October 7, 2021

October 2021 News from KVV

Dear Client

Recently the world sat in awe as we watched athletes from across the world compete in the Olympics. One thing that always stands out for me is that the principle that I was taught in primary school when running a 400m race is still practiced by the worlds’ elite athletes. The principle that our coaches taught was that when you run a 400m race you run with your whole heart but it is in the last 100 meters where you need to throw all caution to the wind, dig deep and lay it all out in the field. The last 100m of the race is where the race is won, where we see the type of grit and glory that inspires us. It’s that last 100m that captures the imagination of the world and draws millions of people worldwide to watch these races on the edge of their seats.

To me, the coming of October month has always been the start of the last 100m for any given year. Three quarters of the year lies behind us. When October starts I always find my mind drifting to the three quarters of the year that has passed. I take stock of the things I learned and experienced, the unmerited blessings I received, the hurts and losses I experienced. My mind wanders through the year, the lows sharply contrasted by the highs and I always stop to make room for the impact of all these events to shape me as a person, to let it matter, to let it sink in.

This year was no exception to this process and I think for many people this was a year in which uncertainty reigned and the losses suffered were devastating. 2021 has not been the fairest or most palatable year for most people I speak to. But 2021 is not yet over, it is the coming quarter, the last 100m, that defines the race, defines the players that run in the race, that shows the guts and the glory that inspires nations and brings people together. So let’s dig deeper than we ever have before, push through the sore muscles, look past the sweat stinging our eyes and let’s finish this year like the elite athletes we are.

Ianthe Biggs | Conveyancer

October 7, 2021

Property Sellers: When to Choose Your Own Conveyancer

“A great deal is at stake in the transfer of fixed property. It is generally the largest single asset that a person owns and the transaction for the purchase or sale of a fixed property is probably the most important contract undertaken by individuals” (Law Society of South Africa)

For many of us, our home is our most important asset so when it comes time for us to sell, do everything possible to ensure that your interests are fully protected, that the sale goes through quickly and smoothly, and that you are paid without unnecessary delay.

Appointing the right conveyancer is key here. Let’s have a look at the “Why, Who, How and When” of it…

Why do I need a conveyancing attorney?

Legal ownership in “immovable” or “fixed” property (that is, land and permanent attachments such as buildings) can only be transferred from seller to buyer through a formal registration process in the Deeds Office. This is carried out by specialist attorneys who have been admitted to practice as conveyancers.

Who appoints the conveyancer, and how?

As the seller, it is your right to choose which conveyancer will carry out the transfer.

The agreement of sale (it may be called an “Offer to Purchase”, “Deed of Sale” or similar) should contain a clause specifying the conveyancing (or “transferring”) attorney. Make sure you fill in your chosen attorney’s name and details in the space provided, and do not allow anyone else to dictate to you who to use!

You may occasionally come across an offeror/buyer wanting to appoint their own attorney for one reason or another, perhaps with the argument that because they are paying the transfer costs (which include the conveyancer’s fees), the choice should be theirs.  But the fact is that you carry more risk, and there is nothing to stop the buyer from employing another attorney to monitor the transfer on their behalf if they really feel this necessary.

Bottom line – stick to your guns! This is your house at stake, so the choice is yours, and yours alone. How to choose the right conveyancer Your choice here is critical. You need to appoint someone you can trust to handle the process with the utmost professionalism –

  • Speed will be important to you (“time is money”!), and whilst a certain amount of delay is inevitable (there are lots of formalities and red-tape requirements involved), a pro-active and committed conveyancer will keep delays to a minimum.
  • Communication: Progress updates should be regular and timely, keeping you in the loop at every step of the process.
  • Attention to detail is also vital. Conveyancing is a specialised field, calling for meticulous compliance with a host of rules and regulations. Moreover every sale agreement will be different, and its precise terms and conditions must be complied with.
  • Cybersecurity has become a major issue in recent years, particularly around the question of email integrity. You will need to play your part here too (to take just one example, don’t ever take at face value an email purporting to come from your attorneys “advising you of our new banking details”), but knowing that your chosen firm of attorneys has security protocols in place is critical to resting easy that the purchase price will indeed end up in your account.
  • The need for scrupulous integrity goes without saying – a lot of your money will be at stake here!

