THE PROSECUTION OF CYBERCRIME IN SOUTH AFRICA

The prosecution of cybercrime in South Africa is regulated by the Electronic Communications and Transactions Act 25 of 2002 (“the ECTA”) and the Cybercrimes and Cybersecurity and Related Matters Bill (“the Bill”). Alongside these pieces of legislation exists the common law, as well as the Constitution of the Republic of South Africa, 1996 (“the Constitution”). The ECTA and the Bill are to be read in conjunction with the common law (where it is applicable) and the Constitution in order to obtain a holistic understanding of the improvement of cybersecurity and the prosecution of cybercrimes in South Africa. It should be noted that where the ECTA fails to impose criminal sanctions on cybercrime, the common law sanctions will apply.

The ECTA

The ineffectiveness of the common law to deal with and combat cybercrime led to the promulgation of the ECTA in 2002. The ECTA has as its objective the facilitation and regulation of electronic communications and transactions.

The ECTA deals with cybercrime in Chapter XIII, in which several new cybercrime-related offences were created. These new offences include obtaining unauthorised access to, interception of or interference with data; computer-related extortion, fraud and forgery; and attempt, and aiding and abetting regarding the aforementioned offences.

The ECTA also created the “cyber inspector” who may “enter any premises or access any information that has a bearing on an investigation” into a cybercrime.

The arrival of the ECTA was applauded, as it was an attempt made by the South African legislature to address and improve cybersecurity and to create and prosecute new cybercrimes. However, the ECTA received some criticism and it is generally accepted that there is still room for improvement.

It is argued that the penalties for engaging in cybercrime, as stipulated in section 89 of the ECTA, are not severe enough. This is because it is argued, a person convicted of certain offences in the ECTA can, at most, be liable for a fine or be imprisoned for a period of one year.

For other offences in the ECTA, a person can be liable for a fine or be imprisoned for, at the most, a period not exceeding five years. It is argued that these punishments are not enough of a deterrent to prevent the commission of cybercrimes and that the ECTA should be amended to include harsher penalties. It is also argued that the police, the private sector and academia should be involved in the fight against cybercrime. As noted above, the ECTA created cyber inspectors, though none have been appointed to date, and therefore no actors are currently exercising their power to conduct investigations into cybercrimes.

The Bill

The Bill was promulgated to address the shortcomings of the ECTA, and it is apparent that the Bill has in fact done so.

First, the Bill imposes a fine with a minimum amount of 5 million Rand and a maximum amount of 10 million Rand. The Bill also prescribes a minimum period of imprisonment of five years and a maximum period of imprisonment of 10 years. Moreover, the Bill makes provision for the combined penalty of a fine as well as imprisonment.

Secondly, the Bill addresses the lack of involvement of police, the private sector and academia in the fight against cybercrime in the ECTA by creating several structures to assist in the eradication of cybercrime. These structures include a Cyber Response Committee and a Cybersecurity Centre.

These penalties are considerably stricter than those of the ECTA, and it is believed that the Bill will have a greater deterrent effect on the commission of cybercrimes.

Upon examination of the ECTA and the Bill, as well as the amount of criticism that the respective pieces of legislation have attracted, it becomes apparent that the prosecution of cybercrime in South Africa is not, and will not be, without challenges. This is because these pieces of legislation are grappling simultaneously with an all-new type of criminal activity and the advanced phenomenon called cyberspace. Developing legislation that effectively prosecutes cybercrime will, therefore, take legislatures and experts on cybercrime some time to perfect.

Reference List:

  • Cassim F ‘Addressing the growing spectre of cybercrime in Africa: evaluating measures adopted by South Africa and other regional role players’ 44 CILSA (2011) 123 at 127.
  • Sections 86 to 88 of the ECTA.
  • Section 82(1) of the ECTA.
  • Sections 37(3), 40(2), 58(2), 82(2), 86(1), (2), (3) of the ECTA.
  • Sections 86(4), (5) and section 87 of the ECTA.
  • Van der Merwe D et al Information Communications and Technology Law 2 ed (2016) at 80-81.
  • Section 14 of the Bill.
  • Schultz CB ‘Cybercrime: An Analysis of Current Legislation in South Africa’ (2016) at 35.
  • Chapter 10 of the Bill.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

LITTLE WHITE LIES CAN GET YOU INTO BIG TROUBLE

October 2019, was Justice month as Ramaphosa signs in various new laws, one of them being CV Fraud. Do you embellish your curriculum vitae to increase your chances of procuring a new job? A fake matric certificate, inflated education, fake degree certificates and unfinished degrees are some of the common embellishments that are found on a CV.

