“…it has been suggested that bullying refers to any unfavourable or offensive conduct on the part of a person or persons, which has the effect of creating a hostile workplace environment… In these terms, bullying includes a wide range of insulting, demeaning or intimidating behaviour that lowers their self-esteem or self-confidence of an employee” (quoted in the judgment below)

An employer may be tempted, when an employee resigns, to breathe a sigh of relief and think “great, I got rid of a problem without having to jump through all the hoops of a disciplinary enquiry/retrenchment process”.

Not so fast! One of the protections our law provides to employees is the “constructive dismissal” concept, and every employer and employee should understand what that is, and how it works in practice.

The 3 requirements to establish a constructive dismissal

A recent Labour Court decision sets out the requirements thus –

1. The employee must have terminated the contract of employment,
2. The reason for termination must be that continued employment had become intolerable for the employee (to be determined objectively, the employee bearing the onus of proof), and
3. It was the employer who made continued employment intolerable.

Two special needs teachers resign after workplace bullying

• Two special needs teachers were employed by an independent school, registered with the department of education and catering for learners affected by autism spectrum disorder.
• They resigned on a month’s notice but then asked the CCMA (Commission for Conciliation, Mediation and Arbitration) to declare that they had been unfairly dismissed.
• The CCMA found on the evidence presented to it by the employees (the employer chose not to attend the hearing nor to lead any evidence) that constructive dismissals had taken place, a finding confirmed by the Labour Court on review.
• The teachers testified to a litany of bullying behaviour by their employer, such as unauthorised/unlawful deductions from their salaries, unreasonable/unlawful demands on them, use of abusive and offensive language when dealing with them, sexual innuendos, sexual harassment, sexual orientation discrimination, the making of disparaging and derogatory remarks, undermining and belittling them, embarrassing and humiliating conduct, and impairment of their constitutional right to dignity – in front of them and/or their work colleagues and/or in public places.
• “In short”, held the Court, “what the evidence discloses is a workplace operated by a narcissistic personality whose offensive and unwelcome conduct had the effect of creating a toxic working environment in which discrimination, degradation and demeaning behaviour became the norm. I have no hesitation in finding that the nature and extent of the workplace bullying suffered by the [employees] was such that for the purposes of [the Labour Relations Act], their continued employment was rendered intolerable.”

• The end result is that the employer must pay the two employees compensation amounting to four/six months’ remuneration respectively (the Court indicating that higher awards would have been considered if applied for on review), plus legal costs on the punitive attorney and client scale.

Two other things to bear in mind in a constructive dismissal claim were addressed in this matter…

The need to “exhaust all internal remedies” first

“Generally speaking”, as the Court put it, “an employee is required to exhaust all possible internal remedies prior to resigning and claiming a constructive dismissal.” Only where the available channels for raising a grievance “are ineffective or where on the facts it would be futile for the employee to resort to a grievance procedure, an employee is not necessarily precluded from claiming constructive dismissal.”

In this particular case, although the two teachers did not follow the grievance procedures set out in their contracts of employment, the Court held that this channel had not been open to them as the “immediate manager/director” to whom they were supposed to direct their grievances was the very person they were complaining about.

As an employee however, the general rule is this – follow whatever internal grievance procedures apply in your workplace or you could lose your claim.

Is “working your notice” inconsistent with constructive dismissal?

The employer argued that the teachers’ willingness to work out their month’s notice periods was “incompatible with any notion of intolerability of future employment”. Not so, held the Court, the teachers were acting “out of their sense of duty towards the learners in their care, and the need for a smooth transition so as to minimise any harm that might be caused to them.”

Employees should however be careful here – without such special circumstances a willingness to work out a notice period could well be taken as proof that your working conditions are not as intolerable as you claim.

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.

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“If it sounds too good to be true, it probably is” (wise old adage)

2021 could well be a bumper year for Ponzi schemes (and their equally evil cousins, pyramid schemes). They flourish in all countries and at all times, but with our pandemic-related economic woes and general disruption we will no doubt provide the scamsters with particularly fertile ground this year.

And these schemes just never go away. As soon as one collapses or is shut down, it is immediately replaced by a new one – or more (like the Hydra’s heads, cut off one and two grow back).

Who is at risk?

