EY Suart Attorneys

This newsletter is for our valued clients and is intended to inform them of recent developments in our law and of other matters of interest. This newsletter and other articles are available on our website. Kindly advise should you not wish to receive this newsletter in future and feel free to distribute it to your friends or other interested parties if you so wish. Contributions are made by our directors and professional assistants.  Please also refer to our disclaimer at the bottom of this newsletter.

 

THIS MONTH:

(1) SALE OF ARREAR LEVIES BY A BODY CORPORATE

(2)  CONFIDENTIALITY, NON-DISCLOSURE AND NON-CIRCUMVENTION AGREEMENTS

(3)  LOCAL GOVERNMENT AND ITS DUTIES TO PROPERTY OWNERS

(4)  DIVORCE IN A NUTSHELL

(5)  ABOUT US 

 

1)  SALE OF ARREAR LEVIES BY A BODY CORPORATE

We have been requested to advise if a Body Corporate may sell its arrear levy debtors book to a third party.  The selling price would be less than the value of the arrear levy debtors’ book.

The powers of Bodies Corporate are set out in Sections 4 and 5 of the STSMA, where specific provision for specific powers are recorded and which includes the power of a Body Corporate to borrow monies for the performance of its functions or the exercise of its powers, if authorized by special Resolution [Section 4(e)].

No specific provision is made, in terms whereof a Body Corporate is empowered to sell its arrear levy debtors book.

There is no specific provision in the STSMA or Regulations, in terms whereof a Body Corporate may write-off arrear levies or acquit a member from payment of levies, or for that matter, interest which were duly raised.

Prescribed Management Rule 21(2) specifically prohibits a Body Corporate from making loans from Body Corporate funds without the authority of a Unanimous Resolution and prohibits a refund to any member of a contribution lawfully levied and paid.

The administrative fund of a Body Corporate is owned, jointly by all members of the Body Corporate and its funds are to be utilized in favour of advancing their interests and maintaining the common property.  For this reason, Trustees of a Body Corporate are not entitled to donate for charitable purposes, funds of the Body Corporate or to pay a honorarium to a retiring caretaker, as this would require members’ approval.

If Trustees intend to sell the arrear levy debtors book of a Body Corporate, I am of the view that such conduct should be approved by a Unanimous Resolution of members and not a mere Special Resolution of members, as the funds in the administrative fund are held on behalf of all members.

Elmo Stuart - Director

2)  CONFIDENTIALITY, NON-DISCLOSURE AND NON-CIRCUMVENTION AGREEMENTS

Have you ever had an idea for a new invention, but was too afraid to trust someone with your idea or information, afraid that they will “steal” your idea and claim it as their own?

Don’t be afraid. Our law makes provision for parties to enter into a confidentiality, non-disclosure and non-circumvention agreement (“NDA”) to protect certain information which might be private to a person, organisation or entity. This type of agreement is normally entered into, especially in the event where one has a certain new invention in mind and wishes to first test the feasibility thereof, but requires the information shared to be kept confidential.

Therefore, the party who’s idea the invention is (“the inventor”) will request a third party (his/its developer, assistant or even his/her advisor) to enter into a NDA, to prevent that the idea or information is leaked  by or used by the third party as his or her own before the invention receives protection as a registered trademark or patent. 

It is also not uncommon to enter into these types of agreements to keep certain information of an organisation or company confidential, especially its trade secrets or know-how of the business. It is essential that you conclude such agreement with a third party before contracting and disclosing any of your confidential information.

In short, the purpose of a Confidentiality-, Non-Disclosure- and Non-Circumvention Agreement is as follows:

• To protect and prevent certain confidential information (your invention, know-how, trade secrets etc.) to be exposed;

• To afford legal recourse should such information be disclosed or used outside the terms of the agreement.

Therefore, an NDA serves only to protect certain information. However, take note that merely by stating that the information so disclosed is confidential is not enough. The information so disclosed must be appropriately defined and worthy of protection in the first case.

