Kruger & Co – KRUGER & CO

Sep 25

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The Transfer Process in a Nutshell

By Kruger & Co | Property

“Don’t wait to buy real estate. Buy real estate and wait.” (Will Rogers)

Spring is in the air and, as the annual uptick in property sales kicks in, let’s address two questions commonly asked by both sellers and buyers who are unsure about exactly what happens after they sign their sale agreement:

How does the transfer process work?
How long does it take before the seller gets paid and the buyer becomes the new registered owner?

Let’s begin with this simplified “in a nutshell” flowchart of the transfer process:

How long does it all take?

How long is a piece of string? If everything goes swimmingly and the bureaucratic stars truly align in your favour, the total timeframe from signing the sale agreement to popping the champagne could be as little as eight weeks. On average, however, it’s safer to work on no less than ten to 12 weeks, and possibly a lot more.

What could delay things? This is a complicated process involving a disparate array of role-players and a host of opportunities for unforeseen delay. Some of the more common sources of delay (and frustration!) centre on bond approval, bank processes, SARS and municipal delays, clearance certificates and repairs, lost title deeds, intervening public holidays, and Deeds Office backlogs. But the list really is endless.

Bottom line: you need professionals in your corner to protect your interests and to move the process along as quickly as possible. We’re here to 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 us for specific and detailed advice.

Sep 25

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When Liquidation is Inevitable: A Bad Faith Business Rescue Application Backfires

By Kruger & Co | Business Rescue, Insolvency / Liquidation

“If you’re flogging a dead horse, make sure you’re not riding it.” (Josh Stern)

Creditors and company directors alike need to know how best to deal with a company in financial distress. Both should learn to recognise the difference between an enterprise that has failed beyond resuscitation, and one that, given a chance, can be returned to solvency and success.

With that in mind, the law provides you with two main options:

Liquidation: Liquidation is the winding up of a company that cannot pay its debts. A liquidator is appointed to sell all the assets and to distribute the proceeds to creditors in their order of legal preference. When the business is hopelessly insolvent and has no reasonable chance of recovery, it ensures an orderly closure and fair distribution to creditors. There’s seldom a good outcome for creditors, especially “concurrent creditors” (holding no security or preference) who can generally consider themselves lucky to recover anything more than a few cents in the rand on their claims. Moreover, at the end of the winding-up, the company ceases to exist and is lost to all role-players — employees, creditors, suppliers, the taxman and indeed the economy as a whole.
Business rescue: This process is designed to rehabilitate distressed companies by protecting them from attack by creditors while a business rescue practitioner (BRP) develops and implements a plan to restructure debts and operations. The idea is to allow the company to continue trading, save as many jobs as possible, and provide a better return to creditors than liquidation would. Critically, however, there must be a realistic prospect of turning the business around and saving the company. If there isn’t, as we shall see below, applying for business rescue can land the applicants in some very hot water.

The dodging debtor and the creditor’s lament

There’s nothing worse for a creditor: after chasing a recalcitrant debtor from pillar to post and finally cornering them, you’re stymied at the last hurdle by the director’s last-ditch application for business rescue.

“Tough”, the director tells you. “That’s the end of your hunt for payment.” When your blood pressure has dropped a bit, you take legal advice — can this really be correct?

In most cases, yes, you are stuck with waiting while a BRP is appointed and a rescue plan formulated and put to you and other role players for consideration. If the application is genuine, you might even recover something worthwhile. At best you could also retain a long-term customer.

But if this is just another debt-dodging or delaying exercise, our courts will come to your rescue. A recent High Court decision not only set aside business rescue proceedings launched in bad faith but also penalised those responsible by hitting them in their own pockets — hard.

A bad faith application backfires, badly

A property-owning company, in a settlement agreement made an order of court, agreed to a creditor selling its property and keeping the proceeds in full and final settlement of its claim. An auction sale was arranged by the creditor, but on the eve of the sale the director of the property company commenced business rescue proceedings and a BRP was appointed.

