SHARING OF JOINT BENEFITS AFTER CO HABITATION

It is a general rule of our law that couples who live together but do not marry (co habitees) do not have any special legal rights on separation. The supportive and protective measures provided by our family law are not generally available to couples who choose to live together and not marry.

It is however a matter of fact that family lawyers are having to consult with ever increasing numbers of women who have been left high and dry by their life partners. There is now some clarity.

In a case decided in 2012 the Supreme Court of Appeal by a majority of 3 to 2 Judges, (Butters vs Mncora) the Court defined the principles of a universal partnership that needed to be proven to share the assets in an estate created whilst the co habitation existed.

In the Butters case the couple lived together for 20 years. They met when she was 24 and he was 27 in 1988. He worked in Grahamstown and she lived in Port Elizabeth. They spent weekends together. Two children were born. They became engaged in 1998. She made virtually no financial contribution to the estate and only worked for a menial salary for 2 years. She also looked after her partner’s daughter for 3 years. Four years after the co habitation began he left his Telkom job and started a business installing car alarm systems which became successful. Their lifestyle improved greatly and they enjoyed the trappings of success. She never had any direct part to play in the business or the acquisition of the many assets in his name. Her role was to nurture the family and maintain the common home. In 2008 the relationship showed cracks and she established that he had married one Ms Mbewu in 2007. The relationship was terminated leaving Ms Mncora without security or an income at age 44 and relying on Mr Butters’ generosity. He intended to keep all the assets.

Ms Mncora alleged that they had entered into a partnership which encompassed both their family life and the business. She succeeded in the High Court and was awarded 30% of the net assets and Mr Butters appealed that decision.

The Supreme Court of Appeals upheld the Eastern Cape High Court decision to award her 30% of the net asset value of Mr Butters estate. The case was decided on the basis that she had proved that a tacit universal partnership had existed. The requirements to prove the essential elements of a universal partnership are set out in the Judgment. Partners must bring something into the partnership (money or labour or skill), it must be carried on for the benefit of both partners, and its object must usually be to make a profit.

On the first point the Court rejected the argument that the universal partnership must consist only of a commercial undertaking, and arise from an express agreement. It ruled that universal partnerships of all property which extends beyond commercial undertakings were part of our law, and that a tacit agreement is sufficient (that is one derived from conduct.) It is a question of the balance of probabilities where conduct is capable of more than one interpretation.

Once it is established the partnership goes beyond a commercial undertaking it flows that it is not confined to a profit making entity, given that one partner provides the nurturing of the family and maintaining of the home and the other the finances.

The case is worth reading and can be found via Google. Of course the facts in each case are critical and sound legal advice should be sought before embarking on costly litigation.

Contributor: David Randles (Senior Executive Consultant) (Commercial, Litigation & Matrimonial Law) (Umhlanga Branch)

Email: randles@tmj.co.za

Tel: 031 566 2207