Everyone! It’s not just pensioners and retrenched employees desperate to recoup their 2020 investment losses. Past schemes have counted some of South Africa’s wealthiest and most savvy citizens as victims, the problem being of course that the con artists who originate them are highly skilled at picking their targets and at creating cover stories to make everything seem legitimate. Perhaps most importantly, they are skilled at the social engineering side of it, building trust and credibility in their target markets with endorsements and “success” stories.

2020’s R9.45bn parting shot at us

There’s often big money involved too. Witness 2020’s parting shot at us in the form of the late-December provisional liquidation of Mirror Trading International (MTI), alleged by its detractors to be a scam (an allegation hotly denied by MTI) and reportedly involving some R9.45bn worth of Bitcoin and some 280,000 investors from all over the world, lured by promised returns of up to 10% per month. At time of writing MTI denies that it runs a Ponzi scheme or indeed that anything is amiss, plus its website is still up, but a flood of media speculation to the contrary no doubt has investors panicking.

See also the recent press reports of the Asset Forfeiture Unit’s seizure of R106m worth of assets (11 chunks of land, 5 aircraft and a motor vehicle) linked to a suspected pyramid scheme.

During the lockdown, another alleged scheme took R42m in deposits from over 230,000 unsuspecting investors.

Stand by for more…and protect yourself and others by knowing the warning signs.

Red flags to watch for

See Sanlam’s Infographic below for a summary of how to spot a Ponzi scheme.

As the infographic suggests, let your watchword be: “If it sounds too good to be true, it probably is”.

Source: Sanlam Employee Benefits.

Another possible indicator of a fraud is a promoter with no physical address – and if you are given a physical address, make sure it is real!

If your proposed investment is presented as being a part of a legitimate multi-level marketing (MLM) scheme, it may or may not be genuine – tread very carefully and read “Understanding pyramid schemes and multi-level marketing” here for some pointers.

Warn others (including your staff and the “early birds”)

Please think of passing on this warning, and if you are an employer alert all your staff. These criminals often target workplaces because of the trust factor between fellow employees and colleagues.

Tell everyone not to fall into the trap of thinking that they can be winners by “getting in early”. Statistically, 88% of “investors” lose everything. And, as a number of South African court cases have shown, even the 12% “early bird winners” must, if sued by a liquidator or trustee, cough up not only their “profits” but also their initial stakes.

That’s because a liquidator (“trustee” in the case of a person or a trust) can recover any monies paid out by a liquidated scheme during the 6-month period prior to liquidation, unless the recipient can prove that the disposition was made “in the ordinary course of business” and without intention to prefer one creditor above another.  That’s likely to be impossible to prove with an illegal scheme. Even after 6 months the investor is still at risk, although the onus of proof then shifts to the liquidator.

In other words, even the “early birds” stand to lose everything.

So the bottom line is this – if you are approached by anyone with a “too good to be true” deal, don’t part with a cent until you are 100% sure it is legitimate!

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.

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A recent High Court decision has been widely viewed as an important victory for the rights of unmarried opposite-sex life partners. Until now, if one such partner died intestate (without making a will), the other could not inherit on the same basis as could a married spouse. Nor could the surviving life partner claim maintenance from the deceased estate (whilst a surviving spouse can claim).

The High Court’s pronouncement that the relevant legislation was unconstitutional and invalid in this regard must still be confirmed by the Constitutional Court, but it certainly is a clear indication that our courts want to see our laws amended to protect the rights of such couples.

The life partner who will now inherit

• An unmarried 57-year-old man died leaving substantial assets. Both the executor of his deceased estate and the Master of the High Court rejected, primarily on the basis of existing law, his surviving (female) partner’s claim to inherit from the estate.
• She approached the High Court with her claim, and the Court found on the facts that the couple had been “partners in a permanent opposite-sex life partnership, with the same or similar characteristics as a marriage, in which they had undertaken reciprocal duties of support”. 
• The provisions of the Intestate Succession Act and the Maintenance of Surviving Spouses Act were, held the Court, unconstitutional to the extent that they excluded opposite-sex permanent life partners from their provisions.
• The practical effect is that the surviving partner will inherit as though she was a spouse.

But, if you are in an opposite-sex life partnership –

1) You should still make a will     

There’s no guarantee that the Constitutional Court will confirm the declaration of invalidity, but more importantly there are very sound reasons for everyone – married or not – to leave behind a valid and properly-drafted will.   

It is quite possibly the most important document you will ever sign. Without a will, you lose your right to choose who inherits what (your spouse for example will get only a “child’s share” on intestacy), you have no say in who will be appointed as the executor of your deceased estate, and you risk exposing your surviving loved ones to the trauma and expense of family dispute and litigation.

