In July 2011, the respondents (Mr and Mrs Zietsman) purchased a guesthouse in Tzaneen, Limpopo from the appellant (Mr Le Roux) for R1,300,000. Before the sale, during viewings of the property, the respondents and their estate agent noticed water stains on ceilings and walls in rooms 6 and 7. The appellant assured them that the roof leaks had been repaired by his handyman and would not recur. The property was transferred on 30 September 2011 and occupation taken on 11 July 2011. Approximately three months after taking occupation, when it rained heavily, the entire roof leaked extensively, flooding the guesthouse and damaging furniture and linen. The respondents were forced to obtain additional funding of R241,281.76 to repair the roof, and they lost income for two months while the guesthouse was under repair. Evidence revealed that the appellant had used plastic sheeting the size of a double garage in the ceiling as a temporary measure. An expert engineer's report established that the roof had longstanding structural defects due to inferior design and workmanship, and that it was prone to leaking from the day it was built. The expert concluded that any claim by the previous owner that no leaking problems existed would be "impossible and untruthful".
The appeal was dismissed with costs. The Regional Court's award was confirmed: the appellant was held liable to pay R167,480.23 for repairs and R68,038.00 for loss of income, together with costs including counsel fees and expert witness fees.
To succeed with a claim based on fraudulent non-disclosure and fraudulent misrepresentation, a purchaser must prove that: (a) the seller was aware of the latent defect at the time of sale; (b) the seller deliberately (dolo malo) failed to disclose the defect to the purchaser; and (c) the non-disclosure was made with the aim to induce the purchaser to conclude the sale. A seller has a duty to disclose latent defects in property that are known to them, particularly where such defects would materially affect the purchaser's decision to acquire the property. A voetstoots clause does not protect a seller from liability where the claim is founded on delictual liability for fraudulent non-disclosure or misrepresentation, as opposed to breach of the implied warranty that the merx is free of latent defects. Knowledge of defects can be inferred from the circumstances, including the length of occupation, the nature and extent of the defects, attempts at temporary repairs, and expert evidence establishing that the defects were longstanding and would have been apparent to an occupier. A seller cannot avoid liability by claiming ignorance as a layperson where the objective circumstances and expert evidence establish that they must have been aware of the defects during their period of occupation.
The Court noted that it was bound by the credibility findings of the trial court and would not interfere with factual findings that were justified by the record. The Court observed that the high court went beyond what was necessary by addressing the voetstoots clause defence which the trial court had not addressed, though the appellant had raised and subsequently abandoned this defence. The Court remarked that the use of plastic sheeting much larger than the admitted water spot was "telling" and indicated knowledge of more extensive problems. The Court commented that it was "simply disingenuous" for the appellant who had occupied the property for five years to claim unawareness of the defects. While not necessary for the decision, the Court noted that even temporary measures like plastic sheeting "could not withstand rains, more so heavy rains," suggesting that such repairs would be inadequate and that this inadequacy should have been apparent to the seller.
This case is significant in South African law as it clarifies the principles applicable to fraudulent non-disclosure and misrepresentation in property sales, particularly regarding latent defects. It reaffirms that a seller has a duty to disclose known latent defects that would influence a purchaser's decision to buy, even when a voetstoots clause exists, where the claim is based on delict rather than breach of warranty. The case demonstrates how courts will assess credibility and draw inferences from objective expert evidence, particularly where a seller's version is irreconcilable with expert testimony. It establishes that a seller cannot escape liability by claiming ignorance as a layperson when the circumstances and duration of occupation would reasonably have revealed the defects. The judgment reinforces the protection of purchasers against fraudulent conduct in property transactions and clarifies the proper application of the aedilitian action in South African law.