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Universal Partnerships - What consequences does the law attach to it?

Universal Partnerships

Introduction
In South African many couples choose to cohabit instead of getting married. However South African law does not automatically grant parties who cohabit, legal rights. They would have to prove that their cohabitation amounts to a Universal Partnership, before being able to claim from one another.

A Universal Partnership is where two unmarried parties have lived together for an extended period. They usually share responsibilities and obligations that are like married couples. They can have an express or tacit agreement in place pertaining to how their income, expenses and assets are dealt with.

The Western Cape High Court delivered judgment on Universal Partnerships in Booysen v Stander (“hereafter Booysen v Stander”)1 on 27 June 2018. The case will be discussed below to illustrate how South African law deals with long-term cohabitation that might be Universal Partnerships.

Case study: Booysen v Stander
Facts
Booysen instituted a claim against Stander for the termination of joint ownership of an immovable property in Parklands, the repayment of a loan and the return of a motor vehicle registered in Booysen’s name. Stander instituted a counterclaim that sought to declare that a Universal Partnership existed between them thereafter a Court Order declaring the Universal Partnership to be terminated and division of their joint estate.2

Booysen testified that she was in a 17-year relationship with Stander. They were both employed. They decided to live together and run a joint household. They agreed that they both would contribute the same amount of money towards their joint household. They had agreed that their financial obligations would be divided equally. The Parties agreed that whatever was put in by either party they would receive back. The immovable property was transferred into both their names in undivided shares.3

What the Court decided:
Andrews AJ stipulated that the Court had to determine what the parties’ intentions were during their relationship4. He used criteria that the Supreme Court of Appeal set out in Butters v Mncora5as guideline to decide this matter.

The Court came to the following conclusion:
“If regard is had to the duration of the relationship, the nature of the relationship between the parties and that the parties conducted a joint household, the only reasonable inference to be drawn is that the parties pooled their resources to the benefit of the joint estate. Pellucid is the fact that both parties put everything they had into the proverbial melting pot (including their pensions). Because they were both fully committed to the relationship, they each gave what they could. To put a rand value to each one’s contributions would, in my view, be tantamount to diminishing the value of their individual contributions. The manner in which the parties conducted their affairs fits with the concept of universal partnership which describes a state of affairs between parties who meet the requirements of a partnership as earlier stated: contribution by both, to the benefit of both and for the purpose of making a profit. Consequently, I am satisfied on a balance of probabilities that a universal partnership came into existence between the parties”6.

Andrews AJ further determined that a Universal Partnership is like a marriage in community of property and that the Parties should thus equally share in the assets as well in the liabilities of such an Estate7. The Judge further declared that a Universal Partnership had existed between the Parties between 14 July 1996 and 8 March 2014. He further declared that their joint estate must be divided.

Conclusion
It is thus clear from the case study of Booysen v Stander that long-term cohabitation could be seen as a Universal Partnership in the eyes of the law, should the criteria as stipulated in the above judgment be met. Parties who do not wish to have the unintended consequences of a Universal Partnership forced on them, are advised to enter into a written Cohabitation Agreement whereby their rights, duties and obligations could be properly worded and protected. It is further advised that both Parties have Wills drafted to prevent their personal assets from becoming part of a joint Estate.

At SchoemanLaw Inc we can assist you to manage your Universal Partnership by drawing up a Cohabitation Agreement as well as Wills for both parties. Contact SchoemanLaw Inc today for expert assistance!

Booysen v Stander 19122/14 [2018] ZAWCHC 80 (“Booysen v Stander”).
Para 1 and 2 of Booysen v Stander.
Para 5 and 6 Booysen v Stander.
4 Para 63.
5 Butters v Mncora [2012] 2 All SA 485 (SCA).
6 Para 73 of Booysen v Stander.
7 Para 74 of Booysen v Stander.

© Helena Roodt - Schoemanlaw Inc. - 2018

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