In the context of life partners, perhaps you want your surviving partner to inherit everything, or perhaps you don’t. The only way to ensure your desired outcome is to specifically provide for it in your will.

2) You should still have a cohabitation agreement

 An enduring myth in our society is that our law recognises the concept of a “common law marriage”. There is no such thing in South African law and whilst there are some limited statutory protections for life partners, if and when you part ways you could well find yourselves embroiled in a prolonged and bitter dispute. Quite possibly one of you will be left destitute after many years of “living as man and wife”.   

The quick and easy solution is to enter into a cohabitation agreement, it’s the best way to safeguard both of your rights (personal as well as financial). 

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.

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Whether 2020’s lockdown gave you a great idea for a new business, put you out of a job, or killed your old business, 2021 may well be a year full of new opportunities. If the excitement and rewards of entrepreneurial life appeal to you, have a look at “Starting a Business” on the Small Business Site here for checklists and articles like –

• “#20Lessons20Years”,
• “Small business compliance guide”,
• “Where can I register my company in South Africa”, and so on.

Your first port of call however should always be your lawyer – not only are there important legal requirements to consider before you start up, but you need to choose the right vehicle and structure for your business (sole trader, partnership, company, trust etc) upfront.

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.

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“Who acts in haste repents at leisure” (Aesop)

Our Festive Season is always a busy time for property sales, and this year should be no different – pent up demand, increased affordability, relocations, record low interest rates and availability of bonds are all factors likely to drive a busy property market for at least the next few months.

If you are one of the many property sellers or buyers planning to take advantage, you are in for an exciting time, and as far as practical advice goes you have a treasure trove of it awaiting you on the internet.

Just don’t neglect the legal aspects – rushing in without legal advice risks falling foul of any one of the many pitfalls out there, and if that happens you really will “repent at leisure”.  

Here’s 12 reasons to call your attorney first 

Let’s look at some of the benefits of making your lawyer your very first port of call –

1. Local, specialised knowledge: Lawyers have their fingers on the pulse of what is happening locally – what is happening in the property market, who is selling and who is buying, what marketing strategies are producing results, which banks are granting bonds on the best terms, and so on. All invaluable information for both sellers and buyers.
2. Choosing a conveyancer: As a seller insist on choosing which conveyancing attorney will attend to the transfer in the Deeds Office. Pick a lawyer you trust to act quickly and efficiently, protecting your interests at every step.
3. The Offer to Purchase/Deed of Sale: Typically a written offer from a buyer becomes the Deed of Sale on acceptance by the seller, and it is that Sale Agreement that is at the heart of whether a sale proceeds smoothly or whether it devolves into a nightmare of cost, delay and dispute. Prevention being as always better than cure, both buyer and seller should sign nothing until they fully understand and accept all the terms and conditions in the document. Our law will with very few exceptions hold you to your agreements – and if you sign in haste you are likely to regret at leisure! 
4. Agent’s commission: Don’t risk any misunderstanding or dispute if you decide to market your property through an agent or agents – in a worst-case scenario when dealing with multiple agents, you could even risk double commission. Have your lawyer check the agent’s mandate before you sign it, and as a buyer look for any undertakings you may be giving in the sale agreement regarding commission disputes.
5. Other costs: Both parties need to fully consider their total costs, and not all of them are immediately apparent. As a seller for example you need to consider things like bond cancellation costs, compliance certificate costs, tax risks (capital gains tax can be a big factor here) and the like. Buyers of course need to plan for transfer duty, transfer costs etc. Ask your lawyer to give you an estimate.
6. Bond clauses: Our courts are regularly called upon to resolve “bond clause” disputes. A properly worded clause, correctly recording what you have both agreed to, is essential. As a seller ask about the “72-hour clause” concept if you are selling subject to the buyer getting a bond and you think you may get another and better offer in the interim. 
7. Other suspensive and resolutive clauses: A “suspensive” clause is one that says the agreement is “suspended” until the happening of something – for example the granting of a bond to the buyer as we covered above, or the granting of a sub-division or something similar. A “resolutive” clause on the other hand provides that the agreement is binding on signature but falls away on something happening. Both can cause all sorts of confusion and their interpretation is best left to the experts.
8. Views, alterations, home businesses, title deed restrictions etc: As a buyer if you have fallen in love with a house because of its spectacular sea views for example, or because it is perfect for adding on that second story or granny flat, or because you plan to move your pandemic-hit business into the garage, have your lawyer check the title deeds and local town planning regulations for what is allowed and what is not. Many a bitter neighbour dispute has its roots in building extensions that block views or exceed local zoning restrictions, or in objections to business activities on residential property. A title deed inspection will also reveal any hidden pitfalls such as servitudes, usufructs and the like.
9. Investment Properties: Property can be an excellent investment, but good upfront advice is essential, particularly if you plan to undertake any development or alterations. Understand the costs, the tax implications, and the risks of property “flipping” if you plan to resell, or of managing tenants if you plan to be a landlord. 
10. Who will the buyer be? Trusts, joint ownership, life partners and other considerations: Should you buy in your personal name or hold your house in a trust or company? Should you buy jointly with your spouse or life partner? These are critical decisions, involving questions of estate and tax planning, marital regime if married, cohabitation agreements if not married, financial status, risk profile in the commercial sense, and a host of other factors. Not getting this 100% right upfront is a recipe for disaster.  
11. Defects and the old “voetstoots” chestnut: Avoid any risk of dispute over defects, be they “patent” (easily identified on inspection) or “latent” (hidden or non-obvious) with a properly structured voetstoets (“as is” or “without any warranty”) clause. Buyers – bear in mind the old “buyer beware” maxim. Sellers – manage your potential liability for undisclosed defects.
12. Community Schemes: Buying into a community scheme comes with many advantages, provided that you understand fully what you are letting yourself in for. For example, our courts will hold you to whatever housing complex rules and regulations apply. It will avail you nothing to say you weren’t aware of them when buying. In a sectional title development understand exactly what you are buying and how the concepts of “exclusive use” and “common property” areas affect you.

