Constitutional Court Ruling on Asset Redistribution in Accrual Regime Marriages

 

In this article, we discuss the Constitutional Court ruling in the case of EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others [2023]

Introduction:

On October 10, 2023, the Constitutional Court of South Africa delivered a significant judgment in two separate applications seeking confirmation of orders declaring section 7(3) of the Divorce Act 70 of 1979 invalid and unconstitutional. The cases, CCT 364/21 and CCT 158/22 centred on the issue of whether parties married under an accrual regime may be awarded redistribution of assets by a court, regardless of when they were married, or whether the marriage ends through death or divorce.

Discussion of the Case:

CCT 364/21 - Dissolution of Marriage by Death:

In CCT 364/21, the case revolved around divorce proceedings initiated by Mrs. B against her late husband, Mr. B, who were married under an antenuptial contract that excluded community of property. During the divorce process, Mr. B passed away, dissolving the marriage. The primary constitutional challenge was the alleged discrimination in section 7(3) of the Divorce Act, which only applied to marriages ending in divorce, not death. Mrs. B argued that this distinction was unconstitutional, as it unfairly discriminated against spouses married before November 1, 1984. The High Court found this distinction unconstitutional and ordered an amendment to the Divorce Act, including redistribution in cases of marriages dissolved by death.

In a unanimous judgment, the Constitutional Court affirmed the High Court's decision. It found that section 7(3) created an unjustifiable differentiation between spouses married before and after November 1, 1984, based solely on the date of their marriages. This differentiation was deemed irrational and unconstitutional. The Court ordered an interim reading-in of an analogous provision and granted Parliament 24 months to address the issue comprehensively.

CCT 158/22 - Marriages Before and After November 1, 1984:

In CCT 158/22, Mrs G sought a redistribution order under section 7(3) of the Divorce Act after her 30-year marriage broke down. However, she was disqualified from its provisions due to the limitation that it applied only to marriages out of community of property concluded before November 1, 1984. Mrs. G argued that this limitation was unconstitutional as it arbitrarily discriminated against spouses married before and after the mentioned date. The High Court ruled in favour of the government, citing the importance of honouring contractual agreements. 

In the Constitutional Court, Mrs G continued her challenge against section 7(3), alleging that it unfairly discriminated against spouses in different types of marriages, particularly marriages concluded after November 1, 1984. The Court upheld her challenge, finding that the differentiation based on the availability of the accrual regime was rational but created indirect discrimination against women. The Court ordered the suspension of the declaration of invalidity for 24 months and an interim severance of the offending differentiation in section 7(3)(a) while granting Parliament time to address the constitutional issues.

Conclusion:

In both cases, the Constitutional Court has declared section 7(3) of the Divorce Act 70 of 1979 invalid and unconstitutional, allowing for the potential redistribution of assets in marriages governed by the accrual regime. These rulings have far-reaching implications for spouses married before and after November 1, 1984. The Court's decision emphasizes the need to rectify gender-based disparities and grants Parliament time to enact legislative changes to address the constitutional issues. These rulings mark a significant step towards achieving greater fairness and equity in marital property matters in South Africa.

Legal Case Analysis: Lion Ridge Body Corporate v. Alexander - Disconnecting Utilities in Sectional Schemes

  

Introduction:

The Lion Ridge case revolves around a pivotal legal question - Can a Body Corporate within a sectional scheme disconnect water and electricity services for non-payment? In this analysis, we will delve into the details of the case, its background, and the court's findings, shedding light on the intricacies of this legal matter.

Summary of the Court's Findings:

The Lion Ridge Body Corporate initiated legal proceedings against Alexander and other respondents, seeking to recover arrear levies, water, and electricity charges. They further sought an order to disconnect electricity services to their units and limit water supply to six kilolitres per month until the judgment debts were settled. Additionally, Lion Ridge requested that the respondents be held liable for the costs associated with the disconnection and reconnection of utilities.

The court, however, denied the relief sought by Lion Ridge, citing the profound constitutional rights implicated in this matter. These rights include the right against arbitrary deprivation of property, the right to sufficient water, the public law right to receive electricity, and the right of access to adequate housing. The court highlighted that any relief that limits these constitutional rights is only permissible if authorized by law.

