the Constitution and, as a result, is rendered invalid, but the Constitutional Court’s approval was still required.

The Ruling

On Tuesday, October 10th, 2023, the Constitutional Court of South Africa rendered a verdict declaring the Divorce Act Section 7(3) unconstitutional. The court determined that this provision resulted in indirect discrimination against women due to the disproportionate impact it had on them. Consequently, this ruling signifies that irrespective of the timing of a couple’s marriage, the court may potentially intervene and issue redistribution orders in specific instances of divorce, especially when the couple had been married out of the community of property without accrual.

Implications of the Ruling

Given the recentness of this judgment, it is premature to establish universal guidelines for preparing for the prospect of asset redistribution. Until more widely recognized guidance becomes accessible, addressing this potential scenario must be approached on an individual, case-specific basis. After a thorough assessment of your situation, your estate planners and financial advisors can ascertain whether your exposure to asset redistribution is low or high.

While the current focus centres on the Divorce Act Section 7(3), there is a potential scenario where a spouse might perceive this judgment as an opening to assert a claim against a deceased estate. It’s worth noting that death effectively dissolves a marriage, making it a plausible avenue for such claims. Allowing this would arguably align with the principle of ensuring equal opportunities, a fundamental goal of our Constitution.

Should this scenario materialize, executors would need to adhere to the court order’s directives regarding what relief can or cannot be granted. It’s important to consider that engaging in legal proceedings within the estate could lead to delays in the estate’s finalization and potentially result in increased executor fees or the nullification of any previous fee concessions provided by the executor handling the estate.

Way Forward

Planning for the future is always a wise choice. When circumstances hint at a heightened risk, such as the possibility of asset redistribution under the Divorce Act section 7(3), having a thorough estate plan becomes paramount. At Crest Trust, our estate planners work closely and harmoniously with your financial advisors, creating a powerful and complementary team to address your estate planning requirements. To learn more or to schedule a consultation with one of our professionals, contact Crest Trust today.