Every situation will be different so tell your attorney everything that could possibly be relevant. 

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.

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“…where there is disharmony, the essential test is whether it imperils the Trust estate or its proper administration” (extract from judgment below)

Trustees are of course supposed to work together to protect and further the interests of their trust and its beneficiaries, but the fact is that on occasion serious disputes can and do arise.

If settlement negotiations fail and if there is no alternative but to forcibly remove a trustee our courts have the power to do so, on the application of either the Master of the High Court or of “any person having an interest in the Trust property”.

What must you prove for removal?

As to the grounds on which a court will agree to remove a trustee, a recent Supreme Court of Appeal (SCA) judgment confirms that “loss of mutual trust and respect does not, without more, translate to a ground for the removal of a trustee, or to a conclusion that the Trust property has been imperiled [Put at risk of being harmed, injured, or destroyed]. It must further be established that, as a result, the Trust property has been imperiled or the administration of the Trust and the management of its property are at risk. That is a factual enquiry …The determinative test is always whether any state of affairs – be it incompetence, misconduct, incapacity, or lack of trust and respect among trustees or beneficiaries –  has resulted in the Trust property or its proper administration being placed at risk.” (Emphasis supplied).

Importantly the Court added that in exercising its power to remove a trustee, “the courts do so with circumspection”. 

Your work, in other words, is cut out for you.

Fighting in a family trust – the outcome

• A deceased businessman’s R2.8m share portfolio and a 75% share in a property-owning company were vested in a family trust, in which the deceased’s mother, step-father, brother, wife, adult children and accountant were all involved in one capacity or another.
• In short, relationships between the role-players soured, involving a flurry of accusations and counter-accusations of theft (reciprocal criminal charges being laid), oppressive conduct, conflicts of interest, collusion, vendettas – the list goes on.
• The wife (as trustee and beneficiary) together with her sons (the other beneficiaries), applied for the removal of the trustee in question, and after a long – and no doubt expensive – trek through the courts, ended up in the SCA. 
• Finding on the proved facts that “the state of the relationship of the appellant and the respondent has not imperiled the Trust property or its proper administration. I find no other basis on which it would be in the interests of the Trust and its beneficiaries to remove the appellant” the SCA reversed a High Court order removing the trustee. The trustees are it seems just going to have to work this one through themselves.

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.

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“An inability on the part of the parents to maintain a child must be established before a grandparent will be legally liable to do so” (extract from judgment below)

One wonders how many grandparents are aware of (let alone plan for) the possibility that they may have a legal duty to support their grandchildren in certain circumstances.

