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July 18, 2018

Contracts in restraint of trade – the law

Contracts in restraint of trade – the law

An agreement in restraint of trade is prima facie enforceable. The onus rests on the party seeking to avoid a restraint clause to prove that it is contrary to public policy.

The approach to restraints of trade is neatly summarised by Malan AJA in Reddy v Siemens Telecommunication, as follows:

·         A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint.

o   The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

o   The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or their professions.

·         Both considerations reflect not only common-law but also constitutional values. Contractual autonomy is part of freedom informing the constitutional value of dignity, and it is by entering into contracts that an individual takes part in economic life. In this sense freedom to contract is an integral part of the fundamental right referred to in s 22 of the Constitution that guarantees ‘[e]very citizen … the right to choose their trade, occupation or profession freely’ reflecting the closeness of the relationship between the freedom to choose a vocation and the nature of a society based on human dignity as contemplated by the Constitution.

·         In applying these two principal considerations the particular interests must be examined.

o   A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. Such a restraint is not in the public interest.

o   Moreover, a restraint which is reasonable as between the parties may for some other reason be contrary to the public interest. In Basson v Chilwan and others Nienaber JA identified four questions that should be asked when considering the reasonableness of a restraint:

§  Does the one party have an interest that deserves protection after termination of the agreement?

§  If so, is that interest threatened by the other party?

§  In that case, does such interest weigh qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive?

§  Is there an aspect of public policy having nothing to do with the relationship between the parties that requires that the restraint be maintained or rejected? Where the interest of the party sought to be restrained weighs more than the interest to be protected the restraint is unreasonable and consequently unenforceable. The enquiry which is undertaken at the time of enforcement covers a wide field and includes the nature, extent and duration of the restraint and factors peculiar to the parties and their respective bargaining powers and interests.

July 09, 2018

Can I list a debtor as a bad payer with the credit bureaus?

A credit granting business client can list a business or individual, who has defaulted on payment in accordance with the National Credit Act (NCA) regulations, directly onto the several Credit Bureau Default Listing databases.

This listing will immediately appear on the person's Consumer Credit Report as adverse information under Default listings. In the case of a business, the Default listing will immediately appear on the business's Business Credit Report under Default listings.
Default listings will negatively influence the person or business's credit rating and will reflect on their credit report for a minimum of two years.
These are the steps to follow:
·         In terms of section 72 of the NCA, a creditor is obliged to give the consumer 20 business days’ notice of its intention to list any default information on a consumer’s credit report. The written notice may be contained in a written notice that is sent via registered post or in an e-mail. The onus would be on the creditor to prove that any such written notice had been duly given to the consumer. It is important to note that the aforesaid applies to “default” (aka adverse information as defined in Regulation 17 – such as a failure to pay) and would not apply to information listed under the consumer’s payment profile as such information is classified as account information which is essentially information that relates to how a consumer pays his or her account on a monthly basis.

During that 20 days period, the consumer can challenge the accuracy of the information proposed to be reported to a credit bureau or to the National Credit Register.
A creditor can list judgment information on a consumer’s credit report without being obliged to give the consumer written notice of its intention to do so.

June 26, 2018

Are you confused by or unhappy with your family trust?

Are you someone:
  •  who has had an estate plan done, but who knows or suspects that somehow it is incomplete or lacking?
  • who has purchased a boiler-plate estate plan from a living trust company rather than engaging the professional services of a specialist?
  • who has not yet begun to plan for themselves and their families but would like to do so?
If you have had an estate planning done, but are uncomfortable with that planning, our firm will enable you to review what you have done. We will show you whether or not it is in your best interests to make additions or changes in your planning, so that you can fine-tune your plan.

If you have not yet accomplished any planning, we will show you - from the very beginning - the right way to effectively and efficiently complete your estate plan.
We will assist you to implement a modern living-trust-centered estate plan, from beginning to end. We will provide you with step-by-step advice, that has helped many clients over our forty-plus years of practice experience.

We endeavour to utilize the best workable estate planning strategies and practicalities. We explain how you can formulate your estate planning goals, and how to work profitably from the beginning all the way through to the successful completion of your estate planning documentation.

We explain what estate planning is, and what you should expect to accomplish. We determine what a living trust-centered estate plan should look like, so you can clearly see a picture of your objectives.

We determine the process of precisely what you should and should not do, to make your estate planning process effective and pleasant. It encompasses professional planning secrets and empowers you.

