LANDLORDS – CHECK YOUR SURETYSHIPS!
If your tenant is a corporate in financial distress and you find yourself calling up the director’s suretyship, you could be in for a nasty shock if the suretyship isn’t absolutely clear on exactly what the surety is liable for.
The reason – our law interprets all suretyships “strictly”, which means that they “may not be extended beyond what was expressed or was at least covered by the intention and sense of the words of the suretyship”. Put another way, our courts will not likely hold a surety to be bound beyond the express wording of the suretyship, whether in regard to premises or the period of the lease.
The one that got away
Thus the High Court recently let a surety off the hook in a case where a tenant had occupied premises under three consecutive leases. The director signed surety for the first lease, and the landlord had clearly been under the impression that he still held a surety for the subsequent leases. But, held the Court, the landlord should have specified clearly that the surety was bound for future leases as well as for the initial lease - and as it had not done so unambiguously, the surety was not liable.
YOUR WILL: COULD IT FOMENT A FAMILY FIGHT?
Your loved ones are going to have enough on their plates when you die without also having to worry about finances, or fighting with each other over your worldly goods.
Here’s what you need to do right now to avoid that.
Make a will, now
Why? If you die without a will, you die “intestate”, which means you have no say at all in: -
Who is appointed as executor of your estate. Rather choose a competent professional to protect your heirs’ interests independently and quickly; and
Who will inherit what. Without a valid will, the law prescribes who benefits and who doesn’t, and that is a recipe for hardship - for example your spouse could be left trying to survive on only a “child’s share” rather than inheriting your whole estate; and
How much tax your estate will pay. You might for example be able to reduce estate duty, capital gains tax etc with a correctly structured estate plan.
The Court’s warning – Use a Professional!
“It is a never-ending source of amazement that so many people rely on untrained advisors when preparing their wills, one of the most important documents they are ever likely to sign.” Those opening remarks by a Judge of the Supreme Court of Appeal highlight yet again the downside of not seeking professional help.
The facts were that a defective will (its terms were unclear, technical terms were incorrectly used, and it didn’t comply with statutory formalities) caused 3 years of bitter family dispute. The deceased’s widow contended that everything had been left to her, but his children from a prior marriage challenged the will’s validity, and eventually succeeded in having the High Court set it aside as being “void for vagueness”. Then on appeal (and by this stage we are talking substantial legal costs, quite apart from all the stress and strain on the parties) the SCA reversed the High Court’s decision and upheld the will.
You won’t be around to witness the distress that ‘shoddy drafting’ and ‘incompetent advice’ will cause your loved ones, but you can avoid it by getting expert assistance upfront!
DIRECTOR DISPUTES – A NEW REMEDY TO THE RESCUE
Directors behaving badly
You are a director of a company and discover that your fellow director is acting against the company’s best interests. You want the company to sue him/her to recover the company’s losses, but naturally your fellow director isn’t going to agree to that – what can you do about it?
Directors, shareholders and employees need to know of an important new remedy introduced by the new Companies Act. In a nutshell, it allows for directors and other interested parties to litigate in the name of the company for any such claims, without a board resolution, after giving the company notice and an opportunity to investigate your allegations.
The court will only allow you to sue in the company’s name if satisfied that: -
4. You are acting in good faith, and
5. There is a “serious question of material consequence to the company” at stake, and
6. The proposed litigation is in the best interests of the company.
The feuding brothers - Court to the rescue
In a recent High Court case, the only two directors of a company were brothers involved in a long-term personal feud, and one director believed that the other had grossly abused his credit card facility (to the tune of over R1.1m).
The other director denied this, claiming that the debits were rightfully incurred by him as a director, and that his brother was acting not in good faith but rather with an “ulterior motive occasioned by the animosity which exists between them”.
On the facts the Court disagreed, finding that the applicant director was indeed acting in good faith and in the interests of the company, and therefore authorising him to institute action against his brother in the company’s name.
Note: If you are faced with a similar situation, take proper advice before acting – the procedures prescribed in the Act need to be followed closely.
LEARNER DRIVERS – TOUGH REGULATIONS LOOM
If you don’t yet have a driver’s licence (and if you do, pass this warning on to any friends or family without one), apply as soon as you can.
Proposed new Road Traffic Regulations – which could be implemented any time now – will radically toughen up the rules applying to provisional licence holders. The draft regulations may or may not be amended before they come into effect, and they will be welcomed by law-abiding drivers sick and tired of our high traffic accident rates.
But they won’t be easy on you if you don’t already hold a licence -
You will have to hold your provisional licence status for a probationary period of a year.
You face 2 years’ suspension if during your probation you
Drive between midnight and 4 a.m., or
Commit 6 “traffic related offences”, or
Commit any one of a range of other offences, such as speeding (just one speeding offence will be enough
to keep you off the road for 2 years!), drunk driving, or overloading.
Fail to complete a provisional driving licence logbook recording all trips undertaken with a minimum of 60
hours.
ALL COMPANIES NOTE: NEW RULES FOR REGISTERED OFFICES
Directors and company secretaries need to know that CIPC (the Companies and Intellectual Property Commission) has recommended that all companies – existing and new - ensure that their registered office is recorded as “the address where the administrative business of the company is conducted or, should they have more than one office, their principal office”. The common practice of using “an address for convenience” – normally the auditors’ address – should be discontinued.
This follows a High Court decision to the effect that, due to differences between the old and new Companies Acts, a company’s “registered address” must now be the same as its “principal office”. Previously it was quite possible for a company to have two totally separate addresses, namely a “registered address” and a different “main place of business” (often referred to as the “principal place of business”)
No longer!
In the case in question, a dispute arose as to which Court had jurisdiction over a company subject to liquidation and business rescue applications. It was in the end found to fall under the sole jurisdiction of the Western Cape High Court because the company’s “central administration”, books and records, banking account etc were all situated in Cape Town.
THE AUGUST WEBSITES: APPS FOR EVERYTHING (AND HOW TO CHOOSE THEM!)
Smartphones, tablets, mobile devices. They are the future of the Internet, and the exponential growth in the number of businesses and individuals using them means that - very shortly - that future will be here. You need to be part of it!
And once you are the proud owner of your new device, you really are losing out if you don’t have a lot of apps installed on it. The beauty is that you choose only those apps that are useful for you. There are apps for just about everything you can think of out there, literally now hundreds of thousands of them – many of them free.
And as the list of new apps grows daily, your challenge is in navigating this Aladdin’s Cave to find the best and most useful of them for your particular needs.
A good place to start is the MakeUseOf blog at www.makeuseof.com. Hover over the “Best of Apps” tab at the top and choose your device.
Then there’s the Gizmodo blog – choose whichever of these pages applies to your device -
http://gizmodo.com/5739420/the-best-android-apps
http://gizmodo.com/5747915/the-best-ipad-apps
http://gizmodo.com/5676549/the-best-iphone-apps
Tip: Before you download any new app, check how often it has been downloaded and read the reviews. As a rule of thumb, the more popular an app is the better it is. And take note of any negative reviews as well as positive ones - there are rogue apps out there you definitely don’t want to touch for fear of spammy advertising or even malware.
Happy ‘Apping’ and have a great August!
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