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Analysing the Legal Aspects of an Accrual Claim

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Analysing the Legal Aspects of an Accrual Claim

Case Name: D V M D

Citation: [2020] ZAGPJHC 228

Court Where the Case Was Heard: 

In the High Court of South Africa Gauteng Local Division, Johannesburg

Date of Judgment: 16 September 2020

Introduction to The Matter

The Matrimonial Property Act 88 of 1984 provides protection to a spouse who is married out of community of property with accrual. 

This protection involves the right to share in the accrual of the other spouse’s estate. In order to exercise this right and seek an immediate division of the accrual, the following conditions must typically be met:

The spouse seeking to share in the accrual of the other spouse’s estate must demonstrate to the court that their right to share in the accrual is being or will probably be seriously prejudiced by the conduct of the other spouse.

Once the court is satisfied that the conditions are met, it may make an order for an immediate division of the accrual. 

This means that the court can intervene to ensure that the assets accumulated during the marriage are fairly and equitably distributed between the spouses, taking into account their respective contributions and entitlements.

Overview of The Matter at Hand

The Applicant seeks the immediate division of the accrual in terms of section 8 of the Act to prevent the respondent from prejudicing her right to share in the accrual.

Legal Issues Raised in The Case

Whether the applicant was entitled to the immediate division of the accrual in terms of section 8 of the Act or if she is entitled to interim relief to prevent the respondent from disposing his assets.

Relevance to Divorce and Family Law

Vulnerable spouses whose estate is lesser than the other spouse in terms of the Matrimonial Act may approach the court to secure their rights to the accrual.

Applicable Legislation

The Matrimonial Property Act 88 of 1984

Summary of The Relevant Legislation

Section 3(1) of the Act it defines the legal framework for marriages out of community of property. Allows spouses to choose between separate estates or an accrual system.

Section 8 of the Act deals with sharing the growth of estates during marriage. Requires proof of serious prejudice to claim a share in the accrual.

Explanation of How the Legislation Applies to The Case

Section 3 of the Act defines the structure of the marriage, allowing spouses to choose between separate estates or an accrual system. This section sets the initial terms of how assets and property are managed during the marriage.

Section 8 of the Act complements Section 3 by addressing the sharing of the increase in the value of the estates during the marriage. It comes into play when the marriage ends through divorce or the death of a spouse. 

This ensures that the accrual growth of each spouse’s estate during the marriage is shared fairly.

In summary, Sections 3 and 8 of the Act collectively serve to define the financial arrangement within the marriage, including how property and assets are initially managed and how the growth of these assets is shared upon the dissolution of the marriage.

Comparison to Other Relevant Legislation

Section 20 of the Act offers protection to a spouse who believes that their interest in the joint estate is being harmed by the other spouse. In such a case, the affected spouse can make an application to the court, seeking an immediate division of the joint estate. 

This division can be done in equal shares or in another manner that the court deems appropriate. It provides a legal recourse for a spouse who feels their financial rights are at risk due to the actions of the other spouse.

Background and Facts of The Matter

The case involves a divorce proceeding in South Africa where the parties were married under the accrual system. The accrual system is a legal framework that governs the division of assets acquired during the marriage. 

In this context, the applicant has raised allegations of abuse by the respondent, along with claims that the respondent has been disposing of assets to decrease the value of his estate.

Additionally, the respondent is accused of failing to fully disclose the value of his estate, which is essential for a fair division of assets.

The applicant is seeking immediate division of the accrual and interim relief to prevent the respondent from further alienating assets.

This case raises critical legal questions regarding the protection of spouses’ rights during divorce proceedings, the transparency and disclosure of assets, and the legal remedies available to address disputes in such cases.

The court’s decisions in this matter will have significant implications for family and divorce law in South Africa, emphasising the importance of equitable asset division and the safeguarding of spouses’ rights during divorce proceedings.

Detailed Description of The Facts Leading Up to The Case

The applicant who is the plaintiff, instituted divorce action against the respondent who is the defendant, seeking an order that the respondent pay the applicant pay an amount equal to one-half of the difference between the accrual of the respective estates of the parties.

