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08 Nov 2019

THE STORY BEHIND MOVEMBER

Don’t MO it, GROW it!

During the month of November, we all see men growing their moustaches, trying to emulate Tom Selleck in Magnum P.I. I myself was asked by my firm to grow mine, probably or so I thought, for the sole purpose of posting a selfie at the end of November on our Social media pages. Never one to just partake in something without knowing why (and making a fool of myself by looking like a 1980’s police-officer), I decided to do some research into the origins of Movember, with the hope of finding a deeper meaning. I certainly did!

According to Wikipedia, Movember is a “combination of the two words, “mo” for moustache and “November”. It is an annual event that involves men growing their moustaches during the month of November to raise awareness of men’s health issues, more specifically for prostate cancer, testicular cancer, and men’s suicide.”

So, where did it all start?

In 2003, two Australian friends, Travis Garone and Luke Slattery, met up for a beer and they came up with the idea that would eventually be “Movember.” They found 30 guys willing to take up the challenge to grow their moustaches (which was a dying trend) for cancer awareness and men’s health issues. These guys and girls willing to grow their “mos” are referred to as Mo Bros and
Mo Sistas. Movember was born!

In 2006, Movember reached official charity status in Australia.

In 2010, Movember officially hit the motherland of South Africa in partnership with CANSA (Cancer Association of South Africa). Through its funding, the world’s first Prostate Cancer Genome Mapping Project was completed, which assists us in understanding of how prostate cancer works. It was also through Movember funding alone, that it was possible for the University of Michigan to identify that there are over 25 different kinds of prostate cancer.

Today, Movember is ranked in the top 100 NGOs (charity) in the world, based on three primary criteria: impact, innovation and sustainability. (just to note that there are over 5 million NGO’s in the world, so this is no mean feat). The Mo Bros and Mo Sistas have grown to over 5,5 million and currently over 1250 men’s health projects has been funded. Movember has raised over R5 billion in support of men’s health issues.

Globally, a man dies by suicide, every minute. In South Africa, 75% of suicides, are male. Prostate cancer is the number 1 cancer affecting men in South Africa. Statistically, 1 out of 19 men will develop prostate cancer. Testicular cancer will affect 1 out of 270 men globally.

Taking part in Movember is more than just a selfie at the end of November. It’s about showing support for men world-wide that struggle with health issues. It’s a sign that we acknowledge each other as men, as humans and that we stand in solidarity for something that affects us all.

If Faf de Klerk can meet a Prince in his underwear, I can and shall proudly grow my moustache!

Elbe Young
Miltons Matsemela
Movember 2019

10 Oct 2019

BREAST CANCER AWARENESS MONTH

When asked what the most important sphere of life is, almost all of us would answer with something including a mention of good health. Health constitutes the essence of living, not only being alive but living a life free of limitations, having basic abilities and to some, simply having the possibility of seeing another sunrise.

A harsh reality most of us have experienced, either first-hand or through someone we have known, is the gravity of illnesses such as cancer, and quite frequently, breast cancer, which has become a leading cause of death in women. The importance of creating awareness, to diagnose and get timeous treatment cannot be understated. It is however even more devastating when you react as you should: pick up the warning signs, go to the doctor (who you trust to give you the best care) and the results are still tragic because of the negligence of the doctor who misdiagnoses an illness that could have been cured.

Instances like this, where a medical professional acts negligently in the diagnosis and/or treatment of an illness is called medical malpractice, and we have lots of cases in our law reports where doctors have been sued on these grounds.

In the case of Estelle Kunneke, a misreading/failure to screen correctly and a failure to adhere to the “standard of care” formed the basis of her misdiagnosis claim. In this matter, heard in the Gauteng High Court in Pretoria in 2014, Mrs Kunneke was misdiagnosed with breast cancer and had a double mastectomy. It was later established that she did not have breast cancer at all, and that the doctor was negligent in his diagnosis. Mrs Kunneke won her claim and was awarded damages of R2.8 million.

