WARNING: LAST-MINUTE SURPRISES IN THE CPA!
Consumers and suppliers must deal with several last minute surprises sprung on us when the Consumer Protection Act ("CPA") came into effect on 1 April, including: -
The asset or annual turnover level at which "juristic persons" (corporates, partnerships and trusts) are deprived of most consumer rights under the CPA was expected to be set at R3m. Instead it was reduced to R2m - that's a lot of SMEs still carrying the risks of being "suppliers", but now unexpectedly deprived of protection as "consumers".
In relation to fixed-term contracts -
The maximum allowable contract period of 24 months is now subject to additional exceptions, such as provision for a longer period if so "expressly agreed" provided there is a "demonstrable financial benefit to the consumer". So do not assume that the contract you are signing is capped at 2 years - check carefully to see what period is specified.
If you elect to cancel a fixed-term contract early, the "reasonable" penalty that the supplier can charge you is no longer capped at 10%. Instead, the final Regulations set out a number of factors to be taken into account in deciding what it is "reasonable" to charge you - there is no cap. So when some slick sales person says "Don't worry about the 2 year period in this gym/cell phone contract, the new CPA says you can cancel it whenever you want", take that with a pinch of salt - early cancellation could cost you dearly!
A STITCH IN TIME - SLIPPERY STAIRS AND THE BUILDING OWNER BLUES
A recent High Court case highlights the dangers that building owners face if they don't constantly monitor maintenance issues in their premises - even minor ones like replacing light bulbs.
The Court found the owner of a shopping centre liable for the injuries suffered by a visitor who slipped on a wet patch in a dimly-lit stairwell, holding the owner to be "at fault in not ensuring that the lighting was properly maintained and the stairwell kept free from water".
The owner, held the Court, clearly had a "duty of care" to persons using the stairwell to ensure that they suffered no harm in doing so. In fact it seems likely that the accident would never have happened in the first place had just one defective light in the stairwell been properly maintained - the visitor would probably have seen and avoided the wet patch - a real case of "A Stitch In Time Saves Nine".
THE "BLIND SIGNED" SURETYSHIP THAT COST A FARMER R8 MILLION
Yet another warning to read what you sign - and understand it - comes from a recent Supreme Court of Appeal case in which a farmer was held liable - as a surety - for a debt of R8m owed by a farming trust to a creditor.
Although a trustee of the farming trust ("only in name" as he put it), the farmer had no personal interest in the trust, nor any part in negotiating the loan of R8m. He had, he told the Court, unknowingly signed a personal suretyship tucked away in a 75 page bundle of documentation - which he didn't read before signing because he thought he was signing as a trustee only and wasn't personally affected.
In the absence of any misrepresentation or fraud on the part of the creditor, the Court held the surety to his signature.
THE NEW COMPANIES ACT - DO YOU NEED AN AUDIT?
The extent to which the annual financial statements of private companies will have to be professionally reviewed or audited will depend on the company's "Public Interest Score" (a measure of "economic or social significance"), which will be determined broadly as follows: -
point per employee ( take the average number of employees for the year)
point for every R1m or part thereof turnover
point for every R1m or part thereof "third party liability"
point for every shareholder (and anyone else with a direct or indirect "beneficial interest" in the issued shares and other securities).
Where your score is -
350 or more - a full audit is required
100 - 349, and the financials are prepared internally by your staff - a full audit is required
100 - 349, and the financials are prepared independently - they are subject to "independent review" by an auditor or CA
Under 100 - "independent review" is required, and it can be carried out by anyone qualified to be "accounting officer" of a close corporation.
Where all shareholders are also directors, you are - with a few exceptions - exempted from both audit and independent review.
Note that although audit will not be mandatory for the majority of companies, they may still elect to be audited, perhaps for governance reasons, or at the urging of shareholders and/or financiers. In this event they should consider opting for a "voluntary audit" - less costly and time-consuming than the statutory version.
This is new legislation - take advice before making any decisions based on it!
HOME SOLD IN EXECUTION: CAN THE EX-OWNER CLAIM?
Lenders are doubtless going to be more cautious about granting residential bonds, especially at the lower end of the market, following the recent Constitutional Court ruling to the effect that only a judicial officer can declare a person's home executable.
In the past, when judgment (usually a default judgment) was taken against a defaulting borrower, an execution sale of the debtor's house could be authorised by the Registrar of the High Court as an administrative function.
Now however, the Court itself is going to have to make "an evaluation of the facts of each case" before deciding whether or not to order execution against a person's home, in which process: "...due regard should be taken of the impact that this may have on judgment debtors who are poor and at risk of losing their homes. If the judgment debt can be satisfied in a reasonable manner without involving those drastic consequences that alternative course should be judicially considered before granting execution orders."
