Making An Eft Payment? Know Where Your Responsibility Lies In The Event Of Cybercrime

CAN AN OFFER TO PURCHASE BE REVIVED?

SHAREHOLDER PROTECTION UNDER THE COMPANIES ACT 71 OF 2008

ENFORCEMENT OF COMPANY BENEFICIAL OWNERSHIP FILINGS AND SECURITIES REGISTERS BY CIPC

UNDERSTANDING CURATORSHIP IN SOUTH AFRICA:  AN OVERVIEW

WHEN DOES THE NATIONAL CREDIT ACT APPLY?

The National Credit Act No. 34 of 2005 (“NCA” or the “Act”) is a piece of legislation that provides for consumer protection. This means that where credit transactions take place between parties, it is important for the credit provider to act in accordance with the NCA to ensure it does not prejudice the consumer. The intention of the NCA is to level the playing fields to allow consumers to feel empowered and not to be taken advantage of by large corporate entities. 

The two-step test to determine whether the NCA applies to a credit agreement, is whether the consumer falls within the definition of a consumer under section 4 of the Act and whether the transaction would be considered a credit agreement under section 8 of the Act. If the first question is answered negatively then there is no need to continue to the second question as the NCA will not be applicable. It is important to note that the Act only applies to credit agreements within the Republic of South Africa. 

Section 4(1) of the NCA states as follows:

“Subject to sections 5 and 6, this Act applies to every credit agreement between parties dealing at arm’s length and made within, or having an effect within, the Republic, except a credit agreement in terms of which the consumer is-

(i) a juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons, at the time the agreement is made, equals or exceeds the threshold value determined by the Minister in terms of section 7( 1);
(ii) the state; or
(iii) an organ of state;
(b) a large agreement, as described in section 9(4), in terms of which the consumer is a juristic person whose asset value or annual turnover is, at the time the agreement is made, below the threshold value determined by the Minister in terms of section 7(1);”

The annual turnover or asset value for a juristic person as of today’s date is more than R1 million.  This means that the NCA will apply to all individuals and juristic persons whose annual turnover or asset value is less than R1 million. While a large agreement is R250,000.00 or more in terms of Section 7(1)(b).

Section 8 of the NCA defines what credit agreements are and separates the definition into four categories – credit facilities, credit transactions, credit guarantees and any combination of a credit facility or credit transaction.

What is important to note is that there is a misconception that only registered credit providers need to comply with the provisions of the NCA. This is false as the NCA applies to all credit providers and therefore unregistered credit providers should be familiar with the provisions of the NCA in order to be compliant.

If you are thinking of entering into a transaction where credit will be provided, it is important to understand whether you are required to register as a credit provider. Failure to do so may result in unexpected penalties.

Written by: Orissa Ramesar (Candidate Attorney)

For more information please contact Sarah Marx at smarx@bissets.com or via:

Switchboard:   021-441 9800
Website:  www.bissets.com
Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

MUSLIM MARRIAGES RECOGNISED

There has been a significant development regarding the marital rights of Muslim women in South Africa after a judgment handed down by the Constitutional Court in June 2022.

In 2014, The Women’s Legal Centre Trust (WLCT) brought an application in the Western Cape High Court. The legal context out of which this application was brought is briefly as follows.

The Marriages Act 25 of 1961 fails to define the notion of ‘marriage’. However, this lack of legislative clarity has hindered rather than helped those married under Sharia law (Muslim marriages). The prevailing judicial and legislative sentiment has been that due to the potentially polygamous nature of a Muslim marriage, such religious unions are repugnant to public policy and therefore without legal effect. This has meant that if one were to conclude a marriage in terms of Sharia law, those party thereto would still be treated us unmarried individuals unless a separate civil union was also concluded. Naturally if the law does not recognise a marriage as legally valid, the dissolution thereof would not be subject to any regulatory legislation. In this sense, the Divorce Act 70 of 1979 does not afford protection to the dissolution of marriages concluded in terms of Sharia law, leaving Muslim women with little agency in terminating these marriages – under Sharia law, the power to dissolve a marriage is largely viewed as vesting exclusively in the husband.
With reference to this legal background, the High Court application brought by the WLCT sought an order compelling the State to implement legislation that would afford legal recognition to, and the regulation of marriages concluded in terms of Sharia law. This application was opposed by the State, including the President and the Minister of Justice and Constitutional Development who lodged an appeal to the Supreme Court of Appeal (SCA) following judgment in favour of the WLCT. 
At the SCA, the state parties conceded that the Marriage Act and the Divorce Act did in fact infringe on the Constitutional rights to equality, dignity and access to courts of women in Muslim marriages. This concession limited the scope of the SCA’s interrogation to whether the State is under a Constitutional obligation to provide legislative recognition and by extension, protection to marriages concluded under Sharia law.
On 5 August 2021, the Constitutional Court was presented with the opportunity to confirm the order coming out of the SCA and solidify the legal status of marriages concluded under Sharia law. In a judgment penned by Acting Justice Tlaletsi, the Constitutional Court confirmed the position taken by the SCA, holding that sections 6, 7(3) and 9(1) of the Divorce Act were unconstitutional and invalid. The Court further held that the common law definition of marriage is unconstitutional to the extent that it fails to recognise Muslim Marriages.
So where does this leave us? The President and Cabinet, together with Parliament now have a 24-month window in which they must “remedy the foregoing defects by either amending existing legislation, or initiating and passing new legislation.” In essence, by 28 June 2024 at the latest, marriages concluded under Sharia law shall be recognised as legally valid and giving rise to the same rights and obligations incurred by virtue of marriage in the traditional legal sense. The Court also provided a degree of interim relief that shall afford provisional protection primarily to women in Muslim marriages during the rectification window – see paragraphs 1.7 – 1.11 of the judgment for further details.

