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Dissipation of assets pending Divorce proceedings
01 December 2020  | Marié Combrink
 

We encounter this problem on a regular basis when one party is squandering money or assets of the estate while the Divorce is still pending.  This can cause great strain to the other party who is observing this happening and feeling a sense of frustration and stress.

In a recent High Court case as referred to in resources the Applicant in the matter sought continued interim relief to prevent her husband from squandering assets while the divorce has not been finalized.  They were married out of community of property with the accrual system.  She sought for an order that there be immediate division of the accrual in the parties’ respective estates.

To address this matter the court looked at the accrual system in terms of Section 8(1) of the Matrimonial Property Act, how to preserve the contingent claim in terms of the accrual and the Respondent’s conduct in these circumstances.

The Applicant did not succeed with the application to have immediate division of the accrual pending the divorce proceedings, BUT she succeeded in extending the interim interdictory relief where the court made and order to prohibit the respondent from disposing certain protected assets that is contained in a list provided to court.

Due to the fact that a spouse’s claim only arises at the dissolution of the marriage, excluding certain exceptions, this can cause as mentioned the difficulty that one spouse may dissipate his or her assets in anticipation of the dissolution of the marriage to reduce the value of the accrual claim.

As in these circumstance, as the court case referred to, the court may on application of a spouse whose marriage is subject to the accrual system and who satisfies the court that his or her right to share in the accrual of the estate of the other spouse at the time when marriage is dissolved is being or will be seriously prejudiced by the conduct OR proposed conduct of the other spouse, order the immediate division of the accrual concerned according to Section 8(1) of the Matrimonial Property Act or such basis that the court deems as just.

If there are to many factual disputes before court, the court may merely on papers dismiss the application.  Therefor make sure all relevant factors are addressed and taken into consideration when such application is made.  The court will in any instance pay close consideration whether any apparent factual disputes are genuine so as to advance immediate division as an effective remedy to protect the position of the vulnerable spouse.

In this matter the court only made an order to prohibit the respondent to directly or indirectly through a third party remove, dispose, sell, transfer and or otherwise alienate certain assets in any manner whatsoever before the divorce is finalized.

 

Resources : NLD / MJD (GJ) 16 September 2020

 
 
 
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Tags: Divorce