SECURITY WARNING: PROPERTY SALE CYBERCRIME SURGES, AND NEW AI DANGER
“The infectiousness of crime is like that of the plague” (Napoleon Bonaparte)
This October marks the 20th anniversary of the globally observed Cyber Security Awareness Month, and with cybercrime continuing to surge, here’s a cautionary tale to bear in mind.
You buy your dream house and pay the purchase price to the transferring attorneys (the conveyancers). Excitement builds as you wait eagerly for transfer and call the family together to plan your move. Then comes a call from the attorneys – why haven’t you paid yet? Your heart sinks, and panic sets in as it becomes clear that you just paid into a fraudster’s bank account. You contact the bank but your money has gone, along with the fraudsters.
That’s a nightmare scenario to which an ever-increasing number of property buyers and sellers around the world are being subjected. Property transactions are a natural focus for these cybercriminals because of the large amounts involved, but more and more personal and commercial transactions are also being targeted.
A recent High Court fight over yet another email interception fraud reinforces the need to remain alert in every situation and at all times.
R2.94m stolen – buyers, banks and conveyancers all at risk from email interception fraud
- A couple bought a house and paid R2.94m into the bank account specified in an email which appeared to come from the conveyancers. It was however a classic case of email interception and compromise – somehow the criminals had obtained sufficient information about the sale transaction to enable them to email the buyers, pretending to be the conveyancing firm, and convince them that their payment was being made into a legitimate trust account.
- As soon as it emerged that the account was in fact a fraudster’s, the buyers contacted the bank which promised to immediately freeze the account. Nevertheless, the R2.94m was transferred out to the fraudsters, and the couple sued the bank in the High Court for negligently allowing that to happen.
- The bank replied that, if it were indeed found to be negligent, it would allege contributory negligence on the part of both the buyers and the conveyancers.
- Its application to join the conveyancers into the court action failed, the Court holding that the buyers could choose who to sue and who not to, but the practical point of interest to most of us is the clear indication that in a case such as this, everyone stands to lose – property buyers (sellers are equally at risk), banks and conveyancers.
How to stay safe
Forewarned is forearmed, so follow these procedures strictly:
- Never fully trust anything you access or receive electronically. Everything electronic is potentially unsafe – think emails, SMSs, WhatsApp messages, websites, social media pages, online forms and anything similar. Don’t click on links without checking first for suspicious URLs and even then, be careful if asked to submit information, don’t download attachments unless you are certain they are safe, never disclose login details, passwords or other sensitive or personal information. Keep reminding yourself, your family and your staff of the ever-present dangers.
- Secure all your email, network and online systems against viruses, malware, breaches, hacking and compromise. Make sure all devices, servers, domains etc are protected. A good start is to install strong anti-malware software and firewalls, to ensure that all software and browsers are constantly updated with the latest security patches, and to use data encryption where you can. Use strong passwords and change them regularly.
- Use an online resource like the South African Fraud Prevention Service to security check websites.
- Pay particular attention to all banking and investing channels, and under no circumstances trust any email, SMS or other communication purporting to advise banking details or (a particular risk area) a change of banking details.
- If you are a business that regularly requests payments from customers or clients, add a suitable warning to every communication and a disclaimer against liability if a loss occurs. Legal advice specific to your circumstances is essential here. Consider using a secure payment portal with two factor authentication protection. If you email invoices with banking details, secure them from alteration (don’t put all your faith in PDFs, it’s a myth that they can’t be changed).
- Perhaps most importantly – always check directly with the account holder before paying anything. Contact the account holder only on its real and confirmed contact details – fraudsters are adept at creating look-alike emails and email addresses, telephone numbers, WhatsApp and cell numbers, and website addresses.
A new and substantial danger – AI voice cloning
As AI explodes into every aspect of our lives, an increasing number of reports are made of voice cloning frauds.
Perhaps you get a call from “your attorney”, or your attorney gets a call from “you”. Or your “boss” or your “HR department” phone you. Perhaps the call is to ask for sensitive information or perhaps it is to ask for money. A particularly successful fraud here, because of its emotional content, could be a variation on “Hi Mum and Dad, I have a problem, can you send me R10k urgently please? Send it to…”.
You know the voice, so you trust the call, but the reality of course is that a criminal has fed a sample of someone’s voice into an AI program and duplicated it perfectly (or at least perfectly enough to fool you in the heat of the moment). No doubt cloned video calls and other AI powered scams will proliferate soon if they aren’t already doing so.
Once again, constant awareness is the key to protecting yourself from this sort of scam. Never let your guard down!
According to Joubert Galpin Searle’s Conveyancing Director, “We advise that you make an appointment and hand deliver your banking details to the conveyancer and under no circumstances will these banking details be changed, unless another appointment is arranged in person. This is the best way to prevent any information from being intercepted.”