Written by: Daniel Prevost (Candidate Attorney)

For more information please contact Rifqah Omar at romar@bissets.com or via:

Switchboard:   021-441 9800
Website:  www.bissets.com
Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

UNDERSTANDING CONFIDENTIALITY AND LEGAL PROFESSIONAL PRIVILEGE

In the process of rendering a proficient legal service, the minds and offices of industry practitioners often become crypts, places harboring the secrets and intricacies of clients that otherwise would have been taken to the grave. While legal professionals require a holistic factual matrix in order to comprehensively respond to a client’s instruction, eliciting such information from a client requires a proverbial carrot – an incentive to disclose all the relevant facts, even if doing so has the potential to paint the client in a negative light. This sentiment was crisply summed up in the English case of Balabel and Another v Air India where the Court noted “A man must be able to consult his lawyer in confidence since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent.”

From this starting point, one can consider what is meant by confidentiality and legal professional privilege.

Legal practitioners have a contractual duty of confidentiality which obliges them not to reveal or use information bestowed upon them by their client. This duty arises from the contract of mandate between the legal practitioner and the client as well as from the fiduciary relationship that exists between them. The concept of confidentiality is, however, a broad one and one that exists in many professional environments. It is also uncommon for contracting parties in other contexts to include a ‘confidentiality clause’ which requires the parties to the contract to keep the content of the agreement to themselves.

On the other hand, legal professional privilege is a doctrine unique to the legal sphere. It is a substantive rule of law which allows a client to prevent his legal representative from disclosing certain communications to third parties. It is fundamental in ensuring the proper functioning of the legal system.

Legal professional privilege can be notionally divided into litigation privilege and legal advice privilege.  Legal advice privilege relates to communications between a lawyer and client whereby legal advice is given or is sought. Litigation privilege pertains to any advice given in contemplation of litigation. There are, however, principles applicable to both types of legal privilege:

1. The legal privilege belongs to the client and not the legal practitioner. It therefore the client who must claim the privilege and the client who can waive this right.
2. In order for legal professional privilege to be claimed the legal advisor must have been acting in a professional capacity and have been consulted by the client in confidence. The effect of this is that casual chats between a legal advisor and client in a social setting is may not be protected as legally privileged.
3. The communication between the legal advisor and client must have been for the purpose of obtaining legal advice.

While a powerful concept that aides the wheels of justice to remain in motion, legal professional privilege is not absolute. Communications which pertain to the facilitation of the commission of a crime or fraud are not protected as privileged communications. That is to say that privilege can only operate within ambit of legality. Furthermore, legislation or public interest can pierce the shield of legal privilege. For example, section 46 of the Promotion of Access to Information Act 2 of 2000 requires public entities to disclose information, regardless of privilege, in the event that such disclosure would bring to light “evidence of substantial contravention or a failure to comply with the law” or “an imminent and serious threat to safety or environmental risk […] where public interest in the disclosure clearly outweighs the harm [of overriding the privilege]”.

The relationship between legal practitioner and client is a unique one and one which is protected by both the practitioner’s duty of confidentiality and the client’s right to legal professional privilege. It is useful to understand these concepts as they remain important aspects of any legal matter in which you may find yourself.

Written by: Daniel Prevost (Candidate Attorney)

For more information please contact Savanna Kanzler at skanzler@bissets.com or via:

Switchboard:   021-441 9800
Website:  www.bissets.com
Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

IS A FINANCIAL INSTITUTION REFUSING YOU ACCESS TO CREDIT BECAUSE OF A DEFAULT JUDGEMENT?

An adverse civil judgment against a person’s name can greatly affect their ability to obtain credit and is often only noticed when they approach a financial institution to apply for credit. It is important to take legal advice as soon as one becomes aware of this situation.

Typically, default judgment for payment of a debt or a liquidated demand will be granted against a defendant if they fail to deliver a notice of intention to defend an action within the time stated in the summons. Or if they fail to deliver a plea or subsequent pleading within the time stated in Court Rules.

On failure of the defendant to defend the action, the plaintiff may lodge with the Clerk of the Court a written request for judgment in default. Should default judgment be granted and subsequently registered with a credit bureau this may prevent the judgment debtor from successfully applying for credit at a financial institution.

Fortunately, the law in South Africa does allow for this judgment to be set aside or rescinded by the Court. This can be done on application by the judgment debtor to the relevant Court within a time period specified by the Rules of the Court.

The following are examples of grounds upon which an application for rescission of the default judgment may be brought:

– If the judgment debtor has a valid defence that they had not raised as a result of having no knowledge to the legal proceedings. For instance, if the judgment debtor did not receive the summons notifying them of the legal action on grounds that it was served on an incorrect address.

– If the judgment debt, the interest thereon at the rate granted in the judgment and the costs have been paid in full or the judgment debtor has obtained a paid-up letter or confirmation from the judgment creditor.

– If the party who obtained judgment against you (judgment creditor) consents to the rescission or variation of the judgment.

Rescission procedure (in terms of Magistrate’s Court Rule 49):

The following general steps apply when bringing an application for rescission:

1. The judgment debtor must give notice to the judgement creditor and any other parties to the original case that they are bringing a rescission application.

2. This application is ordinarily supported by an affidavit setting out the grounds of the judgment debtor’s application.

3. Once the Court has granted an order rescinding the judgment, the applicant may notify the various credit bureau in South Africa to ensure that the judgment is removed from their credit profile and their records are updated.