The applicant then instituted urgent ex parte application alleging that the respondent was alienating assets and prejudicing her right to share in the accrual.

She sought an interim relief order to prevent the respondent from alienating his assets until the conclusion of the divorce action.

Chronological Order of Events

In 2013 the Parties were married out of community of property subject to the accrual.

Early 2019 the applicant and respondent separated vacated the former matrimonial home with the minor children.

In February 2019 the Parties vacated the former matrimonial home with the minor children.

On 16th of July 2019 applicant instituted divorce proceedings against the respondent.

On 25th of September 2019 respondent forcibly and with the consent of the applicant removed her Mecedes Benz.

On the 27th of September 2019 the respondent gained access to the applicant’s residential complex and assaulted her.

The respondent was investigated by the South African Police Services for the assault and was released on bail.

On the 3rd of October 2019 the applicant was admitted to the intensive care unit where she remained for three days.

On the 23rd of October 2019 the respondents brother removed all assets from the former matrimonial home after being instructed by the respondent.

On the 5th November 2019 the respondent failed to comply with section 7 of the Act requiring the respondent to disclose his assets under oath.

On 5th of November the applicant instituted an urgent ex parte application and was granted interim relief.

Relationship Between the Parties Involved

The Parties are married out of community of property with accrual in September 20 2013. Two minor children were born of the marriage.

Issues to Be Determined

The relief sought is of a final nature, and therefore, the Plascon Evans rule is applicable. This rule means that the court will carefully assess whether the applicant has met the burden of proving her claim for immediate division of the accrual.

The applicant must demonstrate that there are no bona fide factual disputes or obstacles that would prevent the court from granting the requested relief.

The applicant is also seeking interim relief to prevent the respondent from alienating their assets, as per their marital regime. The court will consider whether the applicant has a prima facie right to share in the accrual, although there may be some doubt. 

This is a lower standard than the Plascon Evans rule’s requirement for final relief.

In this context, the court will evaluate whether the applicant has shown a reasonable apprehension that the respondent’s actions could harm her financial interests, and if so, whether interim measures should be taken to safeguard her rights.

The court will weigh the evidence and arguments presented by both parties to determine whether the applicant’s claims for immediate division of accrual and interim relief are justified and should be granted.

Primary Legal Questions Raised in The Case

If the applicant can persuade the court that she is entitled to immediate division of the accrual.

Explanation of The Significance of Each Issue

The applicant must present her case to the court through an affidavit. In this affidavit, she needs to clearly demonstrate her entitlement to an immediate division of the accrual.

This would typically involve providing evidence and arguments supporting her claim.

The Plascon Rule is a legal principle that guides the court’s decision-making process. It involves a careful examination of both the applicant’s claims and the respondent’s responses to those claims. 

The court will assess whether the applicant’s arguments are well-founded and whether there are any disputes or obstacles that need to be addressed.

The applicant must persuade the court that, in accordance with their marital regime, she has a contingent right to a share of the accrual. 

This means showing that the legal framework, as established in their marriage, entitles her to a portion of the growth in the estates.

Once the court is satisfied that the applicant has a valid right to a share of the accrual, it may grant interim relief. 

This relief could take the form of an order that prevents the respondent from alienating or disposing of assets that are subject to division as part of the accrual.

How the Issues Relate to Divorce and Family Law in South Africa

In a marital regime subject to the accrual system, the principle is that the spouse whose accrual (accumulated wealth or assets) is lesser or shows no growth during the marriage is entitled to a share of the other spouse’s accrual. 

This means that the law aims to ensure fairness and equitable distribution of wealth acquired during the marriage.

If one spouse’s accrual is significantly smaller or hasn’t grown while the others has, the spouse with the lesser accrual has a legal entitlement to a share of the accrual that occurred in the other spouse’s estate during the marriage.

To protect this right and enforce it, the spouse with the lesser accrual can apply to the court.