The BRP sold the property for R3.4m (to the same buyer who’d offered R3.25m at the auction) and prepared a business rescue plan which was duly adopted. The real fly in the ointment was presumably the fact that the plan included remuneration of over R2.2m for the BRP — a sum grossly disproportionate, said the creditor, to the limited scope of her duties.

Having none of that, the creditor applied to the High Court to set aside the business rescue proceedings. The Court was quick to agree to this request, commenting that the company had no operations, income, or employees. There was no viable business to rescue.

More specifically (emphasis supplied): “The business rescue proceedings were accordingly initiated in bad faith, amounting to an abuse of process … the BRP was remunerated extensively without a proper accounting … no reasonable prospect of rescue existed, procedural requirements were ignored, and it is just and equitable to set the resolution aside.”

Punitive costs and a R2.2m fee down the tubes

No wonder, then, that the Court expressed its displeasure at the actions of both the director and the BRP by ordering them to personally pay all costs (jointly with the company itself, for what that’s worth) on the punitive attorney and client scale (much higher and more severe than the normal costs scale). The BRP, in particular, must be mourning the additional loss of her R2.2m fee.

The bottom line

As a creditor, don’t take it lying down if a company tries to dodge or delay paying you through a misuse of the business rescue procedure.

As a director or BRP, be careful never to be seen to abuse the process. It’s not a “get out of jail free” card to delay liquidation or to relieve creditor pressure. As the Supreme Court of Appeal has put it: “Business rescue proceedings are aimed at restoring a company to solvency, and are not to be abused by a company with no prospects of being rescued but mainly to avoid a winding-up or to obtain some respite from creditors.”

The rules and process relating to business rescue and liquidation can be complex, but we’re here to help you navigate them if needed.

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 us for specific and detailed advice.

Sep 25

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Divorce Lawfare: The Serial Litigant and his Stalingrad Strategy

By Kruger & Co | Family Law

“This [the Stalingrad Strategy] is a strategy of wearing down the plaintiff by tenaciously fighting anything the plaintiff presents by whatever means possible and appealing every ruling favourable to the plaintiff. Here, the defendant does not present a meritorious case. This tactic or strategy is named for the Russian city besieged by the Germans in World War II.” (Judges Matter website)

Divorce disputes are of course intensely personal and emotionally charged affairs — and when feelings run high the resultant fallout can mean protracted, bitter, and costly litigation.

If you are being subjected to a barrage of such litigation, take heart. In balancing our constitutional right to access the courts against the need to prevent people from abusing court processes with endless and meritless litigation, our law provides for “vexatious litigants” to be stopped dead in their tracks.

A recent pair of High Court decisions (featuring the same parties and the same divorce dispute, but in two different battles) provides a textbook example.

A saga of litigation, complaints, threats, and blackmail

This 11-year saga dates from the start of divorce proceedings in 2014, with the financial aspects of the divorce being finalised only in 2020. The ex-wife was awarded a total of R16.8m in accrual, maintenance, and costs. The ex-husband’s property-owning trust was held to be his alter ego, and that opened the door for the house held by the trust (a valuable property in an upmarket Cape Town golf estate) to be sold as his asset.

He responded with a concerted campaign of unrelenting litigation, complaints, and threats — all aimed, the Courts have now determined, at overturning the divorce order.

The list of his serial litigation and intimidation tactics is both long and extraordinary, but suffice it to say that a flood of applications of all sorts to a wide variety of courts (all the way up to the Constitutional Court) is just the tip of the iceberg. He has also lodged professional complaints against all the attorneys and advocates involved in this matter (including his own legal team) and against the Divorce Court Judge. Not even his own financial expert escaped a formal complaint. Allegations of perjury, fraud and collusion abound. He has threatened massive lawsuits (for R210m and R190m to date) against various legal representatives. He was even found to have resorted to blackmail.

Neither his singular failure to reap anything but defeat from any of these endeavours (barring a few minor skirmish successes, and noting that some of the more recent matters remain pending), nor the slew of costs orders made against him (at least one of them on the punitive attorney and client scale), seem to have deterred him in the slightest.

