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- Piercing the Corporate Veil: When Can a Court Look Behind a Company?
As mentioned in our previous article titled Director’s duties and Personal Liability, one of the most important principles in company law is that a company is a separate legal person. This means that a company exists separately from its directors and shareholders. It can own property, enter into contracts, sue and be sued, and incur debts in its own name. This principle is one of the main reasons people register companies. It allows business owners to trade through a separate legal entity and, as a general rule, limits their personal liability to the company’s debts and obligations. However, this protection is not absolute. Where a company is abused, the court may, in appropriate circumstances, disregard the company’s separate legal personality and look into the liability of the directors in their personal capacity. This is commonly referred to as “piercing the corporate veil”. What does it mean to pierce the corporate veil? Piercing the corporate veil means that a court looks beyond the company as a separate legal person and considers the people or entities behind it. In ordinary circumstances, the company is treated as separate from its shareholders, directors and related companies. However, where the company structure is used improperly, the court may refuse to allow those behind the company to hide behind its separate legal personality. This may result in the rights, obligations or liabilities of the company being attributed to another person or entity. In simple terms, the court may say: although the company appears to be separate, it has been used in such an abusive manner that the law will not allow that separation to protect wrongdoing. The legal position in South Africa Section 20(9) of the Companies Act 71 of 2008 (“the Companies Act”) allows a court to pierce the corporate veil where there has been an unconscionable abuse of the company’s juristic personality. The section provides that, where the incorporation, use, or conduct of a company constitutes an unconscionable abuse of its separate legal personality, a court may declare that the company is to be deemed not to be a juristic person in respect of certain rights, obligations or liabilities. The court may also make any further order it considers appropriate to give effect to that declaration. This is a powerful remedy, but it is not granted lightly. The court must be satisfied that there has been more than ordinary business failure, poor management or commercial difficulty. There must be an abuse of the company’s separate legal personality. When may a court pierce the corporate veil? A court may consider piercing the corporate veil where, for example: the company is used to commit fraud; the company is used to avoid existing legal obligations; company funds are moved improperly to frustrate creditors; the company is used as a façade or device to conceal wrongdoing; personal and company affairs are deliberately mixed; related companies are used as a single abusive structure; the company is used to defeat the rights of creditors; assets are shifted between companies without proper commercial justification; the separate corporate structure is used in an unconscionable manner. Each case depends on its own facts. The mere fact that a company cannot pay its debts does not automatically justify piercing the corporate veil. Similarly, the fact that a company forms part of a group of companies does not, on its own, mean that the separate legal personality of each company will be ignored. The focus is on whether the company structure has been abused. Lessons from the Constitutional Court The Constitutional Court recently considered the scope of section 20(9) of the Companies Act in Centaur Mining South Africa (Pty) Ltd v Moodliar N.O. and Others. The case involved various companies in the Trillian group. The evidence showed that the affairs of the companies were heavily intermingled. Funds were moved between different companies, invoices were allegedly used to disguise the movement of money, and certain entities were found not to have conducted legitimate business. The liquidators sought relief under section 20(9) of the Companies Act on the basis that the companies had been used in a manner that amounted to an unconscionable abuse of their separate legal personalities. The Constitutional Court confirmed that separate legal personality remains the foundation of company law. A company is ordinarily treated as an independent legal person, separate from its shareholders, directors and related companies. However, the Court also confirmed that section 20(9) gives courts a discretion to disregard separate legal personality where there has been an unconscionable abuse of that personality. Importantly, the Court clarified that section 20(9) is not a general liquidation mechanism. In other words, the section does not, by itself, empower a court to liquidate a company. Its purpose is to address the abuse of separate legal personality by allowing the court to disregard that separate personality in respect of specific rights, obligations or liabilities. The judgment is significant because it confirms that courts will protect the principle of separate legal personality, but will not allow that principle to be used as a shield for abuse. Practical example Assume Company A owes money to creditors. Its directors then transfer its assets to Company B, a related company controlled by the same people, for no proper commercial reason. Company A is left empty and unable to pay its debts, while Company B continues trading with the transferred assets. In those circumstances, a creditor may argue that the company structure has been abused to avoid payment. Depending on the facts, a court may consider piercing the corporate veil or granting other appropriate relief. By contrast, if Company A simply fails because it loses a major client, suffers cash flow problems, or makes a bad commercial decision, that alone will usually not be enough. Honest business failure is not the same as abuse of corporate personality. Why this matters for directors and shareholders Directors and shareholders should not assume that the use of a company will protect them in all circumstances. The protection of limited liability is available where the company is used properly. It becomes vulnerable where the company is used to perpetrate fraud, avoid obligations, conceal wrongdoing, or frustrate creditors. This is particularly important in group structures, family businesses and small private companies, where the same individuals often control multiple entities. Directors and shareholders should ensure that: each company has a legitimate commercial purpose; company funds are kept separate; inter-company transactions are properly documented; loans between related entities are recorded; company assets are not moved without proper authority and value; financial records are accurate and up to date; creditors are not misled; the company is not used to avoid existing legal obligations. Proper corporate governance is not only an administrative requirement. It is a safeguard against personal exposure and future litigation. Conclusion Separate legal personality is a fundamental protection in company law. It allows businesses to trade, contract and grow through a legal entity that is distinct from the people behind it. However, that protection is not absolute. Where a company is used dishonestly, fraudulently or in a manner that amounts to an unconscionable abuse of its separate legal personality, a court may pierce the corporate veil. The lesson for directors, shareholders and business owners is simple: use the company structure properly. Keep proper records, respect the distinction between personal and company affairs, and avoid using companies as vehicles to escape obligations or frustrate creditors. At Le Roux Vivier Attorneys, we advise directors, shareholders, companies and creditors on corporate governance, personal liability, shareholder disputes, debt recovery and commercial litigation. Ezekiel Dikio LLB Associate at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Medical Treatment and Patient Consent