Ramaphosa signed in the new National Qualifications Framework Amendment Act (hereinafter referred to as the “Act”), which aims to prevent South Africans from mispresenting their qualifications in their curriculum vitae. Misrepresentation of your qualifications persuades the employer to offer you employment under false pretence, as you would probably meet their requirements. Mispresenting yourself on your CV can also be career-limiting, as we live in the digital age, where information is at our fingertips and it will not be long before it is discovered that the qualification or skill is fraudulent.

This Act permits the South African Qualifications Authority to establish and maintain separate registers for professional designations, misrepresented qualifications and fraudulent qualifications. This register will name those who misrepresent themselves and/or fraudulently list false qualifications on their CV. It will also be considered an offence if falsified information is entered into the register, hence if your name is on the register, it will be taken seriously. But the Act goes further, bragging on social media platforms such as Facebook, LinkedIn, etc. that you have a qualification which if found to be false, is now considered a serious offence as well.

The amendments to the Act introduces punitive penalties for those found to be lying in their CV. The penalty for CV Fraud is a fine or up to five years imprisonment.

But the Act has also placed an administrative as well as a monetary burden on employers and educational institutions, skills development providers and quality councils, who before appointing and or registering any person, must verify whether any qualification of such person is registered on the national learners’ record database. Should it be found that the qualification is not registered, it must be referred to the South African Qualifications Authority for verification, who will conduct the verification at a prescribed fee.

The Act makes provision for there to be consequences for education institutions and education skills providers who falsely claim to be registered on the National Qualifications Framework.

Good faith can also get you out of “hot water”. If you did a qualification in good faith believing it was a legitimate qualification, this can be used as a defence if charged with contravening the Act and you may be acquitted and the relevant institution will be charged and may be liable to a fine and criminal conviction.

Do you have an onus to report if you are aware of someone who misrepresented themselves on their CV and does not report them? No, you do not. You will not face legal charges if discovered that you were aware but did not report it.

Examples of top executives that have lied on their CV is Passenger Rail Agency of South Africa (Prasa) suspended its chief engineer, who subsequently resigned amid allegations that he falsified his qualifications. Daniel Mtimkulu headed the engineering team that designed new Afro 4000 locomotives delivered to South Africa in January, at a cost of R600 million. He reportedly claimed to have an engineering degree from the University of the Witwatersrand (Wits), before studying in Germany to get his doctorate. Wits, however, said it did not have any record of Mtimkulu attending the university.

Some other examples to note, include Pallo Jordan, a former South African cabinet minister, who claimed to have a doctorate from the London School of Economics, when he did not; Hlaudi Motsoeneng, SABC COO, claimed to have a matric certificate, which was untrue; and Ellen Tshabalala, former SABC chairperson, who claimed to have postgraduate degrees from UNISA, which remains elusive.

In 2015, a screening company noted that there was a record high of CV Fraud and this could be due to the unemployment rate in South Africa, but one has to ask, is it worth it being unemployed permanently due to fraudulent misrepresentation or achieving a degree and being employed permanently?

Employers be sure to check your potential job applicants and ensure you’re employing the best and legal employees!

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

THE IMPORTANCE OF MENTORING AND COACHING

Mentoring trends challenge individuals to develop and manage themselves and are becoming an integral part of productive performance and increased learning. It can help in career development, strategic planning, skills development, employment equity and building relationships and leadership potential.

What is mentoring?

Mentoring refers to a partnership between two people with the main aim of development. Usually, the mentor is an experienced individual who shares their knowledge and experiences, while giving advice to a less experienced person, i.e. the mentee. The relationship may be between two people from the same company, industry, or networking organisation.

