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January 10, 2018

Is an unregistered marriage contract binding on the parties?

In a case heard in the High Court of KwaZulu-Natal, (KS v MS [2015] JOL 33262 (KZD)), in a divorce action between the parties, two issues were separated and were now before the Court.
  1. The first issue was whether the signing of a power of attorney by the parties and the initialling of a draft antenuptial contract constituted a recognisable antenuptial contract, and accordingly whether the parties were married in or out of community of property. 
  1. If the parties were married out of community of property with the application of the accrual system, the question was whether the date for determination of any such accrual should be litis contestatio (the stage in litigation when the pleadings are closed) or the date of divorce. 
Prior to their marriage, the parties had signed a power of attorney that authorised an attorney to appear before a notary public and to execute an antenuptial contract on their behalf. Unknown to the parties, the antenuptial contract was not executed and registered in the deeds office. The plaintiff therefore contended that the marriage was in community of property.
Held that although the antenuptial contract was not registered, the plaintiff conceded that prior to the marriage, the parties agreed that their marriage would be governed by an antenuptial contract. Although an antenuptial contract which has not been registered in accordance with the provisions of section 87 of the Deeds Registries Act 47 of 1937 is of no force or effect as against any person who is not a party thereto, it would be valid and binding as between the parties because the unregistered contract would reflect the common intention of the parties at the time the contract was entered into. The Court therefore found that an informal antenuptial contract existed in this case.

The Court then turned to consider the date for determination of accrual. The practical effect of litis contestatio being the date of determination of accrual is that the trial is expedited and the temptation to squander assets is limited. It was held that the date for determination of accrual was at litis contestatio.

December 10, 2017

Change the registered office of your company!


It is no longer possible for a company to use an address chosen for convenience (e.g. of its auditors) as its registered address. Company management should ensure that CIPC's records reflect the company's registered office as the address of its office. If there is more than one office, then the address of the principal office should be used.

A company can change its registered office by filing a notice of change of registered office with the CIPC. There is no filing fee payable.

The Western Cape High Court considered the issue of the 'residence' of a company under the new Companies Act (the '2008 Act') in the matter of Sibakhulu Construction (Pty) Ltd v Wedgewood Village Golf and Country Estate (Pty) Ltd.

The judgment highlights the changes introduced by the 2008 Act relating to a company's registered office as well as the impact of these changes on the court having jurisdiction over proceedings involving the company in certain circumstances.

Judge Binns-Ward found that under the 2008 Act:

• a company's registered address must be the address of its office;

• if the company has more than one office, its 'principal office' must be its registered office in accordance with section 23(3). The term 'principal office' is not defined in the 2008 Act. Looking at the 2008 Act's requirements as to what must be kept at its registered office (sections 24 and 28), the court concluded that the principal office should be the place where "the company's general administration is centered" in other words where the "administrative business of the company is principally conducted";

• the transitional provisions in Schedule 5 of the Act do not deal with a pre-existing company's registered office and accordingly section 23(3) applies equally to such companies (a 'pre-existing company' is a company that was incorporated before 1 May 2011 under the Companies Act 1973); and

• the place where the company's registered office is situated determines where a company resides and therefore which court has jurisdiction in proceedings affecting the status of a company, such as liquidation and business rescue proceedings. (Before the 2008 Act came into effect, it was possible for a company to reside at more than one place and one could elect to institute proceedings using, for example, either the place of its registered office or its principal office.)

December 02, 2017

Rights of grandparents to contact with grandchildren

Grandparents can seek court-ordered contact with their grandchildren.

Most grandparents actively participate in their grandchildren’s lives. Unfortunately, divorce or family dysfunction often cuts them off from their grandchildren. For example, the mother of a child born out of wedlock may, on a whim, refuse the paternal grandparents contact with her kids.

Any number of situations can lead to a grandparent petitioning a court for contact (visitation) rights – frayed relationships with their own children or their spouses, abuse or neglect of the grandchildren by their parents, or divorce. Fighting parents sometimes forget the special bond that has been created between the children and their grandparents.

The courts consider the best interests of the child
If such a special bond exists, the courts usually find that it would be in the children’s best interests for grandparents to continue seeing their grandchildren.
Our law requires judges to make their decisions about grandparents’ right to contact based both on the best interests of the child as well as the parents’ rights to fundamental care and custody of their children.

Money is a factor, but communication is key
It is difficult and expensive for grandparents to pursue visitation rights through the courts and mediation is more effective and cheaper. If parents and grandparents agree to meet with someone to facilitate a resolution of the disputes, most cases can be settled without expensive litigation and cost (both financial and emotional) for the family.
Reunification of the family can be a success for everyone, especially the children.

In LH and another v LBA (EL1426/20101, Eastern Cape High Court) the court had to decide what rights of access grandparents had to their grandchild.

The applicants sought an order allowing them access to their six-year-old grandson, born out of a relationship between their deceased son and the respondent. The respondent had initiated contact between the child and the applicants when the child was about six months old. The applicants then had regular contact with the child and he soon started to spend weekends with them. That arrangement continued until December 2008, after the child’s third birthday, when the respondent abruptly stopped it. Despite various attempts by the applicants to convince the respondent to allow them to see the child, they had not had any contact with him for the past three years.