When should I bring my attorney into the sale process?

Ideally, from the very start. When you first decide to sell, you will find it invaluable to have your attorney’s advice on how to go about it, whether you should speak to an estate agency, how best to market your property, what pitfalls to avoid and so on.

When it comes to the agreement of sale itself, a myriad of things can go wrong if the contract isn’t professionally drawn to be clear, concise, legally enforceable and configured to protect your interests. So if you are presented with an offer or agreement drawn by someone else, take legal advice before you agree to anything!

© LawDotNews

October 7, 2021

Employers – Walking the “Compulsory Covid-19 Jab” Tightrope

As the Covid-19 pandemic continues to wreak havoc around the world, an increasing number of businesses find themselves walking a tightrope between their obligations to, on the one hand, both protect the public and provide a safe and healthy workplace, and on the other hand to respect the individual constitutional rights of employees to make their own choices in matters of bodily and psychological integrity, religion, belief and opinion.

These deeply conflicting rights and obligations have left employers asking themselves questions like: “Must we insist on our employees having the vaccination to protect their colleagues, our visitors, our customers and the public at large?” and “If so, can we actually force unwilling employees to get jabbed or are we in for unfair practice or wrongful dismissal claims?”

The Minister’s “Amended Consolidated Direction”

On 11 June 2021 the Minister of Employment and Labour issued an “Amended Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces” under the National Disaster Regulations in an attempt to address those questions.

The Direction is long, detailed and complex, setting out a host of “minimum measure” requirements for workplace safety during the pandemic, so specific professional advice is essential here. But in a nutshell there is now an official guideline for employers wanting to make vaccination compulsory or partially compulsory. At a minimum, comply with all these specified obligations –

  1. Undertake a risk assessment

    This risk assessment (supposed to have been completed by 2 July 2021) was to determine (a) whether vaccinations were to be made mandatory considering the “operational requirements of the workplace” and if so (b) who was to be compulsorily vaccinated, taking into account the risk of transmission to employees through their work and their risk for severe Covid-19 disease or death due to their age or co-morbidities.

    In assessing whether or not your particular workplace needs a mandatory vaccination policy, include factors such as the ongoing requirement to enable employees to work from home where possible (still applicable even under Adjusted Level 1), the nature of the work in question, whether adequate ventilation is possible, whether adequate social distancing measures are possible and so on – the list is endless.

    As regards that 2 July deadline, it seems likely that many (perhaps most) employers missed it. If you are in that boat, what should you do now? There is no clear guidance on that, but the consensus of expert opinion seems to be that you should still comply, as soon as possible.
  2. Develop or adjust a vaccination and protective measures plan

    Based on the risk assessment, this plan must outline both what protective measures you have in place, and what vaccination measures you intend to implement.
  3. Consult on the risk assessment and plan

    Consultation must be with any representative trade union and any health and safety committee or representative. We should discuss under this heading also the questions of communication, education and training. We all know that together with some rational and valid concerns, there is an avalanche of fake news around Covid-19 and vaccinations. Inform your employees fully of their rights, help them to distinguish fact from fake, address their individual fears and concerns, explain the benefits of your plan to everyone, and strive for consensus.
  4. Make the plan available

    The plan must be available to an Occupational Health and Safety Act inspector and to the person/s listed in point 3 above.
  5. Other requirements and factors

    No list of this nature can ever be comprehensive but consider factors such as paid time off and transport to vaccination sites, sick leave for employees who suffer side-effects, counselling for “vaccine hesitant” employees and the like. There are also defined procedures to be followed when employees raise medical or ethical objections to being vaccinated (for example, the employer may need to try to find an alternative position in the business for such an employee).
    And of course every workplace will be different, which leads us to …

The bottom line

There is talk of workplace vaccination being officially made compulsory either across the board or in certain sectors, whilst media reports suggest that an increasing number of large employers are already implementing compulsory vaccination policies on the basis of legal advice received. There is also much speculation that our courts will support dismissal of employees who refuse vaccination in appropriate cases, and there is even a report of a High Court Judge insisting on either proofs of vaccination or negative PCR tests “for the general well-being of all parties in attendance at court”.

Bear in mind however that every situation, every workplace, and every employee will be unique – and with the high stakes involved, tread with extreme care and only after taking professional advice.

