Archives: General Interests & News Flashes

“In our law cohabitation does not have special legal consequences. Generally the proprietary consequences and rights flowing from a marriage are not available to unmarried couples, regardless of the length of their cohabitation” (extract from judgment below)

Anyone in an informal life partnership arrangement should beware the extremely prevalent – and extremely dangerous – myth of the “common law marriage”.

We discuss the risks of relying on this myth with reference to a recent High Court case in which a couple split after a 22 year relationship. The life partner holding the assets vigorously defended the other partner’s claim to a 50% share, and her struggle to prove the existence of a “universal partnership” shows how difficult it can be to exit such a relationship with even the smallest financial benefit. The claimant in this case was fortunate in eventually being awarded a 30% share (better than nothing, but not 50%!)

Fortunately our law offers you a quick and simple solution…

If you live as a couple, avoid the trap of believing the myth of the “common law marriage”. It’s a very persistent myth, possibly because some other countries do indeed give formal recognition to certain forms of life partnership.

But not in South Africa – there is no such thing in our law as a “common law marriage”. No matter how long you have lived together, if you break up or when one of you dies, neither of you automatically has any of the rights and protections afforded to a couple in a marriage or civil union.

Apart from the personal consequences the financial downsides can be huge, and our courts are all too often faced with sad and bitter disputes which end with one of the partners destitute and homeless after decades of cohabitation.

A recent High Court case highlights the financial dangers…

22 years on, a couple splits

• For most of 22 years, with only a short early separation, a man and woman “in a romantic relationship” lived as a couple, in a household complete with the woman’s daughter from a previous relationship.
• They had been jointly involved to one degree or another in a series of business ventures including vegetable farming (on a farm purchased in the man’s name), commercial blasting, a bakery and a packaging business, and what was at stake in the High Court was whether the woman could prove her claim to a 50% share of the resultant assets.
• The facts were bitterly disputed, with the man adamant that the relationship had been nothing more than co-habitation as lovers. But eventually the Court concluded, on the basis of the facts that it found proved, that “the parties intended to pool their resources for the benefit of a joint estate” and that the woman had accordingly proved the existence of a “universal partnership”.
• Not however to the 50/50 extent she claimed, and the end result is that at age of 47 and after 22 years she leaves the relationship with only 30% of the net assets. Hard though that may seem, she could easily have been left with nothing, as we shall see below when we look at what our law says about such relationships.

The difficulty of proving a “universal partnership”

The problem in such a case is that you have to prove a lot more than just cohabitation.

You also need to prove the existence of a “universal partnership” and that, as many cases in the past have illustrated, is not easily achieved, not least because the onus is on you to prove your case. You will need to prove all of the following –

1. Each of the parties brought something into the partnership, or bound themselves to bring something into it, whether it be money or labour skills;
2. The business had been carried on for the joint benefit of both parties;
3. The object was to make a profit; and
4. The partnership contract was legitimate.
   • If, as is common in this sort of situation, you rely on a “tacit” agreement (an unexpressed agreement inferred from your actions as a couple), you have to go further and prove that –
5. The other person was fully aware of the circumstances connected to the transaction;
6. The act relied upon was unequivocal; and
7. The tacit contract does not extend beyond what the parties contemplated.

Again, not easily proved, as “A tacit contract will be interpreted strictly and not extensively, since a contract must be interpreted in favour of the person on whom it is sought to place an obligation.”

The good news – there’s a simple solution…

We have talked above only about the financial consequences of life partnerships which are unregulated by agreement. But formal marriage also provides a range of other legal benefits and protections (such as rights of inheritance and support and other personal aspects of your relationship) which are not automatically available to you.

Fortunately you can avoid all the risk and uncertainty of an unregulated relationship with a quick and simple solution – a formal cohabitation/life partnership agreement.

Just be sure to get it in place early on. Take professional advice (jointly – this is to protect you both!) as soon as you commit to a long-term relationship.

Recent amendments to the City of Cape Town’s Water By-law have introduced a few significant changes that are going to impact on our lives, especially for the owners of Sectional Title properties or properties where the main municipal water supply feeds more than one dwelling or unit.

If you were the owner, or the person in control of such a property, and if the branch supply pipes to the separate units did not have:

1. an isolating valve (to control or cut off supply); and
2. a water management device, prepayment meter, or private sub meter,

you now have an obligation to ensure that these items are installed. The deadline for such an installation is 4 October 2020.

If, however, there was already an isolating valve on the branch supply pipe, you were obliged to have installed a water management device, prepayment meter, or private sub meter by 4 October 2019. This obligation is therefore already overdue.

According to Tyron Vomberg of Inspecto, these requirements are not yet on the list of items to be checked by the plumber who issues a water certificate of compliance, but we believe they soon will be. When this happens, no water certificate will be issued if your property is non-compliant.

The installation of these items can be done by private plumbers who are registered with the City, but the work can take time. So, if you are non-compliant and intending to sell your sectional title property or a property forming part of a scheme, it would be advisable to get compliant before you do so, especially if your transfer will be registered after 4 October 2020.