The implications of judgments being made against a person can be serious and it is therefore important to approach an attorney as soon as you become aware of a default judgment against you.

Written by: Unathi Mayekiso (Candidate Attorney)

For more information please contact Amy van Dyk (Senior Associate) at avandyk@bissets.com or via:

Switchboard: 021-441 9800
Website: www.bissets.com
Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

PRESCRIPTION AND MAINTENANCE: CLAIMING MAINTENANCE AFTER 29 YEARS

In a landmark judgement handed down in January 2022 the Supreme Court of Appeal (“the SCA”) held that a maintenance order is classified as a ‘judgement debt’ and therefore only prescribes after 30 years (Arcus v Arcus 4/2021 2022 ZASCA).

Mr and Mrs Arcus got divorced on 27 July 1993. In terms of this divorce order, Mr Arcus was required to pay maintenance of R2 000.00 per month to Ms Arcus and their two minor children, until their daughters were self-supporting and Ms Arcus either remarried or died. He failed to do so. Over 20 years later, Ms Arcus decided to enforce the maintenance order against her husband. Mr Arcus argued that it would be unfair to permit his former wife to enforce the claim for arrear maintenance so long after their divorce and that the debt had become unenforceable due to prescription.

Let’s unpack what this judgement means for you.

Maintenance

Maintenance is an amount of money that is payable based on the existence of a legal duty to support. When you apply for a divorce order, it is possible to simultaneously claim maintenance from your spouse. There are two types of maintenance: spousal maintenance and child maintenance.

Child maintenance is granted under the Maintenance Act 99 of 1998 and is based on the obligation of a parent to support a minor child. This could include providing the child with housing, food, clothing, education and medical care, or providing the funds necessary to pay for these essentials.Spousal maintenance is also granted under the Maintenance Act 99 of 1998. In determining whether an order for spousal maintenance should be made, the Court will consider inter alia how long the marriage was, whether both parties earned an income during the marriage and the spouses’ respective means.

The duty to pay spousal maintenance may arise in two ways:

• Settlement agreement: the Court may make in accordance with the written agreement between the parties.
• Order of Court: the Court may make an order which it finds just in respect of the payment of maintenance by the one spouse to the other by considering various factors.

Prescription

Prescription is a legal principle that results in a debt or other obligation being extinguished after a certain period of time has elapsed. The Prescription Act 68 of 1969 provides for the time periods after which specific debts prescribe. Most civil claims prescribe after three years. Court orders, or judgement debts, are only prescribed after 30 years.

In the Arcus case, the SCA held that a judgement debt has three attributes:

1. The decision must be final and not susceptible to alteration by the Court of the first instance;
2. It must be definitive of the rights of the parties; and
3. It must be able to dispose of a substantial portion of relief claimed in the main proceedings.

Conclusion

In reaching its decision that a maintenance order is enforceable for 30 years after it is granted the SCA considered, amongst other things, that it is often vulnerable individuals who are the beneficiaries of maintenance orders. Any hardships that Mr Arcus now faces could have been avoided by complying with his maintenance responsibilities.

This judgement means that ex-spouses who struggle to enforce maintenance orders in their or their children’s favour will have many years to pursue the enforcement of the debt.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Unathi Mayekiso (Candidate Attorney)

For more information please contact or via: Savanna Kanzler at skanzler@bissets.com or via:

Switchboard:   021 441 9800

Website:  www.bissets.com Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

FOREIGN BUYERS: PURCHASING A PROPERTY IN SOUTH AFRICA

There is significant foreign interest in the South African property market. We have identified some useful information for foreign buyers to be aware of when considering purchasing property in South Africa.

Property can be owned by individuals or by a juristic entity such as a company, close corporation or trust. If the juristic entity is registered in a foreign country, it must also be registered in South Africa.

Ownership of land is evidenced by a Title Deed, which is issued to the owner of the property and signed by the Registrar of Deeds. In South Africa, there is a Deeds Registry in each major centre and the head office is located in Pretoria. The seller of the property will ordinarily appoint a conveyancer who will draft documents that both parties will need to sign. Thereafter, the conveyancer will prepare the Deed of Transfer and have it lodged at the Deeds Registry for registration. Ownership of the property passes on the day of registration of the Deed of Transfer.

Securing the purchase price

Purchases in South Africa are typically secured by means of a banker’s guarantee payable to the seller’s conveyancer or any third party that has been nominated by the seller or his conveyancer. Guarantees that are issued from a foreign bank are usually not accepted by a conveyancer; therefore, foreign purchasers should obtain a guarantee from a South African bank. Alternatively, the foreign purchaser can pay the full purchase price to the conveyancer, who would then invest the amount pending registration of the transfer.

Interest gained on invested funds A conveyancer will place the received funds, which exclude costs and disbursements, into a separate trust account. The interest on this investment will accrue in part to the Attorney’s Fidelity Fund and in part in accordance with the sale

agreement. If the purchaser wishes to benefit from the investment, they must ensure that provision is made for this in the sale agreement.

Exchange control

The South African Reserve Bank has imposed regulations that govern the transfer of funds in and out of South Africa, referred to as exchange control. Any funds that a non-resident has introduced into South Africa in order to purchase a property must be disclosed to the relevant South African bank. This will allow a purchaser to convey the proceeds of a future resale of the property back to their overseas bank accounts. The banks act as an agent of the South African Reserve Bank and they will endorse the title deed with “Non-Resident” as a record that the funds were introduced from overseas.   