His latest rearguard action, a failed attempt to postpone the auction sale of his house, has earned him yet another defeat and another costs order, with the cherry on top being his being declared a “vexatious litigant”. He can now no longer launch legal proceedings without specific High Court authority to do so.

All’s fair in love and lawfare? Not so fast

As the Court put it: “A fundamental doctrine in our law is, there must be an end to litigation … nobody should be permitted to harass another with second litigation on the same subject as such litigation can be viewed as an abuse of process.” Our courts accordingly have the power to declare such a person a “vexatious litigant”, thus restricting them from launching any new legal proceedings without specific court authority.

To have your opponent declared vexatious, you will need to prove that the person “has persistently and without any reasonable ground instituted legal proceedings in any court or in any inferior court, whether against the same person or against different persons.” There are two legs to that, and note that you can’t stop anyone from pursuing normal appeal and review processes — there must be some abuse of judicial process.

You may also be able to get an order that your opponent provide security for your costs. Although, in this particular matter, the ex-wife was unable to convince the Court to grant her such an order.

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 us for specific and detailed advice.

Sep 25

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Don’t Let Cybercriminals Haunt You this Halloween — Verify, Verify, Verify!

By Kruger & Co | Business, Criminal Law / Crime, General Interest, Property

“If you suspect deceit, hit delete!” (Online cybersecurity slogan)

October is Cybersecurity Awareness Month, a good time to note that as cybercrime continues to grow, more and more businesses and individuals are falling victim to the dreaded “BEC” or “Business Email Compromise” fraud.

The million-dollar question: Who takes the hit?

Typically in a BEC fraud, email or other electronic communications between a creditor and debtor (often a seller and buyer, or service provider and client) are hacked by criminals, who con the debtor into paying what they owe into the fraudster’s bank account. By the time the parties realise they’ve been had, the criminals are long gone, and all that remains is the million-dollar (sometimes quite literally!) question: “Which one of us takes the hit?”

Until now we have been faced with conflicting High Court decisions on this point, but now the SCA (Supreme Court of Appeal) has settled it: The risk is the debtor’s.

A car dealership must pay twice over

It was a classic case of BEC: A dealership bought two Hyundai Nissan NP200 vehicles from another dealership for R145,000 each. The seller issued invoices showing its banking details. The buyer paid by EFT and sent proof of payment to the seller, which happily (without checking that the funds had actually landed in its account) delivered the vehicles to the buyer.

As always with these cases, one can imagine the sinking feeling that greeted the parties’ realisation that the seller’s emails and the attached invoices had been intercepted, and the banking details subtly altered. As a result, the buyer had paid the full R290,000 to the criminals’ bank account.

Long story short, a real seesaw of a legal battle ensued. The buyer said, “I’ve already paid you”. The seller retorted, “No you haven’t, you paid the criminals,” and sued the buyer for the R290k. The seller won in the Regional Court, lost on appeal to the High Court, but then turned the tables again and celebrated victory in a further appeal to the SCA.

Verify, verify, verify

The SCA’s findings amount to this:

The onus is always on you as buyer to prove, on a balance of probabilities (i.e. more likely than not), that you have paid the seller.
When you pay by EFT, you must show that the seller actually got the money. In other words, that you paid into the correct bank account.
Creditors (recipients) have no legal duty to protect debtors (payers) from the possibility of their accounts being hacked where the debtor could have taken steps to protect itself but failed to do so.
The obligation therefore is on you as debtor to ensure that the bank account details in the invoice are in fact correct and verified because “it is the debtor’s duty to seek out his creditor”. Fail to follow basic verification steps, and your payment to the wrong account does not remove your liability to pay the debt — you still have to pay your creditor.

Bottom line, the buyer in this case should have verified the banking details given in the emailed invoices before paying. It didn’t, so it couldn’t prove that it had paid into an account authorised by the seller.

It must pay the seller the R290k, with interest and doubtless substantial legal costs.

Don’t make the same mistake

These scams grow more sophisticated by the day, fuelled now by AI-perfected deep fakes, cloned websites and social engineering. Treat all emails, all electronic messages, and all electronic invoices with great suspicion — even if they appear to come from businesses you have known and trusted for decades. Verify bank account details (preferably by speaking to the creditor directly on a number you know to be correct) before paying a cent.

