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:

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.

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:

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.

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.

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.

“Get yourself a comfortable pair of shoes;  you will be doing a lot of walking!” is a tip most Candidate Attorneys hear when they begin their articles. This advice rings true for Conveyancers, Deeds Office Clerks, Candidate Attorneys, and also the conveyancing paralegals, especially during recent weeks!

One should also have a mask, sanitiser and a phone loaded with data and airtime (not to mention fully charged) to start one’s day.

Being advised that the Deeds Office would open as South Africa moved to Alert Level 3 was indeed great news and everybody was excited to be able to get the wheels turning again.  Unfortunately, but understandably, the process of re-opening was slow and since then the Deeds Office has had numerous Covid-19 contacts and had to close for decontamination a number of times.  They have strict protocols and have to answer to a Provincial Steering Committee.  The strict protocols, together with the limited staff capacity, make for slow progress at the Deeds Office.  However, our calls have been heard and the Deeds Office has made arrangements to staff an office in Mowbray in an attempt to expedite the examination of the large backlog of Deeds.

Our conveyancer who attends at the Deeds Office every morning on behalf of the company has certainly had her fitness levels (and patience) tested over the past weeks.  Even arriving one morning just to confirm that the office was DEFINITELY closed after being advised that it was so.  Her photography skills have improved as she has had the task of sending the conveyancing department photos of the many notices that have been posted on the closed doors of the Deeds Office.  However, her resilience and ability to adapt and communicate with the office has made a difficult situation easier to handle.

The screening and sanitising procedures at the Deeds Office have ensured that all conveyancers are some of the most thoroughly sanitised and screened citizens.  Only conveyancers are currently permitted in the building, which often means that Deeds office Clerks and Candidate Attorneys are outside of the building and communicate telephonically; arranging for documents to be exchanged or delivered to the conveyancer.  There have been frustrating, but at times amusing scenes of car boots becoming sorting tables in the street outside and many law office staff standing on the street in a telephonic conversation with their offices and conveyancers in the building.

Our Deeds Office Clerk, Fareed, has been attending at the Deeds Office for 41 years and said that he has never experienced anything even close to Lockdown/Covid-19.  However, he did recall a

time in the 1980s where the Deeds were taking three to four months to come up for registration!  He couldn’t recall the reason.

Fareed also mentioned that its tough sorting deeds in the boot of one’s car, one needs to really concentrate and be very careful of not mixing any batches up!  That done, an additional challenge has been the inclement weather, so he has taken to securely filing the deeds in his raincoat! as he dashes across the road to meet our conveyancer.

Young law students would never have expected to find these scenes, let alone be part of them – those walking shoes were money well spent!  The lifts in the Deeds Office are somewhat fragile and currently limiting the capacity to 2 people, so many flights of stairs are also climbed to meet the timelines. It’s all in a morning’s work – teamwork!

Questions that we are often asked are the following:

• Is the Deeds Office open/how are they operating?
• Turnaround times for lodgement?
• When will my transaction register?

The Deeds Office is most definitely open!   We have been advised by the Deeds Office that the current turnaround times in the Cape Town Deeds Office are as such:

• 90% of deeds lodged on the 18 and 19 June 2020 were sorted to be allocated to level 1 examiners on 20 July 2020.
• 32% of deeds lodged on the 15 June 2020 were sorted and to be allocated to senior levels (level 2 & 3) on 20 July 2020.

To understand this, you will need to know the process once the deeds have been lodged at the Deeds Office.

With regards to the examination process: 

There are 3 levels of examination in the deeds office – junior (level 1) and senior (levels 2 & 3).  Once the matter has reached level 2, it normally takes a week to “appear for registration” which is when conveyancers can hand the matter in to register the following day.

To date, roughly 12 847 (35%) of the 35 937 deeds lodged have registered which unfortunately leaves a rather large backlog to still deal with.

We often need to stay on top of rates clearance certificates (only valid for 60 days) that have expired due to the length of time for examination or addendums for an early occupation to try and accommodate purchasers that need to move into their soon-to-be-property.

In closing, this quote of Jimmy Dean sums up the Bisset’s Team’s approach to dealing with conveyancing transactions during Lockdown/COVID.

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” -Jimmy Dean

We are, as always, adapting to the changes and procedures presented to us and endeavoring to streamline and expedite the smooth passage of each and every one of our transactions in the Deeds Office.  We assure you that despite the challenges our team is at the ready, changing tack and adjusting the sails as each situation arises.

This is a developing story;  and we shall definitely keep you posted!

On 1 July 2020 the main substance of the Protection of Personal Information Act 4 of 2013 (commonly known as “POPI”) came into operation. The Act outlines how parties who handle an individual’s personal information need to protect this information and provides for some severe-sounding sanctions if this is not done.  This article will attempt to provide you with a brief overview of POPI:   what it intends to achieve, what it requires, what sanctions there are for non-compliance and how this may impact you.

What is POPI?

POPI is an Act that has been passed to give effect to the constitutional right to privacy by protecting how an individual’s personal information is handled, used and recorded. The Act protects a wide scope of information including identifying numbers, contact details, personal opinions and views, race, gender, sexual orientation, culture and financial and criminal records.

