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PROPERTY TAX GAP WIDENS - EXTENDED TO TRUSTS
The draft tax legislation we mentioned last month (tax relief for the transfer of residential property out of companies and CCs) has been extended to include properties held in trusts. Again, we'll give you full details if and when the legislation is approved and promulgated - in which event it will apply retrospectively to 11 February 2009 (so take advice if you intend in the interim to sell any residential property held in a company, CC or trust).
INVENTORS: S.A. PATENTS LAUNCHED INTO CYBERSPACE!
"There's a way to do it better - find it!" (Thomas Edison)
Inventors (budding and veteran) take note - CIPRO's new electronic patent database has just been launched. Go to the "Public Patent Search" site at http://patentsearch.cipro.gov.za/home/default.aspx to view all South African patents for the period 1984 to 2005 (other years will be added to the site in phases). You can access the full details and status of each patent via a comprehensive search facility.
As soon as you have your own bright idea, remember the Number One rule: "Keep your idea secret until you patent it". Don't tell anyone else about it, don't put it on the Internet, don't use it - until you have obtained legal assistance. You will lose your rights to protect your idea if you don't do this properly! Anyone else who of necessity has to be exposed to the idea must first be bound by a full confidentiality agreement, and it is vital that the actual patent be drawn and registered both promptly and correctly.
DEBT RECOVERY INTEREST AND COSTS CAPPED
Credit providers and consumers need to be aware of a recent High Court ruling that applies to any debt governed by the National Credit Act (the relevant sections of which came into effect on 1 June 2007).
In a nutshell, interest and costs stop accruing on such a debt as soon as it equals the capital (the "principal debt") outstanding at date of default. So the penalty for falling into arrear on a credit agreement will be having to pay up to double the debt. But never more than double.
Credit providers - tighten up your lending and recovery procedures! Debtors - check that you don't overpay!
BUYERS BEWARE! CHECK THE SELLER'S MARITAL STATUS BEFORE BUYING!
Where a couple is married in community of property, certain assets (including property interests, shares, investments etc) cannot be disposed of by one spouse without the consent of the other.
There's danger there for the buyer, as illustrated in two recent High Court cases, where sales were set aside because the husband in each case had (as a result of breakdown in the marriage), sold property interests at reduced prices to relatives without the wife's knowledge or consent.
Naturally enough, such a disposal will be set aside if the buyer "was aware when entering into the transaction that the husband's disposal of the asset was being effected fraudulently as against the wife".
But what if you buy such a property in the innocent belief that any and all necessary consents are in place? You are protected - and the sale is valid - provided that you "do not know" and "cannot reasonably know" that the sale is being entered into without the necessary consent.
The problem is that you cannot merely "rely upon a bold assurance by another party regarding his or her marital status". You are required to perform an "adequate inquiry" into such status. What level of investigation is required? How do you confirm that the seller is telling you the truth? In the one case, even the Deeds Office's records were misleading! Take advice in doubt.
DANGER - DON'T RELY ON VEHICLE REGISTRATION PAPERS TO PROVE OWNERSHIP!
Never buy anything without checking that the seller is indeed the true owner. If he or she isn't, the real owner can recover the property from you, even if you bought it from the seller entirely innocently.
That leaves you with nothing but a worthless claim against a fraudster. Which is precisely what happened in a recent High Court case where a motor vehicle was fraudulently "bought" on an auction, and "paid" for with a stolen cheque. In short order the fraudster registered the car into another name, sold it on to his innocent victim, and disappeared with the money.
The mistake the eventual buyer made was to rely on the car's registration papers as conclusive proof of the seller's ownership. It isn't - in fact all that registration papers provide is a presumption (which can be refuted, i.e. what the law calls prima facie proof) of the accuracy of their contents. Insist on proper proof of ownership, and take legal advice in doubt!
AN INSULT TOO FAR: DAMAGES FOR THE "INEFFECTUAL IMBECILE" SLUR
With our Constitution guaranteeing freedom of expression, how far can you go in publishing allegations against others without becoming liable for defamation? (Note that "publishing" is not limited to publication in the media - any form of disclosure to another person/s carries risk).
Our law provides that once a publication is proved to have been defamatory (damaging to another's reputation), it is presumed to be intentional and wrongful. That puts the onus on you to prove justification via one of the legal defences - such as "mistake", "lack of intention", "consent", "fair comment", "truth and public benefit", or "privilege".
For example in a recent High Court case, the defence of "qualified privilege" recently came to the (partial) rescue of a plot owner in a housing estate. Following a surge of crime in the estate, he wrote an open letter to other Home Owners Association members accusing the security company contracted to the estate (and its managing director) of providing a "totally unacceptable service" and of having an "alarmingly dismissive service delivery attitude".
The letter was found to be both defamatory ("calculated to injure a trading corporation in its business reputation"), and "not altogether fair" - but still privileged. To be protected by privilege, a publication must be made "in the discharge of a duty or the protection of a legitimate interest to another person who has a similar duty or interest to receive it". Tests of relevance, reasonableness and public policy apply here, and the defence fails if the publication was made with "malice" i.e. with spite, ill-will or any improper motive.
Where the sender of the letter in this case went too far, was in referring to the managing director as an "ineffectual imbecile" - that, held the Court, went beyond mere "meaningless abuse" and amounted to the sort of "insulting invective" that should not enjoy protection. The MD was duly awarded his damages for that part of the letter.
Our law of defamation is complex - and riddled with grey areas - so seek advice in doubt!
YOUR STATE TENDER FAILED? CLAIMING YOUR LOSSES
With allegations that improper government tender procedures are widespread, unsuccessful tenderers who believe themselves to be the victims of irregularities will want to sue for damages (loss of profits, the costs of preparing and submitting their tenders, etc).
The bad news here is that the Supreme Court of Appeal recently, in ruling against an unsuccessful tenderer (which had sued the South African Post Office for R514m for loss of profits), held that such a damages claim can succeed "only if it is established that the award of the contract to the rival was brought about by dishonest or fraudulent conduct on the part of one or more of the officials for whose conduct SAPO is vicariously liable, but for which the contract would have been awarded to the complainant."
In other words, it is not enough to show that there were irregularities, nor incompetence, nor negligence - not even that you were more worthy of being awarded the contract than your rival. You have to prove (and the onus is on you here) that there was actual dishonesty or fraud, leading to your loss.
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