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20 Jun 2023

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From: The Registrar, Supreme Court of Appeal
Date: 15 June 2023
Status: Immediate

The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal

Le Roux v Zietsman and Another (330/2022) [2023] ZASCA 102 (15 June 2023)

Today, the Supreme Court of Appeal (SCA) dismissed an appeal with costs against the decision of the Limpopo Division of the High Court, Polokwane (the high court).

The facts of the matter were as follows. In July 2011, Mr Christiaan Frederik Zietsman and Mrs Ester Petronella Zietsman (the respondents) bought a guesthouse situated in Tzaneen, Limpopo from the appellant, Mr Jan Pieter le Roux. Barely three months after they had taken occupation of the property, it rained heavily. There was extensive leaking of the entire roof. The guesthouse was flooded with water. And the furniture and linens were soddened. The respondents were compelled to repair the roof at a cost of R241 281.76. In addition, for the two months that the guesthouse was under repair, they could not conduct business. As a result, they lost the income which would have been generated during that period.

Consequently, the respondents sued the appellant in the Regional Court of Limpopo, Tzaneen (the regional court) for damages in the amount of R241 281.76 (for the first claim, based on fraudulent non-disclosure) and for R102 725.04 (for the second claim, based on loss of income). The regional court found in favour of the respondents. And declared that the appellant was liable to pay for the damages in the amount of R167 480.23 for the repairs of the property and an amount of R68 038.00 in respect of the loss of income. Aggrieved by the decision of the regional court, the appellant appealed to the high court, which dismissed the appeal with costs and confirmed the order of the regional court.

Before the SCA, the issues were narrowed down to one crisp issue: whether the appellant, knowing the purpose for which the property was to be used, and having knowledge of the latent defect in the property (the leaking roof), fraudulently failed to disclose same to the respondents before the sale with the aim to induce the sale.

The SCA found that there was no reason to interfere with the factual findings of the trial court. On the contrary, they were fully justified by the record. The SCA showed the proven facts from which the high court and the regional court drew their inferences, to conclude that the respondents had objectively proven the causal link between the false representations and non-disclosures and the conclusion of the sale. These facts and inferences included the following. First, the engineer’s report (drawn up by Mr Rosslee) revealed extensive and long- standing defects in the roof which contradicted the appellant’s claim that he was not aware of the seriousness of the leakage problems. Second, the roof could not possibly have

deteriorated from the repair of the roof claimed by the appellant to its leaking condition barely three months later, when all the rooms leaked. Third, the evidence of the appellant was irreconcilable with Mr Rosslee’s evidence that there were numerous places where rainwater directly leaked through the ceiling because of longstanding defects in the roof construction. Fourth, the appellant admitted to the presence of a water damp spot on the ceiling of bedroom 7, yet used plastic sheeting/membrane much larger than this area to address it. It was reasonable to draw an inference from this that the appellant had knowledge of far more extensive water leakage than what he admitted. Fifth, Mr Rosslee’s expert evidence that the leakage problems of the roof were so stark that if anyone claimed that there had been no problem of leaking before the respondents complained, they were being untruthful. And importantly, sixth, the recent/fresh crack which Mr Rosslee found when he did his investigation shortly after the rains, was telling. Notably, the appellant led no evidence to rebut the evidence of Mr Rosslee.

The SCA thus found that, on the established evidence, the appellant fraudulently misrepresented the true condition of the roof and failed to disclose this to the respondents, as that would have clearly played a crucial role in the respondents’ decision of whether to acquire the property or not. Further, that, on the probabilities, the only reasonable inference to be drawn, as correctly concluded by both the high court and the regional court, was that the non- disclosures and misrepresentation were made deliberately in order to induce the sale of the guesthouse, and this constituted fraud. The SCA therefore held that the high court’s dismissal of the appeal could not be faulted.

 

07 Jun 2023

Maintenance Claims and Life Partners

Couples in permanent life partnerships should take note of a recent High Court decision refusing a partner’s claim for personal interim maintenance after a relationship came to an end. The Court held amongst other things that a “permanent romantic relationship” is not the same as a permanent life partnership in which the partners had agreed to support each other.

