Understanding Redistribution claims in terms of Section 7(3) of the Divorce Act post KG v Minister of Home Affairs
In October 2023, after judgment was handed down by the Gauteng High Court, Pretoria in Greyling v Minister of Home Affairs, we published an article on section 7(3) of the Divorce Act, 1979 (“the Act”). This article (which you can access here) deals with the expansion of redistribution claims in terms of section 7(3) of the Divorce Act to persons married out of community of property after 1984. The position adopted by the High Court has since been confirmed by the Constitutional Court in EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others (hereinafter referred to as “KG v Minister of Home Affairs”) and as a result many individuals married out of community of property are incorporating section 7(3) redistribution claims in their pleadings. It is therefore worth becoming familiar with the jurisprudence surrounding section 7(3) and how case law has developed the remedy since KG v Minister of Home Affairs was handed down in October 2023.
Section 7(3) – the basics
Section 7(3) allows a spouse to claim a redistribution of assets despite being married out of community of property where the sharing in a joint estate is expressly excluded. Such a redistribution is available on the basis of the claimant spouse having contributed, directly or indirectly, to the spouse from which the redistribution is being claimed.
Section 7(3) should be read with its accompanying provisions in the Divorce Act in order to gain a basic understanding of how these redistribution claims work and the principles that guide whether one may qualify for such a redistribution and, if so, the extent of the assets one may expect to be awarded.
The relevant portions of the Act, which for the purposes of this article are sections 7(4) and 7(5), read as follows:
7(4) An order under subsection (3) or (3A) shall not be granted unless the court is satisfied that it is equitable and just by reason of the fact that the party in whose favour the order is granted, contributed directly or indirectly to the maintenance or increase of the estate of the other party during the subsistence of the marriage, either by the rendering of services, or the saving of expenses which would otherwise have been incurred, or in any other manner.
7(5) In the determination of the assets or part of the assets to be transferred as contemplated in subsection (3) or (3A), the court shall, apart from any direct or indirect contribution made by the party concerned to the maintenance or increase of the estate of the other party as contemplated in subsection (4), also take into account-
(a) the existing means and obligations of the parties, including any obligation that a husband to a marriage as contemplated in subsection (3) (b) of this section may have in terms of section 22 (7) of the Black Administration Act, 1927 (Act 38 of 1927);
(aA) any contract or agreement between the parties in a Muslim marriage, where the husband is a spouse in more than one Muslim marriage;
(b) any donation made by one party to the other during the subsistence of the marriage, or which is owing and enforceable in terms of the antenuptial contract concerned;
(c) any order which the court grants under section 9 of this Act or under any other law which affects the patrimonial position of the parties; and
(d) any other factor which should in the opinion of the court be taken into account.
Considerations of justice and equity
Although sections 7(4) and 7(5) are certainly a mouthful, it is clear that the 7(3) remedy is steeped in considerations of justice and equity and provides courts with wide discretion in reaching a conclusion on what constitutes a just and equitable remedy. With section 7(4) focusing on “direct and indirect” contributions, is also much more likely to come to the aid of women in “stereotypical” heteronormative marriages wherein women have less economic agency than their male counterparts and often find themselves in the roles of mothers, homemakers and supporters, with little to show for the efforts poured into the household and their husbands’ estates at the dissolution of the marriage. This is particularly true for wives who sacrifice their careers for the sake of fulfilling these duties. As set out by the Constitutional Court in KG v Minister of Home Affairs, marriages out of community of property hold serious disadvantages where one of the spouses is less economically active than the other and the section 7(3) remedy “was introduced in an effort to address the obvious disadvantage suffered by the economically inactive spouse”, in a society where “women are still predominantly the economically disadvantaged spouses.”[1]
The remedy therefore plays a pivotal role in recognising the contributions women make to their husband’s asset bases and earning power and the case law surrounding section 7(3) assists in assigning monetary value to these contributions. For instance Beaumont v Beaumont makes clear that the “indirect contributions” referred to in section 7(4) include “the ordinary householding and childcare duties; performing these duties by necessity contributes indirectly to the maintenance or increase of the husband’s estate”.[2]
HC v CC – the remedy as applied to modern marriages
Because of the fact that section 7(3) is most valuable to women in traditional roles, and until recently, was only available to women who did not have the option of adopting the accrual system, some have thought that the remedy should be applied more sparingly to modern wives who had the choice to get married with the accrual regime.
This stance has not been credibility, however, with HC v CC,[3] handed down in the High Court of South Africa, Gauteng Division on 31 July 2024 confirming that there should be no differentiation between “old” section 7(3) claims and ones instituted post KG v Minister of Home Affairs.
The parties were married in 2007, out of community of property with the exclusion of the accrual system. There had been one child born of the marriage in 2008 and the parties were agreement that the wife and mother had been the primary caregiver of the child as she had taken most responsibility for the child-rearing while the father had taken financial responsibility for the household. The wife, having left employment in 2012, had been unemployed for 12 years as at the time the divorce was heard in 2024.