The Act predominantly deals with regulating the interactions between a “data subject” and a “responsible party” during the “processing” of personal information

• A data subject is the person/entity to whom the personal information in question belongs and the responsible party is a body which processes the data
• Processing has a very wide definition and includes the collection, recording, storing, dissemination or destruction of personal information – essentially if an activity involves personal information in any way, that activity would fall under the definition of processing

The Act has also established the office of the Information Regulator which is a body that receives and investigates complaints made in relation to non-compliance with the Act.

Section 5 of the Act lists the “Rights of data subjects” which is essentially the rights of individuals in relation to their information. This would be a useful section to read if you would like to be more informed on what your information privacy rights are.

What requirements does POPI introduce for the processing of personal information?

The first thing to note here is that the Act has a 1 year ‘grace period’. So, a responsible party needs to ensure that they are processing personal information in line with the POPI requirements (including those discussed below) before 1 July 2021.

The Act outlines “conditions” for the processing of personal data. These conditions are essentially the requirements that need to be met by a responsible party when they handle personal information and can be summarised as follows:

• The responsible party is accountable for ensuring that personal information is processed in line with the Act and that the information is accurate and relevant
• The Act outlines certain situations in which personal information may be processed. The most relevant situation is that a person’s information may be processed if they consent
  • The Act specifically provides that the consent obtained needs to be specific and informed
• Personal information must be collected for a specific, explicitly defined purpose that relates to a function of the responsible party and the data subject must be aware of this purpose when they consent
• The information that has been collected may only be used for the specific purpose for which it was collected, and it cannot be passed on / sold to third parties unless the data subject consents
• The responsible party needs to make sure that the data subject is informed about the collection, retention and use of their personal information
• Security: The Act requires that appropriate, reasonable safeguards are taken to ensure the security and integrity of the personal information

Practical consequences

For the individual, POPI signifies a concrete step forward in attempting to regulate how our personal information is used by private and public entities.

For businesses, the requirements outlined in the Act may mean that the business will need to restructure how they handle information in order to make sure they do not contravene the provisions of POPI. Some practical steps for a business could include:

• Understanding how POPI will impact the business’ email and direct marketing strategies
• Drawing up a POPI plan – creating a document which outlines the internal steps taken by the business to comply with POPI. The Plan should visualise and record the flow of how personal information is processed as it moves through the business.

Enforcement procedures and consequences of breaching POPI

There are a number of sanctions outlined by the Act. These are:

1. Civil damages: A data subject or the Regulator may institute an action for civil damages (for a “just and equitable amount”) if one of the provisions outlined in section 99 is breached (includes the “conditions” described above and direct marketing provisions).
2. Administrative fines: Administrative fines of up to R10 million are payable by a party who commits an offence in terms of the Act. The offences are listed in chapter 11 of the Act.
3. Some offences may result in up to a 12-month imprisonment or fine. These include:

• Processing information that carries a particular risk to the data subject which requires prior approval AND you fail to get approval from the Regulator (section 59)
• Falsely declare compliance with an information orderissued on your organisation by the Regulator

4. Some offences may result in up to a ten-year imprisonment or fine. These include:

• Responsible party who fails to meet all the conditions in relation to personal information classified as an “account number” (section 105)
• Failure to comply with enforcement notice issued to you by the Regulator

Written by:
Savanna Kanzler – Candidate Attorney
Should you require assistance kindly contact Stephen Koen at skoen@bissets.com or via:

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

“The tiny seed knew that in order to grow, it needed to be dropped in dirt,
covered with darkness, and struggle to reach the light.” 

– Sandra Kring

It is a month since our last newsletter and, as of 1 June 2020 we have moved to Lockdown Alert Level 3. Our doors are open and it is business as usual for us. Whilst our offices are open, we are committed to keeping our staff and clients safe. We continue to adhere to strict standards of hygiene and health protocols relating to Covid-19, which includes the implementation of an internal Risk Assessment Plan to combat the escalation of Covid-19 and the majority of our staff continue to work from home. Our priority is to keep our clients informed of relevant changes in the law. Even though Covid-19 has brought about a number of unexpected challenges we are rising to those challenges not only to meet your requirements, but to also continue providing you with efficient and professional services.

The Courts, Deeds Office (although currently closed for decontamination due to Covid-19), Master’s Office, and the CCMA are open and beginning to slowly operate. As of 1 June 2020, more sectors in the economy were opened with the exception of a few.

The Minister of Justice has issued directives relating to conduct at the courts. All matters are now being heard and will be heard and dealt with electronically and by way of virtual hearings where possible.

The Master’s Office has also broadened the scope of the services that will be dealt with. Liquidation and Distribution accounts are now being examined. Matters relating to curatorships have now been added to the list and the accounts, as well as issuing of letters of appointment, will now be dealt with. All insolvency matters are also being dealt with.

The proper functioning of the Deed’s Office is currently a challenge, but we are staying up to date with the developments and procedures to offer an efficient service in these times.