The value of mentoring programmes

Mentoring programmes are generally focused on achieving a number of objectives for both the individual and the company. These objectives usually include the individual being able to perform specific tasks while their personal and career development needs are also taken into consideration. By means of mentoring programmes, employees get enabled to leverage some of their academic knowledge in the workplace and in addition, they will gain knowledge of an organisation’s culture.

Mentoring serves the purpose of conveying knowledge to inexperienced employees. The idea is to teach employees the core skills they will need to fulfil an efficient role in the workplace. Mentoring can enhance morale, motivation and productivity and reduce staff turnover and hence employers seek mentoring for performance enhancement rather than the correction of a performance issue.

Benefits of mentoring

There are benefits for both mentees and mentors; it is not only the mentee that gains valuable insight. By means of mentoring, both the mentor and mentee will learn to communicate more effectively, especially if they are from different backgrounds. New perspectives and ways of thinking are learnt. Both parties also get the opportunity to work on their leadership skills.

So, whether you’re on the giving or receiving end of a mentoring relationship, either way, it can benefit your career. Mentoring is essential to the work environment and companies should allocate appropriate funds to develop their staff, and as a consequence, their company.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

HOLIDAY HOMES ARE NO HOLIDAY

Finding a holiday home isn’t as simple as choosing your favourite holiday spot and packing your bags. With the festive season around the corner, the urge to buy a holiday home may be rising, but a decision like this demands time and careful consideration. Let it simmer. This is not a holiday – this is an investment.

Just like those of us who want to avoid over-crowded beaches and rush-hour-like traffic when travelling, you may want to wait for the off-season. Property prices, as well as both the buyer’s and seller’s expectations, may be affected by the holiday buzz.

Be sure to conduct the necessary research. Owning property in an area is different from simply visiting for a week or two during the holidays. Make sure you choose a location suitable for a home, not just a pit-stop. Consider the area’s liveability both in and out of season. Quite often holiday destinations become ghost towns when the holiday season ends. If that is exactly the peace and quiet you want, perfect! If it’s not, you may want to continue your search, because, contrary to their names, holiday homes can’t only be lived in during holidays.

Homes need constant maintenance and care. Staying close to your holiday home will allow you to break away for weekends, making sure the home receives the necessary attention. If your holiday home is a bit too far from your current residence, consider renting it out for the periods when you are not there. This will ensure your property is well-maintained as well as offering you an extra income. When choosing to rent out your property it becomes especially important to make sure the area provides the necessary amenities for everyday living.

The most important aspect, though, is enjoyment. A holiday home is meant to be enjoyed. Make sure you enjoy yours for the longest possible time by making an informed decision.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

KEEP CALM AND SELL YOUR PROPERTY

Selling your property can often cause your hands to get itchy, or ants to start roaming where they have no business being. But more often than not rushing into the sale of the property leads to choices you’ll regret later. Several points need to be remembered once you’ve decided to take the plunge and dive into the property market.

The first step to take is to have your property evaluated. The evaluation is not only to help you find out your property’s market value, but it will also help you identify the areas where your property needs improving. Before you even think about going any further it is advisable to complete any necessary maintenance and make improvements that could lift the value of your property. This phase will not only allow you to lift the property’s selling price, but it will also allow you to improve its attractiveness to buyers. A fresh coat of paint and clean surroundings will contribute as much to attracting possible buyers as the actual features of the property.

Once you’re ready to start with the listing process it’s important to notify the bank where your mortgage is of your intention to sell your property to avoid any delays in the transfer of documents once the sale is complete. Equally important is to procure the services of a conveyancer to ensure a seamless sale.

Even though it may seem daunting, the sale of your property is not a journey you have to go on alone. An estate agent can be more than a middle man during your property sale – their expertise can help you avoid unnecessary pitfalls while helping you direct your attention where it matters from the beginning. An experienced estate agent will be able to help you screen the interested parties early on, ensuring you spend the least time with those who will not continue with a purchase later on. They can also help you through the unforeseen circumstances that you may not have been able to handle on your own. The experience here is of importance, as it will ensure the highest level of knowledge in the technical field.

