Ruhan Knoetze v Gysbertus Johannes Botes N.O. (in his capacity as trustee for the time-being of the JRB Trust)

In July 2018, the plaintiff purchased a residential townhouse (Unit 2) from the defendant Trust (a property developer) for R1.2 million. The unit was built with a fireplace featuring a brick-and-mortar chimney. Prior to the purchase, the plaintiff's parents had leased the property since February 2015. On 24 June 2019, the plaintiff's father lit a fire in the freestanding open stove on the ground floor. A fire subsequently broke out on the upper floor, causing extensive damage particularly to a spare bedroom. The fire originated in the roof void near the chimney, causing the roof to collapse. Investigation revealed that a timber roof truss had been built through the brick-and-mortar chimney into the chimney flue void, in breach of National Building Regulations and SANS 10400 which require combustible materials to be at least 200mm from the inside of a chimney. This constituted a latent defect and fire hazard. The chimney was not shown on approved building plans. The sale agreement contained an exemption clause purporting to exclude liability for any defects. The plaintiff sued for damages in delict based on fraudulent non-disclosure of the latent defect.

• Whether a latent defect existed in the construction of the unit in breach of building regulations
• Whether the latent defect caused the fire
• Whether the defendant Trust knew of the latent defect at the time of sale
• Whether the defendant fraudulently concealed the latent defect
• Whether the exemption clause in the sale agreement protected the defendant from liability for latent defects
• The standard of proof required for expert evidence on causation and building defects
• The effect of closing a case without leading evidence after absolution is refused

The defendant was held liable for all damages the plaintiff may prove arising from the fire on 24 June 2019. Quantification of damages was postponed sine die. The defendant was ordered to pay the plaintiff's costs on a party-and-party scale including counsel fees on scale B, expert report costs, and expert witness fees, with interest at the legal rate from 14 days after allocatur/agreement.

A property developer-seller who constructs and sells residential units is in the position of a manufacturer-seller and will be deemed to have knowledge of latent defects in the construction. Where a latent defect exists that breaches building regulations and constitutes a fire hazard, and the defect is not shown on approved building plans, fraudulent concealment may be inferred. An exemption clause purporting to exclude liability for latent defects cannot protect a seller who had knowledge of the defect and failed to disclose it to the buyer. A latent defect is one not ordinarily discernible to a person of normal intelligence, and professional inspection of other aspects of a property does not amount to inspection sufficient to discover such defects. Expert evidence on causation in civil matters must be assessed on the balance of probabilities standard, not scientific certainty. Where expert evidence establishes that a building defect constituted a fire hazard, all necessary factors for ignition were present, and the fire originated in the location of the defect, causation may be established on the balance of probabilities even without direct physical evidence of the ignition mechanism.

The Court made several non-binding observations: (1) The court noted that fraud will not lightly be inferred but may be established by circumstantial evidence such as omission of structures from approved building plans; (2) The Court observed that expert witnesses often assess likelihood in terms of scientific certainty and must be guided to express probabilities in more practical terms for forensic assessment; (3) The Court commented that the phenomenon of 'pyrophoric carbon' (spontaneous ignition of repeatedly heated wood) was referenced in literature but it was unnecessary to venture into that technical terrain given the evidence on probabilities; (4) The Court noted that where a defendant fails to call its own expert witness despite filing expert reports, and closes its case without rebutting evidence, no general rule determines the effect but exculpatory assertions put in cross-examination cannot be weighed as evidence; (5) The Court observed that while the nature of a seller's business is a factor in determining knowledge of defects, a developer who builds units with assistance is sufficiently involved in the building process to be treated as a manufacturer-seller; (6) The Court noted that agreement between experts in a joint minute binds them to the same extent as facts common cause on pleadings, but this does not extend to matters outside their expertise such as building code compliance where they are not qualified.

This case is significant for several reasons: (1) It clarifies the liability of property developers as manufacturer-sellers who are deemed to have knowledge of latent defects in buildings they construct and sell; (2) It confirms that exemption/voetstoots clauses in sale agreements cannot protect sellers from liability for latent defects that were known but not disclosed, particularly where fraud is involved; (3) It demonstrates the application of the balance of probabilities standard in assessing expert evidence on causation, distinguishing between scientific certainty and legal proof; (4) It reinforces the principle that latent defects are those not ordinarily discernible to persons of normal intelligence, regardless of professional inspections; (5) It addresses the interpretation of National Building Regulations and SANS 10400 standards regarding fire safety and combustible materials near chimneys; (6) It confirms that when a defendant closes its case without leading evidence after absolution is refused, the court assesses only the plaintiff's evidence without weighing competing versions.