As a general rule, a patient must provide informed consent before any medical treatment or procedure may be performed. This principle was recognised in the landmark case of Stoffberg v Elliot 1923 CPD 148, and remains a fundamental component of South African medical law. The requirement for informed consent is now codified in the National Health Act 61 of 2003 ("the Act"). What is Informed Consent? The Act defines informed consent as consent for the provision of a specified health service given by a person with the legal capacity to do so and who has been properly informed as contemplated in section 6 of the Act. Section 6 of the Act requires every healthcare provider to inform a patient of: the patient's health status, except where disclosure would be contrary to the patient's best interests; the range of diagnostic procedures and treatment options generally available; the benefits, risks, costs, and consequences associated with each option; and the patient's right to refuse treatment and the implications, risks, and obligations arising from such refusal. Where reasonably possible, this information must be communicated in a language and manner that the patient understands, taking into account the patient's level of literacy and comprehension. The Requirements for Valid Consent The requirements for informed consent were considered in Castell v De Greeff 1994 (4) SA 408 (C), where the court held that: the patient must be aware of the nature and extent of the risk involved; the patient must understand and appreciate that risk; the patient must voluntarily consent to the treatment despite the risk; and the consent must cover the particular treatment and associated risks. In addition, section 12(2) of the Constitution guarantees every person's right to bodily and psychological integrity, including the right to security and control over their own body. The doctrine of informed consent therefore serves to protect a patient's constitutional rights and personal autonomy. Exceptions to the Requirement for Consent Although informed consent is generally required, the National Health Act recognises certain circumstances in which healthcare services may be provided without the patient's consent. Section 7 of the Act permits treatment without the patient's direct consent where: the patient is unable to provide informed consent, and consent is given by a person authorised by the patient, by law, or by a court order; the patient is unable to consent, and no authorised person is available, in which case consent may be obtained from the patient's spouse or partner, parent, grandparent, adult child, brother or sister in the order prescribed by the Act; treatment without consent is authorised by legislation or a court order; failure to treat the patient would pose a serious risk to public health; or any delay in treatment may result in the patient's death or irreversible damage to the patient's health and the patient has not expressly or impliedly refused the treatment. The Act further requires healthcare providers to take all reasonable steps to obtain informed consent before relying on any of these exceptions. Accordingly, where a patient is incapable of consenting and immediate treatment is necessary to save life or prevent serious and irreversible harm, the law permits treatment without consent. Consequences of Failure to Obtain Informed Consent Failure to obtain informed consent may expose a healthcare practitioner to legal liability. Medical treatment performed without valid consent may constitute an unlawful infringement of a patient's bodily integrity and may give rise to a claim for damages. Depending on the circumstances, liability may arise in contract, delict, or both. However, a distinction must be drawn between a lack of consent and negligent treatment. A patient may consent to a procedure yet still have a claim if the procedure is performed negligently. Conclusion The principle of informed consent is firmly entrenched in South African law and reflects the constitutional values of dignity, autonomy and bodily integrity. As a general rule, medical treatment may only be provided with a patient's informed consent. Although the law recognises limited exceptions in circumstances such as emergencies, healthcare practitioners remain under a duty to obtain consent wherever reasonably possible and to ensure that patients are adequately informed before making decisions concerning their healthcare. treatme Fraser Stockley BCom Law; LLB Partner at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Developments in the legal profession: Summary of Ramalepe and Another v Minister of Justice and Constitutional Development and Others
The Gauteng Division of the High Court recently delivered an important judgment in Ramalepe and Another v Minister of Justice and Constitutional Development and Others [2026] ZAGPPHC 443, in which it declared section 25(3)(a) of the Legal Practice Act 28 of 2014 unconstitutional. The Legal Practice Act regulates the admission and practice of both attorneys and advocates under a single statutory framework. Although both professions are admitted as legal practitioners, section 25(3)(a) of the Act currently provides that an attorney may only appear in the High Court, Supreme Court of Appeal, and Constitutional Court after having practised continuously for at least three years since admission and obtaining a certificate from the registrar of the relevant High Court. By contrast, advocates enjoy rights of appearance in all courts upon admission and are not required to satisfy an equivalent waiting period. The applicants challenged the constitutionality of the three-year waiting period, contending that it unjustifiably differentiated between attorneys and advocates who are admitted under the same legislative framework. They argued that the provision infringed their constitutional rights to: equality; human dignity; freedom to choose and practise a profession; and constituted irrational legislation. The Minister of Justice did not oppose the constitutional challenge on its merits. Instead, the Minister argued principally that the relief claimed is moot because Parliament was already considering legislative amendments that would remove the impugned provision. The Court rejected the Minister's argument that the matter was moot, holding that the mere existence of proposed legislation does not deprive a court of its constitutional obligation to determine the validity of legislation that remains in force. On the merits, the Court found that the distinction between attorneys and advocates lacked a