Author: zerophoid

South Africans employ an estimated 900,000 domestic workers. They assist us with a range of tasks that keep our homes running smoothly – from cleaning and gardening to cooking and childcare, their contributions are invaluable. However, as an employer, it is vital that you recognise and fulfill your legal obligations in order to establish a fair and lawful working relationship.

Compliance with these legal requirements has become increasingly important as law enforcement authorities become more and more vigilant in ensuring adherence, so without further ado let’s delve into the details of what the law expects from you.

Firstly, what do we mean by “domestic worker”?

In the context of this article, domestic workers refer to individuals who work in your home, including gardeners, cleaners, cooks, nannies, caregivers (to children, the aged, the sick, the frail or the disabled), au pairs, chauffeurs and the like. Excluded are farm workers and those working less than 24 hours a month for you.

5 key requirements

1. Employment Contract: It is essential to sign a written employment contract with your domestic worker. This contract should specify important details, including full name and ID number, remuneration, working hours, overtime, leave (annual, sick, maternity, compassionate, family responsibility), and job description (list roles and responsibilities). Having a clearly defined contract protects both of you and ensures a fair working relationship to your mutual benefit.
2. Minimum Wage: The current National Minimum Wage (NMW) for each “ordinary hour worked” is R25-42. Assuming a work month of 21 days x 8 hours per day, R25-42 per hour equates to R4,270-56 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).
3. Pay Slips: Every month, you must provide your domestic worker with a written pay slip. The pay slip should include your and your employee’s details, the ordinary and overtime hours worked during the payment period, the applicable rate of remuneration, and any deductions made by you. This document ensures transparency and accountability in the payment process.
4. UIF Registration: You must register your domestic worker for UIF (Unemployment Insurance Fund) and make monthly contributions. This will provide short-term relief to your employee during periods of unemployment, maternity leave, or illness. Both of you must contribute 1% of wages each month (i.e., 2% in total). Failure to comply is not only unfair to your employee, but it also exposes you to penalties and other legal consequences.
5. COIDA Registration: Under COIDA (the Compensation for Occupational Injuries and Diseases Act), you must register your domestic worker with the Compensation Commissioner to ensure that your worker (or dependants) is eligible for compensation in case of injuries, disabilities, or illnesses sustained while on duty.

It is crucial to understand that non-compliance with these obligations can lead to severe consequences for you, with the risk of legal disputes, referrals to the CCMA (Commission for Conciliation, Mediation and Arbitration), Labour Court fights, and so on.

Familiarise yourself with your obligations, seek professional guidance if needed (dismissals and retrenchments are particular minefields here!) and prioritise the well-being of your domestic workers to maintain a positive and lawful working relationship.

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

More and more couples are opting to live together as permanent life partners rather than enter into a formal marriage. The risk for such couples is that whilst our law is steadily (if slowly and cautiously) extending many of the protections of formal marriage to unmarried life partners, that process is not by any means complete yet.

A recent High Court decision, refusing a life partner’s claim for interim maintenance after her relationship broke down, illustrates.

A “permanent romantic relationship” and a failed maintenance claim

• An opposite-sex couple had lived together in a “romantic” relationship for 8 or 9 years, having three young children and splitting when one partner left the common home.
• That partner then sued her ex-partner for (amongst other things) personal maintenance for herself for ten years or until her “death or remarriage”. She based that claim on her request for a declaration that she and her partner had lived as “partners in a permanent opposite-sex life-partnership in which the partners had undertaken reciprocal duties of support”. That main action is being defended by the ex-partner and is yet to come to trial.
• In the meantime, having successfully obtained interim maintenance orders for her children, she then asked the High Court to likewise order interim maintenance for herself as well. She asked for R56,000 per month plus payment of medical, motor and other expenses, together with a R1m initial contribution to costs.
• The Court dismissed this interim application, and whilst its analysis of our current law on the subject, with all the constitutional law ramifications, will be of great use and interest to lawyers, the practical result is what life partners should take note of.

