Consumer Information

Author : Maryna Botha – STBB
12 September 2016

NO COHABITATION AGREEMENT:  PROOF REQUIRED THAT YOU SHARE IN THE HOME AND ASSETS
VERMEULEN V MARX (19398/2014) [2016] ZAGPPHC (25 JULY 2016)

There are hard financial and emotional lessons to be learned in this judgment as it highlights the unenviable position of a person, after break-up of the cohabitation relationship for which no agreement was concluded, to prove that his/her contributions over a span of years constituted a universal partnership and what share in this partnership accrues to which party. One can only repeat the advice that, where persons are in cohabitation relationships, they conclude a written contract which lays out explicitly who has claims to what type of support, who owns the property and how, if at all, it would be split if the relationship fell apart.

SUMMARY OF JUDGMENT

FACTS
Vermeulen and Marx were involved in a romantic relationship and started living together in 1996. They jointly purchased a house and agreed to share living expenses. When the relationship fell apart, Marx disputed Vermeulen’s share in the home they had put up together.

Vermeulen then approached the Court for a declaration that a universal partnership had been established and for a declaration that they held equal shares in the partnership. Marx denied that any universal partnership had come into existence.

The facts showed that they had lived together as husband and wife for approximately 18 years and that it always was Vermeulen’s understanding that they came into a relationship on the basis that they would give each other their respective possessions or properties.

When Vermeulen and Marx first moved in together, they stayed in a house provided by Vermeulen’s employer. At the time, Vermeulen earned more than Marx. The parties contributed towards household expenses and food together without following strict rules regulating their respective contributions. They subsequently jointly purchased an immovable property and agreed to share living expenses such as buying groceries and home maintenance.

As time went by and Marx started earning more, he contributed 2/3rds and Vermeulen 1/3rd of the household expenses and the bond over the property they purchased. Marx paid for the maintenance and renovations of their home whilst Vermeulen assisted by contributing physical labour and skill.  

Marx later bought another immovable property, vacant land, in order to build a bigger house to occupy in the future. This was to be their dream home where they would retire. Vermeulen helped design the house and trusted Marx in this venture and believed they shared the new property jointly. Marx denied this and alleged that he only requested Vermeulen’s input on how to design a good investment house and that there was no agreement between them that Vermeulen had a right to the property. In October 2013 their relationship was terminated at the instance of Marx. 

HELD

• Our Courts have held that a universal partnership will exist if the following essentials are present:

(i) Each of the parties brought something into the partnership, whether it be money, labour or skill. (ii) The partnership was carried on for the joint benefit of the parties. (iii) The object was to make a profit. (iv) The contract was legitimate.

• A universal partnership of all property does not require an express agreement. Like any other contract it can also come into existence by tacit agreement, that is by an agreement derived from the conduct of the parties.

• It is by now accepted that a partnership enterprise may extend beyond commercial undertakings. Logic then dictates that the contribution of both parties need not be confined to a profit making entity.

• In the instance of persons cohabiting, this means that the contribution of one party can be the time, effort and energy in promoting the interests of both parties in their communal enterprise by maintaining their common home and raising their children. The partnership enterprise can include, if the facts support it, both the commercial undertaking and the non-profit making part of their family life.

• On the present facts the existence of a universal partnership has been proved. Amongst other facts shown: both contributed to the purchase of homes and daily expenses; when the relationship struggled, Marx offered to buy a house for Vermeulen; Marx nominated Vermeulen as sole beneficiary for his death benefits, and had retained her on his medical aid; it was also notable that their relationship lasted for 18 years, which is not a negligible duration. Significant was the concession made by Marx that if the relationship had not terminated because of his infidelity, Vermeulen would have benefited from the assets he had accumulated over time.

CONCLUSION:
It was found that Vermeulen had succeeded in establishing, on a balance of probabilities, the existence of a universal partnership between her and Marx.
Vermeulen was found to have a share of 33% in the partnership.