by Caitlin Harvey

Competition law in South Africa is an area of law that aims to maintain and promote competition in the South African market. Since 1998, competition law in South Africa has been regulated by way of the Competition Act (“the Act”). It is relevant to many businesses, as companies naturally compete with each other and gain market power in the course of their business.

The Competition Commission is the governing statutory body and has the duty to investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers to achieve equity and efficiency in the South African economy.

It has the following objectives:

• promoting the efficiency, adaptability and development of the economy;
• providing consumers with competitive prices and product choices;
• promoting employment and advancing the social and economic welfare of South Africans;
• expanding opportunities for South African participation in world markets and recognising the role of foreign competition in the Republic;
• ensuring that small- and medium-sized enterprises have a fair opportunity to participate in the economy; and
• promoting a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged people.

The Competition Amendment Act (“the Amendment Act”) was assented to on 13 February 2019 and has been the subject of much legal debate and controversy. The Amendment Act aims to give effect to what the Act set out to achieve for the most part, to address the on-going issues of concentration and racially-skewed ownership. It sets out to achieve this, by radically changing the provisions relating to collusion, abuse of dominance, price discrimination, administrative penalties, merger control and market enquiries.

The Amendment Act has been described as ‘giving teeth’ to the market inquiry process, as it gives the Competition Commission more power in assessing a specific market, as opposed to just the conduct of the firm in question. This will allow competition authorities to truly change the structure of a market through specific remedies.

One of the proposed new provisions deals with mergers that involve a ‘foreign acquiring firm’ and entitles the President, via a committee, to assess whether a proposed merger with a foreign acquiring firm would have ‘an adverse effect on the national security interests of the Republic’.

The introduction of the Competition Amendment Act is an interesting development that will undoubtedly have a significant impact on the way companies, both South African and foreign, conduct their business in the South African market.

For more information regarding commercial matters, please contact:

Henning Pieterse | Partner

E: h.pieterse@bissets.com

Areas of Expertise: Corporate & Commercial Law

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)

by Erlise Loots

Capital gains tax

In South Africa, a so-called capital gains tax (“CGT”) is triggered when any immovable property situated in South Africa is sold.

The net capital gain is generally calculated by deducting all deductible capital expenses relating to the property (known as “base costs”) from the selling price of the property. However, if the property was purchased before 1 October 2001, different calculation methods must be used to determine the deductible base costs and, ultimately, the net capital gain.

The result (after deduction of all base costs, exemptions and rebates) is known as the “net capital gain” and is taxable at an effective tax rate of 0–18% if the seller is a natural person.

Withholding tax

When a non-resident individual of South Africa for tax purposes disposes of an immovable property in South Africa with a value exceeding R2 million, 7.5% of the purchase price must be withheld and paid to the South African Revenue Service (“SARS”).

The 7.5% withholding tax provision is a security measure implemented by SARS to ensure payment of capital gains tax. If capital gains liability is less than the 7.5% payment to SARS, a refund would be payable by SARS upon the completion and submission of an income tax return by the non-resident seller and the assessment and verification thereof by SARS.

The timeframe for submission of an income tax return and the process to obtain a refund from SARS by a non-resident could be quite lengthy.

The alternatives to paying 7.5% withholding tax to SARS are to:

1. calculate the actual capital gains tax liability (in respect of the sale of the property) and to apply to SARS for a Directive that the actual tax liability be withheld and paid to SARS;
2. furnish security; or
3. apply to SARS to pay a reduced amount (or no amount) based on the extent of the assets of the non-resident seller in South Africa.

The amount paid to SARS would be deemed a self-assessment if an income tax return is not complete and submitted to SARS.

In respect of non-resident sellers whose main assets are immovable properties in South Africa, the tax directive route whereby the actual amount payable to SARS is calculated and paid to SARS often proves the best option.

For more information regarding tax matters, please contact:

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax (Income Tax, Capital Gains Tax, Tax Directives re Capital Gains Withholding Taxes, Tax Clearances, and Estate Duty), Curatorships, Trusts, Estates, Exchange Control (involving remittance of funds abroad, formal emigrations, foreign investment allowances and the endorsement of title deeds), Non-resident services and advice

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)

by Bisset Boehmke McBlain

The beginning of a new year often brings with it decisions of a life-changing nature. Many couples and individuals will decide that this is the year to start a family. In South African law, major changes to parental leave were introduced to help working parents adjust to the demands of new additions to their families.

