When can you ask the court to make a settlement agreement an order of court?

The Supreme Court of Appeal in Avnet South Africa (Pty) Limited v Lesira Manufacturing (Pty) Limited and Another (18/38649) [2019] ZAGPJHC 72 (4 March 2019) had to decide if a settlement agreement may be made an order of court when the agreement was reached without litigation having commenced between the parties.

Settlement agreements usually contain a standard clause providing that either party to the agreement may approach the court for an order incorporating the terms of the settlement agreement.

The court found that it does not have the power to make a settlement agreement an order of court where litigation has not commenced by the time that the settlement agreement is concluded. The salient points of the judgment are as follows:

• “The primary function of the courts is to determine disputes between parties. The basis upon which a court makes a settlement agreement an order of court is therefore that there is a dispute between the parties which is already before the court. Absent the settlement agreement, the court would have to adjudicate that dispute”.
• “When the parties resolve the dispute that is before the court, the court may then (after satisfying itself that the settlement agreement is a permissible one) make the settlement agreement an order of court”.

Accordingly, the courts will not make agreements orders of court merely on consent.

 

Inheritance and Wills

 

Source: A simple guide to South African Family Law by Nthabiseng Monareng

Introduction

One of the most important things that a person needs to think about is death and how their assets will be distributed after their death. When a person dies, their assets will be distributed either in terms of their will (testate succession) or according to the rules of intestate succession, if the person has not left a will.

 Intestate succession (dying without a will)

When a person dies without leaving a will, that person is referred to as having died intestate. This means that the deceased’s assets and property will be distributed in terms of the Intestate Succession Act 81 of 1987. 

In terms of intestate succession law, only certain people, called beneficiaries, can inherit from the deceased’s estate. These beneficiaries are: the deceased’s legal spouse, children, blood relatives, and adopted children. 

A deceased’s estate consists of liabilities (debts) and assets (properties, money, car, household furniture, and so on). If the deceased was married in community of property, the surviving spouse must receive his or her half share of the joint estate. If the deceased was married out of community of property but with the accrual system, the surviving spouse might have a claim against the deceased’s estate for an accrual share. Only once the debts have been paid off, and the surviving spouse has received his or her share in terms of the marriage in community of property or his or her share in terms of the accrual system, can the deceased’s estate be distributed. 

Procedure for inheriting intestate

When the deceased has left a spouse and children

The spouse and biological children will inherit. Firstly the child’s share has to be calculated. 

Child’s share

When a spouse dies and is survived by a surviving spouse and children, a child’s share must be calculated. To calculate a child’s share you divide the value of the estate by the number of children of the deceased, plus one (the surviving spouse). 

·         The law says that a spouse must receive R250 000 or a child’s share, whichever is the higher amount. 

Example 1

John dies and he leaves his wife Mary and three children. His estate is worth R1 000 000 after payments of debts. Take R1 000 000 and divide it into four. The result will be R250 000. All four will get R250 000 each. 

Example 2

John dies leaving behind four children and a wife. His estate is worth R1 000 000, after payment of debts. You take R1 000 000 and divide it by five. The result will be R200 000. The wife gets R250 000 and the children share the difference of R750 000 and each R187 500. 

·         In the examples above, the marriage was out of community of property. 

Example 3

John and Mary were married in community of property. John dies and leaves a joint estate worth R600 000 after payments of debts. He also left behind a wife and two children. Mary has to receive her half share before distribution can occur. R600 000 divided into two is R300 000. Mary will firstly receive R300 000 under matrimonial property law. Mary and the children will then share the remaining R300 000. 

A child’s share has to be calculated first. R300 000 divided into three (Mary and two children) is R100 000. Because the amount is lower than R250 000, Mary will receive R250 000, and the children will share the rest of the money. In the end, Mary inherits R250 000, and receives the R300 000 by virtue of the marriage in community of property. 

If any of the deceased’s children have died and have left children of their own (for example, grandchildren of John), the children will take the place of their deceased parent and inherit his or her share. They will then divide the share that would otherwise have gone to their deceased parent equally between them. 

When only a spouse survives the deceased

When married spouses do not have children and one of the spouses dies, the surviving spouse will inherit the entire estate. The deceased’s parents, brothers and sisters will inherit nothing. 