It could be a heavy blow – trying to navigate one’s retirement financially can be hard enough without suddenly having to maintain not only yourself and your spouse but also a grandchild, possibly for decades. And what about the risk that when you die your deceased estate might remain liable – a drain, possibly a critical one, on your estate’s sufficiency to support your surviving spouse?

A recent Supreme Court of Appeal (SCA) decision confirms that –

• As a grandparent you are potentially liable for maintenance during your lifetime but
• When you die, your deceased estate will (as the law currently stands) not be liable. 

The adult granddaughter’s claim and the law

This was a damages claim against the executors of a grandfather’s deceased estate based on the proposition that the estate was liable to pay maintenance for a 30-year-old granddaughter unable to support herself because of psychiatric issues, mild intellectual disability and an autism spectrum disorder. The father had emigrated, had paid no maintenance, and was allegedly untraceable, whilst the mother’s ability or inability to fully support her child had not been established.

The SCA was asked to break new legal ground by extending a grandparent’s liability to his or her deceased estate, but on the evidence before it in this case (i.e. our courts may revisit this issue in the future) the Court declined to extend the law in this way, and set out our current law as follows –

• Liability for maintenance generally depends on three factors –
  • The claimant’s inability to support him or herself.
  • His or her relationship with the person from whom support is claimed. 
  • That person’s ability to provide support.
• The primary caregivers are the parents who have a duty of support as far as they are able to do so (this applies also to the parents’ deceased estates when they die). 
• Parents and children have a reciprocal duty of support.
• “If parents are unable to support their children who are in need of support, other relatives including grandparents, may be obliged to support them … But that duty is imposed first upon a nearer relative before it moves to remoter ones.” (Emphasis supplied).
• However, as our law stands, a grandparent’s deceased estate is not liable.

In summary – 3 factors for liability

In other words, you (but currently not your deceased estate) could be liable to pay maintenance if –

1. Your grandchild is not self-supporting, 
2. Neither parent (nor their deceased estates) is financially able to provide the necessary support, and 
3. You are financially able to do so.

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.

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A recent CCMA (Commission for Conciliation, Mediation and Arbitration) ruling, in which an employee’s dismissal for smoking cannabis before work was set aside and he was re-instated, has garnered a lot of media attention.

Unfortunately, some of the resultant articles and headlines may have given the inaccurate impression that employees are now free to report for duty under the influence of the intoxicant. In fact, although the employee in question was indeed re-instated, he was still held to be in the wrong, and sanctioned with denial of back pay and a 12-month final written warning. 

Moreover, a previous (2018) CCMA ruling had confirmed the dismissal of employees in broadly similar circumstances. 

It seems that each case will be treated on its own merits so let’s compare the facts in these two matters –

2018: Dismissal upheld

• Employees in a particularly dangerous workplace environment (involving heavy machinery, vehicles, and timber and hence a risk of fatality), had a zero-tolerance policy when it came to workplace safety and substance abuse. 
• All employees were tested for cannabis use and four who tested positive were dismissed after admitting that they had smoked the drug at home. They knew of the zero-tolerance policy and of the dismissal risk for contravening it.
• Their dismissals were upheld by the CCMA as being an appropriate sanction in the circumstances. 

2020: Dismissal too harsh

• An employer’s Code of Conduct and Discipline prohibited anyone from working under the influence of alcohol or drugs, a policy strictly enforced as a compliance issue under the Occupational Health and Safety Act. The Code recommended dismissal for even a first offence.
• An employee (a “picker” in a cosmetics and fragrance business) arrived late for work with red and watery eyes, tested positive for cannabis use and admitted having smoked a “zol” (cannabis cigarette) some two hours before reporting for work.
• After a disciplinary hearing he was dismissed, but the CCMA re-instated him on the basis that although he had tested positive for cannabis there was no evidence that his ability to perform his work had been affected. Indeed, his employer had allowed him to remain at work that day, albeit in a “safe” environment. “The problem with a charge of being under the influence of drugs” said the Commissioner “is that there has not been any scientific method of determining whether a person is under the influence of the drug such that there is an impairment in their performance.”
• “In the circumstances dismissal was too harsh and was not an appropriate sanction”. As mentioned above the employee was not let off the hook but his sanction was reduced from dismissal to loss of back pay and a final written warning. This on the basis that he was aware of the policy prohibiting the use of drugs on duty and “It was irresponsible to take a substance that may have the ability to impair his mental or physical abilities.”