DEMENTIA: UNDERSTANDING YOUR LEGAL OPTIONS
“Dementia is the plague of our time, the disease of the century” (Unattributed)
Dementia is a widespread medical condition that affects people of all ages but particularly the elderly, and includes conditions like Alzheimer’s. One of the most significant challenges of dementia is the loss of mental capacity, making it difficult for individuals to make crucial decisions, including those related to their legal affairs, finances and care. This can be particularly problematic when family members are unprepared or unaware of the practical and legal implications.
Beware the Power of Attorney myth
One common misconception is that a signed Power of Attorney (PoA) can authorise a family member to take control of the individual’s financial affairs in perpetuity. In fact, a PoA is only valid as long as the person who granted it maintains “legal capacity”, in other words an understanding of its implications. If and when dementia kicks in, the PoA automatically becomes invalid.
Enduring Powers of Attorney, which continue even after someone loses legal capacity, are valid in some countries but are unfortunately not yet recognised in South Africa.
So, what are your legal alternatives for dealing with dementia?
You will typically have three legal options available –
1. Curatorship: This involves appointing a curator bonis through a High Court order to manage the financial affairs of the person with dementia (a curator ad personam may in rare cases also be needed to manage the person’s personal affairs). This process can be complex and expensive, but in some cases it may be the only viable option available.
2. Administration: Similar to curatorship but less complex, less expensive, and quicker, this involves an application to the Master of the High Court for the appointment of an Administrator.
It is only available when your family member is a mentally ill person or person with severe or profound intellectual disability, which excludes cases of purely physical frailty or disability, and suggests that in cases of mild dementia or mild cognitive impairment only curatorship is an option – but take legal advice on your specific circumstances. An extra element of cost and delay applies in larger estates, in that the Master must commission an investigation into any application where the assets involved are over R200,000 and the annual income is over R24,000 p.a.
3. Special Trust: An alternative option is to consider a trust or special trust, which can be established if your family member suffers from an early onset of dementia but is still lucid and has legal capacity. All trusts have advantages in that they allow individuals the freedom to choose upfront who the trustees will be and what powers and duties they will have, whilst special trusts come with significant tax benefits over ordinary trusts. Individualised professional advice is essential here.
Understanding the available legal avenues can help you navigate this difficult journey, and with proper planning, personalised legal advice and early action, you can ensure that your family member’s legal and financial well-being is protected at all times.
SUING FOR A SUPERMARKET TRIP "SLIP 'N TRIP" - WHAT MUST YOU PROVE?
“The path is smooth that leadeth on to danger” (William Shakespeare)
Tripping over aisle blockages or slipping on floors made slick by spillages can happen in even the best-managed supermarkets, and injured shoppers regularly turn to our courts to claim damages from shopkeepers and building owners.
It’s no surprise therefore that this sort of claim has its own (informal) name – the “slip ‘n trip” case. A recent High Court judgment provides some clarity on what you will need to prove should you be one of the unfortunate shoppers who are injured in this way.
A shopper slips, and sues
- A shopper slipped on an unidentified spillage, injuring herself and needing hospitalisation and further treatment for unspecified orthopaedic injuries.
- Supermarket employees initially undertook to cover her medical expenses but later the supermarket denied liability.
- It admitted that it had a general duty of care to customers visiting its store to ensure that it afforded them a safe environment within in which to shop, but claimed the shopper’s fall was due to her sole negligence in that she failed to keep a proper lookout, failed to take reasonable steps to prevent her fall and failed to avoid injury to herself. In the alternative it alleged contributory negligence on her part. It also sought to blame its cleaning service contractors and/or an independent merchandiser who had been working in the aisle in question.
- The shopper took her claim for damages to the High Court, which confirmed that what you will have to prove is that the shop:
o Should have foreseen the reasonable possibility of its conduct causing your injury and monetary loss; and
o Should have taken reasonable steps to avoid that loss; and
o Didn’t do so.
- The Court held that, on the evidence presented, the shopper had proved that she took proper care for her own safety on the morning in question. The fact that she may have moved down aisle 5 at more than a leisurely dawdle did not occasion her fall: she did not slip or trip because of haste or inattention but because she stepped in some spillage of unknown origin (i.e., you need to prove you weren’t negligent).
- And even if the spillage was a small one (supposedly the size of a R2 coin in this case) it really matters not what the extent thereof was as its mere presence on the supermarket floor presented a risk to any unassuming shopper, who would be expected to spend her morning looking at the merchandise on the shelves and not peering down at the floor ahead of her (i.e., keeping a proper lookout doesn’t necessarily mean peering down at the floor ahead of you all the time).
