THE "SWEEPING SEA VIEWS" SALES PITCH: GET IT IN WRITING!
A recent Supreme Court of Appeal decision highlights the dangers of relying on anything said in the course of a "sales pitch" when buying a property.
Firstly, the facts: -
The developer of a multi-story sectional title development instructed agents to sell the (as yet unbuilt) luxury apartments on an off-plan basis.
The purchaser of a 4th floor apartment had been told by the agents that it would enjoy unobstructed sea views.
This impression was confirmed in a promotional CD-ROM supplied by the seller.
To the purchaser's dismay, the same developer then commenced construction of an adjacent 5-story development which significantly impinged on the view.
The purchaser sued the seller for damages for "fraudulent misrepresentation or non-disclosure".
On appeal the buyers' claim was dismissed, the SCA holding that "the agents were not party to an actionable misrepresentation" and had "probably expressed themselves in terms which conveyed no more than their opinion of the future state of the view".
To be "actionable" in our law, a representation "must relate to an ascertainable fact as distinct from a mere expression of opinion...what is decisive is a holistic view of the terms of the representation and the context in which it was made."
Buyers: That's a fine distinction there, and fine distinctions make for expensive litigation. The new Consumer Protection Act (CPA) will bolster a purchaser's rights in this sort of case, but still the best way to avoid uncertainty and dispute is to insist on recording - in specific terms - anything said that is material to your decision to buy.
Sellers and agents: Make sure that all "sales pitches", marketing and negotiating statements are accurate and recorded - where the CPA applies, "false, misleading or deceptive representations" (which are widely defined) are specifically prohibited.
DISMISSAL FOR DISHONESTY - WHEN IS IT FAIR?
When is dismissal an appropriate sanction for an act of dishonesty by an employee?
In a case recently before the Labour Court, a senior municipal manager in a position of trust was found, during a general investigation by the Scorpions into licencing fraud, to have acted dishonestly by using a fake Namibian driver's licence to obtain a South African licence.
The Court upheld the manager's dismissal, confirming in the process the general principles in our law that trust is an important element in any employer/employee relationship, and that, as the Court summarised it: "dishonest conduct goes go to the heart of the employment relationship and is destructive of it".
However, dismissal is not always an appropriate sanction. "Where misconduct involves an element of dishonest conduct which is not gross or serious" held the Court, mitigating factors (such as remorse, length of service etc) "may (and in fact should) be considered in determining a sanction short of dismissal."
What will constitute "gross or serious" dishonesty will depend on the circumstances of each case, but it is important to note that the focus is "on the effect of the conduct on the trust relationship between the parties".
The mitigating facts put forward in this case illustrate this principle in action: -
There was no direct loss or prejudice at all to the employer (similarly, where there is actual loss, for example by theft, even a petty theft could in appropriate cases justify dismissal).
The dishonesty was committed "outside the workplace".
The conduct was from years ago (in this case, 9 years prior to detection by the Scorpions).
Despite these factors, held the Court, the employer was entitled to require the manager in question to be "beyond reproach", her fraud "was characterized by a high degree of dishonesty and corruption", and she had shown no remorse. Her dismissal was accordingly fair.
Every case will be different - take advice upfront on what will be an appropriate sanction in each instance.
THE RESTRAINT OF TRADE THAT SANK THE SUSHI BAR
When you buy a business, think about whether the goodwill you are paying for will be damaged if the seller starts up a new business in competition with you. If so, a "restraint of trade" clause is essential, but beware - it must be properly drawn to be valid. Our courts will not enforce any restraint that is unreasonably wide in nature, geographical area, or duration.
Having said that, as a recent High Court case shows, even a widely-worded restraint clause can still be perfectly valid. The clause in question restricted the seller of an Italian-style restaurant from carrying on any similar business, and in particular provided that she could not compete with the buyer "in any form of Restaurant / Coffee Shop Business" for 3 years.
