Brief Summary

Property Law — Actio communi dividundo — Joint ownership — Applicant sought to terminate joint ownership of immovable property and appoint a receiver — Respondent contended existence of a universal partnership which had not been dissolved — Legal issue centered on whether a universal partnership existed and if the actio communi dividundo was the appropriate remedy — Court found that a universal partnership was established and that the applicant was entitled to invoke the actio communi dividundo to partition the property, as the parties could not agree on the termination of joint ownership.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings took the form of an opposed application in the Gauteng Local Division, Johannesburg, in which the applicant sought to terminate joint ownership of an immovable property by invoking the actio communi dividundo. The applicant also sought the appointment of a receiver and liquidator to implement a fair and equitable division of the co-owned property (or its proceeds).

The parties were Lloyd Sevren Crawford (applicant) and Leslie Alexander Goodman (respondent). They had previously been involved in a romantic relationship and had acquired the property as joint registered owners in undivided half shares.

Procedurally, the application was opposed and the respondent raised two points in limine. First, it was contended that the applicant had no cause of action under the actio communi dividundo because the co-ownership allegedly flowed from a universal partnership that had not been dissolved. Second, it was contended that the applicant should not have proceeded by way of motion proceedings because he allegedly knew (before launching the application) that material disputes of fact would arise. The court also granted condonation for the late filing of the answering affidavit.

The general subject-matter of the dispute concerned the legal character of the parties’ co-ownership (whether free or bound co-ownership), whether a universal partnership existed and, if so, whether it had terminated, and whether the court should grant relief terminating the co-ownership and regulating implementation through a receiver and liquidator.

Material Facts

It was common cause that the parties were previously in a romantic relationship, although they differed on its precise commencement date (August 2017 on the applicant’s version; June 2017 on the respondent’s version). They also differed on when cohabitation began and the precise arrangements leading up to the acquisition of the property. The court treated those differences as not decisive to the outcome.

The property was purchased on 18 February 2018, and transfer occurred on 6 June 2018. The applicant and respondent became joint registered owners in undivided half shares. That joint ownership, and the fact that the property was the object of the requested division, were not in dispute.

It was also common cause that the relationship had ended and that the parties were no longer living together. The applicant alleged that the respondent vacated the property in February 2020. The respondent asserted that the romantic relationship ended on 21 August 2019, and that he continued to frequent the property on some occasions until January 2021, after which relationship ties ended. The court treated the precise date discrepancy as immaterial, because the termination of the relationship and cohabitation was common cause and, importantly, the applicant had changed the locks and disallowed the respondent access to the property.

It was further apparent from the papers that the parties were unable to agree either on terminating the joint ownership or on a methodology to implement termination. The applicant wished to end joint ownership; the respondent refused to terminate it on the basis that the co-ownership was a consequence of a continuing universal partnership.

A key factual aspect concerned the existence of a universal partnership. Although the applicant did not refer to it in the founding affidavit, correspondence prior to the litigation reflected an express assertion (by the applicant’s attorney in an email dated 18 February 2021) that the parties intended to enter into a universal partnership, with contributions and an intention of making a profit. The respondent’s attorneys responded with a blanket denial that allegations were admitted, but the litigation position ultimately reflected that both parties were ad idem that a universal partnership existed, with the real controversy being whether it had terminated.

Legal Issues

The central legal questions for determination were whether the parties’ co-ownership was linked to a universal partnership, whether that partnership had been terminated, and whether the applicant was therefore entitled to invoke the actio communi dividundo to end joint ownership of the property.

Closely connected to those questions was whether the co-ownership was bound co-ownership (enduring for as long as an extrinsic relationship persists) or free co-ownership (capable of being terminated at the insistence of a co-owner). The availability of the actio communi dividundo depended, on the respondent’s argument, on whether the partnership relationship (as the alleged “tie”) still endured.

A further issue concerned procedure: whether the applicant’s election to proceed by motion was appropriate given the respondent’s contention that there were material disputes of fact, and whether any such disputes required resolution by trial action rather than application.

These issues involved both questions of law (the nature of the actio communi dividundo, the distinction between free and bound co-ownership, and partnership principles) and the application of law to fact (whether, on the affidavits, the partnership had terminated and whether any dispute of fact was genuine and material in the motion-proceedings sense).