On 23 November 2018, the Labour Laws Amendment Act (“LLAA”) was signed into law by President Ramaphosa but it is not in force yet as a commencement date still has to be announced. It amends the Basic Conditions of Employment Act (BCEA), amongst other legislation.

Prior to the Act, there was no such thing as paternity leave for fathers in South African law. Fathers would use their “family responsibility” leave which was limited to a maximum of three days per one-year cycle. Fathers are now entitled to ten consecutive days’ paid parental leave after the birth of their child, as a result of the LLAA. Paid parental leave benefits will be paid by the Unemployment Insurance Fund (UIF). Employers have a discretion to provide employees with further parental benefits.

The LLAA introduced another novel concept in South African law, namely parental leave for commissioning parents. Prior to the LLAA, no provision was made for parental leave for commissioning parents in a surrogacy agreement. This led to the case of Mia v State Information Technology Agency (Pty) Ltd, where the employer was found to have unfairly discriminated against a male employee who had applied for maternity leave in terms of the employer’s maternity leave policy. The employee was in a same-sex civil union and it was agreed between him and his partner, after they had entered into a surrogacy agreement with a surrogate, that he would take on the role and responsibilities often associated with the birth mother. After applying to his employer for maternity leave benefits he was subsequently denied such benefits. His employer argued that such policy only covered female employees who had given birth. The Labour Court disagreed with the reasoning of the employer and stated that “there is no reason why an employee in the position of the applicant should not be entitled to maternity leave and equally no reason why such maternity leave should not be for the same duration as the maternity leave to which a natural mother is entitled”.

The LLAA now allows for commissioning parents in a surrogacy agreement to apply for parental leave. One parent is entitled to at least ten consecutive paid weeks’ leave and the other parent is entitled to ten consecutive paid days’ parental leave. This applies to parents who adopt a child under the age of two. The payment of adoption and surrogacy leave will similarly be paid by the UIF.

To a large extent maternity leave has remained untouched by the LLAA. The BCEA states that employees are entitled to at least four consecutive paid months’ maternity leave, which payment is received from the UIF. If the mother suffers a miscarriage in her third trimester or bears a still-born child, she will be entitled to six weeks’ paid leave after the miscarriage or still-birth.

This is a step in the right direction but there is still much progress to be made. In Sweden, for instance, parents are given paid parental leave of 480 days per child, which can be divided between the parents as they choose. Notably, South Africa is the first sub-Saharan country to introduce parental leave for fathers, as well as for commissioning and adoptive parents.

For more information regarding family matters, please contact:

Kobus Pieterse | Partner

E: k.pieterse@bissets.com

Areas of Expertise: Litigation, Family Law, Curatorship Applications

For more information regarding labour matters, please contact:

Clint van Aswegen | Partner

E: c.vanaswegen@bissets.com

Areas of Expertise: Commercial Litigation, Civil Litigation, Property Litigation, Employment Law, Insolvency Law

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)

by Leanne Williams

The buying and selling of a property can be an intimidating and complex process. The sale process involves specialised skill and knowledge and therefore it is customary to make use of different professionals who can ensure a smooth and successful transaction. These professionals include, but are not limited to, real estate agents and conveyancing attorneys.

The sale process normally commences with the seller approaching a real estate agent to assist with finding a buyer for the seller’s property. In the competitive real estate industry and the present uncertain financial climate, the seller may choose to approach more than one real estate agent to widen the net and ensure a successful sale as soon as possible.

In situations where more than one real estate agent has been granted a mandate, it can become tricky to determine who is entitled to the commission. The concept of “effective cause” is therefore important as it is the threshold test to secure and ensure commission is earned and payable.

What is “effective cause”?

“Effective cause” is the causal link which persuades the buyer to purchase the property. Put differently, it means that through the efforts of the real estate agent a successful sale of the property was concluded and the real estate agent is therefore entitled to the commission.

Why is it important?

The importance of establishing the effective cause of a sale can be illustrated by way of an example in case law.

A real estate agent “W” introduced a purchaser “H” to a house. The house was subsequently sold to “H”. However, a different real estate agent “D” who knew that “H” was interested in the house had contacted “H” when she heard that the seller was willing to reduce the price.

Not only does this example illustrate that a real estate agent’s commission is not guaranteed, but it also leaves the seller open to the possibility of having to pay more than one real estate agent.

What qualifies as the effective cause?

The general rule can be described as “first come first served”. Or better yet, whoever introduces the purchaser to the property is usually the “effective cause” of the successful sale.

