DEBT RELIEF FOR MANY PROPOSED BY DRAFT BILL

Parliament’s Trade and Industry Committee plans to formally adopt the draft National Credit Amendment Bill on 16 August 2018, despite strong opposition by the banking industry.

The controversial Bill allows for the cancellation of debt in certain circumstances and has been under review over the past 3 years. The Committee has earlier this month thrown out a clause in the draft Bill which would empower the Minister of Trade and Industry to hold extensive powers to prescribe debt intervention measures in exceptional circumstances. This clause was removed by agreement by all political parties after senior counsel’s opinion that such enfettered powers would be unconstitutional.

The proposed debt relief, which could result in the write-off of between R13.2bn and R20bn, would benefit consumers:

  • earning a gross monthly income of less than R7 500;
  • having unsecured debt of no more than R50 000; and
  • deemed by the National Credit Regulator to be “over-indebted”.

Whilst the initial lifespan of the Bill is set to be 48 months, the Committee has agreed that the Minister is to submit a report on the Bill’s effect to Parliament within 36 months of implementation in order to decide on the extension of the Bill’s lifespan.

For more information, contact Sandy Scholtz at Goldberg & de Villiers Inc on 041 5019800.

 

 

SUING YOUR SECURITY COMPANY: THE CASE OF A BURGLED BUTCHERY

“Somewhat ironically, given the fact that the phrase “not a sausage” is originally derived from the Cockney rhyming slang “sausages and mash” meaning “cash”, they got away with not a sausage from the butchery but a great deal of cash” (extract from judgment below

When you employ a security company to provide alarm monitoring and “armed response” services, you are paying them to protect you from criminals. What are your rights if they don’t do their job properly?

A recent High Court case illustrates.

The alarm, the safecrackers and the “all in order” report 

  • Burglars broke into a butchery one evening through the roof, triggering an alarm. They cut open two safes with angle grinders and escaped into the night with a large amount of cash.
  • The security company contracted to provide “monitoring, reaction, reporting and maintenance security services” to the butchery had received the alarm signal and identified the zone as being in the roof/ceiling.
  • The vehicle response officer despatched to the scene reported, after “a hurried inspection of 2 ½ minutes”, that “as far as he can see” all was in order, and that he had left a slip in the door of the premises advising of the incident and of the fact that all was in order.
  • The problem it seems was that the roof break-in wasn’t visible from the street and the security company was unable to contact the first key holder (the butchery manager, whose cell phone battery was dead), to arrange access to the premises. The company made no attempt to contact the second key holder (the business owner) because, it said, he had in the past rudely instructed them not to contact him except in an emergency. The owner denied having given such an instruction and the Court accepted his evidence to this effect.
  • The (no doubt delighted) safecrackers were in the end result left undisturbed to get on with their angle grinding, and the butchery sued the security company for damages.

The exemption clauses

The Court found the security company to have been negligent in its breach of contract, and then considered its attempt to avoid liability by relying on not one but two exemption clauses –

  1. The first disclaimed liability unless the client could prove “negligence … or disregard of duties”,
  2. In contradiction to that, the second clause was a blanket indemnity absolving the security company “from any liability whatsoever for any loss howsoever occasioned”.

The contract being thus ambiguous, the Court gave effect to the first clause and, negligence having been proven, ordered the security company to pay the butchery owner whatever damages he can prove.

The lesson for security companies

Aside from the poor publicity that any service failure like this will expose you to, the legal ramifications could be huge.

  1. So firstly, have your lawyer check your client contract and in particular ensure that you have one clear, enforceable exemption clause. Note that disclaimers, particularly those “very general in [their] application”, may be tricky to enforce when constitutional considerations, considerations of “public policy” and “good faith”, or the Consumer Protection Act (CPA) apply. The CPA requires contracts to contain “fair, just and reasonable terms and conditions”, plus exemptions/disclaimers of any sort must be clearly drawn to the attention of clients in plain language.
  2. Secondly, if your contract obliges you to do anything specific – like contact a second key holder when you can’t raise the first – do so. Make sure any contrary instructions are recorded and provable (you may even need to amend the contract itself – ask your lawyer for specific advice).
  3. Thirdly, make sure that your response to alarm activations cannot be considered negligent – the Court in this case was clearly unimpressed with the reaction officer’s “hurried inspection” and there was much debate during the trial as to whether he should have made more effort to check the premises from an adjacent alleyway.