When a purchaser acquires the shares in a South African juristic entity in order to facilitate the purchase of property, they will need to have in their possession a document from any South African bank that confirms that they are transferring funds from abroad. 

Mortgage finance

A purchaser who is a non-resident may borrow funds via mortgage through a South African commercial bank.  This amount cannot exceed 50% of the purchase price for the property, unless it has been approved by the South African Reserve Bank. For every R1.00 deposited, you can apply for a loan of an equal amount.

Voetstoots This clause is introduced by sellers to avoid liability for latent or patent defects found on the property. It is advisable for a purchaser to inspect the property sufficiently to detect any patent or latent defects. The maxim is linked to the caveat “let the buyer beware”, thus indemnifying the seller from future damages claims if defects are discovered by the purchaser after registration. The Consumer Protection Act 68 of 2008 (“the CPA”) limits service providers or suppliers from relying on the voetstoots clause to escape liability of defects that said the supplier had been aware of but this would only occur where the CPA is applicable.

Possession

Possession of the property will typically coincide with occupation and is important because it usually entails the transfer of the benefits and risks of ownership. This means that risk can transfer to the purchaser before formal registration occurs in the Deeds Registry. We would therefore advise that a prospective purchaser should have the property insured from the date of possession.

Costs

Prospective purchasers should be aware that they are usually liable for the following costs:

• Transfer fees — based on a recommended tariff that is issued by the South African Law Society
• Value-added tax or transfer duty
• Deeds Office levies
• Pro-rata municipal rates and sectional title levies (applicable to sectional title properties only)
• The costs of obtaining the rates and levy clearance certificate/s

The sale agreement should make provision for the payment of the various fees so that it is clear which party is liable.

Section 35A of Income Tax Act 58 of 1962 – Withholding Tax

There is an automatic withholding of tax which is levied by the South African Revenue Service (SARS) when a non-resident sells a property.

The following rates apply:

• Natural persons – 7.5%
• Companies – 10%
• Trusts – 15%

These amounts are payable to SARS within 28 days after transfer for non-resident purchasers.  The purchaser can apply to SARS directly for a directive which will state the exact amount of tax that is payable. When you liaise with your attorney, they will explain the relevant documents that are necessary and will be expected by SARS when applying for the directive.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Orissa Ramesar (Candidate Attorney) and Andrea Tomassichio (Associate)

For more information please contact Andrea Tomassichio at atomassichio@bissets.com or via:

Switchboard:   021 441 9800

Website:  www.bissets.com Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional

INCAPABLE OF MANAGING AFFAIRS?

There are several situations in life that may result in a person no longer being able to manage their financial affairs or make rational and/or informed decisions. This usually follows cases of mental illness, intellectual disability, physical disability or general ageing-related issues. The only way to assist these people is to apply for the appointment of a curator bonis or a curator ad personam.

It is fundamentally important to distinguish between a curator bonis and a curator ad personam. A curator bonis is the person who manages the finances, property, or estate of the person unable to do so because of mental or physical incapacity. A curator ad personam tends to the day-to-day needs regarding the living, care, and treatment of the Patient. The latter form of curatorship is a far greater curtailment of a person’s rights and freedoms, the court will not lightly make such an appointment unless there are exceptional circumstances.

Curators are accountable to the Master of the High Court. A curator bonis is required to furnish security to the Master of the High Court, as a guarantee for doing the job properly. Practising attorneys hold Fidelity Fund certificates that satisfy this requirement; therefore, only practising attorneys are appointed as curators (with a few rare exceptions).

The curatorship application is initiated by the application for the appointment of a curator ad litem (to investigate the need for a curator to be appointed), normally an Advocate nominated by the applicant or their attorney. The applicationshould be supported by reports of two medical practitioners who have assessed the Patient recently, and are able to attest to the extent, duration, and nature of the mental condition of the Patient and make a recommendation that a curator is, in fact, needed. Once the various assessments have been conducted and the reports have been filed with the Master of the High Court, the matter can be placed before the court for an order declaring the Patient of unsound mind and/or incapable of managing his/her own affairs. The person bringing the curatorship application or their legal representative usually recommends a curator bonis and/or a curator ad personam

who should be appointed if the court grants the above order, and they need not be the same person.

There are instances where a Patient, who has been declared to be of unsound mind and is under curatorship, may recover and no longer require the assistance of a curator. In this case, an interested party may bring an application before the court requesting the release of the Patient from curatorship. Further assessments will be conducted to determine whether the Patient is in fact capable of managing their own affairs. If that is true, the court will likely order the release from curatorship.

The above article briefly outlines the application for the appointment of a curator process. If you believe there is someone in your life who would benefit from the assistance of a curator or wishes to be released from curatorship, please contact Rifqah Omar at romar@bissets.com or via the relevant contact details below.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Chelsea Banks – Candidate Attorney 

Switchboard: 021-441 9800

Website: www.bissets.com

Bissets WhatsApp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professionals

GENERAL PRINCIPLES: REMEDIES FOR BREACH OF CONTRACT

Upon concluding a contract, the parties involved are bound by the terms of the agreement. Should any of the parties not perform their part as agreed in the contract (without a lawful excuse), a breach of contract occurs.  When a party has breached the terms of the agreement, the aggrieved party(ies) to the contract have a number of options available to them. These options, called remedies, usually include damages, specific performance, and contract cancellation. The available remedies are, however, also dependent on stipulated terms of the contract.

