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) COVID-19 PRECAUTIONS TO BE TAKEN BY SCHEME EXECUTIVES

2) DOES COVID-19 AFFECT YOUR MAINTENANCE PAYMENTS, AND CAN I APPLY FOR A REDUCTION THEREOF?

3) PARENTAL CONTACT DURING COVID-19 LOCKDOWN

4) BUSINESS RESCUE AN OPTION FOR FINANCIALLY DISTRESSED COMPANIES

5) FIREARM AMNESTY

6) ABOUT US

1) COVID-19 PRECAUTIONS TO BE TAKEN BY SCHEME EXECUTIVES

We have recently been bombarded with questions concerning obligations of Scheme Executives of Community Schemes and how they should manage members of their Community Schemes and enforce Regulations (the “Regulations”) under the Disaster Management Act.

We were called upon to advise what disclaimer notices should be installed at the entrance gates of a Community Scheme and how Scheme Executives can avoid liability where a person contracts the Coronavirus within a Community Scheme.

The answer to both questions is simple. Community Scheme Executives are not law enforcement officers and the COVID-19 Regulations apply to all persons. On the second question, it would simply be impossible to prove that a person contracted the Coronavirus within a specific Community Scheme.

It is however the duty of Scheme Executives to ensure that they comply with the Regulations as far as employees and/or contractors are concerned and not to allow members to transgress the Regulations. Where a person transgresses the Regulations, such member can be reported to the relevant authorities.

Scheme Executives can make and implement Rules and/or measures in order to comply with the Regulations. The specific circumstances, available amenities, common areas and movement of members within a Community Scheme must be considered in order to implement appropriate and reasonable measures and/or rules which are not in conflict with the Regulations and there is not a “one size fits all”-set of Rules.

The Regulations may also be amended from time to time and Scheme Executives are best advised to receive appropriate guidance and advice when implementing any additional rules and/or directives.

As a general guideline, the following measures can be considered:

1. Disclaimer:
In addition to any existing disclaimer notice, this notice can be supplemented to advise at any entrance to the Community Scheme that the Regulations are to be adhered to, in addition to any directives as may be issued by Scheme Executives, that any transgression will be reported to the authorities and that no entry will be allowed if co-operation is not received.

2. Security:
Security protocol should be the same as prior to lockdown. It is not the responsibility and/or within the authority of Scheme Executives and/or security to enforce Lockdown Regulations.

Security services are usually contracted out and Scheme Executives should ensure that the security contractor complies with the Regulations. Security guards should therefore comply with to the Regulations concerning wearing of masks, adhere to social distancing, etc.

Although not required, it is advisable to implement hand-sanitation where contact is required for completion of registers. It is not the duty of security or Scheme Executives to enforce “self-assessment” and/or to take temperature readings.

3. Movement and common areas:
Common areas should be closed to the extent required in terms of Regulations in order to avoid any gathering and where there is opportunity for the Regulations to be contravened. As stated, the available open space, common property facilities and amenities will dictate what freedom of movement on common property should be allowed.

As a general rule, streets and open areas within Home Owners Associations should be regarded as “public areas” where the Regulations apply, but again, other considerations may be applicable such as ownership of the common areas, any zoning conditions and again, available amenities and movement space.

4. POPI Act, where a person contracted the Coronavirus:
Scheme Executives should take caution not to publicize personal information of persons who are presumed to have contracted the Coronavirus, as information may be false and/or may lead to contravention of the POPI Act and/or damages claims.

They must obviously inform any of their employees, such as cleaners and/or caregivers of any increased risks and should receive assistance from the relevant authorities if they have reasonable suspicion of an infection and deem it necessary to implement further measures.

5. Employees and contractors:
Scheme Executives should ensure that their employees are provided with the required personal protection equipment (sanitation, masks, etc.), that temperature readings are taken and self-assessment questionnaires be completed and/or any other Regulatory requirements be complied with.

They should also ensure that their contractors comply with the Regulations.

6. Reporting:
Where there is any suspicion of an infection of the Coronavirus, then required action should be taken and staff members must be placed on sick leave and all staff members who may have had contact with such employee, must be tested and placed on sick leave.

Again, it is essential and in order to avoid any claims or liability, that any such incidents be reported to the authorities.

7. Business activities:
In most Community Schemes it is prohibited to conduct any business activities from a unit or erf. The Covid-19 Regulations forced many people to work from home. The mere working from home does not constitute a “business activity”.

If a person is required to meet with clients or customers at home, then such activities can be considered “business activities”.

We can expect to live with Covid-19 for a long time, if not for years to come and Scheme Executives are best advised to consider and formulate appropriate and reasonable rules in order to allow and manage business activities within a Community Scheme.