Property sales are particularly vulnerable

Be especially vigilant when buying or selling property because these high-value sales are a particular focus for cybercriminals worldwide. There are rich pickings in the offing, and the opportunities for baddies to intercept and falsify emails is multiplied by the range of trusted role players involved — typically several sets of attorneys, estate agents, and banks as well as the buyers and sellers themselves.

A final note on online security

Let’s end off with a note to everyone: Keep reminding your whole team (not just your accounts department) that securing your computer and email systems against bad-actor compromise is no longer a nice-to-have, it’s essential. This whole unhappy saga could all have been avoided if everyone involved had followed basic security protocols. Prevention is always better than cure.

Give us a call if you need any 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 us for specific and detailed advice.

Aug 26

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Excuses, Excuses: Why People Don’t Make Wills, And Why You Must

By Kruger & Co | Wills and Estate Planning

“All that lives must die, passing through nature to eternity.” (William Shakespeare, in Hamlet)

Master’s Office records suggest that less than a third of us leave behind a will when we die. That’s astonishing, given the fact that death is one of the few absolute certainties in our lives.

Why do so many of us put our families at risk like this?

“I don’t have a will because…”

It’s easy to find excuses for doing nothing about a will, with surveys conducted both locally and overseas suggesting that people’s failure to act is normally rooted in one or more of these common excuses:

We’ll help you structure a will and estate plan that honour your last wishes and provide proper protection for your loved ones.

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 us for specific and detailed advice.

Aug 26

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Panhandle Access to Properties – The Mistakes to Avoid

By Kruger & Co | Property

“You aren’t buying a house, you’re buying a lifestyle.” (Anon)

As more and more residential properties are subdivided and developed, an increasing number of homes are effectively cut off from direct access to the nearest public street or road.

That’s where the “panhandle” comes into play, a narrow strip of land (looking on diagrams very much like the handle of a pan, hence the name) which gives the needed street access to the “landlocked” property. The panhandle can be owned by the property using it as an access road, or it can be a right of way in favour of the property over neighbouring land.

A recent High Court run-in between two neighbours over a panhandle right of way highlights the mistakes made by the various parties involved, and so provides a neat “must do” checklist for everyone in such a situation – buyers, sellers and neighbours alike.

“Wait, what right of way?”

You can imagine the reaction of a property buyer when he was told, only after taking transfer, that his nice little plot was lumped with a registered servitude. Not only did he have the neighbour freely crossing his land at will via a four-metre wide panhandle road, but he also found himself blocked from part of his own land by the neighbour’s gate.

Luckily for the buyer, the servitude turned out to be a temporary one. The wording stated clearly that it was to provide a right of way only until alternate access became available to the neighbour. And a consolidation of neighbouring properties (involving the creation of eight mini subdivisions for a property development) had indeed opened up such an alternative access route.

The buyer accordingly asked the High Court to declare the servitude lapsed, and to order that all “barriers and obstructions” to the panhandle be removed. His neighbour fought back, arguing amongst other things that he had paid R35,000 to the original owner of the buyer’s property as part of a verbal agreement to increase the panhandle’s width from four to six metres.

The neighbour’s problem here is that a servitude has to be in writing, so his verbal agreement with the original owner for a six-metre servitude was unenforceable – certainly against this buyer who had never agreed to it. For a servitude to bind a subsequent buyer of the property, it needs to be registered against the title deed.

The Court accordingly held that the registered four-metre servitude had lapsed and that the supposed six-metre servitude agreement was unenforceable against the buyer. End result, the neighbour loses his right of way and must remove all “obstructions” (the gate, presumably) on it.