In Shabbir Carrim v The Premier of the Gauteng Province (04/12338) 2009 ZAGPJHC 98, the government hospital where Mr Carriem was treated was found to be negligent and damages were awarded to Mr Carrim. The test applied in this case to establish whether the hospital had acted negligently was the following: (1) Could it be foreseen that there is a reasonable possibility of the hospital’s conduct causing harm or affecting the patient negatively? (2) If so, were reasonable steps are taken to guard against this happening? If not, the hospital would be found to have acted negligently, and the patient would be entitled to compensation.

What is the standard by which the conduct of a medical professional, will be judged? On the basis of previous case law it is clear that a doctor only needs to adhere to the general level of skill and diligence possessed and exercised at the same time by the members of the branch of the profession to which he belongs. Only if he falls below this standard would this constitute negligence. As the judge put it in the case of Castell v De Greef 1993 (3) SA 501 (C): “the test remains always whether the practitioner exercised reasonable skill and care or, in other words, whether or not his conduct fell below the standard of a reasonably competent practitioner in his field‟.

Should you suspect medical malpractice, it is crucial that you speak to a medical malpractice attorney as soon as possible to ensure that you are properly advised, and remember, your claim against the doctor or the hospital will prescribe (become extinguished by the passing of time) after a period of 3 years, if you take no steps to enforce your rights.

Let’s be vigilant, moving forward with eyes wide open and let’s create awareness for early detection and early treatment – in support of those to whom the next sunrise is not a given.

Chené Labuschagne
Attorney
October 2019

02 Oct 2019

How Courts Sort Fact from Fiction – A Tale of Jags, Deception and Damages

“Truth will out” (Shakespeare)

Sometimes you just have to sue to enforce your rights, and should sweet victory crown your efforts you will celebrate your decision to do so. But litigation isn’t for the faint-hearted, and apart from the cost, delay and stress of fighting your way through our courts, you will want to reduce your risk factors upfront as much as you can. So if your opponent’s version of events is totally at odds with yours you will want some comfort that it is your version that is likely to win the day.

But just how can you predict which way the court will go in deciding which version to accept? We explain, with reference to a most interesting High Court fight over whether or not a (relatively inexpensive) Jaguar XF had been fraudulently sold by a dealership as a (much more expensive) Jaguar XFR.

You are wondering whether you can win in court against an opponent where your two versions of what happened are totally at odds with each other.

How will a judge decide where the truth lies? It’s an important question because even though you know you are telling the truth, the court must base its decision on the evidence put before it. In other words, whether or not Shakespeare’s “Truth will out” will apply to your court case is going to depend on what evidence you have, and on how you present it.

A recent damages claim for fraudulent misrepresentation illustrates…

Selling R320k worth of Jaguar XF as a R1m XFR

  • A dealership (owned by a close corporation) sold a “Jaguar XFR” to a buyer, who financed the purchase through a bank at a price of R985,139-29. Legally the sale was from the dealership to an intermediary, which then sold the vehicle on to the bank, which then sold it to the buyer on instalment sale.
  • When the buyer failed to make payments due under the instalment sale agreement, the bank seized the vehicle from him. In the process it became aware that it was in fact a Jaguar XF, not the XFR reflected in all the documentation.
  • That made a big difference to the bank because a Jaguar XFR5.0 V8 S/C is, the Court was told, a very different beast from its cousin the XF5.0 V8. What was most relevant to this case was that “the Jaguar XF is a considerably cheaper kind of Jaguar vehicle than the Jaguar XFR”.
  • The bank cancelled its agreement with the intermediary on the grounds of misrepresentation and the intermediary had to repay the R985k to the bank.
  • The intermediary then in turn tried to recover its losses from the dealership, which however refused to pay back a cent and refused to accept return of the vehicle. To reduce its losses, the intermediary sold the XF on for R275k, after which it sued the dealership for its net loss of R710k.
  • The two versions of events given by the dealership and the intermediary were irreconcilable and the factual evidence heard by the Court was an interesting and complex mix of allegedly forged signatures, unsigned documents, the mysterious addition of an “R” badge to the vehicle, and a disclosure that the dealership had bought the vehicle for R320k just days before on-selling it for R985k.

How did the Court decide?

