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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


November 03, 2017

Altering the surname of a minor

A client asked: My wife and I have been raising her son. The biological father had passed. How can we change his surname to mine?
You can change the surname of a minor:
·         If a child is born out of wedlock and the mother marries a person other than the child's biological father and wishes to change the child’s surname to that of her husband.
·         If a mother, after her divorce from or the death of her husband (father of child), wishes to change the child's surname to her maiden surname or to another surname she bore legally; or if she has remarried, to the surname of her new husband.
·         If a child is born out of wedlock but registered under the biological father's surname and the mother wishes to change the child's surname to hers
·         If a minor is under the care of a guardian and the guardian wishes to change the child's surname to his/hers.
·         Other situations not mentioned above where a good and sufficient reason for the change exists.

Applications must be on a duly completed Form BI-193.
·         The natural father's written consent, unless waived by a competent court is a statutory requirement in the case where the child was born in wedlock. 
·         The mother’s husband, whose surname the child is to assume, must also give his written consent to the assumption.
·         Both the natural parents’ written consent is required as well as a good and sufficient reason, in writing, for the change. Obviously, in this case – because the father has died – his consent is not a requirement.

October 23, 2017

If you do not leave a will

© 2012 Department of Justice and Constitutional Development

Any person of 16 years and over is free to make a will in order to determine how his/her estate should devolve upon his/her death.

If you die without a will, your estate will devolve in terms of the rules of intestate succession (your assets will, contrary to general belief, not go to the state).

What is said hereunder is not meant to replace the provisions of the Intestate Succession Act, no. 81 of 1987. The information is merely to inform the user of this site about some of the basic questions asked about intestate succession. Click on the topics below for more information as to how the intestate estate will devolve.

·       Deceased is survived by a spouse or spouses, but not by a descendant/s.
The spouse or spouses will inherit the intestate estate. In the case where the deceased was a husband in a polygamous marriage the surviving spouses will inherit in equal shares.
·       Deceased is survived by a descendant/s, but not by a spouse.
The descendant or descendants will inherit the intestate estate.
·       Deceased is survived by a spouse or spouses, as well as a descendant/s.
Each spouse will inherit R125 000,00 or a child's share, whichever is the greater and the children the balance of the estate. A child share is determined by dividing the intestate estate through the number of surviving children of the deceased and deceased children who have left issue, plus the number of spouses who have survived such deceased.
NOTE: In case of a marriage in community of property, one half of the estate belongs to the surviving spouse or spouses and, although it forms part of the joint estate, will not devolve according to the rules of intestate succession. For more information on the Intestate Succession Act, no. 81 of 1987 please consult the act or your legal representative.
The following two examples will illustrate what is said above about the child's share:

Example 1:
Value of intestate estate is R425 000,00
The deceased is survived by a spouse and 3 children
A child's share amounts to R106 250,00 (R425 000,00 divided by 4 (3 children plus spouse)).
The child's share is less than R125 000,00. Therefore, the spouse will inherit R125 000,00 and each child will inherit R100 000,00. (R425 000,00 less R125 000,00 to spouse, divided by 3).

Example 2:
Value of intestate estate is R800 000,00.
The deceased is survived by a spouse and 3 children.
A child's share amounts to R200 000,00 (R800 000,00 divided by 4 (3 children plus spouse)).
The child's share is greater than R125 000,00. Therefore, the spouse will inherit R200 000,00 and each child will also inherit R200 000,00 (R800 000,00 less R200 000,00 to spouse, divided by 3).
·       Deceased leaves no spouse or descendants, but both parents who are alive.
His/her parents will inherit the intestate estate in equal shares.
·       Deceased leaves no spouse and no descendants but leaves one parent, while the deceased parent left descendants (brothers/sisters of the deceased).
The surviving parent will inherit one half of the intestate estate and the descendants of the deceased parent the other half.
·       Deceased leaves no spouse or descendants but leaves one surviving parent, while the deceased parent did not leave any other descendants.
The surviving parent will inherit the whole estate.
·       Deceased does not leave a spouse or descendants or parents, but both his parents left descendants.
The intestate estate will be split into equal parts. One half of the estate is then divided among the descendants related to the deceased through the predeceased mother and the other half among the descendants related to the deceased through the predeceased father.
·       Deceased does not leave a spouse, descendant or parents, but only one of the predeceased parents left descendants
The descendants of the predeceased parent who left descendants, will inherit the entire intestate estate.
·       The deceased does not leave a spouse or descendants or parents or descendants of his parents. The nearest blood relation inherits the entire intestate estate.
·       The deceased is not survived by any relative. 
Only in this instance will the proceeds of the estate devolve on the state.
·       What is the position with regard to an illegitimate child of the deceased.
An illegitimate child can inherit from both blood relations, the same as a legitimate child.
·       What is the position with regard to an adopted child of the deceased.
An adopted child will be deemed
§  to be a descendant of his adoptive parent or parents.
§  not to be a descendant of his natural parent or parents, except in the case of a natural parent who is also the adoptive parent of that child or was, at the time of the adoption, married to the adoptive parent of the child.

October 05, 2017

Adoption Advice – can I adopt my friend’s baby?

A client asked how she goes about adopting her friend’s child, soon to be born. The friend wishes to give up her baby for adoption.

The biological parents would need to receive counselling from an accredited adoption social worker to look at all the options available to them when planning the future for their unborn child.

Should they decide on adoption, they will be assisted to sign consent for the baby’s adoption, in a Children’s Court.

The biological parents would have 60 days after signing the adoption consent to change their minds about the adoption.

Its best that during this period, the baby is placed in a temporary safe care facility.

As a prospective adoptive parent, you would need to go through a screening process with an accredited adoption agency or with an accredited adoption social worker in private practice which involves attending an orientation meeting, interviews with a social worker, a full medical with a doctor on our panel, a psychological assessment, a marriage assessment (if married or in a committed relationship), a home visit, police clearance and clearance from the Child Protection Register.  You would also be required to attend a full day’s training and preparation group.

The screening can take between 5-6 months. There is a charge for all professional services and you would be responsible for paying the doctor and psychologist directly.

The baby would remain in temporary safe care until the prospective adopters have completed the screening process and the baby has become adoptable.

For more on this topic, go here: https://goo.gl/e2AHvJ

September 27, 2017

Sectional title owners – who is responsible for excess payments on insurance claims?

Owners in sectional title schemes believe – incorrectly – that because the body corporate insures the common property it must pay any insurance excesses (e.g. for a burst geyser).
In fact, the Sectional Title Act provides that the owner in a sectional title scheme is responsible for all excess payments on insurance claims – unless the body corporate has passed a special resolution that it will cover these, in certain special cases.
Prescribed Management Rule 29 (1) requires the trustees to take reasonable steps to insure the buildings and all improvements to the common property to the full replacement value and must negotiate excess amounts, premiums, cover, and insurance rates on behalf of the body corporate.
The most common insurance claims relate to damage caused by burst geysers and the problems they cause. Insurance companies often negotiate a higher excess amount for such claims, to reduce the overall insurance premium and claims.
Most insurance companies have call centres set up to deal with the more common claims and on these cases no excess, or a considerably reduced excess, will usually be payable, provided the centre is contacted quickly and allowed to send one of their preferred suppliers to handle the work. Quick action by the owner can save unnecessary damage to the unit (and to other units).