Kruger & Co – KRUGER & CO

Sep 25

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Three Ways to Protect Yourself from the Nightmare Neighbour in Your Complex

By Kruger & Co | Property

“A bad neighbour is a misfortune, as much as a good one is a great blessing.” (Hesiod, 700 BCE)

It seems that every community has at least one nightmare neighbour who delights in objecting to everything, fighting with residents and management at every turn, and becoming abusive and aggressive when they don’t get their way.

What can you do to protect yourself and your family if you live in a residential complex and come under attack from such a neighbour?

Of course, first prize will always be to prevent a long and bitter feud from developing in the first place. But if you’ve tried the “let’s chat about this over a cup of coffee” approach without success, what then?

The case of the abusive neighbour and the protection order

Two residents of a complex ended up in the High Court after a magistrates’ court had issued an interim protection order restraining one resident (a man) from having any contact with another resident (a woman). This after he’d subjected her to verbal and physical abuse, threats, and harassment.

The Court’s judgment doesn’t say where these warring neighbours live. And it provides scant details of their conflict, barring that the victim ended up being physically injured. While these details would have been fascinating, the decision’s importance lies in the Court’s confirmation that our laws do provide complex dwellers with two, and in some cases three, options for protection.

Let’s investigate…

The Community Schemes Ombud Service

The CSOS (Community Schemes Ombud Service) has wide powers to arbitrate in disputes concerning complexes and other community schemes. Included in those powers, in respect of “behavioural issues”, is the power to order “that a particular behaviour or default constitutes a nuisance” and requiring “the relevant person to act, or refrain from acting, in a specified way.”
That’s great in theory but unfortunately the CSOS process is not always as quickly accessible as it should be. So, it’s good news that the High Court in this particular case allowed the victim to pursue a more immediate and direct route to justice using Option 2.

This is an important outcome, because the golden rule has always been that you are obliged to approach the Ombud Service first in any case where it has jurisdiction. If you don’t, and you decide to go straight to court, you risk being thrown out of court for jumping the gun. But there are exceptions to that rule…
The Protection from Harassment Act

The PHA (Protection from Harassment Act) gives you and your family a straightforward and affordable solution, allowing you to apply for a protection order from your local magistrates’ court to force the harasser to stop their unlawful behaviour immediately. The Act is strong in its enforcement, with violators facing arrest and fines or imprisonment of up to five years.
“Harassment” is defined widely in the PHA as covering any conduct that causes or threatens harm (mental, psychological, physical, or economic) and extending to stalking, cyber-stalking, sexual harassment and physical or electronic communication.

As this Court put it, “The mischief which the legislature intends to eliminate … is the prevalent violent behaviour in our society and in particular gender-based violence”. The Court certainly considered it relevant that the complainant in this matter is a woman, and her harasser a man.
The Domestic Violence Act

If harasser and victim are in a “domestic relationship”, there is a third option that was not mentioned in the judgment as it did not apply in this instance: the protections of the DVA (Domestic Violence Act). These protections are again quick, accessible, and effective, and the definitions of both “domestic relationship” and “domestic violence” are wide.

When are neighbours in a complex limited to Option 1? The High Court has spoken

Now for the crunch. This dispute ended up in the High Court because the magistrate reasoned that the application was prematurely before his court. He said the application should have gone first to the CSOS because the conduct complained of was a “nuisance” which gave the CSOS power to adjudicate the matter.

Not so, held the High Court on appeal. Nothing prevented the magistrate from hearing an application based on the PHA, and the victim had been free to choose either option. In reaching this decision the Court commented that “… the disputes to be dealt with under this [CSOS] Act, are those which concern the well-being of a community scheme as opposed to individuals’ dispute (sic)” – an indication perhaps that our courts will allow a direct approach to a court where “harassment” (as defined) impacts on you personally as an individual rather than solely as a complex resident.

The upshot

It’s back to the magistrates’ court for the duelling neighbours. The magistrate, after hearing both parties and any further evidence, will either make the protection order final, or discharge it.

So, which remedy should you choose?

If your neighbour’s conduct amounts to personal “harassment” or “domestic violence” as well as “nuisance”, you might well have a choice of remedies and should choose whichever is more likely to give you and your family the quickest and most effective protection. If, however, your neighbour’s conduct does not amount to either personal harassment or domestic violence, a first approach to the CSOS will probably be advised as the safer course.

