A commencement value in an ANC can determine whether a spouse has a substantial accrual claim or no claim at all. This often becomes clear only when the marriage ends and the parties begin calculating the growth of their respective estates.
A spouse may then discover that the antenuptial contract records a commencement value that appears inflated, unsupported by a valuation or inconsistent with the spouse’s actual financial position when the marriage began.
The immediate question is whether the figure can be replaced with the historically correct value. Following the Supreme Court of Appeal’s decision in Manelis v Manelis, the answer will usually depend on where the figure was recorded and whether there is a recognised contractual basis for challenging it.
The fact that a commencement value in an ANC was financially inaccurate may not, by itself, allow a court to substitute a different figure.
Commencement Value in an ANC: Why the Figure Matters
The accrual system compares the growth of each spouse’s estate during the marriage. It does not give either spouse immediate ownership of half of the other spouse’s property.
An accrual claim ordinarily requires a calculation of each spouse’s net estate at the dissolution of the marriage. The inflation-adjusted net value at commencement is deducted from the net value at dissolution. The spouses’ respective accruals are then compared.
A simplified calculation may look like this:
- Declared commencement value: R1 million
- Value after the required CPI adjustment: R2.3 million
- Net estate at dissolution: R8 million
- Approximate accrual: R5.7 million
This example is deliberately simplified. Liabilities, excluded assets, inheritances, donations and other legally relevant items may affect the final calculation.
The CPI adjustment applies to the commencement value. It does not mean that the entire present estate is adjusted for inflation. Confusing these two steps can materially distort an accrual claim.
If the commencement value is very high, the adjusted value may reduce or eliminate the apparent growth in that spouse’s estate. Establishing the legally operative figure should therefore happen before substantial money is spent on forensic accounting.
Practical step: Obtain the registered ANC and a reliable preliminary estate calculation before deciding how extensive the financial investigation should be.
What Manelis v Manelis Changed
Manelis v Manelis concerned spouses married out of community of property subject to the accrual system. Their ANC recorded the wife’s commencement value as nil and the husband’s as R68.7 million.
During the divorce litigation, the wife sought to dispute the husband’s declared figure. The Supreme Court of Appeal addressed whether a commencement value in an ANC was merely prima facie evidence that could be displaced by proof of the actual historical value.
The Court concluded that a commencement value agreed and declared in the ANC itself binds the spouses. A party cannot go behind that contractual figure merely by proving that the spouse’s estate was worth something different when the marriage commenced.
This makes challenging commencement values a contractual enquiry. The question is not confined to whether the number was financially correct. The enquiry is whether the contract can be attacked or corrected under recognised principles of contract law.
The judgment should not be read as removing the wording of section 6(3) from the Matrimonial Property Act. Its significance lies in the distinction between the contractual force of a value agreed in the ANC and the evidential treatment of a value recorded through the statutory section 6 process.
The Difference Between an ANC and a Section 6 Statement
The first document to examine is the registered antenuptial contract. A commencement value in an ANC forms part of the spouses’ contractual arrangement.
A section 6 statement serves a different purpose. Where the ANC does not declare a spouse’s commencement value, section 6 permits the value to be recorded in a separate statement that complies with the statutory requirements.
The distinction matters because a section 6 statement and an agreed contractual declaration do not necessarily have the same legal effect.
The timing and formalities of a section 6 statement also matter. The statement must be made before the marriage or within the statutory six-month period after the marriage. The other spouse must sign it, a notary must attest it, and it must be filed with the notary’s protocol copy of the ANC.
If you are uncertain which document contains the value, obtain both the registered ANC and the notarial protocol records. A heading, annexure or informal asset schedule should not be assumed to be a compliant section 6 statement without examining how it was executed and filed.
Practical step: Ask the notary who attended to the ANC, or the notary holding the protocol, for the protocol copy and any related commencement-value documents.
What Happens If No Value Was Declared?
Where no commencement value was declared in the ANC or in a compliant section 6 statement, section 6(4)(b) may result in the value being treated as nil unless a contrary value is proved.
This creates an evidential enquiry. The spouse alleging a value other than nil must establish the net value of the estate when the marriage began. It is not enough to show that the spouse owned a business, property or investments. The associated liabilities must also be considered.