It has certainly been a trying time and I would like to once again, on behalf of the partners, extend our thank you to our staff for the manner in which they have and continue to rise to the various challenges in carrying out their duties during this difficult time and a special thank you to all of the clients for your loyalty and support, all of which is greatly valued.

Should you have any questions or require any assistance please feel free to contact me.

Keep well and stay safe.

Best regards,

Clint Van Aswegen
Managing Partner

With many South Africans encouraged to practise social distancing to help ‘flatten the curve’ of the coronavirus contagion, there is a focus on planning ahead for your future, executing a valid will or updating an existing will.  When we are dealing with estate planning usufructs are often considered when we want a vulnerable family member to be taken care of.  In theory this may sound like a solution but there are certain implications to consider before bequeathing a usufruct.

To bequeath usufruct to someone is a common way of providing for your next of kin after your death, but people often forget that usufruct can place an enormous financial burden on the actual heirs to your estate

Usufructs

When drawing up a will, a concern often raised is what to do with immovable property, especially if a dependant person requires living in the property after someone has passed away, for which purposes a usufruct is a popular consideration.

What is a usufruct?

A usufruct is the right to possession, use and enjoyment of an asset and the right to take the fruits thereof.  A usufruct is most commonly over immovable property.  An example would be where an immovable property is transferred to an heir, also known as the bare dominium owner, subject to the condition that a usufruct be registered in favour of a third party, known as the usufructuary.

The usufructuary cannot destroy or adversely affect the value of the asset or alter its character.  On termination of the usufruct the property must be restored to the bare dominium owner.

Usufructs are personal servitudes and cannot be registered beyond the lifetime of a person in whose favour it has been created.  Usufructs are usually created for the lifetime of the usufructuary, however they can also be created for a fixed period of time.  Usufructs may also be subject to conditions, which should be provided for in a will.

Usufructs are not transferable, and a usufructuary cannot pass on, bequeath or dispose of the usufruct on his or her death.  A usufructuary is not obligated to live in the property and may rent out the property provided that such a lease agreement does not exceed the duration of the usufruct.

When to consider creating a usufruct

A testator should be mindful of the fact that whilst he or she intends creating a benefit by ensuring a “roof over the usufructuary’s head” he or she may in fact be creating a burden for the usufructuary as the gift of the usufruct may be inappropriate to or for the usufructuary’s circumstances.

The usufructuary is responsible for the maintenance and upkeep of the property and if the usufructuary does not have the means to maintain the property the usufruct can create unintended hardships.  Ideally provision should be made in the will to cover expenses such as maintenance, insurance and rates.

What are the tax implications of a usufruct?

When considering creating a usufruct it is wise to consider Capital’s Gains Tax implications for the bare dominium owner.  The bare dominium owner receives the asset at the bare dominium value (this constitutes base cost) and after the death of the usufructuary and on the sale of the asset, the Capital Gains Tax is greater than if he had inherited the full value of the asset.

Further consideration should be given to the practical consequences of creating a usufruct, especially in cases of second marriages and the relationship between the second wife and the children from a previous marriage.

In a case where a husband bequeaths immovable property to his children from a first marriage and creates a usufruct in favour of his second wife for the duration of her lifetime, could create unpleasant hardships and family disagreements continuing for years. Especially if there are strained relationships between the usufructuary (spouse) and the bare dominium owner (children).

Heirs must refrain from interfering with the use of the property while the usufruct is in existence. However, they do have the right to protect their interest should the usufructuary be using the property inappropriately.

In closing, while the property is transferred into the names of the heirs, the usufruct is registered against the new title deed for the usufructuary.  If the heirs pass away before the usufructuary, their portion of the usufruct assets is transferred to their heirs and subject to the existing usufruct.

It must always be remembered that a usufruct is registered at the Deeds Office against the title deed, so no transactions can take place on that property without due consideration given to an existing usufruct.

Written by:
Elke Herbst – Associate
For more information on usufructs, please contact our Elke Herbst at eherbst@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.

On 1 June 2020, to the economic relief of many, the national lockdown alert level dropped from level 4 to level 3. In doing so, many persons who had previously been restricted from working were allowed to return to work, including domestic workers.

The reintroduction of domestic workers to the workplace has come as a relief both to domestic workers as well as to many employers who rely on the important roles they fulfil in their households.

In some instances, employers who could afford to pay their domestic workers under level 4 and 5 of lockdown will continue to do so under level 3, whether they are required to come in to work or not.  Unfortunately, for some domestic workers, on account of the financial constraints also felt by their employers this may simply not have been possible.

So, taking into account the above, what requirements must an employer comply with if they do ask their domestic worker to return to work?  If you aren’t able to afford to pay your domestic worker as a result of the current COVID-19 measures, what can and should you do?  If you have failed to register your domestic worker for UIF, will they still be allowed to claim benefits?

We deal with the answers to these questions below, so keep reading!

I require my domestic worker to return to work.  What now?