  • The Court followed “the technique generally employed by courts in resolving such factual disputes” which it summarised as (format supplied):

“To come to a conclusion on the disputed issues a court must make findings on –

  1. The credibility of the various factual witnesses;
  2. Their reliability; and
  3. The probabilities.”
  • Those three factors are of course closely inter-linked, and the Court’s assessment of them will lead it to decide whether whichever party bears the onus of proving a fact or facts has succeeded in doing so. There’s a clear blueprint there for any litigant wondering whether their version of events is likely to be accepted as fact, or rejected as fiction.
  • In this case, the “We did nothing wrong” evidence given for the dealership by the close corporation’s member and ex-member was rejected by the Court, which referred to both the general probabilities and to several important changes of story both on the papers and on the witness stand with comments like “…had to change his version drastically during cross-examination as to how the transaction came about…”.
  • The end result – the Court found that the member had made a misrepresentation, knowing that it was false, that the vehicle was a Jaguar XFR and not a Jaguar XF. The ex-member was found co-responsible for the fraudulent misrepresentation and all three (member, ex-member and dealership) held jointly and severally liable for damages of R710,139-29 plus interest and costs.
02 Oct 2019

Security Complexes and Fibre – You Can Use Telkom Ducting After All

“Reliable electronic communications go beyond just benefiting the commercial interest of licensees to the detriment of ownership of property. The statute [Electronic Communications Act] is designed to avoid this no-winner conflict. What it seeks is to bring our country to the edge of social and economic development for rural and urban residents in a world in which technology is so obviously linked to progress.” (Extract from Constitutional Court decision quoted in the judgment below)

If you live in a “community scheme” such as a residential security estate, you probably access the Internet and make calls via either ADSL or fibre, with the necessary cabling running in underground ducting installed by the developer.

Unless your complex is brand new, that ducting is probably occupied by Telkom’s copper cabling, and in 2017 Telkom won an important case against a Home Owners Association (HOA) which wanted Vodacom to install fibre for it in the existing ducting. That outcome left HOAs and homeowners around the country facing the delay, disruption and cost of having to create new underground infrastructure.

We discuss a recent Supreme Court of Appeal decision reversing that…

If you haven’t already done so, you are no doubt thinking of upgrading soon to the “superfast broadband” provided by fibre optic cabling. In any event ADSL is about to disappear with Telkom’s plans to shut down its copper network and migrate ADSL customers to either fibre (where available) or LTE.

In a community scheme, your challenge is that your chosen fibre service provider must either use your existing underground ducting or start digging new trenches and putting in new ducting, sleeves and manholes. The expense and disruption of the latter option naturally make it very much second prize.

So Telkom no doubt celebrated its 2017 High Court victory over Vodacom and a Home Owners Association (HOA) restoring to Telkom exclusive and undisturbed possession of its underground ducting in a residential estate.

The fight, however, had only just begun. The HOA and Vodacom took this decision on appeal to the SCA (Supreme Court of Appeal), and this time they succeeded.

The complex and the copper cables

  • In what is no doubt a pretty standard historical scenario for residential complexes, the developers of a private security lifestyle residential estate had some 20 years ago asked Telkom to provide telecommunication services to the estate, and had built and installed the infrastructure at the developer’s cost but in compliance with plans provided by Telkom and under Telkom’s oversight.
  • Correspondence at the time indicated that “Telkom envisaged that the infrastructure would be for its exclusive use”, and since then it had always had access to the network and maintained it.
  • When the HOA rejected an offer by Telkom to install fibre and instead awarded a contract to do so to Vodacom, Vodacom installed its fibre in the Telkom ducting. Long story short, Telkom successfully asked the High Court for a “spoliation order” restoring “undisturbed possession” of the infrastructure to it.
  • On appeal however, the SCA ruled that in fact “Telkom’s actual use of the ducts, cables and its service to its customers remains undisturbed. It has not lost possession of anything. It remains entitled to enter into [the estate] for the purposes set out in s 22 [of the Electronic Communications Act] and its network remains fully functional as it was prior to Vodacom’s conduct. There was accordingly no spoliation.” The spoliation order was accordingly set aside.