Got a troublesome neighbour? We can help.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Sep 25

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How Can You Protect Your Heirs’ Inheritances from Their Creditors?

By Kruger & Co | Wills and Estate Planning

“The only person who sticks closer to you in adversity than a friend is a creditor.” (Unknown)

You’ve done everything you can to leave your loved ones financially secure after you die. You’ve left enough assets to set them up in their own lives, made a valid will (“Last Will and Testament”), and chosen a trustworthy and efficient executor to wind up your deceased estate. You think you’d done everything you can to help and safeguard them.

But what if you missed something – something that could be a real gamechanger for your heirs?

Insolvency and attack by creditors

We’re talking here about one or more of your heirs getting themselves into serious debt. It really can happen to anyone. As the out-of-the-blue pandemic lockdowns confirmed, even the most prudent of people can find themselves unexpectedly in the dwang. The danger is that if your heirs’ personal estates are sequestrated, or if their creditors execute against their assets, their inheritances could be attached – and lost to your family forever.

Fret not! There are ways to manage this risk whilst still ensuring that your heirs are looked after. Which route is best for you calls for specific legal advice. But here are the main options:

Set up a discretionary trust: You set up a trust to which you leave everything, or just a portion of your estate, or specified assets. This ensures that the inheritance is managed by trustees for the benefit of your heirs, and out of reach of their creditors – if you do it correctly.
Choosing the right form of trust (the most commonly encountered types being living or “inter-vivos” trusts and will or “testamentary” trusts) needs careful consideration with professional guidance. It’s equally critical to use the best structure for the trust, its assets, and its management.

Tax and other practical aspects also need careful consideration. In the context of protecting assets from creditors, it’s vital to make the trust a “discretionary” one, because the trustees in a discretionary trust can distribute to beneficiaries at a time of their choosing, rather than the inheritances automatically vesting in your heirs (and being attached).
Insert an “insolvency clause” into your will: This one calls for particularly careful drafting by a professional. Our courts have previously held that it is not permissible to simply include a clause or condition that’s intended to prevent creditors from pursuing an heir’s inheritance once that heir “has acquired rights to the inheritance.”
Rather, the clause needs to create a “gift over” such as a provision stating that if your heir is insolvent at the time of your death, the bequest must accrue to another person. Or perhaps you could allow your executors a discretion to divert the inheritance? Clearly, crafting such a clause to both benefit your heirs and withstand attack from a creditor or the trustee of an insolvent estate requires specialist help.
Create a usufruct or fideicommissum over assets: If you want to leave an asset (typically, but not always, immovable property) to your heirs, you could create rights for them under a “usufruct” or “fideicommissum” – technical terms which again require specialist advice and consideration of all the legal, practical and tax angles.

The last option, of course, is to leave it to your heirs to repudiate (reject) their inheritances after you die. That’s not a first prize solution as it requires your heirs to both understand the legal position and to repudiate at exactly the right time.

A will is only as good as its most recent review

There are many good reasons to diarise regular reviews of your will: changing circumstances; new laws and taxes, the list goes on… But we’ve just added another reason. While conducting these reviews, consider whether any of your heirs could be at particular risk of financial distress and if so, how you can manage that risk. Let us know if we can assist!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Sep 25

0

How Does the New Corruption Reporting Law Affect Your Business?

By Kruger & Co | Business, Criminal Law / Crime

“In defence of Madiba’s legacy, we will continue to wage a relentless war on corruption…” (President Cyril Ramaphosa)

You may have seen mention of the new amendment to the Prevention and Combatting of Corrupt Activities (POCCA) Act that imposes severe penalties for any failure to report corruption. If you did see it, you quite possibly thought “Doesn’t apply to me, I’m just a small business”.

Wrong! Let’s have a look at who the new law applies to, what it requires of you, the risk you run if you don’t pay it due attention, and how you should manage this new risk.

Who does the new reporting requirement apply to?

