“The minute you read something that you can’t understand, you can almost be sure that it was drawn up by a lawyer.” (Will Rogers, cowboy and actor)

We’ve all seen (and probably ignored) disclaimer notices as we enter shopping centres, restaurants, businesses, hotels, sporting venues and the like. Usually, they read something along the lines of: “All persons enter at their own risk” or “the owner shall not under any circumstances be liable …blah blah blah…”

A legal duty to ensure safety

The restaurant owner in the McDonald’s case we discuss below had accepted that it had “a legal duty to exercise the standard of care expected of a reasonable restaurant operator in the circumstances by ensuring that the premises of the restaurant were safe for patrons to use.” 

And therein lies your risk, because that general principle applies to all owners and occupiers of premises which are open to the public. The question is, how well do disclaimer notices really protect businesses from legal claims? 

The McDonald’s “slip and trip” case

A customer sued the owner/operator of a McDonald’s in Cape Town. On her way through the restaurant to find a table for a business meeting, she slipped and fell on a recently mopped floor. Her fall was a serious one – in considerable pain, she was carried from the restaurant on a stretcher and underwent operations to her ankle and knee. 

She argued that the owners had acted negligently by failing to:

• Keep the floor dry and safe
• Place warning signs showing the wet floor
• Cordon off the wet area to prevent accidents

The owner defended itself both by denying any negligence, and by relying on the disclaimer notice posted at the entrance (bolstered by a “floors may be slippery when wet” sign). It also suggested that the customer had caused, or at least contributed to, her own accident by not keeping a proper lookout, and by walking too fast. 

As always, the onus was on the customer to prove her case, i.e. that the restaurant had been negligent, and that its negligence had caused her fall. 

In the end, she succeeded in doing both, with the Court accepting that the restaurant hadn’t put up “wet floor” signs to cordon off the wet, slippery area of the floor. This was the nail in the coffin – it hadn’t followed its own cleaning protocols. 

The “lady with the mop”

How had the Court reached that conclusion? By applying the “thing speaks for itself” (res ipsa loquitor) doctrine, which says that if the occurrence itself (in this case, the fall) is enough to infer negligence, it’s up to the person being sued to provide a contrary explanation. 

The restaurant was unable to give any explanation for the fall which would counter the inference of negligence. The Court noted in this regard that the restaurant hadn’t called as a witness the “lady with the mop”. She had been mopping the floor at the time and was, said the Court, “the only person that could have shed light on whether the cleaning protocols were strictly adhered to.”

This left the Court to hold that the restaurant hadn’t taken reasonable steps to prevent the incident, and that its negligence had caused the fall. Finally, there was no contributory negligence on the part of the customer, so the owner is 100% liable for whatever damages she suffered. 

Unless, of course, its disclaimer notice shields it from liability…

“A disclaimer is not an automatic legal shield” 

The disclaimer notice read: “All persons entering McDonald’s and using its facilities, including drive-through and parking areas, do so entirely at their own risk. Neither McDonald’s nor it’s (sic) suppliers, employees and or representatives shall be responsible and or liable in respect of any theft and or loss and or damages sustained to property and or the persons of any customer and or employee of McDonald’s whilst on the premises for whatsoever reason. Right of admission reserved.”

The customer did not recall noticing this disclaimer at the entrance, but in any event, as the Court put it (emphasis supplied): “it must be emphasised that a disclaimer is not an automatic legal shield, and must … be evaluated in the context of the overall safety management of the premises.” 

Despite the disclaimer, the restaurant would still be liable if it hadn’t taken reasonable steps to guard against the customer slipping. It was unable to put forward an explanation to counter the inference of negligence, and its failure to follow its own safety protocols sealed the deal.

So, disclaimer notices aren’t foolproof. How can you strengthen yours?

