“Fraud is a cancer that is crippling our country” (Supreme Court of Appeal in 2019)

An all-too-common scenario in these times of high unemployment is job applicants who, desperate to be hired, lie about their qualifications on their CVs. Recent high-profile stories of fake doctors and the like are no doubt only the tip of the iceberg when it comes to this growing problem.

And of course, the consequences for any business hiring such a candidate can be extremely serious. You face loss of reputation, loss of clients, dangerous workplaces where safety issues are at stake, and potential liability for any damage caused by the under-qualified employee.

The new offences

But there is help at hand! All employers, employees and jobseekers need to know that anyone lying about their qualifications now faces heavy fines and up to 5 years’ imprisonment.

That’s in terms of the newly operational National Qualifications Framework Amendment Act, which makes it a criminal offence to “falsely or fraudulently” claim to be holding a qualification or part-qualification from any educational or skills development provider, including a foreign institution. Fraudulent claims needn’t necessarily be in the form of a CV – any deliberate “falsification and dissemination or publication” of false qualifications is now criminalized, so posting fake matric certificates or degrees on social media for example would now be a criminal offence.

What you should do as an employer

• If a job seeker lies
  

  Of course, prevention is always better than cure, do your due diligence upfront – verify all qualifications claimed, speak personally to references, query inconsistencies or gaps in CVs and so on.

  You naturally won’t hire an applicant who turns out to be a liar but think of going one step further – lay criminal charges! It may seem overkill but the applicant has put your business at risk just by claiming the false qualification, and the best protection you can have from future attempts to defraud you in this way is to build a reputation for taking firm action against cheats.

• If an existing employee lies

  If on the other hand you find out that an existing employee has been guilty of CV fraud, either to get the job initially or to qualify for a benefit such as a promotion, you have a range of options available to you –

  • Lay charges: Send out a clear message: “Don’t mess with us!” by pursuing criminal charges, either as above if it’s qualification fraud or under our general criminal laws for other types of fraud. A recent example is provided by the case of a fake radiographer who misrepresented her qualification to get employment and has been sentenced to 2,000 hours’ periodical imprisonment.
  • Disciplinary action: You should also consider disciplinary action against the employee, with dismissal a distinct possibility in appropriate cases. Note that specific legal advice is essential here to get it right.
  • Claim damages: You may well also have a claim against employees for any losses flowing from their fraud. For example, the High Court recently ordered an employee who had claimed to hold what turned out to be a fake degree to repay everything he had earned back to his employer – over R2.2m. Moreover, the Court authorised the employer to execute against the employee’s provident fund, and that’s really going to hurt the fraudster’s retirement plans. Note that pension and provident funds are normally protected from creditors but not from claims for “any damage caused to the employer by reason of any theft, dishonesty, fraud or misconduct”. As a final mark of its displeasure, the Court ordered the employee to pay costs on the punitive attorney and client scale.

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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“Caveat subscriptor” – old legal maxim meaning “Let the signer beware!’

A recent High Court decision once again highlights the dangers of signing anything without reading, understanding and fully considering it.

A “Renovator’s Dream” and a case of buyer’s remorse

• A couple viewed a house advertised as “a renovator’s dream” and they immediately decided to sign an offer to purchase for R550,000 (R20,000 under asking price).
• The seller accepted the offer that afternoon (after the agent agreed to reduce her commission to R40,000) and the agent emailed a copy of the sale agreement to the buyers with confirmation of the acceptance.
• Early the next morning the buyers emailed the agent saying that the cost of renovations meant the purchase was not feasible for them “Therefore I hereby decline my offer to purchase and thanks for your time.”
• After taking legal advice the agent confirmed that a binding sale agreement had been concluded and that the sale must proceed.
• The buyers’ response was to suggest that the sale was subject to their daughter’s approval, to which the agent countered that had that been discussed, a special condition to that effect would have been inserted into the agreement.
• The seller thereafter sold the house to another buyer, and the agent (having not been involved in the second sale) sued the buyers for the agreed commission of R40,000 in terms of a standard clause in the sale agreement making the buyer liable for commission on breach by the buyer.

“Let the signer beware!”

