Walkers Attorneys

An article had been prepared on yet further changes to the position relating to the transfer of residences, free of Transfer Duty. However when the draft of this and the proposed Voluntary Disclosure Programme (“VDP”) was sent to our Newsletter Editor, Denis Beckett, a response was received from him, which is set out below.

“Right, I have Residence Transfer Relief and I have Exchange Control Amnesty."

Yep, sure, I can get out my panelbeating hammer.

But kindly tell me why we are doing what we do. I think we want the Walkers client (or prospective client) to get a little lilt of appreciation -- "ah, the Walkers newsletter, where my up-and-about lawyers give me information, entertainment, thought and straight-talk on wazzup in their world." Is that right? Is that our objective?

Have we not already given this client Residence Transfer Relief? Have we not already given this client Exchange Control Amnesty?

In fact, have we not given this client Residence Transfer Relief and Exchange Control Amnesty more than once each?

Am I imagining things or have we given this client Residence Transfer Relief and Exchange Control Amnesty more than twice each?

My suspicion is that even if we had big new news in respect of Residence Transfer Relief and Exchange Control Amnesty, we'd be wary of downloading it.

I'm only querying. You want more Residence Transfer Relief, you get it. More Exchange Control Amnesty, too.

But think of your options. One is that you might bring out your knuckledusters. I believe that even just one partner's head, impaled on a banister post, works wonders in concentrating the minds of others.”

Once again, case law brings a long-standing wrangle to an end. What exactly is "delivery", as in "delivery of notice" in the National Credit Act? Forever, or anyway since long before the present, 2005, Act, two schools of thought have fought it out.

"Notice" says the one school, is what is actually brought to the attention of the addressee. No, says the rival school, leaning philosophically toward the notion that you can lead a horse to water but you can't make it drink, "notice" is served when you have done what is reasonably necessary to make the addressee know that his/her attention is called upon.

Well, School Two wins the war. On September 30, in Rossouw vs FirstRand, the Supreme Court of Appeal spoke. The legislature, it declared, intended registered mail to constitute proper delivery. The fact that the consumer is allowed to choose the manner of delivery "points to an intention to place the risk of non-receipt on the consumer's shoulders". The consumer gets to choose the form of delivery that is most reliable in his case, and thereafter "actual receipt is the consumer's responsibility".

But ... this is the law; there are always cautions. Firstly, the Rossouw judgment is technically binding only to Section 129(1)(a) of the National Credit Act, although it will obviously have an influence where the crux is another, similar Act or a contract. Secondly, Rossouw dealt with delivery to a chosen domicilium. In cases where no domicilium has been chosen, School One would take the honours

A Trustee's primary duty is one of fiduciary responsibility as was evident in the Tax Court case 1840 72 SATC 79 where extreme cost attached to a slip too small for many an eye to detect.

In 1973 Mr X set up what we will call Joint Trust for his six children, who could not receive the capital until after his death.

Between 1994 and 1996 X created six new trusts, Trusts 1-6, one for each child, and the trustees of Joint Trust cleared that trust into the six new ones.

SARS considered the distributions to Trusts 1-6 to be donations and issued an assessment for donations tax of R79 million. Joint Trust appealed.

In 2006 Joint Trust was advised that the distributions to the six trusts were probably illegal, (a) because these trusts were not beneficiaries of the original trust and (b) because distributions were not to be made before X's death.

Joint Trust did not take steps to void the transactions, pending the appeal against the tax assessment.

The court found that, indeed, Trusts 1-6 were not beneficiaries of Joint Trust. Moreover, even awards to the beneficiaries, the children, would have been ultra vires until X's death. So the distributions were illegal. But ... did that mean the distributions were void? Here the court took an extremely interesting line of thought: that as soon as the trustees became aware that the transactions were a nullity, they could have reversed the distribution, but did nothing. But by remaining "supine" after the 2006 discovery that their distribution was ultra vires, their "inaction amounted to a donation giving rise to liability for donations tax."

The Trustees may well expect a demand for payment of R79 million from the Trust Beneficiaries!

by Charl Theron

Unbeknown to most house owners, on 1st October 2009 new Regulations in terms of the Occupation and Safety Act came into operation regarding gas installations in properties.

Basically, it affects all properties with a gas stove, a gas geyser or an inbuilt gas braai. Although similar Regulations have existed before, no one paid attention to it as gas installations in dwelling houses were few and far between.

With the problems encountered by Eskom to supply electricity more and more home owners are installing gas installations. In terms of these Regulations, all such installations since 1st October 2009 must be accompanied by a Certificate of Conformity issued by a person so qualified to issue such certificate, which should thereafter be in the possession of the “owner or user” of the premises.

Technically speaking therefore, if an installation was done prior to 1st October 2009, the owner/user need not be in possession of such certificate.

Regulation 17(3) however now stipulates very clumsily that (irrespective of when the installation was made) such a certificate must also be issued “after change of user or ownership”. Regulation 17(3) does not stipulate at all that where a property with such installation is sold, the Seller shall at its cost supply such a certificate.

Therefore, from the wording it appears that after the transfer of a property the Purchaser (new owner) must obtain such a certificate. This scenario is virtually the exact same as the Regulations relating to the issue of Electrical Certificates. It has however become the custom to contractually bind a Seller to supply at its cost an Electrical Certificate of Compliance as a condition of a Deed of Sale. If a Deed of Sale does not provide for this, even today the supply of an Electrical Certificate would be the obligation of the “landlord or user” (the words used in the Regulations relating to Electrical Certificates).

It is therefore suggested that Estate Agents should seriously consider amending their standard Deeds of Sale to provide for this failing which it is submitted, the Purchaser will have to bear the brunt…..

There is talk that the City of Cape Town will in future also insist on a plumbing certificate before they will issue clearances for transfers.

It seems as everyone is trying to climb on the bandwagon of property transfers – Beetle, Electrical, Gas and Plumbing Contractors. Who next? Roofing, Foundation, Structural, Glazing Contractors et al?