No disclaimer will ever be a watertight defence against liability, but you can strengthen yours significantly by understanding what sort of factors courts are likely to take into account when assessing such claims. We share below some tips on how to address each of these risk factors:

• Disclaimers must be conspicuous, clear and visible: A disclaimer hidden in small print or obscured by a door is unlikely to hold up in court, so maximise visibility by placing signs at entrances where they are easily seen by everyone before they enter the premises. Use legible fonts and contrasting colours.
• Plain, simple language is essential: If a disclaimer is too complex or ambiguous, or uses too much legal jargon, courts may interpret it against you or accept that your customers may not have understood it.
• The Consumer Protection Act (CPA): The CPA does not allow disclaimers that exclude “gross” (extreme or total) negligence, and it requires that such notices be conspicuously drawn to the attention of consumers, who must also be treated fairly, reasonably, and justly. We can help you draft signs that comply.
• Disclaimer or no disclaimer, you must still take reasonable safety measures and give warning of any risk areas: Warning signs and proactive safety practices and protocols will reduce your risk of liability substantially.

If you need guidance on drafting effective disclaimer notices tailored to your business, or help with your risk management practices, we’re always 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.

© LawDotNews

“An ounce of prevention is worth a pound of cure.” (Benjamin Franklin’s warning to fire-threatened Philadelphians in 1736)

Cases of Business Email Compromise (BEC) fraud continue to surge, and recent High Court decisions have confirmed that it’s up to you to verify that you are paying into the correct bank account. 

 How does BEC work and who is at risk?

BEC fraud involves cybercriminals impersonating your trusted contacts (e.g. suppliers and professional advisors) in fraudulent emails that look genuine. The idea is to trick you into making payment into the scammer’s account. 

Everyone’s at risk, but BEC is particularly rife in transactions where large amounts of money are in play. Favourite targets are commercial operations and their customers, as well as all role-players in property sales – buyers, sellers, conveyancers and estate agents.

How do these scams work? For a snapshot of a classic BEC sting, have a look at this recent High Court case…

“But I paid you the R890k!”

Two Cape Town companies, who had been trading happily and successfully with each other for seven years, fell out over who should bear a loss of R886,726.25 after scammers stole the customer’s payment for a consignment of valves. Here’s how it went down:

• The customer had always made payments to the supplier’s Standard Bank account in the past. So far, so good.
• But then, enter stage left, our villain: Joe Scammer. Joe intercepts the supplier’s email correspondence and, pretending to be the supplier’s managing director, asks the customer to make all payments to an Absa bank account from now on.
• The customer asks for a bank confirmation letter, which Joe (still in his guise as MD) gladly supplies.
• Reassured, the customer makes payment to the Absa account. The fraud is only discovered when, three days later, the supplier emails asking for payment. 
• Joe is of course now long gone with his loot, leaving customer and supplier to fight it out over who must bear the loss.  

Blaming the supplier won’t work – you must “seek out” your creditor

The customer, sued by the supplier for the outstanding amount, contended that the blame lay with the supplier, whose own negligence in failing to secure its IT systems against email interception caused the fraud. 

That’s a defence often raised by BEC victims, and indeed our courts have stressed in the past the need for suppliers and professionals to ensure that their own computer systems are properly secured at all times. But it cut no ice in this case. 

Rather, said the Court, (emphasis supplied), “it is the debtor’s obligation to ‘seek out his creditor’ and … until payment is duly effected, the debtor carries the risk that the payment may be misappropriated or mislaid.”

The real cause of the loss in this case, held the Court, was not any hacking of the supplier’s emails (if there was in fact a hack – the supplier denied it), but the customer’s failure to take the steps that a “prudent debtor” would have taken to ensure that it was paying into the correct account. 

Our unfortunate customer must now pay the supplier, plus a raft of legal costs to boot. 

Pick up the phone!

Our courts will have no sympathy for you if you fall victim by not protecting yourself. A factor that counted against our customer here was (emphasis supplied): “the fact, known to any persons in business and making use of computer-based methods of communication and payment, that cyber crime is rampant and that care must be taken at all times to limit its impact.”