When only the children survive the deceased

The children will inherit the entire estate and share it equally. 

When the deceased dies without a spouse or children

If the deceased’s parents are still alive, each one will inherit half of the estate. If only one parent is alive, the dead parent’s children or grandchildren will inherit in the place of their parents. Only if the parent does not have children or grandchildren will the other parent inherit the entire estate.

Where there are no parents, the deceased’s estate will be inherited by his siblings equally. If one of them has passed away leaving children, the children will inherit the share of the deceased’s sibling. 

When the deceased does not have a spouse, children, parents or siblings

The closest blood relative of the deceased will inherit. Close in terms of blood relations means, for example, uncles, aunts, cousins, and so on. It does not mean close in terms of who was living close to the deceased or who was in a close personal relationship with the deceased. 

General notes about intestate succession 

1.      An illegitimate child has a legal right to inherit from his or her father.

2.      An adopted child can inherit from his adoptive parents and their blood relatives. The child cannot inherit from the natural parents and their blood relatives and they in turn cannot inherit from the child. The only time they can inherit is when they are named as beneficiaries in the child’s will. 

Testate succession (dying with a will)

When a person dies and has left a will, that person has died testate. 

What is a will?

A will is a written document in which a person, called the testator, voluntarily stipulates how his or her estate will be distributed after his or her death. 

Drafting a will

Requirements for drafting a will

·         The testator must be over the age of 16.

·         He or she must be a person of sound mind, in other words, must be mentally capable.

·         The testator must draft the will personally. However, there are circumstances whereby a third person can draft a will on behalf of the testator, for example, if it is drafted by a lawyer, or by a third person on behalf of a testator who cannot read or write. 

Procedure for drafting a valid will

1.      The will must be in writing.

2.      The testator must sign it at the end in the presence of at least two witnesses. If the will is more than one page long, every page must be signed by the testator. If the testator cannot read or write, he can sign by making a mark (X), or someone else can sign on his or her behalf. In either of these cases, the will must be signed in the presence of the testator, two witnesses and a commissioner of oaths.

3.      If the testator signs by a way of a mark (X), or if someone else signs the will on the testator’s behalf, a commissioner of oaths must attest the document, by putting the prescribed certificate on the will and signing every page of the will other than the page on which the certificate appears.

4.      Two or more witnesses must sign the will in each other’s presence and in the presence of the testator.

5.      The witnesses must not be named as beneficiaries in the will.  

 

 

WHEN CAN A LANDLORD USE A DUPLICATE SET OF KEYS TO ENTER LEASED PREMISES?

 

A CLIENT ASKED: As a landlord/owner, is it their right to have a set of keys to an apartment they are renting out? I read somewhere that in an emergency, fire or burst pipe, it is the landlords right to be able to enter (but only in the case of an emergency) and in all other instances, they need permission to enter to inspect. Is there a law re this? 

The short answer is that the landlord should have a duplicate set of keys, provided he or she doesn’t invade the privacy of the tenant and only uses the keys in a case of emergency. To avoid doubt, this is a provision that should be included in a lease agreement. 

In terms of the Rental Housing Act, 1999, as amended, it is an offence that may result in the imprisonment of the landlord or a fine (although imprisonment is highly unlikely) if the landlord, amongst other things, provides the tenant with a dwelling that is uninhabitable or fails to maintain the leased premises. 

A landlord may not enter leased property without giving a tenant reasonable notice and then only to inspect the property, to make repairs to the property, to show the property to a prospective tenant, purchaser, mortgagee or its agent or if the property has been abandoned or having obtained a court order. 

What about situations of sudden emergency? 

A landlord may well need a key in order that he may be able to enter quickly in the event of emergency – fire, burst pipes or whatever. He may need a key to enable him or those authorised by him to read meters or to do repairs which are his responsibility. 

I would suggest that a landlord should indeed hold a set of keys, to carry out necessary repairs expeditiously, with the permission of the tenant – in the ordinary course, and without his or her permission – in the case of emergency. 

I fail to see how the landlord can carry out the works “expeditiously” if the landlord does not hold a key. 

