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DIVORCE AND FAMILY LAW
MODULE ON FORFEITURE
HOW ARE YOU GOING TO DIVIDE THE ESTATE/S?
  1. Are you married out of community, excluding sharing in anything – what are your rights?

  1. If you are married with the accrual system, how are the estates divided then?

  1. If you are married in community of property, does it mean you will receive only 50% on division?

  1. Rights regarding the pension interests

  1. Did you know that you can, under specific circumstances, ask for a division of assets before you are divorced?

Section 9 of the Divorce Act, 70 of 1979, determines the following:
9.Forfeiture of patrimonial benefits of marriage.—(1)When a decree of divorce is granted on the ground of the irretrievable break-down of a marriage the court may make an order that the patrimonial benefits of the marriage be forfeited by one party in favour of the other, either wholly or in part, if the court, having regard to the duration of the marriage, the circumstances which gave rise to the break-down thereof and any substantial misconduct on the part of either of the parties, is satisfied that, if the order for forfeiture is not made, the one party will in relation to the other be unduly benefited.
(2)In the case of a decree of divorce granted on the ground of the mental illness or continuous unconsciousness of the defendant, no order for the forfeiture of any patrimonial benefits of the marriage shall be made against the defendant.
Supreme Court Act, 59 of 1959: Uniform Rule 18: Rules relating to Pleading generally
18(9) A party claiming division, transfer or forfeiture of assets in divorce proceedings in respect of a marriage out of community of property, shall give details of the grounds on which he claims that he is entitled to such division, transfer or forfeiture.
[Sub-rule (9) substituted by rule 10(c) of GN R2164 of 2 October 1987 and rule 10(c of GN R2642 of 27 November 1987.]
Magistrates’ Courts Act 32 of 1944: Rule 6: Rules relating to pleadings generally
6(8) A party claiming division, transfer or forfeiture of assets in divorce proceedings in respect of a marriage out of community of property, shall give details of the grounds on which such party claims entitlement to such division, transfer or forfeiture.

IMPORTANT FACTS

Forfeiture

1.Section 9 of the Divorce Act makes provision at least for forfeiture for all marriages. In respect of marriages under discussion, whether concluded before or after 1 November 1984 and before or after 2 December 1988, a party may claim forfeiture. Forfeiture will be with regard to benefits that arise upon marriage. Here one has to consider the terms of the ANC. If the ANC gives benefits like a donation or an inheritance, one may ask forfeiture in respect of that. Gifts during the marriage will not be fit for forfeiture as the courts and authors regard gifts to arise from the relationship developed between the parties subsequent to the marriage and NOT by virtue of the legal effect of the marriage regime.

If a party claims for a decree of divorce on the ground of the mental illness or continuous unconsciousness of the defendant, no order for the forfeiture of any patrimonial benefits of the marriage will be successful as section 9(2) of the Divorce Act determines that no such order shall be made against the defendant.

MARRIED IN COMMUNITY OF PROPERTY OR WITH ANC INCLUSIVE OF ACCRUAL
If you are married in community of property, does it mean that you will receive
only 50% of the joint estate on division?
OR
If you are married in with an ANC inclusive of accrual, does it mean that you will receive
only 50% of the accrual at divorce?

The answer is NO. Under certain circumstances, and especially if you have contributed more than your spouse, you may get more than 50.

UNDERLYING PRINCIPLE

Forfeiture existed in our common law. The underlying principle in awarding forfeiture is that no one should benefit financially from a marriage that s/he has destroyed. The common law required an innocent and a guilty party. Today, fault or misconduct is only one of the requirements a court will consider in its determination of granting forfeiture or not.

The section refers to three (3) factors a party may place before the court to consider:

REMEMBER YOUR DURACELL’S MISSION:

  1. Duration of the marriage or civil union–DUR

-(like a short marrigae in Klerck case and a long marriage in Wijker case)

  1. The circumstances that gave rise to the breakdown–C

- relationship (different development of personalities now cause clashes in Klerck; clash over financial matters in Wijker)

  1. Any substantial misconduct on the part of either of the parties – S + MIS

-(none in Klerck; on both sides in Wijker)

If more than one factor is present in a particular situation, the pleadings should reveal all of them. The factors do not work accumulative because of the word “and”.

Klerck case – one or all factors may be present – not an accumulation, but must look for all 3 and consider each, if present.

Wijkercase - the same facts may be representing two factors, like substantial misconduct being the reason/s for breakdown.

(seeKlerck 1991 1 SA 265 (W); Binda 1993 2 SA 123 (W) and Wijker 1993 4 SA 720 (A); Botha v Botha [2006] SCA 7 (RSA)).

Forfeiture may be granted on only on factor. Only these three factors are available to a party, as the court may not consider any other factor.