The good news is that a few simple preventative measures can provide everyone involved with a strong layer of protection:

1. Put in place strong policies and procedures to ensure that your IT systems and emails are secured against breach and interception. 
2. You, and all of your staff, must remain constantly vigilant against the techniques which the scammers use. They are particularly adept at exploiting trust-based and long-standing relationships, for instance with suppliers you have dealt with for years, and professionals like attorneys, accountants and financial advisors etc. 
3. Most importantly, perhaps, given the current attitude of our courts, is to always verify payment details via contact with your creditor through another communication system. As our courts have pointed out, “a simple telephone call” can be enough to avoid falling victim to fraud.

If you need help reviewing your fraud prevention and payment verification procedures, please feel free to contact us. 

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.

© LawDotNews

From 1 April 2025, the earnings threshold under the Basic Conditions of Employment Act (BCEA) will increase, impacting not only the BCEA but also employee protections under the Labour Relations Act (LRA) and Employment Equity Act (EEA). 

Broadly speaking, employees earning less than the threshold amount are entitled to stronger labour protections.

The new threshold 

The threshold rises by only 2.9% this year, increasing from R254,371.67 per year (R21,197.64 per month) to R261,748.45 per year (R21,812.37 per month).

What counts as “Earnings”?

“Earnings” (for this purpose only) means “the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration”.

The impact on employee protections 

• BCEA: Employees earning above the new threshold aren’t entitled to statutory protections for working hours, overtime pay, Sunday, public holiday and night work, daily and weekly rest periods and meal intervals. 
• LRA: Those earning below the threshold gain stronger protections:
  • If working for a client via a labour broker for more than three months, they are deemed employees of the client – unless they really are performing a temporary service. 
  • Fixed-term contracts exceeding three months are presumed indefinite unless the employer has a justifiable reason for fixing the term of the contract. 
• EEA: Employees earning above the threshold can only take unfair discrimination disputes (except sexual harassment cases) to the Commission for Conciliation, Mediation and Arbitration (CCMA) if both parties agree. Otherwise, they must approach the Labour Court.

Exceptions to the BCEA protections

Some employees have limited BCEA protection regardless of their earnings, including:

• Senior managerial employees – defined as “an employee who has the authority to hire, discipline and dismiss employees and to represent the employer internally and externally”.
• Sales staff who travel to customers and set their own work hours.
• Employees working less than 24 hours a month.

Please ask us for specific advice if you need it. This article is merely an overview of a complex topic with many pitfalls for the unwary.

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.

© LawDotNews

“O, I do not like that paying back.” (Falstaff, in Shakespeare’s Henry IV Part I)

A standard clause in loan agreements, suretyships and the like is the “certificate of balance” or “COB” clause. 

Typically, it will read something like this (but normally with a lot more verbiage, and bear in mind that every lender has their own version or versions): “A certificate signed by a bank manager will be prima facie proof of the amount owing in terms of the loan agreement, unless the contrary is proved.” Most homeowners will have encountered a COB clause in what we all refer to loosely as “mortgage bond agreements” (actually loan agreements where the loans are secured by bonds). 

The question is, should you be intimidated by that wording into accepting whatever amount a bank or other creditor demands from you? 

Definitely not, confirms a recent High Court decision: a COB is not conclusive proof of the amount that is owing. Rather, it is a tool to assist the creditor in proving the amount owing.

The couple who challenged the bank’s R2.1m calculations – and won

A couple fell into arrears with their monthly repayments on a bank loan which was secured by bonds over two of their properties.

The bank sent them a “Section 129 Notice” in terms of the National Credit Act (NCA). That’s a formal letter of demand to a consumer that must be sent by the creditor before it can go ahead with court action. It warns the debtor that they are in default and sets out alternative ways for them to sort the matter out – payment, debt counselling, alternative dispute resolution, and so on. 

The bank in due course applied to the High Court to enforce the loan agreement (putting both properties at risk of sale in execution). The couple, in opposing the application, said they couldn’t accept the accuracy of the R2.1m claimed by the bank in the COB. That, they said, was because they hadn’t received any statements since 2019, so they demanded a breakdown from the bank of the total amount owing. 

The bank declined to provide statements, saying that the couple had to set out a basis for requesting them, and arguing that the COB was conclusive proof of indebtedness. It was for the debtors, said the bank, to disprove the accuracy of the claim. 