An agreement of lease should contain a clause dealing with Lessor’s rights of entry and carrying out of works that contains not only the usual rights of the landlord (or his agent) to enter the premises to inspect them, to carry out any necessary repairs, replacements, or other works, or to perform any other lawful function in the bona fide (good faith) interests of the landlord or the tenant, provided that:

• The tenant’s right to privacy cannot be violated during the lease period;

 

• Should the landlord wish to inspect the property, reasonable notice to the tenant must be given;

 

• The landlord shall hold duplicate keys to enter the premises without notice, only in the event of emergency – fire, burst pipes or whatever – and if the tenant is not available to seek his prior permission. The landlord must handle the keys in a proper and responsible manner. 

Without such written permission to hold keys and enter the premises to deal with a burst pipe, the landlord will have to exercise his discretion in good faith in the interests of the landlord or the tenant. That could lead to later legal arguments.

 

When a buyer can claim damages for a leaking roof

 

A client asked: I recently bought a house and on taking occupation I noticed that there was a bad leak in the roof that the seller never told me about. I complained to the agent, and she told me that as the deed of sale contained a voetstoots clause there was nothing I could do. What are my rights? 

The voetstoots clause in a contract bars a buyer from complaining as he or she buys the goods (in this case a house) as is, in the condition in which it is found. 

However, a seller is deprived of the protection of a voetstoots clause in circumstances where the seller perpetrated a fraudulent non-disclosure or fraudulent misrepresentation. 

Our law sets out when a buyer can successfully sue a seller, despite the voetstoots clause. The buyer must show that: 

·      The roof of the property suffered from a defect, and

·      The seller was aware of the defect in the roof, had a duty to disclose the defect to the buyer and failed to disclose the defect, thereby committing a fraudulent non-disclosure, alternatively misrepresentation.

If the buyer establishes that the seller intentionally failed to disclose the defects in the roof and that he would not have entered into the sale agreement if he had been aware of the defects, the buyer would be entitled to the reasonable costs of repairing the roof and other concomitant loss he may have suffered.

More about legal costs

 

A client asked, “If I win my case will I get back all the fees I paid you?” 

Types of legal costs

There are three types of legal costs:

Party and party costs

These are the costs that a court will award the successful party in a court case. The losing party must pay these costs. They can be agreed or taxed. Taxed costs are those assessed by the Taxing Master of the court you sued out of.  The bill of costs is based on the applicable Magistrates’ or High Court tariffs laid down by law. You would proceed out of the Magistrate’s Court or Regional Court for matters up to R400 000. For claims above that amount, one would sue out of the High Court.

Your attorney will ask you to sign a fee agreement setting out the hourly rate of the attorney and his or her support staff. The agreement will make it clear that the rates are not according to tariff but are on an attorney and own client basis.

Even if you win the case, you will normally only recover the party and party costs and will have to pay your attorney his costs in full. These costs will always be more than the laid down tariff, so you will be out of pocket by the difference.

Attorney and client costs

If a court wants to show its displeasure about a defendant’s conduct during a trial, it may order the defendant to pay attorney and client costs. This is called a punitive costs order and is rare.

Such order obliges the losing party to pay party and party costs plus certain other legal costs, including costs for attendances between you and your attorney.

Of course, if the case is of a contractual nature and the contract has a clause that obliges the losing party to pay attorney and client costs, the court would make such a costs order.

Attorney and “own” client costs

Attorney and “own” client costs are the actual fees and disbursements a client pays his attorney in terms of their fee agreement. Such a costs order is equally rare.

In extreme cases, a court may punish the defendant's lawyer and order him or her to pay the costs de bonis propriis (out of his or her own pocket).

 

THE PROCESS TO WIND UP A DECEASED ESTATE

 

·      If your loved one passed away in a hospital, the medical practitioner will complete a BI-1663 form (notification of death) to certify the death. You will receive a copy.  If your loved one did not pass away in a hospital, the mortician will complete the form and hand it to the next of kin. You must take the BI-1663 form, with the deceased’s original valid South African identity card to the Department of Home Affairs who issues a death certificate. The funeral home or the Department of Home Affairs stamps ‘Deceased’ on the identity card or document of the deceased and punches a hole in the identity card. 