Botha v Botha 2006:

Conspicuously absent from s 9 is a catch-all phrase, permitting the court, in addition to the factors listed, to have regard to ‘any other factor’.

The only other requirement is that that factor or factors should convince the court that if forfeiture is not granted, one party will be unduly benefitted in relation to the other. This is a value judgement the court has to make, using a qualitative test, looking at the seriousness of the benefit to be gained.

Forfeiture together with the issue of spousal maintenance, are requiring the court to look at fault, even if the modern SA divorce law is no longer based on the principle of fault. Interesting too, is that the degree of blameworthy required for forfeiture (‘substantial misconduct’), is of a higher degree as for spousal maintenance (‘misconduct’).

NATURE OF MARRIAGE

Before we go further, you have to understand the nature of marriage – whether it is with an ANC that excludes community of property, community of profit and loss and accrual sharing in any form; or with an ANC that includes the accrual system; or a marriage in community of property. All three may have benefits without the party who is benefitting from it, has made any contribution at all. If an ANC stipulates a benefit to go to one party on divorce, s/he will get it by virtue of the contract. If parties marry with the accrual, and the wife stays home looking after the house and children while her husband works and brings in the money, she will get her share of the accrual even if she did not contribute a cent. The position will be the same with marriages in community of property – it is the nature of marriages!

The Appeal court (now called Highest Court of Appeal) in the Wijker case looked at what exactly a marriage in community of property entails. The court mentioned that the husband being entitled to share in the successful business established by his wife is a consequence of their marriage in community of property. The court found that even if it is assumed that the man made no contribution to the success of the business of his wife and that the benefit which he will receive will be a substantial one, it does not necessarily follow that he will be unduly benefitted.

A person can not forfeit the assets or value contributed to either the benefit as stipulated in the ANC, or the joint estate or the accrual. Even if one spouse displayed substantial misconduct, that person will not loose the assets brought into or contributed to the growth in value of the stipulated benefit or joint estate or accrual.

In the first type of marriage, there are no benefits except if the ANC makes provision for one or more benefits at divorce, like all the household effects. If the “guilty” party has brought all the household effects, that party will not forfeit the goods. If the party was not guilty, but also has not contributed at all to the accumulation of the household effects, that party will get the goods on divorce – based on the contract concluded. However, if the “guilty” party has not contributed at all to the accumulation of the household effects, that party will stand the chance of forfeiting the goods.

A lazy housewife, showing no responsibilities towards the keeping of the house and best interest of the children, brought in R450 000 being an inheritance, at the beginning of the marriage. At date of the divorce its value has grown to R500 000. Her husband’s contribution to the joint estate is R600 000. Under normal circumstances, she would get 50% of the total value of R1 100 000, being R550 000. If, and this is a big if, forfeiture is granted, she will receive only her R500 000.

If the parties were married with an ANC including the accrual system, the party’s right to his/her share in the accrual, is the object of an order for forfeiture. If the accrual is determined to be say R600 000 for instance,50% of that should go to each party. If an order for forfeiture is granted, the “losing party” looses the right to get the R300 000, unless the losing party has contributed that amount. If the “guilty” party has contributed less, say only 10% of the R300 000, that party will not forfeit the R30 000.

A party who seeks forfeiture, must in the pleadings:

  • allege the grounds on which the claim is based
  • lodge the claim and not try to bring an application after the divorce order was granted
  • include a prayer for an order for forfeiture
  • indicate whether forfeiture is prayed for wholly or in part


Lets see if you understand your right to forfeiture!

Let’s see if you understand your right to forfeiture!

  1. If a spouse, A, has contributed 60% to the value of the joint estate, may the other spouse, B, ask that s/he forfeits 10%?

No. A party will not forfeit what s/he contributed. Thus, the other spouse should rather go for a division. A may as a matter of fact ask that B gets only 40%.

  1. If a spouse, A, has contributed 60% to the value of the joint estate, may the other spouse, B, ask that s/he forfeits 60%?

No. A party will not forfeit what s/he contributed. Thus, the other spouse should rather go for a division. A may as a matter of fact ask that B gets only 40%.

  1. If a spouse has contributed 80% of the joint estate but the other spouse has abused alcohol to such an extent that s/he is declared mentally disturbed, may spouse A ask for an order of forfeiture?

No. It is explicitly excluded by section 9(2).

  1. If parties are married with the accrual, and the wife’s estate has not shown any accrual, but her husband, who has openly committed adultery many times, made good deals with his girlfriends benefitting his estate enormously, may she ask for forfeiture, based on his substantial misconduct?

No, as her husband will not forfeit what he has contributed. It will be best for her to go for her share of the accrual.