• The Court dismissed the buyers’ objection that they hadn’t realised that they would be liable to pay the commission if they breached the sale agreement. “It is evident”, held the Court, “that the caveat subscriptor [‘let the signer beware’] rule provides that a person who signs a contract signifies their assent to the contents of the document, and they are bound by the document even if it subsequently turns out that the terms are not to their liking. In that event, they have no one to blame but themselves.” In other words, read and understand any agreement before you sign it – once you sign, you are bound whether you read it or not.
• Nor could the buyers prove that the sale was subject to their daughter’s approval as there was no condition in the agreement to that effect. In other words, make sure that any special conditions you want to form part of the sale are inserted into the signed agreement.
• Finally, there was no evidence of misrepresentation or fraud inducing the buyers to sign – if they were mistaken as to what was in the agreement and in particular in the commission clause, that was due to their failure to read it before signing.
• The buyers must pay the R40,000 commission plus two sets of legal costs.

Bottom line – sign nothing without understanding exactly what you are agreeing to.

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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“The buyer needs a hundred eyes, the seller but one” (Old proverb)

You buy a “pre-loved” vehicle which turns out to be a complete dud. You go back to the dealership which says “sorry, you bought it as is, not our problem”. What are your rights?

Buying from a private seller

When we discuss the CPA (Consumer Protection Act)’s consumer protections below, note that the CPA only applies to dealerships and to other sellers acting “in the ordinary course of business”. Private sales won’t fall under the CPA and any savvy private seller will sell subject to an “as is” or “voetstoots” clause, which will be valid and means that unless you can prove fraud on the part of the seller in concealing defects from you, the risk is on you. Bottom line – have the vehicle fully checked out before you pay a cent!

Buying from a dealership – CPA to the rescue!

Dealership sales are another matter entirely. The CPA provides that –

• Goods must be “reasonably suitable for the purposes for which they are generally intended … of good quality, in good working order, and free of any defects … will be useable and durable for a reasonable period of time, having regard to the use to which they would generally be put and to all the surrounding circumstances of their supply”.
• You are automatically given an implied warranty of quality that goods comply with those requirements and standards.
• If the goods fail to meet this standard, you can return them (at the seller’s risk and expense) within 6 months of their delivery and then the seller must – at your direction, the choice is yours – either
  • Repair or replace the goods, or
  • Refund you in full.

Note that the defects complained of cannot be just cosmetic or inconsequential. As the SCA (Supreme Court of Appeal) has put it: “Not every small fault is a defect as defined. It must either render the goods less acceptable than people generally would be reasonably entitled to expect from goods of that type, or it must render the goods less useful, practicable or safe for the purpose for which they were purchased.”

Four cases in point…

The National Consumer Tribunal deals with a large number of consumer complaints, and many of them relate to used car disputes. If you complain, it will be for you to prove that the dealership is in breach of the CPA, and if you succeed in doing so the Tribunal can impose administrative fines on the dealership as well as help you get redress. Let’s have a look at a few recent Tribunal judgments to see how that works in practice –

1. A breakdown after four months

A couple bought a Mercedes Benz 220 CDI Automatic motor vehicle for R225,900. Four months later they suffered a breakdown, and were quoted R47,782 for repairs. The dealership replied that it was not liable because the issue was wear and tear, the buyers knew of the vehicle’s high mileage and they had declined to buy a warranty.

Declining a “goodwill” offer of R10,000 from the dealership, the buyers referred the matter to the Motor Industry Ombudsman and thence it found its way to the Tribunal. The Tribunal, finding that the dealership had failed to make out a case that the damaged parts was a wear and tear issue, held the dealer guilty of prohibited conduct in terms of the CPA and ordered the dealership to refund the buyers in full.

2. Wrong tyres fitted – ordered to replace and to pay a R50k administrative fine

A consumer bought a 2015 Mercedes Benz C200 Bluetec Avantgarde A/T motor vehicle for R300,469 and two days later established that its tyres were standard, and not run-flat per the manufacturer’s specifications. That meant there was no room in the vehicle for a spare wheel, plus she was told that this could result in her insurers repudiating any claims made.

The dealer refused to act, claiming that the standard tyres were “100% according to specification and road legal as per roadworthy”. The Tribunal however held the dealership in breach of the CPA, ordered it to replace the tyres with run-flat tyres, and imposed a R50,000 administrative fine.

