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Study Unit 9 - Other factors that influence status - Coggle Diagram
Study Unit 9 - Other factors that influence status
Mental illness
Definition
A person who does not understand the nature or consequence of their juristic act
A person who does understand the nature and consequences of the juristic act but acts as a result of delusions
The presumption in our law
Every person has mental capacity
If a person alleges mental incapacity, then the accused bears the onus of proof on a balance of probabilities
During a period of mental incapacity, any contract concluded is VOID, even if it is to the advantage of the said person.
Condictio indebitii and rei vindicatio are enrichment remedies that then vecome available
If I dont want to be a party to a contract, the onus of proof lies on me to prove mental incapacity
Mafuya v Lizwe (2012)
There was no court order declaring mental incapacity and thus the onus of proof lies on the person alleging mental incapacity
If a person has been declared mentally ill by a court - then there is a presumption that the person is mentally incapacitated.
There are however, periods where a person may be mentally capable (lucidum intervallum)
This court order shifts the onus of proof - if a person concludes a contract during a lucid interval, the onus of proof lies on the person that alleges a lucidum intervallum exists
Where a person takes alcohol or drugs for a period is not mentally capable and is unable to understand the nature and consequence of their act - then no valid contract exists. But with delictual accountability it differs
Prinsloo v Prinsloo
There was a court order declaring mental incapacity and thus court decided that the onus is on the person alleging the interval
Prodigality
Prodigal tendencies
Does not affect capacity to act
Only when declared to be a prodigal and prohibited from managing own affairs
Procedure:
Who can bring an application?
=> Any interested party - typically the spouse
Where?
=> The high court where the person is domiciled
Declaration and interdict
=> A declaration alone does not limit a persons capacity to act, there needs to also be an interdict for this to occur
-Publicity requirement - to protect interested 3rd parties
*Published in the Government Gazette or local newspaper
-Curator Bonis - appointed by the court
*In order to manage the estate and financial matters of the declared prodigal
=> The prodigal has limited capacity to act
-It is similar to that of a minor - confirmed in case
-Must conclude a contract with the consent of the curator
Position in respect of third parties
=> If a prodigal acts in conflict with the orders of the court - he or she is deemed to act in contempt of the court
=> Contract- voidable at the instance of the curator
-Two options - to either ratify the contract (binding and enforceable)
-May repudiate the contract - any performance must be given back (status quo ante)
Definition => Prodigality means when a person has normal mental ability but is not capable of managing own affairs
Defect in power of judgement or character - squanders his assets in an irresponsible and reckless way
Restore capacity to act
Discharged from curatorship by an order of the court
Phil Morkel BPK v Niemand 1970
=> Facts - 1958 Niemand was declared a prodigal
=> In 1965 there was a hire-purchase agreement
=> It was ratified by the curator
=> Legal position wasn't clear yet in 1970 and it was alleged that Niemand had no capacity to act although the contract was ratified
=> Legal question - What is the legal capacity of a prodigal?
-It is similar to that of a mentally ill person
=> Judgement - Mentally ill persons have no capacity to act but a prodigal has limited capacity to act
Intoxication from drugs and or alcohol
Capacity to hold office
Legal capacity is only affected by intoxication when the holding of a particular office entails the performance of juristic acts
For the duration of the intoxication, the person is prohibited from holding the particular office because there is no capacity to act there can be no legal capacity to hold office
Curatorship
A person whose understanding and appreciation of her or his acts and their consequences is impaired by drugs and or alcohol can be put under curatorship in terms of the common law if the case warrants it
But the circumstances are likely to be exceptional, because in the case of drugs and alcohol, the condition is usually only temporary and not a permanent impairment
Capacity to litigate
A person who is intoxicated to such a degree that she or he does not understand the nature of court proceedings has no capacity to litigate for the duration of the intoxication
Delictual and criminal capacity
Intoxication resulting from alcohol or drug abuse is not generally sufficient reason to exclude negligence
This applies particularly to drunken driving
The taking of the drugs or alcohol or both could in itself be regarded as a negligent act which establishes liability
Parliament passed the Criminal Law Amendment Act. This Act provides that:
=> If a person commits a prohibited act (for example kills someone)
=> But is found not guilty of a crime because he or she was under the influence of alcohol or drugs (and this lacked criminal accountability) the person will still be guilty of a crime
This crime is spelled out in section 1 (1) of the Act
A person commits a crime
=> If he or she uses drugs or alcohol, and
=> He or she knows that drinking alcohol or taking drugs will impair his or her ability to distinguish between right and wrong or act in accordance with that appreciation, and then
=> Commits a prohibited act (for example kill someone)
Capacity to perform juristic acts
We need to assess whether the person was able to understand the nature and legal consequences of his or her act
The influence of drugs or alcohol must be so severe that the person is of unsound mind at the time of the performance of the act
For the duration of this unsound state he or she lacks capacity to act
The presumption remains that every person has full capacity unless the contrary is proved
The onus is on the party alleging the incapacity
The consequence of finding that a person's capacity to act was nullified by drugs and or alcohol is that the transaction is void from the outset
The parties mist be restored to the position that they were in immediately before the transaction in question
Thomas is a 19 year old aspiring painter
He believes that smoking cannabis helps him be creative and improves his painting
Thomas and his friends take a cocktail of different drugs, not only cannabis
The drug cocktail makes Thomas act in a strange way, including clucking like a chicken
He stays up the entire night and the next morning he goes to town and enters into a contract for the purchase of a sports car that he simply cannot afford as an artist
He pays a deposit by cheque, but he has insufficient funds to honor the cheque
The law has an obligation to protect the interests of persons who do not understand the nature and or consequences of a juristic act due to some or other incapacity
