DOUBLE COMMISSION DANGER! SELLERS, BUYERS AND AGENTS BEWARE
"Double, Double Toil and Trouble" (Shakespeare)
Particularly in these challenging times, properties are often marketed by multiple estate agents before a successful sale is finally achieved.
The resultant risks (for all concerned) are illustrated in a case recently before the Supreme Court of Appeal. The sellers in question have ended up having to pay double commission, and are down some R450.000 plus legal costs - a situation, held the Court, entirely of their own making.
The competing commission claims came from -
1. The agents who were instrumental in concluding the eventual sale. The seller paid them in terms of the sale agreement.
2. The agent who had originally introduced the buyer to the property, but who had failed to conclude a sale at the time. The seller denied liability, but the Court held that - on the particular facts of this matter - the original agent was still the "effective cause" of the sale, and thus entitled to its full commission.
Every case will be different, and - as the Court noted: "It is notoriously difficult, when there are competing estate agents, to determine who is the effective cause of the sale that eventuates. It may be that more than one agent is entitled to commission."
Protect yourself! Take legal advice before you agree to anything.
* Sellers: Have agent mandate agreements checked. And insist on a properly-worded warranty (plus indemnity) from
the buyer against multiple commission claims.
* Buyers - if the sale agreement imposes any such warranties and indemnities on you, check that you can safely
agree to them.
* Agents - don't risk your commission through disputes between the parties and other agents - avoid uncertainty with
clear, written client mandates.
RIOT! CAN YOU SUE TRADE UNIONS?
Suing rioters themselves for the damage they cause is likely to be an exercise in futility. But, per the "Regulation of Gatherings Act", you may also have a claim against any trade union involved. Where a "gathering" degenerates into a riot, then "every organisation on behalf of or under the auspices of which that gathering was held, or, if not so held, the convener" is jointly and severally liable for the riot damage.
In a case recently before the Supreme Court of Appeal, a trade union argued unsuccessfully that this statutory provision is unconstitutional. The union was being sued for damage caused when a strike-related protest march 'descended into chaos', causing some R1,5m worth of damage to vehicles and shops along the route.
Assemblies, pickets, marches and demonstrations are, said the Court, "an essential feature of a democratic society" and "are essential instruments of dialogue in society" - but they are protected by our Constitution only when they are peaceful and unarmed. The Act - which is "designed to prevent unlawful violent behaviour that impinges on the rights of others and to ensure that persons or organisations which organise assemblies that degenerate into riots should bear liability" - is valid.
That certainly doesn't mean that you will automatically be able to claim against a trade union whenever a riot occurs. Various defences to such a claim are provided for in the Act - the union could for example show that the act or omission leading to the damage "was not reasonably foreseeable" and that it "took all reasonable steps within ……… its power to prevent the act or omission in question".
But unions would be wise to take advice on their obligations in regard to such gatherings; and to take steps to limit their exposure to litigation should chaos and violence ensue.
WHEN CAN CREDITORS ATTACK TRUST ASSETS?
Trusts can be valuable estate planning tools, and are often legitimately used to protect assets from the risks of business failure. They must however be structured and administered correctly and lawfully otherwise, as illustrated in a recent High Court case, they are open to attack by creditors.
The facts were that a couple owed a bank in excess of R56m. The bank established that the couple had no assets in their own names, but that two trusts controlled by them held substantial assets, including their family home, furniture and other contents. The bank applied for, and obtained, a court order declaring the assets of both trusts to be assets of the couple personally, and therefore executable to satisfy the personal debt.
In the absence of fraud, a trust's assets will generally only be included in the trustees' personal estates where they have not treated the trust as a separate entity - where it is in fact the "alter ego" of the trustees. Relevant considerations in determining whether or not this is so will include -
* The terms of the trust deed
* The actions of the trustees in controlling the trust and conducting its affairs.
The Court, in finding that the trustees had in this instance not treated the trusts as separate entities, took into account a number of factors -
* The couple were the only trustees and had practical control of the trusts' affairs and assets via provisions in the trust deed granting them control over the appointment of further trustees, and granting them absolute and unrestricted discretion to act as trustees without reference to the beneficiaries.
* The trustees made no distinction between their personal assets and those of the trusts, using them as their own.
* Although the trustees claimed to lease the house from the trust that owned it, there was no lease agreement produced, nor any bank account for the trust to receive rental and disburse expenses (the bond was paid by the trustees personally).
* No formal trustee meetings were shown to have been held.
Every case will be different - take advice in doubt.
ALCOHOL ABUSE IN THE WORKPLACE - IT'S NOT ALWAYS MISCONDUCT!
You may think that alcohol abuse in the work place will inevitably constitute misconduct, but this is not so. Per a recent Labour Court decision, an offending employee will fall into one of two distinct categories: -
1. Where the employee is an alcoholic, he or she is "not at fault". Because alcoholism is recognised as diagnosable and treatable disease, it is regarded as a form of incapacity which requires counselling and rehabilitation rather than disciplinary action.