The court can then take action to prevent actions that might harm the rights and interests of the spouse with the smaller or no accrual, ensuring that both spouses are treated fairly in the division of assets.

Legal Arguments Presented

The applicant, in her affidavit, made several critical allegations against the respondent.

She claimed that the respondent was abusive towards her, was intentionally disposing of assets to diminish his accrual, and failed to provide a transparent disclosure of the value of his estate.

These allegations are significant factors in the case, demonstrating the complex nature of the dispute and the potential consequences on the division of assets during divorce proceedings.

The respondent acknowledged the attempt to remove assets but stated it was to protect them, not to dispose of them to affect the applicant’s accrual claim.

He argued that the applicant’s claim was misleading, as her assets actually exceeded his, challenging her assertion of a lesser accrual.

This dispute over intention and contrasting claims about the accrual’s value complicates the case and warrants careful legal evaluation.

Summary of The Arguments Made by Both Parties

The applicant alleged abuse, alienation of assets and failure to disclose the estate’s value.

The respondent alleged that he has a lesser accrual than the applicant and is, therefore, not entitled to an accrual claim.

Evaluation of The Strengths and Weaknesses of Each Argument

The applicant failed to demonstrate to the court with her arguments that she was entitled to immediate division of the accrual, as she could not satisfy the court with a determination as to the value of both parties’ estates.

The applicant satisfied the court that she has a contingent right and that it she be protected until the determination of the divorce action.

The respondent arguments did not persuade the court that he was not disposing of his assets and that the applicant did not have the right to the accrual.

Discussion of Precedents and Other Relevant Case Law

RS v MS 2014 (2) SA 511 at para 17 this case was used as a precedent in that the court held that a spouse would have to prove that the assets are within the jurisdiction of the court, the respondent has no bona fide dispute against the applicant contingent accrual claim and the respondents conduct in prejudicing such claim.

U v U  [2019] ZAGPJHC 347 at para 29 the court held that the applicants application for an order to interdict the respondent for alienating his immovable before the dissolution marriage- “the applicant has failed to establish that he will suffer irreparable harm if the respondent is allowed to use the proceeds of the sale of her house to provide for her living expenses and support of their children”.

“There is no evidence that the conduct of the respondent is actuated by fraudulent intent to prejudice applicant’s claim or that the respondent was intentionally secreting assets with a view to frustrating a possible subsequent judgment against her”.

Similar to the above matter, the applicant would have to prove that the right is in immediate harm due to the conduct of the respondent and therefore the right to accrual will be prejudiced.

Court’s Decision and Order

The court granted extension of the interim interdictory relief.

Summary of The Court’s Ruling

The applicant failed to satisfy the court that she is entitled to immediate division of the accrual because she could not demonstrate that she will be a beneficiary of the accrual claim.

Explanation of The Reasoning Behind the Decision

The applicant had failed to justify the order for immediate division due to being unable to satisfy the court that there are no bona fide factual disputes on the issues in the matter. 

For the granting of the inter relief order, the applicant only needed to demonstrate to the court that that there is prima facie right which proves that she is a beneficiary of an accrual claim.

The Order Made by The Court

The court ordered that-

Pending the determination in the action under this case number of the applicant’s accrual claim, and more particularly whether the applicant enjoys an accrual claim, the respondent is prohibited, interdicted and restrained, either directly and/or indirectly through any third party, from removing, disposing of, selling, transferring, and/or otherwise alienating in any manner whatsoever any of the protected assets which are the following:

  1. All furniture and household effects which are currently situated in the former matrimonial property being Erf […] Meyersdal Ext 12, as per the inventory conducted by the applicant as at 31 January 2020;
  2. The immovable property situated at Erf […], Meyersdal Ext 12 and the respondent’s undivided half-share in Erf […], Spruitview Ext 1;
  3.  Any money in the respondent’s personal bank accounts, pension funds and/or any other investments (other than required in the ordinary course of business and/or for day-to-day expenses);
  4. The respondent’s open-ended Investment Retirement Annuity (Plan Description: Focussed Investment Plan) held at Old Mutual under contract number;
  5. The respondent’s open-ended Investment Retirement Annuity (Plan Description: Committed Investment Plan) held at Old Mutual under contract number;
  6. The respondent’s member’s interest in Lemmon Peel Management CC, and any member’s emoluments (other than his monthly salary) and/or dividends received by the respondent in the 2019 and 2020 financial years and receivable in the 2021 financial year;
  7. The respondent’s member’s interest in GVB Transport CC (2006/225208/23) and any member’s emoluments (other than his monthly salary) and/or dividends received by the respondent in the 2020 financial year and receivable in the 2021 financial year;
  8. The respondent’s member’s interest in Mampodi Projects CC (2003/066872/23) and any member’s emoluments (other than his monthly salary) and/or dividends received by the respondent in the 2020 financial year and the receivable in the 2021 financial year;
  9. The respondent’s member’s interest in Intuition Development Services CC (2006/019380/23) and any member’s emoluments (other than his monthly salary) and/or dividends received by the respondent in the 2020 financial year and the receivable in the 2021 financial year;
  10. Any director emoluments received by the respondent for the financial year 2020, or receivable by the respondent for the financial year end 2021, in respect of his directorship in RRD Marketing (Pty) Ltd (2017/412063/07);
  11. Any director emoluments received by the respondent for the financial year 2020, or receivable by the respondent for the financial year end 2021, in respect of his directorship in Chiskop Investments Solutions (2014/024730/07);
  12. Any director emoluments received by the respondent for the financial year 2020, or receivable by the respondent for the financial year end 2021, in respect of his directorship in Diatla Tsa Dikgale Construction (Pty) Ltd (2014/024732/07);
  13. Any director emoluments received by the respondent for the financial year 2020, or receivable by the respondent for the financial year end 2021, in respect of his directorship in Babereki Ba Makgonthe (Pty) Ltd (2019/032825/07).
  14. All motor vehicles registered in the respondent’s and/or entities’ name, which include the Harley Davidson motor bike, VW Caddy, Mitsubishi Colt and Range Rover Evoque (registration number JD 25 GZ GP).
  15. The costs of opposition of the application are reserved for determination in the action.

Implications for Divorce and Family 

The court’s actions demonstrate the legal system’s commitment to protecting the rights and interests of both spouses during divorce proceedings.

It allows one spouse to seek relief when they believe their financial rights are at risk.

The court’s willingness to grant an extension of interim relief indicates its intention to ensure a fair division of assets accumulated during the marriage, especially when there’s a significant difference in the accrual of the estates.

The legal framework, including the Matrimonial Property Act, provides a clear legal recourse for spouses to address disputes related to the division of property and assets in divorce cases.

Analysis of The Impact of The Case on Divorce and Family Law in South Africa

The spouse with a lesser accrual and believes that the other spouse with a higher accrual is alienating assets may approach the court for an interim order to prevent the other spouse from disposing of assets or order immediate division upon dissolution of marriage.

Lessons to Be Learned from The Case for Potential Clients

Potential clients facing divorce in a similar marital regime should note several critical lessons from this case: 

  • fully understand your marital contract, 
  • seek legal counsel early to protect your rights, 
  • gather and preserve evidence supporting your claims, 
  • be prepared for legal processes, 
  • consider the impact on any children involved, 
  • consult financial experts when necessary, 
  • plan for your financial future post-divorce, and 
  • stay informed about evolving family and divorce law. 

Recommendations for Individuals Facing Similar Situations

Individuals who are in this position should seek divorce and family specialist who will ensure that their right to share in the accrual is protected.

Judges and Legal Teams

Judge: Gilbert AJ

For the applicant: Advocate E Learny

Instructed by: Canario Cornofsky Attorneys

For the respondent: Advocate I Strydom

Instructed by: Jurgens Bekker Attorneys

Read More:

Read the Case Here! 

Marriages with Accrual (Plus A Step-by-Step Guide on how to calculate the Accrual)

The Divorce Process in South Africa

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