At this stage, no directives specific to the return to work of domestic workers have yet been announced. However, it would appear that all employers of domestic workers should at least adhere to the requirements set out clause 46 of the Directions published by the Department of Labour on 4 June 2020.  For the Gazetted Directions see:

https://www.gov.za/sites/default/files/gcis_document/202006/43400rg11128gon639.pdf

In terms of these Directions all employers should, as a minimum, take the following steps:

1. develop a basic plan for the worker’s return to work, taking into account factors such as the domestic worker’s age (ie. if over 60 years of age) and/or if he/she has any co-morbidities. This plan may include agreeing to an adjustment of working hours to avoid the domestic worker taking public transport during peak times or arranging private transport;
2. make the necessary arrangements to ensure that your domestic worker will have adequate space in which to work – ie. that a 1,5m distance may be maintained between your domestic worker and any person in your household;
3. undertake the necessary symptom screening of both the domestic worker as well as the employer and all members of the employer’s household. To this effect, it should be ascertained whether any of the aforesaid persons are suffering from any symptoms of COVID-19.  If either the domestic worker or the employer or any member of the employer’s household suffers from these symptoms, the domestic worker should not be required to come in to work.  For further information on the measures to be followed see clause 25 of the Directions mentioned above as well as the handy screening checklist at the end of this article;
4. should either party require clarity on the implementation of the necessary precautionary measures or have a concern regarding possible infection, the employer should contact the COVID-19 hotline and both parties should act in accordance with any instructions provided;
5. provide cloth masks to the domestic worker or require the domestic worker to wear some form of cloth covering over his/her nose and mouth while at work;
6. provide the domestic worker with sufficient hand sanitizer and access to soap and clean water for the purpose of sanitizing their hands and surroundings; and
7. ensure that while at work the domestic worker washes his/her hands with soap and sanitizes his/her hands regularly.

The employer should also provide their domestic worker with a permit should it be requested that same be presented on such worker’s travels to/from the workplace.  We include a draft version of such a permit at the end of this article.

I am worried about the financial impact of the lockdown on my Domestic Worker.  Tell me more about UIF.

In terms of the Unemployment Insurance Contributions Act, which applies to all employers and employees (unless the employee works less than 24 hours a month for a particular employer), both employers and employees must contribute to the Unemployment Insurance Fund (UIF). The Fund was established to protect employees from the harmful social and economic effects of unemployment.

Domestic workers are some of the most vulnerable work seekers in South Africa and must accordingly be protected from the harms of unemployment. The contributions by the employer are also relatively low at 1 per cent of the remuneration payable (another 1 per cent is paid by the domestic worker, but many employers choose to pay this on the domestic worker’s behalf as well).

It is important to note that domestic workers are often employed by more than one employer. Even if only one employment of the domestic worker is terminated, the domestic worker is entitled to benefits in terms of the Act. However, the employee can only claim UIF benefits if the employment was terminated by the employer or a fixed-term contract ended, the employee was unfairly dismissed, the employer becomes insolvent, or, in the case of a domestic worker, if the employer dies.

Not registering a domestic worker for UIF can have dire consequences for an employer: the employer will be liable for all outstanding UIF contributions (including those of the domestic worker), on which outstanding contributions interest is calculated, and the employer may have a penalty of 10% imposed on the unpaid amount.

The process of registering a South African domestic worker is quite straight-forward, but not so simple for a foreign domestic worker. Regardless of the domestic worker’s nationality, they must all be registered in order to be protected.

Does the Temporary Employer/Employee Relief Scheme (TERS) apply to Domestic Workers?  What if my Domestic Worker is not registered with the UIF?

At the moment, while South Africa is facing the challenges of COVID-19, many employers are facing reduced income and are unable to pay the full salary of their employees, it at all. While many employees are still employed, albeit, with reduced hours or even temporarily laid off, countless employees are facing the effects of unemployment and can benefit from the Temporary Employer/Employee Relief Scheme (TERS).

To benefit from TERS, the employer must apply by sending an email to covid19ters@labour.gov.za. An automatic response will outline the procedure and list the required documents and information. It is best to have all the information at hand, including the details of the employer and the employee(s), proof of remuneration of the employee(s) of the past three months, and confirmation of banking details.

The Department of Labour makes a useful step-by-step guide available at:

http://www.labour.gov.za/DocumentCenter/Publications/Unemployment%20Insurance%20Fund/COVID%2019%20TERS%20SOLUTION%20USER%20GUIDE.pdf

Initially, employees could only benefit from TERS if they were registered with and were contributors to the UIF. However, it quickly became apparent that many employers were not complying with the UIF Act or not applying for the benefits on behalf of their employees. Many employees were accordingly either not earning an income, or earning a reduced income, yet were unable to benefit from TERS.

On 25 May 2020, the 25 March 2020 Directive was amended to allow for employees to benefit from TERS even if they are not registered for UIF due to circumstances beyond their control.

Need more advice?  Contact us!

It is important that going forward every employer and employee plays their part in stopping the spread of the virus by adhering to those Regulations and Directions in force at any given time.

COVID-19 is also a very real example that demonstrates how important it is to contribute to the UIF, and highlighted how vulnerable people can be if they unexpectedly lose their income.