Damages

Damages are a monetary payment made by the breaching party to the aggrieved party, which usually aims to put the aggrieved party in the same position as it would have been had the breach not taken place. The damages that may be claimed include actual damages and loss of profits. The aggrieved party is only entitled to the damages that he or she can prove. Once the damages have been proved, the aggrieved party will need to quantify the damages, which can be difficult. When claiming damages, the aggrieved party should ensure that it has taken all reasonable steps to minimise its losses. This is called mitigation of damages.

Specific Performance

This remedy is a way of forcing the breaching party to perform what was agreed to in the contract. The aggrieved party will need to apply to Court for an order that will compel the breaching party to perform in terms of the contract.

Generally, the aggrieved party has the right to this remedy, but the Court does have the discretion to refuse to make such an order.  For example, the Court may refuse to grant an order for specific performance if the performance is impossible. If an order for specific performance is granted by the Court and the breaching party still fails to perform, the breaching party may be held in contempt of Court.

Cancellation

If the aggrieved party wishes to cancel a contract, the most important question is whether or not the contract included a cancellation clause. If no cancellation clause exists, the aggrieved party’s right to cancel is dependent on a number of factors, including the materiality of the breach. However, if the contract includes a cancellation clause, it is easier to utilise this remedy.  It is important to ensure that all aspects of the cancellation clause are complied with, including giving notice where required.  If a contract is validly cancelled, each party has the duty to return what was received under the contract.

There are a number of remedies available where a breach of contract has taken place. The consequences of a breach of contract can be costly so it is important to ensure that all parties understand the terms of a contract, and are happy with what they are agreeing to, before signing the agreement.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Simthandile Cagwe (Candidate Attorney)

For more information please contact Sarah Marx at smarx@bissets.com.

Switchboard:             021 441 9800

Website:                     www.bissets.com Bissets Whatsapp:   072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professionals

Residential Evictions: The Basics

Q: What is a residential eviction?

A residential eviction is the forced removal of unlawful occupiers from a house or from land.  Importantly, section 26 of the Constitution protects an individual’s right to housing by providing that an eviction may only take place in terms of a court order and after all relevant circumstances have been considered. In order for an eviction to be valid, the correct legal process must be followed, which includes an application which must be made to a competent court in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE”).

Q: Who may apply for an eviction?

Either the owner of the property or the person legally in charge of a property (referred to as the applicant) may apply to court for an eviction order. The applicant must be able to show that the occupier is in illegal occupation of the property and that the procedural and substantive requirements for the granting of an eviction order have been met.

Q: What are the steps?

1. Ensure that the occupier is not legally entitled to occupy the premises. This may, for instance, include the cancellation of a lease agreement (if applicable) or the delivery of a notice to vacate the property. This is a crucial step to the success of the eviction application.

• The Main Application

An application to court must be prepared – this is done in a prescribed form and must be supported by an affidavit deposed to by the applicant.  This application is then issued by the Court and served by the Sheriff on, amongst others, the occupiers of the property.  Owing to the technical nature of this application, it is recommended that it be drafted by an attorney with experience in such matters.

• Ex-parte Application

In compliance with the requirements of the PIE Act an ex-parte application (i.e. an application made without notification to the other parties) must be brought.  The purpose of this further application is to inform the court that an eviction application has been served on occupiers of the property and to obtain authorisation and directions for service of a further notice of the proceedings on the occupiers.

• Notice of Proceedings

Once the court has authorised service of a further notice on the occupiers, this notice must be served on the occupiers by the Sheriff at least 14 days before the main application is heard in court.  This notice once more informs the respondent of the hearing date in the main application, provides a summary of the reasons for the eviction and sets out the consequences of ignoring the matter.

• Hearing of the Main Application and Further Steps

By the hearing date of the main application it will become known if the application is being opposed by the occupiers or not.  This factor will largely determine the further conduct of the matter.  Ultimately, if the application is successful, an order declaring the occupiers to be unlawful and providing for their eviction, will be granted.

Important to note: Before an eviction order is granted by the court the court will consider the personal circumstances of the occupants as special regard is given to the rights of children, the elderly, disabled persons and women-headed households.  The court has to be satisfied that any order granted will not infringe the rights of the occupants without just cause.

Q: Are evictions allowed during the current National State of Disaster?

Although the National State of Disaster initially placed a blanket moratorium on evictions, this position was altered with the relaxing of the various lockdown alert levels.  Persons declared to be unlawful occupiers of property may now be evicted provided that evidence of the eviction being just and equitable is placed before the court.  Determining whether an eviction is just and equitable involves taking into account the circumstances of all parties.

TIPS

Before applying for an eviction order:

• Attempt to effectively communicate with the occupier;
• Do not “take the law into your own hands”;
• Make sure that you understand what an eviction entails and the procedure to be followed;
• Ensure that valid notice has been given to the occupier.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Simthandile Cagwe – Candidate Attorney

For more information please contact Lili von Geyso (Partner) at lvongeyso@bissets.com or Amy van Dyk (Senior Associate) at avandyk@bissets.com via:

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Website: www.bissets.com

Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

REINSTATEMENT OF COMPANIES AND CLOSE CORPORATIONS (CIPC PRACTICE NOTE 1 OF 2022)

The Companies and Intellectual Property Commission (CIPC) recently issued a revised practice note regarding the re-instatement of companies and close corporations in terms of section 40(6) and (7) of the Companies Regulations.

CIPC will only reinstate a company or close corporation if:

1. The company or close corporation was in business at the time of deregistration (proof will have to be provided that it was conducting business or has any other economic value at the time of deregistration);
2. There is immovable property registered in the name of the business; or
3. There is a court order re-instating the company or close corporation.

The procedure to re-instate a company entails submitting the re-instatement application form CoR40.5 to CIPC with the supporting documents.