Divan Stander and Deon Welz
Miltons Matsemela Inc
March 2020

At long last the main provisions of POPIA (the Protection of Personal Information Act) have been gazetted, and they will commence on 1 April 2020. That means that the one year transitional period will expire on 31 March 2021.

Don’t panic just yet, and ignore the many “fake headlines” in the media implying that you are at immediate risk of non-compliance, but at the same time don’t leave this to the last minute! Preparing for compliance is going to be a time-consuming affair, almost all South African businesses will need to comply, and the penalties for not doing so will be very severe indeed…

• You risk administrative fines of up to R10m;
• You could face criminal prosecution (with up to 10 years’ imprisonment);
• You could be sued for millions by anyone whose data has been compromised, and this is an instance of strict liability” in that no “intent or negligence” on your part need be proved;
• The loss of trust and the adverse publicity resulting if your data breach goes public could be devastating.

In future issues we’ll let you have a lot more practical advice on how POPIA will affect your business, and on the steps you will have to take to protect yourself from the dangers of non-compliance, but for now get started with this first planning step: Ask yourself what personal information you hold, where you hold it, who has access to it, and how secure it is.

“Engage brain before hitting send” (Anon)

As WhatsApp use grows exponentially (it just hit the 2 billion mark worldwide) we all need to be mindful of the risks that come with it. One of them is the danger of committing yourself inadvertently to a binding legal obligation.

We’ll start off by understanding the basic elements of a legally-enforceable contract in our law, then – with reference to a R1m “offer” made by a WhatsApping father to the mother of one of his children, we’ll discuss the question of “intention to contract”. The father, having won R20.8m on the National Lottery, denied any real intention to offer the mother the R1m. Was his “offer” an offer capable of acceptance?

The Court’s reasoning in answering that question holds important lessons for us all.

WhatsApp comes with a host of business and personal benefits, and its use is growing exponentially here as in the rest of the world. Which brings us to a possible downside – binding yourself to a legally-enforceable agreement without really meaning to.

First principles: Offer + Acceptance = Contract

What makes for a binding contract? In the most simplistic sense, all you need is for one person to make an offer and for another to accept that offer.

There are of course many other requirements – consensus ad idem (‘true agreement’ or ‘meeting of minds’), lawfulness, capacity to contract, compliance with any formalities, certainty of terms, possibility of performance and the like. Lawyers and legal academics love to wax lyrical on the finer ins-and-outs of these and of related concepts like “quasi-mutual assent” (more on that below, it’s actually an important concept), but the core principle applicable in the vast majority of cases remains this: Offer + Acceptance = Contract.

And of course, with only a few exceptions (such as property sales, wills and ante-nuptial contracts), even verbal agreements are fully binding, and the binding effect of electronic messages has been established both by legislation (most importantly the ECTA or Electronic Communications and Transactions Act) and by a series of modern court decisions.

A R20m lottery windfall and a R1m WhatsApp “offer”

• A father was paying R1,000 p.m. child maintenance to the mother of one of his seven children.
• Shortly after becoming the lucky recipient of a National Lottery windfall in the form of a prize of R20.8m, he met with the mother, told her that his health had deteriorated, that he could no longer be employed (by SARS) and that he would get about R600,000 in pension benefits.
• He offered R100,000 out of these pension benefits in full and final settlement of his child maintenance obligations, which the mother accepted and which was paid to her for the child’s benefit.
• At a meeting with the maintenance officer he denied having won R20m but the mother, after getting proof of his win, sent a WhatsApp message to the effect that she knew about it. He replied – also on WhatsApp – “if I get 20m I can give all my children 1m and remain with 13m.I will just stay at home and not driving up and down looking for tenders”.
• The mother sued the father for R900,000 on the basis that he had contracted to pay her R1m and had only paid R100,000. The father denied liability, saying that his WhatsApp message was just to “get rid of” the mother and that he had no intention to make an offer to contract.

When is an “offer” not an offer? The “intention to contract” factor

The mother won in the High Court but lost on appeal to the Supreme Court of Appeal (SCA), which held that the father wasn’t bound because on the facts his message was a denial of having won R20m and it “related what [he] could possibly do in the hypothetical future event of him receiving R20 million. It set out what the [he] might do if he received R20 million … the message clearly did not contain an offer that could on acceptance thereof be converted into an enforceable agreement.”

On the facts of this case, the father “subjectively had no intention to contract and the message did not suggest otherwise.” His “morally reprehensible conduct” lost him his claim for legal costs, but it did not affect his lack of intention to contract. So in this case our WhatsApping father is off the hook and gets to keep his R1m.

But… before you hit send

On slightly different facts his WhatsApp message could easily have been held to have been a valid offer, binding him on acceptance. For example, the concept of “quasi mutual consent” which we mentioned above, means that even if you don’t actually intend to make a binding offer, our law can hold you to it if your actions or conduct lead the other party “as a reasonable person” to believe that you did intend to enter into a contract. So you may not intend your message to be a real offer but if the recipient reasonably thinks it is, you are in trouble.