While the 25 May 2020 amendment has temporarily resolved non-compliance with the Act, it is crucially important to be registered with and to contribute to the fund.

For assistance on all aspects of your employment relationship between employer and domestic worker, including those stemming from the current Regulations in place, please contact Lili von Geyso on lvongeyso@bissets.com or Amy van Dyk on avandyk@bissets.com.

Written by:
Lili von Geyso – Senior Associate
Amy van Dyk – Associate

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.

COVID-19 SCREENING CHECKLIST:

Employee Name:  ……………………………………………………….

Date:  …………………………………………………………………………..

Time:  ………………………………………………………………………….

Temperature:  …………………………………………………………….

Employee Signature:  ………………………………………………..

CONFIRMATION OF EMPLOYMENT / PERMIT TO TRAVEL TO PERFORM WORK AS A DOMESTIC WORKER:

I, being the employer with the below-mentioned details,

Hereby certify that the following individual is in my employ for the purposes of undertaking the work of a Domestic Worker at my abovementioned address and that accordingly he/she is required to travel between the abovementioned address and the address at which he/she resides:

SIGNED AT ____________ on this the _____ day of ______________ 2020.

______________________________

EMPLOYER SIGNATURE

One of the many difficulties that we are faced with during this country-wide lockdown is the question of eviction proceedings or the lack thereof.

In terms of the amended regulations of the Disaster Management Act 2002 that was published in the Government Gazette on the 29^th of April it states that, “A competent court may grant an order for the eviction of any person from land or home in terms of the Extension of Security of Tenure Act 82 of 1997 and the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998: Provided that any order of eviction shall be stayed and suspended until the last day Alert Level 4, unless a court decides that it is not just and equitable to stay and suspend the order until the last day of the Alert Level 4 period.”  Therefore, eviction orders may, in fact, be granted but may not be executed and unlawful occupants may remain on the land or home until the Alert Level 4 period is declared to be over.

This is subject to a Judicial Officer’s (a Judge or a Magistrate) discretion that it is not just and equitable to allow the unlawful occupant to remain until the Alert Level 4 period has come to an end.  It is difficult to imagine circumstances that would not be “just and equitable” as the amended regulations states.  A Judicial Officer would need to be faced with truly exceptional circumstances to enforce the eviction order during the Alert Level 4 period.

We advise all owners of unoccupied property to appropriately secure these premises as many have taken advantage of this lockdown in order to illegally occupy property and in some cases have erected structures.  Furthermore, unless a judicial officer deems it to be just and equitable evictions may be granted but the orders will be suspended until the end of the Alert Level 4 period.

Written by:

Harris Hardcastle – Candidate Attorney

For more information please contact Albin Wagner at awagner@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.

On 29 April 2020, the Minister of Cooperative Governance and Traditional Affairs published the latest Regulations that were issued in terms of section 27 (2) the Disaster Management Act of 2002.

In terms of the Regulations, a child is allowed to move between co-holders of parental responsibilities and rights or a caregiver in the same metropolitan area or district municipality if the co-holders of parental responsibilities and rights or a caregiver is in possession of:

(a) a court order; or

(b) a parental responsibilities and rights agreement or parenting plan, registered with the Family Advocate,

(c) a permit issued by a magistrate where the documentation in (a) and (b) above is not available.

In order for a magistrate to issue a permit, the following documents must be provided:

(i) a birth certificate or certified copy of a birth certificate of the child or children to prove a legitimate relationship between the co-holders of parental responsibilities and rights; and written reasons why the movement of the child is necessary.

A child is allowed to move between co-holders of parental responsibilities and rights or a caregiver between different metropolitan areas, district municipalities or provinces if the co-holders of parental responsibilities and rights or a caregiver is in possession of a permit issued by a magistrate.

Any child who was not at the residence of their primary caregiver before the lockdown period and who could not travel between provinces, metropolitan and district areas during the lockdown will be permitted, on a once-off basis, to return to the residence of their primary caregiver if the co-holders of parental responsibilities and rights or a caregiver is in possession of a permit issued by a magistrate.

In respect of the last two instances, the following documents must be provided for the issuing of a permit:

(i) a birth certificate or certified copy of a birth certificate of the child or children to prove a legitimate relationship between the co-holders of parental responsibilities and rights;

• written reasons why the movement of the child is necessary;
• a court order; and
• a parental responsibilities and rights agreement or parenting plan registered with the Family Advocate.

The Regulations require that the household to which the child has to move must be free of Covid-19.

Parents should continue to adhere to the Regulations and only move a child when it is necessary and should transport a child directly from the one parent to the other with the prescribed documentation.

Written by:
Clint van Aswegen – Partner
For more information please contact Clint van Aswegen on cvanaswegen@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.

What does force majeure mean?

The term force majeure refers to an extraordinary event or circumstance beyond the control of the parties in a contract, which renders either one or both parties unable to perform their contractual obligations. When this occurs, the party who is unable to perform its obligation is absolved from liability by raising impossibility of performance as a defence. Natural disasters, plagues and acts of State are all examples of circumstances which could be classified as force majeure.

