Court Orders Full Disclosure of Assets in Divorces

The Gauteng High Court has clarified the obligations of spouses to disclose financial details during divorce proceedings, ruling that transparency under the Matrimonial Property Act (MPA) cannot be delayed by pending legal challenges. The decision, handed down by Acting Judge Adrian Friedman, reinforces the principle that full disclosure of assets is essential to ensure fair calculations of estate accrual, even amid complex, protracted litigation.

The case centres on a bitter divorce between a couple identified in the court papers as DM and DM, embroiled in a four-year legal battle over asset division. The applicant, DM, sought to compel the respondent, DM, to disclose comprehensive financial records under Section 7 of the MPA, which requires spouses to furnish “full particulars” of their estates when necessary to determine accrual, i.e., the net growth of each spouse’s assets during the marriage.

The respondent resisted, arguing that disclosure was premature pending a separate application to resolve whether assets held by trusts and companies he controls should be included in his estate. The respondent claimed compliance should await the outcome of this interlocutory issue, but the court dismissed this as a stalling tactic.

Section 7 of the MPA mandates disclosure when “necessary” to calculate accrual. The applicant argued this obligation arises immediately upon request during divorce proceedings, while the respondent contended courts retain discretion to delay disclosure if timing is prejudicial.

Friedman AJ acknowledged the novelty of the question, noting sparse precedent on whether courts may defer Section 7 requests. However, he emphasised that the Constitutional Court’s inherent authority to regulate judicial processes (under Section 173 of the Constitution) allows courts to exercise discretion in compelling disclosure. Despite this, the judge stressed that such discretion must be sparingly used, favouring transparency to prevent asset concealment.

The judgment dissected the respondent’s arguments, particularly his claim that the applicant’s notice overreached by demanding details of assets held by third-party entities. Friedman AJ clarified that Section 7 requires spouses to disclose assets they beneficially own, even if held nominally by trusts or companies. “The duty rests on [the spouse], not third parties,” he wrote, rejecting claims that the notice improperly targeted non-spouse entities.

Crucially, the court found no merit in delaying disclosure until the resolution of the respondent’s pending application to separate legal issues. Friedman AJ noted that beneficial ownership disputes are factual matters to be resolved at trial, not via preliminary rulings. Requiring disclosure now, he reasoned, would not prejudice the respondent but would instead streamline proceedings by clarifying the factual landscape.

The judge also highlighted the respondent’s history of non-disclosure, referencing a prior Rule 43 application where the court found he had obscured his financial position. This history, coupled with the protracted nature of the case, underscored the need for judicial intervention to curb delays.

The ruling solidifies the principle that spouses cannot exploit procedural manoeuvres to evade financial transparency. Friedman AJ cited the “catch-me-if-you-can” doctrine, articulated in DEB v MGB, which discourages tactics designed to obscure assets. While acknowledging the discretion to defer disclosure in rare cases, the judgment establishes a default expectation of immediacy, absent compelling evidence of prejudice.

The court ordered the respondent to disclose his assets within 20 days, extending the original 10-day deadline sought by the applicant. While denying punitive costs, Friedman AJ awarded costs against the respondent on a standard scale, criticising his “unsustainable” initial argument that disclosure obligations arise only post-divorce.

In closing, the judge lamented the case’s four-year stagnation, urging parties to “err on the side of disclosure” to avoid draining estates through endless litigation.

You can read the full D.M v D.M judgement here.

Written by Theo Tembo