May 2025 | Property
“Trust me, I’m a lawyer.” (Popular T-shirt slogan)
South African property buyers and sellers will have been cheered by news that we are now officially the most affordable country in the world in which to buy a home. We’re only a nose ahead of the USA and Bahrain in this particular race, but it’s great to be a world leader in something so positive for a change. Have a look at BestBrokers’ analysis of house affordability in 62 countries here to see just how unaffordable property is in many other countries around the globe.
This all bodes well for the South African property market, so it’s perhaps a good time to remind sellers that it’s not just about getting a good price for your house. Equally important is ensuring that you choose the right conveyancer to attend to the transfer for you, with a recent High Court fight over a dishonest attorney’s theft sounding a stark warning in this regard.
An absconding conveyancer steals R4.25m
Having bought a house on auction for R4.1m, the buyer paid the auctioneer the required 5% deposit and the auctioneer’s commission. The auctioneer duly paid the deposit to the conveyancer nominated by the seller and the conveyancer, having not yet turned to the dark side, paid the deposit over to the seller. So far, so good.
The conveyancer then issued a pro forma invoice to the buyer for the balance of the purchase price and transfer costs, a total of R4.25m. The buyer duly paid that amount into the conveyancer’s bank account specified in the invoice.
Conveyancers are obliged to pay all such funds into a separate trust account for safekeeping, but in this case it emerged (after the buyer queried inordinate delays in the transfer process) that the bank account specified by the conveyancer in her invoice was not a trust account at all. Worse still, she had absconded with the funds.
A series of tussles followed, with the buyer demanding the house be transferred to him because he had paid in full, and the seller countering that they had cancelled the sale because the buyer didn’t “secure” payment of the balance of the purchase price by paying it into a trust account.
The seller learns a hard lesson
The High Court, called upon to sort out who must ultimately bear the loss, held that by paying the conveyancer per her invoice, the buyer had done everything required of him by the conditions of sale and was entitled to transfer. It was not the buyer’s obligation to ensure that he was paying into a trust account and to monitor its safekeeping there until transfer. Rather, it was the conveyancer’s obligation to secure the funds in her trust account until transfer.
The end result is that the seller must now transfer the property to the buyer and try to recover his losses elsewhere. He can sue the conveyancer (not a hopeful prospect) and as a last resort he can lodge a claim with the Legal Practitioners Fidelity Fund (LPFF). He’ll be wishing he’d avoided all that cost, delay and risk by choosing a more trustworthy conveyancer in the first place.
(As a side note, the conveyancer has been suspended from practice and her firm placed under curatorship – she blames her total trust account shortfall of at least R8m on a dishonest bookkeeper.)
Remember: as seller it’s you who gets to choose the conveyancer, so choose wisely! And as always, don’t sign anything until we’ve checked it all out for you.
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 us for specific and detailed advice.
© LawDotNews
May 2025 | Employment and Labour Law
“The legal principles, as I understand them, do not confer on me the powers of Father Christmas. I cannot rescue the un-rescuable.” (Quoted in the judgment below)
We all want loyal, competent staff who remain motivated to stay with us in the long term, but the reality is that a degree of employee churn is always inevitable.
Imagine then this scenario – a key employee (someone senior, a specialist, or perhaps even a partner or director) is fired or leaves you. They take with them intimate knowledge of your business. They know all your trade secrets, your pricing processes, your marketing strategies, and all your trade connections. Plus, they’ve built up client relationships and credibility in your industry while employed by you.
If they now decide to start up their own business in opposition to you, or if they take their insider knowledge to your competitors, you have a real problem.
That’s why it’s essential to consider, right up front when you’re hiring someone and drawing up their employment contract, whether you need to protect your business from this sort of unfair competition. That’s where the tried-and-tested restraint of trade clause comes into play. It’s as easy as including one in your employment contract, and making sure that your new hire is fully on board with it. Or is it?
The basic requirements for legal validity
As a starting point, our courts are cautious about curbing anyone’s constitutional right to be economically active and to earn a living.