Not just big companies and multinational businesses. It applies not only to all members of “incorporated state-owned entities” but also to all persons and entities in the private sector. The definition here is very broad indeed, and it includes all types and sizes of businesses from sole trader up, all types of entity large and small, all companies, every “body of persons” and every “other legal person”.

In short, it applies to you!

What does it require of you?

Simply put, you must report any corruption or attempt at corruption. Of course, we all know what the common-sense definition of “corruption” is. If you need an exhaustive legal definition, we can certainly help you with that.

But in practice just be aware that it applies to any agreement or offer by an “associated” person (including employees, independent contractors and the like) to give anyone else any unlawful “gratification”. What’s more, “gratification” is so widely defined as to include every possible form of monetary or non-monetary advantage (or avoidance of disadvantage) you can think of. Naturally the agreement or offer in question must relate to an attempt to either obtain or retain a business advantage of some sort.

On another warning note, POCCA penalises not just active knowledge of corruption and wrongdoing, but also brings in concepts of “should have known” and “turned a blind eye”.

Put simply, you must report any form of “corruption”. Full stop.

What penalties apply?

In theory, the sky’s the limit here – unlimited fines and life imprisonment! In practice, courts will of course tailor the punishment to fit the crime. The bottom line: there are very clear indications that the authorities mean business, so beware.

How should you protect yourself?

The new law pulls no punches. But fortunately there’s a solid defence included in the new provision: to escape liability you only need to show that you “had in place adequate procedures designed to prevent” the corruption. There’s no definition of what this might entail, so it’s up to you to use common sense based on your particular business and circumstances. Local experts suggest that to be safe we follow the UK’s “Six Principles” – proportionality (procedures tailored to the level of your risk), top-level commitment, risk assessment, due diligence, communication, and monitoring and review.

Need help with drafting a corruption prevention protocol? Shout if we can help.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Sep 25

0

Protect Your Employees from Harassment and Abuse – or Pay the Price

By Kruger & Co | Employment and Labour Law

“It takes leadership to improve safety.” (Jackie Stewart, Formula 1 legend)

One of your key duties as an employer is to create a working environment in which your employees are protected from harassment and abuse. As a recent High Court judgment graphically illustrates, dropping the ball will cost you dearly.

Meet the protagonists

The cast of characters in this unhappy tale features:

The employer: A private hospital in Bloemfontein, operated by a national healthcare group.

The employee: A Surgical Theatre Manager employed to oversee and manage the hospital’s operating theatres, manage the theatre staff and monitor patient care in the theatres.

The surgeon: Who conducted a private practice at the hospital and performed surgeries in its surgical theatres.

11 years of staggering abuse

To summarise a long saga of woe, the employee endured eleven years of abuse from the surgeon, the highlights (or, more accurately “the lowlights”) being:

Eleven years (!) of verbal abuse in which the surgeon’s aggressive personality and temper tantrums saw him “hurling profanities, insults, blasphemous language and obscenities at [the theatre manager] while in the presence of other operating theatre staff and even members of the public”.
The Court summarised the surgeon’s behaviour as “disgusting” – unsurprising given the employee’s evidence that the surgeon had once gone to the extent of flinging a patient’s colon at her, together with a volley of swear words.
Only her sense of duty, and her pity for the patients (many of them cancer patients in dire need of urgent surgery), caused her to endure the constant abuse, defamatory remarks and insults for so long.
She submitted numerous complaints to the hospital over the years, both on her own behalf and on behalf of other theatre staff (including several scrub nurses who refused to work with this surgeon), without any appropriate response. Indeed, she testified that the hospital told her that she and the other staff “were not allowed to lay any complaints against a medical doctor”, who was constantly touted as a “money spinner” for the hospital.
It’s important to note here that, although the surgeon wasn’t a hospital employee under its direct control, the hospital had the right to revoke his “admitting privileges” at the hospital for any reason including “abusive behaviour or harassment”.

The theatre manager sued the hospital for failing to come to her assistance and endured almost eight years of litigation. She eventually accepted an award of R300,000 as damages for the humiliation, degradation, shock, anguish, fear and anxiety she suffered. This included “severe psychological and psychiatric trauma manifesting as post-traumatic stress syndrome and major depressive disorder for which she requires psychotherapy treatment”.

The Court confirmed her damages award of R300,000, together with a large portion of her costs including a portion on the punitive attorney and client scale.