The seller then opened up a sushi bar nearby, arguing that it did not compete with the original restaurant, being Japanese rather than Italian, and being largely take-away rather than sit-down in style. Unimpressed by these arguments, the Court interdicted the seller from continuing to run her sushi bar - which, held the Court, "still operates as a restaurant" regardless of the differences in cuisine and style. Nor was it relevant that the buyer of the Italian restaurant had changed its name, menu and décor - despite the changes it remained "a restaurant business".
Every case will be different - reduce the risk of dispute and costly litigation (there is talk of an appeal now in the case in question) by ensuring that both parties are clear on what they are agreeing to, and by insisting on a properly-drawn agreement that is tailored to fit the particular circumstances of your sale.
DON'T MISS YOUR TAX DEADLINE: AND AVOID THE QUEUES!
Don't miss the deadline for submission of your Income Tax return - SARS warns that you will face administrative penalties of "at least' R250 per month that your return is outstanding.
The deadlines are: -
If you are a non-provisional taxpayer who completes your tax return manually and posts it or puts it in a SARS drop box, you have until 30 September 2011.
If you are a non-provisional taxpayer who uses eFiling to submit your return, you have until Friday 25 November 2011.
Provisional taxpayers who file via eFiling have until Tuesday 31 January 2012 to submit their returns.
Get more information and help from the "Tax Season 2011" guide on the SARS website at http://www.sars.gov.za/tools/Printbody.asp?pid=57785, and if you want to avoid the long queues currently clogging up SARS offices, use their eFiling system (full details and registration at http://www.sarsefiling.co.za).
FIXED-TERM CONTRACTS: BANKS EXEMPTED FROM CONSUMER PROTECTION ACT
"A bank is a place that will lend you money if you can prove that you don't need it" (Bob Hope)
The Minister of Trade and Industry has exempted banks from the provisions in the Consumer Protection Act that (with a few exceptions) limit fixed-term contracts to a 24 month period, give consumers the option of cancelling them subject to 20 business days' notice (on payment of a "reasonable" penalty), and regulate notice of expiry and automatic continuation of such contracts.
So if, for example, you put money into a fixed deposit with a bank, you are still bound to its full term - you can't give early notice to take advantage of an upward movement in interest rates. Counter parties will likewise remain bound to hedge and swap agreements.
NEW TRANS-FAT REGULATIONS: READ THE LABEL!
It will be unlawful from 17 August to sell, manufacture or import any oils or fats with more than 2% "industrially produced trans-fatty acids". Note that naturally occurring trans-fats (such as the small amounts found in the milk and meat of some animals) are not affected - it's the artificially manufactured fats that are being targeted as serious health risks.
Nor can a product be advertised or labelled as "Trans-fat Free" unless it has less than 1% artificial trans-fats.
Manufacturers, importers and retailers have had 6 months to prepare for these restrictions so they should be fully compliant by the 17th. But it's ultimately up to you to protect your own health, so if you aren't already scrutinising the labels on foodstuffs, start now! Always look for the "content per 100g" figures - the "content per serving" figures won't give you percentages, and it's the percentages that count.
THE AUGUST WEBSITE: START YOUR OWN RUGBY WORLD CUP POOL
Whatever sport you follow have some fun (and maybe even win a prize or two) with South Africa's own Superbru sports prediction game at www.superbru.com.
After registering (for free) you are invited to -
Be assigned to an automatic pool of random players, or
Start your own pool and invite friends and colleagues to join, or
Find an existing pool to join.
Businesses: Use the game as an innovative marketing or management tool to build relationships and publicise your brand.
Perhaps invite all your networking contacts to join a pool, or run a competition for clients, or start an office pool. You can make your pool publicly visible in cyberspace, and you can even sponsor prizes - leverage those options to get wide exposure for your business. Consider upgrading to a "SuperPool" or "MegaPool" for really serious marketing.
Rugby World Cup fever is building and the kick-off is on 9 September - there's no time to lose!
August - Women's Month
South Africa commemorates Women's Month in August. We want to say to all those hard working women, mothers, grandmothers and daughters - we wish you all the best and take the time to enjoy your National Women's Day on Tuesday, 9 August 2011.