© LawDotNews

October 7, 2021

Don’t Lose Your Own Citizenship When You Apply for Another!

Many South Africans who need to be aware of this risk will be overseas and/or may not have heard of the High Court decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

A recent High Court judgment has confirmed that you will lose your South African citizenship if you apply for citizenship of any other country without prior Ministerial permission.

It is irrelevant whether you are South African by birth or not. It is also irrelevant why you want to acquire dual citizenship – perhaps you are living/working overseas, perhaps you want a second passport just to make travelling easier, perhaps you have financial reasons.

How and why you lose your South African citizenship

Dual citizenship itself is allowed, but our Citizenship Act provides that if “by some voluntary and formal act” you acquire citizenship or nationality of another country, you are deprived of your South African citizenship. And Home Affairs is interpreting that to mean that you have voluntarily given up your South African citizenship by your own “formal act” of applying for foreign citizenship.

You are exempt only if …

This loss of citizenship does not apply to –

  1. Minors (under 18 years of age) and
  1. Acquisition of another country’s citizenship by marriage.

How to retain your South African citizenship

The good news is that you can apply through Home Affairs for authority to retain your SA citizenship – but your application must be approved before you acquire your second citizenship.

The bad news is that it takes time, so don’t leave it to the last minute! Even before the pandemic, processing time was given as “3 to 6 months” and media reports suggest that delays are now much longer, although perhaps the publicity surrounding the High Court case in question will assist in improving the situation.  If you are overseas, you should find the necessary forms and instructions on your local SA Embassy/Mission/Consulate website.

You’ve lost your citizenship – what now?

This is very much second prize, but you can still apply to get your citizenship back –

  • If you were a citizen by birth or descent you can apply for reinstatement only if you have returned to, or are living in, South Africa permanently (you still have permanent residence, you just aren’t a citizen).
  • If you were a citizen by naturalisation, you must re-apply for permanent residence or apply for exemption thereof, before you can be considered for resumption of citizenship.
  • If all else fails, consider taking the legal route. As we discuss below, the High Court has recently held that the relevant provisions of the Citizenship Act pass Constitutional muster, but there is talk of a possible appeal.

High Court: Choose how important your citizenship is to you, and know the law

There has always been speculation that this section of the Citizenship Act could be held to be unconstitutional. However, in rejecting a recent application to that effect by the Democratic Alliance, the High Court has confirmed that it passes constitutional muster and is not “irrational”.

The High Court’s reasoning was that “It is ultimately a matter of personal choice what weight each of us attaches to the idea of our citizenship”, and that this is not a case of automatic loss of citizenship without notice but rather it “is really about personal and individual choices people make about their future and often choices come with consequences.”

The section in question, held the Court, is “not a secret provision but one that every citizen who voluntarily seeks to acquire another citizenship should ordinarily acquaint themselves with … while it may be arguable that citizens cannot be expected to know every feature of the law, those citizens involved in migration and  relocation to other countries with the possibility of acquiring citizenship there must surely be expected to acquaint themselves with the law in that area of activity they are involved in.”

There is talk of an appeal but for now at least, if you have already lost your citizenship your options are limited to those set out above.

P.S. Never let your SA passport lapse! 

Although you can travel freely around the world on your second passport, you must enter and depart from South Africa on your valid SA passport.  Keep renewing it!

© LawDotNews

October 7, 2021

What SARS Says About Crypto Assets and Tax

“The future of money is digital currency” (Bill Gates)

If you are thinking of buying – or have bought – any “crypto asset” such as a cryptocurrency like Bitcoin, Ethereum, Polkadot, Solana (or any of the many other crypto currencies springing up all over the place), be aware of the tax implications.

As a start, read the new SARS webpage “Crypto Assets and Tax” here, first published on 27 August 2021 and providing guidance on (at date of writing – expect this webpage to evolve!) these questions –

  • What is it?
  • How did we get here?
  • Do I need to pay tax on crypto assets?
  • How will it work? (With an example of the ITR12 Income Tax Return for the 2020/21 tax year)
  • How is SARS tracing crypto asset transactions?

There are still grey areas here – and many pitfalls – so be sure to take specific professional advice!