What you must prove to get a maintenance order

Holding that “a ‘permanent romantic relationship’ is not synonymous with a permanent life partnership wherein the parties undertook reciprocal duties of support to one another within the context of a familial setting”, the Court found that the applicant “must first prove facts establishing that the duty of support existed, and that it existed in a familial setting.” (Emphasis added)

She could prove all that, said the Court, in the pending court case. For the moment she must live on her own means, without interim maintenance, until her main action comes to trial.

Practically, if you find yourself in a similar situation you have four choices if you want to claim personal maintenance for yourself (note that maintenance for children is an entirely separate issue, not subject to these limitations) –

1. As regards interim maintenance, you can hope that a court will assist you despite the outcome in this case, the Court here stating that “In reaching these conclusions we make it clear that they pertain only to the particular case presented to us by the applicant. Our conclusions are most certainly not intended to be of some broader implication or consequence. It thus of course remains open to anyone to approach court for declaratory relief of the nature which the applicant has sought in this matter and it is hoped that, should that occur, this judgment may provide assistance as to the manner in which such an approach should be made.”; or
2. You can try to prove at the full trial that your relationship was more than a “permanent romantic relationship” and was in fact a permanent life partnership with an undertaking of mutual support; or
3. You can hope for a change in the law creating an automatic duty of support between you. New legislation on the matter has been pending for many years but appears to be currently stalled. In addition, if this particular case proceeds to trial it may be that something further will emerge from that; or
4. Clearly the safest solution – you can put the matter beyond all doubt by signing a full “cohabitation agreement” as soon as your relationship becomes a permanent one.

What should be in your cohabitation agreement?

Although everyone’s own situation and needs will be unique, make sure that your cohabitation agreement (also sometimes called a “domestic partnership agreement”) sets out clearly your respective legal rights and financial arrangements both during your relationship and in the event of separation.

Cover questions such as –

• How will your various assets be divided?
• Do you undertake a reciprocal duty of support and on separation will each or both of you be entitled to personal maintenance and other financial support?
• What provisions are made for your children’s support and maintenance?
• Will there be any financial adjustment between you? What happens for example if only one of you works? Or if you paid for an extension to your life partner’s house or have been paying the bond? Or if one of you brought more into the relationship than the other?
• Who will take over ongoing liabilities and contracts such as leases, bonds, medical and life policies, monthly accounts and so on?
• What else that will need to be regulated in your particular circumstances?

Also make wills!

Supplement your cohabitation agreement with a valid will (“Last Will and Testament”) or perhaps a joint will. That’s the document that will count when you die and it’s the only safe way of ensuring that your last wishes are carried out, and that the loved ones you leave behind are properly looked after once you’re gone. Your cohabitation agreement and your wills are separate and essential documents, so have your lawyer draw them all for you at the same time.

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

“MTl’s business clearly amounted to an unlawful ponzi-scheme, i.e. a fraudulent investing scam promising high rates of return to investors and generating returns for earlier investors with investments taken from later investors.” (Extract from judgment below)

In times of economic turmoil, the promise of “easy money” can be incredibly enticing. Unfortunately, this allure often leads people into the clutches of fraudsters who operate ponzi and pyramid schemes.

But why are these scams so successful at fooling even the most astute investors? The answer lies in several factors. First, the promise of quick and substantial profits taps into our desire for financial security and independence. Second, scammers often prey on our emotions and exploit our fear of missing out on lucrative opportunities. Third, they employ persuasive tactics, such as using testimonials and social proof, to gain our trust.

The latest High Court judgment in the MTI (Mirror Trading International) liquidation saga highlights yet again the dangers for investors who get sucked into these schemes.

“An illegal and unlawful scheme”

• MTI was founded in 2019, promising high returns to investors (members of “My MTI Club”), pooling bitcoin for trading “on the global cryptocurrency market”. In 2020, referral bonuses for introducing new members were implemented.
• This latest judgment is part of an extensive saga of litigation involving liquidators, investors/members, creditors and directors (who still steadfastly deny any wrongdoing). In this matter the liquidators applied to the High Court for a series of declarations aimed at facilitating their claims against investors and others.
• The liquidators succeeded in obtaining declarations that –
  • MTI’s business model is “an illegal and unlawful scheme”, and
  • “All agreements concluded between MTI and its investors in respect of thetrading/management/investment of bitcoin for the purported benefit of the investors, are declared unlawful and void ab initio [void from the beginning]”.
• They failed in their attempts to have MTI declared “factually insolvent” (i.e., its liabilities exceeded its assets) from 2019, nor did they obtain declarations that payments made by MTI to investors/members, commission earners and others amounted to “dispositions” recoverable by the liquidators. Both would have made it easier for them to recover from anyone who ever received any form of payout from MTI, but that is unlikely to deter the liquidators from pursuing these claims.