The hospital (eventually) paid up. But what about the surgeon?

If you’re an employee unfortunate enough to fall victim to this sort of abuse you may wonder if you can sue your tormentor directly in addition to suing your employer. The answer is an emphatic yes.

The theatre manager in this matter did sue the surgeon for damages. And while he died before the matter was finalised, she obtained a confidential settlement from his deceased estate.

The bottom line

All of your employees deserve to work in a civilised environment. This can be achieved by having common sense policies in place – and enforcing them uniformly, regardless of the seniority of the staff member, or their value to your business.

No doubt the negative media coverage that accompanied this trial has rubbed a lot of salt into the hospital’s monetary wounds. Their humiliating court defeat was very public, and the reputational damage they suffered surely exceeded the R300,000 they ended up paying the victim.

Actions speak louder than words

Good idea then to learn from the hospital’s mistakes. On the plus side, it had in place detailed policies to underpin its zero-tolerance approach to harassment, together with clear grievance procedures. What went wrong, it seems, was its failure to implement them.

Don’t make the same mistake!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Aug 27

0

Sibling Showdown: How One Missing Word in a Will Divided a Family

By Kruger & Co | Wills and Estate Planning

“From small mistakes come great catastrophes.” (Justin Cronin)

We’ve all seen how even the smallest mistake can have huge consequences down the line. A recent High Court spat between siblings over a poorly-drafted will confirms once again that when it comes to important documents (and it doesn’t get more important than your will!), every word counts.

The joint will and the “30-day survivor” clause

In their joint will, a wealthy couple had left everything to each other. When the husband died, his wife inherited their whole joint estate. Things started to come unstuck when she was then found to be unable to manage her own affairs and placed under curatorship – before she had a chance to make her own new will.

When she died 3 years later, only the original joint will remained. Her three children quickly came to blows over whether that joint will still applied to their mother’s estate, or whether she had died without any will (“intestate”).

At issue was a “30-day survivor” clause in the joint will reading (as translated from the original Afrikaans): “Only if we die simultaneously or within 30 (thirty) days of each other, in such circumstances in which the survivor does not make a further will, then in that case we will bequeath the entirety of our estate as follows…”.
Did that wording mean that the joint will no longer applied? For the children, that was a critical question, because in their joint will the couple had left the lion’s share of their estate (a property and the family businesses) to the son. No doubt that was because he had played a “central role” in the management and funding of the businesses. But it left his two sisters to inherit only the “residue” of the estate – clearly an unattractive proposition to them.

Unsurprisingly, the son, hoping to keep his “lion’s share” of the estate, argued that the joint will was still valid and applied to his mother’s estate. Equally unsurprisingly, his sisters, hoping for a three-way split of the total estate, argued the opposite – that the joint will had fallen away and that their mother had died intestate.

“And” or “Or”? One missing word, a world of difference

As is all too common when sibling heirs fall out over the “who gets what” aspect of their parents’ passing, swords were drawn, and the High Court had to adjudicate.

The Court found itself having to decide between two possibilities. Had the couple meant to say:

“Only if we die simultaneously or within 30 (thirty) days of each other, or in such circumstances in which the survivor does not make a further will…”. That “or” would mean that the joint will was still valid, and the son would get his lion’s share;
OR
“Only if we die simultaneously or within 30 (thirty) days of each other, and in such circumstances in which the survivor does not make a further will…”. That “and” would mean that the joint will no longer applied, that the mother had died intestate, and that the estate would be split three-ways.

The Court described the will in question as “an inelegant and very badly drafted document.” But it also noted that a will is “held void for uncertainty only when it is impossible to put a meaning on it” and that “any document must be read to make sense rather than nonsense.”

The Court decided that it could make sense of the sentence in question and duly held that the couple must have intended their joint will to survive if the surviving spouse did not subsequently make their own new will.

The end result – the joint will stands and the son “wins”. But of course, all three siblings are “losers” when you consider all the familial conflict, angst, time-wasting and costs that surely accompanied this litigation.

Avoid all that uncertainty and family conflict

No one wants their loved ones fighting over their estate after they are gone. But as this unhappy case so clearly shows, even the slightest inelegancy in wording can lead to just that. Let us help you draft a will that is clear, concise and fully reflective of your last wishes.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Aug 27

0

When Can You Legally Record Conversations?