Evidence that may assist includes:
- Bank and investment statements from the period around the marriage
- Company registers, share certificates and historical financial statements
- Property deeds and mortgage balances
- Vehicle-finance and loan-account records
- Tax returns and financial-planning records
- Contemporaneous business, property or share valuations
- Schedules prepared when the ANC was drafted
- Correspondence with the notary, accountant or financial adviser
- Evidence of debts or contingent liabilities at commencement
Documents created close to the marriage date will generally be more useful than a reconstruction prepared many years later without supporting source records.
A spouse resisting the alleged value may examine whether the asset was owned at commencement, whether liabilities were omitted, whether a modern valuation has been projected backwards, and whether the reconstruction is supported by contemporaneous evidence.
When Challenging Commencement Values May Still Be Possible
After Manelis, challenging commencement values requires more than evidence that the number was wrong. The available route depends on the evidence concerning the formation and contents of the contract.
Potential grounds may include:
- Fraudulent misrepresentation
- Another legally actionable misrepresentation
- Duress
- Undue influence
- A mistake affecting consensus
- Rectification based on a common error
Each ground has its own legal requirements. The availability of a remedy depends on the facts, the evidence and the relief pleaded.
Rectification of an ANC
Rectification of an ANC is often misunderstood. It is not enough for one spouse to say that the written number was objectively inaccurate.
A rectification case ordinarily contends that the written agreement does not reflect the parties’ true common intention. The spouse seeking rectification must identify what the parties actually agreed and show how the written ANC failed to record that agreement.
For example, assume both spouses gave written instructions that their commencement values were R2 million. The exchanged draft recorded R2 million, but the signed ANC recorded R20 million because of a transcription error. The instructions, drafts and notary’s file may support rectification of an ANC.
The position differs where a spouse agreed to and signed an ANC recording R50 million, but a forensic accountant later concludes that the historical estate was probably worth R8 million. Without evidence of a different common agreement or another recognised contractual ground, the valuation discrepancy alone may be insufficient.
Practical step: If rectification of an ANC is being considered, preserve the drafting history. Financial records prove value. Drafts, instructions and correspondence may prove what the parties agreed.
Warning Signs That Require Investigation
The following circumstances may justify investigation:
- The ANC was signed shortly before the wedding
- One spouse did not receive separate legal advice
- No independent valuation supported the declared value
- One spouse was substantially more financially sophisticated
- The notary received most instructions from one spouse
None of these factors alone necessarily invalidates an ANC. They are circumstances to investigate, rather than independent grounds for setting the contract aside.
More significant evidence may include material last-minute changes, proof that a spouse was prevented from reading the document, written instructions inconsistent with the signed ANC, knowingly fabricated information, improper pressure, or correspondence showing that the final document departed from the parties’ common agreement.
Challenging commencement values should remain focused on consensus and recognised contractual remedies. A court does not have a general power to rewrite an ANC simply because its operation appears unfair.
Excluded Assets, Growth and Income
A commencement value must also be distinguished from an asset specifically excluded from accrual. The concepts serve different functions and should not be deducted twice.
It is unsafe to assume that excluding an asset necessarily resolves every question about its future growth, income, proceeds or replacement assets. The wording of the ANC and the ability to trace later property to the excluded asset may matter.
A dispute can arise over whether property held at divorce is the original excluded asset, a qualifying substitute or an independently acquired asset. Good records of disposals, reinvestments and transfers are therefore important.
Readers who are actually married without accrual should consider the separate principles governing redistribution of assets where there is no accrual. Redistribution is not a general substitute where an accrual calculation produces an unfavourable result.
Do the Preliminary Calculation Before Forensic Work
A statement of account and debatement or a forensic investigation can be costly. Before committing to that process, establish:
- The document in which the commencement value appears
- The legally operative commencement value
- The applicable CPI adjustment
- A reasonable preliminary estimate of the net estate at dissolution
- Whether the calculation indicates a positive accrual
- Whether the potential financial result justifies the proposed investigation
Consider a contractual commencement value that adjusts to R100 million while the present net estate is approximately R80 million. If the contractual value stands, proving that the spouse’s actual estate was historically much lower may not produce a positive accrual.
