Universal Partnerships – A Weighty Affair

15th September 2016

Universal Partnerships – A Weighty Affair

Cohabitation, where two individuals live together but are not married, is becoming increasingly popular in South Africa. Our law does not give parties to a cohabitation arrangement automatic legal rights and if one party wishes to claim from the other, they would need to prove that the cohabitation amounts to a universal partnership.

Universal Partnerships
Universal partnerships are instances where there is an express or, more often than not, a tacit agreement between two unmarried parties who live together for an extended period of time. Usually, these parties share similar responsibilities, duties and obligations as married couples which often includes income, expenses and assets.
The court in Pezzuto v Dreyer and Others 1992 (3) SA 379 (A) set out factors required for the existence of a universal partnership, namely that-

  1. each partner should contribute to the partnership, including labour, skill or monetary contribution;
  2. the partnership is carried out for the joint benefit of the parties;
  3. the object of the partnership is profit; and
  4. the agreement is valid, although this has been dicounted for being a factor of all contracts (see Bester v Van Niekerk)

The old position in situations of cohabitation, often referred to as common-law marriage, was prescribed by Volks v Robinson 2005 (5) BCLR 446 (CC), where Mrs Robinson was denied inheriting from her deceased partner’s estate because they were not married. This, despite living together in a husband/wife manner for sixteen-odd years. Generally, where there was no express or tacit agreement as to the existence of each partner’s rights and duties, the claiming partner would be unsuccessful.

This was not the case in Gory v Kolver NO (Starke intervening) 2007 (4) SA 97 (CC), where the surviving partner to a same-sex life partnership called for the inclusion of same-sex partners in the Intestate Succession Act 81 of 1987. This claim was successful, and the Act was extended to include same-sex partners under the term “surviving spouse”.
Arguably, there is a discrepancy in how Mrs Robinson was treated as compared to Mr Gory. Essentially, this could be tantamount to discrimination on the basis of marital status and sexual orientation. In both instances, there was long-term cohabitation. Why, then, the differentiation? The confusion surrounding heterosexual cohabitation, and when it constitutes a universal partnership, was cleared up somewhat by the Supreme Court of Appeal in Butters v Mncora (181/2011) [2012] ZASCA 29 (28 March 2012).

A brief look at the facts
This case deals with two parties to a relationship that had had a cohabitation arrangement for some 20 years. Ms Mncora was, for the large majority of the relationship, unemployed and earned no personal income while Mr Butters built up a successful business and acquired a number of properties and assets. Ms Mncora raised their two children and maintained their common home while Mr Butters provided for them.

After deciding to split up, Mr Butters claimed that he ran his business and acquired his assets independently from his relationship to Ms Mncora, despite the couple having been engaged for a brief period.

The Judgment
The judgment considered the essentials of a partnership and put particular emphasis on accepting that a partnership enterprise may extend beyond commercial undertakings. The Court held that-
“It can be accepted that the plaintiff’s contribution to the commercial undertaking conducted by the defendant was insignificant. Yet she spent all her time, effort and energy in promoting the interests of both parties in their communal enterprise by maintaining their common home and raising their children. On the premise that the partnership enterprise between them could notionally include both the commercial undertaking and the non-profit making part of their family life, for which the plaintiff took responsibility, her contribution to that notional partnership enterprise can hardly be denied.”

In other words, there should be equal value placed on the contribution of time and energy as the caregiver as is placed on the bread-winner or provider.

This is further discussed and it is emphasised that universal partnerships relating to cohabitees should not be confined and viewed the same as commercial undertakings-
“Taken to its logical conclusion, it would mean that even a negligible monetary contribution would outweigh an invaluable non-financial contribution to the family life of the parties. In this light I must admit some sense of relief that, freed from the restraints of regarding universal partnerships as being confined to commercial enterprises, we are now able to evaluate the contribution of those in the position of the plaintiff in its proper perspective. This also accords with a greater awareness in modern society of the value of the contribution of those who are prepared to sacrifice the satisfaction of pursuing their own careers, in the best interests of their families.”

The Court also commented on the fact that the evidence suggested a relationship based on good faith and that an inference can be drawn from the fact that Butters was an extremely generous provider, and that him keeping the excess of his earnings and assets was inconsistent with this.

In granting the application, the Court ordered that the universal partnership be dissolved and that Ms Mncora was entitled to be paid 30% of the nett proceeds of the assets.

While in most cases it is difficult to prove the existence of a universal partnership, the present case showcases the willingness of our Courts to assist parties in deciding whether or not an express or implied partnership exists between them.

Butters v Mncora also assists in respect of clarifying the Courts position that a universal partnership does indeed exist in instances where parties act as a married couple in all material aspects without actually entering into an explicit agreement.

In such instances and where the relationship breaks down, the party with less bargaining power in the relationship may take some comfort from this case. Depending on the merits of each case, the Court may award a share of the assets acquired during the course of the partnership to such a party. 

Written by Robyn Smerdon, Bouwer Kobeli Morabe