3. Continuous breakdowns and a R100k fine

A 2015 model Toyota Avanza vehicle, with 172,475 kilometers on the odometer, kept breaking down and being repaired by the dealership. Eventually, three months after purchase, the buyer had had enough and told the dealer to take the vehicle back and refund him. The dealer however insisted on repairing the vehicle once again, and held the buyer liable for a R6,000 shortfall on a warranty policy repair, plus R58,000 in storage charges. He was unable to pay, plus he ran into arrears on his financing agreement and the financing bank repossessed and sold the vehicle.

The dealership claimed that the buyer had acknowledged that the vehicle was in good condition by signing a checklist to that effect and argued that the buyer “purchased the vehicle pursuant to his satisfaction thereof”. Finding on the facts however that the dealership was guilty of conduct prohibited by the CPA, the Tribunal imposed an administrative fine of R100,000 on the dealership. The buyer can now claim his damages in the High Court with a certificate issued by the Tribunal confirming its findings.

4. Undisclosed accident damage reduces a vehicle’s value by R110k

Bought for R342,900, a 2015 model Isuzu KB300 turned out to have been involved in a major collision before it was sold to the buyer, and to have a trade value of only R230,900. Finding that the material fact of the collision was not disclosed to the buyer at the time of sale, the Tribunal held the dealer to have engaged in prohibited conduct which caused the buyer financial prejudice, entitling him to compensation. He now has a Tribunal certificate to that effect and can pursue his damages claim accordingly.

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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“Oh, I’m an alien, I’m a legal alien” (Sting’s ‘Englishman in New York’)

South Africa is attractive to overseas property buyers with our world-class lifestyle, depreciated Rand, strong property registration and legal systems, and minimal restrictions against non-resident property ownership.

Which is of course great news for property sellers in any area popular with foreign investors. Coastal and other tourist-friendly areas will appeal particularly to buyers wanting a holiday or retirement destination, whilst those buying purely for investment or business reasons will have a wider focus.

As an upfront note, remember that as the seller it is your right to choose the conveyancing attorney. Don’t ever give that right up, and as always sign nothing without first taking specific legal advice.

But can a non-resident buy your house?

Yes – South Africa (unlike many other countries) imposes few restrictions on non-resident property buyers. Only “illegal aliens” (foreigners unlawfully in South Africa) are totally barred from ownership.

There are however some aspects that both you and your prospective buyer should be aware of –

• What laws and requirements apply? South African legal and regulatory requirements apply and non-residents should take local professional advice on anything they aren’t sure of to avoid unnecessary delay and to ensure a smooth sale and transfer process.
• Can the buyer buy in an entity? Certainly, but specific rules and tax considerations apply when an entity like a company or trust is the purchaser – professional advice is essential, and as a seller be aware of possible delays in the transfer process.
• Signing documents: The sale agreement itself can be signed anywhere and is valid so long as it is in writing and physically signed. However, when it comes to the signing of transfer documents for the Deeds Office and bond documents for the bank (if a bond is applied for) the buyer should if possible sign in South Africa. If that isn’t possible, the buyer can either appoint a local trusted representative via a Power of Attorney, or sign documents overseas with proper authentication (normally by a notary public or embassy/consular official, but the requirements vary by country).
• Costs: Overseas buyers should understand what costs are payable by them and should consider in particular big-ticket items like transfer duty (or VAT if applicable). Your conveyancer can help the prospective buyer with a cost estimate to avoid any cash flow issues and delays during the transfer process.
• Mortgage bonds: South African banks offer bond finance to non-residents, generally subject to both their normal criteria relating to affordability and so on, and to a “50/50” limit – the amount of the loan must be matched by an equal cash payment (usually by import of foreign funds). Note that this limit only applies to non-residents, so foreign nationals who are legally resident in the country may, and this varies from bank to bank, qualify for larger bonds of up to 75%, perhaps more in some cases. Compliance with FICA (the Financial Intelligence Centre Act) will require identification of the buyer and proof of residential address.
• Repatriating the money: When the non-resident eventually resells, they can repatriate the imported foreign funds and any proportional profit. It is essential for the buyer to keep all records relating to the original purchase and the “deal receipt” proving import of funds.
• What income and capital gains taxes are payable? If the property is rented out, rentals are subject to local income tax. On resale, CGT (Capital Gains Tax) applies.

