THE BAD BOND CLAUSE THAT SANK THE SALE!
With property sales regularly falling through when the bank turns down the buyer's application for a bond, don't be tempted to word your bond clause too widely.
The danger of doing so is clearly illustrated in a matter recently before the High Court, where a developer had worded its sale agreement in such a way as to allow it to extend ("in its absolute discretion", and with neither notice to, nor permission from, the buyer) the time within which the buyer had to obtain a bond.
In effect, it depended "entirely on the will" of the seller to determine whether or not the buyer had performed in terms of the bond clause; and that, held the Court, rendered it "void for vagueness".
The buyer accordingly escaped from the sale.
MINORITY SHAREHOLDERS - YOUR RIGHTS RE MEMBERS' MEETINGS
As a company shareholder, you have, per a recent High Court judgment, the following rights (subject only to "any justifiable limitation imposed by the Articles of Association") in regard to any members' meeting: -
To attend the meeting, and
To participate fully in its proceedings, and
In particular, to address members present, to speak for or against any motion tabled for adoption, and to register your vote for or against the motion.
Critically, these rights extend to all members, including minority shareholders. Thus, you cannot be excluded from a meeting merely because your voting power is insufficient to alter the outcome of voting at the meeting.
In the case in question, a group of minority shareholders opposed resolutions to be voted upon in a company's Annual General Meeting. They had given proxies to proxy holders to speak and to vote on their behalf at the AGM. However the Chairman of the meeting excluded the proxy holders from it, holding that their proxies were invalid.
During the subsequent court case, the invalidity issue fell away, but it was argued that in any event the voting power in question was too small to have changed the result of the voting.
The Court however held that the voting power of the minority shareholders was irrelevant. Their exclusion amounted to "a violation of their right as members of the company to participate in the decision making process".
The resolutions passed at the AGM were set aside accordingly.
RUNNING A BUSINESS IN A RESIDENTIAL ESTATE: IS NEIGHBOURS' CONSENT NECESSARY?
Whether or not a homeowner in a residential estate is permitted to carry on any form of business - and if so, how will normally be governed primarily by the constitution of the estate's Home Owners Association, and by any rules or regulations made by it.
There is also a strong indication in a recent High Court judgment that, whenever a business is so permitted to operate, it will as a matter of course require the actual consent of other home owners - at least of the immediate neighbours.
The case in question saw a home owner running a children's playgroup from her house. She had none of the necessary government and other statutory permits but had applied for them, and the only point at issue was whether or not she needed the consent of her neighbours.
The Court, holding that "the consent of the respondent's neighbours in any event ought to be obtained if regard is to be had to the communal rights and interests of the owners and residents in the estate", ordered her to obtain both such consent, and the permits.
CASH TRANSACTIONS OVER R25.000 - NEW FICA REPORTING DUTIES FOR AGENTS, BROKERS ETC
FICA (the Financial Intelligence Centre Act) has always obliged a long list of "accountable and reporting institutions" to report any "suspicious" transactions to the Centre.
That obligation has now been extended to every cash transaction - "suspicious" or not - over R25,000. Note that "cash" in this respect includes foreign currency and traveller's cheques, and that both payments and receipts fall into the net.
The roll-out comes in two phases: -
Phase 1: this kicked off on 4 October with casinos, motor vehicle dealers and attorneys
Phase 2: all other designated institutions and individuals become liable to report from 1 December. The list includes estate agents, long-term insurance brokers, investment advisors, Kruger Rand dealers, financial instrument traders, and a host of others.
Take advice if you aren't sure of your obligations here - heavy penalties attach to non-compliance!
TROUBLE ON THE PICKET LINE: 'STRIKING' A BALANCE
The right of strikers to picket is enshrined in our law, and the "Code of Good Practice on Picketing" (issued in terms of the Labour Relations Act) sets out guidelines aimed at ensuring that strikers are able to picket effectively.
They must exercise these rights in an organised, lawful and peaceful manner. So whilst picketers may "carry placards", "chant slogans", and "sing and dance", they must be "unarmed", and must not: -
"Interfere with the constitutional rights of other persons"
"Prevent members of the public, including customers, other employees and service providers, from gaining access to or leaving the employer's premises"
"Commit any action which may be unlawful, including but not limited to any action which is, or may be perceived to be violent".
The balancing act for courts is always going to be to find a fair compromise between the competing rights of employers, strikers, non-striking employees, and members of the public.
Thus, the High Court recently ordered strikers picketing at a shopping mall to "lower their noise level" on the basis that the noise they were generating had "disturbed and intimidated members of the public and disrupted normal business operations", and amounted to the mall's tenants suffering "an unacceptable and unjustifiable limitation on their right to their property, to trade and to a healthy environment."
Beyond the noise factor, our law stresses the need for all parties to act lawfully and peacefully. Any form of violence, intimidation, or destruction of property is likely to amount to both criminal conduct subject to prosecution, and misconduct justifying disciplinary action (with dismissal an appropriate sanction in some cases) - take advice in doubt.
SURVIVING SPOUSE MAINTENANCE: WHEN IS IT PAYABLE? AND HOW?
Spouses in our law have a reciprocal "duty of support" and, when one spouse dies, this "primary obligation" is transferred to the deceased's estate.
The surviving spouse must, per a recent Supreme Court of Appeal decision, firstly establish that he/she is unable to provide for his/her "own reasonable maintenance needs from his/her 'own means and earnings'".
In determining this, a court has to consider the survivor's -
Existing and expected means (which excludes, held the Court, any "financial generosity" from third parties, such as the assistance that the surviving spouse in this case had been receiving from her children),
Earning capacity,
Financial needs and obligations,
Age and life expectancy at the time of death,
Standard of living during the marriage.
Any other relevant factors (such as how long the marriage had subsisted) will also come into play.
The court must also consider the "amount in the estate available for distribution to heirs and legatees", i.e. the deceased estate's ability to meet a maintenance claim.
In establishing this, the Court held that the proceeds of any life assurance policies with named beneficiaries must be excluded from the calculation. And - an important practical issue for executors - any maintenance obligation can be settled by way of a lump sum payout, rather than ongoing monthly payments.
Executors need also to take heed of the Court's award in this case of punitive costs against the executors in their personal capacities - they were heavily criticised for failing to end this protracted litigation by way of a negotiated settlement.
Don't subject your loved ones to the delay and acrimony of such a dispute - have your will drawn professionally to ensure that your spouse's financial needs are properly catered for once you are gone.
THE NOVEMBER WEBSITE: "TED" TALKS
TED Talks ("Ideas Worth Spreading") at www.ted.com gives free online access to more than 100 "Riveting Talks by Remarkable People".
They are hugely popular, with over 290 million views to date, and cover a wide range of thought-provoking subjects as varied as these examples: -
"How to Live Before You Die"
"The Web's Secret Stories"
"Brain Magic"
"Where Good Ideas Come From"
"The Happy Planet Index"
"The Surprising Science of Motivation"
"Economic Reality Check"
"New Insights on Poverty"
.......and many more.
Have a great November!
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