Forfeiture of patrimonial benefits – it’s not really about what’s fair
Forfeiture of patrimonial benefits – it’s not about what’s fair
The law regarding forfeiture of patrimonial benefits on divorce continues to trouble most legal practitioners in South Africa. This is reflected by the way most pleadings are drafted and the prayers sought in these pleadings. As such, divorce courts have become hesitant to grant forfeiture orders. It has long been accepted that when parties enter into a marriage in community of property one joint estate will be formed. It has been stated that: ‘Community of property is a universal economic partnership of the spouses. All their assets and liabilities are merged in a joint estate, in which both spouses, irrespective of the value of the financial contributions, hold equal shares’ (HR Hahlo The South African Law of Husband and Wife 5ed (Cape Town: Juta 1985) at 157-8).
Choosing community of property
In most instances, parties entering into a marriage do not make equal contributions towards the joint estate for a variety of reasons, including, but not limited to –
- one spouse might enter into the marriage already owning property (movable or immovable);
- one spouse’s salary might be more than that of the other;
- one spouse might not be employed;
- one spouse might request the other to stop working in order to take care of the household and children; and
- one party might have been employed for some time and have substantial pension benefits.
As such, entering into a marriage in community of property is a risk that each spouse takes. The spouses will, on the date the joint estate is created, become joint owners of all the assets brought into the estate and will also share each other’s liabilities.
The law provides alternatives to a party who believes that the other party will end up being unduly benefited by the marriage. Such a party can conclude an antenuptual contract and ensure that the marriage is one out of community of property or out of community of property subject to the accrual system, where he will be able to exclude assets that he does not wish the other party to benefit from. However, if parties decide to marry each other in community of property, then ‘joint ownership of another’s property is a right that each of the spouses acquires when concluding a marriage in community of property’ (JW v SW 2011 (1) SA 545 (GNP) para 18, citing the headnote in Engelbrecht v Engelbrecht 1989 (1) SA 597 (K)). It is well established that if an antenuptial contract is not signed before the marriage, the marriage will automatically be in community of property. The parties to such a marriage will be contracted to deal with both the advantages and disadvantages of this marital regime. ‘One of the ordinary consequences of marriage in community of property is that the property of the spouses is brought together in a joint estate that is owned by them in equal undivided shares’ (Du Plessis v Pienaar NO and Others  4 All SA 311 (SCA) para 1). It can be reasonably argued that parties entering into marriage in community of property tacitly and expressly consent to build one joint estate that will hopefully grow and mutually benefit them. However, in practice when a marriage sours one party might decide to divorce and attempt to ensure that the other party does not share in the joint estate. A division of the joint estate is a natural consequence of a divorce where the parties were married in community of property. However, a party to the divorce proceedings who believes that the other party should not share in the joint estate may request the court to order forfeiture of benefits when issuing the order of divorce.
Forfeiture of benefits: Undue benefit NOT fairness
On divorce the court is empowered to order forfeiture of all or only some of the patrimonial benefits derived from the marriage (Ex Parte De Beer 1952 (3) SA 288 (T)). Schäfer has argued that courts do not have the power to order forfeiture ‘merely because this might seem equitable’.
‘While the court has a wide discretion in that it may order forfeiture in relation of the whole or part only of the benefits, it is not empowered to award a “portion of an errant husband’s separate estate” to his wife, for example, merely because this might seem equitable in the circumstances. Nor may a forfeiture order be granted simply to balance the fact that one of the spouses or partners has made a greater contribution than the other to the joint estate. The forfeiture order relates only to the benefits of the marriage … . The precise nature of these benefits depends on the particular matrimonial regime’ (Schäfer Family Law Service: Issue 54, October 2010, 26 – 27).
The party claiming forfeiture must show the court that the other party will be benefited if the order is not made. However, it is the nature of marriages in community of property to benefit parties thereto and it will not be enough to just prove that the other party will be benefited. As such, ‘the court may not use a forfeiture order as a mechanism for deviating from the normal consequences of the spouses’ matrimonial property system and achieving a redistribution of assets simply because it considers this fair and just’ (Cronje & Heaton South African Family Law 2ed (Durban: LexisNexis Butterworths 2004) at 132). The second leg of the inquiry is for the party claiming forfeiture to show that the other party will be unduly benefited if the order is not made. The courts have ‘emphasised that a party who seeks a forfeiture order must first establish the nature and extent of the benefit’. Unless that is proved, the court cannot decide if the benefit was undue or not’ (JW para 18). It has, however, been held that:
‘Unless the parties (either before or during the marriage) make precisely equal contributions the one that contributed less shall on dissolution of the marriage be benefited above the other if forfeiture is not ordered. This is the inevitable consequence of the parties’ matrimonial property regime.