·         The estate of a deceased person must be reported to the Master of the High Court’s office in the area where the deceased lived. within 14 days from date of death. The following documents, where applicable, will also be required: 

ü  An original or certified copy of the Death Certificate and Identity Document.

ü  An original or certified copy of the marriage certificate.

ü  A declaration of marriage by the surviving spouse indicating the type of marriage.

ü  The original will and any annexures that may apply.

ü  A completed next-of-kin affidavit if there is no will in place.

ü  A completed inventory form.

ü  A declaration to confirm that the estate has not been reported at another Master’s office.

ü   

·         For estates valued at more than R250 000: 

ü  If an executor is not specified in the will of the deceased, the Master will appoint one on the deceased’s behalf. The family may also nominate an executor if there is no will. 

ü  The person nominated to wind up the estate (the executor or his or her agent – normally a lawyer, accountant, or trust company) reports the estate at the offices of the Master, who issues Letters of Executorship in favour of the executor or executrix, authorising him or her wind up the estate. 

·         For estates valued at less than R250 000 

ü  The Master will appoint a Master’s representative and will issue Letters of Authority (where the requirements are less stringent).

 

• On receipt of the Letters of Executorship, the executor arranges the publication of a notice to creditors in a local newspaper and government gazette, inviting them to submit any claims against the estate, within 30 days.

 

• Within 6 months of the issuing of the Letters of Executorship, the executor must submit an estate account (liquidation and distribution account) to the Master. This account gives effect to the wishes of the deceased in his will (or the laws of intestacy if there is no will).

 

• Once the Master approves the account, the executor has it advertised and that it lies for inspection for 21 days. If no objections are received within 21 days, he or she pays out the heirs and beneficiaries, and transfers any fixed property. 

The following words are commonly used when dealing with deceased estates:

 

• Estate – the deceased’s assets and liabilities property at the time of his or her death
• Testator – a man who makes a will
• Testatrix – a woman who makes a will
• Dying testate – when a person dies leaving a will
• Dying intestate – when a person dies without leaving a will
• Executor – a man who distributes the estate under a will
• Executrix – a woman who distributes the estate under a will
• Letters of Executorship – letters issued by the Master, authorising the executor to wind up the estate 

An executor makes sure that a deceased’s last wishes are adhered to regarding the distribution of his/her property and possessions.

He or she must also ensure that all the deceased’s debts are paid off. Any remaining money or property (called the residue) can then be distributed according to the deceased’s will or, if there is no will, in accordance with the Intestate Succession Act, 81 of 1987.

 

 

What is a usufruct?

 

The English word usufruct derives from the Latin roots usus and fructus, from verbs meaning to possess and to have the benefit of, respectively. 

A usufruct is a right given by an owner to someone else to use the owner’s property for a limited time, usually for a person’s lifetime. The holder of a usufruct, known as a usufructuary, has the right to use (usus) the property and enjoy its fruits (fructus), but does not acquire ownership of the property, known as the bare dominium. 

An example of a usufruct is where a husband in his will leaves his home to his children but directs that his wife has the use of the house and the furniture in it for her lifetime (or some other period, e.g., until she remarries). In this example, on his death the property will be transferred into the name of the children and the usufruct is simultaneously registered against the new title deeds in favour of his surviving spouse. 

Rights and obligations of the usufructuary 

In the above example, the wife: 

·         has the right to use and enjoy the property 

·         can let it out and earn the rental income 

·         cannot sell the property, mortgage it, or leave it to someone else in her will

 ·         must ensure that the property is maintained and is not altered or damaged in any way. She must pay the property rates and general day-to-day costs of maintaining it. The husband should leave enough money, possibly in a separate account, to ensure that the property is maintained and that his wife has enough money to pay for the rates and other property expenses 

·         is not obliged to do any extensive repairs that result from normal wear and tear or daily use. While there is no obligation for the usufructuary to insure the home against storm, fire, or other such damage, it is advisable and in her own interests to do so

 

·         may make improvements to the property but may not claim reimbursement when the usufruct ends. 

·         has the right to occupy and use the property until her death or remarriage, when the usufruct would lapse, and the full property rights would automatically vest in the children. 