The lesson for clients

Although as we pointed out above you may sometimes have room to challenge exemption clauses, don’t count on having an easy time of it. Our law recognises the general right of suppliers to protect themselves “against liability insofar as it is legally permissible”.

Having said which, if you are the unfortunate victim of a crime and your security company has let you down, take legal advice immediately – you may just have a claim!

Credit: LawDotNews

For more information, make an appointment with the professional legal team at Goldberg & de Villiers Inc on 041 5019800.

YOUR BODY CORPORATE AND ARREAR LEVIES: TO SEQUESTRATE OR NOT TO SEQUESTRATE?

          “…aye, there’s the rub” (Shakespeare)

Levies are the lifeblood of a sectional title scheme, and the Body Corporate has a duty to recover arrears from defaulting owners. It has the power, in addition to following standard debt collection procedures and perhaps approaching the Community Schemes Ombud for assistance, to apply for the sequestration of the owner’s estate. Indeed just the threat of a sequestration application is sometimes enough to frighten a recalcitrant debtor into paying up.

But, as Shakespeare might have put it, there’s an alarming “rub” here that body corporate trustees ignore at their peril. It arises from ‘the danger of contribution’ in insolvent estates. In a nutshell, where the ‘costs of sequestration’ exceed the funds in the estate available to pay them, proved creditors may well have to contribute towards those costs in addition to losing their claims. Talk about adding insult to injury!

A R46k shortfall – must the body corporate contribute?

  • A body corporate successfully applied for the sequestration of the personal estate of a defaulting section owner.
  • The property was bonded to two banks who duly proved their claims against the insolvent estate. Wisely, no other creditors proved claims and the trustee of the insolvent estate drew an account providing for the two banks alone to pay pro-rata contributions to cover the R46,663-16 shortfall in the costs of sequestration.
  • The banks objected to the account on the basis that the body corporate should also contribute as ‘petitioning creditor’, although it hadn’t formally proved a claim. The Master of the High Court ruled that the body corporate was protected from contributing as its claim related to arrear levies (and the costs of recovering the arrears) – claims which didn’t need to be formally proved and would by law be paid out of the proceeds of the property anyway.
  • The banks asked the High Court to set aside the Master’s ruling, and the Court duly held that as “petitioning creditor” the body corporate must indeed contribute to the shortfall pro-rata with the bondholders.

The bottom line – trustees of bodies corporate should, before applying for a defaulting owner’s sequestration, make certain that there is no danger of contribution.

Credit: LawDotNews

For more information, contact the professional legal team at Goldberg & de Villiers Inc on 041 501 9800.

DO YOU READ ONLINE TERMS AND CONDITIONS? YOU SHOULD AND HERE’S WHY

      “The Internet is a Real Place with Real Consequences” (Rebecca MacKinnon, Internet policy expert)

We live in an age of online commerce. We buy and sell pretty much anything you can think of on the Internet, whilst contracting online for everything from an Uber ride to a plumber’s call out has become second nature.

So we should all know just how important it is to take note of those annoying little tick boxes saying things like “I agree to the terms and conditions available here” (with of course a hyperlink under the “here” leading you to a list of terms and conditions as long as your arm).

An interesting case recently before the High Court illustrates.

“I’ve won R5m” thought the online gambler

A regular visitor to a bookmaker’s online sports betting website was overjoyed when, after placing over 530 bets over an 8 month period, and for a stake of only R100, he successfully picked the winners in 8 different horse races.

His betting slip showed a “total possible payment” of R4,841,728 and that, thought the gambler, was exactly what he’d won (actually it would have been over R5m before tax).

Imagine his disappointment and distress when the bookmaker paid him only R1m, referring him to its online standard terms and conditions. Clause 9, pointed out the bookmaker, was headed “Maximum Payout” and imposed on every customer a daily winnings limit of R1m.

Unwilling to go down without a fight, the punter sued the bookmaker for the full amount. He hadn’t, he said, read the Ts and Cs (he is no doubt in very good company in that, which is indeed the point of this article) and anyway they were, he argued, overridden by the express reference on his betting slip to the full amount.

Let the signer beware

Unfortunately for him his luck had well and truly run out. The Court dismissed his claim with costs, holding that the “total possible payout” figure quoted on the betting slip could not entitle him to a payout in conflict with the daily limit.

Central to the Court’s decision was its finding that the gambler, when he opened his account on the site, must have ticked a box agreeing to the bookmaker’s standard terms and conditions. “When signing the document by placing an electronic tick in the box”, held the Court, “the applicant placed himself in the same position as a person who had physically signed the document. He is bound by the maxim caveat subscriptor [‘let the signer beware’], whether or not he actually took the trouble to read the terms”.