Court’s Reasoning

The court began with the established position in South African law that the actio communi dividundo allows a co-owner to insist upon partition and termination of co-ownership. Relying on authority, the court emphasised that a co-owner is generally not obliged to remain in co-ownership against their will, and that where co-owners cannot agree on the method of division, a court may craft relief that is fair and equitable, including ordering a sale and division of proceeds.

The court then addressed the respondent’s first point in limine: the alleged absence of a cause of action because the property was said to be partnership property within a subsisting universal partnership. Although the applicant’s founding affidavit omitted any mention of the universal partnership, the court considered the pre-litigation correspondence, which reflected that the applicant had previously asserted the existence of a universal partnership. The court criticised both sides’ conduct in the correspondence (the applicant for the omission in the founding papers; the respondent’s attorneys for a bald denial that contributed to confusion), but treated the litigation reality as being that both parties accepted that a universal partnership existed. The question therefore narrowed to whether the partnership had terminated.

In determining termination, the court drew on the approach in Khan v Shaik, which emphasises that controversies about the existence of a universal partnership typically arise when it ends, and that a universal partnership is grounded in agreement (which may be tacit), involving joint effort and pooling of risk and reward, with accounting consequences upon termination. The court also relied on Butters v Mncora for the proposition that the ordinary partnership essentials (as formulated by Pothier and long accepted in South African law) apply to universal partnerships, including between cohabitees, and that a tacit agreement can bring such a partnership into existence.

Applying those principles, the court reasoned that a tacit agreement to end the universal partnership could be inferred from the parties’ conduct. It treated the termination as “self-evident” from the end of the romantic relationship, the respondent’s vacating of the property, and the fact that the parties were living apart and no longer pooling resources or contributing to a joint venture for mutual benefit. On that basis, the court found that the universal partnership had terminated when the relationship ended and the respondent vacated the property.

The court then addressed the conceptual distinction between free and bound co-ownership. It referred to the Supreme Court of Appeal’s articulation in Municipal Employees Pension Fund and Others v Chrisal Investments (Pty) Ltd and Others: free co-ownership exists where co-ownership is the sole legal relationship, while bound co-ownership exists where there is a separate “primary” relationship of which co-ownership is merely a consequence, and the co-ownership endures for as long as that extrinsic relationship persists. It further relied on the principle that bound co-ownership becomes free co-ownership once the primary relationship is terminated, at which point termination under the actio becomes available.

On the court’s factual findings, any bound co-ownership that might have existed (as a consequence of the romantic relationship and partnership tie) had become free co-ownership because the tie had ended. Accordingly, the court held that the applicant had correctly invoked the actio communi dividundo and dismissed the first point in limine.

Turning to the second point in limine (motion proceedings and disputes of fact), the court acknowledged the general procedural principles: the applicant as dominus litis may choose motion proceedings, but where genuine and material disputes of fact are foreseeable or exist, action proceedings are ordinarily appropriate. The court referred to the Plascon-Evans approach to disputes of fact on affidavit and the principle (supported by Lombaard v Droprop CC and Others) that an application may be dismissed if a party proceeds on motion in the face of a known, bona fide, material dispute.

However, the court concluded that there was no material dispute of fact requiring trial. It held that the existence and termination of the universal partnership were capable of determination on the papers, without the need for extrinsic evidence or a protracted enquiry. On that basis, it dismissed the second point in limine.

In relation to the mechanics of division, the court accepted that the parties could not agree on termination or a methodology and noted that the respondent, while opposing, offered no workable solution. In the exercise of its equitable discretion inherent in actio communi dividundo relief, the court regarded the appointment of a receiver and liquidator with defined powers as the most equitable method to implement termination, including sale and distribution of proceeds.

Finally, on costs, the applicant sought punitive costs. The court applied the principle that attorney-and-client costs require special grounds such as dishonesty, fraud, or vexatious or reckless conduct. It found the circumstances did not warrant punitive costs, but nonetheless ordered the respondent to pay the ordinary costs of the application.

Outcome and Relief

The application succeeded. The court ordered that the parties’ joint ownership of the specified property be terminated.

The court appointed Johannes Hendricus Du Plessis as receiver and liquidator, granting extensive powers and functions to sell the property (including to either party at a price deemed to reflect true market value), sell by public auction or private treaty, provide notice, sign transfer documentation, obtain valuations, call for documents, pay property debts, and distribute net proceeds between the parties in equal shares or otherwise as determined appropriate based on representations made.

