PERMANENT LIFE PARTNERSHIPS: IS THERE A JOINT ESTATE AND IF SO, HOW WOULD IT BE DIVIDED ON TERMINATION OF THE PARTNERSHIP?
Uncertainty regarding permanent life partnerships and how to divide the joint estate which the partners have built up during the partnership has surrounded the law for many years but have finally been clarified by the Western Cape High Court, in a fair and equitable manner as many would describe it.
Parties who have been living together as permanent life partners, enjoying life together as an unmarried couple and advancing each other’s lives can now enjoy greater certainty in what awaits them if the permanent life partnership ends.
The concept of a universal partnership was briefly identified and confirmed in the Butters1- case where two parties lived together for 20 years without getting married, where one party provided financially and the other cared for their children and maintained the common household.
The judgment handed down by Acting Judge Andrews on the 27th of June 2018 is a landmark judgment intended to provide a fair and equitable manner in which the joint estate of parties who have been living as permanent life partners for an amount of time, should be divided. This judgment especially provides more clarity on the position of each partner in the household. Clarity to the partner as breadwinner and clarity to the other who maintains the household.
In the matter between Booysen and Stander2 the plaintiff, Booysen, instituted a claim against the Defendant, Stander, based on an actio communi dividendo (Judicial division of a joint property) for the termination of the joint ownership of an immovable property, valued at R2,5 million, the repayment of a loan made to the Defendant and return of a motor vehicle which was in the Defendant’s possession. The Defendant, in her counterclaim, sought an order declaring that a universal partnership existed between the parties, the termination thereof and the equal division of the joint estate.
The Plaintiff and Defendant had been living together for 17 years. Both parties started the relationship in an average financial position and had to work hard to make ends meet. The Defendant had a more difficult career and as such was more dependent on the Plaintiff. The Plaintiff paid for the mortgage bond of the immovable property, the medical aid, basic household expenses as well as the repayment of the motor vehicle. The Plaintiff also loaned money to the Defendant to start a business.
According to the Plaintiff, her intention was to recover the expenses and loan from the Defendant and did not intend to forfeit her right to do so. The Defendant on the other hand articulated that she was not in the same financial position as the Plaintiff and relied on her to maintain the household as breadwinner and as such was not under the impression that she had to reimburse the Plaintiff for her portion of the expenses and mortgage bond since they lived together in a permanent life partnership. During cross-examination, the Plaintiff conceded that a joint household had formed but denied that a joint estate had formed as a result thereof.
It is thus evident that the parties conducted a normal joint household where the one cared and provided for the other financially and the other would maintain the household accordingly.
Andrews AJ found that a universal partnership had indeed existed between the parties and that the joint ownership of the immovable property should be terminated. It was further ordered that the Defendant’s half-ownership of the property be transferred to the Plaintiff against payment of a specified amount of money to the Defendant. The Defendant would also keep the motor vehicle as her sole property and each party may retain assets and other property in their possession. The Plaintiff shall be liable for the costs to effect the aforesaid but each party shall pay its own legal costs.
The Court held further that the manner in which the parties conducted their affairs and day to day living was consistent with a universal partnership. Such partnership was similar to that of a marriage in community of property and as such each party becomes joint-owner of everything that either party owned before the partnership.
The aforesaid reinforced the view that the Plaintiff’s claim based on the actio communi dividendo could not be sustained since it would be near impossible to untangle the interwoven threads of the narratives of the life partners and the way they conducted their affairs during the partnership. The fair result to both parties would be to order a hybrid of both the actio communi dividendo and the universal partnership which would result in the division of the joint estate, just as in the event of a marriage in community of property.
By Werner Cilliers
Associate Attorney, Dyason Incorporated
25 March 2019