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TRUST ASSETS - WHEN ARE THEY AT RISK?
There are two types of trusts - testamentary (created per your will) or inter vivos (created during your lifetime). The latter have been legitimately used for many years both to reduce estate duty, and to protect assets from attack by creditors. The idea is that assets are held by a trust or trusts rather than by you personally, so as to compartmentalise assets into a series of "strongholds"; if one falls, the other/s survive.
Be aware however that proper administration is vital. The courts have in several recent cases breached these strongholds' defences - for example in a divorce case where assets were being redistributed, assets held in a family trust were treated as being personal assets of the husband (a trustee).
Whether or not a particular trust is at risk will depend on a variety of factors; some of those considered relevant in the various judgments were: -
- Trustees acting in breach of the provisions of the trust deed and relevant legislation
- Trustees treating trust property as personal assets (such as a trustee listing trust assets as his own in a credit application, or insuring them in his own name)
- No "functional separation of ownership and enjoyment" in the assets, evidenced in part by a failure to appoint at least one independent trustee.
CC MEMBERS - WATCH OUT FOR PERSONAL LIABILITY WHEN RESTRUCTURING
Members of close corporations need to be aware of the various circumstances in which they can be held personally liable for the debts of the close corporation. One example is that anyone (not necessarily an appointed member) who is held to have been "knowingly a party to the carrying on of the business" in a reckless or grossly negligent manner, or fraudulently, could be held liable for all or part of the CC's debts. Similar principles apply to companies.
In a recently-reported case, the members had handed over control of the business to a third party as part of a restructuring effort, but were held (on the particular facts of the case) not to be liable for the wrongful conduct by the third party that followed. The court held that "conscious negligence" is required for liability - in this case, proof that the members foresaw a real possibility of the wrongful conduct and were "reckless to that consequence".
However the members had clearly been treading on very dangerous ground, and anyone initiating a restructure or turnaround strategy of any business in difficulty would do well to proceed with extreme caution.
ABORTIONS STILL LEGAL
Some of the media reports on the recent Constitutional Court "Doctors for Life" decision have given the impression that abortions have now been declared illegal. Not so - they are still lawful within the stipulated limitations. What has happened is that an amendment to the main Act (which amongst other provisions enabled nurses to perform abortions) will fall away if Parliament does not within 18 months comply with its constitutional duties relating to public participation.
BUILDING A HOUSE? BEWARE THE SUSPENDED BUILDER
Before you build, check that your builder is registered with the National Home Builder's Registration Council, and has not been suspended. The Council's website at www.nhbrc.org.za has lists of registered builders, suspended builders, and "competent persons". Have your building contract drawn or checked professionally, with reference to the Standard Home Warranty and other NHBRC requirements. And report any problems or snags within the prescribed time limits after occupation.
CONSENT PAPER MAINTENANCE - IS IT FINAL?
A divorce consent paper, once made an order of court, is final and binding, except that it may subsequently be altered by the court in respect of provisions as to maintenance.
However, a recent High Court judgment makes it clear that, where a party's rights to maintenance are waived in the consent paper, that really is the end of the matter. The lesson is clear - make sure that the consent paper, including its provisions for maintenance, correctly reflects what you are agreeing to. There could well be no second bite at the cherry. And if you want finality, the consent paper must be correctly worded to achieve that.
FARMERS - WHO IS (AND WHO ISN'T) A "LABOUR TENANT"?
Any resident on a farm who supplies labour to the farmer is either a "farmworker" or a "labour tenant". The distinction can be an important one, as labour tenants have particular protection from eviction, and in some cases also the right to apply for ownership of any part of the farm over which they have historically had use rights.
A central test for whether or not a resident is a labour tenant is the method of payment for labour - a labour tenant is paid predominantly in the right to occupy and use land, and must have (or have had) a parent or grandparent in the same position. The test is not necessarily an easy one to apply - in fact the Land Claims Court has held that it "requires expert knowledge". Farmers, and people providing labour to them, need the method of payment to be clear in employment contracts.
DON'T TAKE GIFTS FOR GRANTED
When you get a gift from Great Aunt Agatha, be nice to her if you want to keep it - the High Court has recently applied an old Roman-Dutch rule that a donation can be revoked on the grounds of "ingratitude". In the case in point, a son and his wife were ordered to repay almost half a million Rand to the father, who had spent large amounts of money on the family whilst staying with them, but wanted it back when he was ordered to leave the house after a series of family fights.
WHEN WORKPLACE RULES AND RELIGIOUS BELIEFS CLASH
A dismissal is automatically unfair if it results from discrimination based on religious beliefs. Whether a discriminatory job requirement is justified will depend on such factors as whether or not it is an "inherent requirement of the job", and whether the religious beliefs can be reasonably accommodated.
In a recent Labour Court matter, employees in the security industry were dismissed for refusal to obey an instruction to shave their beards, which they justified on the ground that their religion prohibited them from doing so. The court found that the employees were selective about which rules of their faith they would follow, and upheld the dismissal.
The result could well have been different in other circumstances. A recent example is that of a correctional services social worker who was dismissed for refusing to comply with the official dress code because it clashed with her religious beliefs. She took the matter to the Labour Court, and has been re-instated as part of a settlement agreement.
Legal advice should be obtained wherever workplace rules come into conflict with religious tenets.
PRIVATE PROSECUTION
What if you are a victim of crime and the Prosecuting authority declines to prosecute? You can get authority to conduct your own private prosecution, but the procedure is very unusual and (per a recent High Court judgment) you are going to have to show that: -- You have evidence of the alleged offence
- You have some "substantial and peculiar interest in the issue of the trial"
- Your interest arises from an injury you individually have suffered
- The injury resulted from the alleged offence
- Your motive is simply to see criminal justice done - the procedure cannot be used for example to try to extort money from an offender.
WEBSITE OF THE MONTH: WHO WANTS TO LIVE FOREVER (OR AT LEAST TO 100)?
You may (or may not) want to know just when you are likely to shed this mortal coil. Regardless, if you want a few tips on how to live a long and healthy life, go to the Life Expectancy Calculator at www.livingto100.com, and spend 10 minutes answering a series of questions related to your health and family history. The answers will give you an idea of what you are doing right, and where there's room for improvement.
Phase 2 - now that you know that you'll still be boring the great grandchildren with "good old days" stories at a ripe old age, you need to make sure that the Rand will still be rolling in at a reasonable rate. Financial planning for the golden years is essential, whether you are still 20, or many moons older.
Retirement planning calculators such as the one on the Finance24 website at http://www.fin24.co.za/finance/retirement/default.asp?Nav=pf are no more than a start - use them to lay the groundwork for your planning, then get proper advice from a competent adviser.
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
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