Note that the judgment itself contains much that will be of interest to lawyers on the questions of “servitutal rights”, “quasi-possession of rights”, and the ins and outs of the Electronic Communications Act – but the important practical outcome for HOAs and complex homeowners is that it is now easier to choose your own fibre installer because, provided your installer does nothing to disturb Telkom’s use of the ducts (and its service to its clients), the free space in the existing underground infrastructure is available for use.

02 Oct 2019

Dementia and Incapacity: What is a Power of Attorney and is it Forever?

“The number of cases of dementia is estimated to almost triple by 2050” (World Health Organisation)

It’s a growing problem – with our aging population comes a steady increase in the number of older people developing dementia and other incapacitating mental conditions.

How as a family member or caregiver can you help? How as a person approaching old age can you plan for a future time when you will need help? Your first thought will likely be the quick, simple and cheap option of a power of attorney, but beware – it will fail (in a legal sense) just when it is needed most.

We’ll have a look at what a power of attorney is, at why it is (unfortunately) not a “forever” solution, and at the alternatives available to you.

Although the actual prevalence per capita of dementia is reportedly on the decline, aging populations ensure that it is becoming more and more of a problem in society – for older people, their families and caregivers.

If someone close to you (normally an aging parent or relative) needs – or may in the future need – assistance with their financial affairs, your first thought will probably be a power of attorney by which the “principal” appoints an “agent” to act for him/her, either for a particular purpose (a ‘special power of attorney’) or generally (a ‘general power of attorney’). You may well have the same thought if you yourself are approaching old age and starting to plan for your future needs.

A power of attorney is certainly a quick, cheap and easy solution but be careful – it’s only a temporary one. It is not “forever”!

The downside – automatic termination (just when help is most needed)

Of course a principal can cancel his/her own power of attorney at any time, but what is not so well known is that it terminates automatically if and when the principal –

  1. Dies (an executor is then appointed); or
  2. Becomes insolvent and his/her estate is sequestrated (a trustee is then appointed); or
  3. Becomes mentally incapacitated in the sense of being no longer able to make his/her own decisions for whatever reason – perhaps a stroke, coma following an accident, mental illness, dementia, Alzheimer’s, general age-related diminishing capacity etc.

It’s this last scenario that catches most people unawares, because it seems so illogical for the power of attorney to lapse just when it’s needed most.

But that, unfortunately, is the law. An agent can only do what the principal can do, so if a principal loses legal capacity, the power of attorney immediately fails. Or as a Department of Justice document neatly puts it: “In South Africa the power of attorney remains valid only for as long as the principal is still capable of appreciating the concept and consequences of granting another person his or her power of attorney”.

In practice there are probably many cases of powers of attorney continuing to be used to everyone’s benefit long after the principal has lost formal capacity, but an agent in that situation acts without authority and risks personal liability for doing so if the validity of anything done under the failed power of attorney is challenged.

So what are the alternatives?

  • The High Court can appoint a “curator” when a person becomes unable to manage his/her own affairs. A curator bonis handles all the person’s financial affairs, a curator ad personam his/her personal affairs (such as giving consent for medical treatment, where to live etc). Unfortunately curatorships are costly, prone to bureaucratic red tape and delay, paternalistic and, being public, demeaning to the principal.
  • A simpler and cheaper alternative is the appointment by a Master of the High Court of an “administrator” in terms of the Mental Health Care Act. An administrator only has power to deal with the person’s property (not personal affairs), and this alternative is only available in cases of actual “mental illness” or severe/profound intellectual disability, and only for smaller estates (assets up to R 200,000 and annual income up to R 24,000).
  • A trust to address the purely financial aspects might also be worth considering whilst the person in question still has legal capacity. Take advice however on the costs, tax and other implications.

What about an “enduring” or “conditional” power of attorney?

In 2004 the South African Law Reform Commission recommended changes to our law to allow for alternatives like –

  1. An “enduring power of attorney” (or “EPA”) which would remain valid despite the subsequent incapacity of the principal; and
  2. A “conditional power of attorney” which would come into operation only on the incapacity of the principal.

Unfortunately nothing concrete has as yet come of that, and although some legal commentators suggest that our courts might perhaps uphold a properly-worded EPA, the general consensus appears to be that they will not be recognised.