That when considering such an application the Court is enjoined to consider, inter alia, the best interests of the child; the relationship between the applicant and the child, and any other relevant person and the child; and the degree of commitment that the applicant has shown towards the child. In terms of section 7 of the Children's Act 38 of 2005, the Court must, when determining what is in the best interests of the child, have regard to the need for the child to remain in the care of his or her parents, family or extended family; and to maintain a connection with his or her family, extended family, culture or tradition.
The Court was not convinced that the reasons proffered by the respondent for refusing to allow contact between the child and his biological paternal grandparents were valid. However, the Court was also of the view that the extent of the access sought by the applicants was too wide, and it would not be in the child’s best interests to allow contact on that basis. A more limited right of access was granted.

November 18, 2017

Can a municipality terminate electricity to premises without a court order?

As a rule, a landlord requires a court order before terminating the electricity supply to a property.

A municipality does not.


It is a reality that when faced with a tenant who falls into arrears, some landlords consider taking the law into their own hands, for example by either locking the tenant out of the property or cutting off the electricity or water supply to the property. This can be an expensive course of action for the landlord.

The landlord has a duty to allow the tenant undisturbed use and enjoyment of the leased premises for the duration of the lease. Should the Landlord breach this duty, the tenant has the right to apply to Court, for a spoliation order. This means that the Court will order that occupation of the property be restored to the tenant and the Landlord will be liable for the tenant’s legal costs of the Spoliation Application, which can be quite substantial. The law also provides that where a tenant is unlawfully deprived of his use and enjoyment of the premises in this manner, he is not required to pay rental during the relevant period. See: https://goo.gl/19M7Gd

Homeowners Association

What if the rules allow a HOA to restrict rights to water and electricity?

The Court considered whether the restriction of his rights to water and electricity was lawful. One of the conditions of title agreed upon by the property owner, and registered against the title of the property, were that the owner would be bound by the statutes and rules of the respondent. Parties are free to contract as they please. The law permits perfect freedom of contract. Parties are left to make their own agreements, and whatever the agreements are, the law will enforce them provided they contain nothing illegal or immoral or against public policy. In this case, the applicant had the choice of not renting the property if he was of the view that the applicable rules were inconsistent with his rights. The respondent’s conduct was not unlawful as it acted within the rules and the agreement it entered into with the property owner. The conduct of the respondent did therefore not amount to spoliation.

In a matter heard by the Constitutional court in 2013, in Rademan v Moqhaka Local Municipality, the court had to decide on this crisp issue: Ms Rademan did not pay her full municipal account (including rates and taxes), but only the electricity portion, because she felt that the municipality provided a poor service. Several other community members, adopted the same approach.

The municipality threatened to terminate her electricity, unless she paid. She refused to do so, and the municipality cut off her electricity.

The court had to decide if that was justified, even if her electricity bill was up to date, and it did, based on these facts:

·         Section 102 of the Municipal System Act 32 of 2000 provides that a municipality may consolidate accounts (rates, water, electricity, etc.).

·         Section 25(1) of the municipalities by-laws states that a Municipality may restrict or disconnect the supply of water and electricity or discontinue any other service to any premises whenever a user of any service, fails to make payment on the due date or fails to make acceptable arrangements for the repayment of any amount for services, rates or taxes.

As Ms Rademan failed to pay the consolidated account – even though her electricity was paid for - she contravened the municipality’s conditions of payment, and the municipality was entitled to cut her electricity.

November 11, 2017

What is the effect of the accrual system in a marriage contract, on death or divorce?

This is an example of a standard calculation at the death of the first-dying: 

Note:  The Matrimonial Property Act 88 of 1984 is applicable to

(a) every marriage out of community of property entered into on or after 1 November 1984 in terms of a antenuptial contract by which the accrual system is included or excluded; and
(b) spouses married before 1 November 1984 out of community of property by antenuptial contract and before 1 November 1986 executed and registered a notarial contract applying the accrual system to their marriage in the deeds registry.
The following assets are not considered in determining their respective accruals (are not included in the nett value of estate assets in this example):
1.      Any asset excluded from the accrual system under the antenuptial contract as well as any other asset which the spouse acquired by virtue of his/her possession or former possession of such asset.
2.      An inheritance, legacy or donation which accrues to a spouse during the subsistence of the marriage, except in so far as the spouses may agree otherwise in their antenuptial contract or in so far as the testator/trix or donor may stipulate otherwise, as well as any other asset which has been acquired by the spouse by virtue of his/her possession or former possession of the inheritance, legacy or donation.
3.      Any donation between the spouses is not considered in either estate.
4.      Any amount which accrued to a spouse by way of damages (e.g. slander), other than damages for patrimonial loss.

At the commencement of the marriage, A declared R 100,000 and B nil in their antenuptial contract. At the dissolution of the marriage on A’s death the respective net market values of their estates assets are A R 3,000,000 and B R 100,000. At the date of the marriage the official Consumer Price Index was 120 and at A’s death it is 300:

Example 1:

A's estate:

Net value (assets minus admin costs and liabilities) at death

Less: Net value declared at commencement of marriage

         Adjusted for Consumer Price Index 300 X 100,000 ÷ 120

Net value of accrual (a)


B's estate:

Net value (assets minus liabilities) at death of A

Less: Net value declared at commencement of marriage
Net value of accrual (b)

Difference between accruals: (a) 2,750,00 less (b) 100,000

B is entitled to claim one-half thereof from the estate of A