The ex-partner must now prove such an agreement (or hope for a change in the law creating an automatic duty of support in such a case). That’s a clear reminder to couples that entering into a cohabitation agreement – as soon as your relationship becomes a permanent one – is the only safe course of action. We’ll explain, and we’ll share some ideas on what should be in your agreement. We end with a reminder to make sure you also have valid wills in place.

More and more couples are opting to live together as permanent life partners rather than enter into a formal marriage. The risk for such couples is that whilst our law is steadily (if slowly and cautiously) extending many of the protections of formal marriage to unmarried life partners, that process is not by any means complete yet.

A recent High Court decision, refusing a life partner’s claim for interim maintenance after her relationship broke down, illustrates.

A “permanent romantic relationship” and a failed maintenance claim

  • An opposite-sex couple had lived together in a “romantic” relationship for 8 or 9 years, having three young children and splitting when one partner left the common home.
  • That partner then sued her ex-partner for (amongst other things) personal maintenance for herself for ten years or until her “death or remarriage”. She based that claim on her request for a declaration that she and her partner had lived as “partners in a permanent opposite-sex life-partnership in which the partners had undertaken reciprocal duties of support”. That main action is being defended by the ex-partner and is yet to come to trial.
  • In the meantime, having successfully obtained interim maintenance orders for her children, she then asked the High Court to likewise order interim maintenance for herself as well. She asked for R56,000 per month plus payment of medical, motor and other expenses, together with a R1m initial contribution to costs.
  • The Court dismissed this interim application, and whilst its analysis of our current law on the subject, with all the constitutional law ramifications, will be of great use and interest to lawyers, the practical result is what life partners should take note of.

What you must prove to get a maintenance order

Holding that “a ‘permanent romantic relationship’ is not synonymous with a permanent life partnership wherein the parties undertook reciprocal duties of support to one another within the context of a familial setting”, the Court found that the applicant “must first prove facts establishing that the duty of support existed, and that it existed in a familial setting.” (Emphasis added)

She could prove all that, said the Court, in the pending court case. For the moment she must live on her own means, without interim maintenance, until her main action comes to trial.

Practically, if you find yourself in a similar situation you have four choices if you want to claim personal maintenance for yourself (note that maintenance for children is an entirely separate issue, not subject to these limitations) –

  1. As regards interim maintenance, you can hope that a court will assist you despite the outcome in this case, the Court here stating that “In reaching these conclusions we make it clear that they pertain only to the particular case presented to us by the applicant. Our conclusions are most certainly not intended to be of some broader implication or consequence. It thus of course remains open to anyone to approach court for declaratory relief of the nature which the applicant has sought in this matter and it is hoped that, should that occur, this judgment may provide assistance as to the manner in which such an approach should be made.”; or
  2. You can try to prove at the full trial that your relationship was more than a “permanent romantic relationship” and was in fact a permanent life partnership with an undertaking of mutual support; or
  3. You can hope for a change in the law creating an automatic duty of support between you. New legislation on the matter has been pending for many years but appears to be currently stalled. In addition, if this particular case proceeds to trial it may be that something further will emerge from that; or
  4. Clearly the safest solution – you can put the matter beyond all doubt by signing a full “cohabitation agreement” as soon as your relationship becomes a permanent one.

What should be in your cohabitation agreement?

Although everyone’s own situation and needs will be unique, make sure that your cohabitation agreement (also sometimes called a “domestic partnership agreement”) sets out clearly your respective legal rights and financial arrangements both during your relationship and in the event of separation.

Cover questions such as –

  • How will your various assets be divided?
  • Do you undertake a reciprocal duty of support and on separation will each or both of you be entitled to personal maintenance and other financial support?
  • What provisions are made for your children’s support and maintenance?
  • Will there be any financial adjustment between you? What happens for example if only one of you works? Or if you paid for an extension to your life partner’s house or have been paying the bond? Or if one of you brought more into the relationship than the other?
  • Who will take over ongoing liabilities and contracts such as leases, bonds, medical and life policies, monthly accounts and so on?
  • What else that will need to be regulated in your particular circumstances?

Also make wills!

Supplement your cohabitation agreement with a valid will (“Last Will and Testament”) or perhaps a joint will. That’s the document that will count when you die and it’s the only safe way of ensuring that your last wishes are carried out, and that the loved ones you leave behind are properly looked after once you’re gone. Your cohabitation agreement and your wills are separate and essential documents, so have your lawyer draw them all for you at the same time.