Our Courts hold the view that, by merely stating that information is confidential, does not prove it.  The Court will delve into the facts of the matter and take into account the true nature of the information, whether it is worthy of protection and then consider if such disclosure or use was prejudicial to the disclosing party.

It is important to understand which information can enjoy protection and an appropriately drafted NDA would be required to furnish adequate protection. It is perhaps the most important step you may take in the development of your invention and it will be unwise not to seek legal advice.

            Quintin Badenhorst - Associate

3)  LOCAL GOVERNMENT AND ITS DUTIES TO PROPERTY OWNERS  

On the 31st of May 2018 an important judgment was delivered in the case of the City of Tshwane Metropolitan Municipality v Lombardy Development (Pty) Ltd and Others (2018) 3 All SA 605 (SCA). A part of the judgment dealt with the service requirements that must be complied with for a proposed valuation roll to be deemed valid and later implemented.

Only select portions of the judgement insofar as they relate to the service and notice requirements will be discussed.

Facts

The respondents own vacant stands in Lombardy Estate and Health Spa, which was within the Kungwini Local Municipality jurisdiction, and was, from the 1st of July 2011 disestablished and absorbed into the appellant, City of Tshwane Metropolitan Municipality (“the City”). While under the administration Kungwini, the respondents’ properties were categorised as ‘residential’, and not as ‘vacant’ properties. For a year or more following the disestablishment of Kungwini, rates were levied on the respondents’ properties at the rate charged by the City for ‘residential’ properties. In effect, the respondents only experienced borderline increases in their rates upon absorption into the City. A year later, the respondents began receiving invoices from the City reflecting large increases in their liability for rates, which were retrospectively imposed to July 2011. The increase was approximately 700% above the amount previously levied. The respondents requested clarity from the City as to why their rates had increased so exponentially. The City’s response claimed to have “held a Public participation process for the adoption of the Medium-Term Revenue and Expenditure Framework which was in line with legislation, which did not require individual consultation with ratepayers”.

The respondents took the matter further and, 5 years later, they obtained an order against the appellants (the City) which, amongst other findings, declared the City’s 2012 Supplementary Valuation Roll invalid and set it aside.

Legislation

Section 49(1)(c) of the Local Government: Municipal Property Rates Act No. 6 2004 (“the Act”) provides that the public must be given notice of proposed valuation roll. The section states:

“The valuer of a municipality must submit the certified valuation roll to the municipal manager, and the municipal manager must within 21 days of receipt of the roll serve, by ordinary mail or, if appropriate, in accordance with section 115 of the Municipal Systems Act, on every owner of property listed in the valuation roll a copy of the notice referred to in paragraph (a) together with an extract of the valuation roll pertaining to that owner’s property”.

Non-compliance

The service requirements of section 49(1)(c) of the MPRA were not followed by the City of Tshwane Metropolitan Municipality in that it did not serve a notice stating that the roll is open for public inspection on every owner of property. The property owners only received invoices reflecting exaggerated rates, for which no reasons and clarity were requested and never provided. Furthermore, the City confirmed that they did not comply with the service requirement.

In principle, property owners must be afforded a reasonable opportunity to respond to any proposed municipal rate changes and the service requirements of the abovementioned section were designed to do just that.

When the City failed to comply with the service requirement, it robbed the property owners of their legal right to respond and the exercise of same by either accepting or declining the proposed rates.

Conclusion

Where a municipality fails to account for its actions (in this case, by implementing a Supplementary Valuation Roll without following due process under section 49 of The MPRA nor providing reasons for the rate increase in the Supplementary Valuation Roll when requested for same), property owners can and must enforce their legal rights as such. The SCA judgment dismissed the City’s Appeal an upheld the Act and the rights of property owners – but not without a fight.

 

  Thando Meth - Candidate Attorney

4)  DIVORCE IN A NUTSHELL

It is a well-known fact that South Africa has one of the highest divorce rates in the world.

