16 October 2019 by Dispute Resolution Alert

“Till dissolution do us part?”

There is no escaping the fact that the Matrimonial Property Act, No 88 of 1984 (MPA) provides for the date of determination of the accrual in a divorce action to be set at the date of dissolution of the marriage; whether it be at death or divorce. The question is whether the strict interpretation of this provision provides for a practical consideration of the divorce of two individuals, and the protection of their respective rights, or whether there should be an amendment to the MPA to change the date of determination of the accrual (and therefore the calculation of each respective parties’ estates).

Due to the emotional nature of divorce proceedings, as well the current backlog of our court rolls, a defended divorce action may take years to reach finality. It is likely, as a result of the parties having been separated for quite some time, that the quantum of their respective estates would have altered substantially during this period – between the date of issue of summons and the date of the decree of divorce.

In the unlikely event of one spouse winning the lotto during this period, is it fair that this fortune be included in the determination of the parties’ respective estates on calculation of the accrual? Conversely, does it not pose a greater risk, whilst parties are in the midst of lengthy divorce proceedings, for one party to succeed in maliciously dissipating his/her assets in order to benefit in the accrual calculation? This, on a practical level, is required to be revisited by the legislature as it could pose serious prejudice to one spouse in either of the above situations.

Brassy AJ was alive to this consideration, and the possible prejudice thereof, in MB v NB 2010 (3) SA 220 (GSJ), in that he contemplated when that moment, with reference to each party’s respective estates, is to be crystallised. Brassy AJ found that the operative date is at the date of litis contestatio (the date of close of pleadings in an action), and the value of each party’s estate should be secured at this date – for as long as the divorce proceedings endure.

It is clear that Brassy AJ did not exclude s3(1) of the MPA from his deliberation since the judgment states that s3(1) of the MPA “establishes the moment at which the contingent right becomes perfected …. at the moment when the divorce court makes the applicable order”. Brassy AJ did not view the date of dissolution of a marriage as the moment the parties’ respective estates should be quantified but instead considered s3(1) as the provision which creates the contingent right – which is perfected at the date of the divorce order.

This authority is confirmed in MB v DB 2013 (6) SA 86 (KZD). Sutherland J, however highly criticised this approach in JA v DA 2014 (6) SA 233 (GJ), finding that “litis contestatio is an archaic label for a banal event: the moment when no more pleadings may be filed. It is the moment when the formulation of the contending propositions have all been put on record”. Sutherland J further found that the date of dissolution, as per s3(1) of the MPA, is not open for interpretation as it specifically provides for the relevant date of the calculation of the accrual (being the date of the divorce decree).

Although these judgments have been raised in matters before the Supreme Court of Appeal, the Court has yet to make a final determination in respect of the contradictory case law.

The question is whether the legislature should effect amendments to the MPA in order to confirm that litis contestatio is not just a “banal” event but instead the moment at which the quantum of the respective parties’ estates is crystallised. Surely this should be the position, not only for practical considerations but since it is far more commercially acceptable?

Taking into consideration that the parties have elected to separate and no longer share a day-to-day relationship, it seems appropriate that the date of close of pleadings in a divorce action should be the date of calculation of the accrual, and that the subsequent enforcement of that accrual calculation (the date on which the right is perfected), should remain at date of divorce, as per the MPA.

In the interim, before the above question is finally determined, legal practitioners who are particularly alive to the practical and commercial advantages of the date of determination of the accrual being set at litis contestatio should consider, in consultation with their clients, including this provision in antenuptial contracts, or even to take it a step further to include the operative date, for accrual purposes, as the date of separation of the respective parties should they ever divorce. The effect would crystallise the quantum of the parties’ respective estates at the date of the termination of the relationship.

The question remains for all parties engaged in current divorce proceedings: “Till dissolution do us (financially) part?”

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