We also advise how to take best advantage of the planning talents, of your accountant, financial planner and stock broker. We share with you those planning matters that each of your advisers is good at and enjoys accomplishing, and those tasks which he or she is not so good at and would rather delegate.

We will explain to you the legal language of your plan, and how could we actively participate in making sure that your assets would be placed safely into the protection of your living trust. We would assist you in how to determine the funding of your trust and how you and your accountants, financial advisers and stock brokers, should complete various aspects of your trust funding.

We would warn you of hidden planning dangers, while stepping you through the procedures for getting your assets into the protection of your trust. Our documentation makes your trust endure particularly following your disability or death. We share them in the hope that your estate planning efforts will succeed because of proper follow-through.

Our practice endeavours to prompt action. It gives you many options every step of the way and empowers you to make the right choices at the right time, to maximize your and your family’s emotional and financial successes. It is based on the simple philosophy that knowledge should be with action.

June 24, 2018

What happens if a usufructuary dies and she rented out the house during her lifetime?

What rights does the owner have to sell the house? What rights does the tenant enjoy?
Here’s an example of a simple usufruct:

I bequeath to my son, Joe Bloggs, my house at 67 Henry Road, Norwood, Johannesburg, and all the contents therein, subject to a life usufruct therein in favour of my wife, Jane Bloggs.

So, the will enables Jane (the usufructuary) to use the Norwood property (the usufructuary property) belonging to her son, Joe (the bare dominium owner) and to enjoy the fruits (fructus) thereof, for her lifetime.

The usufruct ends on Jane’s death, when the usufructuary property vests in Joe.
These are some of Jane’s and Joe’s rights and obligations:
·         Jane’s estate is obliged to restore the property to Joe on her death in the same condition as that in which she received it, fair wear and tear excepted;
·         Jane was responsible for the maintenance of the property, but not to improve it;
·         Jane could not mortgage the property subject to the usufruct;
·         Unless both Jane and Joe agree, the property subject to a usufruct cannot be sold by the usufructuary or by the bare dominium owner without leave of the court;
·         Unless the will provides otherwise, Jane had to pay rates and taxes;
·         If the property is subject to a mortgage bond, Jane was not responsible for payment of the interest, unless the will has so specified, or there were insufficient funds in the estate to do so;
·         Jane had the right to let the property which is subject to a usufruct and collect the rental (the fruits and profits which may be derived from the property subject to the usufruct), but the lease can only be valid for the period of the usufruct.
Accordingly, on Jane’s death, the lease comes to an end and Joe can sell the property.

June 19, 2018

The prescription of debt – must I pay a claim older than 3 years?

A client asked: debt collectors have been phoning and texting me to recover a claim that goes back more than three years. Do I have to pay?

In summary, if you know that the debt is older than three years, never admit anything, sign anything or pay anything. In that way, the claim against you will have lapsed and you won’t have to pay anything.
Creditors sell their Debtor’s Book to Debt Collectors, who will then try to collect the debt. Obviously, they will try to collect more than what they paid for the Debtors’ Book. So, when they call or text consumers, they will try to get them to admit that they owe the money and, preferably, get them to make a small payment. The reason for this is that any express or tacit acknowledgement of liability or payment by the debtor, interrupts the running of prescription.
The Prescription Act 68 of 1969 provides that a debt shall be extinguished by prescription after three years.

Interruption of prescription by acknowledgement of liability
(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.
(2) If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run afresh from the day on which the interruption takes place or, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt, from the date upon which the debt again becomes due.

Judicial interruption of prescription
(1) The running of prescription shall be interrupted by the service on the debtor of any process (any document whereby legal proceedings are commenced) whereby the creditor claims payment of the debt.
(2) Unless the debtor acknowledges liability, the interruption of prescription in terms of subsection (1) shall lapse, and the running of prescription shall not be deemed to have been interrupted, if the creditor does not successfully prosecute his claim under the process in question to final judgment or if he does so prosecute his claim but abandons the judgment or the judgment is set aside.
(3) If the running of prescription is interrupted as contemplated in subsection (1) and the debtor acknowledges liability, and the creditor does not prosecute his claim to final judgment, prescription shall commence to run afresh from the day on which the debtor acknowledges liability or, if at the time when the debtor acknowledges liability or at any time thereafter the parties postpone the due date of the debt, from the day upon which the
debt again becomes due.
(4) If the running of prescription is interrupted as contemplated in subsection (1) and the creditor successfully prosecutes his claim under the process in question to final judgment and the interruption does not lapse in terms of subsection (2), prescription shall commence to run afresh on the day on which the judgment of the court becomes executable.