© LawDotNews

September 7, 2021

KVV | A Note from our Director

Dear Client

Writing something inspiring in the beginning of September should be easy. There is so much to take positive inspiration from – we just ended Womens Month in August, it is the start of Spring and nature is waking up with blooms and blossoms wherever you look, and we are celebrating heritage month in our lovely country South Africa this month.

But the truth of the matter is, this is not a normal Spring season. Instead of walking around with smiles on our faces, smelling the roses as we go, we have to wear facemasks when out in public. Instead of attending spring festivals and planning holidays with loved ones, we are forced to social distance and nobody is sure when we will be able to gather in large numbers again. We are waking up every day to more news of loved ones being tested positive, and even the devastating heart-breaking news of loved ones passing on, not surviving the virus. People are scared and confused – vaxxers and anti-vaxxers are criticising each other on social media. No one knows what is lying ahead for us in the months and years to come. One thing that is sure though, is that nothing will ever be the same again.

Having said all that, I am still going to refer you to a story from nature. My grandmother had an Amaryllis flower, which flowered so well over the years that all of our family members have been fortunate enough to receive a bulb. Each year we would announce to each other “ouma is blooming”, when the pink flowers start to blossom.

My “ouma” plant sadly was eaten by worms this year – within the midst of everyday live and tragedy I saw too late that the leaves were turning brown. An early sign of worms eating at the bulb of the plant. I gave the necessary pesticide, but sadly it seemed to be too late as all the leaves of the plant died away.

Over the past weekend, I looked at my “ouma” plant and to my surprise I saw the green of a flower sprouting out of the bulb! The plant has no leaves, has been eaten rotten by worms, but not only is it not dead, it still has the energy to produce a flower!!

Sometimes looking at nature makes me feel small and even a little embarrassed. Through all the turmoil we face in our daily lives, we as humans many times feel like we cannot go on. Like the “worms” of our existence have eaten away at everything that could ever be considered as beautiful in our lives. May you, like me, take inspiration from the lesson learned from this little Amaryllis plant. May we stand proud through our storms – and not only survive them, but still find the energy to produce a beautiful flower!

September 7, 2021

Noisy Neighbours – Your Rights, and Buyers Beware!

