Prescient precedent: PAF v SCF (SCA) and a new paradigm for testing whether a trust has been abused to manipulate a spouse’s accrual (or redistribution) liability at divorce

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

NOTE

Prescient precedent: PAF v SCF (SCA) and a new paradigm for testing whether a trust has been abused to manipulate a spouse’s accrual (or redistribution) liability at divorce

Author: Bradley S Smith

ISSN: 1996-2177
Affiliations: Senior Lecturer: Research, The Independent Institute of Education’s Varsity College; Extraordinary Professor of Private Law, University of the Free State
Source: South African Law Journal, Volume 140 Issue 4, p. 697-714
https://doi.org/10.47348/SALJ/v140/i4a1

Abstract

In this note, I argue that PAF v SCF 2022 (6) SA 162 (SCA) is a groundbreaking judgment for curbing the abuse of the trust form by spouses who are married out of community of property and who engage in unscrupulous ‘divorce planning’ aimed at manipulating their personal estate values for the purposes of dividing matrimonial property at divorce. PAF not only removes several uncertainties regarding our courts’ ability to pierce the veneer of an abused trust but also broadens our conventional understanding of what trust-form abuse entails in the divorce setting, particularly by virtue of its engagement with the SCA’s earlier (prescient) judgment in Badenhorst v Badenhorst 2006 (2) SA 255 (SCA). In the process, I argue that there is a need to reconsider the test formulated in REM v VM 2017 (3) SA 371 (SCA) for taking the asset value of an alter-ego trust into account for accrual claims at divorce. I further assert that the new paradigm PAF ushers in requires formulating a consolidated test that takes into account this reconsideration, as well as the novel factual matrix in PAF. I conclude that this consolidated test is not only capable of being applied in the context of accrual liability, but also where a spouse is eligible to seek a redistribution order in terms of s 7 of the Divorce Act.

Progressive, yet problematic: Unpacking the therapy order and sentence in S v SN

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

NOTE

Progressive, yet problematic: Unpacking the therapy order and sentence in S v SN

Author: Delano Cole van der Linde

ISSN: 1996-2177
Affiliations: University of Cape Town
Source: South African Law Journal, Volume 140 Issue 4, p. 715-732
https://doi.org/10.47348/SALJ/v140/i4a2

Abstract

The judgment in S v SN [2022] ZAECGHC 35 is dichotomous as it is both progressive and problematic. The judgment is progressive as, for the first time, a South African criminal court imposed a therapy order for a victim of rape. The minor victim in this case was raped multiple times by her uncle in a familial home. The court was further enjoined to impose a minimum life sentence under the Criminal Law Amendment Act 105 of 1997, as the victim was under the age of 16 and had been raped on multiple occasions. However, the court in SN was entitled to deviate from the minimum sentence when ‘substantial and compelling circumstances exist’ to do so. In considering the mitigating and aggravating factors present in the case, the court deviated from the minimum life sentence based on the remorse of the accused and the lack of force used during the rape. The judgment is problematic because considering these factors unearthed problematic narratives surrounding the nature of rape. This note critically analyses the judgment in SN and submits that although the therapy order is a welcome development, the court erred in considering a lack of force employed during the rape as a mitigating factor.

Lawful act duress

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

Lawful act duress

Author: Jacques du Plessis

ISSN: 1996-2177
Affiliations: BCom LLB LLM (Stell) PhD (Aberdeen)
Source: South African Law Journal, Volume 140 Issue 4, p. 733-762
https://doi.org/10.47348/SALJ/v140/i4a3

Abstract

Legal systems generally accept that contracts may be concluded by way of hard bargaining. This could entail obtaining assent through threats of lawful acts, such as terminating a contract by notice, refusing to enter into a new contract, or instituting legal proceedings. However, in exceptional cases, a threat of a lawful act may be regarded as unlawful or contra bonos mores and give rise to duress. Unfortunately, the South African contract law on identifying these cases is undeveloped. Recent advances in English law may provide guidance on when a threat of a lawful act should be regarded as unlawful. Relevant considerations that could point to such a conclusion include whether the party making the threat created or increased a situation of vulnerability in an unacceptable manner, and what benefits such a party obtained from the threat. It is less clear why it should matter whether a demand was made in bad faith.

