YOU MUST PROVE YOUR CONTRIBUTION- The question of Division of Matrimonial Property in Kenya

On Friday, 27^th January 2023, the Supreme Court of Kenya delivered a precedent-setting judgement on the division of matrimonial property between divorced parties. This was in Supreme Court Petition No. 11 of 2020 between Joseph Ogentoto (Appellant) and Martha Ogentoto (Respondent) and FIDA Kenya (1^st Amicus Curiae) and Law Society of Kenya (2^nd Amicus Curiae). The decision has far-reaching implications as it sets an authority to be followed by courts from now on.

Brief Background 

Mr. and Ms. Ogentoto married under the Abagusii Customary Law in 1990. They were issued with a marriage certificate after their union was formalized in 1995 at the Office of the Registrar of Marriages in Nairobi. The couple got two children. Later, Mr. and Ms. Ogentoto moved into their matrimonial home in Tassia Estate in Embakasi, Nairobi, where they also constructed rental units. Ms. Ogentoto stated that she took out a loan of Kshs 200,000/=, which she gave to Mr. Ogentoto to complete the construction of the units. Mr. Ogentoto also acquired more assets in the form of properties and vehicles in his name. In 2008, Mr. Ogentoto applied for the dissolution of the marriage, which had irreparably broken down. Thereafter, Ms. Ogentoto commenced proceedings for the division of their matrimonial property. The case was initially tried in the High Court, appealed to the Court of Appeal and then finally appealed to the Supreme Court of Kenya. The Apex Court used this opportunity to render a firm decision on the division of matrimonial property and cure the divergent and uncertain positions taken by different courts. That notwithstanding, all three courts had the opportunity to pronounce themselves on key legal issues relating to matrimonial property disputes, which we shall expound on  below: -

1. What constitutes Matrimonial property?
2. What is the applicable law in the division of matrimonial property when the divorce case was filed in 2008 (or before the Constitution of Kenya 2010 and the Matrimonial Property Act 2013 took effect)?
3. Does Article 45(3) of the Constitution of Kenya 2010 provide for proprietary rights?
4. Does Article 45(3) of the Constitution provide for a 50:50 ratio that can be used as a matrix for apportionment and division of matrimonial property?
5. What is contribution in relation to the matrimonial property?

• What constitutes Matrimonial property?

In the High Court, Ms. Ogentoto sought, among others, a declaration that the divorced couple's home and rental units in Tassia Estate -Embakasi, as well as other properties registered in the name of Mr. Ogentoto sole name, as the joint ventures of both parties. The High Court, guided by the repealed Married Women Property Act of 1882 and the principles of the Court of Appeal in the case of Echaria vs Echaria, held that the only property that amounted to matrimonial property was the couple's matrimonial home in Tassia Estate –Embakasi, as well as the rental units which they had constructed thereon. The Court further held that Ms. Ogentoto had failed to prove that she had directly contributed to the purchase of the other properties and vehicles owned solely by Mr. Ogentoto. Therefore, those assets were not matrimonial property. The Court's holdings aside, taking stock of what the current law provides about a matrimonial property is crucial. Section 6 of the Matrimonial Property Act, 2013 defines matrimonial property as: -

1. The matrimonial home or homes;
2. The household goods and effects in the matrimonial home or homes; or
3. Any other immovable and movable property jointly owned and acquired during the subsistence of the marriage.

Section 6 further clarifies that property that is held in a trust does not form part of matrimonial property; adding onto the many advantages of setting up a family trust as discussed in our previous article Family Trusts as a tool for protection of Family Wealth . It also gives couples the choice to dictate their property rights before they commit to marriage through pre-nuptial agreement.

What is the applicable law in the division of matrimonial property when the divorce case is filed in 2008?

Mr. Ogentoto filed the divorce cause in 2008, and the decree absolute dissolving the marriage was issued on 15^th October 2015. After that, Ms. Ogentoto filed a matrimonial property cause before the High Court in 2010 under the Married Women Property Act of 1882 (now repealed). In his appeal to the Supreme Court, Mr. Ogentoto claimed that the Court of Appeal had erroneously relied on the current Matrimonial Property Act, 2013 and Article 45(3) of the Constitution of Kenya 2010, which were not in effect at the time he filed the divorce cause in 2008.

• Retrospective application of Matrimonial Property Act, 2013

On this issue, the Supreme Court held that the current Matrimonial Property Act, 2013, cannot apply retrospectively, meaning that the said statute cannot apply to events before its commencement date in 2013. They further held that for an Act to apply retrospectively, the intention has to be clearly indicated in the words of such statute. Therefore, the applicable statute, in this case, was the Married Women Property Act of 1882 (now repealed).