In any event both sides will presumably appeal this latest judgment, and for now at least it seems that investors/members, whether “winners” (those who got payouts exceeding their investments) or “losers” (presumably the vast majority of investors/members as is invariably the case with ponzi schemes), must remain concerned that not only will their claims turn out to be valueless, they may also have to pay back into the liquidation everything they were ever paid out if the declarations of illegality and voidness are confirmed on appeal

Even if their claims are eventually allowed and proved, they must wonder what if anything they’ll be awarded in light of a R931m preferent claim proved by SARS.

The red flags to share with friends, family, colleagues and employees

The bottom line is that, when a ponzi or pyramid scheme inevitably collapses, investors risk losing everything.

To protect ourselves and others, it’s essential to be aware of the warning signs. Keep in mind at all times that “if it looks too good to be true, it probably is” and be alert to key “red flags” such as guarantees of high returns with little or no risk, complex investing and compensation structures, and an emphasis on recruitment rather than product sales.

Sharing this information with friends, family, and colleagues is crucial in preventing more people from falling victim to these schemes. Employers, in particular, should educate their staff about the dangers and provide resources to help them avoid becoming victims.

Stay informed, be vigilant, and protect yourself, your employees and others from the siren call of “easy money.”

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

On Tuesday night President Cyril Ramaphosa told South Africa that the government “will not spare any effort, or any expense, in our determination to support our people and protect them from harm”. The economic support package that he announced of half a trillion rand was evidence of this.

The substantial stimulus comes in addition to the measures that government has already implemented in the past few weeks to support the economy, and will provide relief to millions of people, and hundreds of thousands of businesses.

Essentially, the package is divided into three parts:

• A R200 billion bank guaranteed lending programme for small, medium and micro enterprises (SMMEs).
• Additional tax relief for companies.
• A fiscal spending programme that includes money for health, social grants, food provision, job creation and business support.

Guaranteed loans

The R200 billion lending scheme will be implemented by the government guaranteeing loans made by the country’s major banks. This will allow these banks to offer credit at lower rates, and to companies that may not usually have qualified for it.

This will provide a lifeline to businesses that are struggling to meet operational costs such as salaries, rent and paying suppliers. The exact details of how the scheme will work should be clarified in the coming days, but the President noted that, initially, it will be targeted at companies with turnovers of under R300 million per year.

“It is expected that the scheme will support over 700 000 firms and more than three million employees through this difficult period,” Ramaphosa said. “A number of the banks are ready to roll out the product before the end of the month.”

Additional business support

The President also announced a range of tax relief measures to help businesses in the coming months. These include:

• A four-month holiday during which companies will not have to pay their skills development levy contributions.
• A three-month delay in the first filing and payment of carbon tax.
• More emphasis on fast-tracking VAT refunds.

In addition, Ramaphosa expanded the relief available by allowing companies to defer some of their PAYE payments to the South African Revenue Service (SARS). Previously, businesses with turnover of less than R50 million were allowed to defer 20% of their PAYE due to SARS until after September. This threshold was raised to include businesses with turnover of under R100 million, while the portion of PAYE that may be deferred was also lifted to 35%.

Any business with a turnover of more than R100 million will also be able to apply to SARS to ask to be allowed to make a similar deferral. These will be assessed on a case-by-case basis.

Support where it’s needed

Ramaphosa also announced additional spending in key areas necessary for addressing the country’s health crisis. These include:

• An additional R20 billion towards health efforts.
• Assistance of R20 billion to municipalities for the provision of water, sanitation and food and shelter for homeless people.

A significant part of the additional spending that the President announced will also go towards supporting South Africans who are most at risk from a sharply weaker economy. This will be done primarily through increasing social grants and feeding schemes.