So, while we are all generally held to the agreements we make, and while restraint clauses have long been recognised in our law as a legitimate way for businesses to protect their interests from unfair competition, our courts are unlikely to enforce restraints unless they are:
- Reasonable: You cannot impose an unreasonable restriction on your former employee’s freedom to trade or to work. Go too wide on time period, geographic area or scope, and your clause could be held wholly or partially void.
- Protective of a legitimate business interest: You must have a real commercial interest in imposing the restraint, you can’t use it just to block competition.
- Not contrary to public policy: There must be no other aspect of public policy weighing against the clause.
Each case will be judged on its own facts and merits, with the court balancing your rights against those of your former employee in a bid to ensure fairness to both of you.
As a starting point, make sure that your clause isn’t “void for vagueness”, or you could end up in the same position as the employer we discuss below.
Too vague to enforce, and no Father Christmas to the rescue
An employer, providing physiotherapy services to two major hospitals in the Umhlanga area of KwaZulu-Natal, employed a senior physiotherapist in January 2023. Eight months later she resigned.
The restraint of trade clause in her agreement was a particularly terse one. Headed “15. Trade Restriction”, it read simply: “2 year 8km restriction in event of termination / expiry of Contract.”
When the employer tried to enforce this clause, the High Court refused, pointing out that it was “lacking in substance” and contained no indication of:
- A definite commencement date for the two-year period
- What the “8 km restriction” referred to
- What exactly was restricted
- What interests it sought to protect
What’s more, it contained no mention of the two particular private hospitals which the ex-employee was not to practice at. The Court refused the employer’s request to “read in” more wording to the clause to remedy its vagueness and lack of detail, quoting from another High Court decision: “the legal principles, as I understand them, do not confer on me the powers of Father Christmas. I cannot rescue the un-rescuable.”
It also warned against the trend for smaller businesses to cut corners by going the “DIY contract” route: “SMME businesses are reluctant to seek advice from attorneys, and less so to employ attorneys to prepare important legal agreements. This pattern, fuelled undoubtedly by the rising cost of legal charges, often results in unforeseen circumstances by the time the matter reaches a litigious stage”.
That’s putting it mildly – defective restraint clauses like this one literally aren’t worth the paper they’re written on. A properly drawn clause is essential, and we’re here to help.
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 us for specific and detailed advice.
© LawDotNews
May 2025 | Family Law
“Grandparents, like heroes, are as necessary to a child’s growth as vitamins.” (Quoted in the judgment below)
One of the greatest tragedies of family fall-outs will always be the effect they have on the children involved. A recent High Court fight over a granny’s attempts to have contact with her two grandchildren in the face of bitter opposition from their father confirms that what really counts is what’s best for the grandchildren.
A tragic death, and a family fight
Two boys, aged 9 and 13, are the innocent subjects of this legal wrangle. They live with their father in Makhanda.
Their mother, a professional nurse serving in the SANDF with the rank of captain, tragically died in a motor accident three years ago.
Their father, currently a High Court advocate, had met their mother while a member of the SANDF’s Special Forces Unit. They were never formally married but the two children were born of their union. He is described as a good father providing his boys with good care and a stable home and family life.
Their grandmother is widowed and a retired nurse and midwife. Her requests to the father for contact with her grandchildren were met with an obstinate refusal to even engage with her. His intense dislike for her – based, he said, on his late partner’s anger issues with her – was reiterated in his stance in the Children’s Court where he made it clear that he refused ever to talk to her.
The grandmother lives in the village of Herschel on a large plot, is in good physical and mental health, and says she is well able to look after for the children while in her care.
The Children’s Court, having received the reports and evidence of social workers (which spoke of a healthy relationship between mother and grandmother in contradiction to the father’s perception), granted access to the grandmother.
The father appealed this order to the High Court. While accepting that the father genuinely believed that he was acting in his children’s best interests, the higher court upheld the contact order, albeit in a more structured form than the original. The grandmother now has access by way of:
- Weekly telephonic/multimedia contact
- Monthly day visits with her in Makhanda
- Mid-year and year-end school holiday visits to her home in Herschel, for a week at a time, initially under the supervision of the Department of Social Development
The decisive consideration
The Children’s Act sets out in detail a wide variety of factors to be considered by a court in deciding any application for access (referred to as “contact” in the Act). But as the Court here pointed out, the decisive consideration is always going to be the best interests of the child.