rational and constitutionally justifiable basis. The Court held that, although the Legal Practice Act unified the admission and regulation of legal practitioners under a single regulatory framework, newly admitted attorneys remained subject to a three-year restriction that did not apply to newly admitted advocates. No sufficient justification for this differentiation was advanced by the Minister. Accordingly, the Court declared section 25(3)(a) of the Legal Practice Act inconsistent with the Constitution and invalid. As required by the Constitution, the declaration of invalidity has been referred to the Constitutional Court for confirmation. Until the Constitutional Court confirms the order, the impugned provision remains in force. If the Constitutional Court confirms the declaration of invalidity, newly admitted attorneys would no longer be required to complete three years of continuous practice before acquiring rights of appearance in the High Court, Supreme Court of Appeal, and Constitutional Court. The judgment also reflects the continued evolution of the legal profession since the enactment of the Legal Practice Act. While attorneys and advocates continue to perform distinct roles in many respects, the Court recognised that both professions are now admitted and regulated under a common statutory framework, making differential treatment increasingly difficult to justify without a rational basis. For the present, however, the existing statutory requirements remain applicable until the Constitutional Court confirms the declaration of invalidity or Parliament amends the legislation. Nomalanga Langa LLB Candidate Attorney at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Navigating the Alienation Nation
What is the Alienation of Land Act, 68 of 1981 This Act regulates the sale, exchange, and donation of immovable property in South Africa. When buying or selling immovable property, various legal processes must be followed before ownership can be transferred from one person to another. The mere payment of money does not automatically make the purchaser the new owner of the immovable property. Unfortunately, many people do not understand that a legal process must be followed to obtain ownership of immovable property. In many cases, a purchaser assumes that once money has been paid to the seller, they own the immovable property. The purchaser, or their family, may then only discover at a later stage that the property was never officially transferred into the purchaser’s name. Important Requirements to Ensure your Deed of Alienation is Valid Without discussing all the different clauses that may be inserted into a Deed of Alienation, depending on the type of sale involved, there are a few very important essential elements that must be included for the Deed of Alienation to be valid, namely: it must be in writing; it must specify the following with sufficient clarity so that they can be determined without relying on oral discussions: the identity of the parties; a description of the subject matter, including the full property description; and the purchase price or consideration. the Deed of Alienation must be signed by the parties themselves, or by their appointed agents acting in terms of a formal written authority; it must be signed in wet ink, an electronic signature is not sufficient; and if applicable, the cooling-off clause must be included. This clause applies where the purchase price of the residential immovable property is R250 000 or less. Its purpose is to give the purchaser 5 (five) days within which to unconditionally revoke the offer by delivering written notice. If this clause applies, this statutory right must be expressly stated in the Deed of Alienation. Does my spouse really have to sign? Yes, no, maybe, I don't know When conveyancing attorneys attend to the transfer of immovable property, one of the first things they do is review the Deed of Alienation. In addition to ensuring that there is a valid contract to work from, they must also confirm that all relevant parties have signed the document. Being married does not only change your honorific, it may also affect your rights to some extent, depending on the marital regime under which you are married. Don't Assume: The Mother of All Contractual Catastrophes The Deed of Alienation is the foundation of the transfer process. If the foundation is weak, the process may not run as smoothly as intended. When drafting a Deed of Alienation, you must ensure that everything agreed to by the parties is recorded in writing and signed for in the Deed of Alienation. Do not simply tell the agent what you want and then sign an agreement that does not include all the specific terms or requests you mentioned. Since the signed Deed of Alienation constitutes the whole agreement between the parties, only the terms recorded in that document will apply. Rather be safe than sorry, insist that everything be included in the Deed of Alienation and confirm whether all parties agree to it. This will help prevent unnecessary misunderstandings and disputes during and after the sale. It is very important that every party to the Deed of Alienation understands what they are signing. If you do not understand something, ask questions until you do. Common Ways in which Ownership of Immovable Property may be Acquired There are various contracts available to transfer immovable property, which includes but are not limited to: Deed of Sale (the most common contract – Sale Agreement); Instalment Sale Agreement (when purchasing an immovable property by paying the purchase price in more than 2 instalments over a period of more than 12 months); Donation Agreement (when the Donor donates the immovable property to the Donee); Exchange / Barter; By inheritance (by way of a Last Will and Testament); By way of a divorce order (the Decree of Divorce issued by a Court); By marriage (In community of Property); and By prescription (Acquisitive Prescription). I will be discussing the various contracts in my next few publications. Sharon Honiball LLB Partner at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Can an Illegal Contract Ever Be Enforced?
Introduction As a general rule, contracts are enforceable. After all, the very purpose of a contract is to create legally binding rights and obligations between parties. However, one important exception exists: an illegal contract is unenforceable. This principle is absolute. An illegal contract cannot be enforced by either party, regardless of whether one or both parties have already performed in terms of the agreement.