Although it is sometimes tempting to advertise with as many real estate companies as possible to get maximum marketing exposure, it may not be the best choice. Having one firm handle your listing from beginning to end will ensure the smoothest process when buyers become committed. It will also allow you to create a closer relationship with your real estate agent, having them as a partner in your endeavour and not part of a competition to see who can sell the property first.

Having the assistance of an estate agent doesn’t mean that you have no responsibilities, though. Making sure the property is well-maintained (having made the necessary improvements after the evaluation) and is as presentable as possible is on your shoulders. In reality, homes don’t look the way they do in property magazines or on television shows – it takes effort to make a home look both lived in and picture-perfect. Clear out as much as possible from the property while leaving essential items that create a sense of homeliness. One book on a bedside stand will do – you don’t need to impress potential buyers with all the books you’re planning on reading next. Finally, even though it’s a part of everyday life, no one needs to see your dirty laundry or dishes. Make sure your home is (and looks) clean at all times.

The final touch: ambiance. A bouquet of fragrant flowers (such as lavender, roses or geraniums) will create a welcoming aroma as buyers enter the property as well as being a functioning part of the decoration.

Now, no matter how much effort has been put in, or how perfect your listing is, sometimes properties just don’t sell. At these times it’s important to keep calm and try again. Though, maybe not immediately. Recessions, political angst, a looming tax season – all of these events and many more can cause the property market to grow a little stagnant. Potential buyers may hold back on purchases to see how the dust settles. Our advice: do the same. Remove your listing from the market, avoiding it being around too long and becoming part of the scenery, so to say. Once the market picks up again, re-list your property, allowing it to be seen with new eyes. In the interim time, you may consider renting out your property if you will not be staying there yourself.

Selling a property demands meticulous work, but following these easy steps with the necessary guidance will make it a walk in the park.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

WORKPLACE TRAINING 101

Some companies spend billions on training their employees, however, their investment does not always ensure results. The success of training programmes implemented in businesses depends on whether or not the purpose of the training is clear and whether or not employees are actively engaged in the training. It would also seem that training is not a priority in many businesses, and businesses also don’t always see the value in the development of their employees’ soft skills.

Many managers are often dissatisfied and discouraged when they do invest in training, and the effectiveness of this training is not seen in the workplace. It’s important to remember that a business should take certain steps before implementing training sessions. For example, it’s important to establish whether the problem you are trying to fix within the workplace, is due to a training issue. It is important for managers to determine whether an employee has the correct tools to do the job expected of them, instead of assuming that the employee lacks the skill to do the job.

When it comes to training, it is of utmost importance that the employee being trained understands why he/she needs to acquire this new skill or enhance their existing skills. Furthermore, the training should be relevant to the skill the employee needs to acquire. Finding an external service provider who can customise their training programmes to address the business’s specific needs could be the way to go when it comes to training your employees. The reason being, in-house training is often amateurish and full attention is not given, however, when employing an external service provider, you can rest assured that the training will be done right as this is their primary job.

The failure to see results is still the main issue when it comes to training. The reason for this is that training is not supported enough; it needs to be thoroughly planned out in order to ensure that employees are learning the relevant skills. In companies where training is available, the content and training methods are not always linked to the actual businesses’ or employees’ needs. This wastes money, and it is highly likely that employers will not see a positive impact of these training sessions within the workplace.

When it comes to training, whether it’s in-house or external, it is vitally important to find the perfect fit. Ask the following questions in order to determine what type of training is necessary:

  • What are some of the business problems we are trying to address?
  • Is this business problem a result of a skills gap, or can it be addressed through training?
  • Which employees should attend the training?
  • Is training the right solution?
  • How can we ensure that the training pays off?

Whether your business decides to go with in-house training or external training, it’s very important that management’s attitude towards the training is not only positive but also participatory. This will ensure that the employee will absorb the training and incorporate it into their everyday work tasks and responsibilities. Finally, ensure that your business culture places a focus on continued learning and improvement of your employees.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

HOW TO DEREGISTER OR TERMINATE A TRUST

There is no provision in the Trust Property Control Act, 1988 that requires the deregistration of trusts.