June 16, 2018

Contracts under the Consumer Protection Act

A client asked: “I signed a tuition agreement that requires me to give a full term’s notice. Am I bound by this?”

I answered:

As you are a “protected person” - defined in the Consumer Protection Act (CPA) as any individual or any legal entity with a turnover and an asset value of under R2 million - the notice period is not binding, and you need only give 20 business’ days’ notice (section 14 and section 51). However, this is subject to payment of a reasonable penalty  for premature cancellation.

The CPA sets out the following rights and obligations concerning contracts between suppliers and consumers:   

·         The contract must be in plain language (section 22);
·         A consumer may rescind a transaction that came about because of direct marketing, without reason or penalty. The consumer merely needs to give the supplier written notification of his or her intention to rescind the agreement, and this notification must be given within 5 business days of the transaction being concluded or, within 5 business days of the goods being delivered to the consumer. (Section 16);
·         The consumer has the right to an itemised breakdown of his or her financial obligations under the contract and to receive a copy of the contract free of charge (section 5);
·         Suppliers must not offer to supply, supply or enter into an agreement to supply goods or services at an unfair, unjust or unreasonable price or on terms that are unfair, unjust or unreasonable. Suppliers are also prohibited from marketing any goods or services in an unfair or unjust manner (section 48);
·         Consumers must be alerted to any contract term that limits the consumer’s rights. This notice or provision must be in a conspicuous manner and form that is likely to attract the attention of an ordinarily alert consumer (typically highlighted at the top of the contract or initialled by the consumer (section 49); and
·         A contract may not contain clauses that are misleading or deceptive, subjects the consumer to fraudulent conduct, directly or indirectly waives or deprives a consumer of a right entrenched in the CPA, avoids a supplier’s duty in terms of the CPA, sets aside or overrides the effect of any provision contained in the CPA,  authorizes the supplier to do anything that is unlawful in terms of the CPA or limits or exempts a supplier of goods or services from liability for any loss attributable to the supplier’s gross negligence section 51).

June 02, 2018

Ubuntu and the law

Wikipedia defines Ubuntu as a Nguni Bantu term meaning "humanity". It is often translated as "I am because we are," and "humanity towards others", but is often used in a more philosophical sense to mean "the belief in a universal bond of sharing that connects all humanity".

According to a colleague, Adv Viljoen Meijers, who researched the impact of ubuntu on the modern law, the term first appears in the Child Justice Act, whose objects are to ‘promote the spirit of ubuntu’ by fostering children’s sense of dignity and worth and reinforcing their respect for human rights and the fundamental freedom of others by holding children accountable for their actions and safeguarding the interests of victims and the community.

The Constitutional Court found that the primary application of ubuntu was in the field of political reconciliation. The court stated: ‘ubuntu is a culture which places some emphasis on communality and on the interdependence of the members of a community. It recognises a person’s status as a human being, entitled to unconditional respect, dignity, value and acceptance from the members of a community such person happens to be a part of’. By the same token, ‘the person has a corresponding duty to give the same respect, dignity, value and acceptance to each member of the community’. Ubuntu ‘carries in it the ideas of humaneness, social justice and fairness…’; ‘an instinctive capacity for and enjoyment of love towards our fellow men and women.’

In a Supreme Court of Appeal matter, dealing with a breach of contract, it was argued that the court should import a term into a lease based on ubuntu. The court refused to do so, reiterating the principle of sanctity of contract.
However, the same court, hearing a claim based on delict (in this case, child support), stated that one must have regard to constitutional values, one of such being ubuntu.

The Equality Court (in Afriforum v Malema) found that freedom of expression, particularly was is classified as hate-speech, is limited not only by the law but also by the spirit of ubuntu.

Adv Meijers concludes that ‘ubuntu will clearly shape the contractual and delictual landscape in the future.’

May 04, 2018

Boundary Walls – problems with your neighbour?

Disputes surrounding boundary walls in residential and commercial areas are one of the most controversial topics facing homeowners. These relate to the location of the boundary between the two properties, or when trees or plants encroach on or overhang the other property, or when the wall (or work done on it) causes a nuisance or a threat to the neighbouring land, or when the wall diverts the natural flow of water or obstructs the neighbour’s view or access to light.
A boundary wall is generally defined as “any wall erected on, above or over the physical boundary between two properties, so that they stand on or occupy space at least partially on both properties”.