Once CIPC has approved the re-instatement application, all outstanding Annual Returns must be filed in order to complete the re-instatement process. If the Annual Returns are not filed within 30 business days from date of re-instatement, the company or close corporation will be finally deregistered again without any further notification.

The legal effect of the re-instatement of a company or close corporation was considered by the Supreme Court of Appeal (SCA) in the case of Newlands Surgical Clinic (Pty) Ltd v Peninsula Eye Clinic (Pty) Ltd 2015 ZASCA 25. The Court concluded firstly, that the re-instatement of the registration of a company by CIPC in terms of the Companies Act 71 of 2008 is automatically retrospective (the corporate activities during the period of deregistration are validated) and secondly, that once the company has been re-instated, a party who is prejudiced by the automatic retrospective effect can seek relief in terms of section 83(4) and a court may grant the relief it considers just and equitable.

The position adopted by the SCA in the above judgment is a welcome decision for third parties in that it serves to safeguard bona fide third parties, who may not be aware of the deregistration of a company or close corporation and continue to transact with the company or close corporation.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Sarah Marx – Associate

For more information on commercial matters and CIPC applications, please contact Henning Pieterse (Partner) at hpieterse@bissets.com or Sarah Marx (Associate) at smarx@bissets.com or via:

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Website: www.bissets.com

Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

Lost Title Deeds

Once the deed of sale has been signed, there is a set transfer process at the Deeds Office. Unfortunately this process can be delayed or even halted due to unforeseen events, such as the loss or destruction of a title deed.

The delay this causes, as well as the additional costs involved, is often not explained to purchasers and sellers. This article aims to give potential sellers and purchasers an idea of how a lost title deed will affect your property transaction.

PROCEDURE

The procedure to follow when applying for a copy (called a “VA copy”) to replace a lost or destroyed title deed is governed by the Rural Development and Land Reform regulations which came into effect on the 1^st of January 2020.

1. The property owner must apply to the Registrar of Deeds for a VA copy. This application includes deposing to an affidavit setting out the circumstances in which the title deed was lost or destroyed.
2. The application also needs to be advertised in a newspaper which circulates in the area of which the property is situated.
3. The Registrar must be furnished with a copy of the application as well as a copy of the lost title deed and a letter confirming the date of the advert in the newspaper on the day of advertisement. These documents will lie for inspection at the Deeds Registry for all affected persons to view during the two week period advertising period. This inspection period is done at no additional cost.
4. If an affected party wishes to object to the application, they must lodge their objection, in writing, with the relevant Registrar of Deeds within the two week period.
5. After the two week period, the application and a copy of the advertisement is lodged together with the transfer deed and a certificate confirming that no objections were received at the Deeds Office.

If there are no queries the Deeds office can issue a certified copy of the title deed and the normal lodgement and transfer process can proceed.

Note that where it can be proved that the original title deed was lost whilst in the possession of the Registrar of Deeds then no advertisement is required.

COSTS

• The newspaper advertising costs are approximately R1 500.00 (VAT inclusive);
• Attorney’s fees for drafting and lodgement costs are approximately R3 000.00 (VAT inclusive); and
• Deeds Office registration fees are approximately R621.00.

Due to the above-mentioned delays and costs we urge our property owners to ensure that they know where their title deeds are before commencing with a property transaction. If your property is subject to mortgage bond then the relevant bank usually holds the original title deed until the bond is fully paid. If your property is unbonded and you are unable to locate your title deed then we urge you to contact us.

If you would like a more detailed analysis or legal advice regarding the new regulations please do not hesitate to contact us.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by:

Orissa Ramesar – Candidate Attorney

Andrea Tomassichio – Associate

For more information please contact Andrea Tomassichio at atomassichio@bissets.com or via:

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Website:  www.bissets.com

Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

INHERITING FROM A LIFE PARTNER

Can I inherit or claim maintenance from my life partner’s estate?

A life partnership or domestic partnership can be defined as a long-term, intimate relationship that is akin to marriage without this relationship being formalised in law.  South African law has no legislation which regulates domestic partnerships and has been slow to develop protection for these partnerships. This has resulted in people living in life partnerships being excluded from the benefits which automatically attach to a marriage or civil union even though they are often substantially the same. For a general introduction to life partnerships and how they are regulated, see our article: https://bissets.com/2020/02/how-does-the-law-provide-you-with-protection-in-your-relationship/

The recent Constitutional Court case of Jane Bwanya v The Master of the High Court, Cape Town CCT241/20 concerned one such discrepancy between a marriage or civil union on the one hand, and a domestic partnership on the other. The applicant, Ms Bwanya, approached the High Court with a claim for inheritance and maintenance as a surviving spouse from her life partner’s estate. Ms Bwanya’s claim had been rejected by the executor administering the deceased’s estate on grounds that benefits are conferred only on married couples and not life partnerships.

Ms Bwanya and Mr Ruch (the deceased) had been in a life partnership since 2014, and were engaged in 2015. They were amid preparations for Lobola negotiations when Mr Ruch passed away in 2016. Mr Ruch had provided financial support to the Ms Bwanya and she had provided care, companionship and support in return. The deceased’s will was regarded as invalid as the sole heir to his entire estate was his predeceased mother, so his estate was being administered in terms of intestate succession.

The Constitutional Court ruled that the Intestate Succession Act 81 of 1987 was unconstitutional insofar as the definition of ‘spouse’ omits the words ‘and includes the surviving partner of a permanent life partnership terminated by the death of one partner in which the partners undertook reciprocal duties of support and in circumstances where the surviving partner has not received an equitable share in the deceased’s partner’s estate’.

