VESTING OF STATE PROPERTY IRO CERTIFICATES ISSUED ITO ITEM 28(1) OF SCHEDULE 6 OF THE CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA, ACT 108 OF 1996

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1 Bulletin 610 of of Period: 128 February to 8 February 07 March IMPORTANT CIRCULARS CHIEF REGISTRAR S CIRCULAR 6 OF 2014 VESTING OF STATE PROPERTY IRO CERTIFICATES ISSUED ITO ITEM 28(1) OF SCHEDULE 6 OF THE CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA, ACT 108 OF 1996 The purpose of the circular is to address the rejection of certificates issued ito Item 28(1) of Schedule 6 of the Constitution. PRETORIA REGISTRAR'S CIRCULAR NO. 5 OF 2014 REMOVAL OF PREP NOTES The purpose of the circular is to provide guidance regarding the removal of notes on prep by examiners and it comes into operation immediately and all circulars in conflict with it will be regarded as repealed. It covers the following aspects: Prep notes Purge of examiner notes Holdovers PRETORIA REGISTRAR'S CIRCULAR NO. 6 OF 2014 ELECTRONIC RATES CLEARANCE CERTIFICATES CRC 1/2014 was withdrawn by CRC 4/2014. In the interim, until a joint circular has been issued by Chief Registrar and other interested parties, electronic rates clearance certificates may be issued by the following Municipalities and must be accepted until further notice: Midvaal Local Municipality Thabazimbi Local Municipality Lephalale Local Municipality Greater Tzaneen Local Municipality Emfuleni Local Municipality Rustenburg Local Municipality Lesedi Local Municipality The Circular comes into operation immediately. PRETORIA REGISTRAR'S CIRCULAR NO. 7 OF 2014 RESOLUSIONS TAKEN AT THE 2013 REGISTRARS CONFERENCE The purpose of the circular is to provide guidance regarding the implementation of some resolutions taken at the Registrars Conference in Contact the Knowledge Centre for copies of these circulars or visit

2 2 RECOMMENDED READING Tax issues arising from dividends flowing through a discretionary trust, P Dachs, The Taxpayer, Vol 63.1 & 2 Vested and contingent rights revisited, J van Dorsten, The Taxpayer, Vol 63.1 & 2 The new Expropriation Bill, M Koumbatis, SA Deeds Journal, March 2014, Issue 32 Exposition of recent case law with regard to the requirements of a second and subsequent customary marriages, M Meyer, SA Deeds Journal, March 2014, Issue 32 Recent court judgments on the fate of mineral rights that were not converted ito the transitional provisions of the MPRDA 28 of 2002, M Mekwe, SA Deeds Journal, March 2014, Issue 32 SEMINARS COMMERCIAL LAW PROGRAMME 2014 Presented by the BLA Legal Education Centre in Bloemfontein from 01 April 26 May 2014 Programme compulsory: Programme Overview Corporate Governance Shareholders Agreements Negotiation Workshop Sale of Business Regulation Takeover Commercial Contract Structure Industrie PPP s Consumer Protection Act Taxation of Business Programme Electives: Intellectual Property Conveyancing Banking Law Aviation Law Mining Law Public Sector Law Regulatory Registration fee: R For further information, please contact: Mrs Vuyiswa Mayisela at the BLA-LEC Tel: / Fax: / vuvu@blalec.co.za UPCOMING LSSA-LEAD SEMINARS Deceased Estates Update 29 April 28 Nov Legal Interpretation 11 April - 30 May Legal Costs 21 May 3 October Drafting of Contracts (Advanced) 4 August 5 November Company Law Update 1 August 22 August Trust Law Update 2 June 9 June For registration details, please visit

