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) THINK BEFORE YOU CREATE YOUR CV

(2) LEASE AGREEMENTS

(3) THE FINANCIAL INTELLIGENCE CENTRE ACT, 38 OF 2001 (FICA) AND ITS AMENDMENTS BY THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT ACT, 1 OF 2017 (FICAA)

(4) DIVORCE:  HIDE AND SEEK IS OVER

(5) ABOUT US

1) THINK BEFORE YOU CREATE YOUR CV

It is not unheard of for people to fabricate qualifications or information on their curriculum vitae (CV). It might be white lies, with the facts augmented with a few fancy adjectives to boost their likability.

The National Qualifications Amendment Bill (“The NQA Bill”) is one of the new laws President Cyril Ramaphosa is expected to sign and promulgate soon.

The NQA Bill will regulate the situation where an employer is faced with an employee who fabricated information on his/her CV. The NQA Act, once promulgated into Law, will establish grounds for punishment if a prospective employee or an employee already employed is found guilty of committing fraud on his/her CV. This includes lying about previous employment or falsifying qualifications.

The penalty for lying on your CV? Depending on the severity, up to 5 years of imprisonment or a significant fine. The NQA Bill will establish a number of actions and penalties for the different offences and will be more extensive than current legislation such as the National Qualifications Framework Act 67 of 2008.

Although the full effect of the NQA Act is unknown, it does serve as some reassurance, particularly where an employer requires formal qualifications. The NQA Act will serve as deterrent to restrict the frequency of CV fraud, and once in full force, hopefully deter those thinking of boosting their CV’s with false information and misrepresentations.

Juanné Bester - Associate

2) LEASE AGREEMENTS  

A lease agreement forms the basis of the relationship between the Landlord and Tenant, and it is therefore very important that the lease agreement is clear on the intention of the parties, the so called essentialia of the agreement, to qualify as a specific type of agreement.

The essentialia or essential provisions of a lease agreement are as follows:

  1. The identification/description of the leased premises;
  2. The Tenant have the use and enjoyment of the leased premises;
  3. The use and enjoyment of the premises is temporary;
  4. Tenant to pay for the use and enjoyment of the premises (it does not have to be a monetary value);
  5. The duration of the lease.

Failure to identify the essentialia in the lease agreement will not necessarily render the agreement invalid, it will merely not be the agreement intended to be concluded between the parties.

Lease agreements are to be approached with caution, especially in the event the Landlord intends to cancel the lease agreement prior to the termination date, due to a breach by the Tenant. Non-payment of rental by a Tenant does not automatically cancel the lease agreement.

It is important to take note that the Consumer Protection Act, 68 of 2008 (“CPA”) has a considerable impact on lease agreements especially Section 14 of the Act. Section 14 deals with early termination.

Firstly, Section 14 of the Act is not applicable to agreements entered into between juristic persons, irrespective of their annual turnover or asset value.

And secondly, this Section is also not applicable to agreements entered into on a month to month basis.

Section 14 is therefore only applicable to agreements entered into for a fixed period between the Landlord and Tenant.

A Landlord who entered into a fix term lease agreement with a Tenant may not cancel such lease agreement prior to the termination date. The Landlord will only be entitled to do so if the Landlord can prove that there was a “material failure” on the side of the Tenant, and the Landlord has given the Tenant 20 business days written notice to rectify such material failure.

Section 14 of the CPA will still apply even in the event that the lease agreement makes provision for early termination.

This, however, is not applicable to a Tenant. A Tenant may at any time prior to the termination date give 20 business days written notice to the Landlord to terminate the fixed term agreement for whatever reason.

The CPA protects the Landlord for any loss that the Landlord may suffer due to early termination by the Tenant and allows the Landlord to charge the Tenant a reasonable cancelation penalty fee for such early termination of the fixed term agreement.  

A proper lease agreement is not only required to secure payment of the monthly rentals, but its provisions may become more relevant in the event of eviction proceedings against a defaulting Tenant.

It will be advisable for Landlords to first seek legal advice prior to the election to cancel a fixed term agreement due to a material failure on the part of a Tenant.

Quintin Badenhorst - Associate

3) RECENT CHANGES TO THE FICA AMENDMENT ACT: THE FINANCIAL INTELLIGENCE CENTRE ACT, 38 OF 2001 (FICA) AND ITS AMENDMENTS BY THE FINANCIAL INTELLIGENCE CENTRE AMENDMENT ACT, 1 OF 2017 (FICAA)

The Financial Intelligence Centre Amendment Act has incorporated two additional Schedules into the Amendment Act (namely Schedule 3A and 3B).