[1] While the law may, in certain circumstances, provide alternative remedies to reverse an unjust enrichment, these remedies do not amount to enforcement of the illegal contract itself. What is an Illegal Contract? A contract may be illegal if its conclusion or enforcement is contrary to public policy, good morals (contra bonos mores)[2], the common law, or legislation. Importantly, we are not referring to agreements that are merely defective because they fail to comply with statutory formalities. An illegal contract is void from the outset and cannot be enforced by either party. For example: A contractor agrees to pay a municipal official R50,000.00 to ensure that a tender is awarded to him. The agreement is illegal because it involves bribery and corruption. A person agrees to pay another person to vandalise a competitor's property. The agreement is plainly illegal because its purpose is the commission of a criminal offence. Two parties agree that a portion of the purchase price of a business will be concealed from SARS in order to reduce their tax liability. Because the agreement is designed to defeat the operation of the law, it may be regarded as illegal and unenforceable. Illegality is not limited to criminal conduct. An agreement may also be illegal where legislation prohibits a particular activity or transaction, even though neither party commits a criminal offence. In the above examples, if the agreement is found to be illegal, neither party will be able to enforce it. In other words, if Person A pays Person B for poached rhino horn and Person B absconds with the money without delivering the horn, Person A cannot approach a court to compel delivery or claim contractual damages. Our courts will not enforce an illegal agreement. Does That Mean A Party Is Always Without Remedy? Not necessarily. The fact that an illegal contract is unenforceable does not automatically mean that a party who has performed under the agreement is left without recourse. Consider the following example: A homeowner pays R100,000.00 to a contractor to perform work that, unbeknownst to the homeowner, may only lawfully be performed by a licensed operator. The contractor falsely represents that he holds the necessary licence. After receiving payment, the contractor performs no work and disappears with the money. In these circumstances, the homeowner did not knowingly participate in the illegality. It would be unfair to allow the contractor to retain the money simply because the agreement itself is unenforceable. In certain circumstances, a party who has performed under an illegal contract may therefore be entitled to recover what was paid or transferred. This remedy is known as the condictio ob turpem vel iniustam causam. The purpose of the claim is not to enforce the illegal contract, but rather to reverse an unjust enrichment that has occurred as a result of the illegal transaction. To succeed with such a claim, a plaintiff must generally prove: a transfer of money or property to the defendant; that the agreement or its performance was illegal; that the defendant was enriched at the plaintiff's expense; and that the enrichment was unjustified. Recovery is not always guaranteed, however. The Par Delictum Rule In such proceedings, a defendant may rely on what is known as the par delictum rule, which is based on the principle that a court should not assist a person who willingly participated in illegal conduct. If the defendant can show that the plaintiff knowingly participated in the illegality, the par delictum rule may prevent the plaintiff from recovering what was transferred. The courts are generally reluctant to assist a party who willingly participates in unlawful conduct.[3] Conclusion The lesson is simple: a signature alone does not make an agreement enforceable. Where a contract is illegal, our courts will refuse to enforce it, regardless of whether one or both parties have already performed. While the law may sometimes provide an enrichment remedy to prevent injustice, parties who enter into illegal agreements do so at considerable risk and often without the protection they expected to enjoy. [1] See Jajbhay v Cassim 1939 AD 537; Chevron SA (Pty) Limitedv Wilson t/a Wilson’s Transport 2015 (10) BCLR 1158 (CC); Panamo Properties (Pty) Ltd and another v Nel NO and others [2015] 3 All SA 274 (SCA). [2] See Sasfin (Pty) Ltd v Beukes [1989] 1 All SA 347 (A), 1989 (1) SA 1 (A); Mostert and Others v Nash and Another (604/2017) [2018] ZASCA 62; [2018] 3 All SA 1 (SCA); 2018 (5) SA 409 (SCA) (21 May 2018); African Dawn Property Finance 2 (Pty) Ltd v Dreams Travel and Tours CC and Others (2011 (3) SA 511 (SCA); [2011] 3 All SA 345 (SCA)) [2011] ZASCA 45; 234/10 (30 March 2011). [3] See MCC Bazaar v Harris and Jones (Pty) Ltd 1954 (3) SA 158 (T); Bhyat’s Departmental Store (Pty) Ltd v Dorklerk Invetments (Pty) Ltd 1975 (4) SA 881 (A); Afrisure CC and Another v Watson NO and Another (522/2007) [2008] ZASCA 89; [2009] 1 All SA 1 (SCA); 2009 (2) SA 127 (SCA) (11 September 2008). Fraser Stockley BCom Law; LLB Partner at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Nailing your responsibilities as a Mortgagor
There are several important milestones that people experience throughout their lives. One of the most significant, exciting, and often daunting milestones is purchasing immovable property. As property ownership is a substantial financial commitment, many purchasers do not have sufficient cash available and therefore apply for a mortgage bond through a financial institution. A mortgage bond is a document based on an agreement wherein the mortgagor borrows money from the mortgagee and agrees to pass a mortgage bond over a specific immovable property in favour of the mortgagee as security to the mortgagee for the repayment of money. All immovable property, improved or unimproved, which is registrable in a Deeds Office can be mortgaged. This includes a flat, if it is held under a sectional title and is owned by the mortgagor. Amid the excitement and stress of the property acquisition process, a mortgagor is required to sign numerous documents containing important terms and conditions at the bond attorneys’ offices. What many property owners do not realise is that their responsibilities extend far beyond simply paying the monthly bond instalment. Below are some of the key responsibilities that every mortgagor should be aware of: Maintaining the Property A financial institution grants a mortgage bond on the understanding that the property will be properly maintained during the loan term. Regular maintenance helps preserve the property's value and protects the bank’s security. If the property falls into disrepair and its value decreases, the risk to the bank increases, particularly if the property is sold for an amount that is insufficient to settle the outstanding bond balance. Property Insurance A mortgagor is required to ensure that the property is adequately insured at all times. Maintaining suitable homeowners’ or building insurance is a fundamental condition of the mortgage bond. Proof of insurance is typically required before registration of the bond and must remain in force until the bond has been paid in full. Adequate insurance protects both the homeowner and the financial institution against unforeseen losses or damage to the property. Valid Compliance Certificates A mortgagor must ensure that all required compliance certificates remain valid and up to date. These certificates play a crucial role in protecting property owners and occupants, ensuring the safety of installations and structures, and supporting insurance and bond-related claims. Many insurance companies require valid compliance certificates when processing claims arising from incidents such as electrical fires, gas leaks, or other property-related damages. Failure to maintain these certificates may result in an insurer rejecting a claim or limiting coverage. Owning property is a rewarding investment, but it also comes with ongoing responsibilities. Understanding and complying with these obligations can help protect your property, your investment, and your financial future. Sharon Honiball LLB Partner at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Protection is better than prevention!