In some cases, parties have a force majeure clause included in their contract. Where this is not the case, the common law of impossibility applies to the contract.

Force majeure clauses

In the event that parties have included a force majeure clause in a contract, the parties are able to regulate the consequences that will follow in the event of impossibility of performance. In this context, parties have agreed whether or not performance by the party who is unable to perform should be suspended, when the suspension should lapse and whether or not the contract will terminate automatically.

Common law of impossibility 

The case of Unibank Savings & Loans Ltd (formerly Community Bank) v Absa Bank Ltd 2000 (4) SA 191 (W) outlined the common law position of impossibility of performance. The court held that when performance of a contract is impossible due to unforeseen events that are not caused by the parties to the contract, the parties are excused from performing in terms of the contract. The impossibility, however, must be absolute and objective as opposed to relative or subjective. The court highlighted that subjective impossibility to receive or to perform does not terminate the contract or extinguish the obligations in terms thereof.

The more recent case of Glencore Grain Africa (Pty) Ltd v Du Plessis NO & others [2007] JOL 21043 (O) highlighted the supervening impossibility of performance requirements mentioned above, such as the impossibility must be objective, absolute and must not be the fault of either party. The court went further, to emphasize that the impossibility must be unavoidable by a reasona    ble person and that the fact that a certain disaster or event was foreseeable does not necessarily mean that it ought to have been foreseeable by a reasonable person.

In MV Snow Crystal, Transnet Ltd t/a National Ports Authority v Owner of MV Snow Crystal [2008] 3 All SA 255 (SCA) the court held that establishing the existence of a force majeure alone is insufficient for successful reliance on the defence of impossibility of performance. The court outlined various factors that need to be taken into account in assessing whether a party may rely on impossibility of performance as a defence, including “the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule ought, in the particular circumstances of the case, to be applied”. These considerations were mainly introduced as a safeguard against the abuse of this defence, such as where the impossibility is self-created by one of the parties.

Is COVID-19 a force majeure?

In determining whether the COVID-19 pandemic and the subsequent lockdown regulations operate as a force majeure and suspend a party’s contractual obligations, an assessment of the specific context of the parties involved needs to be made (as described above).

In the context of South Africa, President Cyril Ramaphosa declared a “national state of disaster” as a result of COVID-19, in an address to the nation on 15 March 2020. Most recently, the Alert Level 4 Regulations released on 29 April 2020 (“the Regulations”) outlined the new restrictions in place to combat this epidemic. This declaration and the Regulations made in terms of this declaration have imposed significant, nationwide restrictions. In order to rely on a force majeure clause to avoid contractual performance, a party would need to show that the impossibility of performance is linked to these events. If the prohibitions imposed by the Regulations do not render contractual performance impossible, then a party to a contract will not yet be able to invoke a force majeure clause, unless such a clause is included in their contract.

What steps need to be taken by the parties?

Where a party seeks to rely on a force majeure clause or where the party anticipates that a force majeure clause will be relied upon, one must start by thoroughly going through the provisions of their agreement. This would be to determine whether the clause covers the occurrence of the circumstances that result from the spread of the coronavirus. In this regard, you have widely or narrowly drafted force majeure provisions. A narrow provision is one that specifically lists the events which may occur and therefore excludes any other event outside of those listed which may be relied on to invoke a force majeure clause. On the other hand, a widely drafted provision will normally include, in addition to the listed events, what is termed a “catch-all phrase” such as “any event arising beyond the control of the parties, rendering the performance impossible”. Therefore, as a party that seeks to rely on a force majeure clause as a result of the virus outbreak, it is essential that they ensure that agreement concerned between the parties is wide enough to include the said outbreak.

Material adverse change clauses (“MAC clauses”)

Another type of clause which is relevant to a force majeure event is a material adverse change clause. This clause allocates the risks that may materialise as a result of a force majeure. These clauses operate where an unforeseen state of affairs results in a material adverse change to one or more parties to a contract (financially or in their capacity to perform) or hinders the achievement of a contractual objective. Although similar to force majeure clauses in that both function in the context of impossibility of performance arising from unforeseen events, MAC clauses are distinguishable in their emphasis on the impact of the unforeseen events on parties rather than the unforeseen event itself.

Whether or not a MAC clause in a contract will be enforceable during the COVID-19 pandemic will depend on a case-by-case analysis. Factors to consider include how the clause is constructed, what circumstances / events are referred to, what the impact is on the parties or the object(s) of the agreements (and degree thereof).

During the pandemic, those wishing to rely on such a clause in their contract should do so with care as the consequence of the argument failing in court could result in claims for damages being raised, damage to a business’s reputation or, more likely, a claim raised that the applicant party has shown reluctance to perform their obligations under the contract (repudiation). The best way forward in these times would be for each party to assess the situation going forward and take every measure reasonably possible to mitigate against the financial hardships a particular business (or party to a contract) may experience as a result, before relying on the MAC clause.