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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Media reports of the recent Constitutional Court decision holding a section of the Divorce Act unconstitutional and giving Parliament 24 months to remedy that haven’t always been clear about who needs to be aware of this, and who doesn’t.

Firstly, understand the three “marital regimes” available to you

Legally, marriage amounts to a binding contract, and you have the right to choose between three possible “regimes” –

1. Marriage in community of property: All of your assets and liabilities are merged into one “joint estate” in which each of you has an undivided half share. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage or contributed to it thereafter. This is the “default” regime – so you will automatically be married in community of property if you don’t specify otherwise in an ANC (ante-nuptial contract) executed before you marry.
2. Marriage out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish. Note here that the “accrual system” (see option 3 below) will apply to you unless your ANC specifically excludes it.
3. Marriage out of community of property with the accrual system: As with the previous option, your own assets and liabilities remain solely yours. On divorce or death however you also share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage.

Secondly, what’s the new ruling all about?

If you were married out of community of property (a) without the accrual system (option 2 above) after (b) 1 November 1984, you previously could not ask the court for a “redistribution order” – a reallocation of assets between spouses to ensure a fair split. Your marriage could end (be it through divorce or death) with one of you in a strong financial position and the other in a dire financial position, with a court having no discretion to help the spouse with less or no assets. You could literally be left destitute after possibly decades of marriage, with no redress and no claim against your spouse’s assets.

A 2021 High Court order (now confirmed in a Constitutional Court decision) declared unconstitutional the section of the Divorce Act which led to that unhappy state of affairs, so that you can now ask the court for a redistribution order no matter when you were married.

What does it mean in practice?

• Does this change affect you? The change does not affect you if you were married –
  • In community of property (option 1 above), or
  • Out of community of property with accrual (option 3 above), or
  • Out of community of property without accrual (option 2 above) before 1 November 1984.

  The change does affect you if you were married out of community of property without accrual (option 2 above) after 1 November 1984.

• What new rights do you have? You now have the right – previously denied to you – to apply for a fair, court-ordered asset redistribution between spouses.
• Are you automatically entitled to a redistribution of assets? No – you will have to convince the court that “it is equitable and just by reason of the fact that the party in whose favour the order is granted, contributed directly or indirectly to the maintenance or increase of the estate of the other party during the subsistence of the marriage, either by the rendering of services, or the saving of expenses which would otherwise have been incurred, or in any other manner.” In other words, you must prove what contributions you made to the marriage to justify your claim to redistribution.
• Will the court take anything else into account? What about what you agreed to in your ANC? Importantly, the court can take into account “any other factor which should in the opinion of the court be taken into account”. What you agreed to in your ANC is bound to be a consideration, and as the Court here put it: “This is as wide as can be.The fact that the parties concluded an antenuptial contract excluding the accrual regime could be taken into account.The weight this factor should receive would depend on the circumstances.” Bottom line – the court can take anything relevant into account, including what you agreed to at the time of your marriage.

About to marry?

Which all confirms the importance of making the correct legal choices before you marry to avoid uncertainty, heartache and dispute down the line. Take professional advice on which option is best for you!

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

“The infectiousness of crime is like that of the plague” (Napoleon Bonaparte)

This October marks the 20^th anniversary of the globally observed “Cyber Security Awareness Month”, and with cybercrime continuing to surge, here’s a cautionary tale to bear in mind.

You buy your dream house and pay the purchase price to the transferring attorneys (the conveyancers). Excitement builds as you wait eagerly for transfer and call the family together to plan your move. Then comes a call from the attorneys – why haven’t you paid yet? Your heart sinks, and panic sets in as it becomes clear that you just paid into a fraudster’s bank account. You contact the bank but your money has gone, along with the fraudsters.

That’s a nightmare scenario to which an ever-increasing number of property buyers and sellers around the world are being subjected. Property transactions are a natural focus for these cybercriminals because of the large amounts involved, but more and more personal and commercial transactions are also being targeted.