There’s a strong warning there to all of us – when the chips are down (so to speak) ticking those “I agree to the terms and conditions” boxes online binds you to them. You can’t try to evade them later on by saying “I didn’t actually read and understand them before agreeing – no one ever does”.  You’re probably thinking “life’s too short to read all that gumpf”. But then pick your times to be cavalier about it, and when there’s a lot at stake rather take the time to read and understand what you’re agreeing to.  Get legal advice in any doubt.

But wait, there’s more (a caution for online product and service providers)

This is an area of law still being explored by our courts, and particularly in these days of strong consumer protections, online service and product providers should note that the bookmaker’s case was bolstered by additional facts, two of them in particular –

  1. The punter had been exposed to specific warnings about the limits imposed on winnings both before every bet (i.e. more than 530 times) and thereafter on every betting slip,
  2. He always had easy access to the full Ts and Cs via a clickable icon.

Hence the Court’s conclusion that the bookmaker “takes all reasonable steps to ensure that the client assents to the terms and conditions before the account is opened and both prior and subsequent to the placing of any bet the punter is told about the limits on winnings.”

Perhaps the bookmaker would have won his case anyway on nothing more than the tick box and the “signer beware” principle, but on a better-safe-than-sorry basis online providers should perhaps follow the bookmaker’s lead on that one and not rely entirely on a one-off tick in a tick box.

Credit: LawDotNews

For more information, contact the legal team at Goldberg & de Villiers Inc on 041 501 9800.

 

DISCRIMINATORY FACEBOOK SLUR PROVES COSTLY

 

The old saying “put your money where your mouth is” has been harshly felt by a woman who recently posted offensive and discriminatory comments on Facebook.

 

Stephanie Odendaal of KwaZulu-Natal was taken to the equality court by the South African Human Rights Commission for comments posted on her Facebook account which were based on race and aimed at “persons involved and/or engaging in mixed race relationships in general”.

Following a settlement reached between the parties and accepted by the equality court, Odendaal acknowledged that her comments constituted unfair discrimination that amounted to violation of human dignity. Odendaal was ordered to make an unconditional apology, to complete 100 hours of community service and to make a damages payment of R7000 which is to be donated to two non-profit organisations in KZN.

This case serves as a reminder that comments made on social networking sites could have harsh and costly consequences.

Contact Goldberg & de Villiers Inc. for professional legal services on 041 501 9800.

Bridging Finance in Building Contract – Cancellation of Main Agreement Not a Bar to Third Party’s Claim for Breach of Contract

The following case highlights how important quality legal advice is and why you should be fully aware of the legal ramifications of the agreements you sign.

In a matter which came before the Supreme Court of Appeal (SCA)  the court had to decide whether a third party who provides bridging finance to the contractor in terms of a building contract is entitled to rely on the non-payment of certain payment certificates, as a basis for its claim for damages;  and if so, whether it was open to the Respondent Municipality as a matter of law to dispute its liability for payment of those payment certificates on the basis that they were not validly issued. The trial court (below the SCA) answered the first question posed in the negative and the second question accordingly fell away.

The facts of the case were as follows: a company by the name of Yethu was awarded a tender by the Oudtshoorn Municipality (the Municipality). Yethu applied to the Appellant (“Nurcha”), for bridging finance to enable it to complete the project. Nurcha and Yethu subsequently concluded such an agreement. Yethu advised the Municipality of the finance agreement with Nurcha and that it had ceded to all payments to Nurcha. Yethu further advised the Municipality that it should pay all moneys owing in respect of the project into a nominated bank account (the project account).  The project account was the only account into which the Municipality was to pay moneys due to Yethu and this instruction could only be varied with Nurcha’s written consent. The Municipality accepted the instruction and thereby concluded an agreement with Nurcha upon the agreed terms.

Yethu failed to complete the project and the Municipality cancelled the contract with Yethu. Yethu was then placed under final liquidation. Nurcha claimed damages from the MUNICIPALITY on the basis of BREACH OF CONTRACT.

The SCA Held on appeal that the approach of the court below failed to take proper account of the true nature of Nurcha’s cause of action. Its cause of action was not that of a contractor claiming payment for work done under a building contract. Instead, its cause of action was founded on the undertaking of the Municipality to pay all moneys due and payable by it to Yethu, as and when they fell due, into the project account. Therefore Nurcha’s claim was not based on any payment certificate as such but was made in terms of the Municipality’s undertaking to make all payments due and payable in terms of the building contract to Nurcha and not to anyone else. The cancellation of the building contract could not legally impact upon the nature and extent of the obligation of the Municipality vis-a-vis Nurcha.