Some say: ‘prevention is better than the cure’, we say: protection is better than prevention! The reality is, certain problems are too big to prevent on your own, that is why the law is a great tool you can use to take that burden off your shoulders. If you are fearing for your safety and need a protection order, the Protection from Harassment Act 17 of 2011 was enacted just for you. It provides 5 steps that LVA Attorneys can take on your behalf, to secure your protection order. What is harassment? Harassment is when someone knowingly or should know their actions cause harm or make a person reasonably fear harm. This includes: unreasonable following, watching, pursuing, accosting, or loitering near places where the person or someone close to them lives, works, studies, does business, or happens to be; verbal, electronic, or other communication directed at the person or someone close to them, by any means, whether or not they respond; sending or delivering letters, packages, emails, or other objects to the person or someone close to them, or leaving them where they will be found or brought to their attention; or it can also mean sexual harassment of the person or someone close to them. Step 1 We will submit an application for a protection order at a court near you. Step 2 The court will immediately provide an interim protection order if it believes that: an act of harassment has occurred; you have been or may be harmed mentally, psychologically, physically, or economically; and notifying your harasser will put you in danger. Step 3 If no interim protection order is granted, we will notify your harasser of the application. If an interim protection order is granted, we will notify your harasser of the order. This step is for purposes of letting your harasser know when they must appear in court for step 4. Step 4 There will be a court hearing where we will argue that your interim protection order should be made final; or argue that your application for a protection order should be granted. In both instances, the desired outcome is the granting of a final protection order. The court may refuse to grant a final protection order if it believes that the act(s) of harassment that you endured were to: prevent an offence from happening; reveal a threat to public safety or the environment; reveal undue advantages in competitive bidding processes; or comply with a legal duty. Step 5 You will enjoy protection for 5 years. Nomalanga Langa LLB Candidate Attorney at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Understanding Prescription: When Does a Debt Become Too Old to Claim?
Have you ever been told that a debt is too old to collect, or that it has simply 'fallen away'? This concept is known in law as prescription — a legal time limit on how long a creditor has to claim payment. To better understand prescription, consider the following examples: Example 1: A simple personal loan Assume you lend a friend R10,000.00 and agree that they must repay you by 1 June 2026. If they do not pay on that date, the debt is immediately due. Prescription would generally start running from 1 June 2026 because that is the date on which you could first demand payment and, if necessary, sue for the debt. Example 2: Monthly instalments Assume someone buys a couch and agrees to pay R1,000.00 per month for 12 months. Each monthly instalment becomes due on its own payment date. If the debtor misses the January instalment, prescription may begin running in respect of that January instalment, even though the later instalments are not yet due. Example 3: A loan with an acceleration clause Assume a person borrows R100,000.00 and agrees to repay it over 24 months. The agreement says that, if the borrower misses an instalment, the creditor may demand the full outstanding balance immediately. This is known as an acceleration clause. It allows the creditor, in certain circumstances, to bring forward the due date of the entire outstanding balance. However, the wording of the clause is important. Some acceleration clauses operate automatically. Others require the creditor to first make an election, send a notice, cancel the agreement, or demand the full balance. This distinction can be decisive when determining when prescription starts running. What is prescription, legally? Regulated by the Prescription Act 68 of 1969, the general rule of prescription is that it begins to run as soon as a debt becomes “due”. A debt is usually due when the creditor is legally entitled to claim payment and the debtor is under an immediate obligation to pay. For many ordinary contractual debts, such as unpaid invoices, personal loans, rental arrears, or money owed under a standard agreement, the prescription period is generally three years from the date on which the debt becomes due. However, the Prescription Act provides for longer prescription periods in certain circumstances. For example: Time period before claim expires Description of claim 30 years Judgement debts Debts secured by a mortgage bond 15 years Debts owed to the State particularly those arising from loans, advances, or the sale or lease of land by the State. 6 years Debts arising from certain negotiable instruments, such as bills of exchange or other similar instruments. Accordingly, while the three-year period is often the starting point in many commercial and personal debt matters, it is not the rule for every debt. The nature of the debt, the underlying agreement, whether judgment has been granted, and whether security such as a mortgage bond exists can all affect the applicable prescription period. The key question is therefore not only how much time has passed, but also when the debt legally became due. What interrupts prescription? Prescription does not always run uninterrupted. In certain circumstances, the running of prescription can be interrupted. In simple terms, interruption of prescription means that the legal “clock” either stops or starts afresh. This can be extremely important because it may prevent a claim from prescribing. Two common examples are: Acknowledgment of liability Prescription may be interrupted where the debtor expressly or tacitly acknowledges liability. For example, if a debtor writes to the creditor and says, “I know I owe you the money, please give me more time to pay”, that may constitute an acknowledgment of liability. A partial payment may also, depending on the facts, amount to a tacit acknowledgment of liability. For instance, if a debtor pays R2,000.00 towards a debt of R10,000.00, that payment may indicate that the debtor accepts that the debt exists. Where prescription is interrupted by acknowledgment of liability, prescription generally starts running afresh from the date of that acknowledgment. Service of legal process Prescription may also be interrupted by the service of legal process, such as a summons, provided the creditor proceeds with the claim as required by law. For example, if a creditor issues and serves summons before the claim prescribes, that service may interrupt prescription. The creditor cannot simply sit back after service, but proper legal proceedings can protect the claim from being defeated by the passage of time. Conclusion Prescription is not simply a matter of counting three years from the date of default. The correct question is: when did the debt become legally due and enforceable? If you are unsure whether a debt has prescribed, whether prescription has been interrupted, or whether your agreement contains an enforceable acceleration clause, it is advisable to obtain legal advice before taking, or delaying, further action. Ezekiel Dikio LLB Associate at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Striking a balance: the draft Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment Bill, 2026