“In common law, everyone is in general permitted to use their property for any purpose they choose, provided that the use of the property should not intrude unreasonably on the use and enjoyment by the neighbours of their properties” (extract from the “gym case” below)
Consider this unhappy scenario – you buy your dream home (or perhaps new business premises), only to find that you are afflicted with the noisiest and most unreasonable neighbours you have ever encountered. A friendly approach to them produces no result. Can you get a court order to stop the noise? Let’s address that question with reference to two recent court cases, but first –
What must you prove?
To get a “final interdict” (in this instance a court order compelling the offenders to put an end to the noise) you have to prove three things –
  1. “A clear right”,
  2. “An injury actually committed or reasonably apprehended”, and
  3. “The absence of similar protection by any other ordinary remedy” (in other words, you must show that you have no adequate alternative remedy available to you – an important aspect, as we shall see below).
In the suburbs: The pastor v the puppy daycare home business  “…the courts apply a reasonableness standard, which entails a balancing of the mutual and reciprocal rights and obligations of neighbours” (extract from the judgment below) The scene in this first case is a suburban residential area in Cape Town’s Northern Suburbs.
  • A pastor, needing “a peaceful environment to write, research, study and counsel his congregants”, applied to the High Court for an interdict against his neighbours. The problem was their home business in the form of a puppy daycare centre, operating in their garden and offering supervision, structured playtime, potty training, basic training, socialisation and so on for up to 17 dogs at a time.
  • The complaint centered on barking on the property, triggering “a cacophony of barking from all the dogs in the neighbourhood” – starting at 6.30 am (Monday to Saturday) until 6 pm. This, said the pastor, was “disturbing and disruptive to the peaceful enjoyment of his property and to his daily activities”, plus it had seriously affected the value of his property.
  • Before buying the property he had viewed it over a weekend when there was no noise, and, because it was important to him, had specifically asked the previous owner about whether there was a barking problem in the neighbourhood.
  • After fruitless discussions with the neighbours, he reported them to the municipal authorities (the City of Cape Town), lodging complaints for almost 4 years, resulting only in the issue of a compliance notice which the City failed to enforce, and a failed attempt at prosecution.
  • In the High Court the complainant’s attack relied not only on common law “nuisance law” but also on alleged contraventions of the Western Cape Noise Control Regulations (all local authorities have power to make such regulations in terms of National Regulations), the City’s Development Management Scheme (with its restrictions on home business activities) and Animal By-Laws.
  • The puppy daycare business raised a series of defences to these lines of attack, and disputed many of the complainant’s factual allegations, but in the end result the Court ordered the business to stop operating immediately. The business activity, said the Court, was “abnormal use” of a residential property, and “While such noise may be bearable in a busy City, where there is a lot of activity, such as large volumes of traffic, the constant movement of people and crowds and noise created by businesses, it would definitely disturb the peace and serenity of a quiet neighbourhood where such noises are not expected, and to which the applicant is entitled.” (Emphasis supplied).
In the city: the multi-storey building and the noisy gym  “…What constitutes reasonable usage in any given case is dependent on various factors, including the general character of the area in question – persons living and working in an urban area would, for example, reasonably be expected, in general, to be more forbearing about a higher level of noise intrusion into their lives than neighbours living in a rural housing estate” (extract from the case below) We move now to the second case, also in Cape Town but this time in the City Centre.
  • The owners of a property in a multi-storey building in the centre of Cape Town (a married couple living there and an attorney running a law practice in it) approached the High Court for an interdict against the neighbouring gym on the grounds of a substantial noise nuisance. The married couple’s bedroom window is just over a metre away from the window and balcony of the gym.
  • The gym’s premises are zoned for commercial use, and there was no dispute that the area was subject to “substantial traffic noise”, but the complaints centered on allegations that the gym produced “loud techno/dance music with a strong beat” and microphone-amplified voice instructions to attendees at gym classes – at times ranging from 6 am to 6.45 pm.
  • Many of the facts of the matter were, as is common in such bitterly fought matters, in dispute, and ultimately the Court declined to grant the interdict partially on the grounds of unresolved disputes of fact. Clearly the fact that the area was subject to considerable levels of “inner-city noise” anyway played a part, but the deciding factor seems to have been the Court’s finding that the complainants had declined the neighbour’s offer to follow the processes of the local Noise Control Regulations, which the Court held to provide an “adequate alternative remedy”.
  • Moral of this story – don’t expect too much peace and quiet in a city centre, and exhaust all alternative remedies before asking for an interdict!
Property buyers – do your “noise risk” homework upfront!
Which leads us to a general note of caution to anyone about to buy a property – prevention being as ever a lot better than cure, investigate and understand the potential for “noisy neighbours” disrupting your peace and quiet before putting in your offer. For example, the pastor in the puppy case took at face value the seller’s reassurances about excessive barking in the neighbourhood – he could perhaps have saved himself 5 years of stress and trouble had he been a bit more cynical and returned to the neighbourhood at various times during the week just to check. And bear in mind that what may be considered a totally unreasonable noise level in one context could be considered quite acceptable in another. As the Court in the gym case put it: “…the applicants cannot expect the quiet serenity of the suburbs while living in the inner-city, which comprises a mix of commercial and residential properties, and particularly having purchased a property that is immediately adjacent to a commercially-zoned property.” (Emphasis supplied). Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.