Practical implications: Protection afforded by the Consumer Protection Act 68 of 2008 (“CPA”)

The following provisions of the CPA provide protection in circumstances which may arise during the COVID-19 lockdown. The protection of the CPA is only available to parties who meet the following requirements:

1. The provisions of the Act are only applicable to (a) individuals or (b) companies with a turnover of less than R1 million
2. The provisions do not apply to franchises or special-order goods
3. The provisions only apply to agreements concluded within South Africa

Section 17 of the CPA gives consumers who concluded a contractual agreement without reducing the agreement to writing a right to cancel such agreements. This may be particularly prevalent where an airline or hotel booking has been made. Whilst the consumer is given a right to cancel their booking under the CPA, the Act does also provide some relief to suppliers by allowing them to charge a deposit or ‘reasonable’ cancellation fee. The word ‘reasonable’ imposes a rather broad and subjective standard on suppliers – and it is often difficult to lay down hard and fast rules as to what exactly constitutes ‘reasonableness’. Our courts have, however, suggested a common sense approach as to what would constitute a ‘reasonable’ cancellation fee, based on the particular circumstances of each individual case.

Another important provision in light of the current circumstances, is section 17(5) of the CPA. This section stipulates that if a consumer is unable to fulfil his obligations due to hospitalization or death, he/she is entitled to a full refund from the supplier.

Section 14 of the CPA is of great importance, particularly in relation to commercial and rental agreements. This section deals with the renewal of fixed term agreements and provides consumers with the right to cancel a fixed term agreement by giving suppliers 20 business days written notice. Once again, caution must be given in that the CPA does allow suppliers to charge a ‘reasonable’ cancellation fee, should this provision be exercised by the consumer.

Practical implications: Obligations under lease agreements

During the COVID-19 pandemic and lockdown, there are measures that can be used by parties in a lease agreement to relieve the financial pressures caused by the pandemic:

1. Landlords may sign a waiver so that the lessee’s deposit can be used as rent instead of it being held in trust. To affect this change, an amendment to the rental memorandum by inserting a clause should be made. This clause should include a provision reinstating the deposit in instalments by a certain date
2. Parties may also agree to a reduction in rent for a temporary period

Further, these times do bring up the questions of tenants’ obligation to pay rent. The tenant’s obligation will probably depend on weighing their history of payment (if they are a good tenant who pays rent on time) against the impact of the force majeure event. It is only when a tenant’s beneficial use of the property is directly affected that they will be legally entitled to a remission of rent. In the situation where a tenant cannot earn an income, the effect is only indirect and the tenant generally won’t, therefore, be released from their obligation to pay rent.

In the context of residential rental agreements, the tenants will be enjoying full use and enjoyment of the leased property. This means that, despite the fact the tenant may not be earning their full income, their obligation to pay rental is unaffected. However, a commercial tenant who cannot use the property could be entitled to remission of rental. However, Judicial Officers will evaluate these situations on a case by case basis.

In terms of evictions, the position established by the Regulations is that Courts may grant evictions orders, but they shall be suspended until the last day of the Alert Level 4 period unless the court states otherwise.

Practical implications: The functioning of parental contact

The effects of the national COVID19 shutdown have had serious impacts on the movement of children and parental custody during the country’s 21-day lockdown period.

The current Regulations now permit the movement of children between co-holders of parental responsibilities in the same metropolitan area of district municipality, provided the parents are in possession of a court order, existing parenting plan (registered with the Family Advocate) or Form 3 of Annexure A of the Regulations (issued by a magistrate). Parents need to keep these documents on them when transporting children, in case they are stopped at a police roadblock during the lockdown period. Movement will not be allowed if one of the child’s households has recently been infected, or has reasonably suspected to be infected, by COVID-19, or if there is a reasonable suspicion that a member of his/her household has been in contact with an individual infected with the virus.

For more information please contact Stephen Koen on skoen@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.

“The secret to change is to focus all of your energy not on fighting the old but on building the new.” – Socrates

Welcome to our new-look Newsletter, the launch of which has come at a time where the world we live and work in is vastly different from what we knew a few weeks ago.

Thankfully, technology has made it possible for many aspects of business and schooling to continue to operate.  At Bissets, we have systems that are in place to ensure that our attorneys and staff are available, that they have the necessary tools, and are able to work remotely and that we continue to provide our services to you with as little disruption as possible.

Our homes have become offices and schools with meetings and lessons taking place by way of video conferencing.   Whatsapp and email communications have become a vital tool both in business and in our personal lives.  Working parents have become teachers and are having to juggle facilitating school work with managing their professional life.  Social media is an ever-increasing way in which to connect with clients, friends, and family.  We are seeing innovation in the way in which business and life is conducted and many have been forced into a steep learning curve and adapt very quickly in this ever-changing situation.

We are truly together in this pandemic.

The partners and staff are in constant communication and monitoring matters and ways within which to navigate the way forward as each situation or announcement requires changes.  We are, as always, striving to keep our clients informed where there are changes in the law and providing the highest level of service and efficiency.

The Deeds Office, Master’s Office, and the CCMA were closed during the lockdown period (Level 5).  As of 1 May 2020, South Africa moves to Alert Level 4 and various parts of our economy will reopen.