A recent High Court fight over yet another email interception fraud reinforces the need to remain alert in every situation and at all times…

R2.94m stolen – buyers, banks and conveyancers all at risk from email interception fraud

• A couple bought a house and paid R2.94m into the bank account specified in an email which appeared to come from the conveyancers. It was however a classic case of “email interception and compromise” – somehow the criminals had obtained sufficient information about the sale transaction to enable them to email the buyers, pretending to be the conveyancing firm, and convince them that their payment was being made into a legitimate trust account.
• As soon as it emerged that the account was in fact a fraudster’s, the buyers contacted the bank which promised to immediately freeze the account. Nevertheless, the R2.94m was transferred out to the fraudsters, and the couple sued the bank in the High Court for negligently allowing that to happen.
• The bank replied that, if it were indeed found to be negligent, it would allege contributory negligence on the part of both the buyers and the conveyancers.
• Its application to “join” the conveyancers into the court action failed, the Court holding that the buyers could choose who to sue and who not to, but the practical point of interest to most of us is the clear indication that in a case such as this, everyone stands to lose – property buyers (sellers are equally at risk), banks and conveyancers.
  

How to stay safe

“Forewarned is forearmed”, so follow these procedures strictly –

• Never fully trust anything you access or receive electronically. Everything electronic is potentially unsafe – think emails, SMSs, WhatsApp messages, websites, social media pages, online forms and anything similar. Don’t click on links without checking first for suspicious URLs and even then, be careful if asked to submit information, don’t download attachments unless you are certain they are safe, never disclose login details, passwords or other sensitive or personal information. Keep reminding yourself, your family and your staff of the ever-present dangers.
• Secure all your email, network and online systems against viruses, malware, breaches, hacking and compromise. Make sure all devices, servers, domains etc are protected. A good start is to install strong anti-malware software and firewalls, to ensure that all software and browsers are constantly updated with the latest security patches, and to use data encryption where you can. Use strong passwords and change them regularly.
• Use an online resource like the South African Fraud Prevention Service’s YIMA to security check websites. Download the U.S. Cybersecurity and Infrastructure Security Agency’s “Tip Cards” on its “Stop.Think.Connect. Toolkit” webpage.
• Pay particular attention to all banking and investing channels, and under no circumstances trust any email, SMS or other communication purporting to advise banking details or (a particular risk area) a change of banking details.
• If you are a business that regularly requests payments from customers or clients, add a suitable warning to every communication and a disclaimer against liability if a loss occurs (legal advice specific to your circumstances is essential here). Consider using a secure payment portal with 2FA (2 factor authentication) protection. If you email invoices with banking details, secure them from alteration (don’t put all your faith in PDFs, it’s a myth that they can’t be changed).
• Perhaps most importantly – always check directly with the account holder before paying anything. Contact the account holder only on its real and confirmed contact details – fraudsters are adept at creating look-alike emails and email addresses, telephone numbers, WhatsApp and cell numbers, and website addresses. Which brings us to …

A new and substantial danger – AI voice cloning

As AI explodes into every aspect of our lives, an increasing number of reports are made of “voice cloning” frauds.

Perhaps you get a call from “your attorney”, or your attorney gets a call from “you”.  Or your “boss” or your “HR department” phone you. Perhaps the call is to ask for sensitive information or perhaps it is to ask for money. A particularly successful fraud here, because of its emotional content, could be a variation on “Hi Mum and Dad, I have a problem, can you send me R10k urgently please? Send it to…”.

You know the voice so you trust the call, but the reality of course is that a criminal has fed a sample of someone’s voice into an AI program and duplicated it perfectly (or at least perfectly enough to fool you in the heat of the moment). No doubt cloned video calls and other AI powered scams will proliferate soon if they aren’t already doing so.

Once again, constant awareness is the key to protecting yourself from this sort of scam. Never let your guard down!

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

“Dementia is the plague of our time, the disease of the century” (Unattributed)

Dementia is a widespread medical condition that affects people of all ages but particularly the elderly, and includes conditions like Alzheimer’s. One of the most significant challenges of dementia is the loss of mental capacity, making it difficult for individuals to make crucial decisions, including those related to their legal affairs, finances and care. This can be particularly problematic when family members are unprepared or unaware of the practical and legal implications.

Beware the Power of Attorney myth

One common misconception is that a signed Power of Attorney (PoA) can authorise a family member to take control of the individual’s financial affairs in perpetuity. In fact, a PoA is only valid as long as the person who granted it maintains “legal capacity”, in other words an understanding of its implications. If and when dementia kicks in, the PoA automatically becomes invalid.