2. Where on the other hand the employee is not an alcoholic, he or she is liable to be disciplined for misconduct. The appropriate sanction will depend on all the circumstances of the matter.
The Court in this case confirmed the dismissal of an employee who had reported for duty whilst intoxicated but was not an alcoholic. She was employed in "a safety critical position", and the employer's disciplinary code specifically provided for the offence to constitute "serious misconduct". Moreover she had previously received a serious written warning for the same offence.
The Court did not in this case have to deal with the question of where the factual line is to be drawn between an employee being classified as an "alcoholic" or not. But it is clear that where, as in this case, the employee herself did not claim to be an alcoholic, there is no question of incapacity - accordingly counselling and rehabilitation would not apply.
"VIEW" SERVITUDES - DO THEY LAST FOREVER?
Another warning not to deal with any property without having the title deeds professionally checked first comes from a recent High Court matter concerning an attempt by a landowner to prevent his neighbour from building a second story onto his house. His case was that his neighbour's property contained in its title deeds a servitude restricting buildings thereon to a single story - presumably an attempt to preserve a sea view from obstruction.
Now in our law a servitude can be either: -
* A personal servitude, which is perfectly enforceable, but only by the named beneficiary - thus it ordinarily falls away on the death of that person; or
* A "praedial" servitude, which is established over a particular property in favour of another property, regardless of the identity of the owner - thus it remains enforceable in perpetuity.
That distinction was critical to the outcome of this case, as the restriction, dating from 1926, was worded so as to be in favour of the original seller of that property personally - he was specifically named as the beneficiary of the height limitation. Since the beneficiary was long gone, and since the present landowner was the last in a long line of subsequent owners of the property, he had to try to convince the Court either that the servitude was actually not a personal one at all, or that it had validly been transferred for the benefit of subsequent owners.
He failed on both counts, the Court holding that (a) the servitude was on the facts a personal one and (b) it is not possible in our law to transfer a personal servitude, nor to leave it to one's heirs - a personal servitude dies with the beneficiary.
THE NOVEMBER WEBSITE: FINDING DATES FOR "SILLY SEASON" FUNCTIONS
The "Silly Season" is approaching rapidly, and with it comes the annual headache of finding dates for your various functions and get-togethers - dates that work for everyone.
Whether you're trying to put together the office party, a business function or your Book Club's year-end dinner, here's a website to help you. It's "free, simple and easy to use". Go to the "Which Day Works" website at http://whichdateworks.com - no need to register, just get going (the "Tour" page shows you how to make the most of the system).
Have a great November
(Don't forget to mark "All the Elevens" this Poppy Day at 11:11:11 on 11/11/11!)
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
"Double, Double Toil and Trouble" (Shakespeare)
Particularly in these challenging times, properties are often marketed by multiple estate agents before a successful sale is finally achieved.
The resultant risks (for all concerned) are illustrated in a case recently before the Supreme Court of Appeal. The sellers in question have ended up having to pay double commission, and are down some R450.000 plus legal costs - a situation, held the Court, entirely of their own making.
The competing commission claims came from -
1. The agents who were instrumental in concluding the eventual sale. The seller paid them in terms of the sale agreement.
2. The agent who had originally introduced the buyer to the property, but who had failed to conclude a sale at the time. The seller denied liability, but the Court held that - on the particular facts of this matter - the original agent was still the "effective cause" of the sale, and thus entitled to its full commission.
Every case will be different, and - as the Court noted: "It is notoriously difficult, when there are competing estate agents, to determine who is the effective cause of the sale that eventuates. It may be that more than one agent is entitled to commission."
Protect yourself! Take legal advice before you agree to anything.
* Sellers: Have agent mandate agreements checked. And insist on a properly-worded warranty (plus indemnity) from
the buyer against multiple commission claims.
* Buyers - if the sale agreement imposes any such warranties and indemnities on you, check that you can safely
agree to them.
* Agents - don't risk your commission through disputes between the parties and other agents - avoid uncertainty with
clear, written client mandates.
RIOT! CAN YOU SUE TRADE UNIONS?
Suing rioters themselves for the damage they cause is likely to be an exercise in futility. But, per the "Regulation of Gatherings Act", you may also have a claim against any trade union involved. Where a "gathering" degenerates into a riot, then "every organisation on behalf of or under the auspices of which that gathering was held, or, if not so held, the convener" is jointly and severally liable for the riot damage.
In a case recently before the Supreme Court of Appeal, a trade union argued unsuccessfully that this statutory provision is unconstitutional. The union was being sued for damage caused when a strike-related protest march 'descended into chaos', causing some R1,5m worth of damage to vehicles and shops along the route.
Assemblies, pickets, marches and demonstrations are, said the Court, "an essential feature of a democratic society" and "are essential instruments of dialogue in society" - but they are protected by our Constitution only when they are peaceful and unarmed. The Act - which is "designed to prevent unlawful violent behaviour that impinges on the rights of others and to ensure that persons or organisations which organise assemblies that degenerate into riots should bear liability" - is valid.
