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June 23, 2017

Who is a legal guardian?

A client asked me when and how a person should appoint a guardian to look after minor children, on his or her death.

Why is it so important to appoint a legal guardian for your children?
On the death of the first dying parent, the surviving parent becomes the sole guardian. On his or her death, the legal guardian would be appointed. If the will does not nominate a guardian for the minor children, then a family friend or relative would have to apply to court, at some expense, to be appointed as the legal guardian.

Usually, the will provides that the person who will manage the trust created in terms of the will (the trustee), and looks after the children (the guardian) are one and the same.

Who should you appoint as a legal guardian (relative, best friend)?
Guardians nominated in a will can choose if they wish to accept the office of guardian. On that basis, you should always approach a close family friend or relative, you know you can rely on, and who will accept the office of guardian.

Ideally, the legal guardian should know the family well and can be depended on to act in the best interests of the minor children.

When does the guardian’s legal role end?
The legal guardian must administer the property that the minor children inherited, until each child attains majority (turns 18). The last dying parent may feel that a child of 18 is not mature enough to manage the property, and the will may provide that the guardian’s role will end only when the child turns, say, 21.

Would the guardian also be responsible for the children financially?
A legal guardian is entitled to be paid for administering the minors' estate. This can be set out in a will or is determined in accordance with the tariff laid down by the Master of the High Court.
There should be sufficient funds in the trust, created in terms of the will, to provide for the maintenance of the minor children. It would never be the responsibility of the legal guardian to provide for them, financially. The last thing the parent would want is that the executor must sell a fixed property to raise sufficient funds to maintain the children. If it means taking out a life policy to provide for the children, that is a good idea.

‘Maintenance’ generally means maintenance, education (including higher education), vocational training, setting him up in a business or a profession, accommodation, holidays, travel, general welfare and benefit and reasonable pleasures.

The will should provide that the legal guardian does not have to put up security to exercise his duties and that he or she can manage the funds of the minor children. If the will is silent, the guardian is obliged to pay the cash funds into the Guardian’s Fund, managed by the state. In that event, the guardian would have to approach the Master of the High Court, cap in hand, for funds to maintain the children. This should be avoided at all costs.

The will should also provide that the guardian may (or may not) sell or mortgage any of the minor children's immovable property. If the will is silent, the guardian needs permission from the High Court or, if the property is worth less than R10,000, by the Master. Ideally, the will should give the guardian extensive powers.

Can you stipulate things in your will that your children’s legal guardian must abide by, e.g., where they should go to school or what religion you’d prefer them to follow?
The will can give directions to the guardian, concerning the schooling of the children and what religion they should adhere to. However, it's not likely that a court would enforce these directions, if the guardian fails to adhere to them. This would be especially the case when the children become old enough to make their own decisions.

How often should you revisit the issue of who is your kids’ legal guardian and why (changing circumstances, etc)?
If your nominated guardian passes away, the will should provide for an alternative guardian. Otherwise, you should amend your will, as circumstances change.

June 20, 2017

What does it mean to go insolvent?

In case you don't really know what is involved, I explain what insolvency is about.

A sequestration order places an insolvent person's estate in the hands of a trustee, who must sell the assets and distribute the cash among the creditors.

If you have your back to the wall and can’t pay your debts, you can voluntarily surrender your estate by showing that:

·               Your estate is insolvent;
·               You own sufficient realisable property or cash to meet all the costs of sequestration; and
·               Sequestration will be to the advantage of all your creditors.

A court will not grant an order of sequestration if you have so few assets that your sequestration would lead to your creditors receiving a negligible dividend. At present, you need to show an advantage to creditors of at least 20c in the Rand. So, if you owe creditors, say, R100,000, you must come up with cash or assets of at least R20,000. On top of that, you need to provide for legal fees of about R20,000. (if you don’t qualify, debt review is an option).

If you qualify, you must publish a notice of intention of going into voluntary sequestration, in the government gazette, not more than 30 days and not less than 14 days before your application is to be heard in court. The notice must also be published in a newspaper circulating in the area in which you live or, if you are a trader, the area in which your principal place of business is located. You must send a copy of the notice within seven days of its appearance in the Government Gazette to each of your creditors.

Before the notice is published, you must comply with the formalities required by law - for example, prepare a full statement of income, liabilities and assets in a standard form, which must be verified by affidavit. The form must be made available for inspection by your creditors at the office of the Master of the Supreme Court and the magistrate's court for the area in which you live or carry on business. All your possessions, including bonded property, must be declared and given an estimated value.

If the court grants an order sequestrating your estate, the Master of the High Court will appoint a trustee to locate and sell your assets, for the benefit of creditors.

June 16, 2017

Voetstoots and the CPA

Does the Consumer Protection Act, 2008 (“CPA”), which became effective on 1 April 2011, mean the end of the "voetstoots" or "as is" clause?

What does voetstoots mean

When you buy something, there is an implied warrantee that the thing sold is free from any defects. It is, however, possible that one can contract out of this implied warranty by inserting a term into the contract that says that the sale is voetstoots (that you buy the goods “as is” [warts and all] and cannot rely on the implied right to defect-free goods and complain later if you find certain defects in the goods).

When the seller can’t rely on the voetstoots clause

The common law does, however, allow you to cry foul and sue the seller (even if the contract contained a voetstoots clause) for cancellation of the contract or a reduction in the selling price where the goods were defective at the time of the sale, that the seller knew of the defect but failed to disclose it to the buyer, knowing full well that if the buyer knew about it he would either not have continued the purchase or would have negotiated a more favourable purchase price.

