Microsoft word - email newsletter june 201

Volume 3 – June 2011
IN THIS ISSUE
Welcome to Ben Groot Attorneys’ e-mail newsletter · Welcome
We are halfway into the year, and well into winter! Luckily, most of the holidays · What we offer?
have also passed, and we can now (hopefully) all focus on business again. · Labour Law
Economically, retail seems to be doing better, with the news indicated that · Property Law
electronics, fast food and furniture sales increasing. The inflation outlook remains worrying, though. The growth in GDP over the first quarter seems encouraging, · Insolvency Law
· Strange Laws
We trust that you find the information in this newsletter informative. If you have any and Cases
further questions on any of these articles, or have any suggestions for future articles, please let us know. · Subscribe &
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In this month’s newsletter, we look at Criminal conduct and disciplinary action; Interference with a tenant’s occupation; Liquidation process from sale of the assets to final payment; and Finally, a strange case about a caffeine fix. What do we offer? We are a young, vibrant attorneys’ firm based in Cape Town’s Northern Suburbs. We specialise in Labour Law, Law of Landlord and Tenant, Sectional Titles, Collections and Insolvency. Our mission is to provide a legal service to our clients which is ethical, reasonably priced and commercially viable. If you have concerns in any of the abovementioned areas, please contact us. We will strive to assist you in resolving your problem with passion. That is why our motto is “Your matter – Our passion”. CONTACT US
T: 021 914 0513
With Sheryl Cwele, the wife of State Security Minister Siyabonga Cwele, recently ben@bengroot.co.za
having been found guilty of drug trafficking by the Pietermaritzburg High Court, the 3rd Floor, West Loft
question arises as to how this criminal conviction will influence her current employment as Director of Health and Community Services at the Hibiscus Coast Delphi Arena
Municipality. The official word from the Municipality has been that “…the 1 Old Oak Ave
complexity of the matter, given the fact that the crime is a serious one and that Ms Cwele has appealed, warrants an exhaustive approach of dealing with the matter …” Nevertheless, previous reports have shown that Ms Cwele’s alleged poor Tygervalley
record and unsuitability for her job, was previously a subject for investigation. Additionally, Ms Cwele has twice had her contract renewed although she apparently did not meet the department’s competency profiles or the minimum competency levels specified in the Municipal Finance Management Act regulations required for officials at her level of seniority. Considering the above, let’s dive in the legal position and the employer’s stance on this subject. It is safe to assume that all employers strive to employ honest, hardworking, law abiding individuals. It is unfortunately also safe to assume that not all employees fall in the aforementioned category. However, not all criminal offences translate into disciplinary offences. Depending on the offence, employers may however still be concerned about criminal behaviour displayed by their employees and the impact it may have on their business. In the process of determining the best approach towards this employee dilemma, the employer needs to establish whether the employee’s criminal conduct is work- related or not. In a number of instances, the answer hereto may be obvious. For instance, where an employee assaults a fellow employee on company premises, the criminal conduct constitutes a disciplinary offence and internal disciplinary action may thus be instituted. The answer to this question becomes more difficult if the criminal conduct takes place in an employee’s private time, like in the case of Ms Cwele. As a general rule, employers are not entitled to take disciplinary action against employees for actions performed outside the working place and working hours. However, in the event that the employer is in a position to illustrate that there is a sufficient nexus between its interests and the employee’s conduct outside the workplace, disciplinary action may be justified. Some factors to consider when determining whether such a connection exists, is the role-players involved in the incident, the specific position held by the employee, the consequences of the criminal act, witnesses to the incident, especially members of the public, etc. In Ms Cwele’s case the wide media coverage will certainly be an aggravating factor. In any event, each case will have to be determined on its own merits. The next question employers need to answer, particularly where the criminal proceedings precede the disciplinary proceedings, are what happens if the criminal charges against the accused employee are withdrawn, or the employee is acquitted by the court, or, perhaps in the case of Ms Cwele, acquitted after successfully appealing the guilty ruling. General guidelines stipulate that disciplinary proceedings should not automatically be withdrawn in these cases – what is important to mention, is that the standard of proof differs in that the employer only has to demonstrate that the employee committed the offence on a balance of probabilities as opposed to the more difficult onus of proof of beyond reasonable doubt in criminal matters, which the prosecutor