However, this said, it does not mean that a trust can never be terminated, as there are a few events that can occur during the lifetime of the founder, the trustees or the beneficiaries.

When considering the termination of the trust, the first step will always be to turn to the provisions of the trust deed.

Some of the most common provisions are:

  • that the trust assets have been distributed to the beneficiaries;
  • it may terminate after a certain period of time or upon the happening of a specific event;
  • the discretion of the trustees or through a resolution passed by the beneficiaries;
  • once its primary objective has been achieved; and
  • when it becomes impossible to achieve its main objective.

For the termination of a trust, the following documents are required:

  • resolution by the trustees confirming that the trust was active or dormant and that the bank account in the name of the trust has been closed;
  • The original letter of authority;
  • Bank statements reflecting a nil balance or the final statement;
  • Proof that the beneficiaries have received their benefits; and
  • An affidavit by the trustees confirming that the trust has been divested of all its assets.

Upon receipt of the above documents, the Master will deregister the trust. Please note that the above documents must be lodged with the Master with whom the Trust has been registered.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

RESOURCES AND THE IMPORTANCE THEREOF FOR THE SUCCESS OF ANY BUSINESS

Starting a business may sound like a great idea, but it takes hard work to make a success out of any business venture.

A crucial part of a business is the resources available to conduct the business activities in the best way possible to generate the maximum benefit for the company. Therefore, all current and possible new resources need to be managed extremely well. Resource management is focused on optimisation and efficiency.

There are different categories of resources which are crucial for a business to succeed, but the focus of this article will be on employees and Information Technology (IT).

Employees. The most valuable and important resource in any business. With the right employees, your business will strive to new heights and grow continuously. A big attraction for any employee is remuneration. It is also important to know that this is not the only incentive for a good employee to perceive their job as satisfying. New challenges, growth opportunities and acknowledgement are a few of the other aspects needed to keep the good employees and keep them wanting to grow with the business. It is a win-win situation for both parties. A good employee – what is the meaning of this term? This is the employee who has the same vision and drive to achieve success in line with the company strategy. Therefore, it is of utmost importance to source the specific candidates, who fall into this category, provide the support and other tools to develop them and to bring the best out of them to move forward and achieve the goals set by the company.

IT is the key to growing your business in the modern technology-focused business world to help organisations function more efficiently. The right programmes are needed to streamline the business activities and record-keeping of the processes and results. These results are needed in real-time to make future decisions. If these sources of information are not trustworthy, it may have a negative ripple effect on all the aspects of the business. Employees are needed here to operate these systems in the best possible way to ensure success. The data and record-keeping are not the only aspects of the business that IT can improve. Communication with clients and service providers, training of staff members and real-time updates of changes in the industry are also key aspects which can be improved by using and mastering the role IT can play in your business’s road to the top. As we all know, there are risks in using IT systems like Cyber hacking etc. There are ways to ensure the safety of your company’s information by implementing a strict cyber policy, which is of utmost importance.

As mentioned above, this article only focused on two key resources. However, it is not possible to only look at the above mentioned as all resources are inter-connected and work together to achieve the end goal of your business.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

WAT IS GROEP MAATSKAPPYE?

Artikel 1 van die Maatskappywet, 2008, (“die Wet”) omskryf ‘n groep maatskappy as twee of meer maatskappye wat verwant of onderling verwant is. ‘n Maatskappy (maatskappy A) is aan ‘n ander maatskappy (maatskappy B) verwant indien:

  • een van die maatskappye (maatskappy A of B) die ander maatskappy direk of indirek beheer, of die ander se besigheid beheer; of
  • een van die maatskappye (A of B) ‘n filiaal van die ander is.

Artikel 2(2)(a) van die Wet bepaal dat ‘n maatskappy (maatskappy A) ‘n ander maatskappy (maatskappy B) of sy besigheid beheer indien:

  • maatskappy B ‘n filiaal van maatskappy A is, of
  • maatskappy A, tesame met enige verwante of onderling verwante persoon:
    • regstreeks of onregstreeks ‘n meerderheid van die stemregte wat aan aandele van maatskappy B verbonde is, hetsy na aanleiding van ‘n aandeelhouersooreenkoms of andersins, kan uitoefen of the uitoefening daarvan kan beheer; of
    • die reg het om direkteure van die maatskappy B wat ‘n meerderheid van die stemme by ‘n direksievergadering beheer, aan te stel of te verkies, of sodanige aanstelling of verkiesing te beheer.