Enduring Powers of Attorney, which continue even after someone loses legal capacity, are valid in some countries but are unfortunately not yet recognised in South Africa.

So, what are your legal alternatives for dealing with dementia?

You will typically have three legal options available –

1. Curatorship: This involves appointing a curator bonis through a High Court order to manage the financial affairs of the person with dementia (a curator ad personam may in rare cases also be needed to manage the person’s personal affairs). This process can be complex and expensive, but in some cases it may be the only viable option available.
2. Administration: Similar to curatorship but less complex, less expensive, and quicker, this involves an application to the Master of the High Court for the appointment of an Administrator.It is only available when your family member is a “mentally ill person or person with severe or profound intellectual disability”, which excludes cases of purely physical frailty or disability, and suggests that in cases of mild dementia or mild cognitive impairment only curatorship is an option – but take legal advice on your specific circumstances. An extra element of cost and delay applies in larger estates, in that the Master must commission an investigation into any application where the assets involved are over R200,000 and the annual income is over R24,000 p.a.
3. Special Trust: An alternative option is to consider a trust or special trust, which can be established if your family member suffers from an early onset of dementia but is still lucid and has legal capacity. All trusts have advantages in that they allow individuals the freedom to choose upfront who the trustees will be and what powers and duties they will have, whilst special trusts come with significant tax benefits over ordinary trusts. Individualised professional advice is essential here.

Understanding the available legal avenues can help you navigate this difficult journey, and with proper planning, personalised legal advice and early action, you can ensure that your family member’s legal and financial well-being is protected at all times.

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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“The path is smooth that leadeth on to danger” (William Shakespeare)

Tripping over aisle blockages or slipping on floors made slick by spillages can happen in even the best-managed supermarkets, and injured shoppers regularly turn to our courts to claim damages from shopkeepers and building owners.

It’s no surprise therefore that this sort of claim has its own (informal) name – the “slip ‘n trip” case. A recent High Court judgment provides some clarity on what you will need to prove should you be one of the unfortunate shoppers who are injured in this way.

A shopper slips, and sues

• A shopper slipped on an unidentified spillage, injuring herself and needing hospitalisation and further treatment for unspecified orthopaedic injuries.
• Supermarket employees initially undertook to cover her medical expenses but later the supermarket denied liability.
• It admitted that it had a “general duty of care to customers visiting its store to ensure that it afforded them a safe environment within in which to shop”, but claimed the shopper’s fall was “due to her sole negligence in that she failed to keep a proper lookout, failed to take reasonable steps to prevent her fall and failed to avoid injury to herself.” In the alternative it alleged contributory negligence on her part. It also sought to blame its cleaning service contractors and/or an independent merchandiser who had been working in the aisle in question.
• The shopper took her claim for damages to the High Court, which confirmed that what you will have to prove is that the shop –
  • Should have foreseen the reasonable possibility of its conduct causing your injury and monetary loss; and
  • Should have taken reasonable steps to avoid that loss; and
  • Didn’t do so.
• The Court held that, on the evidence presented, the shopper had proved that “she took proper care for her own safety on the morning in question. The fact that she may have moved down aisle 5 at more than a leisurely dawdle did not occasion her fall: she did not slip or trip because of haste or inattention but because she stepped in some spillage of unknown origin.” (i.e., you need to prove you weren’t negligent)
• And even if the spillage was a small one (supposedly the size of a R2 coin in this case) “it really matters not what the extent thereof was as its mere presence on the supermarket floor presented a risk to any unassuming shopper, who would be expected to spend her morning looking at the merchandise on the shelves and not peering down at the floor ahead of her.” (i.e., keeping a proper lookout doesn’t necessarily mean peering down at the floor ahead of you all the time)
• In principle, once a shopper has “testified to the circumstances in which he fell, and the apparent cause of the fall, and has shown that he was taking proper care for his own safety, he has ordinarily done as much as it is possible to do to prove that the cause of the fall was negligence on the part of the [supermarket] who, as a matter of law, has the duty to take reasonable steps to keep his premises reasonably safe at all times when members of the public may be using them.
• The shopper in this case had done all that, raising a rebuttable presumption of negligence by the supermarket so that, in the absence of an explanation from it, it was inferred that a negligent failure on its part to perform its duty must have been the cause of the fall. In this case it provided no evidence of how long the spillage had been on the floor or how long it was reasonably necessary for it to discover the spillage and clean it up. (i.e., once you prove what happened and that you took proper care for your own safety, it’s for the supermarket to prove that it wasn’t negligent)
• The shopper is entitled to whatever level of damages she can prove.

