McDonald v Young (292 / 10)  ZASCA 31 (24 March 2011) (McDonald case) and Butters v Mncora (181/2011)  ZASCA 29 (28 March 2012) (Butters case) are two recent supreme court of appeal cases that clarified the position of unmarried couples living together — or cohabiting — without having a written cohabitation agreement in place (failing to plan).
The facts of the McDonald case were briefly as follows:
The parties were involved in a relationship and had cohabited as man and wife for approximately seven years from June 1999 until May 2006. After the relationship broke down, the man (appellant) instituted an action against the woman (respondent) in the Western Cape High Court in Cape Town. The action was for an order declaring that a joint venture agreement existed between the parties relating to immovable property situated in the Eastern Cape. Alternatively, the appellant was seeking an order to instruct the respondent pay maintenance to the appellant.
The High Court (Veldhuizen J) found that the appellant had failed to prove the existence of a joint venture agreement. In respect of the maintenance claim, the court found that the respondent had no duty to support the appellant. These issues remain on appeal. Generally, in the absence of an agreement there is no legal duty of support on unmarried cohabitants. However, it was argued that the respondent had supported the appellant financially and on that basis a tacit agreement came into existence.
The court thus dismissed the appeal on the grounds that a tacit agreement cannot arise where there was an existing agreement to the contrary. In this case, the property ownership agreement contained an express provision to retain independence. The property ownership agreement did not create a partnership.
Similarly, in the Butters case, the woman (respondent on appeal) instituted action against the man. The action stated that their common law marriage in community of property was a tacit universal partnership in which both parties held equal shares. Alternatively she claimed contractual damages arising from the defendant’s breach of promise to marry her. This claim was based on the assumption that the intended marriage would be in community of property.
The Eastern Cape High Court found in favour of the woman. The court confirmed the existence of a universal partnership and awarded damages for breach of promise. The decision was overturned on appeal.
In this case it is worth considering that a partnership comprises certain elements:
- Each party brings, or agrees to bring, something into the partnership, whether money or labour or skill.
- The partnership business should be carried on for the joint benefit of both parties.
- The object should be to make a profit.
It is further accepted that:
- Universal partnerships of all property which extend beyond commercial undertakings were part of Roman Dutch law and still form part of our law.
- 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 that arises from the way both parties behave.
- The requirements for a universal partnership of all property are the same as those for partnerships in general. This includes universal partnerships between unmarried cohabiting couples.
- Where both parties act as if they are in a partnership, then the test for a tacit partnership is whether it is more probable than not that the parties reached a tacit agreement.
The Butters case appeal was dismissed on the basis that the appellant could not prove that all the elements of a partnership existed.
In light of this case law, unmarried couples living together should ensure that they execute a cohabitation agreement and prepare their wills to avoid similar situations.