Mulaudzi v Mudau and Others

The first and second respondents were married in community of property on 6 June 2003. The property (erf 571 Makwarela-A township) was registered in the second respondent's name in January 2002 before the marriage. On 7 August 2012 the first respondent instituted divorce proceedings. On 5 July 2012, before the divorce was finalised, the second respondent sold the property to the appellant without the consent of the first respondent (his spouse). The second respondent represented in the sale agreement that he was unmarried and made a sworn declaration to this effect. The property was registered in the appellant's name on 28 August 2012. A final divorce order was granted on 13 February 2014 with forfeiture of matrimonial benefits against the second respondent. In August 2013, the first respondent applied to set aside the sale agreement on the basis that her consent, required by s 15(2)(a) of the Matrimonial Property Act 88 of 1984, had not been obtained.

• Whether a sale of immovable property by a spouse married in community of property, without the consent of the other spouse required by s 15(2)(a) of the Matrimonial Property Act 88 of 1984, could be deemed valid under s 15(9)(a) of the Act
• Whether the appellant (purchaser) knew or could reasonably have known that the seller was married and required spousal consent
• What the legal consequences are when a third party contracts in good faith with a spouse who lacks consent to alienate immovable property forming part of a joint estate

The appeal was upheld with costs. The order of the full court was set aside and replaced with an order dismissing the appeal (from the first instance court) with costs. This effectively restored the order of Semenya AJ in the court of first instance, which had dismissed the first respondent's application to set aside the sale.

Where a spouse married in community of property alienates immovable property without the consent of the other spouse as required by s 15(2)(a) of the Matrimonial Property Act 88 of 1984, the transaction will nonetheless be valid and enforceable under s 15(9)(a) if the third party purchaser establishes that: (1) they did not know that consent was lacking; and (2) they could not reasonably have known that consent had not been given. The burden of establishing these two requirements rests on the party seeking to rely on the validity of the transaction. Where the selling spouse represents in the deed of sale that they are unmarried and confirms this under oath in a sworn declaration, and the purchaser does not know the seller personally, the purchaser is entitled to rely on those representations without making further enquiries with government departments about the seller's marital status. In such circumstances, consent is deemed to have been given and the transaction is valid.

The court noted that the remedy for any loss suffered by a non-consenting spouse in terms of s 15(9)(b) is an adjustment in their favour when the joint estate is divided, though this was academic in this case because a forfeiture order had been made against the second respondent in the divorce proceedings. The court also observed that the case was straightforward and uncomplicated and did not justify the costs of two counsel, noting that counsel for the appellant rightly did not press for such an order.

This judgment clarifies the application of s 15(9)(a) of the Matrimonial Property Act 88 of 1984, particularly the "deemed consent" provision that protects bona fide third parties. It demonstrates the balance struck by the legislation between protecting non-consenting spouses and protecting innocent third parties who contract in good faith. The case establishes what enquiries are reasonably required of a purchaser when a seller represents (including under oath) that they are unmarried. It confirms that purchasers are entitled to rely on sworn declarations and need not conduct independent investigations with government departments in the absence of any indication that the seller may not be truthful. The judgment reinforces that only the party who has been misled can elect to avoid a contract on the basis of misrepresentation, and that such misrepresentation cannot be invoked by the party responsible for it or by third parties to invalidate transactions.