Not so, held the Court: the COB is simply prima facie (“at first sight”) proof of indebtedness, and it is not up to the debtors to prove what the correct amount is.

The bank, held the Court, had failed to set out in the Section 129 Notice both the correct amount of the arrears and a breakdown of that amount, and its application accordingly failed.

Lessons for lenders and borrowers

Lenders: Ensure that the amounts you claim are accurate and supported by documentation. We can help you with that, and with checking that all your loan agreements and other documents are correctly worded and updated.  

Borrowers: If you receive an NCA Section 129 Notice or any other letter of demand, don’t just ignore it! If you aren’t sure what to do, ask us for help – and if you don’t agree with the amount claimed, demand a full breakdown and check it for accuracy. 

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.

© LawDotNews

“If you didn’t hear it from the horse’s mouth, it came from the other end of the horse.” (Anon)

The rapid rise of AI is hard to ignore. DeepSeek’s AI assistant, only launched on 10 January this year, has grown to rival ChatGPT in popularity, making it the most widely used AI language model at the time of writing. But DeepSeek isn’t alone in the race – major players like Copilot, Gemini 2.0, OpenAI o3, Meta AI, Grok, Anthropic and the like are all vying for our attention. The competition is fierce, and we’re spoilt for choice!

With AI becoming an integral part of so many aspects of our lives, it’s no surprise that some of us might be tempted to turn to these models for legal help. We decided to ask ChatGPT itself how it feels about that, and what follows is its unedited response. Direct from the horse’s mouth!

Our question to ChatGPT

“With the current high levels of public interest in using AI to answer questions, would you recommend that people without legal training use AI to answer legal questions and to provide legal advice on specific topics?”

ChatGPT said:

“AI is a powerful tool, but when it comes to legal advice, caution is essential. While AI can summarize laws, explain legal concepts, and assist with research, it cannot replace the expertise of a qualified attorney. The risks of relying on AI for legal advice Lack of context: AI provides general information, but legal issues are highly fact-specific. What applies in one case may not apply in another. Potential for inaccuracy: AI models pull from vast datasets but do not verify legal updates, jurisdictional differences, or recent court rulings. This can lead to outdated or incorrect advice. No professional liability: If AI provides incorrect guidance, there is no recourse. Attorneys, on the other hand, are professionally accountable for the advice they give. Ethical and confidentiality concerns: Sharing sensitive legal matters with AI platforms can pose risks, as they do not guarantee attorney-client privilege or data security. Where AI can help Basic legal information: Understanding general legal principles, terminology, and procedures. Document review assistance: AI can help summarize contracts or flag potential issues but should not replace a lawyer’s review. Legal research: AI speeds up finding relevant case law or statutes, but attorneys must verify accuracy and applicability. The key takeaways AI is a useful tool for research and general legal understanding, but not for personalised legal advice. Only a qualified attorney can provide case-specific guidance, apply legal reasoning, and ensure compliance with current laws. For critical legal matters, always consult a professional – mistakes can be costly. In short, AI can support legal education but should never be a substitute for expert legal counsel. If in doubt, always seek professional advice.”

A last thought or two from us…

In a South African context, we have found inaccuracy to be even more of a risk than it is internationally – no doubt because of the relatively limited online coverage our local laws enjoy. For example, a test question on a relatively simple aspect of South African law resulted in the bot quoting New Zealand legislation back to the asker! What’s more, there are already media reports of South African lawyers finding themselves in hot water after not thoroughly checking technical AI output (and rightly so!).

Whatever you use AI for, be really careful that its answers are factually and technically accurate before relying on them. As ChatGPT itself says under every question field: “ChatGPT can make mistakes. Check important info.”

AI is a useful tool that may be able to point you in the right direction, but it can never replace a human being – let alone a qualified lawyer. Relying on AI for legal advice could be the worst decision you ever make.

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.

© LawDotNews

“The right of self-defence is the first law of nature.” (St. George Tucker, Blackstone’s Commentaries, 1803)

 South Africa’s chronically high crime rates have left many of us wondering what the limits are when defending ourselves and our families from criminals. What weapons does the law allow us to carry, what permissions do we need to carry them, and how and when are we allowed to actually use them? 