The Court held that Nurcha was entitled to rely on the Municipality’s breach of the agreement as a basis for its claim for damages against the Municipality. The first question of law therefore ought to have been answered in the affirmative. The appeal was therefore upheld with costs.

Nurcha’s legal counsel must be praised for understanding the underlying agreements and framing their client’s claim in such a manner so as to ensure that their client was successful in its recovery.

For quality legal assistance contact Kugen Pillay of Goldberg & de Villiers Inc on 041 501 9800.

 

WHAT’S IN IT FOR YOU?

 

Whenever we are offered something for free, especially by large companies, we have to ask ourselves, “what is in it for them?”

While browsing Facebook recently on a mobile phone, the writer received an offer from his mobile service provider (“the Service Provider”), to use a new product of theirs – called “Facebook Flex”. Facebook Flex allows you, the customer, to access Facebook for free anytime, without data charges. For many of us, our phones are largely used to access different social media applications, and accordingly, browsing Facebook might constitute a large chunk of Service Providers’ bread and butter.

The question then arises “What is in it for them?”

The answer presented itself to me on the Facebook Flex Terms and Conditions, available on the Service Provider’s website.

As very few people will ever take the time to read the fine print, we wish to show you what you are paying for the Service Provider’s latest ‘free’ service.

Simply put, the Service Provider gives you data, you give them information. The operative clauses of the Terms and Conditions read as follows:

  • “Using the Facebook Flex service would mean customers grant [the Service Provider] permission to give Facebook periodic access to their cellphone number
  • The use of the Facebook Flex service would also mean that customers grant Facebook the right to share their information with [the Service Provider].”

Terms and Conditions are a contract, and by using Facebook Flex, you bind yourself to the contract. The first clause of the Terms and Conditions are clearly understandable. The Service Provider may now give Facebook your cellphone number. For what purpose we cannot know, but it surely will not mean that your phone is going to ring less.

Clause 2 of the Terms and Conditions are very vaguely put. Facebook are allowed to share the customer’s information with the Service Provider.

  • They give no detail as to which information Facebook will share with the Service Provider.
  • The duration of the period during which information will be shared is not stipulated.
  • The Service Provider makes no indication as to how the information will be used.

We all make ourselves guilty of entering into contracts without looking at the fine print. This is very often the case with online agreements, where terms and conditions are not expressly brought to our attention before we click “I Agree”. Unfortunately for the lay person, these terms and conditions are very often worded in legalese – being formal and technical jargon used by lawyers.

However, if you click “I Agree”, or use a service such as Facebook Flex without reading the Terms and Conditions, it does not mean that they do not apply to you, regardless of whether you would have been able to understand them. You have now given Facebook permission to share your information with the Service Provider. This becomes also very important with the commencement of the Protection of Personal Information Act, we are told, is imminent.

The moral of the story is that before agreeing to use any service, be sure to make an attempt to read the small print, Terms and Conditions or similar contract which you agree to by your use of the service. If you cannot understand the Terms and Conditions, do not use the service.

No amount of free data is worth giving up your privacy.

For information on the interpretation and drafting of contracts, contact Cindy Jonker in the Corporate and Commercial Department at Goldberg & de Villiers Inc on (041) 501 9806 or cindy@goldlaw.co.za.

DEPRESSED AND DISMISSED – A HARD LESSON FOR A HARD EMPLOYER

A recent Labour Court decision shows how dangerous it is as an employer, when attempting to dismiss an employee, not to draw a clear distinction between misconduct and incapacity.

Disciplined for depression

An employee, whose track record had originally been an excellent one, was charged at a disciplinary enquiry with four charges of misconduct –

o             Unauthorised absence from work for 17 working days,

o             Failure to inform his manager of his absences in accordance with company policy,

o             “Gross insolence” in the form of turning his back on his manager when talking about his absenteeism,

o             Refusal to obey a “lawful and reasonable” instruction.

He was summarily dismissed after being found guilty of all the charges.

He then asked the Labour Court to declare his dismissal unlawful on the basis that although his conduct was as charged, it was caused by his state of depression. He had been diagnosed by two doctors for depression and prescribed anti-depressants. Moreover a clinical psychologist recommended he be granted sick leave as he was suffering the symptoms of a burnout and “reactive depression”, and was close to an emotional breakdown.