07 Jun 2023

Property Buyers: The Danger of Not Doing Your Financial Homework

You sell a property but when it comes to the crunch the buyer can’t pay the required deposit. You have to cancel the sale and can only resell at a lower price and by paying an estate agent to help you. Can you claim damages to cover all your losses from the defaulting buyer?

Or perhaps you are on the other side of the coin, a buyer about to sign a sale agreement. How certain should you be that you can meet all the obligations you are committing yourself to, and what happens if you breach the agreement?

A recent High Court decision, in which a defaulting buyer not only lost her property but is now down some R280k plus some serious legal costs, provides key lessons for both buyers and sellers.

“Look before you leap” (wise old proverb)

Don’t let the excitement of buying a property blind you to the necessity of doing your homework before you agree to anything. Look before you leap!

It’s not just a matter of buying the right property at the right price – make sure that your finances (and particularly your cash flow situation) won’t stop you from fulfilling the financial obligations your signature on the sale agreement binds you to.
Otherwise, you could find yourself in the same unenviable position as the property buyer recently ordered by the High Court to pay substantial damages after she couldn’t pay the required deposits.

Three sales, and the seller claims damages

  • A trust sold a property to a buyer for R750,000.
  • The buyer failed to pay the two required deposits totalling R280,000, the trust cancelled the sale and put the property up for resale.
  • It resold the property for R500,000 and sued the buyer for its R250,000 loss on the sale, plus the estate agent’s commission of R22,500 it paid for the new sale.
  • The buyer fought the claim on a variety of grounds, none of which found favour with the Court. It ordered the buyer to pay, in addition to legal costs on an attorney and client scale, a total in damages of R235,875. That’s a figure seemingly arrived at by the Court by taking into account an amount of R40,000 already paid in by the buyer, which presumably leaves the buyer down a total of just under R280k plus two sets of legal costs.

Important lessons for buyers and sellers

  1. Buyers: Before you sign…
    Of course, the big lesson here for buyers is to make sure they can comply with the terms of the sale agreement they sign, with particular emphasis on their ability to make payments as and when due.
  2. And sellers: Before you sign…
    Sellers on the other hand will want to avoid all the risk, delay and cost that the trust in this case was put to by investigating upfront the financial position of all potential buyers before accepting any offer. Make sure also that the terms of your sale agreement protect you adequately in the event of any default by the buyer.
  3. Seller: Mitigate your damages
    Our law requires that if you want to sue for losses you incur as a result of someone else’s breach of contract (or wrongdoing), you must first take reasonable steps to minimise your losses.

    As the Court put it: “… the mitigating rule is a rule where a breach of contract has occurred. The innocent party cannot merely sit back and allow their losses to accumulate; the party must take reasonable positive steps to prevent the occurrence or accumulation of losses. The rule does not require the innocent party to do anything more than a reasonable person could do under the same circumstances. Reasonable expenses incurred in carrying out the mitigation steps may be claimed as additional damage suffered. The onus of proving what steps could reasonably have been taken, or that the expenses incurred were unreasonable, rests on the party in breach.” (Emphasis added)

    As the seller, therefore, be sure to actively seek alternative buyers, use professionals to assist only as reasonably necessary, and accept only a reasonable resale price. In this case the evidence had established that the trust had acted reasonably both in reselling the property at the price it did, and in using the services of an estate agent to do so.

As always, agree to nothing without professional advice!

07 Jun 2023

CITY OF CAPE TOWN IN FULL SWING WITH WATER CERTIFICATES

Water by Law certificates are no longer new to those who own property within the City of Cape Town municipal boundaries. One question that has remained without answer for some time though, is who do purchasers go to, if they feel that the seller’s plumber did not do a proper inspection and that the certificate is invalid?

The City has answered: If any purchaser is not happy and feels that the certificate does not comply, and should the seller or the plumber not respond favourably, then he/she may send an email to certificateofcomplaince@capetown.gov.za and copy Basil van Rooy on basil.vanrooy@capetown.gov.za, who is a Senior Water Inspector. A copy of the Schedule that was issued, must accompany the report. The City is now also conducting its own inspections upon receipt of Certificates from transferring attorneys, to check up on the work that was conducted.

We trust this will be of assistance.

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