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Real rights
A « real right » is a right to a « thing ». It is enforceable « against the whole world »,301 which differentiates it from a personal right which is only enforceable against the other person to the obligation.302 A real right establishes « a direct legal connection between a person and a thing », which is lacking in the case of a personal right.303 « Things », the objects of real rights, are limited to corporeals, subject to a number of exceptions.304 Shares305 and personal payment rights that constitute dividends, being incorporeal in nature,306 are thus excluded.
One of the reasons for limiting « things » to corporeals, is that, traditionally, a real right is regarded as conferring direct physical powers over a thing.307 For example, one of the entitlements of ownership is possession. Possession requires the person to be in physical control of the thing,308 which is not possible in the case of incorporeals. Having said that, South African law recognises so-called quasi-possession in respect of incorporeals.309 Examples of this recognition are found in case law dealing with the mandament van spolie. The mandament is a remedy aimed at restoring possession in cases where possessors have been deprived of their possession unlawfully.310 In some cases the mandament has been allowed in respect of personal rights,311 as explained in the following statement by the SCA:
« Originally, the mandament only protected the physical possession of movable or immovable property. But in the course of centuries of development, the law entered the world of metaphysics. A need was felt to protect certain rights (tautologically called incorporeal rights) from being violated. The mandament was extended to provide a remedy in some cases. Because rights cannot be possessed, it was said that the holder of a right has quasi-possession of it, when he has exercised such right. Many theoretical and methodological objections can be raised against this construct, inter alia, that it confuses contractual remedies and remedies designed for protecting real rights. However, be that as it may, the semantics of quasi-possession has passed into our law. This is all firmly established. »
The (dictionary) meanings of “beneficial owner”, “agent”, “nominee”, “fiduciary” and “administrator” in the Commentary to Article 10
The phrases « beneficial owner » and « beneficial ownership » are defined in a number of dictionaries.
Perhaps the most noteworthy is the American legal dictionary Black’s Law Dictionary, which scholars and courts have in the past used when interpreting DTAs.509 The definition of « beneficial owner » in this dictionary reads as follows:
« 1. One recognized in equity as the owner of something because use and title belong to that person, even though legal title may belong to someone else; esp., one for whom property is held in trust. « Also termed equitable owner. 2. A corporate shareholder who has the power to buy or sell the shares, but who is not registered on the corporation’s books as the owner. 3. Intellectual property. A person or entity who is entitled to enjoy the rights in a patent, trademark, or copyright even though legal title is vested in some else. The beneficial owner has standing to sue for infringement. A corporation is typically a beneficial owner if it has a contractual right to the assignment of the patent but the employee who owns the patent has failed to assign it. Similarly, a patent or copyright owner who has transferred title as collateral to secure a loan would be a beneficial owner entitle to sue for infringement. »
In addition, Brown quotes the following definition of beneficial ownership from « The Dictionary of Canadian Law:
« ownership through a trustee, legal representative, agent or other intermediary »
Chapter 1 Introduction
Chapter 2 Views of the OECD and scholars on the meaning of the term « beneficial owner »
Chapter 3 Beneficial ownership as a concept in the law of common and civil-law countries, with an emphasis on the concept in the law of South Africa
Chapter 4 The interpretation of double taxation agreements
Chapter 5 Beneficial ownership as an anti-avoidance measure
Chapter 6 The views of foreign courts on the meaning of the term « beneficial owner »
Chapter 7 A South African perspective on the interpretation of double taxation agreements and a proposed international meaning for « beneficial owner »
Chapter 8 General renvoi clauses based on Article 3(2) of the OECD MTC
Chapter 9 The meaning of the term « beneficial owner » in South African statutory law and the application of a South African meaning under the general renvoi clause
Chapter 10 Conclusion
Annexure A: Wording of paragraph 12 of the Commentaries to Article 10 after amendment in 2003 and 2014 and the proposed amendments in 2017
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