Redefining Fairness: How the Constitutional Court’s Landmark Ruling Changes the Financial Landscape of Marriages Out of Community of Property in South Africa.

EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others[2023] ZACC 32

Introduction

On 10 October 2023, South Africa’s Constitutional Court delivered groundbreaking judgments in two separate but interconnected cases, both challenging the constitutionality of section 7(3) of the Divorce Act of 1979.

The first case, known as CCT 364/21, was initiated by Mrs. B, who was embroiled in a divorce proceeding with her late husband. The case raised critical questions about the Divorce Act’s applicability only to marriages ending in divorce, excluding those dissolved by death. Mrs. B argued that this was unfair discrimination, particularly against spouses married before November 1, 1984, who were not covered by the accrual system. The High Court agreed, declaring the section unconstitutional and referring the matter to the Constitutional Court for confirmation.

In the Constitutional Court, the focus was on the unfair differentiation between marriages dissolved by death before and after 1 November 1984. Despite the Minister’s historical context and concerns about adjudication complexities, the Court found the differentiation unjustifiable and upheld the High Court’s decision. It also provided an interim solution, allowing Parliament 24 months to enact remedial legislation.

The second case, CCT 158/22, was brought forth by Mrs. G, who was ineligible for a redistribution order under section 7(3) of the Divorce Act due to her marriage date being after 1 November 1984. The High Court had found this limitation to be rationally connected to a legitimate government purpose but discriminatory and unfair. In the Constitutional Court, Mrs. G persisted with her challenge, supported by the Commission for Gender Equality (CGE), which cited international obligations under CEDAW and the African Union’s Maputo Protocol.

The Constitutional Court found that the differentiation based on the marriage date was rational but constituted indirect gender discrimination. It suspended the declaration of invalidity for 24 months, providing immediate relief through an interim severance of the offending differentiation in section 7(3)(a).

In both cases, the Constitutional Court confirmed the High Court’s rulings of constitutional invalidity, providing a 24-month window for Parliament to address these issues. The judgments mark a significant step toward aligning South African family law with constitutional and international standards, ensuring fairer outcomes in divorce and marital dissolution cases.

Key Issues:

1. Constitutionality of Subsection 7(3) of the Divorce Act: The Court examined whether this subsection unfairly discriminates on the grounds of gender, particularly in how it treats marriages “out of community of property” based on the date of the marriage. – CCT 364/21

1. Dissolution of Marriage by Death: The Court considered whether the Divorce Act should also cover the dissolution of marriage by death, not just by divorce. – CCT 158/22

The judgment in this case has significant implications for marriages “out of community of property” with the exclusion of the accrual system that were concluded after 1 November 1984. Prior to this ruling, spouses in such marriages were not entitled to any form of asset redistribution upon divorce, unlike their counterparts in marriages concluded before the commencement of the Matrimonial Property Act of 1984. This was found to be indirectly discriminatory, particularly against women, and thus unconstitutional.

Effects on Marriages Concluded After 1 November 1984:

1. Asset Redistribution: The Court’s judgment opens the door for asset redistribution upon divorce for these marriages. This means that a spouse who has contributed, either directly or indirectly, to the increase of the other spouse’s estate may now have a claim for a share of those assets. Prior to this ruling, spouses in these marriages were generally not entitled to any form of asset redistribution upon divorce. The Court’s judgment changes this by allowing for the possibility of asset redistribution based on what is “just and equitable.” This is a significant departure from the previous legal framework and introduces a new layer of financial considerations for couples contemplating divorce.
2. Interim Measures: Pending legislative amendments, the Court provided interim measures that effectively extend the scope of subsection 7(3) of the Divorce Act to include these marriages. This allows for immediate relief and enables courts to order asset redistribution based on what is deemed “just and equitable.” The Court provided interim measures that extend the scope of subsection 7(3) of the Divorce Act to include marriages concluded after 1 November 1984. This means that, pending legislative amendments, spouses in such marriages can immediately seek relief through the courts for asset redistribution. This is a crucial step in providing immediate remedies for those who may be in the process of divorce proceedings or contemplating it.
3. Choice and Fairness: The Court also addressed the issue of “choice,” noting that the mere availability of the accrual system at the time of marriage does not suffice as a justification for the discrimination. The judgment emphasized that choice was not always freely made and could be influenced by various factors, including social pressures and imbalances of power within the relationship. The judgment critically examined the notion of “choice” in entering into such marital contracts. It acknowledged that the mere availability of the accrual system at the time of marriage was not a sufficient justification for the existing discrimination. The Court emphasized that choices in marital contracts are often influenced by various factors, including social pressures, power imbalances, and lack of access to legal advice, thereby rendering the “choice” less than fully free or informed.
4. Legal Certainty: While the judgment does introduce an element of uncertainty for couples who may have planned their financial futures based on the previous legal framework, it also brings the law more in line with principles of fairness and gender equality. The Court dismissed arguments that this would create undue uncertainty, noting that similar provisions already exist for other types of marriages, and that the principles of “just and equitable” distribution provide sufficient guidance for courts.
5. International Law Recommendations: The Court also made reference to South Africa’s international law obligations, particularly those that pertain to gender equality. This adds another layer of complexity and urgency to the legislative amendments that need to be made, as they must also be in line with international standards.
6. Timeframe for Legislative Action: The Court has given Parliament a 24-month window to amend the relevant laws. This puts pressure on legislative bodies to act promptly to rectify the constitutional defects identified by the Court. Until such amendments are made, the interim measures will apply, providing immediate but potentially temporary relief for affected parties.