Not every kind of intoxication results in incapacity
Only where the influence of the drugs or alcohol is so strong to make the person of unsound mind will his or her capacity be affected
Physical disability or illness
Appointment of curators
An appointment of a curator interferes with a person's autonomy
Courts are cautious when appointing curators
In Ex parte Wilson: In re Morrison
=> The court dismissed an application for the appointment of a curator bonis for a 90 year old woman on the ground that there was nothing which showed that the respondent was incapable of managing her own affairs
=> The court held that a curator could not be appointed where the person sought by others to be placed under curatorship was compos mentis and she was in fact opposed to the appointment of a curator
Legal capacities of a person for whom a curator has been appointed
Does not in itself affect the person's capacity to act
Nor does the appointment of a curator affect their other capacities
The main purpose of the curator is to assist that person when and if he or she finds it difficult or impossible to handle his or her affairs
If a person is physically and mentally capable of performing a particular legal transaction or juristic act, the transaction will be perfectly valid
People who have had curators appointed on the grounds of physical incapacity have full capacity to do anything that they are in fact physically able to do
A curator should be assigned to those who on account of bodily defect are unable to take charge of their affairs, and for that reason are recognized as needing in those affairs the help of another
The High Court appoints curators for people suffering from physical disabilities and other kinds of infirmities including:
=> Those suffering from hearing or speech impediments
=> Persons suffering from chronic disease or serious illness
=> Persons suffering from epilepsy
=> Old age
=> Mental weakness or retardation without being mentally ill within the definition used in the first part of the chapter
Insolvency
Consequences of insolvency
Insolvency is dealt with primarily through legislation, specifically through the insolvency act
When people are unable to pay their debt, their creditors can approach the High Court and ask for a sequestration order against the insolvent person
If this is granted, the court will order the sequestration of the insolvent person's estate, and put it under the control of a trustee appointed by the High Court
Sequestration means that the estate is confiscated, and put under the temporary management of a trustee.
We say the estate vests in the trustee
All property the insolvent owns at the date of sequestration vests in the trustee except:
=> His or her earnings, to the extent that the Master deems thus money necessary for the maintenance of the insolvent and his or her dependents
=> His or her pension
=> Compensation the insolvent receives as damages for defamation or personal injury
=> Clothes, bedding, household furniture, tools and other essential means of subsistence
=> Life insurance policies excluded from the sequestrated estate in terms of the long-term insurance act
Capacity to perform juristic acts
An insolvent person retains full capacity to perform you could say that she or he still has capacity to enter contracts
The validity of a contract entered into by an insolvent is not affected by her or his sequestration provided that
=> The contract does not purport to dispose of any property in the insolvent estate and
=> The contract is not likely to have an adverse effect on the insolvent estate
A contract entered into by an insolvent without the necessary consent of the trustee is not void, but it is voidable if the trustee decides that the contract should be cancelled
Section 23 (3) provides that an insolvent without the necessary consent of the trustee is not void, but it is voidable if the trustee decides that the contract should be cancelled
Section 23 (3) provides that an insolvent may follow any profession or occupation and may enter into any employment, but that she or he requires the written consent of the trustee to carry on the business of a trader who is a general dealer or manufacturer or to be employed in or have any interest in the business of a trader who is a general dealer or manufacturer
Section 24 (1) deals with the sale of property.
It provides that if the insolvent sells any property acquired after the sequestration order, the sale will be valid, provided that the buyer was unaware of the sequestration order and had no reason to suspect it
This is a way of protecting buyers who do not realize that they are transacting with a sequestrated insolvent
Definition of insolvency
People are insolvent if they are unable to pay their debts because their liabilities exceed their assets
Rehabilitation of an insolvent
An order of insolvency is not permanent
Rehabilitation can take place as a result of a court order or can happen automatically ten years after the sequestration unless the court orders otherwise.
The effects of rehabilitation can be listed as follows:
=> Puts an end to the sequestration
=> Discharges all the debts of the insolvent which were due before the sequestration
=> Relieves the insolvent of every disability resulting from the sequestration order
Capacity to hold offices
The insolvent is disqualified from holding certain offices
=> The companies act disqualifies an insolvent person from being a company director, unless she or he has the consent of the High Court
=> The Constitution disqualifies insolvents from being members of the National Assembly or members of a provincial legislature
=> The insolvency act also disqualifies an insolvent from holding certain positions, including that of curator of an insolvent estate and that of an employer
Capacity to be held accountable for crimes and delicts
Insolvency does not affect the insolvent's capacity to be held accountable for crimes and delicts
Insolvents may be sued in their own name for delicts committed by them after the sequestration of their estate, their insolvent estate will not be liable for payment of these debts
This means that those claiming damages from the insolvent will either be limited to those assets which have escaped inclusion in the sequestrated estate, or will have to wait until the insolvent is rehabilitated
Capacity to litigate
Insolvents may sue or be sued in their own name without the consent of the trustee in any matter relating to status or related to any other right provided that it does not affect their sequestrated estate. E.g. an insolvent can bring a suit for divorce
Insolvents have capacity to act. No one doubts their ability to understand the nature and legal consequences of their acts. However, their estate is removed from their control and they are not allowed to manage it
Legal capacities of an insolvent
Insolvency limits the legal capacities of a person in order to protect his or her creditors or potential creditors