There are of course a host of practical considerations to consider on top of the legal ones. Are you trained to use your weapon without hurting yourself or innocent bystanders? Do you know how to stop your attacker from using your own weapon against you? Do you really need a weapon at all, or could you keep yourself and your family safe with home alarms, security response services, and common sense when out and about? 

You’ll have to answer these questions yourself, but we can help with the legal ones. So, let’s have a look at the laws applying to the possession of several popular weapons, before turning to the twin questions of “legal possession” and “legal use”.

Do you need a licence for…

1. Firearms? You need a licence to own and carry a firearm. The process involves background checks, competency training, and proof that you actually need one. Possessing or carrying a firearm without a valid licence is in itself a serious criminal offence which could land you in very hot water indeed. 
2. Tasers and stun guns? Tasers and stun guns are legal to own and carry for self-defence purposes. Unlike firearms, they are not classified as weapons under the Firearms Control Act and do not require a licence or permit.
3. Pepper sprays? Pepper sprays are among the most commonly carried self-defence tools due to their ease of use, affordability, and legality. No licence or permit is required to carry one.
4. Bladed weapons (knives, swords and the like), batons, hunting bows, martial arts weapons etc? There are no restrictions particular to these weapons, but the legality of their possession and use is, as we shall see below, very much context-sensitive.

When can you carry them? The importance of context 

Context is vital here, in that the Dangerous Weapons Act – which carries penalties of a fine or up to three years’ imprisonment – criminalises possession of any “dangerous weapon”, defined as “any object, other than a firearm, capable of causing death or inflicting serious bodily harm, if it were used for an unlawful purpose.” 

That definition is wide enough to include all of the above (other than firearms), and this is why their possession is very much context-sensitive: 

• Lawful possession: There is no problem with possession “in pursuit of any lawful employment, duty or activity … during the participation in any religious or cultural activities, or lawful sport, recreation, or entertainment … or legitimate collection, display or exhibition of weapons.”
• Lawful intention: The line between legal and illegal activity is crossed when possession is in “circumstances which may raise a reasonable suspicion that the person intends to use the dangerous weapon for an unlawful purpose.” It’s important to note that all of the circumstances will be looked at very closely when determining whether an offence has been committed: place, time, and behaviour (including threats or intimidatory behaviour, manner of possession and display of the weapon among others). 

And when can you use them? Our laws on self-defence

Having to defend yourself from an attacker is awful enough – imagine then being arrested for exceeding the limits of self-defence. 

How can you avoid that? As set out by the SCA (Supreme Court of Appeal) “a person acts lawfully when he/she uses force to repel an unlawful attack, which has commenced, or is imminently threatening, upon her or somebody else’s life, bodily integrity, property, or other interests, which deserves to be protected, provided the defensive act is necessary to protect the interest threatened, is directed against the attacker, and is reasonably proportionate to the attack.”

In other words, whatever you do in self-defence must be:

1. Necessary: You must show that, in all the circumstances, you had no alternative but to use force. If you can for example avoid an attack by running away, that is what the law says you must do.
2. Proportionate to the threat: You can’t use more force than is needed to avert the threat, so any excessive response risks serious trouble. 
3. Directed only at your assailant. The critical word here is “directed”, as shown in the case below.

How will that play out in practice? Let’s consider the tragic case of a plain clothes police officer shot in error by another law enforcer.

“Hey, put it down, down, down, down … Shoot him, shoot him”

A City of Cape Town law enforcement officer’s successful appeal against his conviction on two counts of murder (for which he had been sentenced to an effective ten years’ imprisonment) provides a practical example of how our laws on self-defence really work. 

He’d been charged and convicted after shooting dead both an armed undercover policeman in civilian clothes, and the unarmed suspect the policeman had been arresting on a drug dealing charge.

The law enforcement officer and a colleague, patrolling the city streets at night, had responded to reports of an assault by a man carrying a firearm. When they got to the scene, the armed man (they had no idea at the time that he was a police officer) drew his firearm and pointed it at them despite warnings to put it down. The accused then fired two shots in self-defence, fatally injuring both the police officer and also (unintentionally) the suspect being arrested. 

