The Supreme Court of Appeal’s recent judgment in DCM v CCM has set a firm boundary on how marital assets are valued in divorce proceedings when an antenuptial contract is in place. The court ruled that the value of a party’s estate, as declared in the contract, is conclusive proof of that value and binding on both spouses upon dissolution of the marriage. This determination creates a stark divide between the information contained in the contract and the information held in a separate statement required by law.

What the ruling actually means

The parties were married under an antenuptial contract subject to the accrual system, which was signed on 29 April 2009. In that contract, the wife listed a nil commencement value for her estate, while the husband declared a value of R68,746,000. During their divorce, the wife argued that this figure was overstated and that the law allowed her to challenge it using evidence. The husband contended that the figure was agreed upon and final. The SCA found in favor of the husband, affirming that the declaration within the contract is the value as agreed and is conclusive proof of that value.

Under the Matrimonial Property Act, the SCA explained, there is a clear distinction between a declaration made in the antenuptial contract and a statement made under section 6(1) of the Act. A declaration in the contract constitutes the value as agreed between the parties and is binding. This is in contrast to a signed statement attested by a notary, which is a unilateral act that does not require the other party’s agreement. That statement serves only as a prima facie proof of the value and is subject to challenge on dissolution of the marriage.

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Given the prominence of marriage in society, the ruling means that a spouse who has overstated their estate value in the contract cannot be forced to prove a different figure during a divorce. Conversely, a party who has undervalued their estate in the contract may find that their spouse cannot claim the full benefit of the accrual system, effectively negating the financial protections intended by the parties when they chose to share accrual.

Preventing future disputes

A notary is duty bound, especially if acting for both parties, to advise that a substantial commencement value should not be declared in the antenuptial contract. Instead, the value should be contained in a signed statement attested by the notary. This statement is filed in the notary’s protocol with the antenuptial contract. A copy must be provided to the other party.

The impact of the accrual choice

The choice between an antenuptial contract subject to the accrual system and one excluding the accrual system is no longer simple. The exclusion of the accrual system is subject to the provisions of section 7(3) of the Divorce Act. This section affords financial relief to the economically disadvantaged spouse. A court has the discretion to order the transfer of assets from one party to the other if the court deems it just.