A recent report on marriages and divorces obtained from Statistics South Africa showed that 4 out of 10 of the 25 326 divorces granted in 2016 consisted of marriages lasting less than 10 years.

In South Africa, the marital regime of the parties determines how the assets will be divided upon dissolution of the marriage, the assets being those at the time of the divorce. We will discuss the different marital regimes in a follow up newsletter.

This article will broadly explain the difference of an uncontested divorce versus a contested divorce. The jurisdiction of a court/s in divorce matters will also be touched upon.

Provided that the divorce is uncontested the divorce process in South Africa is relatively straightforward. Should the divorce become contested the process is far more complicated, time consuming and costly.

The first step in the legal process is to issue and serve a summons.

The spouse issuing the summons is referred to as the "Plaintiff". The spouse being summonsed for a divorce is referred to as the "Defendant".

A divorce summons is unique because it must be served upon the Defendant personally by the sheriff of the relevant court.

Summons may be issued in either the Regional Court or the High Court with the required jurisdiction over the spouses.

A court has jurisdiction in a divorce action if one or both parties:

• are domiciled in the jurisdictional area of the relevant court on the date on which the action was instituted; or

• were usually residing in the jurisdictional area of the relevant court and were usually residing within South Africa for a period of at least one year immediately before the date on which the action was instituted.

A person is domiciled in the jurisdiction of the court if the person considers his / her residence within that area as his / her permanent residence.

What is the difference between a “contested” an “uncontested” divorce?

Uncontested divorce:

Where the prescribed time frame for delivery of a notice to defend the action expires, and the Defendant fails to defend the action, the divorce will proceed on an uncontested basis.

The Defendant may elect not to defend the divorce for various reasons, such as the Defendant being satisfied with the relief sought by the Plaintiff.

Where the spouses reach an agreement with regards to the terms of their divorce, the divorce will similarly proceed on an uncontested basis.

The spouses may conclude a settlement agreement, and we advise that attorneys assist with
the drafting thereof, at any time during the divorce proceedings. The spouses may conclude
a settlement agreement even in circumstances where the divorce initially became contested. Once a settlement agreement is reached between the spouses, the divorce will proceed on an uncontested basis and the provisions of the settlement agreement, which is made an Order of Court, will be incorporated in the Decree of Divorce.

The legal formalities in an uncontested divorce are minimal, especially in comparison to those in a contested divorce.

Uncontested divorces are capable of being finalised within 2 – 4 months.

Contested divorce:

The Defendant may elect to defend the divorce action for various personal- and/or legal reasons such as:

• not being satisfied with the relief sought by the Plaintiff in respect of the spouses’ child/ren;

• not being satisfied with the financial relief sought by the Plaintiff;

• not wanting to divorce from the Plaintiff.

In circumstances where the Defendant does not want to divorce from his/her spouse, it must be noted that a court will grant a divorce order when even just one of the spouses believes that there has been an irretrievable breakdown of the marriage relationship and that there are no reasonable prospects of restoring it. They say “It takes two to tango” and a court will not force spouses to live together where one of them wants out.

The legal process to be followed in a contested divorce is far more complicated, time-consuming and costly than in the case of an uncontested divorce.

A contested divorce may take years to finalize. It is therefore advisable for divorcing spouses to obtain legal advice from a suitably experienced divorce attorney as this could save the parties thousands of Rands in unnecessary litigation

Annelize Joubert - Senior Associate 

5)  ABOUT US

 

To view our previous newsletters, please visit our website on http://www.eyslaw.co.za.

Kind regards,

EY STUART INC.

 

Disclaimer: The information disclosed herein is not intended to constitute legal advice and is not guaranteed to be correct, complete, or up-to-date. You should not act or rely on any information emanating from this Newsletter without seeking the advice of an Attorney, as the facts relating to your circumstances may influence any advice or information conveyed herein. Should you require legal representation, then please do not hesitate to communicate with us for further information and our standard mandate terms.