2019-04-15 | Karen Van Rensburg

Rule 43

When marriages breakdown, and divorce proceedings are considered families are often in a state of upheaval. The common law in the past provided for interim relief. The law in this regard has not changed but the Uniform Rules of Court now provide for a procedure to bring this interim matter to conclusion as expeditiously as possible.

Rule 43 proceedings are fairly speedy remedies and they provide for interim relief pending the outcome of a divorce action. Interim relief is limited to maintenance, a contribution towards the costs of the pending matrimonial action, interim custody of any child and interim access to any child.

Unfortunately, it often occurs that a substantial period of time elapses between the breakdown in the marital relationship and the ultimate resolution of the matrimonial dispute in a court of law. The four itemised issues often require resolution, as they represent points of conflict between the parties. The remedy is speedy in as much as once a divorce is contemplated or a divorce summons has been issued or even after a summons has been issued, and because of circumstances, one party may claim interim relief against the other. A short affidavit setting out the reason for the relief they seek. The other party is afforded a period of 10 days in which to respond to that relief and thereafter the matter is set down on 10 days notice to the Respondent and the Registrar of the High Court.

In regard to interim maintenance, the general rule is that the Applicant’s spouse is entitled to reasonable maintenance pending the outcome of the divorce proceedings. The level of this maintenance is dependent upon the standard of living of the parties during the marriage. It is not however a blank cheque, and an Applicant’s spouse may not be entitled to every luxury which that party once enjoyed even though the other spouse is extremely wealthy. As far as a contribution to costs is concerned, the common law position has always been that parties should be placed on an equal footing for the purposes of litigating a divorce action. Again this is not a blank cheque, and the Courts usually apply a test which has as its result, whether or not the Applicant party is placed in a position to adequately present his or her case.

What the Courts do take into account, is the nature of the litigation, the scale upon which the other party is litigating and the scale upon which the Applicant party intends to litigate with due regard to the Respondent’s financial position.

This approach has been underscored by the Court’s interpretation of Section 9 of the Constitution, and the requirement that both parties to the dispute must be equal before the law and granted the equal protection of the law. Issues regarding interim custody and access to any child often enjoy the attention of our Courts. Unfortunately the reality of a divorce is that the children can’t live simultaneously with both parties given that the household has now split. This becomes the significant factor in the early phases of a divorce, whilst the parties are unsettled and the children are unsettled.

When bringing an application of interim custody and access to any child, our Courts adopt the approach that, as upper guardian of all minors, the interests of the child or children concerned predominate. And so, the facts which are placed before the Court usually involve the best interests of the children.

The relief granted in terms of Rule 43 is by its very nature interim, and it comes to an end when the divorce proceedings are finalised and permanent orders are given in respect of maintenance, costs of the action, custody and access to children.

The order does not have to be set aside by a competent Court; it follows as a matter of law. As society has evolved and developed, so too has the complexity of Rule 43 Applications and they often enjoy significant attention in our Courts as a precursor to any final Order that the Court may make on trial. Any person who is going through a divorce and is in need of maintenance or a contribution towards costs or some sort of regulation of custody and access to any child, should raise the question of interim proceedings in terms of the provisions of Rule 43, with their attorneys. Given the expedited and somewhat robust approach which the Courts adopt in Rule 43 procedures, and given the length of time that some divorce matters take to reach conclusion, the Rule also provides in Rule 43(6), for a party affected by a change in circumstances for example the loss of a job, the reaching of the age of majority of a child, a change of schooling or any other matter that would have a significant effect on any of the issues covered by a Rule 43 Order, is entitled, utilising the same method, to approach a Court for a reconsideration of any maintenance order, contribution to costs, interim custody or access to any child which had previously been ordered in terms of Rule 43.

It is thus a very effective and efficient method of regulating circumstances between divorcing parties.

Living Annuities And The Calculation Of An Accrual

When parties marry, they must decide whether or not they wish their marriage to be in or out of community of property. Once an election has been made in regard to the matrimonial property system, it is not particularly easy to change because of the effect the legal position may have on the vested rights of third parties, particularly creditors. This is not to say that it can’t be changed, but it a time consuming and expensive procedure.

An Antenuptial Contract is a contract entered into prior to the parties being married, in terms of which they govern their matrimonial property system by excluding or varying the normal consequences of a marriage i.e. that of one In Community of Property.

More recently, and after the commencement of the Matrimonial Property Act, 88 of 1984, the legislature introduced the accrual system, the fundamental idea of which is that that one spouse contributes fina ncially and otherwise to the growth of the other spouses estate and should therefore be entitled to share in that spouses estate on the dissolution of the marriage. In other words, the foundation stone of the accrual system is that upon the dissolution of a marriage out of community of property and community of profit and loss, both spouses ought to share in the growth that their estates have shown, without there in fact having been a joint estate during the marriage.

It is important to contextualise the accrual system because, where parties are married in community of property, they own their assets in joint, undivided shares. In Section 1 of the Income Tax Act, 58 of 1962, provides for a living annuity, being an annuity acquired by an annuitant spouse retiring from a pension fund during the course of the marriage. A thorny question has arisen. Does the living annuity so acquired by the annuitant spouse form an asset and hence growth in that spouse’s estate, to be taken into account upon divorce.

The purpose of a living annuity is to provide the annuitant with an income. It is not an asset nor does it create wealth in the form of an asset.

The purchase of an annuity results in an income stream to the spouse. Upon the purchase of a living annuity, the purchase price being the asset, no longer vests in the purchasing spouse, but belongs to the insurer. This value or purchase price fluctuates from time to time with market forces and also depletes over time with withdrawal. Upon the purchasing spouse’s death, an insurer must pay any remaining capital to that person’s nominee either as an annuity or as a lump sum. If there is no such nomination the capital must be paid as a lump sum to the purchasing spouse’s nominee and if no such nomination the capital must be paid as a lump sum to the purchasing spouse’s estate. A living annuity thus is not a pension. It does not meet the definition of a pension as defined in the Pension Funds Act. As such, the purported capital value of a living annuity does not form part of a spouse’s accrual. The reasoning for this is quite clear. The purchaser of a living annuity only has the right to receive a particular annuity installment subject always to the condition that he is alive to receive it. If he does not survive to the next date of receipt, then, the capital and its destination will be determined by whether or not the purchasing spouse nominated a beneficiary. On the other hand, the monthly income derived by the purchasing spouse, from the annuity, does form part of total income which has a bearing on the means to pay maintenance, if maintenance is claimed.

Thus in summary, although the provision of income post retirement is often referred to as a pension, the purchase of a living annuity results in an annuity stream comprising income whilst a pension fund is an asset which would form part of a party’s estate, for the purposes of calculating an accrual.

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