Tax benefits 

Often, a usufruct is created to reduce the amount that the testator’s estate will have to pay in estate duty. While the children become the owners of the property, the estate duty liability is greatly reduced because the usufruct, which needs to be valued, passes to the surviving spouse free of estate duty, while the bare dominium is no longer the full value of the property but the difference between the property value and the value of the usufruct. 

A usufruct can also be created in a notarial deed of cession or retained by the seller when selling a property to reduce the amount of estate duty or transfer duty payable. When this is considered, it is important to be aware of the possible tax implications for the parties involved, both in the short and long-term.

 

Enforceability of a prenuptial executory donation

 

DB v CB 2021 JDR 0896 (GP) 2021 JDR 0896 (GP) 

Marriage — Divorce — Proprietary consequences — Marriage out of community of property — Antenuptial contract — Enforceability of prenuptial executory donation with terms contradicting those of parties' antenuptial contract — Enforcing such inconsistent with court's discretion under Divorce Act 70 of 1979, s 7(2). 

The parties’ ante-nuptial contract (ANC), which was registered 15 January 2015, records that they were married out of community of property and excluding accrual. 

On 15 February 2015, the parties concluded a written agreement, referred to as the 'B agreement' that recorded the donations that the husband agreed to make upon dissolution of their intended marriage, either by divorce or death, namely a residential dwelling, a motor vehicle and life-long maintenance. 

The parties married each other on 19 May 2015. 

The marriage ended and the wife asked the court to enforce the B agreement. 

The parties had received advice to apply to court to vary the terms of the ANC in terms of section 21 of the Matrimonial Act, which they did not do either before or after it was registered. 

The court accepted the husband’s argument that the B agreement, the terms of which are antonymous to the ANC, cannot be enforced because it was an attempt to settle a divorce before their marriage was concluded; and enforcing the B agreement alongside the registered and legally enforceable ANC, which is binding not only inter partes but on third parties, was an attempt at varying or amending the ANC, which is legally impermissible. 

Sections 7 (1) and (2) of the Divorce Act provide: 

'(1) A court granting a decree of divorce may in accordance with a written agreement between the parties, make an order with regard to the division of the assets of the parties or the payment of maintenance by the one party to the other (own underlining) 

(2) In the absence of an order made in terms of subsection (1) with regard to the payment of maintenance by the one party to the other, the court may, having regard to the existing or prospective means of each of the parties, their respective earning capacities, financial needs and obligations, the age of each of the parties, the duration of the marriage, the standard of living of the parties prior to the divorce, their conduct in so far as it may be relevant to the break-down of the marriage, an order in terms of subsection (3) and any other factor which in the opinion of the court should be taken into account, make an order which the court finds just in respect of the payment of maintenance by the one party to the other for any period until the death or remarriage of the party in whose favour the order is given, whichever event may first occur.' 

In terms of sections 7 (1) and (2) the authority to make orders in respect of matters such as maintenance, even where the parties have agreed, vests with the court. 

The judge found that “In the present case, we are not dealing with a waiver of maintenance but an executory donation with terms that are contradictory to those of the parties' ante-nuptial contract …A cursory perusal of the B agreement will confirm that it is concerned with, inter alia, maintenance of the respondent. The net effect of the court a quo's holding that the B agreement is enforceable, and can be read with the antenuptial agreement, is that instead of a court exercising its discretion as is required in terms of section 7(2), the respondent will end up with an order of life long maintenance, couched as a donation, where no agreement existed in terms of section 7 (1) and in circumstances where the court would effectively have been ousted from exercising its discretion in terms of section 7(2) of the Divorce Act. Such a result cannot be countenanced. On this score, the court a quo erred. The ineluctable conclusion we reach is that the B agreement cannot be enforced”. 

The court further held that “...But such a conclusion is legally untenable in the face of the requirements of section 21 of the Matrimonial Property Act. This is so because the B agreement introduces terms that are contradictory to the antenuptial contract. Before marrying each other, and by following the relevant provision of the Deeds Registry Act, the parties could have effected changes to the ante-nuptial contract via registration with the registrar. Having decided to marry without introducing the donation terms to the registered ante-nuptial, the only option for the parties to achieve what they now seek, was to apply to court for an amendment of the terms of their ANC, in terms of section 21”.