3 3 GENERAL REINSTATEMENT OF DEREGISTERED COMPANY RETROSPECTIVELY RE-ESTABLISHES CORPORATE PERSONALITY AND OWNERSHIP OF PROPERTY BUT DOES NOT VALIDATE ACTS PERFORMED DURING PERIOD OF DEREGISTRATION PENINSULA EYE CLINIC (PTY) LTD v NEWLANDS SURGICAL CLINIC AND OTHERS 2014 (1) SA 381 (WCC) This matter first came before the court last year (reported as Peninsula Eye Clinic (Pty) Ltd v Newlands Surgical Clinic (Pty) Ltd and Others 2012 (4) SA 484 (WCC) ([2012] 3 All SA 183) and was postponed because it was not clear to the court if the registration of the respondent company ( Newlands ), which had been deregistered for failing to render its annual returns, had been effectively reinstated in terms of s 82 of the Companies Act ( the Act ). The court declined to enter into the merits of the application until it was satisfied on supplemented papers that the registration of Newlands had been effectively reinstated. The applicant ( Peninsula ) re-enrolled the matter on supplemented papers with additional evidence that the registration of Newlands was effectively reinstated on 3 April Peninsula sought a declaration that the reinstatement of the registration in terms of s 82(4) of the Act was with retrospective effect, with a consequent revesting in Newlands of the property it had owned when it was deregistered and that it validated all of Newland s acts, from the date of its deregistration until the date of its reinstatement. Newlands on the other hand contended that reinstatement under s 82(4) did not validate corporate activity during the period of deregistration and that if s 82(4) were used for reinstatement, s 83(4) could not thereafter be resorted to. According to the court, the ambit of s 83(4) is wide enough to empower a court to deal not only with the validation, conditionally or otherwise, of corporate activity purportedly conducted on behalf of the company during its period of deregistration, but also, if it is just and equitable to do so, with any prejudicial consequences of the ordinarily retrospective effects of reinstatement, viz the re-establishment of corporate personality, the reinvestment of ownership of property and the reconstitution of the company's board of directors and general body of members. The wide breadth of the court's power in terms of the second category of remedy affords the ability to make the effect of any restoration of the company retrospective, whether generally or selectively. The court held that reinstatement under s 82(4) retrospectively re-established a company's corporate personality and ownership of property, but did not validate its acts during the period of deregistration. Par 51: Construing the provisions of s 82(3) and s 82(4) to the effect that administrative reinstatement of a company's registration retrospectively re-establishes its corporate personality and title to its property, but does not validate its corporate activity during the period that it was deregistered, seems to me to give the preferred result given the choice of meanings available. It is a construction that acknowledges the probably intended significance of the omission from the currently applicable provisions of the phrase 'the company shall be deemed to have continued in existence as if it had not been deregistered in the statutory predecessors of the provisions, but still allows the inevitable practical needs bound up in the reinstatement exercise to be addressed, while minimising the incidence of prejudicial 'anomalies' of the sort postulated in the Supreme Court of Appeal's judgment in CA Focus CC supra. When the subsections are construed contextually in that manner with s 83(4) they are seen to afford a basis for the role of judicial guidance or control that the judgment in Kadoma Trading supra (at para 15) regarded as generally desirable, but which the express retrospectivity provisions in s 26(7) of the Close Corporations Act and s 73(6A) of the 1973 Companies Act had excluded. It was held further that, if reinstatement were obtained under s 82(4), additional relief could afterwards be obtained under s 83(4). Par 52: This conclusion disposes in effect of the respondent's argument that s 83(4) is not available when the registration of a company has already been administratively reinstated in terms of s 82(4). In my judgment the interpretation contended for by the respondent, that an interested person who obtains the reinstatement of a company's registration in terms of s 82(4) is thereby disqualified from subsequently obtaining additional relief, if such is required, under the just-andequitable relief provision in s 83(4), in any event finds no support in the wording of the provision. Section 83(4) permits any interested person to apply for relief connected with or arising from the dissolution of a company and the court is empowered upon such application to make any order that is just and equitable in the circumstances. According to the tenor of the provision such an application can be made at any time after the company's dissolution. In my view the phrase 'at any time after a company has been dissolved' is not bounded by the date of any subsequent revival of the company. There is also nothing in the provision to suggest that the concept of an 'interested person' should be narrowly