  1. May her husband ask forfeiture of her share of the accrual because her estate has not shown any growth?

No, because none of the 3 factors on which he must base his grounds for forfeiture are present. Only if one or more of the 3 factors for forfeiture are present, can he do so.

  1. The parties were married on 2 December 1990 with an ANC that excludes community of property, community of profit and loss and accrual sharing in any form. The wife worked very diligently and gathered a large estate, whilst her husband was, due to their circumstances, forced to work from home and not becoming very successful. Her husband wants to get something from her estate. What are his rights?

He will not be able to get anything:

  • not transfer of assets (specifically excluded for marriages like this that took place after 1 Nov 1984)
  • not forfeiture as none of the 3 factors on which he must base his grounds for forfeiture are present
  • even if there were factors present, she cannot forfeit what she has brought in and thus he will only have what he has brought in.

Forfeiture of benefits of marriage in community of property - Wijker v Wijker 1993

If parties are married in community of property, a court can make an order that one party forfeits his or her benefits in the joint estate in favour of the other party. This could be all of the benefits or part thereof. The court looks at various factors in determining whether there should be a forfeiture of the benefits of the marriage in community of property. They look at the length of the marriage as well as the conduct of each party and whether there was substantial misconduct on the part of one of the parties, and the circumstances that gave rise to the breakdown of the marriage.

One of the leading cases in our law dealing with forfeiture is that of Wijker v Wijker 1993 (4) SA 720. The parties were married in community of property in Holland in 1956. A son was born in 1958 and two daughters, in 1960 and 1965 respectively. On the evidence of the case, prior to 1976, the man was the major breadwinner of the family. In the divorce matter in 1992 the wife claimed a forfeiture order with regards to certain assets.

In coming to their decision the court decided that not all of the factors in Section 9(1) of the Divorce Act need to be alleged and proven for forfeiture to be granted. Section 9(1) of the Divorce Act lists the following factors which the court must 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;
- Any substantial misconduct on the part of the parties.

The court was of the view that the context and subject matter make it clear that the legislature could never have intended that the factors mentioned in the section should be considered cumulatively.

In coming to their decision on Appeal, the court found that on the evidence, a forfeiture order should not have been granted by the trial court. The marriage had lasted for a long time, namely 35 years. The marriage was a happy one until 1983, and the parties became estranged mainly as a result of the fact that the wife became successful in business. The husband found it difficult to cope with this situation and this was probably one of the circumstances that gave rise to the breakdown in the marriage. No substantial misconduct could be proven against the husband.

The court also looked at what exactly a marriage in community of property entails. The court mentioned that the husband being entitled to share in the successful business established by his wife is a consequence of their marriage in community of property. The court found that even if it is assumed that the man made no contribution to the success of the business of his wife and that the benefit which he will receive will be a substantial one, it does not necessarily follow that he will be unduly benefitted.

The court in the Wijker case found that the benefit which would be received cannot be viewed in isolation, but in order to determine whether a party would be unduly benefitted, the court must have regard to the factors mentioned in the section. The court found that the approach adopted by the trial court in concluding that the man would be unduly benefitted should a forfeiture order not be granted was clearly wrong.

“

In Wijker v Wijker,1 this court considered the question whether proof of ‘substantial misconduct on the part of either of the parties’ was an essential requirement for a forfeiture order. It answered this question in the negative, holding2 that the context and the subject-matter of s 9(1) made it abundantly clear that the legislature never intended the three factors mentioned in the section to be considered cumulatively. As regards the approach to be followed by a court of appeal when hearing an appeal in respect of a forfeiture order, Van Coller AJA stated the following:3

‘It is obvious from the wording of the section that the first step is to determine whether or not the party against whom the order is sought will in fact be benefited. That will be purely a factual issue. Once that has been established the trial Court must determine, having regard to the factors mentioned in the section, whether or not that party will in relation to the other be unduly benefited if a forfeiture order is not made. Although the second determination is a value judgment,4it is made by the trial Court after having

considered the facts falling within the compass of the three factors mentioned in the section.’

(Emphasis added.)

1 1993 (4) SA 720 (A).

2 At 729E-F.

3 At 727E-F.

4 On the nature of the discretion exercised by the court in this regard, see Wijkerat 727F-728C. CfBezuidenhout v Bezuidenhout2005 (2) SA 187 (SCA) paras 16-18 and Kirkland v Kirkland [2005] 3 All SA 353 (C) paras 45-51. 5

[7] In relation to the trial court’s finding in the Wijkercase that it would be unfair to permit the appellant husband to share in the respondent wife’s estate agency business while he had made hardly any contribution towards its management, administration and profit-making, Van Coller AJA held5 that --

‘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. . . . . 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.’”

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