needs to discharge. In Durban Integrated Municipal Employees’ Society NO v Durban City Council, two employees pleaded guilty in a criminal court to smoking dagga and were subsequently dismissed by their employer, without a disciplinary enquiry. The Labour Court held that an employer may not merely rely on the employee’s conviction to dismiss, but is still required to hold a disciplinary enquiry, in order to determine whether this incident is of such a nature that it justifies dismissal. Following the above, it seems that much depends on the status of the employee, the nature of the offence and of course, the relevance of the offence to the employer’s business. Naturally, and most importantly, where the employee occupies a position of special trust, much like Ms Cwele, a conviction undermines Your matter – Our passion
that trust relationship, which in turn justifies a dismissal. Taking into consideration the previously recorded questioning of Ms Cwele’s competencies, this unpleasant incident may just be the nail in the coffin for Ms. We get regular queries from clients about whether they may lock a tenant’s premises, or chain it up, or change the locks, or otherwise interfere with the tenant’s occupation, in circumstances where the tenant is in arrears with payment of rent, or where the lease has been cancelled and the tenant remains in occupation. Our short answer is always that, no, you cannot interfere. We therefore decided to look at two recent cases dealing with the mandament van spolie, an application that a person may bring when his possession has been disturbed. The first matter is the case of Fisher v Body Corporate of Misty Hills, a judgement of the Northern Gauteng High Court, Pretoria on 12 April 2011. The facts are shortly that Fisher owned a property in a “vil age complex” since 2007. Access to the complex, and the house, is controlled at the main gate of the complex. Fisher was in arrears with his levies for an amount of just more than R4000. The body corporate then deactivated his security tag, with the result that he could not enter the complex with his car. In argument, the Body Corporate said that, in terms of the body corporate rules, they were entitled to deactivate the tag, as Fisher was in arrears, and secondly, that Fisher as a person was not prohibited from entering the complex, just his car. This is exactly the type of arguments we routinely hear from clients wanting to prohibit access! The court found that Fisher was actually spoliated from the peaceful and undisturbed use of his car, as he could no longer use his car to drive from or to his house as he wanted – he either had to leave the car inside the complex or outside it, depending on where it was when the tag was deactivated. With regard to the argument that they were allowed to deactivate the tags in terms of the rules, the court found that, even if the rules made provision for it, a deactivation amounted to taking the law into one’s own hands, something which the courts will not tolerate. To quote the court: “Spoliation is a robust remedy. It is intended to secure the status quo, that is, to restore possession that was taken away by an action or conduct that amounted to one taking the law into his or her own hands. It is a somewhat summary remedy that is intended to express displeasure at taking the law into one's hands. The displeasure as I see it could also be expressed in making a punitive order for costs.” Accordingly, the court granted an order restoring access, and a costs order on the higher scale. The second matter was the matter of De Beer v Zimbali Estate Management Association (Pty) Ltd and Another 2007 (3) SA 254 NPD. In this matter, De Beer, an estate agent, launched an application for a mandament van spolie after her access disc, giving her access to the whole of the Zimbali estate, was disconnected. Zimbali argued that, as she was not an accredited estate agent, they were entitled to disconnect her access card. De Beer argued that she stood to lose a R15 million sale as a result of the disconnection. The court considered a Your matter – Our passion
long list of articles and previous cases, and concluded that a person only has physical possession of a building if he holds a key to it. Also, if he holds a key to only one part of the building, he does not possess the whole building. It is of cardinal importance that, in order to exercise physical control, the person has to have the only key to the premises. The court also referred to the matter of Shoprite Checkers Ltd v Pangbourne Properties Ltd 1996 1 SA 616 (W), where the court held that the mere contractual right to use a premises does not equate to possession of a premises. The court then stressed that, in order to succeed with the mandament, the applicant had to prove that it was in possession of the premises at the time of the alleged spoliation – the mere right to use the property is not sufficient. As a result, the court concluded that the mandament is there to protect possession, not access. Possession means that it is to the exclusion of others. Accordingly, the court held that the access disk did not grant De Beer possession of the estate, and the application was dismissed. These two cases illustrate that, even on facts which seem similar, important distinctions may exist, which may lead to different results. Based on the De Beer decision (to which the court referred in the Fisher matter), there is a strong argument to be made out that the Fisher-case was wrongly decided. This is because Fisher asked for restoration of his possession of his house, meaning that his access disk be reactivated. The court, however, found that his possession was Your matter – Our passion