4 4 construed so as to exclude a person who had applied for and obtained a reinstatement of registration in terms of s 82(4). The remedy is directed at addressing any consequences of a company's dissolution in circumstances in which it would be just and equitable to do so. AWARD OF DAMAGES TO MINOR CHILD - APPROPRIATE PROVISIONS OF TRUST INSTRUMENT SET OUT. DUBE NO v ROAD ACCIDENT FUND 2014 (1) SA 577 (GSJ) The plaintiff sued the RAF in his capacity as father and natural guardian of his minor son, for damages arising out of injuries sustained by the child in a motor vehicle collision. The most contentious part of the relief sought on behalf of the plaintiff was the manner of payment of the damages. He initially sought an order that such moneys be paid into his attorney's trust account. Furthermore, although an order was sought directing the plaintiff to establish, within six months, a trust which had as its purpose the administration and management of the financial affairs of the child, the proposed order did not provide for payment into this trust. The court had some difficulty with the proposed order. No limitations were placed on the release of the funds from the attorney's trust account and the order proposed would have resulted in the funds being placed at the disposal of the plaintiff. The court considered whether the interests of the child would be served by such an arrangement and concluded as follows: Par 18: It is generally accepted by our courts in the carrying out of their function as upper guardian of minors, that, whilst it must be acknowledged that the guardians of a child have the power and the obligation to manage the child's financial affairs, it cannot be a proper approach simply to order that substantial funds be paid to a guardian without regard first being had to the circumstances under which such funds are likely to be administered and applied. Par 19: It is the court's function, in cases where relatively significant sums of money are awarded to minors, to enquire into the circumstances relating to the person/s to whom payment is sought to be released for the purpose of satisfying itself that the order serves the best interests of the minor in relation to the payment and subsequent administration of the funds. This includes assessing the motivations, qualifications, and ability of a guardian to properly administer the funds to be paid in the event that it is sought that the payment be made to such guardian. Par 25: In my view, it is inadvisable for an order to be made in the absence of the trust instrument itself or a final draft of the proposed instrument. If the final terms of the trust instrument are not circumscribed by the order, there is scope for subsequent amendment of the trust instrument by the parties thereto. This could serve to defeat the object of the order. There should furthermore be a provision in the approved trust deed to the effect that the deed may not be amended or added to, save by way of further order of court. Par 26: Any trust instrument executed for the purposes of administering a minor's money should, ideally, have the following features: 1. The child should be the sole income and capital beneficiary. 2. The number of trustees should be prescribed. 3. There should be a provision which prevents the remaining trustees from acting, otherwise than to achieve the appointment of a replacement trustee, in the event of their number being reduced below that prescribed. 4. The composition and voting rights of the trustees should be such as to avoid deadlock. 5. Unless it is undesirable, a guardian should participate as co-trustee. 6. There should be, at least, one independent professional trustee, who should be properly qualified to administer the trust assets (and who should preferably be an attorney or an accountant). 7. The composition of the board of trustees and the structure of the voting rights of the trustees should be such that the independent trustee/s cannot be overruled or outvoted in relation to the management of the trust assets by any trustee who has a personal interest in the manner in which the trust is managed. 8. The trust should be stated to have the purpose of administering the funds in a manner which best takes account of the interests of the child. 9. Proper provision should be made for the calling and holding of meetings and the taking of resolutions by the trustees. 10. All resolutions must be in writing. 11. Provision should be made for an adequate procedure to resolve disputes between the trustees. 12. Any amendment of the approved trust deed should be subject to the leave of the court. 13. Provision should be made for the recovery and the administration of any undertaking in terms of s 17(4)(a) of the Road Accident Fund Act 56 of 1996 (the Act) by the trustees.