Security, parking, available amenities, Municipal By-laws and zoning conditions will again be important factors to be taken into account and it may well be that certain business activities can simply not be accommodated.

Again, Scheme Executives would be advised to act reasonably and to receive appropriate legal advice in formulating rules.

Elmo-York Stuart - Directo

2) DOES COVID-19 AFFECT YOUR MAINTENANCE PAYMENTS, AND CAN I APPLY FOR A REDUCTION THEREOF?

By now we all have felt the impact of the worldwide pandemic known as Covid-19, either financially, mentally or physically. The national lockdown has left millions of South Africans with no income, a reduced income or unemployed. Expenses remain the same, and not receiving a full income or any income at all, have placed a major strain on many South Africans, especially those who have been ordered to pay maintenance.

The question is: Can I approach the court for assistance in reducing the current maintenance amount payable during the national lockdown? The short answer is no.

It is important to take note that, whilst we are currently still under lockdown, you will not be able to approach the court to apply for a variation of the current maintenance order against you. However, once lockdown has been uplifted, or until new regulations have been Gazetted permitting same under a different level, you will only then be able to approach the relevant court and launch an application for a variation of an existing order should you meet the necessary requirements.

The requirements necessary to be successful with such an application, once permitted to launch same, is that the party who will approach the relevant court has to show that good cause exists, and that there is a material change in circumstances. The applicant should prove the following:

1. a reduction in income; and

2. the inability to pay the current maintenance amount.

It can be argued that any loss of income may qualify as a material change in your circumstances as well as your ability to pay. It should suffice that any loss of income as a result of the national lockdown will be sufficient reason to vary an existing maintenance order.

We advise that you first consult with a legal practitioner for assistance and advice before you approach the maintenance court.

Quintin Badenhorst - Senior Associate

3) PARENTAL CONTACT DURING COVID-19 LOCKDOWN

In terms of Section 18 of the Children’s Act, No. 38 of 2005 (hereinafter “the Children’s Act”) a person may have either full or specific Parental Responsibilities and Rights in respect of a child, which include the right to maintain contact with the child. The situation pertaining to holders of contact rights (hereinafter “parents”) and children have however been unclear since the commencement of the stringent Covid-19 national lockdown imposed on 26 March 2020.

On 7 April 2020, and with the long weekend on the horizon, the amendment of Regulation 10(8) under Section 27(2) of the Disaster Management Act, 2002, No. 57 of 2002, was published in an attempt to facilitate contact during the national lockdown between parents and children who do not share the same residence. Paragraph 6 of the directions read as follows:

“(i) Movement of children between co-holders of parental responsibilities and rights or a caregiver as defined in S1(1) of the Children’s act, during the lockdown period is prohibited, except where arrangements are in place for a child to move from one parent to another, in terms of:

(aa) a court order; or

(bb) where a parental responsibilities and rights agreement or parenting plan, registered with the family advocate, is in existence,

provided that, in the household to which the child is to move, there is no person who is known to have come into contact with, or is reasonably suspected to have come in to contact with, a person known to have contracted, or reasonably suspected to have contracted, COVID-19;

(ii) the parent or caregiver transporting the child concerned must have in his or her possession, the court order or the agreement referred to in sub-items (aa) and (bb), respectively or a certified copy thereof.

This is a case of, as the saying goes, “out of the fire and into the frying pan” or, in this case rather “out of the fire and into the smoke” with the begging question: what about the right to contact between children born out of wedlock and specifically non-cohabitating parents?

The amended regulations only made provision for circumstances where a court order is in place or an agreement/parenting plan exists and provided that same has been duly registered with the offices of the Family Advocate. In terms of sub paragraph (ii), a parent is to present such a court order or registered plan, upon request, to legally exercise his/her contact rights with a child during the national lockdown. The implication of the aforesaid amendment was that virtual contact sessions, where possible, was still the only solution for many parents during the national lockdown.

The flaw in the solution was that the regulations did not make provision for the right to contact between parents with children born out of wedlock and those still legally married and in the process of finalising a divorce with no parenting plan or agreement registered with the Family Advocate (in essence non-cohabiting parents). Many holders of contact rights through a court order is not necessarily in possession of a copy of the court order since it was never required or needed because both parents were aware of the order and did not dispute it. It being unclear how the parties will obtain a copy of the order while most of the administrative functions of the courts were also eliminated because of the national lockdown regulations.

In some cases, a court order does not even exist, as parties have exercised their contact rights per agreement inter partes, never having had to burden the offices of the Family Advocate or the courts until the aforesaid amendment was published. It would furthermore be an expensive exercise at best to approach the High Court on an urgent basis to obtain an order to give effect to the agreement inter partes.

As a result, parents and children with a well-established routine and contact schedule, though not registered prior to 26 March 2020 were not allowed to exercise their contact rights.

