Forfeiture of benefits - 1

In practice, it often occurs that a divorce court order provides that the defendant shall forfeit benefits, without specifying which assets are to be forfeited. It is trite law that the effect of the forfeiture of benefits is that, when dissolving the joint estate, the plaintiff may claim one half share of the joint estate, and also the assets that he/she contributed to such joint estate (see Ogle v Ogle (1910) 31 NLR 87). The defendant does not forfeit his/her half share in the joint estate (see Celliers v Celliers 1904 TS 926). However, the defendant will forfeit any financial benefit that he/she derived from the joint estate due to the additional contribution by the plaintiff (see Smith v Smith 1937 WDL 126).

It is thus abundantly clear, as confirmed by Van der Westhuizen v Seide 1957 (4) SA 360 (SWA), that both parties to a joint estate will be entitled to at least one half share of the estate, where an order grants forfeiture of benefits, except where the order specifically orders otherwise.

From the case law above, should a divorce court order provide for the forfeiture of benefits, nothing prevents the former spouses from entering into a redistribution agreement of the assets of the joint estate (see Section 14(1)(b)(v) of the Deeds Registries Act 47 of 1937). By way of example, should the former spouses decide that only one of them must obtain transfer of the land, the transfer can be effected by virtue of an endorsement in terms of Section 45bis(1)(a). However, the application will have to be brought by both spouses or proof will have to be submitted that the former spouses entered into the redistribution agreement. Cognisance must also be taken of the fact that transfer duty will be payable on the one half-share of the land thus acquired (see the definition of "transaction" and "property" in the Transfer Duty Act 40 of 1949).

Similarly, in terms of our common law, nothing prevents spouses who have divorced and decided on a disposition of immovable property in the divorce agreement from amending or altering their agreement inter partes, provided that the rights of third parties are not adversely affected by such an amendment (see Ex Parte Naude 1964 (1) SA 763 and Ex Parte Boshi en 'n Ander 1979 (1) 249). By way of example, should land be allocated to one spouse in the divorce agreement, such parties may amend the agreement in order that both the parties may sell the land, without firstly complying with the provisions of Section 45bis(1A) of Act 47 of 1937. The mere fact that both former spouses sign the power of attorney to pass transfer is sufficient proof that the former spouses have amended their initial divorce agreement. However, a certified copy of the divorce agreement must be lodged to enable a registrar to ascertain whether the rights of third parties have not been adversely affected by the amended agreement (see CRC 21 of 2004).

It is, however, contended that transfer duty could possibly be payable on the amendment of the divorce agreement and, although not at present the practice, a transfer duty receipt or exemption certificate should be lodged in such an instance (see CRC 14 of 2000).

Republished with permission from SADJ