That is of course good news for indigent home owners, and - as the Constitutional Court notes in its judgment - even past execution sales can be revisited in "deserving" cases. In other words, owners whose homes were sold in execution in the past may be able to have such sales declared invalid.
The Court declined to speculate on what the effect would be of such invalidity, but presumably a monetary claim against the creditor - rather than re-transfer of the property back to the debtor - would be the likely remedy in most cases.
Bear in mind that not only is the debtor going to have to show good cause for rescission of the judgment, he/she must also convince the court " ...that a court, with full knowledge of all the relevant facts existing at the time of granting default judgment, would nevertheless have refused leave to execute against specially hypothecated property that is the debtor's home."
That's unlikely to be as easy as some recent media reports have suggested - take full advice in doubt.
PAYE RECONCILIATIONS DUE SOON: DON'T DELAY!
SARS has announced that the annual PAYE reconciliation declaration for the 2011 tax year must be submitted by 3 June - don't be late, as substantial penalties apply for non-compliance.
In particular, if you intend to file the reconciliation online, don't leave it to the last minute - you need to download and install a new version of the e@syFile software before you do anything else, and you cannot update from your existing version as you could in previous years.
See the "2011 Employers Tax Season" page on the SARS website at http://www.sars.gov.za/home.asp?pid=57785 for details.
THE APRIL WEBSITES: WHITHER THE WEATHER?
"Whether the weather be fine,
Or whether the weather be not,
Whether the weather be cold,
Or whether the weather be hot,
We'll weather the weather
Whatever the weather,
Whether we like it or not!" (Author unknown)
Try these specialist weather websites for something different from the run-of-the-mill forecast sites: -
VFR Route Planning's weather page at www.vfrplanner.co.za/?page_id=2479 may be aimed at pilots, but it has much for the lay user, including meteograms (hour-by-hour forecast graphs), sun and moon rising and setting times, etc.
Wind Guru at www.windguru.cz/int (covers coastal areas) - wind speed and direction, temperature, cloud cover, chances of rain, wave height/period/direction etc. Also has links to maps, webcams etc.
Have a look at the animated satellite and cloud cover images at Kool-a-Sun's website www.koolasun.co.za/weather/africa-satellite-photo.html.
Have a fantastic May - and don't forget Mother's Day on the 8th and Voting Day on the 18th!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
Consumers and suppliers must deal with several last minute surprises sprung on us when the Consumer Protection Act ("CPA") came into effect on 1 April, including: -
The asset or annual turnover level at which "juristic persons" (corporates, partnerships and trusts) are deprived of most consumer rights under the CPA was expected to be set at R3m. Instead it was reduced to R2m - that's a lot of SMEs still carrying the risks of being "suppliers", but now unexpectedly deprived of protection as "consumers".
In relation to fixed-term contracts -
The maximum allowable contract period of 24 months is now subject to additional exceptions, such as provision for a longer period if so "expressly agreed" provided there is a "demonstrable financial benefit to the consumer". So do not assume that the contract you are signing is capped at 2 years - check carefully to see what period is specified.
If you elect to cancel a fixed-term contract early, the "reasonable" penalty that the supplier can charge you is no longer capped at 10%. Instead, the final Regulations set out a number of factors to be taken into account in deciding what it is "reasonable" to charge you - there is no cap. So when some slick sales person says "Don't worry about the 2 year period in this gym/cell phone contract, the new CPA says you can cancel it whenever you want", take that with a pinch of salt - early cancellation could cost you dearly!
A STITCH IN TIME - SLIPPERY STAIRS AND THE BUILDING OWNER BLUES
A recent High Court case highlights the dangers that building owners face if they don't constantly monitor maintenance issues in their premises - even minor ones like replacing light bulbs.
The Court found the owner of a shopping centre liable for the injuries suffered by a visitor who slipped on a wet patch in a dimly-lit stairwell, holding the owner to be "at fault in not ensuring that the lighting was properly maintained and the stairwell kept free from water".
The owner, held the Court, clearly had a "duty of care" to persons using the stairwell to ensure that they suffered no harm in doing so. In fact it seems likely that the accident would never have happened in the first place had just one defective light in the stairwell been properly maintained - the visitor would probably have seen and avoided the wet patch - a real case of "A Stitch In Time Saves Nine".
THE "BLIND SIGNED" SURETYSHIP THAT COST A FARMER R8 MILLION
Yet another warning to read what you sign - and understand it - comes from a recent Supreme Court of Appeal case in which a farmer was held liable - as a surety - for a debt of R8m owed by a farming trust to a creditor.