The crucial legal argument was that neither the Sectional Titles Act nor the standard Management and Conduct Rules provided the authority for a Body Corporate to interfere with a member's utility supply. The Act permits a Body Corporate to enter into agreements concerning utility supply, but such agreements must align with the legal framework provided.

In this case, the court emphasized that Lion Ridge failed to establish any provision within the Sectional Titles Act, a Body Corporate rule, or an agreement term that authorized the relief they sought. The absence of such authorization rendered their claims legally untenable.

Conclusion:

The Lion case underscores the significance of adhering to the legal framework when attempting to limit or disconnect utilities for non-payment within a sectional scheme. While the need to recover debts is acknowledged, constitutional rights, including property rights, access to water, and electricity, must be respected. Any relief affecting these rights must be explicitly authorized by law, be it through the Sectional Titles Act, Body Corporate rules, or agreements. In the absence of such authorization, as was the case here, such relief cannot be granted. This case serves as a significant legal precedent, emphasizing the importance of legal compliance within sectional schemes when dealing with utility disconnections.

University of Pretoria v Roger and Others: Exploring Municipality Land Use Rights, and Noise Nuisance

 Introduction:

In the case of University of Pretoria v Roger and Others, the University of Pretoria ("the University") initiated legal proceedings to address the noise nuisance caused by several pubs close to the University. This case delves into the conflict between land use rights, liquor licenses, and the protection of students' well-being and academic pursuits, with significant implications for zoning regulations and permissible noise levels.

Discussion of the Facts:

The University alleged that the Jolly Roger and other respondents operated bars and nightclubs on premises situated along Lynnwood Road, known as the "Strip," directly across from the University campus. This location proximity has led to complaints from nearly 1,000 students residing in four University-owned residences. The complaints center on the incessant noise emanating from the Strip, disturbing students' ability to study and rest. An environmental noise impact assessment conducted by an acoustics expert confirmed that noise disturbances had occurred at two measuring points on the campus, constituting a severe contravention of the Noise Control Regulations.

Court's Findings:

The court addressed several key arguments. Firstly, it addressed the "authority" attack by respondents, confirming the Registrar's authorization to launch the application on behalf of the University. Furthermore, the court acknowledged that the premises were zoned as Business 1, allowing their use as Places of Refreshment, but it rejected the argument that the Town Planning Scheme allowed for a secondary use as Places of Amusement.

The court considered the steps taken by the Jolly Roger to mitigate noise, acknowledging their success in this regard. Consequently, the claim for an interdict in relation to noise nuisance against the Jolly Roger was dismissed. However, the court emphasized that liquor licenses could not supersede Land Use Rights, and thus, the claim for an interdict against the Jolly Roger's violation of land use rights succeeded.

Additionally, lease agreements contained clauses prohibiting tenants from using the premises for illegal or improper purposes or causing disturbances to adjacent properties. The court ruled that the landowners were entitled to enforce these clauses and granted an order against them.

Conclusion:

In summary, the court issued an order interdicting the respondents from conducting any business in violation of the permissible land use rights outlined in the Pretoria Town Planning Scheme. The respondents were also interdicted from creating or allowing anyone to create, a noise nuisance exceeding the noise levels permitted by the Land Use Rights. The seventh respondent was specifically instructed to take all reasonable measures to ensure that the second and third respondents did not cause a noise nuisance. This case underscores the significance of upholding land use regulations while considering the well-being of the University's students in a densely populated urban area.

Stemmet v Mokhethi - Commencement of Prescription in Latent Defects Case

Introduction:

In the case of Stemmet and Another v Mokhethi and Another, heard on October 4, 2023, the South African Supreme Court of Appeal (SCA) grappled with the crucial question of when prescription starts to run in cases involving latent defects. The dispute revolved around a property sale where the purchasers, the Mokhethis, alleged that the sellers, the Stemmets, had concealed significant structural defects. The central legal issue at hand was whether the Mokhethis had obtained sufficient knowledge of the defects to initiate their claim within the prescribed time frame under the Prescription Act 68 of 1969.

Facts of the Case:

The Mokhethis purchased a property from the Stemmets in Fichardt Park, Bloemfontein, believing it to be in good condition. After taking possession, they discovered structural defects, including structural cracks, which they alleged the Stemmets were aware of but had failed to disclose. Subsequently, on July 19, 2017, the Mokhethis initiated legal proceedings against the Stemmets, claiming damages for the undisclosed defects. They argued that the defects were fraudulently concealed, leading them to purchase the property under false pretences.