In addition, Ramaphosa noted that R100 billion will be set aside for the protection and creation of jobs. There was, however, little clarity on what this would entail or how it would be implemented. The President mentioned that R40 billion would be provided for income support payments for workers whose employers are unable to pay wages.

Unanswered questions

Apart from the details that still need to be filled in regarding the above measures, the government will also need to clarify how it will fund this stimulus. President Ramaphosa did mention that the country is seeking assistance from a number of international finance institutions, including the World Bank, IMF, the BRICS New Development Bank and the African Development Bank.

The amounts and conditions attached to any support received from these institutions will need to be clarified by National Treasury in the coming weeks.

The Minister of Finance, Tito Mboweni, should also present an emergency health budget shortly. This will detail how R130 billion of the country’s spending will be ‘re-prioritised’, which means that money initially allocated in the budget announced in February will be shifted to pay for this package.

Critically, the President also mentioned the imperative of speeding up structural reforms. This will be a vital part of ensuring that businesses have a better operating environment after the crisis, but the detail and the implementation on this are still lacking.

Overall, the President’s announcement sets a positive tone, but it now requires getting things done. As Prof. Raymond Parsons, economist at North-West University’s Business School, notes:

“Post-Covid-19 South Africa needs to eventually break out of its ‘low growth trap’, without falling into a ‘debt trap’. Hence both short term support measures and longer term inclusive growth policies must point in the same direction if South Africa to build a ‘new economy’ and look ahead to renewed prosperity.”

Introduction

During President Cyril Ramaphosa’s address to the Nation on 9 April 2020 he briefly touched on the concerns of many South Africans; the issue of Force Majeure. The implementation of the national ‘Lockdown’, and the extension thereof up and until 4 May 2020, has rendered parties unable to perform the contractual obligations they have undertaken. Many individuals and businesses are unaware of the recourse available should they find themselves in the unfortunate position of being unable to perform, alternatively uphold their respective obligations in terms of legally binding contracts.

The Coronavirus (COVID – 19) global Pandemic has had far reaching effects on all aspects of commerce in both the public and private spheres of our economy. This article will elaborate on the national impact of COVID-19 and the resultant State-declared lockdown on the contractual rights and obligations of parties in contractual relationships under South African law as well as establish whether Force Majeure provides a right of recourse to contracting parties. Fortunately, to mitigate the damage and impact of natural disasters on the contractual obligations of parties to an agreement, our law makes provision for a Force Majeure (vis major) event such as COVID-19.

What is a “Force Majeure”?

Force Majeure or vis major (Latin), when translated directly into English, means “an act of God” and an “irresistible force” that is both unforeseeable and beyond the control of parties to a contractual agreement. The realisation of such an unforeseeable event must render performance on behalf of one or both parties to a contract, objectively impossible. The test is an objective one that asks whether the event or disaster was both foreseeable and avoidable by a reasonable person. To activate a Force Majeure clause in South African law, the aforesaid event must fulfil the following conditions (Glencore Grain Africa (Pty) Ltd v Du Plessis NO & others [2007] JOL 21043 (O)):

1. Performance must be objectively as opposed to subjectively impossible.
2. The impossibility must be absolute as opposed to probable.
3. The impossibility must be absolute as opposed to relative.
4. The impossibility must be unavoidable by a reasonable person.
5. The impossibility must not be attributed to the fault of either party.

In our common law, a party’s inability to perform may be excused by the courts where performance becomes physically impossible, and such impossibility was neither contemplated nor foreseen by the parties at the time of concluding a legally binding contract. Where a contract does not expressly make provision for a Force Majeure event, our common law principle of “Supervening Impossibility” becomes applicable and may discharge a party from liability and absolve them from upholding their contractual duties to perform (Peters, Flamman & Co v Kokstad Municipality 1919 AD 427). A party who wishes to rely on the principle of supervening impossibility, will be required to prove that as a result of the event, it is objectively impossible to tender performance in the circumstances, that the event was objectively unforeseen and further, that the consequence of being unable to perform was unavoidable and by no fault of either party.