Clearly every case will be different, but at the very least employers should have in place workplace policies appropriate to their particular business conditions and requirements.

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.

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It’s been a hard year but at long last the Summer Holidays are here! Here’s a selection of websites to help you enjoy your break – 

Holiday safely in the time of COVID-19

Read Daily Maverick’s “How to go on holiday safely in the time of Covid-19: A practical guide” here for some thoughts on how to travel to your holiday destination, what to do on arrival, and how to have fun – all with minimal risk.

Dodging the dangers – an interactive graphic

Then from Spain (which knows a thing or two about this virus!) comes an interactive and somewhat alarming graphic showing how Covid-19 spreads through the air, how transmission works, and how you can avoid it. 

See “A room, a bar and a classroom: how the coronavirus is spread through the air” on the El País website here. 

And Now for Something Completely Different – “Tax Can Be Fun!”  and Other Online Curiosities

“What a strange world we live in” said Alice to the Queen of Hearts (Lewis Carroll, Alice in Wonderland)

Finally, after such a surreal and challenging year let’s follow through with a few of the many strange webpages out there.

For a start here’s one that’s definitely worth a visit, and it comes courtesy of our very own SARS (not the virus 😀) on its “Tax Can Be Fun!” page.

“Curiouser and curiouser”, cried Alice

To end, a whole collection of strange webpages (warning: there is some really interesting, even useful, stuff here – but you are about to waste a lot of time prospecting for the gems!) on The Black Stump’s “Latest Bizarre, Oddball and Weird Sites” webpage.

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.

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“By subscribing to the constitution, each member accepts the benefits stipulated in his or her favour by the other subscribing members.  One of those benefits is that there shall be rules of conduct to give substance to the objectives and rights promised and conferred by the constitution … and that the other members will be required to comply with them … and that any breaches thereof will be called to account” (Extract from judgment below)

There are many advantages to living in residential estates and sectional title developments, but there are also rules and responsibilities. 

A common source of friction in complexes is parking, leading to complaints such as “there’s never any parking for my visitors because owners hog the visitor bays for their own cars” and “our complex roads are a nightmare of parked cars jutting out of driveways”.

In yet another reminder to community scheme buyers and owners to fully understand and comply with all the rules and regulations you are agreeing to, the High Court recently barred a home owner from parking his vehicles anywhere except in his own garage and driveway.

• The owner in question lives in a residential estate governed by a Homeowners Association (HOA), one of whose rules forbids the parking of owners’ vehicles either in visitors’ bays or in the street.
• Able to park only one of his three vehicles in his own double garage (because of household equipment stored there), an owner persistently parked his second vehicle outside his garage (its size meant that it jutted into the street), and his third vehicle in a visitor’s bay.
• Other owners complained and the HOA asked the High Court for an interdict against the owner in question. 

Two of the owner’s contentions in fighting the application are no doubt commonly raised by rule-breakers generally –

1. “The HOA has waived compliance with its rules by not enforcing them”   
   
   The owner claimed that failures to strictly enforce the rules against other offenders amounted to the HOA waiving compliance with them. Not so, held the Court, the HOA’s duty was to enforce the rules for everyone’s benefit, plus it had no power to waive compliance. HOAs must however both check the exact wording of their constitutions and recognise the need to conscientiously enforce compliance with rules – both factors mentioned by the Court in reaching its decision.
   
2. “The HOA is applying the rules in a discriminatory manner and shouldn’t be allowed to”   
   
   The owner’s argument here was that the HOA was discriminating against him and could not be permitted to do so. This being a contractual right, held the Court, any failure to enforce it against other owners would have no legal bearing on its right to enforce it against this owner. The Court did however warn that “An irrationally discriminatory system of enforcement might well in a given case justify a decision by the court in a matter like this to refuse to grant the interdictory relief in the exercise of its equitable discretion.” In other words, HOAs should be careful to avoid any form of “irrational” discrimination in enforcing rules.

The result – the owner is “prohibited from parking his vehicles, motor bikes, caravans, boats or trailers anywhere … other than in his garages or outside his house wholly within the boundary of his property.” He must also pay the HOA’s legal costs.

An end note on the CSOS dispute resolution service

The CSOS (Community Schemes Ombud Service) provides a dispute resolution service and can adjudicate a wide range of disputes in community schemes. In this particular case it had no jurisdiction to grant an order against the owner, but it should always be your first port of call if possible – take specific advice.

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.

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