© LawDotNews

September 7, 2021

Estate Planning and Wills: A Checklist to Protect Your Family

“Don’t fear death, plan for it” (Anon)
Amazingly, here we are in the middle of a deadly pandemic yet still some 70% – 80% of working South Africans are said to have no will in place. That’s crazy for two reasons –
  1. Without a will your loved ones are exposed    When you die your grieving family must start learning to cope without you, don’t expose them to the added uncertainty and worry that they will face if you haven’t left in place a valid will (often referred to as a “Last Will and Testament” to distinguish it from a “Living Will”). Without a will, your estate will be wound up in accordance with our laws of “intestate succession”. You have forfeited your right (and duty) to ensure that your loved ones each receive what they need from your estate, that your children and their inheritances are properly looked after, and that your estate is wound up by someone you trust.
  2. Estate planning is essential Estate planning in this context is the process of arranging your financial affairs in such a way that the legacy you leave is as large and as well-structured as possible. This needn’t be overly complicated or expensive, and everyone should have their own estate plan regardless of age, health or financial position. In a nutshell you are looking to maximise assets, to reduce estate costs and the taxman’s cut, and to streamline the process of winding up your estate so your heirs are paid out as quickly as possible. No will means no estate plan, and no estate plan means unnecessary worry, cost and delay for your grieving family.
 How to protect your family with a 15-point checklist
Use this checklist to make sure you provide for your family’s happiness and financial wellbeing long after you are gone –
  1. Make a will: See above – a will is a no-brainer! The consequences of dropping the ball on this one are so serious, and it is so easy to make a proper will, that endangering your family’s security and happiness by not having one just makes no sense at all.
  2. Don’t Procrastinate: Procrastination is human and, when it comes to contemplating one’s own mortality, entirely understandable. But it’s not forgivable – death is inevitable, and absolutely no one, no matter how healthy or young, can assume that they will be alive tomorrow. All too often death comes without knocking, so don’t fear it – plan for it. Now.
  3. Beware the DIY route: As tempting as it may be, going the DIY route (online will templates are easily found) is a bit like packing your own parachute for your first jump without assistance – great if you are an expert, but for most of us getting professional help makes a great deal more sense. It’s not you but your loved ones who have to live with any mistakes you make now!
  4. Ensure validity: Your will to be valid must comply with all legal formalities, and although the courts have a discretion to declare a “defective” will valid that process is uncertain, slow and expensive. Rather get it right upfront.
  5. Avoid ambiguity and dispute: Any lack of clarity in the wording of your will is fertile ground for dispute, and our courts are regularly called upon to sort out bitter, divisive and expensive family feuds that could have been avoided with a professionally drafted will setting out clearly and concisely exactly what the deceased’s wishes and intentions were. 
  6. Foreign assets: If you have assets in another country, you may need a foreign will as well as a South African one – ask a professional.
  7. Consider business continuity: If one of your assets is an operating business, or an interest in one, put a continuity plan in place so it can be carried on without interruption.
  8. Review your will regularly: This one is easily (and commonly) overlooked. You finally get a will in place and think “great, that’s it then”. Not so! Personal circumstances change, laws change, taxes change – diarise to review and if need be update/replace your will no less than annually.
  9. Choose your executor wisely: This can be make or break for your family. Choose someone you can depend on to wind up your estate quickly and professionally.
  10. Pay special attention to your minor children’s needs: Firstly, this is your chance to leave each of your children what they will need financially. You could split your estate in equal portions, or you may decide to differentiate based on each one’s situation and needs (a tip here to avoid a family feud – explain to everyone upfront the reason for your decision). Now is also where you nominate your choice of guardian for your minor children – don’t leave that choice to others! Ensure also that your minor children’s’ inheritances are held in trust for them, with your choice of trustees.
  11. Reduce costs and taxes: To maximise what your heirs receive you need to look at all the costs your deceased estate will have to pay out. A professional can guide you through the process of minimising estate duty, executor’s fees and costs (beware of false economy here – “cheap” could also be “nasty”!). Taxes – income tax and capital gains tax in particular – can take a sizeable chunk of your estate without proper planning.
  12. Nominate beneficiaries whenever you can: Where you are able to, nominate beneficiaries for your life policies, annuities, tax-free investments etc to ensure payout directly to chosen recipients, without all the delay inherent in the process of winding up your estate and in many instances reducing costs and taxes. Take professional advice here – different rules apply to each of these categories.
  13. Plan for liquidity issues. Plus, what will your family live on? You don’t want the executor to be forced to sell an asset (your house or business perhaps) that you have left to a particular heir, but that will happen if there is insufficient cash in the estate to meet the various costs and taxes of winding it up. Similarly, your bank accounts and the like will be frozen once the bank becomes aware of your death, so you need to find another way to ensure that your family has cash to live on whilst your estate is being wound up (it can be a lengthy process with all the red tape). Separate bank accounts, life policies (see above), family trusts and the like might work in your particular circumstances, but specific professional advice is key here.
  14. Leave your loved ones an “Important Information” file: This is critical. There are too many heartbreaking stories of grieving spouses and children floundering in a sea of confusion and worry because they have no idea where the deceased’s will is, how the estate is structured, what assets there are, what debts, how to access password-protected computers, where important documents are kept, who they should contact for help. Sometimes they are even at sea as to what assets they have in their own names. The list is endless.What should be in the file? In short, everything that your survivors might need, starting of course with details of where your will is.  Put yourself in their place – what would you need to know if you were the survivor? What information and documents would make it easier for you to get on with life?  Once again, professional advice and assistance will save your loved ones a mountain of trouble and concern.A last thought on this aspect – have “that conversation” with your family as soon as possible. It’s not easy but they deserve no less. Ideally bring them in at the start of your planning and the creation of your “Important Information” file. At the very least they must know about it, where it is and how to use it.
  15. What else? No generalised estate planning checklist can ever be comprehensive. Tailor your plan to your particular needs. Brainstorm, ideally with family and professional input, what else needs attention.
Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.