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

“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)

It may well be that in the future, we will be able to make a perfectly valid will (“Last Will and Testament”) by way of a video recording or other electronic means, but that day has not yet arrived.

For now, it is essential that your will be properly drawn, not only to clearly reflect your last wishes, but also to comply with all the formalities laid out in our Wills Act.

In summary (ask your lawyer to explain the finer points, they are important), wills must be in writing and signed by you on all pages, in the presence at the same time of two competent witnesses who must sign the end page (preferably all pages, but that’s not a formal requirement). Note that neither witnesses nor their spouses can inherit or be appointed as executor, trustee or guardian.

Video wills – are they valid?

Bearing in mind those required formalities, and the fact that an attempt to rely on a video recording as a will was abandoned in the case discussed below, it would be rash to assume that a “video will” ever be accepted as valid even though the concept has not to date been directly tested in our courts.

Rather observe all the formalities listed above, and think of using a video recording just as an adjunct to your formal will. For example, recording the will-signing process itself could help avoid any future dispute over your written will’s validity, whilst an informal video message to your family explaining to them why you have drawn your will the way you have could provide clarity and comfort to them when the time comes.

Non-compliance with formalities – there are “escape hatches”, but …

There are “escape hatches” in that our Wills Act provides that a document not complying with all formalities can be accepted as a valid will if it was drafted or executed by the deceased and if it was intended to be their will. You can also be authorised to both inherit and act as an executor, even if you or your spouse signed as a witness, if you can prove that there was no fraud or undue influence over the deceased. You can also be taken to have revoked a previous will in various ways.

But as we shall see from the two recent High Court cases discussed below, relying on any of those escape hatches is extremely unwise. At worst, your last wishes won’t be honoured, and at best you will be exposing your loved ones to the risk of prolonged and bitter litigation at the very worst time.

Case 1: A Covid-19 video-call attempt to replace a will fails

• A father had left everything to his children in a 2018 will. But, dying in hospital of Covid-19 in 2021, he made a video call to his farm manager indicating his wish to revoke the will and saying that his final instructions were that everything be left to his farming trust.
• As requested, the farm manager had a will to that effect drawn by attorneys and delivered it to the hospital (he was unable to deliver it personally due to Covid-19 restrictions then in place), but the father died before it could be given to him for confirmation and signature.
• The trust asked the High Court for an order declaring the 2018 will revoked and the 2021 unsigned will accepted as valid (it seems to have abandoned an argument that the video call itself was a will). The disinherited children opposed this application vigorously.
• The Court declined to validate the unsigned 2021 document, pointing out that the Wills Act’s provisions in this regard must be interpreted and applied strictly and narrowly. It’s analysis of the trust’s argument that the “impossibility principle” applied will be of great interest to lawyers, but the practical point of issue to most of us is that although it seems clear that the father wanted to make a whole new will, on the facts of this case only his written and signed 2018 will could be accepted as valid.

Case 2: Brothers at war, and a non-compliant will accepted as valid

• Another tragic case of a dying father trying to change his will, this time to disinherit one son (“JP”) in favour of the other (“SG”).
• The new will did not comply with the Wills Act’s formalities. Three witnesses signed it but not in each other’s presence, whilst the fact that one of the witnesses was SG’s wife formally disqualified him from inheriting or acting as executor.
• JP asked the Court to declare the will invalid so he could inherit under the laws of intestacy, whilst SG asked the Court to accept the will despite the non-compliance, and to allow him to inherit and to act as executor.
• On the particular facts of this case, including undisputed evidence of a major rift between JP and his father (in contrast to an extremely close relationship between SG and the father), the Court exercised its discretion in favour of SG.
• Firstly, it held that the will, despite the failure to comply with formalities, was indeed drawn by the father and intended by him to be his will. It was therefore accepted as valid.
• Secondly, it held that SG could both inherit and act as executor because he had proved a lack of fraud or undue influence over his father.