On 16 April 2026, the Minister of Human Settlements published the Draft Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment Bill, 2026 ("the Bill") for public comment. The proposed amendments represent the most substantial reform of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 1998 ("PIE") in many years. Whilst several of the amendments merely codify principles already developed through our courts, others introduce entirely new mechanisms that may materially alter the balance between the constitutional protection of property rights and the right of access to adequate housing. The amendments appear directed at three broad objectives: strengthening measures against organised unlawful occupations and building hijackings, increasing the participation of organs of state in eviction proceedings, and clarifying the role of alternative accommodation in the eviction process. Defining Alternative Accommodation For the first time, PIE would contain a statutory definition of "alternative accommodation". The Bill defines it as temporary accommodation provided by an owner, organ of state or person in charge that prevents persons from being rendered homeless and that is reasonable in the circumstances, taking into account prescribed housing standards, location and available resources. The absence of a statutory definition has long been a source of uncertainty despite alternative accommodation being central to eviction jurisprudence for many years. In that regard, the amendment is a welcome attempt to provide greater legislative clarity. However, the inclusion of private owners within the definition raises interesting questions. Our courts have generally treated the provision of emergency or temporary accommodation as a responsibility of the State flowing from section 26 of the Constitution. The Bill's wording arguably leaves open the possibility that a court may, in exceptional circumstances, consider whether a private owner is capable of making alternative accommodation available. Whether the legislature intended to create such a possibility is uncertain. This aspect of the Bill may ultimately require judicial interpretation. Land Invasions and Building Hijackings One of the most significant amendments appears in section 3. The current prohibition against receiving money in exchange for facilitating unlawful occupation is expanded considerably. The Bill now prohibits any person from inciting, arranging, organising, or permitting unlawful occupation of land. It further clarifies that prohibited consideration includes membership fees, administration charges, service connection fees, infrastructure contributions, and similar payments associated with unlawful occupation schemes. Persons convicted under the section may face fines of up to R2 million, imprisonment of up to two years, or both. Courts will furthermore be required to order the forfeiture of money and assets derived from unlawful occupation schemes. These amendments appear deliberately targeted at organised land invasion syndicates and the increasingly prevalent phenomenon of hijacked buildings, such as those within metropolitan CBDs. In many instances, unlawful occupations have evolved beyond mere shelter-seeking and have become organised commercial enterprises. Buildings are occupied, subdivided, administered, and effectively operated as unlawful rental schemes, often generating substantial income for individuals with no lawful entitlement to the property. Occupiers are frequently required to pay rental, administration fees, service charges, and other contributions to persons who neither own nor lawfully control the buildings concerned. The forfeiture provisions are particularly significant. Rather than merely criminalising the conduct, the Bill seeks to remove the financial incentive that drives many organised unlawful occupations. If enacted, these provisions may provide owners, law enforcement agencies, and municipalities with a more effective mechanism to combat both land invasions and building hijackings. This amendment is undoubtedly welcomed. Mandatory Participation of Human Settlements and Municipalities The Bill seeks to expand the role of organs of state in eviction proceedings. Currently, PIE requires notice of proceedings to be served upon the municipality having jurisdiction. The Bill goes further by requiring service upon both the relevant municipality and the relevant provincial department responsible for human settlements. In addition, those entities, together with any other organ of state having an interest in the proceedings, must be joined as parties to the litigation. Whilst municipalities have already become regular participants in PIE matters through judicial development of the law, the requirement for mandatory joinder now places the issue beyond doubt. Importantly, the Bill also recognises the central role played by provincial human settlements departments in the provision of emergency accommodation and housing interventions. Whether this amendment results in more meaningful participation by organs of state remains to be seen. One of the recurring frustrations experienced by property owners is that municipalities frequently fail to engage substantively with eviction proceedings despite being obliged. Removal of the Six-Month Distinction A further proposed amendment is the deletion of the distinction between occupations of less than six months and occupations exceeding six months. Under the current PIE framework, section 4(6) and section 4(7) establish separate considerations depending upon the duration of the unlawful occupation. The Bill abolishes this distinction and replaces it with a single "just and equitable" enquiry requiring courts to consider all relevant circumstances, including the circumstances of the occupation, the duration thereof, the availability of alternative accommodation and the rights of vulnerable groups. Whilst the amendment undoubtedly simplifies the statutory framework, it may ultimately make it more difficult for landowners to obtain eviction orders. The existing distinction recognises that the circumstances of a recent occupation are materially different from those of an occupation that has persisted for many years. Once that distinction falls away, housing-related considerations may arise in virtually every PIE matter irrespective of how recently the occupation commenced. If that occurs, the amendment may unintentionally increase rather than reduce the burden placed upon property owners. Whether the amendment ultimately streamlines or complicates eviction proceedings will depend largely on how the courts interpret and apply the revised provisions. Compensation for Improvements and Structures The Bill substantially expands the powers of courts when granting eviction orders. Courts will be empowered to make orders concerning the retention or demolition of structures, the retention or harvesting of crops, and compensation relating to improvements, materials, structures, or crops. The court must consider factors such as consent, usefulness, hardship, and overall fairness before granting such relief. A controversial aspect of this amendment is that where compensation is awarded, an eviction order may not be executed until the compensation has been paid or adequately secured. Whilst there may be circumstances in which compensation is justified, particularly where improvements were effected with the owner's knowledge or consent, many property owners are likely to question whether a person found to be an unlawful occupier should be entitled to compensation before vacating unlawfully occupied property. This amendment is likely to generate debate should it ultimately become law. The prospect of an owner being required to compensate an unlawful occupier before