Understanding the Accrual System: CPI Adjustments & Contractual Exclusions

 

Marriages Under the Accrual System

The Matrimonial Property Act 88 of 1984 (the Act) provides that when a couple signs an antenuptial contract that excludes community of property and community of profit and loss, their marriage automatically follows the accrual system —unless they specifically agree to exclude it.

Under the accrual system, when the marriage ends (either through divorce or the death of a spouse), the spouse whose estate grew less during the marriage (or their estate if they have passed away) has a right to claim half of the difference in growth between the two estates.

The "accrual" of an estate is simply the increase in its net value from the start of the marriage to the time it ends.

The Act states that when calculating the starting value of a spouse’s estate at the time of marriage, adjustments must be made to account for inflation. This means that any changes in the value of money between the start and end of the marriage (whether due to divorce or death) are considered. To measure this change, the Consumer Price Index (CPI) — as published in the Government Gazette — is used as proof of how money’s value has shifted. This ensures that the original estate value is fairly adjusted to reflect its real worth at the time of dissolution.

While the CPI is commonly used in practice to adjust commencement values for inflation, parties can contract out of using CPI by specifying alternative methods in their antenuptial contract.

Use of CPI in Practice

The Consumer Price Index (CPI) is used to account for inflation when calculating how much a spouse's estate was worth at the time of marriage. To do this, the CPI at the time of divorce (or death) is divided by the CPI at the time of marriage. The result is used to adjust the starting estate value so it reflects what it would be worth in today's money. This ensures that each spouse's starting wealth is fairly measured in a way that considers changes in the cost of living over time.

Here’s a breakdown:

1. Net Commencement Value: This is the net value of each spouse’s estate at the beginning of the marriage, as declared in the antenuptial contract. It includes all assets minus liabilities.
2. Weighted Consumer Price Index (CPI): The CPI is a measure of inflation. To adjust the commencement value, you use the CPI to reflect how much the value of money has changed since the marriage began.
3. Adjustment Process:
• Identify the CPI at the time of marriage and at the time of divorce or death.
• Calculate the adjustment factor by dividing the current CPI by the CPI at the time of marriage.
• Multiply the commencement value by this adjustment factor to get the adjusted commencement value.

Example:

• CPI at Marriage (2000): 45.975
• CPI at Divorce (2010): 109.26
• Commencement Value: R100,000

Adjustment Factor: 109.26 / 45.975 = 2.37

Adjusted Commencement Value: R100,000 × 2.37 = R237,520

This adjusted value is then used to calculate the accrual, which is the increase in the value of each spouse’s estate during the marriage. The accrual is shared equally between the spouses upon divorce or death.

This process ensures that the initial values are adjusted for inflation, providing a fairer basis for calculating the accrual and dividing assets.

Contracting Out of Using CPI

Parties can include provisions in their antenuptial contract to use alternative methods for adjusting commencement values instead of the Consumer Price Index, such as market value, to account for inflation or other factors affecting asset values. This flexibility allows couples to structure their marital property regime to suit their specific needs and financial circumstances.

The couple (or their executors) can agree in writing on how to value their assets at the time of divorce or death. If they cannot agree, a sworn appraiser or valuer will assess the estates following estate valuation practices. If they cannot decide on an appraiser, they can agree that the Chairman of the Arbitration Foundation of Southern Africa will appoint one, and their valuation will be final unless there is a clear mistake.

Personal Injury Claims: Understanding Duty of Care, Negligence, and Contributory Negligence in Public Liability Cases

A discussion of Stephens v Minister of Police (21884/2017) [2025] ZAWCHC 72 (28 February 2025).

Introduction to Legal Principles

In personal injury cases, several legal principles come into play, including duty of care, negligence, and contributory negligence. The principle of duty of care requires entities to ensure that their premises are safe for public use. Negligence occurs when this duty is breached, resulting in harm. Contributory negligence arises when the injured party's actions contribute to their own harm.