However, there are exceptions to the general rule. In practice these exceptions are often referred to as “intervening causes”. In Basil Elk Estates (Pty) Ltd v Curzon the court concluded that the first introduction by the real estate agent had been outweighed by “intervening factors”. Numerous personal factors prevented the prospective purchaser from initially concluding a sale agreement.  Nine months later personal circumstances changed and the purchaser secured the necessary money and terminated his current lease. The purchaser then bought the property through a different real estate agent. The court concluded that the intervening factors were such as to make the initial introduction unimportant.

Each set of facts should be determined on its own merits. The passing of a period of time does not necessarily result in an “intervening factor”.

What can I do to protect myself?

If you are the seller:

1. Have the mandate checked by an attorney before you sign it.
2. If the mandate is an exclusive one ensure that you do not countenance offers from other real estate agents until you are satisfied that the mandate has expired.
3. Request a list of all persons who are introduced to the property during the mandate period and, if not an exclusive mandate, by which real estate agent(s) they were introduced.
4. Read the fine print in the mandate document. In many cases a prospective purchaser who is introduced during the mandate period but fails to submit a suitable offer, may be a future purchaser which could result in two sets of commission being paid.

If you are the real estate agent:

1. Ensure that all the statutory requirements as required by the Estate Agency Affairs Act have been met.
2. Ensure that the mandate is in writing.
3. Ensure that the mandate is comprehensive and includes the finer details, specifically the details pertaining to the commission payable.

For more information regarding property matters, please contact:

Robert Ferrandi | Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

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)

The Companies and Intellectual Property Commission (CIPC) recently issued a notice regarding the requirements for the lodging of an application for the removal of a director of a company by the shareholders.

The relevant sections of the Companies Act of 2008 (“the Act”) do not specifically set out the grounds for the removal of a director by the shareholders, leading some to conclude that the shareholders have a right to remove a director and need not provide any reason for doing so.  The procedure for such a removal entails the passing of a resolution by the shareholders at a shareholders meeting. However, in terms of the Act, the director concerned must be given notice of the meeting and the resolution and afforded a reasonable opportunity to make a presentation to the meeting before the resolution is put to a vote.

A recent Western Cape High Court decision confirmed a director’s right to be afforded “a reasonable opportunity to make presentation”, and found that shareholders are required to provide the affected director with reasons for the resolution in advance. The absence of these reasons would render any notice of the meeting and resolution invalid.

The implication of the above decision is that anyone wishing to lodge an application with CIPC for the removal of a director of a company (COR39 application), must ensure that their notice lists the reasons for removal.

Should you require further information on commercial matters and CIPC applications, please contact us.

For more information contact:

Henning Pieterse | Partner

E: h.pieterse@bissets.com

Areas of Expertise: Corporate & Commercial Law

Tenants often don’t read carefully through the terms and conditions contained in their lease agreement and this can cause problems down the road. A properly drafted lease agreement will ensure that both parties’ rights are protected. Both parties must ensure that all the necessary information is included in the lease agreement, along with any additional arrangements discussed.

Enquire about costs and duration

The monthly rental cost and duration of the lease (including specific dates) must clearly be stated in the lease agreement to avoid any confusion regarding this matter. The lease agreement should also clearly indicate how and when any increases in rent will take place.

The lease should clearly explain any deposits (e.g. the rental deposit) that have to be paid, how it will be invested, as well as the terms and conditions regarding the refund of deposits. All other variable usage expenses (like water or electricity) that the tenant will have to pay should also be clearly stated.

Some rental properties include utilities within the monthly rental cost, while others don’t. Before you sign the lease to a property, ask your landlord what is included in the rental rate.

Get information regarding changes to the property

Once the landlord has agreed to rent out his property to you, make sure that you document any pre-existing damages to the property and its amenities before you sign the lease. Ask whether these damages can be fixed at the landlord’s expense.

Both the landlord and the tenant are responsible for the maintenance of the property, depending on the type of maintenance. The responsibilities of both parties should be clearly set out in the lease agreement. The lease agreement should also indicate how the tenant must report any problems that require repair and how long the landlord has to take appropriate action.

Make sure which alterations can be made to the property and whether it can be removed upon termination of the agreement, where applicable. Rather know the rules and stick to them, than making an alteration and then finding out afterwards that your landlord is unhappy with it or will retain ownership of it after your departure. Remember that in most instances you will not be allowed to paint walls or damage them in any way (including inserting screws or nails to hang pictures) or will be required to repair the walls (repaint to original colour and/or fix any damage cause by you).