Coercive and controlling behaviour in the Domestic Violence Act

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

Coercive and controlling behaviour in the Domestic Violence Act

Author: Dakalo Singo

ISSN: 1996-2177
Affiliations: LLB (Unisa) LLM (Wits)
Source: South African Law Journal, Volume 140 Issue 4, p. 763-794
https://doi.org/10.47348/SALJ/v140/i4a4

Abstract

This article focuses on two definitions of domestic violence — ‘coercive behaviour’ and ‘controlling behaviour’ — which were formally introduced into South African law by the Domestic Violence Amendment Act 14 of 2021. It tracks the legislative process, including an overview of the different iterations of the definitions as they appeared in the preceding Bills. This is followed by an analysis of the definitions’ grammatical, conceptual and legal meanings (including considering applicable foreign case law), after which various indicators are formulated. The article then examines whether the definitions are fit for purpose by analysing whether they are constitutional. This investigation reveals that the definitions suffer from numerous deficiencies: they are vague, overbroad and ambiguous, rendering them potentially unconstitutional. However, despite these deficiencies, the importance of the definitions — informed by the legislature’s intentions and the prevailing societal context, amongst other things — is likely to deter any potential constitutional challenges disputing their validity. The article concludes by proposing alternative definitional formulations that, if implemented, may circumvent any potential constitutional challenges.

Should the Electronic Communications and Transactions Act be amended to include electronic signatures for the sale of immovable property in South Africa?

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

Should the Electronic Communications and Transactions Act be amended to include electronic signatures for the sale of immovable property in South Africa?

Author: Nirissa Reddy

ISSN: 1996-2177
Affiliations: LLB (UKZN) LLM (Unisa)
Source: South African Law Journal, Volume 140 Issue 4, p. 795-812
https://doi.org/10.47348/SALJ/v140/i4a5

Abstract

Electronic signatures have become a core feature of digital transformation. Organisations can now transact with greater ease, regardless of physical distance or national borders. The Electronic Communications and Transactions Act 25 of 2002 facilitates electronic communications and transactions using electronic documents and signatures in South Africa. Electronic contracts and signatures are legally binding and constitute valid and admissible evidence in legal proceedings, although there are a few exceptions. One of the exclusions concerns agreements for the sale of immovable property. The Alienation of Land Act 68 of 1981, which regulates the sale of land, seeks to promote legal certainty as to the authenticity and contents of these contracts to limit instances of fraud and litigation. This article examines the risk associated with fraud and the case of Borcherds v Duxbury 2021 (1) SA 410 (ECP). In this case, contrary to legislation, the court accepted an electronic signature in a contract for the sale of immovable property. I recommend that the relevant legislation be amended to validate the use of advanced electronic signatures for the sale of immovable property. A holistic approach to electronic signatures is the only way to embrace an inevitable and complete digital transformation.

Bolstering creditor and shareholder protection under the South African and Zimbabwean amalgamation or merger regulatory regimes: Suggestions for company-law reform

by | Nov 5, 2023 | SALJ, SALJ V140 I4 2023

Bolstering creditor and shareholder protection under the South African and Zimbabwean amalgamation or merger regulatory regimes: Suggestions for company-law reform

Author: Justice Mudzamiri

ISSN: 1996-2177
Affiliations: LLB (Fort Hare) LLM (UJ) LLD (Fort Hare)
Source: South African Law Journal, Volume 140 Issue 4, p. 813-837
https://doi.org/10.47348/SALJ/v140/i4a6

Abstract

This article critically assesses the efficacy of the South African and Zimbabwean merger regulatory regimes in providing suitable shareholder and creditor protection. The article seeks to balance competing goals. On the one hand, merger opportunities should be promoted by reducing regulatory barriers to merger regulation by, for instance, facilitating the implementation of mergers through a less complex procedure and with reduced court interference. On the other hand, the merger regimes ought to guarantee the appropriate and adequate protection of creditors and shareholders, including minority shareholders’ interests. The article focuses on the two comprehensive target shareholder protections — participatory and remedial rights — and two creditor remedies — the creditors’ notice and the solvency and liquidity test. The study establishes that South Africa offers better protection to creditors and shareholders than Zimbabwe. However, in some respects, both jurisdictions can seek lessons from other progressive jurisdictions, including the United States of America, with the state of Delaware as a particular example, and the United Kingdom.