The Constitutional Court also found that the definition of ‘spouse’ and ‘marriage’ in the Maintenance of Surviving Spouses Act 27 of 1990 should be extended to include a person in a permanent life partnership.

The invalidity of both of these sections has been suspended to enable Parliament to take steps to cure the constitutional defects in the legislation.

Conclusion

This ruling is an important step in the legitimisation of life partnerships in South Africa. Questions do arise regarding how to practically define a life partnership. For example, one may ask whether there is a minimum length of time that a couple must have been living in a life partnership before legal consequences will attach to the relationship. 

Currently, the South African Law Reform Commission has produced a draft bill on Domestic Partnerships, but this Bill has not been passed since it was produced in 2006. It would be preferable for life partnerships to be regulated comprehensively through legislation such as the Domestic Partnerships Bill instead of through piecemeal recognition by the Courts.

To avoid any unintended consequences or expense, individuals living in a life partnership should ensure that they have a valid will and that their relationship has been provided with all the necessary legal protection.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Unathi Mayekiso – Candidate Attorney

For more information please contact or via: Savanna Kanzler at skanzler@bissets.com or via:

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Website:  www.bissets.com

Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

Execution of residential property

Residential property and judgement debts: what is the general procedure for a creditor to sell a debtor’s home in execution of a debt?

This article will set out the basic procedure a creditor must follow to sell a debtor’s home in execution of a debt.

In general when a debtor reneges on the repayment of a debt, the creditor is required to approach a Court to confirm the existence of the debt. Once this Court order detailing what is owed to the creditor is obtained, the debt is now a judgement debt and the creditor can apply for a writ of execution to be issued. The writ of execution directs the sheriff to attach the property of the debtor, which property will then be sold to satisfy the debtor’s judgement debt. This process is called the execution of a judgement debt.

The creditor is required to attach the debtor’s movable property (such as a car or television) first and may only attach immovable property (for example a house) if there are insufficient movables to cover the judgment debt. However, where the debt is against immovable property specifically (as is the case with a mortgage bond) the creditor, after obtaining a judgment debt, may attach and sell the immovable property without first executing against the movable property.

A number of judgements have dealt with the tension between allowing a legitimate creditor to lawfully execute against a debtor’s home in order to settle their debt and the debtor’s constitutionally protected right to adequate housing (section 26(1) of the Constitution). In preservation of this constitutional right, the current position is that a creditor is required to first institute proceedings at Court to obtain a Court order which creates a judgement debt and then apply to Court again to obtain an order authorising the issuing of a writ of execution against the debtor’s residential property.  

If the Court is satisfied that the execution against the residential property is warranted it will authorise the execution. If this is the case the Court will usually set a reserve price. A reserve price is the minimum value for which the debtor’s property may be sold. Various factors are considered by the court when determining a reserve price.

At this stage, the Court has deemed the debtor’s home executable and has set a reserve price. An auction will take place where the property in question will be sold to satisfy the judgment debt. The property may not be sold for less than the reserve price but, at auction, the reserve price may not be met. This is the scenario that was recently brought before the High Court in the judgment of Changing Tides 17 (Proprietary) Limited N.O. v Kubheka and three other matters ([2022] ZAGPJHC 38). In this case the Court set out clear guidelines of the procedure to be followed should the reserve price not be reached at auction.

The sheriff, following the unsuccessful auction, must submit a report within five days of the auction. This report must set out the details of the auction, the persons who participated in the auction, the highest offer made, and any other relevant information.

The creditor is now required to bring an interlocutory application for the Court to reconsider the reserve price. An interlocutory application is another application within the main application which allows the Court hearing the new application to have access to the documents from the main application. In this scenario the main application is the application for the Court to authorise the execution of the residential property.

In the interlocutory application the applicant must show the Court that the auction was properly advertised and that there is no other reason, other than the reserve price being too high, that the property could not be sold on auction. The relief sought by the creditor is usually that the property be sold to the highest bidder. The Court must then exercise its discretion to reconsider the reserve price.

Summary of the process

1. Creditor must obtain a Court order against the debtor (judgement debt).
2. If the creditor wishes to execute the judgement debt against the debtor’s residential immovable property the creditor must apply to Court to obtain authorisation for the Registrar to issue a writ of execution.
3. The Court may set a reserve price (a minimum price) for the property.
4. Once this authorisation is granted, the sheriff may proceed to sell the property in question on auction. If no bid higher than the reserve price is made the property may not be sold.
5. In these circumstances the creditor must again apply to Court and request that the Court reconsider the reserve price which it set.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Chelsea Banks – Candidate Attorney

We recognize that this is a complicated and stressful situation. For more information please contact Clint van Aswegen on cvanaswegen@bissets.com or via:

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Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

What happens to your lease agreement when the leased property is sold?
The huur gaat voor koop rule

When a lease agreement is concluded between two parties (a lessor and the tenant), the tenant acquires use and enjoyment rights to a property against payment of a rental. The question arises: if the lessor-owner sells the property to a third party, is the lease agreement still enforceable? And if it is, how do rights and obligations contained in the lease agreement function between the tenant and new owner?

At the outset, a distinction must be drawn between a real right and a personal right. A person with a real right can enforce this right against all third parties. Ownership is an example of a real right. A personal right, on the other hand, is only enforceable against a specific person.

Historically in Roman law, when a lease agreement was concluded, the tenant only got a personal right against the lessor. So, if the lessor sold the property to a third party, the tenant was not able to enforce their lease agreement rights against this third party.

