Yearly Archives: 2014

Property Law: Purchasing and bonding a property in a foreign currency

From time to time, foreign investors may wish to secure loans made to South African property owners by means of a mortgage bond and in some cases, the lenders requires the mortgage bond to reflect the amount of the loan in a format with which they are familiar, i.e. a foreign currency of their choice.

Similarly, a foreign purchaser may require that a property purchased in South African is concluded in a foreign currency.  Allan West examines the situation where the parties insist that these amounts are reflected in foreign currency values in the deeds office. .. Read More

Employment Law: Benefits whilst on Maternity Leave

Every employer strives to become an employer of choice, offering a variety of employee benefits to attract and retain quality staff. A medical aid contribution is one of the most common additional benefits offered to employees, as well as a provident fund contribution being a fairly common benefit that is offered.

It all sounds good and well, however the question that arises is, whether the employee is, according to law, still entitled to these benefits during maternity leave?

According to South Africa’s Basic Conditions of Employment Act (BCEA), all employees are entitled to four consecutive months of unpaid maternity leave... Read More

Civil Procedure: Common law grounds for a rescission application: Moshoeshoe and Another v Firstrand Bank Ltd and Others

Facts

The applicants (Mr and Mrs Moshoeshoe) concluded a loan agreement with the first respondent (Firstrand Bank hereafter “the bank”) to purchase their home.  The property was pledged as security and the applicants elected the property address as their domicilium citandi et executandi. However, this address was incorrectly recorded. The applicants drew the error to the conveyancing attorney’s attention, who assured them that it wasn’t important, as well as the bank. It was the failure to correct this error which led to the unfortunate trail of events resulting in the current application... Read More

Company Law: Disposal of a company’s assets and financial assistance to third parties or the directors of the company

Disposal refers to an act of giving away or selling assets to another person or company. Should the company intend to dispose assets or undertaking, special resolution which gives effect to the aforesaid disposal needs to be adopted. It is however vital that such disposal be effected in accordance with the requirements set out in the Companies Act as non-compliance of the Act may render such disposal null and void. A special resolution, which also adheres with the requirements set out in the Companies Act, needs to be adopted in case of financial assistance by the company... Read More

Banking Law: Amendments to the NCA and the impact of the Proof of Income Regulations

Credit providers were required to take reasonable steps to assess whether a consumer will be able to afford making payments, before entering into a credit agreement. The National Credit Amendment Act 19 of 2014(NCAA) containes Regulation 23A[1] which is the ‘criteria to conduct the affordability assessment’ and which sets out clear guidelines for credit providers to be applied when assessing a particular customer’s affordability.

Credit providers complied with the new regulation; most of the banks already had incorporated proof of income documentation as a standard component to their affordability assessment processes... Read More

Banking Law: Rule 46A and execution against residential immovable property

Introduction

The recent changes made to Rule 46 of the Uniform Rules of Court and Rule 43 of the Magistrates Court Rules have caught the attention of the legal community.

The courts in various divisions have been applying the existing Rules regarding the procedure leading up to sales in execution against immovable residential property in different ways, trying to balance out the rights of the judgement debtors and those of the judgement creditors.

In an attempt to reach uniformity in the application of the Rules of Court and to align these with the rights enshrined in section 25 and section 26 of the constitution, the High Court Rules Board have recently made some important amendments to the existing uniform rule 46 which is mirrored in Rule 43 of the Magistrates Court Rules... Read More

Credit Law: Collecting prescribed debts to which the National Credit Act applies

Under the post-1994, democratic dispensation, courts have shown an increased tendency to interpret legislation from a pro-consumer stance. This has produced favourable results in that there has been a decrease in the number of one sided transactions being concluded between large corporations and unwitting consumers. However, the corollary of this is thousands of invalidated contracts and millions of Rands in written-off debts in circumstances where credit providers and companies that concluded agreements in good faith. This harsh commercial climate has placed a demand on attorneys that represent the corporates in question to be incredibly knowledgeable and highly skilled in drafting agreements and collecting debts that stem from the same... Read More

Contract Law: Pre-Emptive Rights: Mokone v Tassos Properties CC and Another

FACTS

A written agreement of lease was concluded between Tassos and Ms Mokone on 1 March 2004 for a one year period. Contained in this agreement was a pre-emptive clause. Once the lease period lapsed an oral agreement on the same terms and conditions as the written lease was entered into. On 3 May 2006 a manuscript was used to extend the lease by means of endorsement in terms of which ONLY a representative of Tassos signed.