At a second attempt, after some four weeks and on 29 April 2020, the situation was to some extent clarified, when the regulations issued in terms of section 27(2) of the Disaster Management Act, No. 57 of 2002 included the following sub-regulation in addition to the limited instances, listed above:

“(c) a permit issued by a magistrate which corresponds with Form 3 of Annexure A if the documentation in paragraphs (a) and (b) is not available.

(2) The movement of children between co-holders of parental responsibilities and rights or a caregiver, as defined in section 1(1) of the Children’s Act, 2005, between different metropolitan areas, district municipalities or provinces is allowed if the co-holders of parental responsibilities and rights or a caregiver is in possession of a permit; issued by a magistrate which corresponds with Form 3 of Annexure A

(5) (a) before a magistrate issues a permit referred to in regulation 17(2) or (3), he or she must be provided with-

(i) a court order; or

(ii) a parental responsibilities and rights agreement or parenting plan registered with the family advocate or

(iii) a birth certificate or certified copy of a birth certificate of the child or children to prove a legitimate relationship between the co-holders of parental responsibilities and rights; and

(iv) written reasons why the movement of the child is necessary.”

In terms of Regulation 17(2) and (5), parents who do not hold a court order or a registered parenting plan can now approach the Magistrate’s Court and apply for a permit to enable them to exercise contact with a child. The requirements for such a permit are listed in sub-paragraph 5. According to sub-paragraph 5, if a court order or registered parenting plan cannot be presented, a birth certificate or certified copy thereof together with written reasons why the movement of the child is necessary must be presented to the presiding officer who will then issue a permit.

In conclusion: parents who do not comply under the provisions of the regulation 10(8), may now approach the magistrate’s court for a permit to exercise their contact rights in terms of the Children’s Act. On paper, this is a huge step in the right direction. The practicality in obtaining such a permit is however still unclear and as with many things related to the lockdown regulations, only time will tell whether this regulation in its amended form will come to the assistance of all parents with contact rights.

Mienke Stuart – Associate

4) BUSINESS RESCUE AN OPTION FOR FINANCIALLY DISTRESSED COMPANIES

Amidst the current recession and dire economic position which South Africa faces, financially distressed companies seeking immediate relief have increasingly opted to apply for business rescue as a strategy to avoid liquidation and ensure their future existence.

Business rescue, through the implementation of an approved business rescue plan, aims to restructure the affairs of a financially distressed company in a manner that increases the likelihood of the continuity of a company on a solvent basis. The business rescue process must therefore not simply be implemented to delay the inevitable liquidation of a financially distressed company. The reason for this is that business rescue is a costly remedy should it fail and, if the company is not prima facie rescuable, business rescue may deprive creditors of the dividend (which is usually already little) which they could have had through direct liquidation.

The main consideration before applying for business rescue is whether the company will have ‘reasonable prospects’ to generate profits and become a self-sustaining business in future. Business rescue is therefore more likely a remedy to be considered if a company only suffers short-to-medium term cash flow issues and a less likely one to consider when the company’s liabilities by far exceeds its assets in addition to such cash flow issues. There are however, as with all things, exceptions to the rule.

Despite business rescue being largely a legal process, another critical factor in determining whether a company under business rescue will be successful or not, is the ability to secure turnaround finance in order for the company to meet its short-term financial obligations (liquidity).

Securing turnaround finance is often the biggest obstacle, as both loan financing institutions and private investors, are reluctant to fund/finance financially distressed companies due to the high level of risk involved.

Statistics indicate that less than 10 percent of companies under business rescue successfully exit business rescue. This suggests that the majority of companies who apply for business rescue do not have a realistic prospect of being rescued.

It is therefore advisable that a company facing financial difficulty obtain legal advice and carefully weigh its options before considering applying for voluntary business rescue as opposed to voluntary liquidation, to ensure the best possible outcome for the company and all those affected.

Ziegh Steenkamp - Assistant

5) FIREARM AMNESTY

A firearm amnesty was declared by the Minister of Police on the 27th of November 2019 and commenced on the 1st of December 2019 and terminated on the 31st of May 2020.

Firearm amnesty inter alia provides for indemnity against prosecution for the unlawful possession of a firearm or ammunition and for surrendering of unwanted firearms or ammunition during the amnesty period.

Although representations were made for extension of the amnesty period, no further extension was Gazetted to date hereof, but it is expected that the Minister of Police will extend this amnesty period as a result of the Covid-19 interruption.

We often have to deal with firearms in deceased estates where we make use of the services of Johan la Grange to assist with the storage, transfer, etc. of firearms (at very affordable tariffs), with whom you can communicate on: +27 829 510 485 or johanlg57@gmail.com, should you require assistance.

Elmo-York Stuart - Director

6) ABOUT US

To view our previous newsletters, please visit our website on 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.