Marriage in community of property and suretyships.

Since the introduction of the Matrimonial Property Act of 1984 (the Act), spouses married in community of property share the same rights regarding the disposal of the assets of the joint estate (the combined assets of both spouses), the contracting of debts which lie against the joint estate and the management of the joint estate, subject to certain limitations. An example is a restriction on signing a suretyship on behalf of the joint estate.

If one spouse wants to incur credit on behalf of the joint estate, the credit provider may insist that the spouse binds himself or herself as surety, to guarantee payment.

The Act provides that the spouse shall not bind himself as surety without the written consent of the other spouse, but sets out a proviso: should a suretyship be provided in the ordinary course of a person’s business then such a suretyship is deemed valid even if spousal consent was not given.

What constitutes ‘in the ordinary course’ of that spouse’s business?

the Supreme Court of Appeal (SCA) was asked to answer this question in the case of Ockie Strydom v Engen Petroleum Limited (184/2012) [2012] SCA: Is a spouse bound by a suretyship even though he/she was unaware that his/her spouse had signed one? Or even if a spouse refused to give written consent?

The SCA had to decide what constituted acting in the ordinary course of one’s profession, trade or business. It found that the determination of whether a person acted in the ordinary course of his/her business was a question of fact that must be judged objectively with reference to what was expected of a businessman/businesswoman. For example, if you are a salaried employee and want to buy a car on lease, signing a suretyship will not be in the course of your ordinary business, and your spouse must consent in writing.

The opposite would apply if you are involved in a business such as a company, close corporation, partnership or trust, and have a commercial interest in the business’ success or failure. In this case, you can sign a suretyship and bind the joint estate, even if your spouse did not consent to the suretyship in writing. Thus, no consent is required to sign as surety, despite being married in community of property, as you signed the suretyship in the ordinary course of your business.