Buyers, sellers and neighbours: Mistakes to avoid

Buyers: Don’t only wake up after transfer to the fact that your new property is subject to a right of way or other right of access – it could do serious harm both to your property value and to your enjoyment of it. Check the title deed before making an offer. As we shall see below, relying on the seller to disclose a servitude during the sales process can be wishful thinking…

Sellers: The seller in this case didn’t disclose the servitude, as he was obliged to, in the mandatory disclosure form – the form that every property seller must sign and provide to the buyer. In it a seller must disclose not only any known property defects, but also things like encumbrances, zoning and title deed restrictions, unapproved alterations or additions, and so on. Presumably the seller’s omission in this case was just an oversight, but he could still easily have been sued by the buyer. It’s vital that you always complete that form fully and accurately.

Neighbours: As the neighbour in this case found out to his cost, if you are reliant on a right of way, make sure it’s granted in a written and registered servitude. He might perhaps have been able to enforce his verbal agreement against the original owner, but it was worthless against a subsequent buyer who knew nothing of the agreement.

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 us for specific and detailed advice.

Aug 26

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Neighbours’ Facebook Feud: Cats Pics, Karens & Keyboard Muppets

By Kruger & Co | Delict and Civil Claims, Property

“Dance like no one is watching, but text, post, and email like it will be read in court one day.” (Anon)

When can the target of rude comments and insults on a community Facebook group sue?

The High Court recently grappled with a community debate over free-roaming jackals that turned sour.

The golf estate and the Facebook group

The scene here is one of Sandton’s large and secure golf estates, whose closed Facebook group, aimed at fostering community spirit, reaches some 1,800 residents.

Jackals roaming freely on the estate were at the heart of this dispute, with residents split into two opposing camps.

In one camp, those believing that all wildlife in the estate should be left alone – including the jackals.
In the other camp, those arguing that, as well as being predators dangerous to other animals (including domestic pets), jackals are carriers of rabies. Presumably this group advocates some form of control measure, no doubt an emotive topic.

Cat pics and Karen insults

The online debate between the two sides began civilly enough, but that changed with a series of posts by a prominent supporter of the “hands-off-the-jackals” lobby. In criticising the other camp, she targeted one of them by name. Stung, the recipient of what she perceived as insulting and defamatory attacks, demanded that her opponent remove the posts and apologise to her.

Central to the outcome of this case are the posts themselves. They included an image of a cat in a spiked vest (with the comment “maybe this will help the cats”), suggestions that the target of the posts shouldn’t be living in Africa, that she had published false information on the group, and that she was “stupid” and a “stupid keyboard muppet”. She read further posts as referring to her as a “B” (she took this to mean “bitch”) and as caricaturing her as a dog (with a bob haircut like hers) and as a “Karen”.

Off to court with a two-pronged attack

As a professional (actually a business rescue practitioner), the complainant wasn’t prepared to take any of that lying down. Offended by the poster’s refusal to retract, she sued her in the Magistrate’s Court for damages of R250,000, asking also for orders to remove the posts and apologise publicly for them.

She lost, appealed to the High Court and lost again. Why?

It’s important to note firstly that she had launched a two-pronged legal attack, enabling her to prove a valid claim for either or both of actionable insult (where offending statements injure your dignity or self-worth) and defamation (where they damage your reputation). To win, she needed to show either that the statements referred to her and were defamatory of her, or that they were wrongful and hurt her dignity.

Her failure to convince the Court that she had a case was partly because she hadn’t been able to prove all the facts needed to establish a case. But it was also rooted in two principles which anyone engaging in public debate (online or otherwise), and anyone thinking that an insult is perfectly fine if it’s structured as a “joke” or “jest”, needs to take note of.

Let’s have a look at each principle.

Public debate is not for sissies

The Court: “The law expects those who take part in public discourse to do so with a degree of pliancy and robustness. A subjectively hurtful remark is not wrongful unless a reasonable person in the plaintiff’s position would take exception to it.”

More particularly, this being a closed group of neighbours in a security complex: “Those who engage in online debate about matters of mutual interest between neighbours ought reasonably to foresee that the criticism they sustain may be tart and, at times, discourteous.”

In this case, while some of the posts were definitely rude and hurtful, no reasonable person would have thought that they had tarnished their target’s reputation. Rather, readers would have thought less of the poster “because she was unable to keep to civil terms of debate.”