By Kruger & Co | General Interest, Information Technology Law / Cyberlaw

“Big Brother is watching you.” (George Orwell)

Your smartphone lets you record just about anything, anywhere, and at any time. Your laptop and other devices can automatically record online meetings. Technology enabling voice and/or video recording is all-pervasive, providing us all with a powerful tool for keeping accurate records, resolving disputes and gathering evidence.

But it’s crucial to understand when it’s legal to start recording – and when it’s not… Whether you’re talking face-to-face, over the phone, or via digital platforms like WhatsApp, Zoom, Slack, or Teams.

The law: What’s allowed & what’s not

The legal framework for recording conversations in South Africa is primarily governed by the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA). The Act is aimed not only at regulating “Big Brother” type government surveillance of its citizens, but also at protecting us from each other when it comes to our rights to privacy generally.

Also relevant is the Protection of Personal Information Act (POPIA) which regulates the processing of personal information. Its impact on recording conversations relates primarily to how the recorded information is handled, stored, and shared.

Here are some key points to consider:

Recording conversations you aren’t party to: Recording conversations between other people, to which you are not a party, is generally illegal unless explicit consent is obtained from all parties. That’s because RICA has a general prohibition against “intercepting communications” without the knowledge and consent of those involved. There are only very limited situations where such recordings may be legal, such as under a court order or for establishing a person’s location in an emergency rescue situation.
Recording your own conversations: If, however you are directly involved in the conversation, you are legally allowed to record it without consent. RICA permits individuals to record communications to which they are a party, either as a direct participant or in their “immediate presence” and within audible range. There is no legal obligation on you to inform or obtain consent from the other participants before recording, but, as we discuss below, there are often good practical reasons for doing so anyway.
Note that specific rules apply to recordings “in connection with carrying on of business”. To comply with POPIA ensure that you have a clear, lawful purpose for your recording, and that you use it only for that purpose.
Recording public conversations: In public spaces, where there is generally no expectation of privacy, recording conversations without consent is unlikely to land you in serious trouble but be careful what you use your recordings for. For example, a person’s image, voice, preferences or opinions is “personal information” subject to POPIA’s restrictions on its use and storage. Moreover, always consider the context before recording as there may be situations where privacy is reasonably expected.

What about workplace communications?

As an employer, you may need to record calls and workplaces for security, compliance, or training purposes, but tread carefully here as clear and transparent communication is essential to maintain trust and to avoid dispute.

You should typically inform your employees if their communications or workplace activities are being or could be recorded. This can be done through employment contracts, policies, or direct notification. As always with our employment laws there is no room for error, so specific advice is essential!

Practical tips for recording conversations legally

If you plan to record a conversation, consider these practical guidelines to ensure you stay within legal boundaries:

Informing others: Even when it might not be legally necessary, informing the other parties involved that you are recording can help prevent misunderstandings and build trust. Many platforms like Teams and Zoom will by default advise all meeting participants upfront that they are being recorded. But there’s no harm in mentioning it specifically when you open the meeting, with an offer to share the recording with participants on request.
Particularly if you think your recording might be important in a legal dispute down the line (to prove the terms of an online contract for example), advising participants upfront of your intention to record can boost its value as evidence and make it difficult for an opponent to challenge it in court.

If your conversation is an international one, bear in mind that some jurisdictions have more stringent rules than others on the necessity for consent.

If in doubt, take no chances: The safest course of action will always be to ask for consent.
Secure storage: Store recordings securely, especially if they contain sensitive information. POPIA requires that personal information be secure from unauthorised access or breaches, and that it be kept only as long as necessary for the purpose for which it was recorded.
Responsible use: Be mindful of how you use the recordings. Sharing or publishing recorded conversations without consent can have serious legal consequences.

There are plenty of grey areas here, so please call us if you’re in any doubt.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Aug 27

0

Waiving the Bond Clause to Keep a Sale Alive: Risk Versus Reward

By Kruger & Co | Property

“This sale agreement is no more! It has ceased to be! This is an EX-sale!” (With apologies to Monty Python)

A “bond clause” – standard in most property sale agreements – typically provides that the whole sale depends on the buyer obtaining a mortgage bond by a specified date. If the deadline comes and goes without a bond being granted, the sale lapses and the buyer is entitled to get their deposit back.