Audio recordings confirmed the accused shouting frantically “Hey, put it down, put it down, down, down, down, down, down, down, down. Shoot him, shoot him.” 

The High Court set aside both murder convictions after analysing evidence from the accused, his colleague, and the prosecution’s witnesses, and finding that the accused’s version was “reasonably possibly true”, and also that it had not been disproportionate for him to fire two shots at someone pointing a firearm at him. 

This case also highlights some other important practical aspects:

1. “Reasonably possibly true” is enough: It’s up to the prosecution to prove its case beyond a reasonable doubt. 
2. No armchair critics: Per the Court: “our higher courts have repeatedly stated that judicial officers should not judge the events like an armchair critic but should place themselves in the shoes of the attacked person at the critical moment, and keep in mind that the attacked person probably only had a few seconds in which to make a decision, which was of vital importance to him.”
3. Honest (but necessary) mistakes are OK: The Court again: “in our law putative self-defence applies when a person honestly believes, although mistakenly, that their actions were necessary to protect themselves or others from imminent harm or danger.”
4. Only target the assailant: The Court clearly accepted the accused officer’s evidence that he did not have any intention of shooting the unarmed suspect – he directed both shots only at the armed man directly threatening his life.

If you have any questions about the legal implications of your decision to carry a self-defence weapon, please speak to us.

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.

© LawDotNews

The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased from 1 March 2025 by 4.4% from R27,58 per hour to R28,79 per hour. 

Domestic workers: Assuming a work month of 22 days x 8 hours per day, R28,79 per hour equates to R230,32 per day or R5067,04 per month. Of course, this is just a bare legal minimum: the Living Wage calculator will help you check whether you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up-to-date).

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.

© LawDotNews

“Home wasn’t built in a day.” (Jane Ace, radio comedian)

You find the perfect plot on which to build your dream home in a security estate. Your offer is accepted and transfer proceeds – happy days!

So, imagine your distress when, having proudly taken ownership, you are suddenly told by the HOA (Homeowners’ Association) that you are liable for penalty levies because the previous owner didn’t build on the plot within the deadline period set out in the HOA’s constitution.

You ask the HOA for an extension – after all, it was the seller who was in default, not you. And besides, no one said anything to you about the problem until now. Most importantly, even with the best will in the world (and the best architect and builder!) it will take you many months to get plans approved and start laying foundations. The last thing you need now is the crippling financial burden of unforeseen penalty levies.  

The HOA is unsympathetic. “You should have checked before buying,” they say. “The seller and the agent should have told you all about it – take it up with them.”

Can that really be correct?

A recent High Court decision addresses exactly that situation. All HOAs, owners and buyers need to understand the ramifications of the Court’s findings.

“You owe R190k in penalty levies and interest. Pay up!”

The scene is an upmarket security estate in Midrand, managed by a HOA. 

In terms of the HOA’s constitution, construction of a house has to start within 18 months of the land first being sold, and be completed within 30 months. Fail to meet this deadline and the landowner is liable for penalty levies of twice the normal levy plus the normal levy. That’s triple levies – payable until completion. Critically, the constitution also specifies that “successors in title” (i.e. buyers of vacant plots from existing owners) fall squarely into this net.

Our buyer, as soon as she became aware of these hefty penalty rates, challenged them with the HOA on the basis that – as she had just bought the property and was awaiting approval of building plans – it was physically impossible to expect her to start building immediately after taking transfer. Therefore, she said, it would have been reasonable to give her the same time periods as the previous owners before charging penalties. In any case she could not be held liable for the previous owner’s failure to build. 

The HOA declined to offer her any relief, and the dispute went before the CSOS (Community Schemes Ombud Service), with the buyer asking for an order that “the unreasonable and therefore incorrect imposed fines/penalties be rescinded”. The CSOS ruled the penalties to be invalid because the HOA had not followed fair procedure in imposing them, and the High Court confirmed this decision on appeal.