A deed of sale was then entered into between Blue Canyon Properties and Tassos this meant that the property was sold to Blue Canyon without allowing Ms Mokone to exercise her right of pre-emption... Read More

Environmental Law: Sustainable Development and Planning

Sustainable development is an evolving concept in both international and domestic environmental law.

The intellectual foundation thereof was laid in Bruntland’s vision of Our Common Future, a report by the World Commission on Environment and Development. The concept was initially constructed in an attempt to resolve the conflicting needs of development and environmental protection. The original definition thereof affirms this as “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

It has developed over the past three decades through a number of hard and soft law instruments. .. Read More

Property Law: Agricultural Land: Options no longer an option

The Subdivision of Agricultural Land Act[1] (“the Act”) prescribes that an owner of agricultural land must first apply to the Minister of Agriculture before subdividing such land. The purpose of the Act is manifest in that its object is to control and prevent the loss of sub-division of agriculturally useful farmland into uneconomic units.[2] Along with this physical prohibition, and for purposes of this article, section 3(e)(i) of the Act prohibits any portion of agricultural land from being sold or advertised for sale, unless the Minister has consented thereto in writing... Read More

Contract Law: Crookes Brothers Ltd v Regional Land Claims Commission for the Province of Mpumalanga : The importance of interest clauses

Interest is a vital consideration when contemplating the provisions of a contract. This was made clear in the judgment of Crookes Brothers Ltd v Regional Land Claims Commission for the Province of Mpumalanga and Others. In this case, the parties had entered into an agreement of sale which included a clause providing that interest was to be levied against the Purchaser in the event that it did not make timeous payment. However, the Supreme Court of Appeal’s (“SCA”) interpretation and application of the clause reached farther than a plain reading of the provision... Read More

Employment Law: The Constitutional Court rules on Temporary Employment Services

In the matter between Assign Services (Pty) Ltd and National Union of Metal Workers of South Africa (“NUMSA”) the Constitutional Court (the “CC”) handed down the judgement in relation to the interpretation of section 198A (3) (b) of the Labour Relations Act (the “LRA”) in terms of Temporary Employment Services (the “TES”) and employees. As of the handing down of the judgement, the conclusion in terms of TES staff has been made that after a period of three months of the employee being placed on the client site, the employee becomes a permanent employee of the client... Read More

Property Law: A seller’s liability for the non-fraudulent misrepresentations by an estate agent

It is often disputed that misrepresentations made by an estate agent in the sale of property bind his or her mandate.

A contracting party who seeks relief on the basis of a misrepresentation or misstatement must establish the following elements:

a precontractual incorrect statement; which was material or wrongful (unlawful); made by the other party to the contract (or someone for whom he or she is responsible); with the intention of inducing the contract; and which induced the contract or caused the other party to suffer loss... Read More

Law of Contract: The legal status of emails: Spring Forest Trading CC v Wilberry (Pty) Ltd t/a Ecowash and Another

Do emails have the same legal status in law as paper-based documents and conventional  signatures? This question was addressed in the Spring Forest Trading-case.

Two parties, Wilberry and Spring Forest, entered into several agreements in terms of which mobile dispensing units were used in Wilberry’s car wash business.

Following a dispute, the validity of the cancellation of a number of agreements between the parties by exchange of e-mails, was relevant. The agreements contained the standard clauses providing that the agreements may only be cancelled in writing and signed by the parties... Read More

Employment Law: Pregnancy and women in high risk areas

Introduction

Many employers operating in hazardous and high risk industries often find themselves in a predicament when they deal with pregnant employees employed in positions that are in high risk areas and are deemed hazardous. The employer in many instances is torn when faced with two contravening provisions in law.

Section 6(1) of the Employment Equity Act states that:

‘No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth or on any other arbitrary ground’

Section 26 of the Basic Conditions of Employment Act further states that:

‘No employer may require or permit a pregnant employee or an employee who is nursing her child to perform work that is hazardous to her health or the health of her child... Read More

Contract Law: Cancelling a contract without a termination clause

An agreement that is reduced to writing is preferred because it is easy to prove the express terms of the contract. However, a party who sues on a contract must prove its terms, which can become a challenge when the term in contention is a cancellation clause that is not in the contract. Two Supreme Court of Appeal (‘SCA’) cases are analysed to illustrate what the court considers when deciding on tacit termination clauses.