Everything said in jest?

Some, but certainly not all, “jokes” are safely posted. The poster of this “cat in spikes” picture said it was just a light-hearted joke, and the Court agreed. A joke can certainly be defamatory if it’s a deliberate attack on the target’s reputation – but in this context, it was just “a satire of the entire debate between the parties.” It wasn’t, said the Court, “of the defamatory kind”.

Turning to what appears to have been another attempt at a joke in the form of the dog caricature and “Karen” reference, what saved the poster here was the lack of proof that this was actually aimed at the claimant. Had it been, calling her a “Karen” (“a privileged, entitled woman with a thin skin and a quick temper”) would have opened her up to ridicule and “would probably have been defamatory”.

There’s a fine line or two there. Call us before posting if you aren’t sure that you’re on solid ground!

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 us for specific and detailed advice.

Aug 26

0

Honesty at Work: A 50c Coin Costs a Bank Teller Her Job

By Kruger & Co | Employment and Labour Law

“There’s no trust, no faith, no honesty in men.” (William Shakespeare, in Romeo and Juliet)

A recent Labour Court decision is a stark reminder to employees that an employment relationship is founded on trust, and that any breach of that trust could justify dismissal.

Pocketing a 50c coin to balance her till

The responsibilities of a bank teller included “balancing cash daily, reporting differences, as well as maintaining effective security controls, including maintaining a high level of honesty, integrity and ethical standards.”

Her clean record over the four years of her employment ended abruptly when a monthly surprise check of the cash balance in her till revealed a discrepancy in the form of a bag of R1 coins totalling R20, unaccounted for and therefore in violation of banking rules and procedures.

The resulting investigation revealed, as recorded on CCTV, the teller’s various failed attempts at balancing her till, which she had ultimately succeeded in doing only by pocketing a 50c coin from the till.

A subsequent disciplinary enquiry found her guilty on charges of misconduct in the form of dishonesty, falsification of balancing records and misappropriation of funds from her till. She referred her dismissal case to the CCMA (Commission for Conciliation, Mediation and Arbitration), which refused her application.

In finding her dismissal to have been fair, the arbitrator rejected both the teller’s claims that her till discrepancies resulted from her ill health, and her denial of taking the 50c to manipulate the system (the CCTV record was, it seems, crystal clear on that point). The court also remarked on her contradictory statements as to the “miraculous” bag of R1 coins.

Critically, the teller had been trained in her duties and was well aware of what was expected of her in line with the bank’s Code of Ethics. Moreover, the bank’s Disciplinary Code provides that falsification of bank records is a dismissible offence as a destroyer of the employer-employee trust relationship.

Undaunted, the teller took the CCMA’s award on review to the Labour Court, which made short work of confirming her dismissal.

It’s the breach of trust that counts, not the amount involved

As our courts have confirmed many times, the employer-employee relationship requires an employee to act honestly and in good faith. The trust which the employer places in the employee underlies their whole relationship, and any breach of that trust risks dismissal.

Even an apparently minor act of dishonesty can justify dismissal if it has resulted in a breakdown of trust that makes continued employment intolerable. The final decision of whether or not dismissal will be appropriate for a particular act of misconduct will depend on all the circumstances.

4 practical tips for employers

For employers, preparation is key in ensuring that you are able to dismiss a dishonest employee without falling foul of our employment laws. Start with the basics:

Your employment contracts and codes are critical: As we saw in this case, the bank’s strictly worded Code of Ethics and Disciplinary Code were central to proving the fairness of the dismissal. Your employment contracts should incorporate reference to zero-tolerance policies that leave employees no wiggle room when it comes to understanding that any act of theft or dishonesty, no matter how minor, will justify dismissal. Incorporate reference also to the monitoring and checking processes you will apply – it was the “surprise monthly till check” that cooked this teller’s goose.
Every workplace will have its own unique requirements in this regard, so contracts and codes tailored to your circumstances are vital.
Training is essential: As we again saw in this case, a deciding factor in the Court’s decision was the fact that the teller had received adequate training in her duties and so couldn’t claim ignorance of the requirements that she balance her till, report discrepancies, act honestly, etc.
Proof is key: The CCTV footage of the teller pocking money from her till was critical in proving that she deliberately flouted the rules and stole from her till. Whatever monitoring devices and processes you may have in place (and do remember to ask us how you can use things like CCTV monitoring without being accused of an unfair labour practice!), make sure to collate and preserve it as soon as any incident of misconduct comes to light. You might have to retain it for a long time (nearly four years so far in this case).
Your disciplinary process must also be fair: Remember that proving “substantive fairness” (a fair and lawful reason for dismissal) is only one part of the equation. You must also be able to show that all your disciplinary processes are “procedurally fair” (i.e. that a fair process was followed).