Our offices reopened on 4 May 2020 to perform an essential service as provided for in terms of the Regulations of 29 April 2020 issued by the Minister of Cooperative Governance and Traditional Affairs.

We are implementing additional standards of hygiene and health protocols relating to Covid-19 at our offices and the majority of our staff are continuing to work from home.  The Deeds Office and Master’s Office will also resume operations and we await directions/guidelines with regard to the procedures and functioning of their offices.

The Chief Justice has stated that the Courts will be open for “urgent” matters involving: any urgent matter or bail application, maintenance and domestic violence matters,   cases involving “children issues” and urgent matters arising out of or from the activities associated with disaster management.

I would like to, on behalf of the partners, extend our thank you to our staff for the manner in which they have risen to the challenge in carrying out their work in these difficult circumstances. Their commitment and support is greatly valued.

It remains to be seen how Covid-19 will affect our business and individual lives in the future and what the new “normal” will be.  In the meanwhile, please stay safe and take care of yourselves.

Stay safe, regards

Clint Van Aswegen
Managing Partner

The lockdown has had alarming consequences for the providers of all goods and services not deemed to be “essential”. The regulations issued by Minister Dlamini Zuma on 25 March 2020 require every non-essential business to close. Yet salaries and wages need to be paid, rent needs to be paid, electricity bills need to be paid – just about every expense associated with such a business continues to be incurred. However, as a direct consequence of compliance with the lockdown laws, the ability to generate income of many who trade in non-essential goods and services has all but dried up completely. Does our law have any answers in these circumstances?

It is necessary, firstly, to understand the distinction between the validity of a contract, and its enforceability. It has long been the position in our law that contracts which are contrary to public policy are invalid. An agreement to commit a crime, for example, is contrary to public policy and invalid on this ground. Any attempt by a party to such a contract to enforce it will not get off the ground, because the contract – on account of its invalidity – does not confer rights or obligations upon any of the parties. Invalid agreements simply cannot be enforced.  However, once an agreement is found to be valid the next question which arises is whether its enforcement is contrary to public policy. If it is then a Court will not enforce the terms of such a contract. Restraint of trade agreements are an example of agreements which are not contrary to public policy, and therefore valid, which Courts nonetheless refuse to enforce if, on the facts, it is shown that enforcement is against public policy. For example, a restraint of trade agreement which is purely anti-competitive in nature will not be enforced by a Court, even though restraint of trade agreements are valid in law.

In Barkhuizen v Napier the Constitutional Court had to consider the question whether a term in a contract of insurance requiring the insured to institute legal proceedings against the insurer within 90 days of the claim being repudiated was against public policy and, accordingly, valid.

In considering the question before it the Court considered separately the issue of validity and the issue of enforcement. Firstly, was the agreement that the insured had to institute proceedings within 90 days of his claim being rejected constitutionally valid? And secondly, if the agreement was constitutionally valid, was it unconstitutional to insist on compliance with the clause? Ultimately, the Court held that the agreement was valid and that, on the facts before it, its enforcement was not against public policy.  Let’s examine, briefly, the notion of “public policy”. It is important to understand what is meant by this. In Barkhuizen the Constitutional Court said this:

“[73] Public policy imports the notions of fairness, justice and reasonableness. Public policy would preclude the enforcement of a contractual term if its enforcement would be unjust or unfair. Public policy, it should be recalled “is the general sense of justice of the community, the boni mores, manifested in public opinion.” Thus where a claimant seeks to avoid the enforcement of a time limitation clause on the basis that non-compliance with it was caused by factors beyond his or her control, it is inconceivable that a court would hold the claimant to such a clause. The enforcement of the time limitation clause in such circumstances would result in an injustice and would no doubt be contrary to public policy. As has been observed, while public policy endorses the freedom of contract, it nevertheless recognises the need to do simple justice between the contracting parties. To hold that a court would be powerless in these circumstances would be to suggest that the hands of justice can be tied; in my view, the hands of justice can never be tied under our constitutional order.”

These principles have not been tested in circumstances such as those confronting us today. Never before have providers of non-essential goods and services been legally prevented from trading and earning an income in order to prevent the spread of a lethal virus in an attempt to prevent the massive loss of life.

However, it is a question of applying the legal principles set out above to the facts. We think that an attempt by a landlord to enforce a lease, for example, by insisting on payment of rent, or cancelling on account of non-payment, may be met by the defence that for a Court to order compliance by a tenant in the circumstances of the present COVID-19 pandemic is against public policy. In other words, the enforcement of the agreement may be against public policy and not therefore be lawful. Evidence, however, is crucial. The tenant would need to show that his or her inability to pay rent was, as a matter of fact, directly a consequence of an inability to trade because of the Regulations prohibiting trade issued by Minister Dlamini Zuma, and not a matter over which he or she had any control.

It remains to be seen whether our law will be developed along these lines. We think that there is every chance that the point canvassed above will be taken and that our courts will be required to pronounce upon it.

Written by:
Stephen Koen – Partner
Savanna Kanzler – Candidate Attorney

For more information please contact Stephen Koen on skoen@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.