It boils down to this – take full legal advice on your particular circumstances.

02 Oct 2019

Landlord vs Tenant: When Can You Cut Electricity or Change the Locks?

“Spoliation is the wrongful deprivation of another’s right of possession. The aim of spoliation is to prevent self-help. It seeks to prevent people from taking the law into their own hands … The cause for possession is irrelevant – that is why a thief is protected … The fact that possession is wrongful or illegal is irrelevant, as that would go to the merits of the dispute” (extracts from a 2012 Supreme Court of Appeal decision)

Landlord vs tenant disputes can quickly escalate into protracted and expensive litigation, and as a landlord you may be tempted to take the law into your own hands by changing locks, cutting electricity etc.

We analyse our law in that regard, explain what a “spoliation order” is and what a tenant must prove to obtain one, and discuss a recent High Court case in which an internet café owner in a shopping centre disputed her landlord’s method of billing for electricity.

When the landlord cut her electricity and changed the locks she successfully asked the High Court for a “spoliation order” – a good practical example of why unlawful self-help is a bad option for landlords.

As a landlord in dispute with your tenant you may well be tempted to avoid the delay and cost of litigation by taking your own eviction or enforcement action.

Bad idea. No matter how good your overall case may be (or how good you may think it is), taking the law into your own hands automatically puts you in the wrong.

Let’s look at how that works, firstly the theory of it and then with reference to a practical example recently decided by the High Court.

The tenant’s right to immediate return of possession

Our law requires that you approach a court for assistance; self-help is not an option. So if you remove the tenant’s access to the leased premises without a court order, you face having to immediately restore possession to the tenant via a “spoliation order”.

The important thing is that at this stage the court has no interest in how strong or weak your actual case against the tenant is. That you can fight about in a full court action down the line. All that counts now is how you dispossessed the tenant, not whether you are the owner nor whether you have any legal right to possession.

So to succeed in obtaining a spoliation order, all the tenant has to prove is –

  1. That he/she was in “peaceful and undisturbed possession”, and
  2. That he/she was “unlawfully deprived of that possession.” The critical question here is whether or not the tenant consented – freely and genuinely – to the dispossession. If so, the dispossession was lawful. If not, it was unlawful. Thus spoliation “may take place in numerous unlawful ways. It may be unlawful because it was by force, or by threat of force, or by stealth, deceit or theft” – or just without consent.

Let’s move on to the practical example of the shopping centre tenant …

The internet café and the self-help landlord

  • An internet café business owner was locked in dispute with her landlord over its method of electricity billing.
  • The landlord’s response was firstly to cut electricity to the premises, then to change the locks.
  • After trying without success to resolve the dispute, the tenant applied for a spoliation order.
  • The landlord did not dispute that the applicant was in possession of the premises, nor that he had dispossessed her with neither consent nor court order.
  • What the landlord did argue was that the tenant’s application was not urgent, that it should have been brought in the magistrate’s court and not in the High Court, and that it was really not about spoliation but about the tenant trying to enforce her rights in terms of the lease.
  • Rejecting all these contentions, the Court held that the landlord had committed two separate acts of spoliation –
    • The first when it disconnected the electricity supply thus denying the tenant use of the premises – “a limitation of her rights as a possessor” and
    • The second when it changed the locks to the premises, thus dispossessing her entirely.
  • The end result – the landlord must pay all costs, immediately restore possession of the leased premises to the tenant, and immediately re-connect the electricity.

Landlords – the self-help option automatically puts you in the wrong. Rather go the legal route!

02 Oct 2019

Tips to Manage Debt and Master Your Money

Times are hard, and although hopefully we are now seeing the first green shoots in our economy, there has never been a better time to improve your relationship with money and the state of your finances.

Have a look at these website articles for ideas on how to make a start –

  • “No more fighting over bills! Here are 3 tips to master your money” on The Catalyst website
  • Time’s “Struggling to Repay Your Debt? The Snowball Method Could Help” here.
26 Sep 2019

DOES ACCEPTANCE OF AN OFFER TO PURCHASE HAVE TO BE COMMUNICATED TO A PURCHASER? THE LATEST CASE ON THE SUBJECT CASTS DOUBT!