However, where provision is made for a Force Majeure clause in a contract, the terms and consequences stipulated in the aforesaid clause will nullify the application of the common law principle of supervening impossibility (Airports Company of SA Limited v BP Southern Africa (Pty) Limited and others [2015] JOL 34127 (GJ)). The implication of this is that an express Force Majeure clause will take precedence over the common law and such clause will take effect from midnight Thursday 26 March 2020, he date and time of the implementation of the national lockdown in South Africa. Should a contract contain a Force Majeure clause and in order for a party who is unable to perform in terms of the contract to invoke the clause, they will have to provide evidence that the COVID-19 pandemic alternatively the State imposed lockdown constitutes a Force Majeure event and therefore falls within the ambit of the wording of such a clause. In this regard any remedy stipulated in the contract in respect of the Force Majeure event, will become applicable.

Commercial Rental Agreements – What now?

Generally, a Force Majeure clause extinguishes contractual obligations between parties. Whilst our President appealed to large businesses by urging them not to resort to Force Majeure and to uphold their rental commitments, as well as to continue paying their suppliers; commercial tenants and parties to lease, sale and employment contracts may not have a choice in the matter due to the financial impact of COVID-19. A consequence of companies resorting to Force Majeure, is that it will have a domino effect on all businesses in South Africa, who may follow the same recourse.

What has become increasingly prevalent is the amount of landlords for large retail stores, shopping malls and offices parks who are struggling to receive payment from their commercial tenants. Under normal circumstances, and as a general legal principle in our law a business’ failure to pay rental in terms of a lease agreement, constitutes a breach of that agreement. This breach entitles a landlord to cancel the agreement, claim damages as well as any arrear rental. However, in these unprecedented times where performance of contractual obligations is impossible due to lockdown regulations, a tenant may find themselves being obligated to pay the full amount of rental for a premises they are physically unable to access. In such a scenario, the aggrieved tenant may find recourse by invoking a Force Majeure clause, should one be incorporated in the contract in question.

Conclusion

Where a company is unsure of the implications of the National Lockdown on the contractual obligations they have undertaken, the contract in question should be assessed to determine whether a Force Majeure clause has in fact been included in the terms of the contract. Where a clause has been included that exonerates performance as a result of a Force Majeure event, the non-performing party will be required to prove that all the conditions as stipulated herein above have been met in order to be absolved from ensuing liability as a result of non-performance. However, where a Force Majeure clause has not been included and was neither anticipated nor contemplated in the minds of parties at the time of contracting, the common law legal principle of ‘supervening impossibility” will become applicable.

Written by: Aalia Amra
Candidate Attorney at Nicole Ross Attorneys

Please contact Nicole Ross Attorneys for all your COVID-19 related questions.

As a result of COVID 19 the Minister has set up a COVID 19 TERS relief fund, as highlighted below, which is a separate fund linked to UIF and which every employer is obligated to register for. I set out the salient points below:

The Covid-19 TERS Gazette

Thembelani Waltermade Nxesi, the Minister of Employment and Labour has issued the Covid-19 TERS Gazette which purposes are as follows:

To make provision for:

• Payment of benefits to the Contributors who have lost income due to Covid-19 pandemic;
• Minimize economic impact of loss of employment because of the Covid-19 pandemic;
• Avoid contact and contain the spread of Covid-19 during the process of application for benefit;
• Establish the Temporary Employee / Employer Relief Scheme and set out the application process for benefits of the Covid-19 pandemic and to alleviate economic impact of Covid-19.

The Covid-19 TERS Gazette states that should an Employer as a direct result of the Covid-19 pandemic close its operations for a 3 (three) month or lesser period and suffer financial distress, the Employer shall qualify for a Covid-19 Temporary Relief Benefit and the benefit shall be de- linked from the Unemployment Insurance Fund’s normal benefits. The benefits will only pay for the cost of salary for the Employees during the temporary closure of the business operations and the salary benefits will be capped to a maximum amount of R17 712, 00 per month, per Employee and an Employee will be paid in terms of the income replacement rate sliding scale (38 % -60 %) as provided for in the Unemployment Insurance Fund Act 63 of 2001. Should an Employee’s income determined in terms of the income replacement sliding scale fall below the minimum wage of the sector concerned, the Employee will be paid a replacement income equal to minimum wage of the sector concerned.