Summary of Court Orders

Case CCT 364/21:

1. Confirmation of High Court’s Order: The High Court’s declaration of constitutional invalidity is confirmed.
2. Declaration of Inconsistency: Subsection 7(3) of the Divorce Act 70 of 1979 is declared inconsistent with the Constitution to the extent that it does not include dissolution of marriage by death.
3. Suspension of Declaration: The declaration of invalidity is suspended for 24 months to allow Parliament to address the constitutional defects.
4. Interim Provision: Pending remedial legislation, the Matrimonial Property Act 88 of 1984 is to be read as including a new section 36A, which allows for asset transfer upon dissolution of marriage by death.
5. Limitation on Retroactivity: The interim provision will not affect deceased estates that have been finally wound up by the date of this order.
6. Costs: The second respondent must pay the applicant’s costs in this Court, excluding the costs of the appearance on 11 August 2022.

Case CCT 158/22:

1. Confirmation of High Court’s Order: The High Court’s declaration of constitutional invalidity is confirmed.
2. Declaration of Inconsistency: Paragraph (a) of subsection 7(3) of the Divorce Act 70 of 1979 is declared inconsistent with the Constitution to the extent that it does not include marriages concluded on or after the commencement of the Matrimonial Property Act 88 of 1984.
3. Suspension of Declaration: The declaration of invalidity is suspended for 24 months to allow Parliament to address the constitutional defects.
4. Interim Provision: Pending remedial legislation, certain words in subsection 7(3) of the Divorce Act are to be excluded.
5. Limitation on Retroactivity: The interim provision will not affect legal consequences of any act done or omission or fact existing before this order was made.
6. Additional Interim Provision: Similar to Case CCT 364/21, the Matrimonial Property Act is to be read as including a new section 36A.
7. Limitation on Retroactivity: The interim provision will not affect deceased estates that have been finally wound up by the date of this order.
8. Costs: The second respondent must pay the applicant’s costs in this Court.

Conclusion

The judgment specifies that its orders are not retrospective in nature. According to the orders made in both Case CCT 364/21 and Case CCT 158/22, the changes will not affect the legal consequences of any acts performed in respect of the administration of a deceased estate that has been finally wound up by the date of the order. Similarly, no claims may be made by or against the executor of a deceased estate that has been finally wound up by the date of the order.

This means that the judgment will not retroactively apply to marriages that have already been dissolved by divorce or death and have had their financial matters finalised. The Court’s decision is forward-looking, affecting only future cases and possibly ongoing cases that have not yet been finalised.

However, the Court has suspended the declaration of invalidity for a period of 24 months to allow Parliament time to enact remedial legislation. During this period, the Matrimonial Property Act of 1984 is to be read as including new provisions that align with the Court’s judgment. These provisions serve as interim measures until Parliament can formally amend the law.

In summary, the Constitutional Court’s recent judgment is nothing short of a watershed moment in the realm of South African family law. It fundamentally alters the legal landscape for marriages that are “out of community of property” and were concluded after the pivotal date of 1 November 1984. This landmark decision goes beyond merely challenging existing legal norms; it establishes a groundbreaking precedent by instituting a more equitable framework for the redistribution of assets upon the dissolution of a marriage.

The Court’s ruling serves as an unequivocal call to action for legislative bodies. It accentuates the urgent need to harmonize South African marital law with the constitutional imperatives and international principles that champion fairness, gender equality, and human dignity. By doing so, the Court has effectively dismantled long-standing legal barriers that have disproportionately disadvantaged women, especially in the financial ramifications of divorce proceedings.

As the nation anticipates the legislative reforms that will be introduced to rectify the constitutional shortcomings identified in this judgment, it becomes increasingly evident that the implications of this ruling are far-reaching. The decision acts as a catalyst for transformative change, compelling lawmakers, legal practitioners, policy analysts, and the broader society to re-examine and reformulate the manner in which marital contracts are conceptualized, negotiated, and executed in South Africa.

This monumental shift in legal interpretation and application has ramifications that extend beyond future marital contracts. It also provides a critical lens through which existing contracts can be scrutinised and, if deemed necessary, amended to align with the principles of fairness and equality. In this way, the ruling serves as a significant stride toward the realisation of a more just and equitable society. It ensures that the law is not just an abstract concept but a living instrument that evolves to better serve the interests and protect the rights of all citizens, irrespective of their gender, social standing, or economic status.

Therefore, this judgment is not merely a legal directive; it is a societal mandate for change, a step towards a more equitable future, and a milestone in the ongoing journey to ensure that South African law is in consonance with the values of fairness, justice, and equality for all.

Summary by Bertus Preller, a Family Law and Divorce Law attorney at Maurice Phillips Wisenberg in Cape Town. A blog, managed by Lawsplash, for more information on Family Law read more here.

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