- In principle, once a shopper has testified to the circumstances in which he fell, and the apparent cause of the fall, and has shown that he was taking proper care for his own safety, he has ordinarily done as much as it is possible to do to prove that the cause of the fall was negligence on the part of the [supermarket] who, as a matter of law, has the duty to take reasonable steps to keep his premises reasonably safe at all times when members of the public may be using them.
- The shopper in this case had done all that, raising a rebuttable presumption of negligence by the supermarket so that, in the absence of an explanation from it, it was inferred that a negligent failure on its part to perform its duty must have been the cause of the fall. In this case it provided no evidence of how long the spillage had been on the floor or how long it was reasonably necessary for it to discover the spillage and clean it up. (i.e., once you prove what happened and that you took proper care for your own safety, it’s for the supermarket to prove that it wasn’t negligent)
- The shopper is entitled to whatever level of damages she can prove
CAN A VIDEO CALL BE A VALID WILL?
“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)
It may well be that in the future, we will be able to make a perfectly valid will by way of a video recording or other electronic means, but that day has not yet arrived.
For now, it is essential that your will be properly drawn, not only to clearly reflect your last wishes, but also to comply with all the formalities laid out in our Wills Act.
In summary (ask your lawyer to explain the finer points, they are important), wills must be in writing and signed by you on all pages, in the presence at the same time of two competent witnesses who must sign the end page (preferably all pages, but that’s not a formal requirement).
Video wills – are they valid?
Bearing in mind those required formalities, and the fact that an attempt to rely on a video recording as a will was abandoned in the case discussed below, it would be rash to assume that a video will ever be accepted as valid even though the concept has not to date been directly tested in our courts.
Rather observe all the formalities listed above, and think of using a video recording just as an adjunct to your formal will. For example, recording the will-signing process itself could help avoid any future dispute over your written will’s validity, whilst an informal video message to your family explaining to them why you have drawn your will the way you have could provide clarity and comfort to them when the time comes.
Non-compliance with formalities – there are escape hatches, but
There are escape hatches in that our Wills Act provides that a document not complying with all formalities can be accepted as a valid will if it was drafted or executed by the deceased and if it was intended to be their will. You can also be authorised to both inherit and act as an executor, even if you or your spouse signed as a witness, if you can prove that there was no fraud or undue influence over the deceased. You can also be taken to have revoked a previous will in various ways.
But as we shall see from the two recent High Court cases discussed below, relying on any of those escape hatches is extremely unwise. At worst, your last wishes won’t be honoured, and at best you will be exposing your loved ones to the risk of prolonged and bitter litigation at the very worst time.
Case 1: A Covid-19 video-call attempt to replace a will fails
- A father had left everything to his children in a 2018 will. But, dying in hospital of Covid-19 in 2021, he made a video call to his farm manager
indicating his wish to revoke the will and saying that his final instructions were that everything be left to his farming trust. - As requested, the farm manager had a will to that effect drawn by attorneys and delivered it to the hospital (he was unable to deliver it personally due to Covid-19 restrictions then in place), but the father died before it could be given to him for confirmation and signature
- The trust asked the High Court for an order declaring the 2018 will revoked and the 2021 unsigned will accepted as valid (it seems to have abandoned an argument that the video call itself was a will). The disinherited children opposed this application vigorously.
- The Court declined to validate the unsigned 2021 document, pointing out that the Wills Act’s provisions in this regard must be interpreted and
applied strictly and narrowly. It’s analysis of the trust’s argument that the impossibility principle applied will be of great interest to lawyers, but the practical point of issue to most of us is that although it seems clear that the father wanted to make a whole new will, on the facts of this case only his written and signed 2018 will could be accepted as valid.
Case 2: Brothers at war, and a non-compliant will accepted as valid
- Another tragic case of a dying father trying to change his will, this time to disinherit one son (JP) in favour of the other (SG).
- The new will did not comply with the Wills Act’s
formalities. Three witnesses signed it but not in each other’s presence, whilst
the fact that one of the witnesses was SG’s wife formally disqualified him from
inheriting or acting as executor. - JP asked the Court to declare the will invalid so he could inherit under the laws of intestacy, whilst SG asked the Court to accept the will despite the non-compliance, and to allow him to inherit and to act as executor
- On the particular facts of this case, including undisputed evidence of a major rift between JP and his father (in contrast to an extremely close relationship between SG and the father), the Court exercised its discretion in favour of SG.
- Firstly, it held that the will, despite the failure to comply with formalities, was indeed drawn by the father and intended by him to be his will. It was therefore accepted as valid.
- Secondly, it held that SG could both inherit and act as executor because he had proved a lack of fraud or undue influence over his father.
Different outcomes but a clear principle – failure to comply with all formalities risks your last wishes not being implemented and exposes your loved ones to dispute and litigation.