Further to the above, to qualify for the TERS benefit the Employer must be registered with the Unemployment Insurance Fund and must comply with the online application procedure as set out in the Department’s media statement.

We encourage Employers to remain compliant with labour laws and to take heed of the plea from the Department of Employment and Labour to compassionately engage with Employees in attempt to find reasonable solutions to avoid retrenchment and short time work implementation. If you are an Employer in financial distress due to COVID-19 we can assist you with your TERS application, alternatively if your application is declined we can assist you with cost effective methods to assist your business during this time.

Their website is updated daily, and publishes calls for action or assistance on important topics, such as:

• Standard Operating Procedure (SOP) under Rebate Item 412.11 for Business importing Critical Supplies during the National State of Disaster.
• Standard Operating Procedure (SOP) for Business to request an update of critical supplies under COVID-19 project as managed on HS Supplies List under ITAC and SARS.
• Companies requested to divert stocks of Personal Protective Equipment (PPE).
• Urgent call for businesses to divert PPE inventories to national healthcare sector.
• Business for South Africa, Covid-19: LRN Escalation Procedure.
• Payment of employees during the COVID-19 lockdown.
• Solidarity fund update.
• Statement on lock down regulations.
• Update: COVID-19 testing.
• South African business collaborates with government to reduce COVID-19 risks and economic impacts.

We have also included the following documents to keep you updated.

• Corona Virus Easy Aid UIF.
• Notice of Compensation for Occupationally Acquired Corona Virus under COIDA Amended Act.
• Guidelines for the Workplace.
• Compensation For Occupational Injuries And Diseases – Period of Returns for 2020.
• Compensation For Occupational Injuries And Diseases Increases.

Contact Nicole Ross Attorneys for advice regarding any Labour Law related issues.

“Never let a good crisis go to waste” (Winston Churchill)

The COVID-19 coronavirus crisis will, like all crises, eventually give way to economic and societal recovery.

Even before that inevitable upturn actually sets in, entrepreneurs should remember that times of great risk and challenge are also times of great opportunity. So get your team together now and brainstorm what new needs and new niches you can fill. Witness for example the “remote destination” businesses like game lodges now offering safe and luxurious havens for those wanting to self-isolate and to practice social distancing far from the city hotspots. That’s a win-win for everyone – businesses, their employees, their clients, and their suppliers.

And when a sustained recovery does make its welcome appearance, make sure that you are way ahead of the pack by using this current time of fear and negativity to maximise your planning. What will the recovery look like? How will you take advantage of it? What staff and resources will you need?

Get off to a good start with “Growth opportunities for small business in SONA and the Budget” on the Catalyst Magazine website which highlights some of the many opportunities still open to businesses big and small –

• The Infrastructure Fund
• The Tourism Equity Fund
• The African Continental Free Trade Area
• Incentive Programmes For Small Businesses.

“In our law cohabitation does not have special legal consequences. Generally the proprietary consequences and rights flowing from a marriage are not available to unmarried couples, regardless of the length of their cohabitation” (extract from judgment below)

If you live as a couple, avoid the trap of believing the myth of the “common law marriage”. It’s a very persistent myth, possibly because some other countries do indeed give formal recognition to certain forms of life partnership.

But not in South Africa – there is no such thing in our law as a “common law marriage”. No matter how long you have lived together, if you break up or when one of you dies, neither of you automatically has any of the rights and protections afforded to a couple in a marriage or civil union.

Apart from the personal consequences the financial downsides can be huge, and our courts are all too often faced with sad and bitter disputes which end with one of the partners destitute and homeless after decades of cohabitation.