The respondent was ordered to pay the costs of the application. Punitive costs were refused. Both points in limine were dismissed with costs, and condonation for late delivery of the answering affidavit was granted.

Cases Cited

Robson v Theron 1978 (1) SA 841 (A).

Rademeyer v Rademeyer 1968 (3) SA 1 (C).

Estate Rother v Estate Sandig 1943 AD 47.

Kruger v Terblanche 1979 (4) SA 38 (T).

Khan v Shaik (641/2019) [2020] ZASCA 108 (21 September 2020).

Schrepfer v Ponelat [2010] ZAWCHC 193.

Cloete v Maritz (2014) ZAWCHC 108.

Butters v Mncora (181/2011) [2012] ZASCA 29 (28 March 2012).

Bester v Van Niekerk 1960 (2) SA 779 (A).

Mühlmann v Mühlmann 1981 (4) SA 632 (W).

Pezzutto v Dreyer [1992] ZASCA 46; 1992 (3) SA 379 (A).

Ntuli v Ntuli 1946 TPD 181.

Municipal Employees Pension Fund and Others v Chrisal Investments (Pty) Ltd and Others (792/19) [2020] ZASCA 116 (1 October 2020).

Ex Parte Menzies et Uxor 1993 (3) SA 799 (C).

Matadin v Parma and Others (4638/2009) [2010] ZAKZPHC 18 (7 May 2010).

Room Hire Co (Pty) Ltd v Jeppe Street Mansions Ltd 1949 (3) SA 1155 (T).

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (2) All SA 366 (A).

Transnet Ltd t/a Metrorail v Rail Commuters Action Group 2003 (6) SA 349 (A).

Lombaard v Droprop CC and Others 2010 (5) SA 1 (SCA).

Waypex (Pty) Ltd v Barnes 2011 (3) SA 205 (GNP).

Legislation Cited

Insolvency Act (referenced for the tariff applicable to the receiver’s fees).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the applicant was entitled to rely on the actio communi dividundo to terminate the parties’ joint ownership of the immovable property, because the parties could not agree on termination or an appropriate method of division and because any partnership “tie” that might have made the co-ownership bound had ended.

The court found that a universal partnership existed between the parties, and that it had terminated by tacit agreement inferred from the parties’ conduct, particularly the end of the romantic relationship, cessation of cohabitation, and the respondent’s vacating of the property.

The court held that there was no genuine, material dispute of fact that rendered motion proceedings inappropriate; the partnership’s existence and termination were capable of resolution on the affidavits. The court therefore dismissed both points in limine and granted the substantive relief, including appointment of a receiver and liquidator, with costs against the respondent.

LEGAL PRINCIPLES

The judgment applied the principle that the actio communi dividundo is available to a co-owner to compel termination of co-ownership and division of jointly owned property, and that a co-owner is generally not required to remain in co-ownership against their will. Where co-owners cannot agree on the manner of division, a court may order a method that is fair and equitable, including sale and division of proceeds, and the court enjoys a wide equitable discretion in determining appropriate ancillary mechanisms.

The judgment applied the distinction between free and bound co-ownership as articulated in Municipal Employees Pension Fund and Others v Chrisal Investments (Pty) Ltd and Others. Bound co-ownership endures while an extrinsic primary relationship persists; once that relationship terminates, the co-ownership becomes free and is then capable of termination under the actio communi dividundo.

In relation to universal partnerships, the judgment applied the principle that universal partnerships (including between cohabitees) may arise by tacit agreement, and that the conventional partnership essentials accepted in South African law apply. The judgment further accepted that termination may also be established on the basis of tacit agreement inferred from conduct, and that whether and when a universal partnership terminates is a question of fact assessed in context.

On motion proceedings, the judgment applied the established approach that proceedings by application may be inappropriate where genuine and material disputes of fact exist or are reasonably foreseeable, and it referred to the Plascon-Evans framework for determining whether final relief may be granted on affidavit. It also applied the principle that applications may be dismissed where a party proceeds by motion in the face of a known material and bona fide dispute, but held that this threshold was not met on the facts.

On costs, the judgment applied the principle that punitive costs require special grounds such as dishonesty, fraud, or vexatious or reckless conduct, and held that ordinary costs (not attorney-and-client costs) were appropriate despite the applicant’s request for a punitive award.

Crawford v Goodman (21/37617) [2022] ZAGPJHC 435 (1 July 2022)