recovering possession of property may be viewed by some as further diluting the protection ordinarily associated with ownership rights. Alternative Accommodation and Eviction Orders The Bill expressly empowers courts to order that alternative accommodation or land be made available as a condition of eviction and, where such accommodation is temporary, to determine the period for which it must remain available. In reality, however, alternative accommodation remains one of the greatest obstacles to the effective implementation of eviction orders. In many matters municipalities either fail to engage meaningfully with the litigation, provide vague reports regarding available housing, or simply lack sufficient resources to accommodate affected occupiers. The consequence is often prolonged litigation and repeated postponements, with private landowners bearing the financial and practical burden of delays arising from failures within the public housing system. Importantly, however, the Bill also introduces a provision confirming that a court may grant an eviction order without requiring a municipality or any organ of state to provide alternative accommodation or land. This may prove to be the most significant amendment contained in the Bill. The Constitution does not expressly provide that alternative accommodation must exist before every eviction order can be granted. Rather, the availability of alternative accommodation has historically been one factor amongst many relevant considerations in determining whether an eviction would be just and equitable. Over time, however, the practical application of PIE has often created the perception that alternative accommodation has become an indispensable prerequisite to eviction. In many matters, property owners have found themselves unable to vindicate their rights because municipalities have failed to provide reports, identify land, secure temporary accommodation, or meaningfully participate in proceedings. The proposed amendment appears to reaffirm an important principle: whilst alternative accommodation remains a relevant and often important consideration, it is not necessarily decisive in every case. The ultimate enquiry remains whether it is just and equitable to grant an eviction order having regard to all relevant circumstances. If enacted, this provision may assist in restoring a more balanced approach to PIE litigation by ensuring that municipal failures do not automatically prevent otherwise justified eviction orders from being granted. Urgent Evictions The Bill also amends section 5, which deals with urgent eviction applications. Courts will now be required not only to consider the risk of substantial harm and the balance of hardship between the parties, but also whether granting the urgent eviction would be just and equitable having regard to the circumstances of the unlawful occupation, including its pace, scale and frequency. This amendment appears aimed at addressing organised land invasions where large numbers of occupiers rapidly establish unlawful occupations over a short period. It may strengthen the ability of landowners to obtain urgent relief in genuine invasion situations whilst preserving judicial oversight and constitutional safeguards. The mandatory joinder and notice provisions applicable to ordinary PIE proceedings are similarly extended to urgent applications. Evictions at the Instance of Organs of State The Bill also amends section 6, which regulates evictions instituted by organs of state. The amendment aligns the considerations applicable to section 6 proceedings with those contained in section 4 and removes the separate list of factors currently contained in section 6(3). The result is a more uniform approach to eviction proceedings irrespective of whether the applicant is a private owner or an organ of state. From a procedural perspective, this amendment is sensible and should reduce unnecessary distinctions between different categories of eviction applications. Mediation The amendments to section 7 seek to encourage greater use of mediation. Most notably, where the municipality itself is the owner or person in charge of the land, the relevant Member of the Executive Council responsible for human settlements will no longer merely have a discretion to appoint a mediator. The appointment of a mediator becomes mandatory. This amendment reflects a growing recognition that many eviction disputes involve broader housing and social issues that may be better resolved through negotiated solutions than prolonged litigation. Conclusion The Bill, to an extent, represents an attempt to recalibrate the balance between property rights and housing rights within South Africa's constitutional framework. Several amendments merely codify principles already established through years of judicial development. Others, particularly those directed at organised land invasions, building hijackings, and municipal participation, are likely to be widely welcomed. Certain amendments, however, are likely to prove controversial. The proposed compensation regime and the removal of the six-month distinction may increase the burden on property owners. Perhaps most significantly, the Bill appears to recognise that whilst alternative accommodation remains an important consideration in eviction proceedings, it should not necessarily become an insurmountable obstacle to the enforcement of ownership rights. Whether the final legislation ultimately succeeds in striking that balance remains to be seen. Fraser Stockley BCom Law; LLB Partner at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Directors’ Duties and Personal Liability: When Can Directors Be Held Personally Liable?
A company is recognised in law as a separate juristic person. In simple terms, this means that it exists independently from the people who own and manage it. A company can own property, enter into contracts, incur debts, sue and be sued in its own name. One of the consequences of a company's separate legal personality is that, as a general rule, its rights, obligations, and liabilities are its own, and not those of its directors. In terms of section 1 of the Companies Act 71 of 2008 ("the Companies Act"), a director includes a member of the board of a company, an alternate director, and any person occupying the position of director, regardless of the title they use. Simply put, directors are responsible for managing and overseeing the affairs of the company. They make strategic decisions, supervise the company's business and are responsible for ensuring that it is managed in accordance with the law and in the company's best interests. Company liability and the principle of limited liability Because a company is a separate juristic person, it is generally responsible for meeting its own contractual and legal obligations. For example, where a company enters into a lease agreement, loan agreement, or supply contract, the company is ordinarily the party responsible for performing its obligations. If it fails to do so, the other party's claim will usually lie against the company rather than its directors. This is a consequence of the principle of limited liability. As a general rule, directors are not personally liable for the debts of a company merely because they manage it. This protection is one of the reasons many businesses choose to trade through companies rather than in their personal capacities. However, this protection is not absolute. The Companies Act, the common law, and, in some instances, other legislation recognise circumstances in which directors may be held personally liable for their conduct. What duties do directors owe? Directors' duties arise from both the common law and the Companies Act. Broadly speaking, directors are required to: act in good