Legal Argument for and Against Prescription:

In anticipation of a potential special plea of prescription, the Mokhethis asserted that they became aware of the defects on August 12, 2014, when informed by Absa that the defects were due to the property being built on clay soil, which expanded and retracted, and that the foundation was inadequately underpinned and supported. They sought damages, including the cost of repairs, amounting to R128,423.26.

The primary legal issue before the court was whether the Mokhethis had acquired the minimum facts necessary for prescription to start running within the framework of the Prescription Act. The Act stipulates that prescription commences when the creditor has the requisite knowledge of both the existence of the cause of action and the identity of the person responsible for the damage.

Court's Finding:

The majority of the full court of the Free State Division of the High Court had ruled in favour of the Mokhethis, rejecting the special plea of prescription. However, the SCA, after a careful examination of the facts and applicable legal principles, came to a different conclusion.

The SCA noted that the Mokhethis had reasonable grounds to believe that the defects existed as early as June 2014. They were in possession of enough evidence to conclude that the Stemmets had attempted to conceal these latent defects through patchwork on the cracks. The court emphasized that prescription begins when the creditor has the minimum facts necessary to initiate legal action, not when they are fully aware of the extent of their legal rights or possess all the evidence to prove their case.

 

In essence, the SCA held that the Mokhethis had sufficient knowledge of the essential facts, namely the existence of the defects and the alleged fraudulent concealment, well within the prescription period. Therefore, the Mokhethis' claim had indeed prescribed.

Conclusion:

The Stemmet v Mokhethi case provides clarity on when prescription begins to run in cases involving latent defects under the Prescription Act 68 of 1969. It underscores that the commencement of prescription is not postponed until the creditor is fully aware of all details or has evidence to prove their case comfortably. Instead, prescription starts when the creditor has acquired the minimum facts necessary to institute legal action. In this instance, the Mokhethis' claim was found to have prescribed, leading to the dismissal of their claim with costs. This judgment reaffirms the importance of timely action in pursuing claims related to latent defects and has implications for similar cases in South African jurisprudence.

General Principles of Restraint of Trade in South Africa: the Kleynhans case

 

Summary:

The case of Micros South Africa (Pty) Ltd and Others v Kleynhans and Others involves an urgent application for interdictory relief to enforce a restraint of trade and confidentiality agreement against Ms Kleynhans, who intended to take up employment with a competitor. The court ultimately granted the interdict, and here, we discuss the general principles and enforcement rationale.

General Principles of Restraint of Trade in South Africa:

In South Africa, restraint of trade clauses are typically valid and enforceable unless they are unreasonable or contrary to public policy. The principle of pacta sunt servanda, emphasizing the honouring of freely and voluntarily undertaken obligations, guides the enforceability of such agreements. An unreasonable restraint of trade is one that prevents a party from engaging in trade or commerce without a corresponding interest deserving of protection.

Enforcement Against Kleynhans: In this case, the applicants successfully argued for the enforcement of a restraint of trade and confidentiality agreement. Several key factors influenced the court's decision:

• Legitimate Interest: The applicants demonstrated a legitimate interest in protecting their trade connections and confidential information related to specialized software for the hospitality industry. Ms. Kleynhans had extensive knowledge of their Opera products and strong customer relationships.
• Reasonableness: The restraint was found to be reasonable as it aimed to prevent employees from utilizing knowledge and connections acquired during their employment to offer similar products to the same customer base. The duration of one year was deemed reasonable.
• Public Interest: Enforcing the restraint was not against public interest, as it aimed to protect confidential information and prevent unfair competition. It balanced the interests of the applicants with Ms Kleynhans's right to employment.
• Confidential Information: The court acknowledged that confidential information in an employee's head, such as business strategies and trade secrets, can be subject to interdiction if unlawfully disclosed, even if not documented.

Conclusion:

The court's decision to enforce the restraint against Ms. Kleynhans aligns with the principles of legitimate interest, reasonableness, and protection of confidential information. Ms. Kleynhans, as an employee, had voluntarily agreed to the restraint, and the court found that her actions posed a substantial risk of taking proprietary interests to a competitor, thereby justifying the interdict. In conclusion, this case underscores the importance of upholding valid restraint of trade agreements while ensuring they are reasonable and aligned with the law to strike a fair balance between protecting business interests and individual rights.