Conclusion

Tenants must understand all the clauses, terms and conditions contained in the lease agreement to avoid any surprises later. A rental agreement is a legally binding document and tenants must understand and agree with everything contained therein before they sign it.

For more information regarding lease agreements, please contact:

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law | Conveyancing

One of the biggest dreams that most people have, is to one day own their own home. However, that is easier said than done. Dreams of owning big houses with backyards turned into renting small apartments. The choice between renting a property and buying a property is often a difficult decision to make. Renting a property comes with its advantages and disadvantages, but so does owning a property.

The idea of renting a property is often frowned upon because most people believe that renting is just as good as throwing money in the bin. This is because the money goes straight to the landlord and the tenant is not getting much in return.

When faced with the decision of renting a property, keep in mind that there are both pros and cons.

The pros include:

1. More flexibility

Renting a home allows for more flexibility. Renting is ideal for those who move around often, whether it be for work or other reasons. If you don’t intend on staying in one specific place for a long time, renting is the perfect option for you, and it requires no long-term commitment from you as a tenant.

2. Affordability

You might not be able to buy a home in your favourite area; however, you could possibly afford to rent a home in your favourite area.

3. Moving out

When it comes to moving out, it is easier to do for a tenant than a homeowner. A tenant can easily give a month’s notice or find someone else to take over their lease, and vacate the premises. A homeowner, however, needs to find a buyer to purchase his/her home before they can even think about moving out.

4. Homeowner’s insurance

Most of the maintenance work and repairs that need to be done on the property is the owner’s responsibility. Homeowner’s insurance is also paid for by the homeowner. The tenant only needs to insure his/her own personal belongings.

The cons include:

1. Lack of freedom

A tenant is required to follow the rules set out in the lease agreement. This could have an impact on the use or renovation of the property. You cannot make any changes to the property without getting the owner’s/landlord’s consent.

2. Third party involvement

In most cases, you will have to deal with a rental agent when renting a property. This rental agent will act as the middleman between you (the tenant) and the owner. The downside of this is that issues could take even longer to be resolved.

3. No return on investment

When renting a property, there is absolutely no wealth creation or return on investment, as the home will never belong to the tenant. The tenant is basically just paying towards the homeowner’s home loan.

4. Rental fluctuations

You as a tenant, have no control over annual rental fluctuations, which are affected by inflation. If you can no longer afford to pay your rent, you will have to find an affordable home, and the homeowner will find a new tenant that can afford the increase in rent.

5. No guarantees

Once the lease expires, there are no guarantees that the lease will be renewed, which means that the tenant will have to vacate the premises and find new accommodation.

Maintenance orders and variation

Maintenance is that part of the divorce order which is not a final determination of the rights of the parties. However, as long as a court order exists for maintenance for a certain amount, the person against whom a maintenance order was granted must abide by that order. In cases where the aforementioned party does not pay the maintenance or fails to pay the entire amount, arrears will accumulate.

The person who is entitled to the maintenance may approach the Maintenance Court for an application in terms of Section 26 of the Maintenance Act, 1998 (“the Act”). The party failing to pay maintenance will be in contempt of court and would thus be guilty of a criminal offence.

However, the Maintenance Officer is aware that it is possible for someone’s financial position to have changed since the maintenance order was originally made. A person may have become unemployed, resulting in him or her not being able to pay the same amount of maintenance. Another factor to consider is the possibility that the needs of the person who is entitled to maintenance may have changed.

The party against whom an order to pay maintenance was made can bring an application for Substitution or Discharge of Existing Maintenance Order in terms of the Act, if good cause exists (such as unemployment). He or she will have to submit a complete statement of income and expenditure, as well as a statement explaining the reasons for the application.

The matter will then come before the Maintenance Officer. The meeting with the Maintenance Officer is of a less rigid nature than appearing in Court in front of a magistrate and is of a more inquisitorial nature.

The Maintenance Officer acts as a neutral party during maintenance applications. At the hearing, the parties, or their legal representatives, will go through the expenses of each party and find expenses on which the paying party can save money and vice versa in order to make payment easier and to make sure that the other party’s luxurious lifestyle isn’t being maintained whilst the paying party hardly makes ends meet.

The Maintenance Officer will take certain factors into account when making an order. These factors may include the standard of living of the parties, the financial position of both parties and the age of the parties. The Maintenance Officer will make an order which the parties will have to abide by.