• Retrospective application of the Constitution of Kenya, 2010

The Apex Court also determined that the Constitution can apply retrospectively. The Court stated that the Constitution is a forward, backwards, vertically and horizontally-looking document that is not necessarily subject to the principles against retroactivity as other ordinary laws. They further stated that the language of the Constitution could give guidance to courts. If the language is forward-looking, they cannot apply that specific article to events that happened before 2010. Article 45(3) Constitution of Kenya 2010 provides that 'Parties to a marriage are entitled to equal rights at the time of the marriage, during the marriage and at the dissolution of the marriage'. Therefore, the Court held that the language used in Article 45(3) did not bar it from being applied to past events or retrospectively.

• Does Article 45 (3) of the Constitution provide for proprietary rights or a 50:50 ratio that can be used during the division of matrimonial property?

The Supreme Court stated that the equality provision in Article 45(3) does not entitle any court to vary existing parties' proprietary rights by taking away what belongs to one spouse and awarding half of it to the other spouse, who has not contributed towards its acquisition. The Court further stated that Article 45(3) deals with the equality of the rights of spouses before, during and at the dissolution of the marriage. Therefore, it does not award spouses equal portions of the matrimonial property, and thankfully so. Otherwise, ill-willed parties would get married for the sole reason of getting 50% of the matrimonial property upon dissolution of the marriage. The Apex Court also reiterated that the rights surrounding property ownership in Kenya are clearly provided under Article 40 of the Constitution of Kenya, 2010.

• What amounts to a contribution to Matrimonial Property?

From the above, it is evident that Article 45 (3) of the Constitution was not designed for the purpose of enabling the Court to pass 50% of the proprietary rights from one spouse to another simply because they were married. The Court found that the guiding principle during the division of matrimonial property can only be by way of proof of direct or indirect contribution, which is determined on a case-by-case basis. Only by way of evidence of contribution can the court address itself on the exact percentage of the beneficial interest in the matrimonial property that each spouse is entitled to, whether it is 10%, 30%, 50% or even 90%. The Apex Court, guided by several cases from other jurisdictions elaborated on what amounts to a substantial contribution to matrimonial property. It stated that a substantial contribution could be either a direct or an indirect contribution. Actions that amount to direct contribution include: -

1. Paying a part of or the full purchase price of the property;
2. Taking a mortgage or loan to settle the purchase price of the property; or
3. Contributing regularly to monthly payments towards the settlement of the purchase price of such property.

Actions that amount to indirect contribution include: -

1. Making substantial financial contributions to family expenses to enable the other spouse to settle the purchase price of the property;
2. Contributing to the running and welfare of the home and children and easing the burden of the spouse paying for the property; or
3. Caring for the children and the family at large, growing food to feed the family and generally taking care of the household; creating an environment for the other spouse to earn income for the family.

The Supreme Court noticed that traditionally, the division of family roles has been that men are the income earners, whereas women are the home-makers. This position has changed over time since some women are income earners and some men home-makers. Irrespective of the role chosen by a spouse, the Court noted that this should not prejudice or advantage any party when considering the contribution issue. Find out more about the concept of contribution in matrimonial property disputes in our article Contribution Aspect in Matrimonial Property Disputes.

Conclusion

The Supreme Court upheld the decision of the Court of Appeal that awarded 50% of the matrimonial property and 50% of the rental units to Ms. Ogentoto. Based on the evidence produced, they found that the Court of Appeal was correct in finding that Ms. Ogentoto had directly contributed to the matrimonial property by taking out a loan to facilitate the construction of the rentals and indirectly by taking care of the general welfare of the family. This decision notwithstanding, it is very difficult to ascertain how property will be divided between spouses after the dissolution of the marriage. The best way to protect your proprietary interest by consulting an experienced Wealth and Private Clients lawyer, who based on your circumstances, can advise whether it is best to create a family trust or enter into a pre-nuptial agreement  or a post-nuptial agreement.

How can we help?

At CM Advocates LLP, we have an outstanding team of Wealth and Private Client lawyers with a wealth of experience in matters of marriage, divorce, children custody and maintenance, estate planning, family businesses, wealth management and trust administration, spanning across the East African Region. We welcome you to take advantage of our team of experts, consult on these critical family issues, and learn how to better protect your proprietary interests in your family.  

Should you have any questions regarding the subject of establishing a blind trust or a family trust, or related topic, please do not hesitate to contact  us on law@cmadvocates.com or dgichuru@cmadvocates.com

Contact Persons & Contributors

Dianah Gichuru- Partner & Head of Unit Shalma E. Maina  – Associate Brian Okwalo- Associate

Disclaimer

This article is for informational purposes only and should not be construed as legal advice.