5 5 14. The trustees should be enjoined to recover their remuneration and the costs incurred by them in administering the trust property and any undertaking in terms of s 17(4)(a) of the Act, in a cost-effective and tax-efficient manner and, if possible and desirable, subject to the prescribed tariff referred to in s 84(1)(b) of the Administration of Estates Act 66 of 1965 in relation to the remuneration of tutors and curators. 15. No charge should be made by any trustee in relation to the receipt of the initial payment to the trust of the proceeds of the litigation. 16. The trust property should be excluded from any community of property or accrual in the event of the marriage of the beneficiary. 17. If apposite, the trust should be stated to terminate at an appropriate date, which should be after the obtaining of his majority and, in the case of disability of the child, should take account of whether such disability is likely to be permanent or temporary and the nature thereof. 18. The powers of the trustees should be determined with reference to the circumstances of each matter and may include the right to purchase, sell and mortgage immovable property, invest and reinvest the trust capital and to pay out so much of the income and/or capital as is reasonably required to maintain the child (with due regard being had to the obligations of any person having a duty to support the child, the requirements of the child and the purpose of the award of damages). 19. The right and obligation of the guardian/s to parent and administer the affairs of the child and the corresponding right of the child to enjoy such parenting and administration of his affairs by his guardian/s should not be unnecessarily impinged upon. BILLS Protection of Crucial Infrastructure Bill, 2014 Notice of intention to introduce and invitation for public comment published GG ( ) Independent Communications Authority of South Africa Amendment Bill, 2013 B18C-2013 & B18D-2013 PROCLAMATIONS AND NOTICES STATISTICS SOUTH AFRICA Consumer Price Index, Rate (Base Dec 2012 = 100), Rate: January 2014: 5,8 published Consumer Price Index for December 2013 published in GenN 42 in GG of 31 January 2014 withdrawn and replaced WINE AND SPIRIT BOARD Proposed protection of European Union geographical indications for wines and spirits published for comment CUSTOMS AND EXCISE ACT 91 OF 1964 Schedule 1 amended Schedule 2 amended with effect from 26 October 2007 Imposition of provisional payment (PP/146) published GG ( ) GG ( ) PETROLEUM PRODUCTS ACT 120 OF 1977 Regulations in respect of the single maximum national retail price for illuminating paraffin published with effect from 5 March 2014 Publication of amendment of regulations in respect of petroleum products with effect from 5 March 2014 GG ( ) Regulations in respect of the maximum retail price of Liquefied Petroleum Gas supplied to residential customers published with effect from 5 March 2014

6 6 SHERIFFS ACT 90 OF 1986 Appointment of sheriffs published with effect from 1 June 2014 or any other date arranged between the Department of Justice and Constitutional Development and the persons so appointed GG ( ) BASIC CONDITIONS OF EMPLOYMENT ACT 75 OF 1997 Sectoral Determination 6: Private Security Sector, South Africa corrected GG ( ) COMPETITION ACT 89 OF 1998 South African Airways (SOC) Limited and Etihad Airways PJSC: Application for an exemption published for comment ELECTORAL ACT 73 OF 1998 National and Provincial Elections - 7 May 2014: Notice of availability of official list of voting stations published Notice of availability of official list of mobile voting stations published GG ( ) EMPLOYMENT EQUITY ACT 55 OF 1998 Public register notice published in GenN 146 in GG of 7 March 2014 withdrawn and replaced GG ( ) PUBLIC FINANCE MANAGEMENT ACT 1 OF 1999 Rate of interest on government loans in terms of s. 80 (1) (a) and (b) fixed at 9.00% per annum with effect from 1 March 2014 PROTECTION OF CONSTITUTIONAL DEMOCRACY AGAINST TERRORIST AND RELATED ACTIVITIES ACT 33 OF 2004 Entities identified by the United Nations Security Council published GG ( ) AUDITING PROFESSION ACT 26 OF 2005 Independent Regulatory Board for Auditors (IRBA): Fees payable to the IRBA published with effect from 1 April 2014 Notice of publication of the Code of Professional Conduct for Registered Auditors revised with effect from 1 April 2014 published ELECTRONIC COMMUNICATIONS ACT 36 OF 2005 Registration for a class community sound broadcasting service licence by Radio Oos-Kaap published Applications for transfer of Individual Electronic Communications Network Service (I-ECNS) and Individual Electronic Communications Service (I-ECS) Licences approved by the Authority from 1 October 2013 to 31 December 2013 published GG ( ) GG ( ) NATIONAL QUALIFICATIONS FRAMEWORK ACT 67 OF 2008 Proposed General Education and Training Certificate for Adults (GETCA), a qualification at NQF Level 1 on the NQF published for comment GG ( )