The details of the dispute are highly technical and will be of little practical import to anyone but lawyers. But what are highly relevant to all HOAs, owners and buyers are the Court’s findings that:

• When you buy into a complex, you agree to its rules: When you buy property and automatically become a member of an HOA, you agree to its rules and are contractually bound to comply with them.
• Late building penalties are justified: As our courts have previously pointed out, penalty clauses like this one are often found in residential complexes as an incentive to owners to “start and complete building works as soon as possible.” This is because “building works inherently cause prejudice to the homeowners’ association and the owners of the Estate … as a result of the nuisance (such as noise and dust) caused by such works, the security risk it presents and the potential for damage to common property…. It also affects the attractiveness and hence the market value of properties in the estate.”
• Subsequent owners can also be bound: HOAs can bind not only original buyers, but also subsequent buyers, to building deadlines. And they can attribute the previous owner’s non-compliance to the new buyer. 
• Wording is critical: HOAs must ensure that the wording of their building penalty provisions is wide-ranging enough to include subsequent buyers. Otherwise, as shown in previous High Court decisions, they will struggle to enforce the penalties against anyone other than the original owner. 
• Fair procedures are essential: In this particular case, the Court set aside the imposition of penalty levies as “unreasonably and unfairly imposed” and therefore invalid. This after finding that the HOA’s outright refusal to allow the buyer a chance to remedy the default, and its refusal to consider her application for an extension of the building deadline, “was unreasonable and contrary to the spirit of the constitutional provision in question.” 

While the HOA’s constitution did unequivocally bind subsequent buyers to the penalties, this was not enough to satisfy the Court to rule in its favour. This is because the HOA did not act fairly in its treatment of the buyer. HOAs take note!

Buyers: Do your homework! 

Although the buyer in this case is off the hook (for now, at least), things could have gone completely pear-shaped for her if the HOA had acted more reasonably in imposing the penalty levies. 

The lesson for buyers therefore is this: Before you put an offer in for any property in a complex, make sure you understand exactly what you are letting yourself in for, and what you are agreeing to. Ask us for help if you’re unsure about 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 us for specific and detailed advice.

© LawDotNews

“Only put off until tomorrow what you are willing to die having left undone.” (Pablo Picasso)

If you own assets outside South Africa, you may have wondered: Is my local will enough? This is a question many South Africans are asking, and the answer will depend on your own unique situation. Let’s break it down.

Why your South African will may not be enough

A South African will can cover all your local and global assets and typically will do so unless otherwise specified. But practical and legal challenges can arise when dealing with foreign laws, tax regimes and regulations:

• Delays and costs: If your executor has to deal with assets in another country this can take considerable time and incur additional legal fees for authentication/translation of documents, applications to recognise appointments and so on.
• Legal conflicts: Many countries have “forced heirship” rules that will override the provisions of your will and require that specified portions of your estate must go to “protected” heirs. In France, for example, your children will inherit up to 75% of your estate. Worse, some legal systems may not recognise your local will as being valid at all. 

The case for a foreign will

You might anyway benefit from a foreign will if:

1. You own immovable property abroad: Immovable property is generally subject to the laws of the country in which it is situated, making a foreign will advisable. 
2. You have significant movable assets overseas: Movables such as investments, shares, bank accounts etc, although likely subject to South African legal principles, could still be easier to manage with a separate will.
3. You spend a lot of time in another country: Regular visits or dual residency could complicate estate administration and make a foreign will an advantage – even if it’s not strictly necessary.
4. You want to minimise your estate’s tax bill: A foreign will might be recommended to you as part of tax planning, which is essential to minimise the risks of double taxation, estate duties and other financial penalties on your foreign assets. This is because we have a residence-based taxation system so SARS will – with few exceptions – be looking at all your assets worldwide. 

How a foreign will works

A foreign will is drafted according to the laws of the country where your assets are located, and should:

• Ensure compliance with that country’s laws and regulations.
• Work alongside your South African will to avoid duplication or conflict.
• Simplify the process for your loved ones when the time comes to administer your estate.

