Section 80(1) of the Administration of Estates Act 66 of 1965 ("the Act") provides inter alia that no natural guardian shall alienate or mortgage any immovable property belonging to his/her minor child, unless authorized thereto by the Court or by the Master.
When analyzing the above, immovable property in the Act is defined as "land and every real right in land or minerals (other than any right under a bond) which is registerable in any office in the Republic used for the registration of title to land or the right to mine.:
In the absence of a clear definition of the term "alienate" in the Act, the wider meaning must be afforded to the term and will thus include dispose of it in any way.
It is thus clear from the wording of Section 80, read in conjunction with the two definitions, that no land or real rights in land may in any way be alienated without either the authorization of the High Court or the Master.
Given the above the questions begging answers are whether -
- Section 80 finds application where a guardian waives preference of the ranking of a bond in favour of a further bond; and
- Section 80 finds application where a minor waives preference of a usufruct in favour of a bond.
Let us commence with the second scenario. The waiver of preference of the usufruct is tantamount to a suretyship, which falls within the ambit of "alienate" as per the aforesaid definition. Furthermore, a usufruct is regarded as a real right in land and thus the waiver of preference will not be capable of being registered without authorization from the High Court or the Master. The amount of the bond will determine whose authorization is required. Should the bond exceed R100 000, 00, the High Court must authorize the alienation, alternatively the Master must authorize it.
In the first scenario, the waiver of the ranking of the bond might prejudice the minor, but does not amount to an alienation, and neither is the bond regarded as immovable property or a real right to land as it is specifically excluded from the definition of immovable property as quoted above. The provisions of Section 80 thus do not find application. However, where a guardian waives a personal right belonging to the minor, such as a right of pre-emption, the court held that a registrar must call for the authorization of the Court, as upper guardian (see Ex parte Oberholzer and Others 1951 (1) SA 554 (A)). On the analogy of this case, it would appear as if the Court's authorization would be necessary for such a waiver.
Furthermore, in terms of the decided case of Smit NO v Die Meester 1959 (4) SA 13 (T), the provisions of Section 80 of the Act must be applied for the registration of any servitude over a minor's immovable property.
Lastly, one wonders whether the waiver of a fideicommissum belonging to a minor will fall within the ambit of Section 80 or not. In the latest cases decided in this regard, there is still no consensus. In Eksteen and Another v Pienaar and Another 1969 (1) SA 17 (O), a fideicommissum is treated and considered as a real right. However, in the case of Van der Merwe v Registrateur van Aktes NO 1975 (4) SA 636 (T), a fideicommissary rights was held to be a jus in persona (personal right) and not a jus in rem (real right). In the light of the two conflicting decisions, it is not clear whether a fideicommissum falls within the ambit of Section 80. However, albeit real or personal, the Oberholzer case above should be followed and the authorization of the High Court obtained and lodged.
The above are merely a few examples of the intricacies of applying the provisions of Section 80 and it is trusted that this article has shed a bit more light on the subject.
Republished with permission from SA Deeds Journal