1. The principle of equal Management of the Joint Estate

• Marital power was abolished by s29 of the General Law Fourth Amendment Act on 1 December 1993.

a) What has marital power been replaced with?
Equal concurrent management of the Joint Estate as set out in S14 & S15 of Matrimonial Property Act.

• The effect of the abolition is that it has done away with the restrictions which marital power placed on the capacity of the wife to contract and litigate.

b) What does s14 provide:
A wife married in Community of Property has the same capacity, with reference to the disposal of the assets of the Joint Estate, the contracting of debts which lie against the Joint Estate and the management of the Joint Estate as the husband had immediately prior to the commencement of the Act.

• This means the husband and wife now have equal powers to manage the joint estate and incur debts.
• However, section 15(1) provides:

A spouse married in Community of Property can perform only juristic act with regard to the Joint Estate without the consent of the other spouse, except such juristic acts as are specifically excluded by the Act.

• Thus, there are certain acts which a spouse may not perform without the consent of the other spouse.
• Each spouse's capacity to act is thus restricted.

2. The different forms of consent
Four different forms of consent required:

1. Prior written consent, attested by two competent witnesses in respect of each transaction separately.
2. Written consent, attested by two competent witnesses, in respect of each transaction separately.
3. Written consent without any further requirements.
4. Oral or written consent.

1) Prior written consent, attested by two competent witnesses
This form of consent is necessary for:

a) Transactions requiring registration in the deeds office, such as transfer of immovable property which constitutes a part of the Joint Estate, registration of mortgages or servitudes over immovable property which is part of the Joint Estate.

b) Suretyship

• RATIFICATION is NOT possible.
• Thus, written consent must be obtained beforehand.

2) Written consent, attested by two competent witnesses
This form of consent is necessary for:

a) Contracts for alienation or burdening with a mortgage or servitude, a conferring of any other real right over immovable property which constitutes a part of the Joint Estate.

b) Credit receipt according to a credit agreement.

c) A contract of sale in terms of the alienation of Land Act for the purchase of immovable property.

• RATIFICATION is possible.
• Thus, written consent from the other spouse can be obtained after the juristic act.

3) Written consent without any further requirements
This form of consent is necessary for:

a) Alienation, cession or pledging of shares, stock, debentures, bonds, insurance policies, mortgage bonds or similar assets and any investment by or on behalf of the other spouse in a financial institution.

b) Alienation or pledging of assets held mainly as investments and which form part of the Joint Estate (e.g. jewels, coins, stamps and paintings).

c) Withdrawing of money credited to the name of the other spouse in any account in a banking institution, building society or post office savings account.

d) Institution of legal proceedings.

• RATIFICATION is possible.
• Thus, written consent from the other spouse can be obtained after the juristic act.

4) Oral or tacit consent
Oral or tacit consent must be given in the following cases:

a) Household effects
(i.e. Consent is required for alienation and pledging of furniture or other effects of the common household, which form part of the Joint Estate (e.g. fridge, washing machine).

b) Money
Neither spouse may receive, without the other's permission, money which is owed to the latter and is derived from one of the following sources:

i) Remuneration in any form, including a bonus, pension or gratuity for services rendered or derived from his profession or trade.
ii) Income derived from the other spouse's separate property.
iii) Interest and dividends on, or proceeds of shares, investments, policies or annuities.
iv) Inheritance, donation, bursary or prize bequeathed, made or awarded to the other spouse.

c) Donations
A spouse may not, without the other's consent, donate any asset from the joint estate to anyone else, if this would unreasonably prejudice the interests his marriage partner has in the estate.

• Factors that must be taken into account to determine whether a spouse's interests in the joint estate will be unreasonably prejudiced:

Value of the donation, the reason for making it, their standard of living, their social and financial position.

3. Acts for which no consent is necessary

• No consent is necessary for acts not mentioned in the Act.
• No consent from the other spouse is required in the following circumstances, in terms of the Act:

a) If the transaction concerned is performed by a spouse in the course of his profession or trade (i.e. a contract to alienate his own immovable property, receive credit, alienate shares, bind himself as surety and institute legal proceedings).
b) Transactions on the stock exchange.
c) Transactions concerning deposits at banking institutions.

4. Protective measures in the Matrimonial Property Act in respect of the administration of the joint estate
You must look firstly at protection afforded to third parties and secondly at protection afforded to spouses inter partes:

1. When a spouse concludes a transaction with a third party without the necessary consent.
2. When one spouse unreasonably withholds consent.
3. When one spouse prejudices the interests of the other spouse in the joint estate in another way.

1) Protection of third parties
There are two circumstances that may arise here:

a) The third party does not know or cannot reasonably know, that consent is required from the person's spouse or that the requisite consent has not been obtained (third party is bona fide).

• Distiller's Corp v Modise: "cannot reasonably know" implies that the matter must be considered from the point of view of the reasonable person.
• The consequence of this is:

The transaction is valid and enforceable by the third party in terms of S15(9)(a) of the Matrimonial Property Act. Consent is deemed to have been given.

b) The third party is well aware that consent is required from the person's spouse and that this consent has not been obtained (third party is mala fide)

• Consequences: The Act is silent, but according to case law (Amalgamated Bank v Lydenberg and Bopape v Moloto) the transaction is void.
• The consequence of this is:

The spouse who had to consent, can if asset belonging to the Joint Estate has already been transferred to the third party, reclaim it from the third party.

2) Protection of spouses inter partes
There are various remedies one spouse has against the other spouse.

5. Capacity to litigate
This is a person's capacity to act as a party in a court case.

a) Section 17(1) provides:
A spouse married in Community of Property cannot institute legal proceedings against another person or defend legal proceedings instituted by another person without the written consent of the other spouse.

b) What is the consequence of a spouse not complying with this section?
The validity of the proceedings is not affected. The third party is completely protected.

c) What happens if costs are awarded against the spouse who instituted or defended legal proceedings without the written consent of the other spouse? The costs must be recovered from the separate property of the litigating spouse. If the separate property is not sufficient, costs can be recovered from the Joint Estate and the court can order an adjustment to be effected in favour of the innocent spouse upon division of Joint Estate. d) When can a spouse institute or defend legal proceedings without the consent of the other spouse?

1. In respect of his separate property.
2. For recovery of damages for non patrimonial loss due to a delict committed against him.
3. In respect of any matter relating to his trade or profession.

• In terms of s17(4) an application for the sequestration of a joint estate must be made against both spouses.
• The application will not be dismissed if it is brought against one spouse only, if the applicant satisfies the court that despite reasonable steps, he was unable to establish whether the debtor was married in community of property or the name and address of the spouse.
• S17(5) provides which spouse should be sued when a debt is recoverable from the joint estate.

e) Who must be sued if the debt was incurred for household necessaries?
Both spouses, jointly or either spouse separately.
f) Who must be sued for debts binding the joint estate?
Both spouses jointly or the spouse who incurred the debt.
g) Who must be sued for debts in connection with the spouse's separate property?
Spouse whose separate property it is.

If you would like to get Ronald Bobroff & Partners Inc to assistance you with any Marriage in Community of Property issues  contact us or call us on 011 880-6781 or on our 24hour toll free number 0860 100 184.