- DOES SILENCE CONSTITUTE FRAUD?
to buy or sell property would invariably include a voetstoots clause
and this is the common basis of property transactions in South
recent Court decision of Waller and Another vs Pienaar and Another
303(C) has elucidated certain aspects of the voetstoots clause.
meant by the term "voetstoots"?
means that the property is sold "as is" or "as it
stands". Accordingly the purchaser purchases the property with
the patent and latent defects. Simply put patent defects refer to
that are visible to the naked eye and don't require expert inspection,
latent defects refer to defects that one would not normally discover
normal inspection e.g. a leaking roof.
There have been fairly recent cases upholding firmly, the purchasers
responsibility to inspect and make themselves aware of any patent
(clear and apparent) defects. As a buyer, you have no recourse should
you move in and find for instance a window latch not working or are
unhappy about a cracked tile. You MUST when viewing the home, properly
Please always remember however that the home must be in the same
condition as when you viewed it, so if the toilet was working when you
viewed and now is not, you will have full recourse.
purchaser is always liable for
patent defects unless the contract provides otherwise. The seller
however must disclose all latent defects or become
them. Once disclosed and accepted the buyer takes reponsibility
for latent defects as well.
Merwe vs Meads 1991 (2) SA 1(A)
of Van der Merwe vs Meads is the leading authority in respect of the
"voetstoots" clause. The case sets out the main criteria when
analyzing the Seller's liability in respect of property sold voetstoots
states that a Seller is deprived of protection under the said clause in
the Seller was aware of the defects in the property when entering into
b) The Seller
(dolo malo) intentionally conceals the existence of the defect with the
intention of defrauding the Purchaser.
the test in Van Der Merwe vs Meads placed a difficult burden of proof
Purchaser as the Purchaser
would have to prove that the Seller had knowledge of
the defect together with the intention to defraud the Purchaser
to succeed in
depriving the Seller of his defence under the voetstoots clause.
past, the second leg of this intention to defraud test was often easily
by the Seller.
Another vs Pienaar and Another (6) SA
case of Waller and Another vs Pienaar and Another deals with the second
the test. Whilst upholding the principals laid down in the Van
vs Meads, the Cape Town High Court in this case has now clarified the
principles and this case will assist Purchasers in the future.
in question arose from allegations by the Purchasers that the property
question had latent defects which the Sellers failed to disclose to
them at the
time of the sale. The court analyzed whether the Sellers
on the voetstoots clause as a defence and what the Purchasers would
prove in order to succeed. The alleged defects were poorly
filling, a vertical crack at the north gable wall, settlement of
screen wall, poor quality of external face brick panels, the failure of
internal walls and the dwelling had been constructed above an
site which fill site was of such a nature that necessary steps had to
to provide adequate footings and suitable founding depths to avoid any
construction on the property from cracking and this had not been done
building in question.
held that in order for the Purchasers to be successful in their claim
to prove that:-
fraudulently concealed the existence of the defects, thereby inducing
contract, alternatively the Sellers fraudulently misrepresented that
defects were latent;
Sellers were aware of the defects at the time of sale;
Sellers had a duty to disclose the existence of the defects to the
at the time of sale;
defects as pleaded latent?
summed up the definition of latent defects to mean not
"apparent" or a defect that is not reasonable capable of
perception. The court held that the defects were in fact latent
especially because the defects would not be visible to the
eye. The Sellers had argued that the crack to the north gable
"visible" and therefore not "latent". The court took
into account that the property was inspected at night time and held
Purchasers would not have seen same and since the Sellers did not
to the Purchasers they could not reasonably be expected to be aware of
thus qualifying the defect as latent.
Sellers aware of the alleged defects at the time of the sale and if so
they under a duty to disclose these to the Plaintiff?
answering this question the Court reviewed the case of Knight vs
think it resolves itself to this, viz that here the seller could be
only in respect of defects of which he knew at the time of the making
contract, being defects of which the purchaser did not then know.
respect of those defects, the seller may be held liable where he has
concealed their existence from the purchaser, or where he has craftily
refrained from informing the purchaser of their existence. In
circumstances, his liability is contingent on his having behaved in a
amounts to a fraud on the purchaser, and it would thus seem to follow
order that the purchaser may make him liable for such defects, the
must show directly or by inference, that the seller actually
general, ignorance due to mere negligence or ineptitude is not, in such
equivalent to fraud."
Sellers were clearly aware of the defects as they admitted to knowing
north gable wall was cracked and also admitted that extensive work had
done to cover up cracks on the internal walls. The Court further
from the case of Forsdicks vs Young where the learned Judge stated
words "designedly" and craftily" imply that there must be some
element of the transaction beyond mere knowledge and
learned Judge further states that it may be that the Seller's awareness
Purchaser's ignorance would supply that element."
pointed out that the Purchaser asked no question regarding certain of
defects and had to have purchased the property ignorant of the same.
Sellers fraudulently conceal the defects and/or falsely misrepresent to
Purchasers that there was no defects with the intention of inducing them to buy
the property under the circumstances where the Sellers had a
duty to disclose
the alleged defects.
when answering this question ultimately decided that "silence in this
instance" arising from the Sellers' knowledge of the facts and the
deliberate decision not to reveal them, was clearly
Accordingly the answer to this question was in the affirmative.
concluded that the contract was to be cancelled and the Purchasers were
placed in the same position they were prior to entering into the
under certain circumstances silence on the part of the Sellers will be
tantamount to fraud and this will assist a Purchaser in succeeding in a
and deprive the Seller of his defence that the property was sold
voetstoots. In light of the above it is evident that the Court
come to the assistance of a "dishonest" Seller.
clarifying points :
- As a Seller, if you are aware of defects -
state them upfront so as to
protect yourself. Most buyers are quite accepting of minor faults and
expect them to exist - in fact you reassure them by being transparent.
DO NOT try and hide major defects such as roof leaks or fondation
problems. Rather negotiate price around them than find yourself sued
- Buyers of new properties from developers
are covered by
means of insurance paid to the NHBRC - get a copy of the certificate
before signing or ensure the receipt of such certificate forms part of
your contract. In most cases, the bank will ask for this anyway as a
condition of granting the bond:
- We at Property Network
automatically have our sellers complete and sign a Seller Declaration
regarding the condition of the property and a copy of this is provided
to the purchaser. In this way, the seller is protected as he has fully
disclosed all issues and the buyer is re-assured by the seller's
- Regardless of any disclosure made by the
seller or the agent, it remains the buyers responsibility to properly inspect the property,
obtain deeds office information etc
- While much hype has centered around the
new Consumer Protection Act, it in our opinion has no relevance to
normal private property transactions
and only apply to developers. The reason for this is that the Act
states that it applies to "any transation in the normal course of business"
For the average man in the street, selling their home is NOT part of
their normal course of business. This comment is based on current legal
counsel but until the matter is actually tested in court, it can not be
said with absolute finality. Transactions with developers, who normally
build and sell however, will have their sales subject to the CPA.
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