January 2019 | Uncategorized
“…it can hardly be in the best interests of all concerned for this family to remain at the School” (Extract from judgment below)
With the new School Year now well under way, let’s have a look at a recent court decision of interest to all schools, parents and learners.
Importantly, this case involves not a state-controlled public school but a private school (private schools being recognised in our national schooling system as “independent schools”).
Sins of the Father – bad behaviour, death threats, expletives and expulsion
- The parent contract between a private school and the parents of two learners (aged 9 and 11) included a termination clause, invoked by the school against the parents following “… a sorry tale of misconduct on their part spanning eight months….” which “… created a toxic and intolerable atmosphere.” The clause gave the school “the right to cancel this Contract at any time, for any reason…” on one term’s notice.
- Effectively, the learners were expelled from the school because of a series of (alleged) incidents, mostly involving the father at school sporting matches. He was, for example, alleged to have shouted abuse at the umpire in an Under-9 cricket match after disagreeing with an LBW decision against his son, and then to have approached the umpire with a cricket-bat in his hand, saying: ‘you fat . . . (expletive omitted), you don’t respect parents’, and threatened to wait for him after the match and kill him.
- The parents failed in their bid to have the High Court set aside the contract’s cancellation. They lost again on appeal to the Supreme Court of Appeal (SCA), which rejected their attempts to have the termination clause declared unconstitutional and contrary to public policy.
- The school, held the Court, “was acutely aware of its constitutional duties not only to the appellants’ children but to all the affected parties in cancelling the contracts. Its reason for doing so, though not relevant, was unimpeachable, given the extraordinary behaviour of the appellants… it can hardly be in the best interests of all concerned for this family to remain at the School.”
- Critically, the Court accepted that the school in terminating the contract had applied the principle “that the best interests of the children is paramount in whatever it does”. Our courts always prioritise a child’s best interests in any matter before them, and schools should ensure that their parent contracts, policies and actions are all fully compliant with that principle.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
January 2019 | Uncategorized
“A small debt produces a debtor; a large one, an enemy” (Publilius Syrus, Roman writer)
You are owed money by a debtor, whose “insolvent estate” is “sequestrated” (in the case of an individual or trust) or “liquidated” (in the case of a company or other corporate).
The Master of the High Court appoints a “trustee” (in the case of a sequestration), or a “liquidator” (in the case of a liquidation) to sell all the debtor’s assets and to distribute the sale proceeds between proved creditors.
When you learn of your debtor’s sequestration/liquidation, ensure firstly that the trustee/liquidator knows that you are a creditor so that you receive reports on the financial position of the estate and on progress towards its finalisation.
You will have an opportunity to lodge and prove your claim in the sequestration/liquidation, which you do by completing a formal “claim form” for proof at a meeting of creditors.
The question is – should you prove your claim or shouldn’t you?
Adding insult to injury – contributing to costs
Note: For simplicity we’ll refer below only to “insolvent estate”, “sequestration” and “trustee”, but the principles apply equally to corporate liquidations.
If you don’t prove your claim as above, you won’t receive any dividend and will effectively have to write off your debt entirely.
But the other side of the coin is that by proving your claim you may be exposing yourself to an even worse fate –
- When the costs of sequestration of an insolvent estate exceed the funds in the estate available to pay them, the trustee of the estate recovers a “contribution” from proved creditors to cover those costs.
- In that case you as a proved creditor risk adding insult (having to pay a contribution into the estate) to injury (having to write off your original debt). That’s why, as a creditor, you should be very wary of formally proving your claim against an estate until you are satisfied that no danger of contribution exists.
The special case of the “petitioning creditor”
Now the rub here for the “petitioning creditor” (the creditor who applied for the debtor’s sequestration in the first place) is this – whether or not you formally prove your claim in the estate, you must still contribute to the shortfall.
That’s why, although applying for sequestration can be an excellent way of recovering debt from a recalcitrant debtor, it is essential to consider the danger of contribution before making any such application.
What if you hold security for your claim?
Note that we are only talking here about holding security over a debtor’s asset/s. If you hold outside security – a surety from a company director for example – you can recover that separately, entirely outside the sequestration/liquidation process.
- If you hold some form of security for your claim, like a mortgage bond over the debtor’s property for example, you are a “secured creditor”.
- You need to prove your secured claim to be awarded the net proceeds of the property. In practice the trustee sells the “encumbered” property, pays out of the proceeds all costs directly related to that property – maintaining it, selling it, paying rates and taxes to pass transfer, the trustee’s fees and so on – and then pays out the balance to you as secured creditor in an “encumbered asset account”.
- On the other hand the proceeds of all unencumbered assets fall into the “free residue” account, and if after being paid your secured dividend as above there is still a shortfall on your claim, that shortfall ranks in the free residue as a “concurrent” claim.
- And that’s where your danger comes in – you are now in line to pay a contribution based on the concurrent portion of your claim.
- The good news is that you can largely protect yourself from having to contribute by “relying on the proceeds of your security” in satisfaction of your claim. That means you waive your concurrent claim for any shortfall, but equally by removing your shortfall claim from the free residue account you no longer contribute together with other proved (or petitioning) creditors.
- In some very restricted circumstances even relying on your security won’t protect you from a contribution (for example when no one else has proved claims or other contributors are unable to pay their share), but relying on your security is the best protection you have.