7 7 CIVIL AVIATION ACT 13 OF 2009 Fifth Amendment of the Civil Aviation Regulations, 2011 published with effect from 1 May 2014 GG ( ) PROVINCIAL LEGISLATION Free State Local Government: Municipal Demarcation Act 27 of 1998 Re-determination of municipal outer boundaries as published under PG 58 of 18 October 2013 confirmed PG 95 ( ) Gauteng National Environmental Management: Protected Areas Act 57 of 2003 Gauteng Gambling Act 4 of 1995 KwaZulu-Natal KwaZulu-Natal Heritage Act 4 of 2008 KwaZulu-Natal Traditional Leadership and Governance Act 5 of 2005 Intention to declare nature reserves: Voortrekker Monument Nature Reserve; Groenkloof Nature Reserve; Klapperkop Nature Reserve; Rietvlei Nature Reserve and Roodeplaat Nature Reserve published for comment Gauteng Gambling Amendment Regulations, 2014 with effect from 1 April 2014 published Draft applications for alterations and additions to or demolition of protected buildings published for comment Recognition of various amakhosi and ibambabukhosi published PG 52 ( ) PG 62 ( ) PG 1104 ( ) PG 1109 ( ) Limpopo Limpopo Initiation Schools Bill, 2014 together with the Memorandum on the Objects of the Bill Published for comment PG 2326 ( ) Northern Cape Northern Cape Use of Official Languages Act 5 of 2013 Northern Cape Heritage Resources Authority Act 9 of 2013 Date of commencement: to be proclaimed PG 1784 ( ) Date of commencement: to be proclaimed PG 1784 ( ) Northern Cape Arts and Culture Council Act 8 of 2013 Date of commencement: to be proclaimed Repeals: Culture Promotion Act 35 of 1983 and Cultural Affairs Act (House of Assembly) 65 of 1989 PG 1784 ( ) Northern Cape Provincial Archives Act 7 of 2013 Date of commencement: to be proclaimed PG 1784 ( ) Northern Cape Planning and Development Act 7 of 1998 Tsantsabane Local Municipality: Notice of intention to develop a Spatial Development Framework/Land Development Plan (2014) published Tsantsabane Local Municipality: Notice of compilation of PG 1786 ( )

8 draft zoning scheme, land development procedures and regulations (LUMS) published North West Nature Conservation Ordinance 12 of 1983 (Transvaal Province), Bophuthatswana Nature Conservation Act,

8 8 draft zoning scheme, land development procedures and regulations (LUMS) published North West Nature Conservation Ordinance 12 of 1983 (Transvaal Province), Bophuthatswana Nature Conservation Act, 1973 and Cape Nature and Environmental Conservation Ordinance 19 of 1974 (Cape Province) Local Government: Municipal Systems Act 32 of 2000 North West Hunting Regulations, 2014 published with effect from a date to be determined by the MEC Maquassi Hills Local Municipality: Credit Control and Debt Collection By-Law published PG 7238 ( ) PG 7243 ( ) Western Cape Western Cape Provincial Commissions Act 10 of 1998 Local Government: Municipal Demarcation Act 27 of 1998: Commission of Inquiry into allegation of police inefficiency in Khayelitsha and of a breakdown in relations between the community and the police in Khayelitsha as published under Proc 9 in PG 7026 of 24 August 2012: Extension of time for submissions of report by Commission and Notice of public sitting published Determination of date: Re-determination of municipal outer boundaries of municipalities as published under PN 339 in PG 7185 of 15 October 2013: 1 July 2014 published PG 7236 ( ) PG7236 ( )

Philip Stoop BCom LLM (UP) LLD (Unisa) is an associate professor in the department of mercantile law at Unisa.

New legislation Legislation published from 15 January 21 February 2014 Philip Stoop BCom LLM (UP) LLD (Unisa) is an associate professor in the department of mercantile law at Unisa. * Items marked with