What is interesting about this matter is that the wife did not exhibit the traits of a traditional housewife and did not perform the usual tasks which would point to an indirect contribution to her husband’s estate. The husband, for instance, in addition to taking financial responsibility for the household, did his own washing, did his own cooking, and bought lunch at work. It further became clear that the wife’s testimony to the effect that she could not have worked out of obligation to care for the minor child, this was largely exaggerated and she could and should have, at least, sought half-day employment.
It is as a result of the wife not fitting the mold of the “classic” section 7(3) that the husband argued that his wife’s role “…did not move beyond the scope of what one would have expected in a traditional marriage. A redistribution claim in terms of section 7(3) of the Divorce Act is an extraordinary claim where the claimant spouse requests the court to exercise a discretion in awarding a certain portion of the estate of the other spouse to the claimant spouse.” The “extraordinary” nature of the remedy arises as, according to the husband, the wife “had the benefit of electing the accrual system to apply to their marriage relationship, which benefit was not enjoyed by spouses married prior to 1984”. Given his characterisation of the section 7(3) remedy as applicable to “modern wives” and his submissions that his wife had failed to prove any direct or indirect contributions to his estate, the husband prayed that his wife claim for a redistribution be dismissed.
The court, with heavy reliance on KG v Minister of Home Affairs, rejected the notion that the section 7(3) remedy now has a stricter threshold than in the past or that it should be applied more sparingly to modern marriages wherein the possibility of marriage with the accrual system existed.
Importantly, it was acknowledged that the “mischief that section 7(3) aims to address must now be identified in the light of constitutional considerations such as substantive gender equality” and that, regardless of the fact that things have improved for women on the whole, “….[i]n many instances women enter marriages as the poorer and less financially independent partner and the parties’ “equal bargaining power” is therefore a myth.”[4] As such, the fact that the parties had the contractual freedom to adopt the accrual system but apparently chose not to was not determinative, but a mere factor to be taken into account.[5] The court held that, should undue weight be given to the terms of the antenuptial contract and the principle of contractual freedom, the reparative purpose of the remedy and its focus on gender equity would be hindered.[6]
The court held further that it the wife need not have gone beyond the duties of a typical wife, thereby rejecting again the notion that a section 7(3) claim is an extraordinary remedy. Viewed from a modern lens, she was an ordinary stay-at-home spouse and mother and her contributions had, at the very least, saved her husband money as she had taken care of the parties’ children and performed some tasks around the house, without which a childminder and housekeeper would have to have been appointed. A redistribution of a portion of her husband’s estate to her was therefore justified.
It is important to recognize that the section 7(3) remedy does not “end” upon the court’s determination that a redistribution would be justified. The court then, with reference to the factors set out in section 7(5), must determine which assets to transfer from one spouse to the other and must determine how much of the one spouse’s estate to award the other.
In HC v CC, the husband was ordered to transfer an immovable property including all its furniture, household effects and appliance to his wife.
In making this order, the court held the following factors to carry the most weight: “any direct or indirect contribution made by the claimant party to the maintenance or increase of the estate of the other party; the existing means and obligations of the parties; and any other factor which should in the opinion of the court be taken into account.”[7]
In this matter, the husband was the owner of three immovable properties but had fallen on some financial hardship as the equity in one of these properties had been nullified by damages caused to its water pipes and roof and his salary had declined over the years. He was, moreover, taking full responsibility for the parties’ minor child’s financial needs. The wife had no assets of her own. While unemployed, the court held that she possessed the necessary skills to obtain employment and would need to do so in order to supplement her own financial needs. The court acknowledged that, despite not being a candidate for lifetime spousal maintenance, the wife would need financial assistance in establishing a home for her and the minor child.[8]
Not much further justification is provided for the court’s determination that the husband should transfer one immovable property to the wife (as opposed to say, an amount that would equalize their estates and / or half of the value of his estate). It is evident, though, that the court took cognizance of the husband’s limited financial means and the reality that he would be carrying a handsome maintenance obligation to the child as well as a temporary maintenance obligation towards the wife while she sought employment. This is underpinned by the principle that “a redistribution order may to some extent also address the maintenance needs of the claimant spouse”.[9] While not made explicit, the fact that the court did not order the wife a higher redistribution from her husband’s estate likely also reflects its recognition that her contributions, while tangible enough for her to qualify, were relatively modest. The court was in essence satisfied that her and the minor child having a property to stay in and the minor child’s financial needs looked after was the most just and equitable outcome.
Conclusion
As before KG v Minister of Home Affairs, the redistribution remedy set out in section 7(3) of the Divorce Act still comes to the aid of ordinary stay at home spouses who find themselves at an economic disadvantage compared to their wealthier, working counterparts. It remains the case that these disadvantaged spouses are mostly women. HC v CC confirms that the remedy operates much as it did before, and that “extraordinary” contributions to the household are not expected of wives and mothers in order to qualify for the remedy. That being said, claimants should not expect an automatic equalization of estates – the factors for consideration in section 7(5) granting the courts a wide discretion to adjust the redistribution downwards where the claimant spouses’ contributions have been but ordinary.
