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The Role Of The Liquidator and Receiver After Divorce

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The Role Of The Liquidator and Receiver After Divorce

When parties elect to get divorced, there are many issues that they have to deal with and resolve. Apart from the issues relating to the minor children, such as maintenance and the care and contact of the minor child(ren), another critical aspect is the division of assets between the parties.

What Are The Functions Of A Liquidator Or Receiver?

 While the liquidator or receiver has several functions, some of the key responsibilities are outlined below:

  •  To request compliance from both parties in providing the receiver or liquidator with an accurate and proper account of their assets;
  • To provide valuations of all movable and immovable assets of the parties, save for their personal belongings;
  • To ascertain and determine the liabilities of the joint estate;
  • To question the parties regarding the assets and liabilities of the joint estate, where necessary; and
  • To be granted access to any premises related to the joint estate. This is inter alia to evaluate the assets.

What Are The Powers Of A Liquidator Or Receiver? 

The court provides the liquidator or receiver with sufficient powers to enable them to attend to the performance of the functions described above.

These powers allow the liquidator or receiver to

Evaluate;

calculate the accrual;

realize and sell any immovable property, and even;

approach financial institutions and obtain bank statements.

The liquidator or receiver assumes those powers when accessing such information.

Who Is Appointed As A Liquidator Or Receiver? 

Usually, the parties would appoint an independent person by agreement, usually an independent Attorney (i.e. neither party’s Attorneys), or in some cases, even a chartered accountant or an actuary to assume this role.

Suppose the parties cannot reach an agreement on the appointment of this independent person?

In the above case where an agreement cannot be reached for whatever reason, the court has the discretion to decide on the appointment, which such appointment is usually an Attorney who has acted as a liquidator or receiver previously.   

Who Pays For The Liquidator Or Receiver? 

The cost of the liquidator or receiver and all related expenses such as costs associated with estate agents, transfer fees, valuators, and municipal charges, are paid by the joint estate.

Due to the costs associated with the appointment of a liquidator or receiver, it is often best to consult with a divorce Attorney before instituting divorce proceedings against a spouse.

This way, your divorce Attorney will be able to advise you on the risks involved and assist you with the legalities surrounding your divorce.

Division Of Assets Of Marriages In Community Of Property Or With The Accrual System 

This issue would often arise if the parties are married in community of property or even married out of community of property with the accrual system being applicable.

These parties are regarded as having a joint estate and at the time of the divorce the assets within the joint estate will have to be divided.

For parties married in community of property, irrespective of whether these assets were obtained prior to the parties’ marriage or in one party’s name specifically, they should be divided amongst the parties at the dissolution of the marriage.

For parties married out of community of property but with the inclusion of the accrual system, this division will also occur. However, in this case, the parties would need to establish the value of their assets in order to determine which parties’ estate has grown more.

At the time of entering into the marriage, each party would have stated a “commencement value” of their respective estates.

This value would be recorded in the parties’ ante-nuptial contact.

The party whose estate has grown the least since the commencement of the marriage would have a claim of accrual against the other. 

In Terms Of The Matrimonial Property Act [No. 88 Of 1984]

At the dissolution of a marriage, subject to the accrual system, either by divorce or by the death of one or both of the parties, the party who is deceased and/or each party to the divorce proceedings acquires a claim against the other party for an amount equal to half of the difference between the accrual of the respective estates of the parties.

The Divorce Act [No. 70 Of 1979]

This further encourages that parties married in community of property should divide their estate by agreement insofar as possible. This settlement agreement is made an order of court when the decree of divorce is granted.  

Often where a divorce has reached the trial stage of proceedings, the presiding judge would usually make a ruling in respect of the division of assets.

In many cases, sometimes, the only unresolved matter in the proceedings is in respect of determining the value of the assets of the parties, and, subsequently how to divide these assets.

This may even occur when the parties elect not to take the matter to the trial stage, but still require outside intervention to deal with this issue.

To tackle this impasse, either party can approach the court and request permission to have a receiver or liquidator appointed.   

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