These Schedules introduce the following concepts:

  1. Prominent Influential Persons (“PIP”) : A PIP is an individual who holds or has held, in the last twelve (12) months, a specified position or function within the Republic of South Africa (RSA) for a period exceeding six (6) months. This includes acting positions. These are categorized as: 

(1)  A person holding a prominent public function; or

(2)  A person holding a senior position in a company providing goods or services to an organ of state, where the annual transactional value of the goods, services or both in excess of an amount determined by the Minister of Finance; or

(3)  A person holding a senior position at an international organization based in the Republic of South Africa.

2. Foreign Prominent Public Officials (“FPPO”) : A FPPO is an individual who holds or has held, in the last twelve (12) months, a prominent public function in any foreign country for a period exceeding six (6) months. This includes acting positions. A FPPO includes: Head of State or head of a country or government, Member of a foreign royal family, Government minister or equivalent senior politician or leader of a political party, Senior judicial official, Senior executive of a state-owned corporation; or a High-ranking member of the military.

Please note the above definitions also extend to family members or close associates to PIP’s and FPPO’s.

Since we are “accountable institutes” in terms of the Financial Intelligence Centre Act, we will now have to request that all Natural Persons declare whether they are Politically Influential Persons, if they are related to a Politically Influential Person, or whether they are Foreign Prominent Public Officials.

Further to the above, the Financial Intelligence Centre Amendment Act has broadened and enhanced the elements of client due diligence. “Accountable institutes” must do additional due diligence for Juristic Persons and Trusts to identify the Beneficial Owner (an individual who ultimately owns or controls more than 25% of a company’s shares or voting rights, or who otherwise exercises control over the company or its management. Where such an interest is held through a trust, the trustee or anyone who controls the trust will be registered as the beneficial owner).

Should you have any queries regarding the FIC Act, you are more than welcome to contact the writer hereof.

  Quraisha Dawood - Associate

4) DIVORCE:  HIDE AND SEEK IS OVER!

In a recent judgment delivered by the South Gauteng High Court a pioneering decision was made in respect of matrimonial property and divorce. In three cases (E v E; R v R and M v M) applications were brought in terms of Rule 43(1) of the Uniform Rules of Court.

The applicants sought relief for interim maintenance, custody and contribution to costs pending the finalisation of their divorce actions.

The abovementioned cases were referred to the full court by the Judge President of this Division pursuant to an order by Van Vuuren AJ to determine the following issues:

  1. While Rule 43 applications generally require the submission of a succinct set of papers, does the court have the discretion to permit the filling of applications that have departed from the strict provisions of Rule 43(2) and (3)?

2. If the Court does not have such a discretion, should the Practice Manual direct that all Rule 43 application conform to a specific form, particularly in terms of length? Would the imposition of a restriction on the length of Rule 43 applications withstand constitutional muster?

3. If the court does have such a discretion, what are the factors to consider in order to reasonably exercise this discretion? Are these factors exhaustive?

Rule 43 applications presently does not make provision for a third set of affidavits. Rule 43 (2) and (3) essentially provides that the Applicant set out relief claimed and the grounds thereof in the form of a founding affidavit while the Respondent is given ten days to respond in the form of a replying affidavit. Often we find that the respective affidavits are voluminous and at times containing irrelevant allegations. This is rooted in the fact that the Applicant does not have an opportunity to place aspects of the Respondents affidavit in dispute in a further affidavit.

The court found that the solution lies within Rule 43(5) of the Uniform Rules which states:

“(5) The court may hear such evidence as it considers necessary and may dismiss the application or make such order as it thinks fit to ensure a just and expeditious decision.”

The full bench of judges approved a twenty-page financial declaration form which can be completed by spouses, under oath, in the process of divorce. The aim of this document is for spouses and the court to obtain full disclosure of spouses’ assets. 

It was found that the benefit of the mandatory filing of a financial disclosure form, filed separately, will discourage lengthily affidavits, ensure transparency for all parties, including the court and the best interest of minor children.  Moreover, this will make early settlement possible and uphold the object of Rule 43 applications: “to provide expeditious and inexpensive procedure for obtaining interim relief in matters relating to matrimonial disputes pending or about to be instituted.”

This judgment allows a Judge allocated to hear an application in terms of Rule 43 may issue a directive to the parties in terms of Rules 43(5). In this instance, the Applicant or Respondent may be called to file affidavits accompanied by the disclosure form, requiring them to make full disclosure of their financial affairs and any other circumstances. This must be filed seven days before the date of the hearing.

This decision does not grant the court the discretion to permit the filing of applications that have departed from the strict provisions of Rule 43(2) and (3). Furthermore, the court confirmed that the necessary amendments must be made in respect of the rules and the practice manual to ensure that Rule 43 applications are filed without restrictions and align with constitution. 

  Bianca van Wyk - Director

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.