Every case will be unique, but one highly relevant factor that our courts will have regard to is “the need for the child to remain in the care of the parent, family, and extended family and to maintain the connection with his family, extended family, culture and tradition”.
Let’s close with this particularly apt observation from the Court (emphasis supplied): “Usually, it is in the best interests of a child to maintain a close relationship with his grandparents”.
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 us for specific and detailed advice.
© LawDotNews
May 2025 | Family Law, Property, Wills and Estate Planning
“An ounce of prevention is worth a pound of bandages and adhesive tape.” (Groucho Marx)
It’s a perennial topic of dispute in our courts. A couple lives together, sharing the same roof and everything else in perfect happiness and harmony.
Until it all goes south. Then the gloves come off and, particularly if our erstwhile couple end up dragging each other through the courts, everyone takes a beating. Bloodied, battered and bandaged, they’re going to wish they’d implemented Groucho’s “ounce of prevention” in the first place.
We’ll explain how to keep things amicable. But before we do, let’s consider the case of the life partner who failed to persuade a court to give him a cut of his ex-partner’s house.
Trying to prove a “universal partnership”
Bearing in mind that our law recognises no such concept as “common law marriage” (a pervasive and dangerous myth that just won’t go away), many an ex-life partner has fallen back on trying to prove that the couple had formed a “universal partnership”. Depending on the type and form of the partnership they claim existed, that would give them a cut of the assets of their relationship. But it isn’t easy to prove.
The facts in a recent Limpopo High Court fight illustrate this point. A couple in a romantic relationship had lived in the woman’s house with her daughter. Each of them contributed equally towards household expenses. They decided to extend the house, and the man contributed R416k out of his pension payout for this purpose.
When their relationship broke down after five years, the man tried to convince the Court that a universal partnership had been formed between them, and he asked for a liquidator to be appointed to divide the partnership’s assets equally between the partners.
The Court’s thorough analysis of the law relating to universal partnerships (there are actually two types, both with fancy Latin names) will be of major interest to lawyers. But what really matters most to you on a practical level is that:
- The onus is on you to prove that a partnership existed, and its terms.
- You must prove that you agreed to pool your assets in order to make a profit.
- A universal partnership needn’t be agreed to in writing – it can be formed verbally, by consent, or by the conduct of the parties. That requires inferences to be drawn so it’s a recipe for misunderstanding and dispute. Without a written agreement it’s never easy to prove and our case law is littered with failed attempts.
- Perhaps the most pertinent factor of all is this comment by the Court (emphasis added): “The mere fact that parties cohabitate does not entitle them to a proportionate share of the other party’s estate.”
In the end, the applicant failed to prove that the relationship had been anything more than cohabitation, so he leaves with nothing (other than, of course, a large legal bill).
An ounce of prevention…
All that litigation and unhappiness could have been prevented had the parties, when they first decided to live together, entered into a cohabitation agreement.
Don’t make the same mistake, and be sure to draw up a document covering, at the very least, the following aspects of your relationship as they apply to you:
- When your relationship began or when the agreement takes effect.
- List who owns what both before and during cohabitation (furniture, vehicles, investments and so on).
- Who is responsible for which debts.
- Who owns (or rents) your house, who will pay the bond instalments if any, who will pay for what upkeep, who will pay for any major extensions or repairs, and so on.
- Who will pay what in ongoing contributions to shared living expenses.
- Will you use joint bank accounts and, if so, how will you manage them?
- Will you run your own businesses, a joint business, or no business at all? What will you each contribute, what will you each take out, how will you manage the business/es?
- Who will be responsible for the children’s financial support, schooling etc?
- If your relationship ends:
- How will you terminate it?
- Who will get which assets?
- Who will be responsible for which debts?
- How will you terminate any business relationship you have?
- Will either of you be entitled to ongoing spousal maintenance?
- What happens to your children, to their financial support, and to your parental duties and rights of contact?
- Think of adding a dispute resolution clause to kick in if you can’t agree on anything.
