BACKGROUND
In this bitterly contested divorce which was between an experienced silk Advocate (“Mr ST” “the Appellant”) and a German Lawyer (“Mrs CT” “the Respondent”) the primary disputes concerned in this matter were, inter alia:
– a prenuptial waiver of spousal maintenance as contained in an ante-nuptial contract between the parties;
– the full and proper financial disclosure of a party’s estate; and
– the calculation of the accrual claim.
The Supreme Court of Appeal (“SCA”) overturned findings and orders of the Cape Town High Court regarding spousal maintenance and the calculation of the accrual claim at date of divorce.
The parties were married out of community of property with the application of the accrual system. The parties’ ante-nuptial contract (“ANC”) included a clause which stated that the Respondent would waive her right to spousal maintenance should the marriage be dissolved.
The SCA upheld the Court a quo’s finding and held that a prenuptial waiver of spousal maintenance prior to divorce by the Respondent, which was contained in the ANC and signed by the Respondent, was deemed to be invalid and unenforceable.
The majority of the SCA held that the basis for invalidity was that such a waiver was against public policy, namely, in terms of section 7 of the Divorce Act 70 of 1979. The minority in the SCA held that the basis for invalidity was that an agreement concluded prenuptially cannot override a Court’s statutory power (in terms of section 7 of the Divorce Act) to grant spousal maintenance upon divorce.
The Court a quo made several adverse credibility findings against the Appellant, many of these findings were related to his lack of forthrightness and failure to fully disclose his financial position. The SCA held that, notwithstanding adverse credibility findings which were justifiably made against the Appellant, it did not warrant the rejection of all his evidence regarding his estate. The Appellant’s version had to be tested against the objective facts. Evidence that was borne out of these objective facts (such as his bank statements or asset registers) had to be accepted.
The SCA further held that in order for the accrual claim to be appropriately calculated, a party is required, in terms of section 7 of the Matrimonial Property Act 88 of 1984, to make full and proper disclosure of the entire particulars and the value of his estate and a Court must ensure proper compliance hereof. The Appellant stated that his current estate was fully attributable to the proceeds realised from his excluded assets in terms of the ANC.
It was further expressed by the SCA, that any income derived by a spouse during the course of the marriage which is used to enhance an excluded asset or to pay a debt which related to such an excluded asset, should be included in the calculation of the accrual of the estate of that spouse.
Therefore, a party who avers that certain assets are excluded from his or her estate for purposes of calculating the accrual bears the burden of proof to establish such an exclusion. Further, where a party states that excluded assets are now associated with current assets, alternatively, where proceeds of the sale of excluded assets were used to purchase a current asset, such a party will also bear the burden of proof in proving that such current assets should not be used in the accrual calculation.
Therefore, due to the Appellant’s incomplete and incremental discovery the experts who attested to the value of his estate, could not properly execute their task. The SCA therefore executed their legal duty and determined the value of the Appellant’s estate without the use of the relevant expert reports.
In determining the Appellant’s estate, the SCA confirmed the Judgment in Montanari v Montanari (26868/14) [2016] ZAGPJHC 387 (10 August 2016) and held that a living annuity does not form part of a party’s estate for purposes of calculating the accrual. The SCA confirmed that the value of a living annuity (being a Sanlam Glacier product) is Sanlam’s asset and not that of the Appellant as the Appellant does not have a right to the capital contained in the living annuity. Consequently, the SCA specified that given that the Appellant does not have the right to claim the capital contained in the living annuity from Sanlam, it could not be part of his estate for purposes of calculating an accrual claim.
HELD
The appeal was upheld in part.
The SCA held the following:
– that the prenuptial waiver of spousal maintenance prior to divorce by the Respondent, contained as a term in the ANC, was invalid and unenforceable as it contravened public policy;
– that a living annuity does not form part of a party’s estate for the purposes of the calculation of accrual; and
that incomplete financial disclosure by the Appellant does not justify the full rejection all of his evidence pertaining to the value of his estate, but only as far as such evidence contravenes the objective facts.
VALUE
Living annuities do not form part of a party’s estate for the calculation of the accrual and a clause contained in an ANC whereby a spouse waives his/her right to spousal maintenance prior to divorce is invalid and unenforceable.
Written by Jeannique Booysen and supervised by Jennifer Stoler, 04 September 2018
