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Receivers and liquidators

When parties are married in community of property there is usually a fifty/fifty division of the assets. However, this isn't always the case. Recently I acted for the man in a trial in the Cape Regional Court. Him and his wife were married in community of property but the end result was his wife only being awarded 15% of his pension and no equity in the house. The court allowed forfeiture due to her gross misconduct and failure to contribute.

What happens when a court awards an equal division of the assets and the parties are unable to decide on how the assets are to be divided? The court has the general power to then nominate someone to collect, realise and divide the estate. Such a person is called a liquidator, receiver or curator.

In Robson v Theron 1978(1) SA 841(A) the court found that a court has the discretion in making a division of the joint estate, having regard to the particular circumstances and what is most advantageous to the co-owners and what they prefer. A court is however not obliged to appoint a liquidator upon dissolution of a partnership. A court has a discretion to appoint a liquidator.

The courts also look at the size of the estate in deciding whether a liquidator should be appointed. In Schoeman v Rokely Farming Co (Pty)Ltd the court found that there was no practical purpose for the appointment of a liquidator. There were no difficulty with regard to capital contributions and the partnership was of a very restricted nature.

When the parties to a divorce cannot agree on a division of the assets, the spouse bringing the application for the appointment of a receiver or liquidator is exercising his or her right to apply for this. There has to be a good reason shown by the court as to why the appointment should not be allowed.

Marriages are seen by the courts sometimes to be similar to commercial partnerships. I had a case where the parties, married in community of property, owned four houses together. Two were bonded and the other two paid off. They couldn't agree as to whether the houses should be sold or whether one party would buy the share of the other party. They furthermore couldn't agree on the value of the house. The only solution in this case, as agreed between the parties, was for a receiver to be appointed. The courts often apply to divorces the principles applicable to the appointment of receivers and liquidators to divide assets of commercial partnerships.

Section 7(1) of the Divorce Act encourages parties to divide the joint estate by agreement. A court granting the divorce may with a written agreement between the parties make an order with regard to division of the assets. Parties should be encouraged to settle a divorce amicably.

The appointed receiver or liquidator however pays himself from the proceeds of the joint estate, and such an appointment is a burden to the joint estate, because, through the appointment, the value of the joint estate is reduced. However when it is necessary, it is necessary and the appointment of a receiver and liquidator should be seen as a right to a party when circumstances allow for the appointment.

Related articles

Section 7 notice in terms of the Matrimonial Property Act

Marriage in community of property

Property clause in divorce settlement

Divorce & finances


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