Most agreements also provide that the bond clause is there for the sole benefit of the buyer, who is thus entitled to waive it, i.e. to tell the seller “I no longer need a bond and I’ll pay the purchase price in cash so the sale can proceed.”

There’s both risk and reward in that

The rewards in such a situation are obvious – both buyer and seller benefit from the sale going through.

But there’s also a risk factor if the “waiver” is open to doubt, as a recent SCA (Supreme Court of Appeal) fight illustrates.

“The whole sale agreement has lapsed, I want my R1m deposit back”

Just before the Covid-19 pandemic lockdown struck and disrupted everything (with a Deeds Office closure to top it all), the buyer bought a house for his daughter and her family for R4.95m. He paid a R1m deposit into a trust account and undertook to pay the balance on transfer. The sale agreement included a standard bond clause, worded along the lines set out above.

The buyer applied for a bond and was eventually granted one. But, critically, this only happened after expiry of the deadline set out in the bond clause. Meanwhile – and here we come to the nub of this dispute – a conveyancing secretary wrote an email advising that “…we have spoken to the purchaser and the purchaser advised that he will make payment of the full purchase price… He will be buying the property cash.” That “waiver email”, the seller would later argue, was the buyer waiving the benefit of the bond clause through the agency of the conveyancer.

Many delays and emails later – caused largely it seems by the lockdown – the daughter and her family were given early occupation as they were keen to get going with repairs, alterations and landscaping. That happy process all came to a screeching halt when an architect discovered that there were no plans for parts of the building and that it was thus illegal. The daughter returned the keys, and her father demanded a refund of his deposit.
The seller refused, claiming that the buyer had both waived his right to rely on the bond clause and repudiated (renounced) the sale. His deposit would therefore be retained to cover the seller’s damages claim against him.
The buyer retorted that he had never waived his rights under the bond clause, and that the whole sale was null and void from midnight on the date of expiry of the bond clause deadline. That, argued the buyer, entitled him to the return of his R1m deposit.

Waiver and the law

Battle lines drawn, the first round went to the buyer: the High Court agreed that the sale had lapsed and ordered that he be repaid his R1m.

Round two was no better for the seller. The SCA, refusing his application to appeal against the repayment order, held that there is a factual presumption against waiver in our law. The onus was therefore on the seller to prove that the buyer had waived his rights to the bond clause. He needed to provide “clear proof” of a “valid and unequivocal waiver” showing that “[the buyer] was aware of those rights, intended to waive them and did do so”. The Court said he had failed to prove this.

Moreover, the agreement required (as is standard) “that any waiver of any right arising from or in connection to the agreement be in writing and signed by the party to the agreement.” No proof of that here, held the Court. And when it came to the seller’s suggestion that the conveyancer had acted as the buyer’s agent in writing the disputed “waiver” email, the Court held that the seller had failed to prove that the conveyancer “was duly authorised to waive those rights, of which [the buyer] was fully aware, and that [the conveyancer] knew all the relevant facts, was aware of those rights and intended to waive them.”

The end result: There was no need to argue over the lack of building plans. The sale died when the bond clause deadline expired. It was, as Monty Python might have put it, deceased, expired, and bereft of life. The buyer gets his R1m back.

Remember: A lot is at stake in property sales, and it’s easy to put a foot wrong. Speak to us before you sign anything!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Aug 27

0

Divorce and the New Three-Pot System: Another Risk To Manage

By Kruger & Co | Family Law

“Divorce is the one human tragedy that reduces everything to cash.” (Rita Mae Brown)

How will the new “Three-Pot Retirement System” (often referred to as a “Two-Pot System”) affect financial arrangements on divorce? Retirement savings can amount to a significant portion of a marriage’s assets, so it’s important to understand the implications of the new system.

First, a quick refresher

Have a look at our graphic below for a neat summary of the three “pots” and what they’re all about.