If you decide to build a wall or erect a fence on the boundary, you may do so provided it is on your property. And this includes the foundations which, of course, will be wider and longer than the wall itself. The structure will then belong to you. 

Usually, however, neighbours agree to share the costs of boundary walls, in which case ownership is also shared. In the absence of proof that a boundary wall is wholly on one or other property, ownership is usually presumed to be shared. Some local authorities state that each side is then owned by the property owner on each side; others say that the wall is owned jointly. If ownership is shared, either way, neither owner may do anything to the wall – i.e. they may not raise it, lower it or break it down – without the other neighbour’s permission. 
If the structure is damaged in any way, both must share the cost of repair. Both neighbours are obliged to contribute to reasonable and necessary costs of repairs or maintenance of the wall. If the wall is damaged by natural forces such as wind or fire, either neighbour can repair or restore it, and the other party is obliged to make a reasonable contribution to the cost of repairs or replacement of damaged or destroyed party walls, if it benefits her as well. She won’t have to contribute if her neighbour decides to replace the existing wall with a better or more expensive one. Obviously, one neighbour cannot do anything that may affect or compromise the overall stability of the wall.

Municipalities require that:
• Solid boundary walls may not be any higher than 1.8 m on street boundaries, and no higher than 2,1 m on lateral boundaries.
• Palisade-type fences may not be higher than 2.1 m on either street or lateral boundaries.
• Fences may not be higher than 2,1 m on street boundaries.

April 24, 2018

Are barking dogs driving you mad?

The sensible thing to do is to chat to your neighbour, over a cup of tea, and explain that the dog is preventing your baby from sleeping (or whatever) and ask him or her to do the neighbourly thing. One solution (if the neighbour works all day and the dog is bored or afraid) is to fit a cold air spray bark collar. All vets sell these devices and they are not at all cruel. Perhaps the dog needs to see an animal behaviourist? He or she will see why the dog barks excessively (lack of exercise, lack of stimulation, separation anxiety, protecting territory, etc.) and recommend a solution.

If that does not help or if the neighbour is indifferent or defensive (and refuses to make the nuisance go away) you should report the matter to the authorities (the local authority and, perhaps the SPCA) and, that failing, contact your lawyer, who will have to send a threatening letter or even go to court for an interdict.

Disciplinary procedures vary from district to district. If you go the reporting or legal route, you will start a feud, so, wherever possible, try and settle matters amicably.
In Johannesburg, Section 5(a) of the City of Johannesburg Metropolitan Municipality’s by-laws relating to dogs and cats (Prohibitions relating to the keeping of dogs) provides that no person may keep a dog which barks, whimpers or howls to such an extent that it, or has another habit which, causes a disturbance or nuisance to inhabitants of the neighbourhood.

Call 011 375 5911 and log a call of “disturbance of the peace”.  The authorities will satisfy themselves that the barking is indeed intolerable and issue a warning notice to the dog’s owner to cease and desist (requiring the discontinuance of such offence). Failure to comply could result in the dog being impounded.

The SA Noise Control Regulations provide that no person shall:
·         make, produce or cause a disturbing noise, or allow it to be made, produced or caused by any person, animal, machine, device or apparatus or any combination thereof;

·         operate or play, or allow to be operated or played, a radio, television set, drums, musical instrument, sound amplifier, loudspeaker system or similar device producing, reproducing or amplifying sound so as to cause a noise nuisance; 
·         offer any article for sale by shouting, ringing a bell or making other sounds or by allowing shouting, the ringing of a bell or the making of other sounds in a manner which may cause a noise nuisance; 
·         allow an animal owned or controlled by him or her to cause a noise nuisance.

If a noise emanating from a building, premises, etc., is a disturbing noise or noise nuisance, the authorities may instruct in writing the person causing such noise to discontinue or cause to be discontinued such noise within a period stipulated in the instruction. Failing response (in the case of e.g. power tools, musical instruments or animal) the instrument, equipment or animal can be confiscated, or impounded.
Any person who contravenes or fails to comply with a written notice shall be guilty of an offence and liable on conviction to a fine not exceeding R20 000 or to imprisonment for a period not exceeding two years, or to both such fine and such imprisonment. In the case of confiscated items, the court may declare any vehicle, power tool, musical instrument or equipment, or animal forfeit to the local authority.