If the biological parent who is supposed to pay maintenance for a child cannot make the payment him- or herself, his or her parents (the grandparents of the child) may be ordered to pay the maintenance of the grandchild as they also have a duty to support a minor child.

For more information regarding maintenance issues, please contact:

Kobus Pieterse | Partner

E: k.pieterse@bissets.com

Areas of Expertise: Litigation | Family Law | Curatorship Applications

The adoption process is regulated in South Africa by the Children’s Act 38 of 2005 (“the Act”). Adoption is one of the ways to help give abandoned minors a permanent or stable family life, which they would otherwise not have had. The Act provides that a child is adopted if the child has been placed in the permanent care of a person in terms of a court order.

Who can adopt?

A child may be adopted jointly by a husband and wife, partners in a permanent domestic life-partnership, or other persons sharing a common household and forming a permanent family unit. The Act goes further to say that a child may be adopted by a widower, widow, divorced or unmarried person, by a married person whose spouse is the parent of the child or by a person whose permanent domestic life-partner is the parent of the child, by the biological father of a child born out of wedlock, or by the foster parent of the child.

In terms of the Act, a prospective adoptive parent must be a fit person to be entrusted with full parental responsibilities and rights in respect of the child, willing and able to undertake, exercise and maintain those responsibilities and rights, over the age of 18 years old, and properly assessed by an adoption social worker.

What does the process entail?

A child may be adopted only if consent for adoption has been given by each parent of the child, regardless of whether they are married or not, or by the guardian of the child, or the child  (if the child is 10 years or older, or if the child is under the age of 10 years old but at an age to understand the implications of such consent).

If the parent of a child wishes the child to be adopted by a particular person, the parent must state the name of that person in the consent. Before consent for the adoption of the child is granted, the adoption social worker facilitating the adoption of the child must counsel the parents of the child and, where applicable, the child, on the decision to make the child available for adoption. The eligibility of the prospective adoptive parent must be determined by the Children’s Court.

The consent to adopt must be signed by the person consenting in the presence of a presiding officer of the Children’s Court, and signed by the child in the presence of the presiding officer (if consent of the child is required). The consent to adopt must then be verified by the presiding officer and filed by the clerk of the Children’s Court pending an application for the adoption of the child.

In certain circumstances, consent of the parent or guardian of the child to the adoption is not required, for example, where the parent or guardian is incompetent to give consent due to a mental illness, has abandoned the child, or if the whereabouts of the parents cannot be established, or if the identity of the parents are unknown, if the parents abused or neglected the child, failed to fulfil his or her parental responsibilities towards the child during the last 12 months, has been divested by an order of Court of the right to consent to the adoption of the child, and/or has failed to respond to a notice of the proposed adoption within 30 days of service of the notice. The Act lists further exceptions where consent is not required.

In terms of the Act, notice must be given by the presiding officer to each person whose consent to the adoption is required. If such person fails to comply with the request contained in the notice within 30 days, the person will be regarded as having consented to the adoption.

Please note that the parent of a child who has given consent to the adoption of the child has the right to withdraw such consent for up to 60 days after the consent has been given. The Children’s Court will not make any order of adoption final before the period of 60 days has expired.

The application

An application for the adoption of a child must be made to the Children’s Court, and accompanied by a report by the social worker. The report must contain information on whether the child is adoptable, whether the adoption is in the best interest of the child, and medical information in relation to the child. The application must also be accompanied by an assessment referred to in Section 231 of the Act and a letter by the provincial head of social development recommending the adoption of the child.

A Court considering the adoption of a child must be satisfied that all the requirements, as set out above, have been met and that the adoption of the child is in the best interest of the child.

For more information regarding adoptions, please contact:

Kobus Pieterse | Partner

E: k.pieterse@bissets.com

Areas of Expertise: Litigation | Family Law | Curatorship Applications

by Sophie Robertson

The Western Cape High Court on 31 August 2018 handed down its judgment in the case of Women’s Legal Centre Trust v President of South Africa and Others, ordering the South African government to enact legislation which will give legal recognition to Muslim marriages. This is a significant and welcomed development in our law which will finally afford rights to women and children affected by the previous non-formal recognition of Muslim marriages.

Historically speaking under apartheid, marriages such as traditional African customary unions and Hindu and Muslim marriages were not formally recognised. The lack of formal recognition of such marriages has drastic negative effects for women married according to Islamic law upon the dissolution of the marriage, as well as children born of the marriage, as rights which would usually be afforded to a wife in a lawfully recognised marriage would not in a Muslim marriage be enforceable, which leaves women and children particularly vulnerable with no legal recourse.