Key considerations

Legal advice is crucial as your South African and foreign wills must align. Contradictions might render one or both wills invalid or open to challenge. When drafting your will(s) be careful to:

• Ensure that your various wills clearly specify which of your assets each applies to.
• Avoid inadvertently revoking your other will/s – specify in each will that it does not replace your other wills, which are to remain valid concurrently. 
• Not allow duplication or conflict to creep in over time – diarise regular reviews of all your wills on an integrated basis.

Remember that drafting and maintaining multiple wills may incur additional expenses – but it can also save your heirs lots of money and time. Separate wills should be structured to streamline and simplify the administration process in different jurisdictions.

Protecting your legacy at home and abroad

Ensuring that your wishes are honoured and that your loved ones are protected starts with the right legal advice. If you’re unsure whether you need a foreign will, let’s talk. A consultation can give you peace of mind – and save your loved ones time, money, and stress in the future.

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.

© LawDotNews

“The secret of life is honesty and fair dealing… If you can fake that, you’ve got it made.” (Groucho Marx)

We’ve all had this experience – meal over, relaxed and happy, you call for the bill and decide to reward your friendly and helpful waitron with a good tip. Only to find, on checking the bill when you get home, that the restaurant had already added a “compulsory service charge” (perhaps 10% or 15% – sometimes even more). When you challenge it, the manager points to the small print on the menu which says something like “service charge applies to tables of six or more”, or “discretionary service charge may be levied”. 

And it’s not only restaurants that engage in such shenanigans. Perhaps it’s a builder or any other service provider adding on bits and pieces to an invoice that you hadn’t noticed when you signed up with them.

Is this kind of behaviour allowed?

The devil, as always, is in the details. If the add-on was properly disclosed to you upfront, you have no legal leg to stand on. It’s up to you to check the menu, or the supplier’s website and Ts and Cs, before ordering. 

But it’s a very different story if the add-on was not properly disclosed upfront by the supplier. As a recent judgment of the National Consumer Tribunal (“the Tribunal”) shows, heavy penalties await any “supplier” (widely defined to include not only restaurants and retailers, but anyone who markets or supplies any goods or services to consumers) who breaches any of their many obligations under the CPA (Consumer Protection Act). And that includes “no hidden charges allowed”.

Being found guilty of “prohibited conduct” will be an expensive exercise. Witness the R1m administrative fine imposed recently on a fast-food chain specialising in that beloved South African tradition – braaivleis.

The braai fast-food chain and the disgruntled customer

Acting on a tip-off from a customer, the NCC (National Consumer Commission) found that a fast-food chain, specialising in “organic braai fast food” (chew on that description for a moment) with 16 outlets across Gauteng was adding a service fee over and above its advertised prices. No mention of this was advertised in its branches, on its menus, or on its website. 

Unabashed, the chain argued before the Tribunal that it was fully compliant with the CPA, that the charge was a fee “to ensure the best service to the consumer” and that there is “a transparent general practice to disclose cost structures rather than hide behind an exorbitant price model.”

The Tribunal, deeply unimpressed with this (frankly baffling) line of reasoning, found the chain guilty of prohibited conduct and gave it 90 days to pay a R1m administrative fine. 

Two breaches of the CPA 

The chain was found guilty of two contraventions of the CPA:

1. That as a supplier it “must not require a consumer to pay a price for any goods or services higher than the displayed price for those goods or services.” 

2. It must also “provide a written record of each transaction to the consumer to whom any goods or services are supplied.” This record “must include at least the following information: the address of the premises at which, or from which, the goods or services were supplied.” Without that, as the Tribunal put it, “vulnerable consumers could find it difficult to institute legal proceedings and enforce their rights.”

A R1m fine for “preying on unwitting customers for selfish financial gains”

The chain, said the Tribunal, had “acted deceitfully towards its customers and contravened the CPA’s significant provisions. It acted contemptuously towards the very consumers who supported it. 

Accordingly: “the Tribunal considers it appropriate to impose an administrative fine that will deter it and other suppliers from preying on unwitting consumers for selfish financial gains.”

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.

© LawDotNews