The unfairness, and impracticality, that arose from this position contributed to the development of a legal rule in the Netherlands: the huur gaat voor koop rule. Literally translated this rule states ‘lease takes precedence over sale’.

The rule means that a lease agreement survives the transfer of ownership from the lessor-owner to a new owner. Instead of the tenant losing their rights to the property when the sale takes place, a tenant can use the huur gaat voor koop rule to enforce the terms of her lease agreement against the new owner. Essentially, this means that the lease agreement creates a ‘limited real right’ in favour of the tenant – the tenant has a right to the use and enjoyment of the property which is enforceable against the original lessor and any third parties who purchase the property from this lessor.

In practice, this means that a tenant can continue to rent the premises after the sale, provided they comply with the terms of the original lease agreement. The new owner cannot terminate the lease for any reason that isn’t provided for in the agreement.

It is clear that the huur gaat voor koop rule means that a tenant is entitled to continuing leasing the property from the new owner. But the question arises: are obligations which were incurred against the original lessor now enforceable against the new owner?

Consider the following situation: Lessor A and tenant B enter a lease agreement in terms of which A is liable for electricity charges. During the first 6 months of the lease, however, B pays for the electricity and attempts to claim these amounts from A. In the 7th month of the lease the property is sold from A to C. Can B now claim the amounts due by B (for electricity during the first 6 months of the lease) from C?

The court in Genna-Wae Properties (Pty) Ltd v Medio Tronics (Natal) (Pty) Ltd 1995 (2) SA 926 (AD) held that “the new owner is in law substituted for, and takes the place of, the original lessor”. This would seem to imply that the new owner takes on all of the previous lessor’s obligations. In reality, it is not clear whether the substitution of the new owner for the previous lessor means that the tenant may claim debts incurred by the lessor from the new owner – this issue has not yet been considered by our courts.
Regardless of this uncertainty, however, it is clear that the sale of the property does not affect the normal, forward-looking functioning of a lease agreement.

Written by:
Savanna Kanzler – Candidate Attorney

For further information or assistance in this regard please contact Stephen Koen on skoen@bissets.com or via:

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Website: www.bissets.com
Bissets WhatsApp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

How the law regulates liability for dog bite injuries

The case of Van Meyeren v Cloete, heard by the Supreme Court of Appeal (“the SCA”), dealt with a dog owner’s liability for injuries caused by his or her dogs.

Facts:

Cloete was walking down the street collecting rubbish and offering gardening services when he was attacked by three dogs belonging to Van Meyeren. Cloete had done nothing to provoke the dogs and was unable to ward off the attack. It was only with the help of a passer-by, and later the police, that the dogs were chased away.  Cloete was very seriously injured. He survived but had to have his left arm amputated.

The dogs had been able to escape from Van Meyeren’s property because the gate was open. Van Meyeren contended that the gate was always bolted shut and could only have been broken open by an intruder.

The actio de pauperie:

In the context of dog attacks, a legal remedy dating back to Roman times called the actio de pauperie, is used.  Under the action where a domesticated animal acts contrary to its assumed gentle nature, the law holds the owner liable.  The court reiterated that the underlying reason for the existence of the actio de pauperie is that it is appropriate for the owner, and not the innocent victim, to bear responsibility for the damages caused.

A few exceptions to the general liability of the owner under the actio de pauperie have been recognised.  The victim will not be entitled to hold the owner liable for their injuries if:

1. The victim is not lawfully present at the place where she was injured – this exception addresses situations where, for example, an intruder is attacked while breaking into the dog owner’s home.
2. The victim provoked or injured the animal which attacked them.
3. The victim was attacked by the animal while it was under the control of a third party – an example of this exception is where the owner is away on holiday and a house sitter was looking after her house and her dogs. If the dogs were to escape and injure an innocent person it would be solely related to the actions of the house sitter (the owner would be exonerated from liability).

Key legal issue:

The legal issue that the SCA considered, in this case, was whether the third exception to the actio de pauperie (outlined above) should be extended.  The court asked:   should an owner be exempt from liability for an injury caused by his or her dogs where a third party was merely involved (and not, as in exception three above, in complete control of their dogs).  In this case, the Van Meyeren contented that the actions of a third-party intruder were the reason why the gate had been broken open and the dogs had been able to escape and attack the Respondent.

The court found that this extension of the exceptions to the actio de paurperie was not justified.  The court analysed case law and common law and found no substantial support for such an extension.  In addition, the court said that a development of the existing law must promote the spirit, purport and objects of the Bill of Rights (as required by section 39(2) of the Constitution).   It noted that it was, in fact, the actio de pauperie itself, and not exceptions to it, that promoted important constitutional rights like the right to bodily integrity.

While fault is often an important element in the law of delict, in the case of vicarious liability it is the relationship between the wrongdoer and the party being held liable that is important.  The court found that the alleged intruder had no responsibility to Van Meyeren in relation to his dogs.  Even though the intruder may have broken the gate, thereby allowing the dogs to escape, the responsibility for the actions of the dogs had not been transferred to the intruder. Van Meyeren remained strictly liable.

Summary:

In summary, the court found that the actio de pauperie was an established legal mechanism for holding the owner of a dog liable for injuries caused by the dog.  It was confirmed that only if (1) the victim is unlawfully present at the place of injury, (2) the victim antagonises the dog or if (3) control over the dog has been completely transferred from the owner to a third party will the owner be able to escape liability under this action.

Written by:

Savanna Kanzler – Candidate Attorney

Stephen Koen – Partner

For further information or assistance in this regard please contact Stephen Koen on skoen@bissets.com.

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Website:  www.bissets.com

Bissets WhatsApp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.