© LawDotNews

September 7, 2021

Eviction Refused – Landowners, Unlawful Occupiers and the “Just and Equitable” Test

“PIE recognises that in appropriate circumstances the right to full exercise of ownership must give way, in the interest of justice and equity, to the right of vulnerable persons to a home.” (Extract from judgment below)
“Unlawful occupiers” of land have strong rights under our Constitution and other laws, and most property owners and landlords understand the need to tread carefully whenever the issue of eviction arises. They are required to comply fully with the provisions of PIE (the “Prevention of Illegal Eviction and Unlawful Occupation of Land Act”) – certainly achievable but never to be taken lightly. Bear in mind that a court order is required before eviction, with additional restrictions applying during the pandemic lockdowns. A recent Supreme Court of Appeal (SCA) decision shows just how energetically our courts will enforce those occupier rights, even when the strict letter of the law appears to be 100% in favour of the landowner.
The 84 year old grandmother who can live on in her childhood home
  • A landowner bought on a liquidation auction a piece of land and a house occupied by an 84 year old widow and her disabled son.
  • The widow had lived in the house since she was 11 years old, her father being employed by the farm owner at the time. She in due course married another farm employee and lived on in the house with him. Widowed, she was reassured by verbal undertakings from previous owners that she had a lifelong right to live on in the house.
  • But when the new purchaser of the property (by now no longer farmland but an urban sub-division of the original farm) she was unable to produce any written agreement confirming her life right to occupation.
  • The new owner then gave the widow and her son notice to vacate and when they refused to leave, he obtained an eviction order from the magistrate’s court.
  • After a 12 year trek through the courts, the SCA finally confirmed the setting-aside of the eviction order, and the importance of this to landowners lies in the fact that the owner here had jumped through all the hoops required by PIE –
    • The verbal “lifelong right of occupation” granted by previous landowners was not enforceable against subsequent buyers,
    • The landowner had removed his consent to the occupants’ right of occupation, thereby terminating it,
    • The occupants were therefore “unlawful occupiers”,
    • The landowner had offered them suitable alternative accommodation.
A Court’s discretion to refuse eviction – the “just and equitable” test
  • Our courts always retain a discretion to refuse eviction from residential property and “must be satisfied that the eviction is just and equitable”.
  • The SCA held that in all the circumstances and facts of this particular case, eviction would not be just and equitable. Major factors were clearly the widow’s advanced age, her 73 year history of living in the house, her disabled son, and her reliance on verbal assurances from previous owners that she had a lifelong right of occupation (which she clearly if mistakenly believed would be enforceable against new owners).
  • Had the land still been farmland the widow would have enjoyed the protection given to farmworkers by ESTA (the “Extension of Security of Tenure of Land Act”) and although the land had now changed to urban land, “her status as a vulnerable person, even in the context of PIE, has essentially remained unchanged.”
  • Commenting that “No case in which an order of eviction from a residence is sought can ignore the visceral reality of what is sought, namely the ejectment of a person from their home in vindication of a superior right to property. Nor can the legal process by which the order is obtained be divorced from our fraught history of eviction and ejectment of vulnerable persons from their homes”, the Court held in all the circumstances that this was a case in which considerations of justice and equity “outweighed protection of the exercise of the right to property that an entitlement to an order of ejectment provides.”
  • This despite the landowner’s offer to give the widow alternative accommodation in the form of ownership of a unit in a secure residential complex, an offer she turned down because “She was accustomed to life in the house she presently occupied and enjoyed not only the freedom and space it afforded her but also the environment around it.”
  • The offer of alternative accommodation, although made in good faith by the landowner, did not tilt the scales in favour of eviction because “This was not a case in which the reasonableness or otherwise of an unlawful occupier’s refusal to vacate was a central issue … The true issue concerned the dignity of an elderly and vulnerable woman and a person with disabilities in the circumstances of the first respondent and her son. To hold that these weighty considerations are to give way merely because an alternative abode is offered would negate the first respondent’s dignity rather than protect it.”
The lesson for landowners and landlords
The significance of the landowner’s defeat here is perhaps best summarised in the Court’s own words (emphasis supplied): “PIE recognises that in appropriate circumstances the right to full exercise of ownership must give way, in the interest of justice and equity, to the right of vulnerable persons to a home.” Before buying property, check for any occupiers, “lawful” or not, and make sure that you can evict them if you need to. As a landlord, ensure that your lease is watertight, and your legal rights protected. There is no substitute for full and specific professional assistance! Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.