He blamed his depression on his personal and financial problems, and on workplace stress related to his management’s reaction (and inaction) when he asked for help. For example, he was denied a salary increase and performance bonus and said he felt betrayed when his manager appeared on behalf of his wife in his divorce.

The Court, finding that depression is a form of mental illness and that the employee’s conduct was inextricably linked to his mental condition, held that the employer had a duty to institute an incapacity enquiry rather than a disciplinary one. Furthermore, knowing that the employee was a person with a disability, the employer “was under a duty to reasonably accommodate him”.

In all the circumstances the Court found that

o             The dismissal was automatically unfair in terms of the Labour Relations Act, and

o             The employee had suffered unfair discrimination in terms of the Employment Equity Act.

The hard lesson for employers

The end result is that the employer must –

  • Reinstate the employee with full retrospective effect,
  • Pay him an additional six months’ salary as compensation,
  • Pay his legal costs.

Mental health issues are perhaps not always as easily understood as physical ones, but they can both amount to incapacity and in both a little bit of empathy will go a long way. Moreover specific legal rules apply as to how you should proceed, and even if you suspect malingering it’s vital to act fairly and in accordance with procedure.

Take specific advice before you do anything as the penalties for getting this wrong will be severe – our courts are not gentle with employers who contravene our labour laws, particularly in cases of automatic unfairness and unfair discrimination

Credit: LawDotNews

For professional Labour Law advice, contact Goldberg & de Villiers Inc on 041 501 9800.

BEWARE OF ONLINE AND EMAIL SCAMS WHEN YOU ARE PURCHASE A PROPERTY

To avoid falling victim to these scams, experts recommend the following measures:

  1. Know your service provider/attorney/conveyancer and always personally verify any change in payment instruction;
  2. Before making a payment, request the contact person that you have been dealing with at the business or firm of attorneys to confirm the amount and their banking details telephonically or to provide you with other proof of their banking details;
  3. Treat any email notification of a change of banking details with suspicion. Rather obtain telephonic confirmation or confirmation in person of the change in banking details;
  4. Do not click reply to an email when you are sending important information. Instead create a new email and type in the email address afresh or select the address from you address book. In this way you can avoid replying to a fake email address that looks similar to the correct email address;
  5. Cooperate with your attorney when proof of your banking details are required in the form of an original bank statement or cancelled cheque;
  6. It is not always practical to make personal contact with parties involved in transactions in our fast-paced, digital age however it imperative to verify bank details in person.

Contact the professional team at Goldberg & de Villiers Inc on Tel. 041- 501 9800 for assistance on your property related matters.

CHANGING YOUR SURNAME – YOUR CHOICES ON MARRIAGE, DIVORCE AND WIDOWHOOD                

 

               “What’s in a name? That which we call a rose By any other name would smell as sweet” (Shakespeare)

You cannot lawfully use any surname in South Africa other than the one shown in the National Population Register (NPR), and trying to do so will land you in a lot of hassle and probably in legal trouble as well. So tread carefully when it comes to any event in your life involving a possible name change.

Don’t be caught out trying to decide at the altar!

As a woman about to get married for example, you have to decide what surname you want to use after the marriage.

There are many pros and cons to consider when deciding between your various options, but ultimately the choice is yours by law. Think about it beforehand, because it’s important and you don’t want to be caught out trying to make a decision at the altar – whatever choice you show in the marriage register (in the “Surname after marriage (wife)” field at the end) will be recorded by Home Affairs in the NPR.

These are your choices on marriage, divorce and widowhood

  1. Take/keep your husband’s surname, or
  2. Use/revert to your maiden name or any prior surname, or
  3. Join the two surnames into a double-barreled surname.

Must you apply to change your name? And what about men?

As a woman, your choices as above don’t need any form of application, but do advise Home Affairs of any changes in writing or they won’t be recorded in the NPR.

For any surname changes other than as above, you need to formally apply to Home Affairs for authorisation. You will have to give a “good and sufficient reason” for the application, and publication in the Government Gazette will be necessary before approval.

Note: The reference to only “a woman” in the “Assumption of another surname” section of the Births and Deaths Registration Act could well be challenged as unconstitutional at some stage, but for the moment men are stuck with the formal name change process as above.

What about buying and selling property?

When you are buying, selling or otherwise dealing in property, your conveyancer will know how to reflect your choice of name and may in some circumstances need you to confirm your choice on affidavit.

Credit: LawDotNews

For more information and advice, contact Goldberg & de Villiers Inc on 041 501 9800.