Monthly Archives: October 2014

A finger in the PIE – Prevention of Illegal Eviction from unlawful occupation of land act

A1_BYou have property and have rented it out. The tenant has decided that he can no longer afford the rent, and no letters or threats seem to make any difference to this cause. The tenant not only refuses to pay the rent, but he also fails to vacate the property.

To put icing on the cake, the law provides more protection to the tenant than ever before. It comes as no surprise that landlords feel that the current legislation enables the tenant to avoid paying rent and also offers much more protection to tenants’ interests and rights than to those of the landlord.

Times have changed, and to simply replace the locks of the premises will offer no quick solution. In reality it is very difficult to evict unlawful tenants rightfully from the property, and therefore it is very important for landlords to use the prescribed procedures as contained in the PIE Act.

In short, the Prevention of Illegal Eviction from Unlawful Occupation of Land Act (PIE) is described as legislation that aims to protect both the tenant’s and the landlord’s interests and rights simultaneously. This legislation prohibits not only unlawful eviction, but also allows for legitimate expulsion of unlawful tenants. 

Procedures as prescribed by PIE

Firstly, it is important to cancel the lease due to non-payment, as per the notice period prescribed by the lease agreement, or with one calendar month’s notice in accordance with the common law.

An ex parte application (an application without notice to any party) must be brought at the appropriate court in order to obtain the necessary permission from the court to initiate PIE procedures. This application is brought by way of two notices supported by a sworn affidavit.

The affidavit must allege the following:

  1. Unlawful occupation;
  2. Reasons for the requested eviction; and
  3. Why it is just and equitable to evict the unlawful occupant.

Once the application has been issued, the sheriff of the court serves notices, advising of intention to institute action, on the local municipality, the unlawful occupier and on all those holding title under him. The local municipality as well as the unlawful occupant has to be given 14 days’ notice of this hearing.

On the day of the hearing, the unlawful occupier will be given the opportunity to show good cause as to why an eviction order should not be granted. The court will only grant an eviction order after considering the relevant circumstances as well as what is deemed as just and equitable. The unlawful occupier may rely on special circumstances to avoid immediate eviction.

In practice, courts have regard for the following:

  1. the rights of elderly persons;
  2. children;
  3. disabled; and
  4. households headed by a woman.

However, the court has wide discretion to grant an appropriate date on which the unlawful occupant has to vacate the property, and a date when the actual eviction order is to be effected.

In general, the PIE procedures are described as lengthy, and depending on the circumstances it often takes a long time before the unlawful occupier actually vacates the property. During this time the property owner does not receive an income from his property whilst still being required to pay the bond.

Landlords … Instead of allowing the unlawful occupier to frustrate you to the point where you want to break someone’s legs, rather take a piece of the PIE, and make it your first priority to evict the tenant from your property.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.

Constructive dismissal: A last resort?

A2_BDear Mr Lawyer, my employer is making working conditions unfavourable and I am unhappy with her management style. This cannot carry on and I want to resign. Can I claim constructive dismissal because she is the reason I want to resign?

Constructive dismissal has become a convenient escape for disgruntled employees. Many employees realise too late that they are not eligible to claim from the UIF after they have resigned of their own free will, due to the fact that they resigned and were not dismissed. All sorts of stories are being told by the employee in an effort to prove that a constructive dismissal has taken place.

Definition of constructive dismissal

The Labour Relations Act 66 of 1995 (as amended) gave statutory status to constructive dismissal. Section 186(1)(e) determines that “dismissal” means, among other things, that “an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee.”

In other words, the employee is compelled to resign due to unfair pressure, unreasonable instructions or unbearable behaviour caused or created by the employer.

Thus, constructive dismissal in general takes place when an employer makes the continued employment or working circumstances of an employee so intolerable that these circumstances are a form of dismissal.

