Directors at War and the Liquidation Option – A Tale of Sibling Rivalry

Legal
A company’s directors have both the power and the duty to manage the company’s affairs for its benefit. When two or more directors are in place, it’s perhaps natural for the occasional disagreement to arise between them. Indeed, regular expression of a variety of different viewpoints and ideas can make for a strong, dynamic board and business. Provided, that is, that the directors are in the end result still able to agree on the decisions vital to their company’s continued operations. What happens though when disagreements and disputes escalate and make it impossible to continue running the business? Typically, communications break down to the extent that decision-making is paralysed. First prize will of course always be an amicable settlement – through formal mediation perhaps, or negotiation to buy out a…
Read More

You Signed a Property Sale Agreement, Can You Still Accept a Better Offer?

Legal
Imagine a situation where you put your property on the market and an acceptable, but not-perfect, offer is received. You think of the old saying “a bird in the hand is worth two in the bush” and you decide that you are going to accept the offer – even though it’s not ideal. Perhaps it’s not perfect because it’s subject to a suspensive condition – common ones give the buyer time to sell his/her current house or to obtain a bond. In each scenario your sale will fall through if the buyer is unsuccessful within the stated time, and if that happens you are back to square one after a long and fruitless delay. Bear in mind that that delay could be a protracted one depending on what your sale…
Read More

Equal Pay for Equal Work – Can You Differentiate Without Unfairly Discriminating?

Legal
Our employment laws and labour courts come down heavily on any unfair discrimination in the workplace, but it’s not always easy to decide whether “differentiation” between employees is or is not “unfair discrimination”. Take for instance a recent Labour Court case where a black female employee complained to the CCMA (Commission for Conciliation, Mediation and Arbitration) about the higher salary paid to her white male colleague. They were both employed as “surveillance auditors” in a casino with the same job descriptions, doing the same work on a daily basis, graded at the same level, and reporting to the same surveillance shift manager. Nevertheless her remuneration package was nearly half of her colleague’s – unfair discrimination, she said, on the grounds of race and gender. The CCMA agreed with her and…
Read More

Business Rescue: Are Your Suretyships Enforceable? A R5.5m Lesson for Directors and Creditors

Legal
When a company goes into business rescue, creditors are often in for a beating. So as a creditor, if you had the foresight to cover your position upfront with personal suretyships from individuals with assets (normally the directors of the debtor company), you will no doubt be keen to recoup your losses by calling in those suretyships asap. What happens though if you assent to a business rescue plan whereby the debtor company’s debt to you is extinguished? Does that also extinguish the surety’s personal liability to you? Let’s have a look at the lessons for both creditors and directors in a recent case where two sureties tried to dodge a R5.5m claim in the High Court with that very argument … Imagine a situation where you are owed a…
Read More

Security Estates: Can You Fine Speedsters?

Legal
There are many advantages to buying in a security estate or other community scheme, including quality of life and increased potential for growth in your property’s value. As a buyer just be aware that you will almost certainly be binding yourself to a set of rules and regulations imposed by the Homeowners Association (HOA) or Sectional Title Body Corporate. Check that you are happy with them before you sign anything! Our courts have regularly confirmed the general principle that you are bound by what you agree to, and a recent high-profile Supreme Court of Appeal (SCA) decision of Mount Edgecombe Country Club Estate Management Association II (RF) NPC v Singh & others (323/2018) [2019] ZASCA 30 provides an interesting example. HOAs and Bodies Corporate on the other hand will be particularly pleased with the outcome, the High Court…
Read More

Accidentally Paid the Wrong Person? Lessons From a R862k Banking App Error

Legal
In these days of online banking and electronic payment, it’s not uncommon to find out to your horror that you have made a payment to someone in error, either to the wrong recipient or in an incorrect amount. If that happens to you and the recipient refuses to pay you back, what can you do about it? The other side of the coin of course is whether the recipient of an unexplained and unexpected bank account credit can safely go ahead and spend the windfall (the answer in a nutshell is very strong “no” – if there are indeed any free lunches in the world, this is unlikely to be one of them!). A recent High Court judgment of Firstrand Bank Limited v Khopo and Another (AR497/2018) [2019] ZAKZPHC 18 sets out the…
Read More

Expats and Employers: Plan Now For the New Expat Tax Changes

Legal
This article is important to you if you are either a South African working abroad or an employer of one. If you don’t fall into either of those categories, but know someone who does, please think of passing this on. As an employee earning foreign remuneration (salary, leave pay, bonuses, allowances, commission etc), you currently enjoy an uncapped tax exemption (on that remuneration only, not on other foreign income) provided that you work overseas – For more than a total of 183 days during any 12 month period, and More than 60 of those days are consecutive. That however is set to change from 1 March 2020, when only the first R1m p.a. of your earnings will be exempt – you will pay tax on anything over that. With the Rand’s…
Read More

Estate Agents: Securing Your Trade Secrets (and Your Commission)

Legal
As an estate agent you will know that without a valid Fidelity Fund Certificate (FFC) you are not entitled to any commission for the successful sales or leases you put together. All your hard work in fulfilling your mandate will come to naught. Your client need pay you nothing. As a recent High Court case of Tria Real Estate (Pty) Ltd t/a Pam Golding Bloemfontein v Labuschagne and Another (5583/2018) [2018] ZAFSHC 198 warns, you will also be unable to enforce any restraints of trade you enter into with your employees. And that’s a major risk if your trade secrets are as valuable to you as they are to most agencies. The company that converted from a CC without changing its FFC A close corporation (CC) trading as an estate agency held an…
Read More

Your Dog, Cat or Cow (Even Your Bees) Could Cost You Millions

Legal
Our law will generally hold you liable for damages only if someone else can prove that you caused them loss/damage/injury through your “fault” (intent or negligence). That seems fair and logical – if it’s your fault, you pay. If however the loss was caused by your animal/s, you are in a much more dangerous position – you can be sued on a “no fault” or “strict liability” basis – and that’s a sobering prospect. It means that bad behaviour by Maxie the Mongrel, Skollie the Cat, Daisy the Cow, or even (per an old 1926 case) your “domesticated” swarm of bees, could leave you with a bill for millions without your being in any way careless or at fault. Ignorance of that risk is very definitely dangerous rather than bliss. A…
Read More

Small Claims Courts – From 1 April You Can Sue For Up To R20,000

Legal
The monetary jurisdiction of Small Claims Courts has been increased from R15,000 to R20,000 from 1 April 2019. Not all claims can be pursued in a Small Claims Court – Claims over R20,000 must be pursued in the ordinary courts (you can if you like reduce a larger claim to the R20k to avoid having to do that). Only individuals can sue in a Small Claims Court, i.e. not companies, close corporations etc. The State and local authorities can only be sued in the ordinary courts. Other than those exclusions, you can sue anyone including companies and the like. Certain types of claim (such as divorce matters, some damages claims, interdicts, will disputes etc) must also go to the ordinary courts. Even if your claim qualifies for the Small Claims…
Read More