As always with our employment laws, the requirements are complex and the costs of getting them wrong are high, so don’t hesitate to ask us for advice and help every step of the way.

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 us for specific and detailed advice.

Jul 28

0

Your House Burns to the Ground: Can You Hold the Seller Liable?

By Kruger & Co | Property

“Time shall unfold what plighted cunning hides.” (William Shakespeare, in King Lear)

A recent High Court judgment confirms, yet again, that if a property seller knows about a hidden defect and keeps it quiet, no exemption clause will save them.

A loud roar, rolling flames, and a dream home turns to ashes

A family thought they were moving into a solid, well-built family home (a dual-level freestanding residential townhouse). They had no idea a hidden hazard was buried in the walls above their fireplace.

They found out on a cold and rainy Free State night when they lit a winter fire, as they had done many times before. This time they were in for a shock. All went well until, watching television some hours later, they heard a loud crack like a gunshot…

When the man of the house looked up the staircase, he noticed a glow. He found that the top floor spare room was on fire, with the curtains and bed already alight. A loud roar and flames rolling under the cornice caused him to retreat. He shouted to his wife to gather their pets and call for help, and they escaped outside to await the arrival of the fire department.

The family got out unscathed. But the extensive damage caused by the fire and the collapse of the roof rendered the unit uninhabitable.

The hidden fire hazard

Unbeknownst to the buyers, during construction, a roof truss beam had been built through the chimney brickwork. Building regulations read with the applicable code of practice forbid this, because any timber near a flue is a fire waiting to happen: “Combustible material such as a timber floor joist, trimmer or roof truss shall not be built within 200mm of the inside of a chimney; and … No flue pipe shall be designed and installed in such a manner that it will cause a fire hazard to any adjacent material.”

Faced with a devastated home and huge repair costs, the buyers took the developers, who had both built and sold the house, to the High Court, where a forensic fire expert explained that the origin of the fire could be traced to the beam in question. Over time, repeated heat exposure had dried out and charred the timber. On the fateful evening, it finally caught alight, and the fire spread to the polystyrene ceiling cornices, which melted and dropped flaming debris onto bedding in the upstairs room directly above the fireplace.

Voetstoots? Forget it!

The developers argued they weren’t liable because the sale agreement contained a standard exemption (“voetstoots”) clause and could not therefore be held to account for a hidden defect such as this one.

In short, the developer’s position was: “You bought the house as it stood, defects and all, whether you could see them or not.” They also pointed out that the buyers had signed an acknowledgement that they’d inspected the house.

But the Court was clear: “It is the duty of the seller to deliver the thing sold to the buyer without any defects.” Voetstoots clauses don’t give a seller free rein to hide behind the contract if there’s fraud or dishonesty:

The defect was “latent”, in that it was hidden inside the chimney and could not have been discovered by a normal inspection.
The developer, as the builder, must have known of the latent defect, and whilst “fraud will not lightly be inferred, the fact that the chimney was not represented on the approved building plans occasions the reasonable inference that it fraudulently concealed the defect.”

Bottom line? By failing to disclose a defect that was dangerous and unlawful, the developer crossed the line from simple non-disclosure to fraudulent concealment.