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September 7, 2021

Directors, Creditors – Do Personal Suretyships Survive Business Rescue?

“Creditors have better memories than debtors” (Benjamin Franklin)
In these hard times of pandemic and economically destructive unrest, an unfortunate number of businesses face collapse, and many will opt for the “first aid for companies” option of business rescue. Creditors coming out of that process with a shortfall (only the luckiest creditors are likely to emerge with full settlement) will naturally look to any personal suretyships they hold to cover that shortfall. A recent SCA (Supreme Court of Appeal) decision has brought welcome clarity to the question of whether – and in what circumstances – such personal suretyships will survive the business rescue process. Both directors and creditors need to understand the outcome, and to act accordingly.
Sued for R6m, a CEO’s defence crumbles
  • A company CEO (Chief Executive Officer) signed a personal suretyship in favour of a creditor supplying the company with petroleum products.
  • When the company fell upon hard times it was placed into business rescue. Eventually a business rescue plan was adopted, the rescue process was terminated, and the creditor sued the CEO for the shortfall on its claim of just over R6m.
  • The CEO’s main defence was that his liability as surety was an “accessory obligation” – in other words, if the creditor’s claim against the principal debtor (the company) fell away, he should be released from his liability as surety.
  • But, held the Court, although a principal debtor’s discharge from liability does indeed ordinarily release the surety, our law allows the creditor and the surety to agree otherwise.
  • And the suretyship agreement in this case did just that. It contained “unobjectionable” and “standard” terms which included a specific agreement by the surety that he would remain liable even if the creditor “compounded with” the company by accepting a reduced amount in settlement of its claim. Nor was there any mention in the business rescue plan of its effect on creditor claims against sureties (it could, for example, have provided specifically for sureties to remain on the hook, or to be released). But the deciding factor remained that the wording of the suretyship was such that the creditor did not abandon its claim against the surety by supporting the business rescue plan.
  • Bottom line – the CEO goes down over R6m, and the creditor has another shot at emerging unscathed from the mess.
Heed these lessons from the judgment! The SCA in its judgment undertook a comprehensive interpretation of the terms of the deed of suretyship, of the business rescue plan, and of the relevant legislation. Although the detail will be of more interest to lawyers and academics than it will be to the average director or creditor, it did bring welcome clarity to an issue of great practical importance, and the valuable lessons therein should be heeded – Directors: As always, think twice before signing any personal suretyship, and if you absolutely have no alternative, at least understand fully what you are letting yourself in for both legally and practically. Equally, ensure that the business rescue plan lets you fully off the hook as regards any possible personal liability; you may be advised to go further and have a separate release agreement with any creditor/s holding your surety. Although not directly relevant to this article, think also of managing any risk of personal liability beyond suretyship, such as allegations of reckless trading and the like. Creditors: You on the other hand should always try for watertight and upfront suretyships from directors and others with attachable assets (again not directly relevant to this article, but also take whatever security you can over company assets such as debtors, fixed property etc). And when it comes to the business rescue plan, make sure that it leaves your claim against sureties unaffected. Upfront professional advice and assistance is a real no-brainer here! Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.

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