Case Law: Stephens v Minister of Police

Facts of the Case

The case of Stephens v Minister of Police involved an 80-year-old man who fell from an unsecured landing at a police station. He had been directed by a police officer to wash his hands at a tap located outside. The plaintiff sustained injuries, including damage to his knee and facial lacerations. He claimed that the police officers failed to ensure the premises were safe for public use.

Court's Decision

The court found that the Minister of Police had a duty of care to ensure the safety of the premises. However, this duty was breached due to the absence of a railing and warning signs on the landing. Despite this, the court also determined that the plaintiff was 20% contributorily negligent for failing to look where he was going and not using the steps provided.

Key points from the court's decision include:

• Breach of Duty of Care: The absence of a railing and warning signs constituted negligence on the part of the defendant.
• Contributory Negligence: The plaintiff's failure to exercise caution and look where he was going contributed to his injuries.
• Apportionment of Liability: The Minister of Police was held liable for 80% of the plaintiff's damages, while the plaintiff was deemed 20% responsible.

Conclusion

The judgment in Stephens v Minister of Police highlights the importance of maintaining safe premises and the need for individuals to exercise reasonable care for their own safety. It emphasizes that entities must conduct thorough risk assessments and implement safety measures, while also considering the actions of the claimant when evaluating personal injury claims.

 

South African Citizenship Law: Court Rules in Favor of Stateless Child Born to Refugee Parents

A discussion of M.M.E and Others v Director General, Department of Home Affairs and Another (21970/2021) [2025] ZAGPPHC 202 (12 March 2025)

Introduction to Legal Principles

The South African legal system, particularly the South African Citizenship Act of 1995, outlines how citizenship is acquired. A key principle is that a child born in South Africa can become a citizen if one of their parents is a South African citizen at the time of birth. However, changes to the law have created complexities for children born to non-citizen parents. This article explores a recent court case involving a child born to refugee parents, highlighting the legal challenges and the court's decision to ensure the child's right to citizenship.

Legal Framework for Citizenship

• Citizenship by Birth: Before 2013, a child born in South Africa could become a citizen if one of their parents had permanent residence. After 2013, citizenship is granted if one parent is a South African citizen at the time of birth.
• Statelessness: The South African Citizenship Act aims to prevent statelessness by providing citizenship to children born in the country who do not have another nationality.
• Refugee Status: Refugees in South Africa face unique challenges in obtaining citizenship for their children, as they cannot easily access services from their country of origin without risking their refugee status.

Case Law: Facts and Court Decision

Background

The case involves a family of refugees from Rwanda living in South Africa. The parents, who are legally recognized refugees, have two daughters. The eldest daughter was born before the 2013 changes to the Citizenship Act and automatically became a South African citizen. However, the youngest daughter, born in 2015, did not qualify for automatic citizenship due to the new requirements.

The Challenge

• Statelessness: The youngest child was stateless because she did not qualify for South African citizenship and could not easily obtain Rwandan citizenship due to her parents' refugee status.
• Application for Citizenship: The parents applied for South African citizenship for their youngest child, but the application was refused by the Department of Home Affairs, citing that granting citizenship would be contrary to the Citizenship Act.

Court Decision

The High Court of South Africa reviewed the decision and ruled in favour of the applicants. The court declared the Department's refusal unlawful and ordered that the child be recognized as a South African citizen by birth under Section 2(2) of the Citizenship Act. This section ensures that a child born in South Africa who does not have the citizenship of any other country can become a South African citizen if their birth is registered in accordance with South African law.

Key Points of the Decision

• Prevention of Statelessness: The court emphasized the importance of preventing statelessness, especially for children, as it is constitutionally directed that every child should have a nationality from birth.
• Best Interests of the Child: The court prioritized the best interests of the child, noting that procedural technicalities should not override justice.
• Refugee Status Considerations: The court acknowledged the difficulties faced by refugees in accessing services from their country of origin, which would imperil their status and that of their family.

Conclusion

The court's decision highlights the importance of ensuring that children have a nationality from birth, as mandated by constitutional principles. It also underscores the challenges faced by refugee families in navigating citizenship laws. The ruling provides a significant precedent for similar cases, emphasizing the need to balance legal technicalities with the best interests of the child and the prevention of statelessness.