Notes Chapter 7

CHAPTER 7: Variable consequences out of community of property:

 

ANC

 

Purpose is to deviate from the common-law /statutory rules regarding the matrimonial property consequences of marriage.

 

Can include marriage settlements e.g. donations, succession or household expenses.

 

ANC = narrow sense = doc executed before notary and reg in deeds office.

Wide sense = informal agreement between between parties only binding them.

 

Formalities for ANC:

 

Informal only valid inter partes.

Must be registered ito sec 86 of Deeds Reg Act, 87 before notary within 3 months register.

Outside RSA – attested by notary / entered into in accordance with the law of the place of its execution.  Foreign ANC must be registered in deeds registry in RSA within 6 months of its execution.

 

Postnuptial execution and registration:

 

Sec 88 –if signed ANC but did not reg one can approach high court. Either party/beneficiary may bring application and has to :

-        parties must have agreed to terms prior to marriage;

-        good reason given

-        Within reasonable time.

If granted same as reg within 3 months.

 

ANC minor:

 

Consent of guardian – sec 18(4) Children’s act = any guardian.

Should be signed by person assisting minor.

Must have consent to enter into ANC – not only to get married.

 

Content of ANC:

 

ANY provision may be included which is not contra bones mores.

·                 Matrimonial property system: regulate system.

·                 Right of resource iro household NB =sec 23 MPA jointly and severally liable for household NB even if married OUT.

·                 Succession = pactum successorium in ANC (a ANC with scope if a will –can only be amended by joint will)

·                 Marriage settlements = is a donation may be subject to a time clause/condition. Reversion clause (donor stipulate an event upon which the donation will revert to him).

·                 Look at discussion Cumming v Cumming ( revert clause if divorce)

 

 

Interpretation of ANC:

 

Intrepid as any other contract, no specific words –as long as their intention is clear. Any doubt –assumed that the parties intended the minimum departure from common law/statutes.

 

Cancellation & amendment:

 

·                 may CANCEL/AMEND up until the wedding;

·                 once wedding cannot;

·                 When MPA came into effect allowed for amendment –Sec21 by reg notarial contract. 2 years, later further 2 years.

·                 Amend by agreeing to replace a marriage settlement with another donation/revoke it completely;

·                 By making a Joint will circumstances can be amended.

·                 Sound reason

 

Termination of ANC:

 

·                 ANC does not  lapse on dissolution of marriage;

·                 Only terminate when all contractual obligations have been fulfilled eg marriage settlement etc.

 

3 ANC:

 

1. Marriage out of community of property and community of profit and loss without accrual system:

·                 complete separation of property

·                 Used to be standard form – until MPA = now ANC automatically include accrual – therefore must exclude this. Therefore new standard form is ANC including accrual.

·                 Consequences = stay separated, free to contract with each other, no restriction on capacity to act, no liability fir contractual /delictual debt.

 

 

2. Marriage out of community of property with retention of community of profit and loss:

·                 retain assets separately as at time of wedding and separate liability,

·                 Donations etc remain separate; difference is now community of profit and loss is retained therefore all profit and loss arising during marriage become joint profit and loss (each party have an undivided share).

·                 Share during the marriage in postnuptial gains and losses.

 

3. Accrual System:

 

·                 If one spouse contribute towards the other spouse’s estate ( not necessarily financially)

·                 Therefore on dissolution of marriage out of com of profit and loss both spouses should share in the growth of their estates without having ever being a joint estate

·                 Sec2 MPA says that accrual is applicable to all marriages out of community of property where the accrual is not expressly excluded. ( after MPA)

·                 Before MPA – had 4 years to change,

 

How accrual takes place:

·                 Each party retains own estate but on dissolution the spouses share equally in the growth of their respective estates. Death = accrual before inheritance etc.

·                 Accrual claim = ½ of (larger accrual – smaller accrual)

·                 Only at dissolution –sec 3(2) no right to transfer share/not part of insolvent estate.

·                 Claim – sec 3(2) at dissolution, right is during the marriage.

·                 Right is not iro other’s property – sec 4(1) (a) “amount” Reeder v Softline – wanted shares be kept in trust – no spouse has a rught to a asset, only value of asset.

 

Renounce accrual claim:

·                 If solvent can renounce the claim.

·                 Insolvent – protect creditors – sec 3(2) excludes right to in accrual of the other party’s insolvent estate. The right never forms part of the insolvent’s estate. The claim is however not excluded from the insolvent estate.

 

Calculating accrual:

·                 Sec 4(1)(a) MPA = amount by which the net value of his/her estate at divorce exceeds the net value at the commencement of the marriage.

·                 Sec 4 & 5 states certain assets are excluded from the accrual:

·                 Accrual = net end value – net commence value – assets excluded.

·                 Commencement value: provided by declaring value in ANC, or separate statement, if neither then regarded nil unless otherwise proven.  Also nil if liabilities exceed assets.

·                 Fluctuation : CPI consumer price index –GG.

·                 CPI  value of the month in which the marriage is dissolved divided by CPI for the month of the wedding.

·                 Eg : May 1987 : 17.6, Feb 2010: 110.2 then 110.2 divided by 17.6 = 6.26 therefore if value was R100 0000 in 1987 then r100 000 x 6.26.

 

Assets excluded from accrual:

·                 any non –patrimonial damages during marriage

·                 assets exclude in the ANC

·                 any inheritance excluded

·                 Donations ( inter vivos) between living persons.

 

Example : Projector:

 

Protection of spouse’s right to share in accrual:

·                 Sec 8(1) MPA =if one spouse seriously prejudice the other’s right to share –may apply to high court fir immediate separation of accrual.

·                 Court may divide 40/60 –discretion.

·                 Can also order after separation of accrual that marriage strictly out of community without accrual.

·                 Or can order that a new accrual will start after separation of accrual.

·                 Also seek interdict

·                 If assets transferred to 3^rd parties – action Pauliana utilis.

·                 Prodigal

 

Satisfaction of accrual claim:

·                 can cause financial dilemma as result of accrual claim

·                 Sec 10 MPA court may on application defer payment. Eg security/interest/ installments/transfer of some assets etc.

 

Advantages/Disadvantages of regimes: IN/OUT (total separation) /Accrual:

·                 Advantages : IN – no ANC, automatic share in assets, share in assets accumulated, credit-worthiness.

·                 Disadvantages : IN – joint liability, cannot recover delictual damages from each other, admin is complicated, liquidation.

·                 Advantages OUT : no liability,

·                 Disadvantages OUT: no right share in any part of other’s estate.

·                 Advantages Accrual: share in growth, assets prior to marriage not shared, not liable, free to enter into contracts with each other, delictual liability against each other uncomplicated admin.

·                 Disadvantages Accrual: ANC; not share in each other’s credit worthiness, accrual calc complicated.