April 21, 2018

Can an unmarried mom claim maintenance from the father’s pension?

A client asked:
I would like some advice please. My partner and I were living together for 5 to 6 years then broke up in February 2018 because he was cheating on me. We have 2 children together which he paid R1000 Maintenance for a month. Last week he let me know that he lost his job and I would like to know how can I get some of his Provident fund money to go to my kids? Even if it’s invested into an Educational Fund that will be fine.
The one problem is we were not married...what are my rights as a mother?

Unfortunately, as you were never married, there has not been a dissolution of the marriage so there is no automatic claim on his pension fund. However, you can obtain a maintenance order for the children. The court will consider the needs of the child and the father’s ability to contribute. Once you have this order you can attach his provident fund benefits to cover area and (possibly) future maintenance.

The Maintenance Act and the Pension Funds Act give a retirement fund the right to withhold or deduct amounts from pension benefits to pay maintenance to a child, and this grants you a mechanism to apply to court to enforce a maintenance order. 

The fund cannot make any deductions for outstanding maintenance payments until the husband’s benefit in the fund accrues. As he has lost his job, the fund will pay out a retirement or withdrawal benefit. Once the retirement benefit has been paid to the member, the benefit is no longer in the hands of the pension fund and you cannot attach the benefit. Therefore, if you know that a defaulting parent is, for example, going to leave his fund, you should ask the fund to withhold his or her benefit while you finalise a claim for arrear maintenance.

In Mngadi v Beacon Sweets and Chocolates Provident Fund, the father was a member of the Beacon Sweets and Chocolates Provident Fund. He had resigned to avoid paying maintenance and planned to withdraw his benefit, the court heard. The court ruled the fund could be interdicted from paying the benefit to the member for as long as the member was liable for maintenance, and it ordered the fund to deduct from the benefit the maintenance due each month.

The court said that once the maintenance was no longer due – for example, when the children reached the age of majority – the member could be paid the remaining benefit.

March 14, 2018

CCTV cameras at home and the right to privacy

A client asked: What is the law on CCTV installation on a private property in relation to privacy and the law? I have a situation where a camera has been set such that 85% of what is being captured is in my yard.
Privacy issues

You have the right to protect your property and this can be done by using a CCTV system where it is necessary, such as a security measure. However, out of respect for your neighbour, CCTV systems should be used in a responsible way to respect the privacy of others.

The problem arises when you cross the line between monitoring your own property and somebody else’s. If your camera is angled in such a way that it includes coverage of your neighbour’s yard or driveway, then complaints about invasion of privacy will follow.

CCTV monitoring is acceptable and even welcomed in public places, but it is unreasonable to be spied on in your own private property. 

The law

The complaints about invasion of privacy are not specifically protected in law. Our constitution gives a citizen the broad right to privacy. However, there is nothing illegal, per se, about home surveillance in South Africa.
South Africa’s Protection of Personal Information Act which seeks to regulate the Processing of Personal Information, does not apply to purely household or personal activity.
Clearly, the common law would protect you, regarding your neighbour’s CCTV cameras, when:
·         The surveillance is of a criminal or voyeuristic nature;
·         The area being monitored is one where someone would reasonably expect to have privacy, such as a bedroom or bathroom;
·         The surveillance is of such intensity that it is creating a nuisance, preventing someone from the enjoyment of their property;
·         The installation of the cameras is the result of a neighbourhood dispute involving threatening behaviour, in which case an apprehended violence order may call for the cameras to be removed.
The solution
Use some basic common sense to avoid alienating your neighbours and possibly being taken to court.
When you install CCTV cameras, make sure that:
·         You are transparent to those around you when installing your CCTV system, by informing your neighbour(s) about your system;
·         They are only monitoring your property;
·         If your camera is pointing directly at a neighbour’s property, you should take steps to reposition it to avoid complaints or in some cases accusations of violation of privacy or harassment;
·         If they are overlooking the street, there is a sign informing people they are being monitored;
·         They are not monitoring areas where people could reasonably expect privacy;
·         The stored information is not used for any other purpose than protecting your property;
·         If you record images, regularly delete the recordings and do not keep them for longer than is necessary for the protection of your property;
·         If your system captures information of an incident, retain that information as it could be use by the police to aid an investigation.