Under the new Constitutional dispensation, The Recognition of Customary Marriages Act was enacted to give legal recognition to marriages previously not recognised. One of the Act’s shortcomings was that it failed to recognise, and thus protect, Muslim marriages. This is due to the wording of the Act which states that only marriages which concern “customs and usages traditionally observed among the indigenous African peoples of South Africa” are to be formally recognised and treated on equal footing as a civil marriage. The courts have, over the years, in a piecemeal and litigious fashion, attempted to provide some kind of equal protection to Muslim marriages in the absence of the necessary legislation.

The findings of the High Court handed down by Judge Desai brought long overdue relief as it has been almost 10 years since a draft bill proposing to legally recognise Muslim marriages was published. The Women’s Legal Centre Trust first brought the matter of enforcing legal recognition of Muslim marriages to court in 2014, three years after the deadline for public comment on the Muslim Marriage Bill had passed. Parliament removed the Bill from their review list in 2012. The Minister of Justice at the time said the reason for the removal was because the Bill was largely opposed by those of the public who submitted comments.

In the case, the High Court found that by failing to enact legislation, the government has failed to fulfil their constitutional obligations to respect, protect and fulfil the rights of the Constitution. The court subsequently directed the government to rectify such failure within 24 months by enacting legislation which will “recognise marriages solemnised in accordance with the tenets of Sharia law as valid marriages and to regulate the consequences of such recognition”.  The court held that in the event that the contemplated legislation is referred to the Constitutional Court by the President or members of the National Assembly, the relevant deadline will be suspended pending the final determination of the matter by the Constitutional Court.

The legislation to be passed in the near future will likely prove to be an interesting balancing exercise between protecting the interests of Muslim women on the one hand whilst respecting and maintaining elements of Sharia law on the other.  Once the government passes the said legislation it will be the first time in South Africa’s recent history that Muslim marriages will be legally recognised.

Rifqah Omar | Partner

E: r.omar@bissets.com

Areas of Expertise: Litigation | Professional Discipline Law | Muslim Personal Law | Curatorship applications and administration | Administration of estates

by Sophie Robertson

Weed, dagga, cannabis and dope have been some words buzzing around the legal and public spheres in the last few months. This flows from the highest court in the country making a landmark ruling, confirming the earlier ruling of the Western Cape High Court. On 18 September 2018 the Constitutional Court ordered the decriminalisation of the use of cannabis in a private space. South African adults can now possess, cultivate and use cannabis for personal consumption but may only legally do so in a private place such as one’s home. An adult may also not use it, even in a private space, in the presence of children or non-consenting adults. What exactly constitutes a private space is not clear as there is no legal definition available. It is however important to emphasise that cannabis cannot be used in public spaces.

Provisions of the Drugs and Drug Trafficking Act 40 of 1992 (the Act) were declared to infringe on people’s section 14 constitutional right, namely the right to privacy. An important difference between the ruling of the Western Cape High Court and the Constitutional Court is that the former declared provisions prohibiting the purchasing of cannabis constitutionally invalid however the latter did not confirm this finding. It is clear therefore that it is still illegal to purchase, and by implication sell, cannabis and one would therefore need to grow or ‘cultivate’ your supply solely for personal use.

Just how much one is legally allowed to grow for personal consumption is something which the courts left for Parliament to decide. The uncertainty created in the meantime means that one should exercise caution if growing or possessing cannabis, as the court warned that “the greater the amount of cannabis of which a person is in possession, the greater the possibility is that it is possessed for a purpose other than for personal consumption”.

The declaration of the invalidity of certain provisions of the Act has been suspended by the Constitutional Court for the next two years in order to enable Parliament to rectify the constitutional defects. This is does not mean however that cannabis cannot be used or cultivated in that two year period. In fact, the Court read in certain words and phrases into the Act to make it legal for an adult to cultivate, possess and use cannabis for personal consumption in a private space until Parliament cures the constitutional defects. The decriminalisation of cannabis, and the possible odd waft from your neighbour’s abode, is therefore here to stay.

Should you require further information, please contact:

Albin Wagner | Partner

E: a.wagner@bissets.com

Areas of Expertise: Consulting and representing German-speaking clients in all matters | Civil Litigation including Commercial &amp | Matrimonial Disputes | Representation of parties in property transactions | Disputes relating to deceased &amp insolvent estates, insurance, neighbours, local authorities, building and construction contracts | Contract and Commercial Law | Sports Law &amp | Administration