faith and for a proper purpose; act in the best interests of the company; exercise the degree of care, skill, and diligence that may reasonably be expected of a person carrying out the same functions; disclose personal financial interests where required by law; avoid conflicts between their personal interests and those of the company; and avoid permitting the company to conduct its business recklessly, with gross negligence, with intent to defraud any person, or for a fraudulent purpose. Depending on the nature of the company's business, directors must also ensure that the company complies with applicable legislation, including tax, employment, and industry-specific regulatory requirements. Importantly, directors are not expected to guarantee that every business decision will be successful. Business inevitably involves commercial risk. The law does not impose personal liability simply because a company suffers financial loss or ultimately fails. Rather, the question is whether the director acted honestly, in good faith, and with the level of care, skill, and diligence required by law. When can directors be held personally liable? Although a company is generally responsible for its own obligations, directors should not assume that they are immune from personal liability. Depending on the circumstances, directors may incur personal liability where they, amongst other things: breach their fiduciary duties or their statutory duties under the Companies Act; fail to exercise the required degree of care, skill, and diligence; authorise unlawful or prohibited distributions; acquiesce in, or knowingly participate in, conduct that contravenes the Companies Act; permit or participate in reckless or fraudulent trading or other conduct prohibited by section 22 of the Companies Act; or are otherwise held personally liable under section 77 of the Companies Act or another applicable law. Whether personal liability arises will always depend on the particular statutory or common-law basis relied upon and the specific facts of the matter. The Companies Act also recognises that, in exceptional circumstances, a court may disregard a company's separate legal personality. Where there has been an unconscionable abuse of the company's juristic personality, a court may declare that the company is to be regarded as not being a juristic person in respect of a particular right, obligation or liability. This remedy, commonly referred to as "piercing the corporate veil", is reserved for exceptional cases and is distinct from the ordinary statutory grounds upon which directors may incur personal liability. Practical guidance for directors Directors should ensure that company affairs are properly managed, that appropriate financial and corporate records are maintained, that conflicts of interest are appropriately disclosed and managed, and that the company is never used to facilitate unlawful, reckless, or fraudulent conduct. Understanding the scope of a director's duties, and obtaining legal advice when difficult decisions arise, can significantly reduce the risk of personal liability. In our next article, we explore the doctrine of piercing the corporate veil in more detail and examine the circumstances in which a court may disregard a company's separate legal personality. At Le Roux Vivier Attorneys, we advise directors, companies, creditors and other stakeholders on directors' duties, corporate governance, commercial disputes, debt recovery and matters involving personal liability under the Companies Act. Ezekiel Dikio LLB Associate at Le Roux Vivier Attorneys Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.
- Understanding Urgent Applications in South African High Court Divisions
Urgent applications are a distinct and critical mechanism within South African civil procedure, governed principally by Rule 6(12) of the Uniform Rules of Court. This rule empowers a court or a judge in chambers, in cases of urgency, to dispense with the ordinary forms and service required under the rules, allowing a matter to be heard at a time and in a manner dictated by the circumstances. Rule 6(12) and Its Parameters Rule 6(12)(a) allows for deviation from standard procedures in urgent cases. However, such deviations must still comply with the rules as far as is practicable. An applicant must expressly seek condonation for any non-compliance and must demonstrate that the matter is indeed urgent, failing which the court may decline to hear the matter urgently, although the application itself remains unaffected (Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk 1972 (1) SA 773 (A)). The application must include, in the notice of motion, a prayer for urgency under Rule 6(12), and the founding affidavit must contain a separate section explicitly setting out the grounds for urgency (Nelson Mandela Metropolitan Municipality v Greyvenouw CC 2004 (2) SA 81 (SE)). Degrees of Urgency There are varying degrees of urgency. Some matters may be so extreme that they require immediate, even late-night or weekend hearings, sometimes without the benefit of written submissions (Luna Meubel Vervaardigers (Edms) Bpk v Makin’s Furniture Manufacturers 1977 (4) SA 135 (W)). Other cases may allow for the usual notice periods to be shortened but still occur during ordinary court hours (IL & B Marcow Caterers (Pty) Ltd v Greatermans SA Ltd 1981 (4) SA 108 (C)). In each case, the applicant must demonstrate an absence of substantial redress in due course if the application is not heard urgently. This is not equivalent to showing irreparable harm (East Rock Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd 2012 JOL 28244 (GSJ)). Self-Created Urgency and Delay Applicants must act with expedition. An unjustified delay in bringing an urgent application may result in the matter being struck from the roll for lack of urgency, particularly if the urgency is self-created (IL & B Marcow Caterers, supra). However, ongoing infringement of rights may justify urgency despite some delay (Lubambo v Presbyterian Church of Africa 1994 (3) SA 241 (SE)). Procedural Considerations and Judicial Discretion The court retains discretion on whether to hear a matter urgently. Factors that influence this decision include: The applicant’s explanation for urgency; Whether the respondent can fairly respond in the time available; Prejudice to the respondent and to the administration of justice; The merits of the applicant’s case; The applicant’s conduct, including delay or self-created urgency (East Rock Trading, supra). Urgency does not override foundational legal requirements such as standing or jurisdiction (Kayamandi Town Committee v Mkhwaso 1991 (2) SA 630 (C)). Nor can it be used to bypass effective service, which remains a legal duty (Transnet t/a Spoornet v Informal Settlers of Good Hope 2001 (4) All SA 516 (W)). Deviation from Rules and Practice Directions In extreme cases, the application may proceed without prior service or notice to the Registrar, but every deviation from the rules must be substantiated. Courts have held that even urgent matters should be properly indexed and paginated (Quick Drink Co (Pty) Ltd v Medicines Control Council 2003 JOL 12048 (T)). Judge Southwood has issued practice directions highlighting these principles, reiterating that urgency must be genuine and properly motivated. Conclusion Urgent applications remain a powerful procedural tool, but they are not to be abused. Practitioners must ensure strict compliance with Rule 6(12) requirements and must justify any deviation from standard procedures. Failure to do so may result in the matter not being enrolled as urgent, although the application itself remains intact and can proceed in the ordinary course. F.A. Stockley BCom Law; LLB Partner at Le Roux Vivier Attorneys









