In two recent court decisions, in the Supreme Court of Appeals and the High Court, Western Cape respectively, important aspects regarding marriages out of community of property to which the accrual system applies, are considered.
In the matter between ST v CT, the Supreme Court of Appeal confirms the distinction between the stipulated initial value of the respective parties’ estates when the marriage commences and the list of assets excluded in the calculation of the accrual when the marriage is dissolved.
It is clear that the pension interest of a spouse for the purpose of calculating the income is taken into account. The issue before the Court was whether a spouse’s living annuity could be considered as an asset to calculate the accrual. The Court makes a clear distinction between a spouse who is a member of a pension fund and a spouse who has taken a living annuity from an insurance company. In Section 37A – 37D of the Pension Funds Act and Section 7 (7) – 7 (8) of the Divorce Act, the claim of a spouse against the pension interest of the other spouse is recognized.
The Court points out that in the case of a living annuity, the capital vests in the insurance company and the right to claim for payment from the insurance company by the spouse who is the owner, is dependent thereon that he should have been alive when the annuity became due and if he was no longer alive, payment of the capital is dependent on whether he has nominated a beneficiary or not. If the spouse passes away before the payment could be made, the benefit in terms of the living annuity will be paid to his nominee (if nominated) and if there is no nominee, the benefit is paid to his deceased estate. The Court orders that a living annuity not be taken into account when calculating the accrual where the marriage is dissolved by divorce. The writer hereof is of the opinion that the capital value of a living annuity may be taken into account when calculating the accrual upon dissolution of the marriage as a result of the death of a spouse.
In TN v NN, the Western Cape High Court considered various conflicting decisions in other courts in respect of the provisions of Section 6(3) of the Marriage Goods Act 88 of 1984. The Court finds that the initial value(s) of spouses’ estates as set out in an antenuptial contract contract and / or certificate are only prima facie proof of those values. Spouses, as well as third parties who have an interest in determining the values, can offer evidence to indicate the correct values.
Article by Barend Kruger.
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