disturbed because he did not have proper access to his house because he could not drive his car to it freely. The end result of the Fisher is, in our view, correct. In order to succeed with an application for a mandament, a person has to prove DISCLAIMER
1. that person has been deprived unlawfully of the whole or part of his possession of movables or immovables; or 2. that person has been deprived unlawfully of his quasi-possession of a Accordingly, where a person has rented a premises in the form of a house, shop or office, it is normally not allowed to do anything which may interfere with his possession of that premises. If you are contemplating any action which might result in possession being interfered with, rather consult with an attorney to make certain of the risks you face. Insolvency Law This month, we look at the process after the assets in the insolvent estate have been sold, until payments are made to creditors. As discussed last month, the liquidator has to take control of the assets in the insolvent estate, and sell it at the best possible price. We are often asked by our clients why there is a significant delay between the sale of the assets and the eventual payments by the liquidator. In this article, we hope to answer that question. Whilst the liquidator is in the process of selling the assets, the creditors who wish to prove claims against the estate have to submit their claims to the liquidator. Generally, al claims are proved at the second meeting of creditors, which normal y takes place between five to eight months after liquidation. Of course, when there is a risk of a contribution, creditors may choose not to prove claims. Once the claims have been proved, the liquidator has to draw up the liquidation and distribution accounts. The liquidation account details the various claims, and the assets available to settle such claims. The distribution account sets out how the available funds wil be distributed between the proven creditors. Once these accounts have been drawn up, the liquidator lodges the accounts with the Master of the High Court, for approval. The accounts have to be lodged within 6 months from the date upon which the liquidator had been appointed, but the Master may give permission for the late lodging of the accounts. A typical example of the need to lodge the accounts late, would be very large and intricate estates, for instance the insolvent estates of CNA, the King group and others. In these instances, normal y, periodical accounts are lodged from time to time. After the accounts have been lodged, they lie open for inspection by the public, and the creditors, who may lodge objections to the accounts. The inspection period is a minimum of 14 days. Where the Master is of the view that the objections are well-founded, he will instruct the liquidator to amend the accounts, and then lodge the amended accounts. Then the accounts will again lie open for inspection. Once there have been no objections, the Master must confirm the accounts. Thereafter, the liquidator must advertise the confirmation in the Government Gazette. Only thereafter can payment be made, usually within 21 days. Normally, if there are no undue delays, the process from the sale of the assets to the eventual payment, takes about six months to a year. These processes and time frames are prescribed in the relevant acts, and therefore it is difficult to obtain speedy payment. It is still wise, however, to keep an eye on the liquidator, to ensure that there are no hiccups at his office. Therefore, if someone who owes you money has been liquidated or sequestrated, keep in mind that, at best, it wil take a year for any monies to be paid over to you. Strange Laws and Cases We lastly bring you a funny legal story, to brighten up your day. Being winter, we thought that this might be particularly relevant to all people who need a so-called “caffeine fix”. In December 2009, Daniel Noble went to his usual Starbucks in Idaho, dressed in his pyjamas and flip-flops, without a wallet. He drank two double-shot espressos, and then left to pick up his wife. On the way, he bumped into two students and drove away. Police finally had to use a taser to subdue him. In the subsequent trial, he pleaded insanity, based on tests conducted on him during his hospitalization after the accident, when it was found that he has a rare bipolar disorder, with caffeine as the final trigger! He was acquitted, and had to undergo treatment and stop drinking coffee. Apparently, the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV-TR), the guidebook used by mental health professionals, lists caffeine intoxication as a disorder. Symptoms can include nervousness, insomnia, muscle twitching, and rambling thoughts and speech. Therefore, be very careful of that caffeine fix every morning, as it can have some unwanted consequences! If you wish to subscribe to this newsletter, please click here. Should you at any time wish to unsubscribe from this mailing list, please click here.

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