Different outcomes but a clear principle – failure to comply with all formalities risks your last wishes not being implemented and exposes your loved ones to dispute and litigation.

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

“Live each day as if it were your last… because one day, you’ll be right.” (Benny Hill)

It’s always tempting to procrastinate about decisions that force us to address the inevitability of our own mortality. But we have no choice when it comes to protecting our loved ones after we are gone, because to protect them a will (“Last Will and Testament”) is not a nice-to-have, it’s a necessity. And it’s urgent. No one – young or old, healthy or ill, wealthy or of limited means – can guarantee that they’ll be alive tomorrow.

How to structure your will? One potential risk area when it comes to your children’s inheritances is the Guardian’s Fund. The Fund serves a vital purpose, but it has featured regularly in the media over the past few years for all the wrong reasons – ongoing losses to cybercriminals and fraudsters (the last reported loss was R17m), SIU (Special Investigating Unit) probes into allegations of misconduct and corruption, and the like.

How is that relevant to you? Well, if you have minor children, it confirms once again that your will should be professionally drawn to avoid any chance of your children’s money ending up in the Guardian’s Fund.

Dying “intestate” means trusting a State-run entity with your children’s money

Without a will, you die “intestate”, which means that the law makes your decisions for you. You have lost the right to choose a trusted executor, you have lost the right to specify how your estate is distributed to your loved ones, you have lost the right to nominate a guardian for your children. Perhaps most importantly of all, you have lost the right to protect your minor children’s inheritances as you see fit.

That’s a problem because, unless you leave a will structured to provide a mechanism for looking after your children’s inheritances until they reach majority (i.e. turn 18), those moneys might well end up in the Guardian’s Fund.

What is the Guardian’s Fund?

• The thought behind the Guardian’s Fund is a laudable one – it was created to hold and protect money (including inheritances) for minors and other people who are legally incapable of managing their own affairs. For those vulnerable people whose money it safeguards, it performs a most valuable service.
• All money is invested with the PIC (Public Investment Commission) and earns interest at a rate set from time to time by the Minister of Finance.
• The Fund is audited annually and is managed by the Master of the High Court (actually by one of several Masters around the country, each of whom runs a separate Fund), without charge.
• A child’s guardian can approach the local Master to pay over accrued interest (and in need up to R250,000 of the capital) for maintenance needs.

So, what’s the problem?

Knowing that your children’s money is to be held in an audited, managed-for-free fund administered by independent and senior government officials is certainly a lot less alarming than many of the possible alternatives, but it is by no means ideal –

• The media reports of hacking, theft, fraud, police probes into allegations of misconduct and corruption etc that we mentioned above hardly inspire confidence in the Fund’s ability to manage and protect your children’s inheritances, even if only one or two “bad egg” employees are involved.
• Your children’s guardian must jump through all sorts of administrative hoops to draw money for maintenance, education, clothing, medical costs and so on. The delays and dysfunction which reportedly still plague many Master’s Offices won’t help.
• As mentioned above, Fund monies are paid a government-fixed rate of interest, currently 4.25% p.a. That’s both below inflation and an unattractive alternative to the earnings potentially available to discretionary funds.
• When your children turn eighteen, they are again faced with red tape and bureaucracy before they can access whatever is left of their money.

The best protection?

The good news is that you can easily protect your vulnerable minor children from all those risks and negatives. These are the two essentials –

1. Leave a valid will, professionally drawn to protect all your loved ones and in particular those most vulnerable such as your minor children, and
   
2. Make sure that your will nominates a guardian for your children and includes a mechanism to protect their inheritances so as to avoid any risk of their money having to be paid into the Guardian’s Fund.

   The most commonly advised protection mechanism to avoid that unhappy scenario is a trust – either an existing trust (if fit for purpose), or a new “testamentary trust” which will come into existence when you die. The alternative is to provide for the children’s guardians to administer their inheritances for them, but a trust is almost always the better, safer, and more practical option. Either way, make sure that your will’s provisions correctly and clearly set out your wishes in that regard.

   Bear in mind that anything to do with trusts of any kind calls for specific professional advice – there are complex legal, financial and tax considerations involved.

Bottom line – have your attorney draw your will (or update your existing will) to ensure that your children’s inheritances are properly protected and don’t end up in the Guardian’s Fund!

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