A recent High Court case highlights the financial dangers…

22 years on, a couple splits

• For most of 22 years, with only a short early separation, a man and woman “in a romantic relationship” lived as a couple, in a household complete with the woman’s daughter from a previous relationship.
• They had been jointly involved to one degree or another in a series of business ventures including vegetable farming (on a farm purchased in the man’s name), commercial blasting, a bakery and a packaging business, and what was at stake in the High Court was whether the woman could prove her claim to a 50% share of the resultant assets.
• The facts were bitterly disputed, with the man adamant that the relationship had been nothing more than co-habitation as lovers. But eventually the Court concluded, on the basis of the facts that it found proved, that “the parties intended to pool their resources for the benefit of a joint estate” and that the woman had accordingly proved the existence of a “universal partnership”.
• Not however to the 50/50 extent she claimed, and the end result is that at age of 47 and after 22 years she leaves the relationship with only 30% of the net assets. Hard though that may seem, she could easily have been left with nothing, as we shall see below when we look at what our law says about such relationships.

The difficulty of proving a “universal partnership”

The problem in such a case is that you have to prove a lot more than just cohabitation.

You also need to prove the existence of a “universal partnership” and that, as many cases in the past have illustrated, is not easily achieved, not least because the onus is on you to prove your case. You will need to prove all of the following –

1. Each of the parties brought something into the partnership, or bound themselves to bring something into it, whether it be money or labour skills;
2. The business had been carried on for the joint benefit of both parties;
3. The object was to make a profit; and
4. The partnership contract was legitimate.

If, as is common in this sort of situation, you rely on a “tacit” agreement (an unexpressed agreement inferred from your actions as a couple), you have to go further and prove that –

5. The other person was fully aware of the circumstances connected to the transaction;
6. The act relied upon was unequivocal; and
7. The tacit contract does not extend beyond what the parties contemplated.

Again, not easily proved, as “A tacit contract will be interpreted strictly and not extensively, since a contract must be interpreted in favour of the person on whom it is sought to place an obligation.”

The good news – there’s a simple solution…

We have talked above only about the financial consequences of life partnerships which are unregulated by agreement. But formal marriage also provides a range of other legal benefits and protections (such as rights of inheritance and support and other personal aspects of your relationship) which are not automatically available to you.

Fortunately you can avoid all the risk and uncertainty of an unregulated relationship with a quick and simple solution – a formal cohabitation/life partnership agreement.

Just be sure to get it in place early on. Take professional advice (jointly – this is to protect you both!) as soon as you commit to a long-term relationship.

…the default position is that an executive director or a senior employee may not carry on business activities which fall within the scope of his company’s business during the time when he serves as director or works as employee. The default position however changes on resignation.” (Extract from judgment below)

What happens if relations between you and your fellow company directors sour to the extent that a director leaves? Can he or she immediately open up a new business in direct competition to you?

A recent High Court decision both addresses that knotty question, and highlights a quick and easy solution.

Fishing for business: “Big Catch” claims R24m

• Big Catch Fishing Tackle (Pty) Ltd markets and hosts fishing and fly fishing tours in both local and international waters.
• The company’s two directors and shareholders fell out, culminating in one director accusing the other of serious breaches of his duties as director.
• Although hotly disputing any wrongdoing he resigned his directorship (under, he says, duress and coercion). He remains a shareholder.
• Big Catch is now suing the ex-director for some R24m in “past” and “future” damages, relying on disputed claims of improper or unlawful conduct which include the channeling away of business from Big Catch, misappropriating stock, diverting payment of commissions and acting recklessly and without authority. Whether or not these allegations will be proved eventually will only be determined when the main case finally goes to trial.
• What is of interest to us at this stage is Big Catch’s interim application to the High Court to interdict the ex-director and his new business (Upstream Fly Fishing) from competing with Big Catch.

Ex-director off the hook

• Directors have a range of fiduciary duties towards their companies. They must at all times act in good faith and in the best interests of the company. They must avoid conflicts of interest. They cannot compete with the company nor make secret profits. “The default position”, as the Court in this case put it, “is that an executive director or a senior employee may not carry on business activities which fall within the scope of his company’s business during the time when he serves as director or works as employee.”
• ig Catch had to convince the Court that those duties survive resignation unchanged. But, held the Court, that “default position” changes on resignation and “the director or employee does not commit a breach of his fiduciary duty merely because he takes steps to ensure that, on ceasing to be a director or employee, he can continue to make a living even by setting up a business in competition with his former company or by joining a competitor and then pursuing opportunities similar in nature to those targeted by his former company.”
• Although a director’s fiduciary duty does indeed survive departure, “the content of that duty does not remain the same … The duty will only be breached after resignation if it involves the use of confidential information or violates an interest of the company that is worthy of protection in some other way” (emphasis supplied).
• In other words, a company cannot simply say “our ex-director is breaching an ongoing fiduciary duty towards us”, it must go further and actively prove a right to protection. Big Catch in this case being unable to make out its case, the Court dismissed the application with costs and the ex-director is off the hook, at least for now.