This does not mean that disclosure can be ignored. Present assets and liabilities must still be identified correctly. It means that the legal effect of the commencement value should be considered before allowing the accounting exercise to determine the litigation strategy.
For broader practical guidance on valuation, disclosure and expert input, see the mistakes to avoid in a high-asset divorce.
Common Mistakes in an Accrual Claim
Common mistakes include:
- Using the historical commencement value without a CPI adjustment
- Applying inflation to the present estate instead of the commencement value
- Comparing gross present assets instead of the spouses’ respective accruals
- Failing to deduct liabilities when calculating net estate values
- Treating commencement values and excluded assets as the same concept
- Assuming hidden present assets invalidate a figure agreed before the marriage
- Assuming a section 21 application can retrospectively correct an unwanted figure
- Assuming redistribution is available whenever an accrual claim produces no payment
A section 21 application concerns a court-approved change to the spouses’ matrimonial property system. It is not a unilateral device for rewriting a disputed commencement value. Read more about changing a matrimonial property regime under section 21.
What to Bring to Your First Consultation
Bring the following records where available:
- The registered ANC
- The notary’s protocol copy
- Draft versions of the ANC
- Any section 6 statement
- Written instructions given to the notary
- Emails and correspondence about the ANC
- Schedules of assets and liabilities
- Bank, investment and mortgage statements
- Company, close corporation and trust records
- Tax returns and historical financial statements
- Business, share and property valuations
- Evidence of liabilities at the date of marriage
These documents answer two separate questions. Financial records may help establish what an estate was worth. The contractual documents may help establish what the spouses agreed.
If the decree of divorce has already been granted and the patrimonial issues were postponed, obtain advice promptly about the pleadings and procedural position. South African divorce proceedings may separate the patrimonial dispute from the decree. The practical effect is discussed in the article on separating patrimonial issues from the decree of divorce.
Practical step: Bring the ANC, protocol copy and pre-marriage financial records to the first consultation. An early legal and numerical assessment can help determine whether a contractual challenge or further forensic work is proportionate.
Frequently Asked Questions
Can a commencement value in an ANC be changed after marriage?
A commencement value in an ANC cannot usually be changed merely because later evidence suggests that it was inaccurate. A change may require a recognised contractual basis, such as actionable misrepresentation, duress, undue influence, mistake or rectification. The available remedy depends on the evidence.
What happens if no commencement value was declared?
The value may be treated as nil unless a contrary value is proved. The spouse asserting another value should present reliable evidence of assets and liabilities at the commencement of the marriage.
Is a section 6 statement the same as a declaration in the ANC?
No. A section 6 statement is a separate statutory document used where the ANC does not declare the value. Its execution, timing, attestation and filing requirements should be checked carefully.
What evidence helps when challenging commencement values?
The relevant evidence depends on the legal basis of the challenge. Historical financial records may establish value. Drafts, instructions, emails and the notary’s protocol file may establish what the spouses agreed.
When may rectification of an ANC be considered?
Rectification of an ANC may be considered where the written contract failed to record the parties’ true common intention. A factual error in value does not, without more, establish a common drafting error.
Does excluding an asset also exclude all its growth?
That should not be assumed. The wording of the ANC, the nature of the growth or income, and whether later property can be traced to the excluded asset may all be relevant.
Should I appoint a forensic accountant immediately?
Usually, a preliminary legal and financial assessment should come first. Establish the operative commencement value, apply the CPI adjustment and estimate the current net estate before deciding whether a full forensic exercise is proportionate.
Obtain Advice Before Choosing a Litigation Strategy
A disputed commencement value can affect the entire economics of an accrual claim. The correct strategy depends on the wording of the ANC, the existence of a section 6 statement, the available historical records and any evidence concerning how the agreement was concluded.
Vermeulen Attorneys assists clients with divorce asset disputes, ANC interpretation and accrual calculations. Obtain advice before committing substantial resources to forensic accounting or litigation based only on the alleged historical inaccuracy of a declared value.
Contact Vermeulen Attorneys to arrange a consultation. Bring the registered ANC, the notary’s protocol copy and any available pre-marriage financial records for an initial assessment.