In Cecil Nurse vs. Bongile Nkola 2008 (1) ALL SA 428 (SCA) the court had to determine which suretyship agreement was binding on Mr Bongile Nkola (‘the respondent’)... Read More

Contract Law: Waiver of a right to cancel: Sewpersadh v Dookie [2008] 1 All SA 286 (D)

A sale agreement had been entered into in regards to the purchase of a property. The material terms of the agreement were that the purchase of price would be paid via installments over a 24 month period. The respondent then breached the terms of agreement when he failed to pay the full purchase price. In light of such failure to pay, the applicant sent a letter to the respondent demanding compliance within seven days.

The applicant asked the court for the ejectment of the respondent from the immovable property on the ground that the agreement of sale had been cancelled... Read More

Company Law: The importance of KING IV’S principles on Corporate Governance

In light of recent events and certain professions going under review by regulatory bodies, we once again are reminded to be cognisant of the importance of applying principles of governance in an organisation that are not only proper but also effective. Corporate governance is defined by King Code IV as the exercise of ethical and effective leadership by a governing body towards the achievement of the following governance outcomes: ethical culture, good performance, effective control, and legitimacy.

In this article, focus is given to the leading governance model entrenched in King Code IV which came into effect on 1st April 2017 and has been leading organisations to date... Read More

Employment Law: Changing perspectives on intoxication or being under the influence.

Labournet reports as follows:

I recently transferred to LabourNet East London and in the first week I received an Arbitration award from one of our consultants, as usual I read the whole case and my conclusion was that I disagree with the findings and perspective taken by the commissioner presiding over a matter relating to an employee attending work whilst under the influence.

At this point you might be thinking why I disagreed with an educated commissioner of the CCMA, the answer to that question is at the core of this article, and we however need to consider the merits of the case at hand to understand my intended change of perspectives and interpretation... Read More

Contract Law: Suspensive conditions and the Kovacs-case

The case of Kovacs Investments 724 (Pty) Ltd v Marais (323/2008) [2009] ZASCA 84 is critically analyzed with a deeper view of suspensive conditions in an agreement of sale.

In dispute was, inter alia, whether an agreement of sale in respect of immovable property had lapsed due to non-fulfilment of suspensive conditions contained in the deed of sale.

A written agreement of sale was concluded on 29 July 2005 in terms of which the respondent sold a commercial section of a building in Bellville, Cape Town for the purchase price of R18 454 041 to the appellant... Read More

Contract Law: Effective cause revisited

The transfer process of a property can be exciting for the host of involved parties but what starts off as a zealous stream of positive energy can turn into a disaster. In the competitive real estate industry, if an agent finds himself in a situation where his commission is not certain due to the intervention of competing agents who may actually eventuate a sale despite the initial agent’s hard work.

If Agent A who introduces a prospective buyer to a property which Agent A has a mandate to sell and if he further invests a substantial effort to bring that sale to fruition, he will have earned his commission and a seller who entertains another Agent B (Agent B who may have actually eventuated the sale) will then be liable for double commission and he will have only himself to blame for not protecting himself against such risk... Read More

Banking Law: The legal relationship between a bank and its customers

The relationship between banker and customer is one of a contested nature comprising various legal duties, obligations, and customs.

These various obligations and customs came to afore in the matter between Standard Bank of SA Ltd vs. Sarwan (2002) 3 ALL SA 49 (W). The case commenced when Standard Bank of SA (“the Bank”) instituted action against Sarwan (“the Customer”) for R193 220.70, being the overdrawn balance on the Customer’s account held with the bank. It was common cause that the amount consisted out of a cheque in the amount of R180 000.00 deposited and credited to the Customer’s account where after she effected several withdrawals and transfers before the cheque was dishonoured resulting in the amount of the cheque being reversed and a debit reflecting on the Customer’s account... Read More

Industrial Relations: Paternity, Surrogacy and Adoption Leave

Currently the Basic Conditions of Employment Act (BCEA), section 27 thereof, provides for three days’ family responsibility leave for employees to spend time with their new-born babies.

Should they require more time with their new-born children, employees have the option of applying for annual leave, in addition to their three days’ family responsibility leave entitlement (per leave cycle). The three days’ family responsibility leave for when a child is born, however, is only applicable to employees who have been employed for at least 4 months and who work at least 4 days a week for the same employer... Read More

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