The “Vested Pot”: This will hold most of your existing (as at 1 September 2024) retirement investments, and the current regulations continue to apply.
The “Savings Pot”: You will be able to withdraw funds from this pot before you retire. Rules apply and you should avoid depleting this pot except in real need.
The “Retirement Pot”: You will (with only a few limited exceptions) only have access to these funds when you reach retirement age (usually 55, depending on the fund).

What happens to these three pots on divorce?

This is of course a brand-new system, and there have been concerns raised about a number of grey areas that may arise in a divorce context. Only time will tell if these will have any meaningful practical effect on divorcing spouses. These exceptions aside, the overriding sentiment seems to be that not much will change other than that your marriage’s “pension interests” will be made up of three distinct pots, rather than just the current one pot.

As such, all three pots will be dealt with as follows:

If you are married in community of property, they will be divided equally between you.
If you are married out of community of property with the accrual system, they will fall into the accrual calculations unless you expressly excluded them in your ante-nuptial contract.
If you are married out of community of property without the accrual system, they might still be taken into account if the court orders an asset redistribution.

And remember, you can always agree between yourselves on a different split upfront in your ante-nuptial contract or on divorce in a settlement agreement.

One new risk to manage

Until now, there has been no “Savings Pot” for a member spouse to potentially deplete as soon as the possibility of divorce raises its ugly head.

While we all know that families should never risk missing their retirement goals by dipping into their long-term savings in any but genuine emergencies, it goes without saying that an acrimonious divorce could quickly change the focus from “let’s save for the future” to “grab it while you can”.

If the worst happens and your marriage hits the skids, be aware that the new legislation states that only when pension funds are given formal written notice, with proof, of divorce proceedings or pending asset divisions, are they legally prohibited from allowing a withdrawal (or granting a loan or guarantee) without your consent as the non-member. That formal prohibition lasts until the divorce is finalised or a court order is issued.

Some have suggested that even before you get to that formal stage, you should alert the pension fund administrators that they should assess any withdrawal requests in light of possible future divorce claims. How that will actually play out in practice remains to be seen, but it is worth noting.

The new system is a lot to get your head around and it’s natural to have questions. Don’t hesitate to ask us for help!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Jul 29

0

The Garage Door That Had the Complex Up in Arms

By Kruger & Co | Property

“Good fences make good neighbours.” (Robert Frost)

When you buy into a community scheme (such as a security estate, complex or apartment block) you automatically become a member of its management body: either a Homeowners Association (“HOA”) if your property is full-title or freehold, or a Body Corporate if your property is part of a sectional title development.

You are then automatically bound by the rules and regulations formulated by your management body, so make sure you understand them fully. They are there to promote everyone’s safety, quality of living and property values, and you have no choice but to abide by them. Of course, as a member, you also have a say in the formulation and amendment of the rules. But once they’re in place you must comply with them.

However, as the outcome of a recent High Court dispute confirms, you are entitled to insist that they be applied consistently and reasonably.

“Remove that garage door, it’s not approved!”

The case saw a homeowner in Randburg take the estate’s HOA to court over their objections to his shiny garage door:

The HOA’s Main Objectives being to “…to carry on, to promote, advance, and to protect communal interests, safety and welfare of the Members of the Association, including, but not limited to, by maintaining the open spaces, controlling the aesthetic appearance of land, including landscaping, buildings and improvements”, its rules and regulations (specifically one of its Architectural Rules) required homeowners to get approval before installing garage doors with any finish other than timber.
Imagine the shock, then, when this homeowner went ahead and installed a garage door with a “mirror exterior finish” without asking for permission. The HOA rejected his subsequent application for approval and required him to remove the door.
The homeowner refused, and the dispute was referred to a CSOS (Community Services Ombud Service) arbitrator, who upheld the HOA’s removal order. But the homeowner, clearly enamoured by his flashy door, wouldn’t take no for an answer.
On appeal, the High Court reversed the CSOS decision because, as evidenced by photographs, the HOA had previously allowed other garage doors with mirrors or glass in their construction. The HOA had raised nothing to contradict that apparent inconsistency, which, according to the Court, “should have led [the arbitrator] to the conclusion that the Homeowners Association acted inconsistently, and thus unreasonably, by ordering removal of the garage door.”

The upshot?