- Anything else? Your circumstances are going to be unique to the two of you, so brainstorm for anything else (who gets the pets, for example) that you’d like to record or agree on at this stage.
Herein lies the rub
Setting out an agreement doesn’t mean you’re planning for failure! In fact, you’re increasing your chances of success. Break-ups are a fact of life, and even if you do grow old and wrinkly together, your cohabitation agreement will still come into its own when one of you dies.
On that note, don’t forget to make or update your will (“Last Will and Testament”) at the same time. Both documents are essential, and the two must be compatible with each other, so make a big note to review/update both together.
Bottom line: you and your life partner should have a cohabitation agreement as well as wills. We’ll help you put all that together.
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 us for specific and detailed advice.
© LawDotNews
April 2025 | Property
“Look before you leap.” (Wise old proverb)
Imagine sealing the deal on your dream property, only to wake up at 3 a.m. beset by sudden doubts. Thoughts like “Can we really afford it?” or “How on earth could we have fallen in love with that old dump?” haunt you. You may have a strong urge to back out – but tread very carefully here. Trying to cancel the sale without sound legal grounds will be a big and costly mistake.
A recent High Court case provides the perfect example.
The R135m house and the “defects” that weren’t
Our buyer put in a R135m offer for a luxury three-storey house in Sandhurst. The cancellation clause in his offer document read (emphasis added): “The Purchaser at his own expense will conduct an inspection of the home within (14) fourteen days of acceptance of the offer. Should there be structural defects or defects that are unacceptable to the Purchaser then the Purchaser can at his discretion elect to cancel this agreement.”
The seller accepted the offer with that cancellation clause – deal done. But then, eight days later, the buyer tried to escape the sale with this email from his attorney: “Unfortunately after conducting due diligence, the purchaser hereby elects to cancel the agreement… Good luck with the sale.” The buyer’s remorse in this case turned out to be monetary – he had, he said, overpaid for the property. He then put in a new offer for R100m.
That was a loss the seller wasn’t going to accept, so daggers were drawn, and the fight was on.
The seller hotly denied that the buyer had any right to cancel the sale agreement, and off they went to the High Court. The buyer said that he had “unfettered discretion” to decide whether or not there were defects, and he refused to give the seller any details of them. Only in his court papers did he provide more information, claiming to have noticed cracks on the walls during an inspection. The rest of his “concerns” related to his personal preferences for the house – wanting new paving, widening the driveway, remodelling the kitchen, installing an elevator and the like.
Subjective belief in a defect isn’t enough
The Court had no hesitation in holding that the buyer had not been entitled to withdraw from the sale “based on any minor ‘imperfection’ in the property, because it does not fulfil his personal needs – at his sole discretion and without proof.”
He had failed, as required by law, to exercise his discretion reasonably and to prove the existence of a defect objectively (i.e., based on facts, not personal belief) rather than subjectively (i.e., based on the buyer’s personal opinions or interpretations). His subjective interpretation was irrelevant.
The bottom line: the seller had rightly rejected the buyer’s cancellation, and the buyer remains bound to the sale. To rub salt into his wounds he must now also pay costs on the attorney and client scale – that’s going to be expensive!
What then is a “defect”?
Per the Court, the ordinary meaning of a defect is (emphasis supplied): “an ‘abnormal quality or attribute’ of the property sold that ‘destroys or substantially impairs’ its ‘utility or effectiveness’ for the purpose for which it is generally used or unfit for the special purpose for which it was intended to be used by the purchaser.”
Personal preferences like elevators and revamped kitchens don’t count, and a wall crack justifying a R35m price reduction can’t be superficial!
Look before you leap!
Some final thoughts for property buyers:
- Don’t rush (or be rushed) into buying anything. Take your time, and make sure this really is the property for you and that you can afford it.
- Check the house thoroughly for any potential problems and consider commissioning an independent home inspection to look for any defects that might not be immediately obvious (damp for example). If you are worried about anything in particular, bring in the experts or insist on expert reports from the seller.
- Last (but certainly not least) don’t sign anything without asking us to review all the paperwork for you first!
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 us for specific and detailed advice.
© LawDotNews
