The period in time when a beneficiary is deemed to have acquired a benefit due to him/her in terms of any legal instrument seems to present challenges to both the practitioner and the deeds examiners alike. This usually presents itself in transactions involving payment of transfer duty from a particular date or determination of whether the legatee can be deemed to have acquired for estate duty or other purposes. Fortunately the examiners are not always at the forefront of the whole challenge in the sense that this mostly involves determining when transfer duty or in some instance estate duty, is payable. In the event that the examination process involves making such a determination of when was a benefit acquired by a party it can be of assistance to have some understanding of how the courts interpret this principle.
In applying one’s mind it is advisable to distinguish between the concepts of dies cedit and dies venit which are used as instruments to make a determination. Accordingly “dies cedit” literally means “the day has come” and occurs the moment the right is deemed to have vested in its beneficiary. On the other hand “dies venit” literally means “the moment has come”. This occurs at the time when the beneficiary becomes entitled in law to demand delivery of the vested right to him/her. Now the two moments do not always occur at the same time in law.
In the case of De Leef Family Trust and Others v Commissioner for Inland Revenue 1993 (3) SA 345 (A) the court had an opportunity to pronounce itself on a similar question. The directors had resolved to voluntarily wind up the affairs of the company. The only asset of the company was an immovable property which was transferred as a liquidation dividend to the two family trusts created by the former directors of the company. The court a quo had taken the view that the directors were liable for transfer duty in that when they resolved to place the company under voluntary winding up, they acquired the right to obtain transfer of the immovable property as envisaged in section 2(1)(a) of Transfer Duty Act after confirmation of the liquidation and distribution account.
In dismissing that view, the Appeal court held that it is important to distinguish between dies cedit, i.e. the time has come when the right is due and owing as opposed to dies venit, when the time has arrived for the enjoyment of the right so that delivery thereof may be claimed. “When the members adopted the special resolution to wind up the affairs of the company they were the owners of their respective shares and already had vested rights (dies cedit) to participate equally in the distribution of the surplus assets of the company upon its liquidation. Dies venit will however occur only after confirmation of the liquidator’s liquidation and distribution account by the Master.” Thereafter "they would have enforceable iure in personam ad rem acquirendam to obtain transfer of the fixed property in their own names pro vided that it had not been realized to liquidate debts and was available for distribution". When they entered Into cessions of their shareholding with the two family trusts they divested themselves of the right to claim transfer of the immovable property once the final liquidation and distribution account had lain for inspection without objection. After this instance dies venit would never occur for them as they no longer had the rights.
The case of Greenberg and Others v Estate Greenberg 1955 (3) SA 361 (A) also had to make a determination as to the moment of vesting of the right to a bequest by a legatee in terms of a Will. The Will had bequeathed certain immovable property to a trust subject to the surviving spouse enjoying the fruits of the immovable property. Upon the death or re-marriage of the surviving spouse the remainder of the estate would be divided equally amongst the deceased’s sons subject to certain conditions. In making the determination the court held that, "in ascertaining whether a legatee has obtained a vested right to his legacy as at the death of the testator or whether an heir who under the law as it now exists, is merely a residual)’ legatee has at any time acquired a vested right to his/her inheritance, it is irrelevant to enquire where the dominium of the legacy or inheritance (as the case may be) resides immediately after the death of the testator. The fact therefore that a testator bequeaths the whole or part of his estate to trustees does not show that he did not intend a legatee oran heir to acquire a vested right to his legacy or inheritance as at his death. In every case the intention of the testator must be gathered from the terms of the Will."
The court then ruled that “the fact that the testator considered it necessary to provide specifically that the widow had to pay rates and taxes on the immovable property shows that he could not have had in mind any intention of treating her as owner of the immovable property: in other words she was not a fiduciary”. The widow therefore could not become owner of the assets in respect of which she had a life interest. She had nothing but interest of a usufructuary character. In the circumstances the court held that the sons of the deceased became Immediately entitled to their inheritance on his death. Dies cedit for them occurred at that moment. Dies venit would however, only occur after the final liquidation account of the deceased estate had lain for inspection without objection. Only then could the heirs lay claim to their inheritances in accordance with the Liquidation and Distribution account, and not the will strictu sensu.
In all instances it seems that the rights accrue only at the moment when the party can demand delivery of his dues from the intermediary. That determination must be made by proper consideration of all the facts surrounding the allocation of those rights. Considerations of whether the rights of the intermediary if applicable are usufructuary or fiduciary in nature will give due to the intention of the principal. In the end the moment when a claimant/party is entitled in law to demand cession or transfer of the rights claimed will be the moment from which those rights became legally accounted to him. The next question will then be whether such accounting of the rights to the claimant is subject to a prescribed tax or some duties due to the Receiver of Revenue. As mentioned in the beginning of this article the examiner will not always be the one to make the determination.
Sydney Mekwe
Law Lecturer, Deeds Training
Pretoria
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