Artikel 3(1)(a) van die Wet bepaal dat ‘n maatskappy (maatskappy B) ‘n filiaal van ‘n ander maatskappy (maatskappy A) is, indien maatskappy A, of een of meer ander filiale van maatskappy A, of een of meer genomineerdes van maatskappy A of enige van sy filiale, alleen of in kombinasie:

  • ‘n Meerderheid van die algemene stemregte wat aan die uitgereikte aandele van daardie maatskappy verbonde is, regstreeks on onregstreeks kan uitoefen of die uitoefening daarvan kan beheer, hetsy na aanleiding van ‘n aandeelhouersooreeenkoms of andersins; of
  • Die reg het om direkteure van maatskappy B wat die meerderheid van die stemme by ‘n direksievergadering beheer, aan te stel of te verkies, of sodanige aanstelling of verkiesing te beheer.

‘n Maatskappy (maatskappy B) is ‘n volfiliaal van ‘n ander maatskappy (maatskappy A) indien al die algemene stemregte wat aan uitgereikte aandele van die maatskappy verbonde is, alleen of in enige kombinasie gehou of beheer word deur maatskappy A, een of meer van sy filiale, of een of meer van die genomineerdes van maatskappy A, een of meer van sy filiale, of een of meer van die genomineerdes van maatskappy A of enige van sy filiale.

‘n Aantal belangrike gevolge spruit uit die bestaan van ‘n groep maatskappy voort. ‘n Handeling van of ten opsigte van een besondere maatskappy kan nie slegs vir homself nie, maar vir die groep waarvan sodanige maatskappy deel vorm, gevolge meebring. Die gevolge ingevolge die Wet sluit in:

  1. Verkryging van aandele – Ingevolge artikel 48(2) van die Wet kan ‘n filiaal aandele in sy houermaatskappy verkry, mits daardie aandele nie 10% in totaal van die getal uitgereikte aandele van enige klas aandele van ‘n houermaatskappy te bowe gaan nie
  1. Direkteure se gedrag – Artikel 76 van die Wet bepaal dat ‘n direkteur van ‘n maatskappy nie sy of haar posisie as direkteur, of enige inligting verkry terwyl hy of sy in die hoedanigheid van direkteur optree, mag aanwend om hom of haar, of enige iemand anders, buiten die maatskappy of houermaatskappy of ‘n volfiliaal van sodanige maatskappy, te bevoordeel nie. ‘n Direkteur van ‘n maatskappy word verbied om inligting willens en wetens te gebruik ten einde die maatskappy, asook enige filiaal van die maatskappy, te benadeel.
  1. Vervreemding van alle bates of van die grootste gedeelte van bates of onderneming Artikel 115 van die Wet bepaal dat ‘n maatskappy nie die geheel of die grootste deel van sy bates of onderneming mag vervreem, of uitvoering mag gee aan ‘n ooreenkoms of reeks ooreenkomste om dit te vervreem nie, tensy sodanige vervreemding deur middel van ‘n spesiale besluit wat geneem is deur diegene wat daarop geregtig is, goedgekeur word tydens ‘n vergadering wat vir daardie doel belê is en waartydens daar voldoende persone wat op stemregte geregtig is en wat ten minste 25% van alle stemregte wat sodanig uitgeoefen mag word ten opsigte van die beoogde vevreemding uitoefen.
  1. Finansiële bystand – inter-maatskappylenings en bystand – Artikel 45 is nie alleen op direkteure van toepassing nie, maar ook op intra-groep verlening van bystand by wyse van lenings en waarborge. In die algemeen word ‘n spesiale besluit van aandeelhouers vereis voordat ‘n maatskappy finansiële bystand aan ‘n ander maatskappy in die groep kan verskaf.