Note that there are grey areas in some of these provisions, so there is no substitute to asking your lawyer for advice on your specific circumstances.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
January 2019 | Uncategorized
Note: If you earn over R22k p.m. (the subsidy threshold) or aren’t personally in the market for a house in the “affordable housing” bracket, please think of forwarding this article to someone who might be – perhaps a relative, friend, colleague or employee. You could be helping them take that important first step onto the property ladder!
Unless you already own your own house, our current buyer’s market – while it lasts – could be your golden opportunity to find one at a reasonable price. But affordability isn’t what it used to be, and you should take advantage of any help you can get.
That’s where FLISP, government’s “Finance Linked Individual Subsidy Programme”, comes into the picture – if you qualify.
How does it help you?
The subsidy allows you to bring down your home loan instalment to an affordable level, by reducing your bond amount or increasing the cash component of the purchase price. You can buy new or old residential property, or you can build on a vacant plot.
The size of the subsidy granted to you will depend on your earnings, with a maximum of R121,626
Do you qualify?
To qualify you need to meet these requirements –
- You must be a South African citizen with a valid ID or a permanent resident with a valid permit
- You must be over 18, and married/co-habiting or single with financial dependants
- You cannot have previously benefited from a Government Housing Subsidy Scheme
- You must have a home loan approval
- You must earn between R3,501 and R22,000 per month.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
January 2019 | Uncategorized
Perhaps you are an employee, dreaming of starting up your own business. Or an entrepreneur looking to leverage your practical experience into another successful start-up. Or perhaps you are the CEO of a multinational planning to launch a new venture.
Small business or big, here’s a quick, practical read for you covering “what many spend fortunes hoping to learn in business schools” in a few bullet points.
“Johann Rupert’s 5 steps to business success” on Moneyweb is a short and insightful summary of the multi-billionaire’s recipe for successfully launching your new business or venture.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
January 2019 | Uncategorized
Employers and employees need to know about four new Acts which will usher in important changes to our labour laws.
The summary below is a short one of only those changes likely to affect a significant number of people and businesses, so take advice on your specific circumstances.
In a nutshell –
Parental leave extended
Until now, mothers have been entitled to unpaid leave when welcoming a new child into the world, in the form of 4 consecutive months’ “maternity leave”. Plus they can claim maternity benefits from the UIF if they are contributors. New fathers however have been limited to at most 3 days’ family responsibility leave.
That will now be extended to –
- “Parental leave”: “Parents” (i.e. including fathers and same-sex partners) – 10 consecutive days’ parental leave.
- “Adoption leave”: Adoptive parents of a child under 2 years old – either 10 consecutive weeks’ adoption leave or 10 consecutive days’ parental leave (where there are two adoptive parents, they decide between them who gets 10 weeks and who gets 10 days).
- “Commissioning parent leave”: Commissioning parents in a surrogacy agreement – same provisions as for adoptive parents.
Parents taking unpaid leave as above also become eligible for UIF benefits.
Employers with maternity leave policies, and those who offer paid as opposed to unpaid maternity leave, should take advice on reviewing these policies.
Minimum wages introduced
The new national minimum wage is set as follows –
- Farm workers – R18 per hour
- Domestic workers – R15 per hour
- Workers in an ‘expanded public works programme’ – R11 per hour
- Other employees – R20 per hour.
Separate allowances apply to those in learnership agreements.
Employers who cannot pay the minimum wage will be able to apply for exemption for up to a year, but draft (at time of writing) regulations allow for only a 10% exemption.
Failure to pay the minimum wage will expose employers to fines of the greater of 2x the value of the underpayment, or 2x the employee’s monthly wage (going up to 3x for second or further non-compliances).
Strikes, lockouts and picketing
An “advisory arbitration panel” can be (and presumably will be) appointed to help resolve protracted or violent strikes or lockouts, and those causing or exacerbating an acute national or local crisis.
New picketing regulations are also in the wind.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
January 2019 | Uncategorized
Here’s yet another warning from our courts to take seriously the building deadlines commonly imposed on buyers of plots in residential estates. Failure to comply with them could expose you to heavy fines, recurring penalties and even the risk of losing your plot altogether.
- A Home Owners Association (HOA) imposed “double levy” penalties totalling R105k on the owners of a plot when they failed to start development before deadline.
- Taken to court, the owners challenged the validity of the penalties on a variety of technical and other grounds, but failed on every count.
- The end result is they must now pay the penalty levies, late payment penalties, and attorney-and-client legal costs for both the original magistrates’ court hearing and for the unsuccessful appeal to the High Court.
3 lessons for HOAs and buyers
The HOA’s victory in this case highlighted several important factors that both HOAs and buyers would do well to take note of –
- The HOA’s power to raise “recurring penalties” was upheld only because of the wording of its articles of association. They specifically gave the HOA the power to “impose a system of fines or other penalties”. Had the wording only allowed “a fine”, its attempt to impose a recurring penalty would have been shot down (exactly that happened to another HOA in an earlier case).
- Penalties must be proportionate to the prejudice suffered by the HOA, but courts are unlikely to interfere unless “the penalty is unduly severe to an extent that it offends against one’s sense of justice and equity”. Here, the double-levy penalties were upheld because the “ongoing delay in developing their property in accordance with their obligation … prejudiced the underlying rights of other owners … to enjoyment of a fully developed estate.”
- The title deed gave the HOA the right to claim the plot back for breach of the building clause, but, held the Court, that right did not replace the right to claim penalties; it was an additional right available to it.
The bottom line for “buy to build” plot purchasers is this – make absolutely sure before buying that you will actually be able to build by deadline.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