Although a trustee of the farming trust ("only in name" as he put it), the farmer had no personal interest in the trust, nor any part in negotiating the loan of R8m. He had, he told the Court, unknowingly signed a personal suretyship tucked away in a 75 page bundle of documentation - which he didn't read before signing because he thought he was signing as a trustee only and wasn't personally affected.
In the absence of any misrepresentation or fraud on the part of the creditor, the Court held the surety to his signature.
THE NEW COMPANIES ACT - DO YOU NEED AN AUDIT?
The extent to which the annual financial statements of private companies will have to be professionally reviewed or audited will depend on the company's "Public Interest Score" (a measure of "economic or social significance"), which will be determined broadly as follows: -
point per employee ( take the average number of employees for the year)
point for every R1m or part thereof turnover
point for every R1m or part thereof "third party liability"
point for every shareholder (and anyone else with a direct or indirect "beneficial interest" in the issued shares and other securities).
Where your score is -
350 or more - a full audit is required
100 - 349, and the financials are prepared internally by your staff - a full audit is required
100 - 349, and the financials are prepared independently - they are subject to "independent review" by an auditor or CA
Under 100 - "independent review" is required, and it can be carried out by anyone qualified to be "accounting officer" of a close corporation.
Where all shareholders are also directors, you are - with a few exceptions - exempted from both audit and independent review.
Note that although audit will not be mandatory for the majority of companies, they may still elect to be audited, perhaps for governance reasons, or at the urging of shareholders and/or financiers. In this event they should consider opting for a "voluntary audit" - less costly and time-consuming than the statutory version.
This is new legislation - take advice before making any decisions based on it!
HOME SOLD IN EXECUTION: CAN THE EX-OWNER CLAIM?
Lenders are doubtless going to be more cautious about granting residential bonds, especially at the lower end of the market, following the recent Constitutional Court ruling to the effect that only a judicial officer can declare a person's home executable.
In the past, when judgment (usually a default judgment) was taken against a defaulting borrower, an execution sale of the debtor's house could be authorised by the Registrar of the High Court as an administrative function.
Now however, the Court itself is going to have to make "an evaluation of the facts of each case" before deciding whether or not to order execution against a person's home, in which process: "...due regard should be taken of the impact that this may have on judgment debtors who are poor and at risk of losing their homes. If the judgment debt can be satisfied in a reasonable manner without involving those drastic consequences that alternative course should be judicially considered before granting execution orders."
That is of course good news for indigent home owners, and - as the Constitutional Court notes in its judgment - even past execution sales can be revisited in "deserving" cases. In other words, owners whose homes were sold in execution in the past may be able to have such sales declared invalid.
The Court declined to speculate on what the effect would be of such invalidity, but presumably a monetary claim against the creditor - rather than re-transfer of the property back to the debtor - would be the likely remedy in most cases.
Bear in mind that not only is the debtor going to have to show good cause for rescission of the judgment, he/she must also convince the court " ...that a court, with full knowledge of all the relevant facts existing at the time of granting default judgment, would nevertheless have refused leave to execute against specially hypothecated property that is the debtor's home."
That's unlikely to be as easy as some recent media reports have suggested - take full advice in doubt.
PAYE RECONCILIATIONS DUE SOON: DON'T DELAY!
SARS has announced that the annual PAYE reconciliation declaration for the 2011 tax year must be submitted by 3 June - don't be late, as substantial penalties apply for non-compliance.
In particular, if you intend to file the reconciliation online, don't leave it to the last minute - you need to download and install a new version of the e@syFile software before you do anything else, and you cannot update from your existing version as you could in previous years.
See the "2011 Employers Tax Season" page on the SARS website at http://www.sars.gov.za/home.asp?pid=57785 for details.
THE APRIL WEBSITES: WHITHER THE WEATHER?
"Whether the weather be fine,
Or whether the weather be not,
Whether the weather be cold,
Or whether the weather be hot,
We'll weather the weather
Whatever the weather,
Whether we like it or not!" (Author unknown)
Try these specialist weather websites for something different from the run-of-the-mill forecast sites: -
VFR Route Planning's weather page at www.vfrplanner.co.za/?page_id=2479 may be aimed at pilots, but it has much for the lay user, including meteograms (hour-by-hour forecast graphs), sun and moon rising and setting times, etc.
Wind Guru at www.windguru.cz/int (covers coastal areas) - wind speed and direction, temperature, cloud cover, chances of rain, wave height/period/direction etc. Also has links to maps, webcams etc.
Have a look at the animated satellite and cloud cover images at Kool-a-Sun's website www.koolasun.co.za/weather/africa-satellite-photo.html.
Have a fantastic May - and don't forget Mother's Day on the 8th and Voting Day on the 18th!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)