Hierdie artikel is ‘n algemene inligtingstuk en moet nie gebruik word of op staatgemaak word as regs- of ander professionele advies nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of vir enige verlies of skade voortspruitend uit vertroue geplaas op inligting hierin vervat nie. Behoudens foute en weglatings (BFW).

INSURANCE – ALL YOU NEED TO KNOW

Insurance is a contract in terms of which the insurer undertakes, in return for the payment of a price or a premium by the insured, to render the insured a sum of money, or the equivalent to a sum of money, on the happening of a specified and uncertain event in which the insured has some interest. The insurance contract is also referred to as an “insurance policy”. The rationale behind insurance is to protect oneself against the occurrence of undesirable risk.

Types of insurance

In South African law we have two types of insurance, namely indemnity insurance and non-indemnity insurance.

Indemnity insurance is taken out to indemnify oneself against a loss. In other words, insurance is taken out so that one is reimbursed if one suffers a loss. Non-indemnity insurance, on the other hand, is taken out to indemnify oneself against the occurrence of a future uncertain event such as death or disability.

Statutory law

There are two statutes dealing with insurance in South Africa, namely the Short-term Insurance Act 53 of 1998 (hereinafter “SITA”) and the Long-term Insurance Act 52 of 1998 (hereinafter “LITA”).

The abovementioned Acts control the insurance industry and aspects of insurance policies with the view of protecting the interests of those insured. The Acts also provide for the registration and control of insurance companies in South Africa.

The SITA focuses on indemnity insurance. For example, motor vehicle policies and health policies. Whereas, the LITA focuses on non-indemnity insurance. For example, life policies, disability policies and health policies.

The Minister has also enacted Policyholder Protection Rules for the respective Acts.

How is an insurance policy created?

There are two parties to an insurance policy: the insured and the insurer. There may also be instances where a third party is nominated as the beneficiary of a policy.

The Acts refer to the person entitled to be provided with the benefits of a policy as the “policyholder”.

At common law, no formalities are required for the conclusion of an insurance policy. In practice, however, insurance policies are generally reduced to writing.

Essential elements of an insurance policy

  1. The obligation to pay a premium

First, there must be an obligation on the insured to pay a premium.

“Premium” is defined in section 1(1) of LITA and SITA as “the consideration given or to be given in return for an undertaking to provide policy benefits”.

There is no rule that the premium must be paid before the contract becomes binding on the parties. However, there must at least be an undertaking by the insured to pay a premium to render the contract “complete”.

Generally, insurers will adopt a policy of ensuring that the insured pays the premium before they take on the risk.

  1. The happening of a specified uncertain or unplanned event

For risk to exist, the event must be in the future, and it must be uncertain as to whether it will occur, when it will occur and how much harm it will cause.

In the case of Sydmore Engineering Works v Fidelity Guards (Pty) Ltd 1972 1 All SA, it was held that the insurer must have no control over whether the event will occur.

  1. The existence of an insurable interest

The case Lorcom Thirteen (Pty) Ltd v Zurich Insurance Company South Africa Ltd 2013 4 All SA 71, defines an “insurable interest” as the insured’s interest in preventing the risk which he/she is insured against from materialising.

  1. The obligation of the insurer to render compensation

The contract must provide for the payment of a sum of money or render to the insured an equivalent to the payment of money, by the insurer if the risk materialises.

The obligation on the insurer varies depending on whether the insurance is indemnity or non-indemnity insurance.

If it is indemnity insurance, the insurer undertakes to compensate the insured for the actual loss which he/she has suffered as a result of the happening of the event.

If it is non-indemnity insurance, the insurer undertakes to pay a specified sum of money (or to make periodic payments of specified amounts of money) to the insured on the happening of an event, regardless of the extent of the actual monetary loss which was incurred.

Reference List:

  • Lakeand others NNO v Reinsurance Corporation Ltd and others 1967 (3) 124 (W) 127H
  • Short-term Insurance Act 53 of 1998
  • Long-term Insurance Act 52 of 1998
  • Sydmore Engineering Works(Pty) Ltd v Fidelity Guards (Pty) Ltd 1972 1 All SA
  • Lorcom Thirteen(Pty) Ltd v Zurich Insurance Company South Africa Ltd 2013 4 All SA 71

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)