The case deals with an application which was brought to court on an urgent basis in 2011 for the restitution of the plaintiffs’ purchase price and the defendants’ property: a wooden house (the “res vendita”) due to structural defects (unlevel floors and ceiling). The Court a quo referred the matter to trial during which trial the parties requested the issues and the quantum be separated.
The issues in the matter were whether the alleged defects were indeed defects, whether they were latent or patent, and whether the voetstoots clause offered the defendants protection.
During the course of the trial it was concluded from the plaintiff’s evidence, and defendants’ admittance in their court papers, that the unlevel floors and the renovations (which had the effect of concealing the unlevel floors) constituted latent defects. The issue, therefore, was whether the voetstoots clause protected the defence in this case as the plaintiffs had inspected the property before purchasing it.
The second defendant claimed she was unaware of the unlevel foundation and therefore she did not have the requisite intention to defraud the plaintiffs. The second defendant further told the Court she had certain remedial work (the renovations) done for aesthetic purposes after she and her husband had been living on the property for a number of years. This work, including applying concrete screed on the floors, covering it up with tiles and laying carpeting, was completed by her husband.
The courts prefer the liberal approach to latent defects which holds that any material imperfection which prevents or hinders the ordinary or common use of the res vendita is defect.
It is trite in law that to avoid the consequences of the voetstoots clause the purchaser must show, not only that the seller knew of the latent defects and did not disclose them, but also concealed them with the intention to defraud.
To answer the question of whether or not a res vendita has a defect, the purpose for which it was bought can have a determining factor. The standard of a reasonable man is also used in such cases. Once a defect has been determined, the court asks if the defect is one that no other person would expect to find in other articles of substantial identity.
The Court held the renovations undertaken by the second defendant’s husband hindered any future renovations to the property, which any reasonable man would not expect to find on such property: therefore, they constituted a latent defect.
As a result, only the defendants knew about the unlevel floor and tried to conceal this defect by means that hindered the ordinary and common use of the property. The Court held they should have disclosed this information. It quoted a judgement from Odendaal v Ferraris where Cachalia AJ says: “where a seller recklessly tells a half truth or knows the facts but does not reveal them because he or she has not bothered to consider their significance this may also amount to fraud.”
The Court also considered an alternative approach and was of the view that if an unusual feature exists, it should be disclosed so as to place the buyer and the seller on an equal bargaining level. This is the case if it is a defect that the seller has an interest in concealing, but that the buyer would want to know as it impacts on the decision to acquire the property.
Finally the Court held at para 74 “the admitted knowledge of the unlevel floor by the second defendant and the failure to inform the plaintiffs of the remedial treatment undertaken by the defendants is a latent defect”. The non-disclosure and the levelling treatment, therefore, resulted in a latent defect and the defendants are accordingly not protected by the voetstoots clause.
The ordinary and common use of property is not a static concept, hence the courts apply the liberal approach when assessing whether or not disclosing latent defects is necessary in terms of the voetstoots clause. Therefore, if the seller suspects or knows that the buyers will have an interest in knowing about a peculiar quality or defect, then the seller must reveal it – this is also known as the parallel duty to disclose.
The court looks at the ordinary use of the property to help it determine if an aedilition remedy is applicable with regards to the non-disclosure of a latent defect, i.e. “Does the defect hinder the ordinary or common use of the property?”