The judgement in the matter of Terry and Terry v Solfafa and Others, which judgement was delivered in the Bloemfontein High Court on 29th of August 2019, has recently come across my desk.

In the matter, Mr and Mrs Terry were seeking an order compelling Ms Solfafa to transfer a property which they had bought into their name. Ms Solfafa raised three defenses to the claim.

Firstly, she argued that because Mr and Mrs Terry were married in community of property, and because only Mr Terry had signed the deed of sale, the agreement was invalid. It did not take the judge long to dismiss this argument. The Matrimonial Property Act leaves no doubt that either spouse who is married in community of property can bind the joint estate to purchase immovable property on their own. It is only when immovable property is sold (or mortgaged) that the written consent of both spouses is required.

Secondly, she argued that because the agreement was subject to the “successful sale” of the Terry’s property, and because it had not been transferred by the due date, the agreement had lapsed for want of fulfillment of this suspensive condition. Once again, the judge found against her and interpreted the term “successful sale” in this contract to mean simply the signing of a deed of sale, not the registration of transfer.

Thirdly, she argued that after signing the deed of sale, and before the acceptance of the offer had been communicated to the purchasers, she revoked her acceptance. On this point the judge found that her signature to the deed of sale alone was sufficient to bring about a binding deed of sale, despite the fact that her acceptance had not yet been communicated to the purchasers.

It was this last point that caught my interest. This is because our common law on the point is clear, and is against the learned judge. In terms of our common law, the general principle is that a contract only comes into being once acceptance of the offer has been communicated to the offeror. The reason for this is obvious. A person needs to know when they are bound by a contract. If they do not know they might do something which will prevent them from being able to perform in terms of the contract (like buy another house). Also, obligations in the contract might fall due for performance, and if a person does not know that they have obligations to perform they could easily fall into breach and become liable for damages.

There will obviously be some exceptions to this rule, for example, some deeds of sale specifically provide for communication of acceptance of the offer to be made to the estate agent. These exceptions should however only come about when the contract specifically provides for this or when circumstances clearly dictate.

In our case, the judge referred to a previous case which had decided that when an offer is made in writing, it will be easier to infer, “in the absence of any indication to the contrary”, that for the contract to arise, the acceptance required was no more than a signature.

The judge then leaped to the conclusion that Ms Solfafa’s signature to the offer to purchase was sufficient to bring about a binding deed of sale here.

While I have not read the contract in this case, and with respect to the judge, I found his reasoning to be weak. Nevertheless, it is a judgement of the High Court, and it will therefore have persuasive value in other cases on this point that might arise in the future. For this reason, I believe is important to check the wording of your deed of sale to ensure that there is no room for doubt.

We suggest that your deed of sale (or offer to purchase) should specifically provide that the contract will only come into existence once the seller’s acceptance has been communicated to the purchaser or the estate agent. This will make things clear, it will protect all of the parties, and it will ensure that there will be no dispute on the point in the future.

If you need help in amending your contract, or if you are not sure what to do, do not hesitate to contact one of our attorneys for guidance.

Miltons Matsemela Inc.
Deon Welz
September 2019

20 Sep 2019

PREFERENTIAL MARKETING AGREEMENTS BETWEEN ESTATE AGENCIES AND HOME OWNERS ASSOCIATIONS – ARE THEY LEGAL?

The legality of an agreement between a home owners association and an estate agency, conferring upon the estate agency preferential marketing rights in return for payment of a percentage of the sales value of the property, has recently been decided on by the Supreme Court of Appeal.

This decision was handed down on 16 September 2019 in the case of Atlantic Beach Home Owners Association and others v The Estate Agency Affairs Board (978/218 ZASCA 112).

In this matter, the Estate Agency Affairs Board (EAAB) had brought charges against the Atlantic Beach Home Owners Association (ABHO) and their CEO, Mr Harry White, along with a franchise of Pam Golding Properties (PGP) and their principal, Mrs Emarie Campbell, flowing from a “Property Partnership Agreement” that had been entered into between the ABHOA and PGP.