The effect of the CPA on the voetstoots clause

In terms of the CPA the consumer is entitled to receive goods that are reasonably suitable for the purpose for which they are generally intended, are of good quality, in good working order and free of any defects.
The definition of “goods” has been amplified to include a legal interest in land or other immovable property.
The CPA provides for a statutory duty of disclosure in consumer transactions. The Act expands on the common law obligation to disclose latent defects by requiring suppliers to disclose material facts and to correct misapprehensions on the part of the consumer, if failure to do so would amount to a deception.
However, sellers can exclude themselves from this obligation by advising the consumer that the goods are being offered in a certain condition. The consumer must then agree to accept the goods in that particular condition. E.g. a motor dealer should explain that the beat-up Volksie is not new, point out the obvious and not-so-obvious defects and if the consumer accepts this, then the sale would be as-is.
The only way sellers can get past the implied warranty is to describe the condition of the goods in specific detail to make it clear in which condition the goods are being sold. The buyer then has to has to “expressly agree” to accept the goods. Only if the buyer “knowingly acted in a manner consistent with accepting goods in (a less than ideal) condition” would the implied warranty of quality fall away. Every defect must be described in the contract of sale that the buyer signs.

A defect is a material imperfection that renders goods less acceptable or less practicable. This includes obvious problems, or latent defects, and those hidden future problems, or patent defects, which sellers are able to escape under the voetstoots clause provided they were not aware of such defects at the time of sale.
If any defects come to light after sale or goods do not comply with standards set out in the CPA, the buyer is entitled to return them within six months of a sale and the Act holds businesses liable to either repair or replace the goods, or to refund the purchaser. After a defective product is repaired, the repair job itself will have a further three-month warranty. In addition to these rights provided to consumers under the CPA, the CPA also provides further should any damages arise as a result of defective goods, they would be able to claim damages from the seller.
Time and case law will determine if the CPA has sounded the death knell of voetstoots clauses, but whatever its fate, the consumer is infinitely better off under the CPA.

June 11, 2017

Relocating kids from Gauteng to the Cape

A client asked me:

Been divorced for 8 years.  Dual custody over our 2 children aged 16 and 11 who reside with mother. Does the law require that the mother has to approach the court for permission to relocate from Gauteng to the Cape?

I advised him that the test is what is in the best interest of the children.

As a rule, the mother has a right to relocate with the minor children, unless a settlement agreement or a court order says otherwise. However, if the father objects, she will have to approach a court, and satisfy it that the move is sound.

May 13, 2017

Social Media and the Law

Social Media and the Law
Social media platforms such as Facebook, Twitter and YouTube have become an integral part of our everyday lives and have an important role to play in our social environment and help us keep in touch with others and stay informed of events around the world. Yet despite many of the benefits of social media platforms, these platforms also create opportunity for abuse and often bring out the worst in people, often without thought as to the consequences of their action.
Many people lose sight of the fact that the moment something is posted on social media sites, it is considered “published” and is therefore subject to the laws applicable to traditional media, such as newspapers. Accordingly, claims for defamation and hate speech as well as dismissal or disciplinary action for social media misconduct become very real possibilities.
Defamation can be defined as the wrongful, intentional publication of words or behaviour in relation to another person which has the effect of injuring his status, good name or reputation.
Our courts have recently set a new legal precedent after it granted a Facebook user an interdict preventing a friend from posting about his personal life on the platform after she defamed him thereon.
In another case a woman was awarded R 40,000 in damages after claiming that her former husband and his new wife were bad-mouthing her on Facebook. The judge found that although the former husband was not the author of the postings, he was tagged in and knew about them and allowed his name to be coupled with that of his new wife thus creating liability jointly with the author of the postings.
Hate Speech
Hate speech is any speech, gesture or conduct, writing, or display which is prohibited because it may incite violence or prejudicial action against a protected individual or group, or because it disparages or intimidates a protected individual or group. The law may identify a protected individual or a protected group by disability, ethnicity, gender, nationality, religion, race, sexual orientation, or other characteristic.
Although freedom of expression is a constitutional right, it is not an absolute right. If what you say, or publish via social media platforms, has a negative impact on the rights of another, then your right to freedom of expression may be limited.
Disciplinary action, including dismissal for social media conduct have increased drastically over the past few years often following on the heels of comments made or posted on social media sites by employees. The Commission for Conciliation, Mediation and Arbitration (CCMA) has dealt with several of these cases where the dismissal was found to be fair based on the evidence garnered from the social media sites.
Some of the grounds for dismissals have included derogatory Facebook status updates, an employee criticising management, criticising the employer, employees using social media to convey internal matters of the business to former employees, etc.
Take note
What should you take note of when using social media to avoid legal or disciplinary action arising from your conduct on these social platforms?
  • The most common defence against defamation is that the publication was true and in the public interest. Make sure about your facts before posting anything and ensure that you can back your comments with substantiating evidence and factual information. Accordingly, making a comment about a friend on a matter that is not in public interest could be defamatory even if it is true.
  • Regularly check your social media profiles to ensure that your name is not being linked to defamatory statements of others.
  • Do not post anything which could be regarded as incitement to cause harm based on race, religion, ethnic background, gender, sexual preference etc.
  • Adhere to the social media strategy and policies of your workplace. Find out what these are, and if these are not in place, keep the following guidelines in mind:
    • Keep posts legal, ethical and respectful.
    • Do not engage in online activities which could harm the reputation of the company.
    • Do not disclose any confidential or business information of the company.
    • Do not discuss colleagues, managers or information pertaining to the company.
A good rule of thumb is to ask yourself whether you would be willing to say something out loud in a room full of people or colleagues. If the answer is no, then you shouldn’t consider posting it on social media.