Here’s how to avoid disaster and dispute

Sellers: Check carefully for any possible defects and make honest disclosure part of your sale process, particularly when completing the “mandatory disclosure form” that must be attached to the sale agreement. And don’t rely blindly on a standard exemption clause – it’s no guarantee of protection if a hidden defect comes back to haunt you.
Buyers: Always ask questions. Look at approved building plans, think of commissioning an independent home inspection, and don’t be shy to raise any concerns. If you suspect fraud after buying, don’t wait – get legal advice fast.

The bottom line

Hidden defects don’t stay hidden forever, no matter how cleverly concealed. Sooner or later, as Shakespeare put it, “time shall unfold what plighted cunning hides.”

If you find yourself facing the fallout of a seller’s dishonesty, we’ll help you protect your rights and recover what you’ve lost.

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 us for specific and detailed advice.

Jul 28

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Divorce 101: A Simple Guide to the Legal Side

By Kruger & Co | Family Law

“You can’t go back and change the beginning, but you can start where you are and change the ending.” (C.S. Lewis)

Divorce is traumatic, to the extent that it’s widely considered to be the second most stressful life event (behind only the death of a spouse, and ahead of marital separation and going to jail!).

But if you’ve come to the conclusion that your marriage is so unhappy or toxic that you have no alternative but to put an end to it, you’ll need to know how to go about obtaining a divorce, and what your legal rights are.

The whole process can feel overwhelming, but it needn’t be. Here’s a clear, simplified overview, followed by a Q & A section to address some of the concerns and queries you may be grappling with.

9 common questions answered

Here are some of the most commonly asked questions. Let us know if you have any others!

Do I have grounds for divorce? Our law has since 1979 had a “no fault” concept, so all you must show is that your marriage has broken down irretrievably, with no reasonable possibility of reconciliation. Mental illness or coma are other grounds for divorce but fortunately they rarely apply.
How long does it all take? In an uncontested divorce (depending on how quickly you reach agreement, how busy the courts are, and a myriad of other factors) you should work on between two and three months. A complex contested divorce on the other hand could take years, particularly when fought bitterly through all the appeal courts.
How are our children protected? Parenting plans, care and contact, maintenance and schooling arrangements can and should be settled by agreement if possible. Otherwise, the Family Advocate’s office can help – it’s a free and impartial service, tasked with protecting the welfare of children through investigation, mediation, reporting and making recommendations to the court. If you are still deadlocked and leave it to the court to decide one way or the other, bear in mind that our courts always put your children’s best interests first – no exceptions.
What about maintenance for me and our children? Both of you must contribute to the reasonable financial needs of your children based on your respective financial positions, and child maintenance orders in favour of the parent with primary care (“custody” in the old terminology) are commonly granted. Orders for spousal maintenance (“alimony” in American legalese) are less common and depend on a host of factors. You may also be able to claim interim maintenance pending the divorce.
How much will this cost me? We can give you an idea of the likely cost based on whether or not the divorce is contested and the complexity of the issues involved. A simple, uncontested divorce will always be the least costly option. If the divorce is contested and you can’t afford to pay legal fees, you may be entitled to a contribution to your legal costs from your spouse. Sometimes, when granting a disputed divorce, a court will order one of you to pay the other’s costs, but the general rule is that each of you will pay your own costs. And of course you can always agree between yourselves who pays what costs.
What assets will I get? What you are legally entitled to depends largely on whether you are married in community of property or out of community of property (with or without accrual), and on what your ante-nuptial contract (if you made one) says. The court also has wide discretion to order a redistribution of assets in your favour in appropriate cases – and of course you can agree between the two of you to divide assets any way you want.
What if there’s domestic abuse? We’ll help you get an urgent protection order to keep you and your children safe.
I really don’t want this to go to trial, how can I avoid that? Mediation is often an effective way to help parties reach an agreement on contentious issues. The reality is that most divorce disputes are eventually settled by agreement – if not upfront, then “on the steps of the court”, or perhaps only after battle has begun and everyone can see which way the wind’s blowing.
How does Home Affairs know I’m divorced? We’ll help you send a certified copy of the divorce decree to Home Affairs to update your marital status on the National Population Register.

Talk to us if you’re considering divorce – or even if you just want to understand your options.

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 us for specific and detailed advice.