The legislature (in s 9 of the Divorce Act 70 of 1979) does not give the greater contributor the opportunity to complain about this. He can only complain if the benefit was undue’ (Headnote in the Engelbrecht case at 599).
It is at this stage that the court should look at s 9(1) of the Divorce Act 70 of 1979, which lists the following factors which the court ought to take into account when deciding whether the party against whom forfeiture is sought would be unduly benefited or not –
- the duration of the marriage;
- the circumstances that gave rise to the breakdown of the marriage; and
- any substantial misconduct on the part of either of the parties.
The court is not called on to decide what is fair and equitable in the circumstances, but rather to decide whether or not the party against whom forfeiture is sought would be unduly benefited if such an order is not granted. The fairness principle was rejected by the Supreme Court of Appeal in Wijker v Wijker 1993 (4) SA 720 (A) at 731C-H:
‘The finding that the appellant would be unduly benefited if a forfeiture order was not made, was therefore based on a principle of fairness. It seems to me that the learned trial judge, in adopting this approach, lost sight of what a marriage in community of property really entails. … The fact that the appellant is entitled to share in the successful business established by the respondent is a consequence of their marriage in community of property. In making a value judgment this equitable principle applied by the court a quo is not justified. Not only is it contrary to the basic concept of community of property, but there is no provision in the section for the application of such a principle. Even if it is assumed that the appellant made no contribution to the success of the business and that the benefit which he will receive will be a substantial one, it does not necessarily follow that he will be unduly benefited. … The benefit that will be received cannot be viewed in isolation, but in order to determine whether a party will be unduly benefited, the court must have regard to the factors mentioned in the section. In my judgment the approach adopted by the court a quo in concluding that the appellant would be unduly benefited should a forfeiture order not be granted was clearly wrong.’
To date the courts have not fully unpacked the concept of ‘undue benefit’. However, I submit that undue benefit will be illustrated by, among others, the relatively short period of the marriage. It is advisable, therefore, to have regard to the date of separation and not necessarily the date of divorce. I submit that the date the parties stopped residing together as husband and wife provides a clear indication of when the marriage broke down, as opposed to the date of divorce. The parties must also have been consistent, in that they denied each other conjugal rights, among others, during the period of separation and divorce. Undue benefit can also be proved where one party continually makes the living conditions in the household intolerable by, inter alia –
- not contributing to household expenses;
- selling assets of the joint estate without the other’s consent;
- inviting friends and family members to reside in the common home against the will of the other party;
- continually undermining the other spouse; and
- abusing the other spouse emotionally, verbally, financially and/or physically.
Undue benefit may also be established by proving that the other party is having an extramarital affair and also if such an affair has resulted in the birth of an illegitimate child. Lastly, it appears that failure to contribute financially with respect to the acquisition and/or maintenance of the asset to be forfeited by the spouse against whom forfeiture is sought will also be considered by the court. In practice, this is an allegation most practitioners rely on for an order of forfeiture.
It was held in the Wijker case that not all of the factors in s 9(1) of the Divorce Act need to be alleged and proved for forfeiture to be granted. The court was of the view that ‘the context and the subject matter make it abundantly clear that the legislature could never have intended that the factors mentioned in the section should be considered cumulatively’ (at 729E-F). The factors in s 9(1) are a closed list and ‘[t]he trial court may therefore not have regard to any factors other than those listed in s 9(1) in determining whether or not the spouse against whom the forfeiture order is claimed will, in relation to the other spouse, be unduly benefited if such an order is not made’ (Botha v Botha 2006 (4) SA 144 (SCA) para 8). Finally, a party claiming forfeiture must plead the necessary facts to support that claim and clearly identify those assets he wishes the other party to forfeit by relying on s 9(1) of the Divorce Act and not any other factor that is not recognised by that section. Furthermore, such a party must formulate a proper prayer in the pleadings to define the nature of the relief sought.
By Clement Marumoagae LLB (Wits) LLM (NWU) Certificate in Advanced Broadcasting Law (Wits) is a candidate attorney at the Wits Law Clinic. This article first appeared in the July 2011 edition of De Rebus, the SA attorneys’ journal published by the Law Society of South Africa.