That certainly doesn't mean that you will automatically be able to claim against a trade union whenever a riot occurs. Various defences to such a claim are provided for in the Act - the union could for example show that the act or omission leading to the damage "was not reasonably foreseeable" and that it "took all reasonable steps within ……… its power to prevent the act or omission in question".
But unions would be wise to take advice on their obligations in regard to such gatherings; and to take steps to limit their exposure to litigation should chaos and violence ensue.
WHEN CAN CREDITORS ATTACK TRUST ASSETS?
Trusts can be valuable estate planning tools, and are often legitimately used to protect assets from the risks of business failure. They must however be structured and administered correctly and lawfully otherwise, as illustrated in a recent High Court case, they are open to attack by creditors.
The facts were that a couple owed a bank in excess of R56m. The bank established that the couple had no assets in their own names, but that two trusts controlled by them held substantial assets, including their family home, furniture and other contents. The bank applied for, and obtained, a court order declaring the assets of both trusts to be assets of the couple personally, and therefore executable to satisfy the personal debt.
In the absence of fraud, a trust's assets will generally only be included in the trustees' personal estates where they have not treated the trust as a separate entity - where it is in fact the "alter ego" of the trustees. Relevant considerations in determining whether or not this is so will include -
* The terms of the trust deed
* The actions of the trustees in controlling the trust and conducting its affairs.
The Court, in finding that the trustees had in this instance not treated the trusts as separate entities, took into account a number of factors -
* The couple were the only trustees and had practical control of the trusts' affairs and assets via provisions in the trust deed granting them control over the appointment of further trustees, and granting them absolute and unrestricted discretion to act as trustees without reference to the beneficiaries.
* The trustees made no distinction between their personal assets and those of the trusts, using them as their own.
* Although the trustees claimed to lease the house from the trust that owned it, there was no lease agreement produced, nor any bank account for the trust to receive rental and disburse expenses (the bond was paid by the trustees personally).
* No formal trustee meetings were shown to have been held.
Every case will be different - take advice in doubt.
ALCOHOL ABUSE IN THE WORKPLACE - IT'S NOT ALWAYS MISCONDUCT!
You may think that alcohol abuse in the work place will inevitably constitute misconduct, but this is not so. Per a recent Labour Court decision, an offending employee will fall into one of two distinct categories: -
1. Where the employee is an alcoholic, he or she is "not at fault". Because alcoholism is recognised as diagnosable and treatable disease, it is regarded as a form of incapacity which requires counselling and rehabilitation rather than disciplinary action.
2. Where on the other hand the employee is not an alcoholic, he or she is liable to be disciplined for misconduct. The appropriate sanction will depend on all the circumstances of the matter.
The Court in this case confirmed the dismissal of an employee who had reported for duty whilst intoxicated but was not an alcoholic. She was employed in "a safety critical position", and the employer's disciplinary code specifically provided for the offence to constitute "serious misconduct". Moreover she had previously received a serious written warning for the same offence.
The Court did not in this case have to deal with the question of where the factual line is to be drawn between an employee being classified as an "alcoholic" or not. But it is clear that where, as in this case, the employee herself did not claim to be an alcoholic, there is no question of incapacity - accordingly counselling and rehabilitation would not apply.
"VIEW" SERVITUDES - DO THEY LAST FOREVER?
Another warning not to deal with any property without having the title deeds professionally checked first comes from a recent High Court matter concerning an attempt by a landowner to prevent his neighbour from building a second story onto his house. His case was that his neighbour's property contained in its title deeds a servitude restricting buildings thereon to a single story - presumably an attempt to preserve a sea view from obstruction.
Now in our law a servitude can be either: -
* A personal servitude, which is perfectly enforceable, but only by the named beneficiary - thus it ordinarily falls away on the death of that person; or
* A "praedial" servitude, which is established over a particular property in favour of another property, regardless of the identity of the owner - thus it remains enforceable in perpetuity.
That distinction was critical to the outcome of this case, as the restriction, dating from 1926, was worded so as to be in favour of the original seller of that property personally - he was specifically named as the beneficiary of the height limitation. Since the beneficiary was long gone, and since the present landowner was the last in a long line of subsequent owners of the property, he had to try to convince the Court either that the servitude was actually not a personal one at all, or that it had validly been transferred for the benefit of subsequent owners.
He failed on both counts, the Court holding that (a) the servitude was on the facts a personal one and (b) it is not possible in our law to transfer a personal servitude, nor to leave it to one's heirs - a personal servitude dies with the beneficiary.
THE NOVEMBER WEBSITE: FINDING DATES FOR "SILLY SEASON" FUNCTIONS
The "Silly Season" is approaching rapidly, and with it comes the annual headache of finding dates for your various functions and get-togethers - dates that work for everyone.
Whether you're trying to put together the office party, a business function or your Book Club's year-end dinner, here's a website to help you. It's "free, simple and easy to use". Go to the "Which Day Works" website at http://whichdateworks.com - no need to register, just get going (the "Tour" page shows you how to make the most of the system).
Have a great November
(Don't forget to mark "All the Elevens" this Poppy Day at 11:11:11 on 11/11/11!)
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)