Big Catch’s big mistake – no restraints of trade

Round 1 therefore to the ex-director; a victory made easier by Big Catch’s failure to put restraints of trade in place for all its directors and senior employees.

As the Court put it “…in the absence of a restraint of trade, the onus shifts to the director’s former company to justify the interdict both in law and in fact” and “…a company that wishes to prevent a director or employee from competing with it after resignation should either do so by way of imposing a reasonable restraint of trade or it will have to persuade a Court that it has an interest worthy of protection, such as confidential information, client lists or connections, that justifies an interdict.”

Bottom line – make protecting your company easy with restraints of trade!

“The primary remedy therefore is an order for removal of the structure” (extract from the judgment below)

What can you do if your neighbour has started (or finished) building without the necessary municipal approvals?

In a nutshell, our courts will very probably assist you with a demolition order, as a recent High Court decision around a long-running property encroachment illustrates.

The 16 year saga of an encroaching garage

• A couple, owners of a property next to a church Mission, expanded their house in 2004 by building a brick garage.
• They thought they were building on their own land, having in 1998 built a wall along what they genuinely – but mistakenly – thought was the correct boundary between the two properties.
• As we shall see below, their fatal mistake was building their garage without municipal plans or approval.
• In fact the garage was inadvertently built on Mission land, but the Mission was having none of that –
  • First in 2012 it asked the couple – and another neighbour in the same position – to demolish.
  • When the couple refused (the other neighbour complied) the Mission in 2014 laid criminal charges against them for failing to comply with the relevant Act (the National Building Regulations and Building Standards Act). These charges, for purely technical reasons, failed to stick.
  • On pressed the Mission, this time turning to the local municipality for help in 2016. The municipality duly issued a formal Notice requiring demolition of the garage as it had been erected illegally without plans or permission. The couple simply refused to either receive the Notice or to remove the encroaching garage.
• Which brings us to the High Court in 2017, with the Mission applying for a demolition order and the couple asking the Court to rather order the Mission to transfer the relevant piece of its land to them against payment of reasonable compensation.

What about alternatives to demolition?

A court deciding a demolition application has “discretion to reach an equitable and reasonable solution in terms of the common law by ordering payment or compensation rather than removal in cases where the cost of removal would be disproportionate to the benefit derived from the removal”.

In this respect said the Court (emphasis supplied) “the encroaching owner’s own conduct plays an important role” and “while one is acutely aware of the financial implications, inconvenience and disruption which the partial demolition will cause the [couple], the upholding of the doctrine of legality, a fundamental component of the rule of law, must inevitably trump such personal considerations.”

Commenting on the couple’s “obstructive behaviour” in this case, and finding that they “are indeed in legal and administrative breach of the law … to allow them to keep the structures where they are, would be to perpetuate the illegality”, the Court ordered the couple to demolish their illegal garage within 90 days.

So if you are the neighbour planning to build…

Whilst the case in question deals with encroachment on another’s land, our courts have applied exactly the same principles to a wide variety of “neighbour dispute” cases – sea view obstructions, failure to observe building lines and the like.

So don’t even think of starting to build without having all necessary municipal plan approvals and permissions in place!

And if you are the objecting neighbour…

The couple in this case put up an argument that the Mission couldn’t demand demolition as it had “acquiesced in their occupation of the relevant land because it did not object when they built the wall on the church ground in 1998, and did not complain when they built the ‘offending’ garage in 2004 or 2005.”

Factually the Mission’s long history of actively objecting to the unlawful construction put an end to that argument, but the longer you delay in objecting and taking action the greater your risk of facing a similar argument. Take immediate action against any neighbour building unlawfully.