In terms of this agreement PGP were afforded special marketing privileges and marketing assistance on the Atlantic Beach Golf Estate, in return for which the ABHOA received a percentage of the sales value of any property sold.

Rival estate agencies in the area were obviously dissatisfied by this arrangement and complaints were lodged against PGP at the EAAB. Following these complaints, the EAAB instituted disciplinary procedures against PGP and their principal, and instituted criminal charges against the ABHOA and their CEO. These charges were premised on the assumption that the ABHOA was operating as an estate agency without a fidelity fund certificate, and that PGP were complicit.

In their defence, the ABHOA and PGP brought an application in the Cape Town High Court in which they asked the court:

  1. to declare that the ABHOA and their CEO were not estate agents as defined in the Estate Agency Affairs Act (and therefore did not need fidelity fund certificates); and
  2. to set aside the decision by the EAAB to institute disciplinary steps against the parties.

The ABHOA and PGP lost the case in the Cape Town High Court on a technical point, but they took the decision on appeal.

At the appeal hearing, the EAAB argued that because the Property Partnership Agreement placed an obligation on the ABHOA to carry out joint marketing and joint advertising initiatives to generate leads for PGP, and because they received a percentage of the purchase price from the sale as payment, the ABHOA fell within the definition of an estate agent and therefore required a fidelity fund certificate.

The court however did not agree. The court found that a person who merely carries out the functions of an estate agent does not automatically become an estate agent for the purposes of the Act unless they also hold themselves out or advertise, “for the acquisition of gain”, that they are doing this work. To put it another way, the ABHOA would only have fallen within the definition of an estate agent if they had, with the intention to make a profit, made it public that they were carrying out the work of an estate agent.

The court interpreted the ABHOA‘s obligations in terms of the Property Partnership Agreement to be nothing more than the provision of marketing benefits and it was in return for these marketing benefits that the ABHOA was to be paid.

The judge therefore upheld the appeal and set aside all the disciplinary charges that the EAAB had initiated against the ABHOA and PGP.

On the basis of this judgement, it would appear that the way is now clear for individual estate agencies to enter into these types of property partnership agreements with home owners’ associations or body corporates.

But please beware, arrangements of this nature may not be exclusive, i.e. they may not deprive other agencies of the right to sell property on the estate. This is because such an exclusive contract would fall foul of our competitions law.

Deon Welz
Miltons Matsemela Inc
September 2019

06 Sep 2019

A September to Remember!

We as South Africans sport a very rich cultural history that is rooted in the celebration of who we are, where we came from and more importantly, where we are going. Heritage month has arrived, and we are urged as a nation to reflect on our history that molded our presence, and which will pave the way for our future.

The South African Constitution supports and protects our country, our heritage and our culture. Our Constitution is regarded as one of the most progressive and fairest pieces of legislation in the world. Our legal system protects us and regulates the mechanisms that allow us to live in a free and fair environment. We are fortunate to be living in a country where our different cultures are celebrated and encouraged.

South Africa is in the middle of economic uncertainty and we are being judged by the world and exposed to opinions and accusations that influence our daily lives. Whispers are heard around every corner about people wanting to liberate their investments and run for the hills or hide money under mattresses. The current decreasing housing market is a big factor in the economy as property owners are focusing on the fact that their investments are not achieving ideal prices. If we look at this from a different angle, as perspective is one the most valuable traits a person can possess, we have arrived at a market more favourable for buyers. This is where first time buyers can get a foot in the door with a decreased prime interest rate and reduced sale prices. We are also experiencing a positive outcome from financial institutions when people are applying for bonds and other funding. The fact that our market is experiencing a dip creates opportunity for new investors and related service providers to inject our economy with fresh ideas. We have access to resources and we are players in a free market system, we need to stay true to our heritage and seek opportunities to rise above the hurdles.

It is important to note that South Africans are the most resilient people who have ever walked this earth and when a nation as powerful as ours is able to give way to differences and act together, there will be nothing that can stop us.

On Heritage Day the entire country will light the fires of hope and prosperity in celebration of OUR day and we should then take a moment and appreciate where we are, where we came from and where we are going. Let’s make this September one to remember.

CORNELIUS BOTHA
Attorney
September 2019

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