The homeowner gets to keep his mirrored garage door, and HOAs and Bodies Corporate learn a sharp lesson – apply your rules and regulations fairly, reasonably and consistently.

Remember that we are here to assist if you are unsure of anything!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

Jul 29

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It’s Sick Leave Season – Can You Reject a Dodgy Doctor’s Sick Note?

By Kruger & Co | Employment and Labour Law

“Many people including workers in South Africa do not have the wherewithal to determine between a qualified doctor, an unqualified doctor and one who is operating illegally. That is why there are regulatory and law enforcement bodies to whom suspicious practices by doctors should be reported.” (Extract from judgment below)

“Sick leave season” is still in full swing and many employers will be struggling with high levels of absenteeism. There’s no problem of course with genuinely ill staff staying at home to recover – no one wants them at work spreading their germs around or damaging their health! But what if you suspect malingering?

When can you demand a sick note?

According to the relevant provisions of the Basic Conditions of Employment Act:

You can require a medical certificate from any employee who’s absent from work for more than two consecutive days or more than twice in an eight-week period.
The medical certificate must state “that the employee was unable to work for the duration of the employee’s absence on account of sickness or injury.”
“The medical certificate must be issued and signed by a medical practitioner or any other person who is certified to diagnose and treat patients and who is registered with a professional council established by an Act of Parliament.”

But what can you do if you suspect that a medical certificate has been bought or falsified? Let’s have a look at a recent Labour Appeal Court decision which provides a timely warning to employers who reject certificates without good cause.

Dismissed for dodgy sick notes

A store employee in Witbank was dismissed after being found guilty of misconduct by dishonestly producing two medical certificates in support of sick leave absences, thus breaching her employer’s policies, procedures, and honesty code.
We’ll detail the employer’s reasons for suspicion in a moment, but the upshot was that the dismissal was found to have been substantively unfair, a finding confirmed by both the Labour Court and the Labour Appeal Court.

But why did they reach that conclusion?

Strong suspicions, but…

The certificates had been issued two years apart by a doctor of whom the employer was justifiably suspicious for a variety of reasons, including:

An email warning the store to be cautious about medical certificates issued by this particular doctor.
Apparently contradictory responses given by the employee when questioned about the notes, one of which had been issued by a nursing assistant and the other by the doctor.
Investigations into the doctor and his practice. These included a visit to his consulting rooms by two managers, who concluded that the doctor might not be a real doctor and that he might be selling fake sick notes on the basis of their observations that:
- The place did not look to them like a doctor’s surgery, with broken gym equipment, ragged curtains, torn posters and only a makeshift partition wall between a reception area and a consultation room featuring an untidy table cluttered with papers, plates, cups and an old computer monitor. They saw no files or filing cabinets, only copies of medical certificates and a stamp.
- None of the usual questions were asked about “medical aid or cash patient” status, and “patients” would emerge from the consulting room in less than a minute holding medical certificates. It seemed clear to the managers that they had bought these medical certificates from the doctor’s assistants.
- The doctor himself did not look to the managers like a doctor. He was not wearing a dustcoat and did not have a stethoscope. What’s more his appearance was unhygienic, with “long nails”.

One of the managers even testified that the doctor and his assistant had been arrested for illegally operating a surgery, dispensing medicine and issuing illegal sick notes. Strong grounds, one would think, for the employer to be extremely suspicious. But in the eyes of the law, they were not enough to justify the employer’s rejection of the medical certificates.

Why did the employer lose its case?

It failed to prove its suspicions about the genuineness of the doctor or of the certificates. The doctor testified that he wasn’t just fully registered with the Health Professions Council of South Africa (HPCSA), he also had an impressive list of international qualifications and experience to his name.
Critically, said the Court, “Ordinary people including workers surely cannot be expected to conduct an investigation into which doctor is qualified, which one is on suspension, and which one is for some or other reason not entitled to practise as a doctor. That is the function of the regulatory bodies.”
The evidence that there may have been “certain untoward happenings in the running of the medical practice” was irrelevant, held the Court, to the key question of whether the medical certificates were irregularly sought and issued.

As an employer, please tread carefully with dodgy-looking medical certificates – you will need more than just strong suspicion to justify rejecting them. Contact us if you aren’t sure what you need to do.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.