The lesson for us all is this – all users of electronic communications, whether via WhatsApp, Facebook, email or any of the many other electronic messaging channels open to us, face the very real danger of inadvertently making a promise in haste which down the line a court will hold us to.

Think before you message!

“It is unquestionable that an owner of land is not permitted to perform activities which contravene the restrictive title conditions or the zoning restrictions” (extract from judgment below)

If you would like to run a business from home or to buy a residential property specifically to convert it into business premises – or indeed on the other side of the coin if you want to object to a new business opening up in your leafy suburb – you should be aware of a recent High Court decision in which a small 8 am – 4.30 pm office was ordered to stop operating in a residential area.

The Court addressed questions such as “Who can apply for an interdict?”, “Does a pending rezoning application make any difference?”, “Must the business be causing a nuisance?”, “What difference does it make that the suburb’s residential character is already changing?” and “What if other property owners are also breaking the law by operating under the radar and getting away with it?”

You decide to open a home business, or perhaps you are about to buy a house in order to run a business from it. You apply for rezoning but the council is taking forever to decide (although it has happily started charging you rates and taxes on the business tariff), your immediate neighbours are supportive, you won’t cause any nuisance, you know of many other businesses operating undisturbed “under the radar”, and anyway the suburb’s residential character has been eroding for years. Surely you are safe to just go ahead and open your business?

On the other side of the coin, perhaps you bought your dream house in a leafy suburb, secure in the knowledge that its residential character is protected by strong and effective zoning laws. Then businesses start moving in – what can you do about it?

A recent High Court decision addresses both questions directly…

A suburban office and the interdict application

• A construction company opened an administrative office in a suburban area, manned from 8 am to 4.30 pm on weekdays by a staff of four (with the occasional visitor).
• Three complainants in the suburb, objecting strongly to this move, applied to the High Court for an interdict against the running of any business on the property. They had, they said “acquired their properties with a keen expectation of residing in a residential suburb with amenities that are consistent with a residential suburb and with a residential character” – sentiments which will no doubt resonate with many other home-buyers.
• Critically, one of the restrictive conditions in the offending property’s title deeds read “this erf shall be used for residential purposes only and no trade or business or industry whatsoever shall be conducted thereon”. That, said the Court, rendered the property’s usage illegal. Full stop.

All the defeated defences

The property owner and the business (let’s refer to them together as “the business” for simplicity) raised a series of defences to the interdict application, all of them rejected by the Court on essentially the same ground that “the use or continuation to use the property for any business or trade other than for residential purposes constitutes an illegal act” –

• The suburb’s character had been changing over the years with businesses moving in, including a large shopping mall. Not relevant.
• The business had applied to the local council for re-zoning and removal of the title deed restriction over a year before, no objections had been received and it had in fact been supported by at least one neighbour. Not relevant.
• Although the rezoning application had yet to be granted or declined, council was already collecting rates and taxes payable by business and commercial properties. Not relevant.
• The office caused no nuisance to anyone in the area. Not relevant.
• Other property owners in the area were also in contravention of the law. Not relevant.

Who can object and who can’t?

The business also argued that only property owners living “in close proximity” to the office had any right to object. That, it said, excluded not only the complainant who was not an owner (she lived with her parents) but all three of the complainants because they all lived about a kilometer away from the office.

No problem, said the Court, “the essence of town planning schemes is conceived in the interest of the community to which it applies” and the complainants lived “in an area affected by an applicable zoning scheme”. All the complainants had “protectable interests” and therefore locus standi (in plain English, the ‘right to bring a legal action’) and were entitled to enforce their rights under the planning scheme.

The interdict and the request to suspend it

“Once it is accepted”, quoted the Court from an earlier judgment “that the nature of the right in question is a public right, then it must follow … that for continuing infringements of that right the only effective remedy is an interdict, all the more so where such infringements amount to an offence.” Final interdict granted with costs.

Finally, the Court rejected a request by the business to suspend the application of the interdict. The business had been continuing to act in an unlawful manner for at least fifteen months, it was “hell-bent to do so without the necessary relaxation of the restrictive conditions” and to suspend the interdict would be to support or give approval “to an ongoing illegality which is also a criminal offence … tantamount to the subversion of the doctrine of legality and undermining of the rule of law”. The business “must be brought into line immediately when such matters are brought to the attention of the court.” Interdict effective immediately.

Owners – must you always rezone?

Have your attorney check what title deed restrictions your property is subject to, what your current zoning is and what it allows and doesn’t allow. Your local town planning scheme may perhaps let you run a small scale “home enterprise” or “micro business” either without any municipal consent (there will be conditions attached) or with a municipal permit. Or you may need to formally apply for rezoning and removal of title deed restrictions. Every local authority will have its own rules on this and the important thing is to comply with them or risk unhappy neighbours applying to close you down.