Burden of proof and evidentiary aspects

Constructive dismissal is an extraordinary form of dismissal and is not easily accepted by the courts. Generally, the employer must prove that the dismissal was procedurally and substantively fair and justified. With constructive dismissal, however, the burden of proof rests on the employee, who must prove constructive dismissal on a balance of probabilities.

The employee will have to satisfy the court as to the existence of the following special circumstances and facts that he or she alleges:

  1. Continued employment has become intolerable for him or her;
  2. The employer must have made continued employment intolerable;
  3. No reasonable alternative to resignation was available to him or her and it was done as a matter of last resort;
  4. He or she must have lodged a grievance before resigning;
  5. He or she must have terminated the contract of employment (resigned); and
  6. He or she did not intend to terminate the employment contract, but resignation was his or her last resort.

This is an objective test of whether or not the situation can be tolerated and does not depend on the employer’s perception or personal opinion (subjective) of whether the situation was intolerable.

Additionally, the employee must prove that he/she would have continued working if it wasn’t for the employer’s conduct.

Once the employee has discharged the onus of proving that he/she was constructively dismissed, the onus shifts to the employer to prove that the employee’s action of resigning was unreasonable.

Test for constructive dismissal

The test for determining whether or not an employee was constructively dismissed was set out in Pretoria Society for the Care of the Retarded vs Loots (1997) 18 ILJ 981 (LAC) [also reported at [1997] 6 BLLR 721 (LAC). The court found that the test is whether the employer, without reasonable and proper cause, conducted itself in a manner that is calculated or likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee.

When referring it, it is the court’s function to look at the employer’s conduct as a whole and determine whether it’s correct when judged as unreasonable and unjust in such a manner that the employee cannot be expected to put up with it.

Disputes

Disputes over a possible constructive dismissal must be referred immediately to the CCMA/ Bargaining Council.

An employee must be aware of the scope and degree of difficulty involved in proving constructive dismissal, especially in light of the fact that if an employee resigns and his/her claim for constructive dismissal is unsuccessful, the resignation remains in force.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.

Jurisdiction of courts in matters involving companies

A3_BTraditionally, and under the previous Companies Act, a company could have a principal place of business and a registered office.  A company could, for instance, conduct its business at one office and also have a registered office with its auditors. In terms of the 1973 Companies Act any division of the High Court where a company’s registered office or its principal place of business was located, would have jurisdiction. More than one Court could, as a consequence, have jurisdiction in proceedings where a company was involved.

The new 2008 Companies Act, which repealed to a large extent the 1973 Act, does not have a similar wording that provides for more than one address. In the matter of Sibakhulu Construction (Pty) Ltd vs Wedgewood Village Golf Country Estate (Pty) Ltd (Nedbank Intervening) 2013 (1) SA 191 the Western Cape High Court dealt with the question of which Court would have jurisdiction where a company has a registered address different from its principal place of business.

The matter revolved around business rescue proceedings and winding up proceedings. The Court remarked that Section 128 of the Act makes reference to only “…the High Court…”  This wording denotes that a single Court would have jurisdiction over a company, and not more than one Court as in the previous Act. In dealing with the matter the Court considered the interpretation of the new Act.

Section 23(3) of the new Act specifically states that a company must continually maintain at least one office and register the address of its office or of its principal office if the company has more than one office. This office will, under the new Act, be the company’s registered office.  Section 23 makes it clear that this office must be maintained by the company itself and the following Section deals with documentary records to be kept at the address. The Court remarked that the new Act retained the institution of a registered office with which the outside world could make contact.

Unfortunately the Act does not define “principal office” but the Court remarked that, from a reading of the Act, it is clear that the intention is to denote the place where the administrative business of the company is centred. It follows, the Court suggested, that this office should also be the principal place of business. The Court concluded that the principal place of business and the registered office have to be at the same address under the new Act.

Reference was further made to Section 7 of the new Act where it is stated that the purpose of the Act is to provide a “predictable and effective environment for the efficient regulation of companies”. The Court held the view that to give effect to the purpose of the Act as set out in Section 7 it would follow that, in terms of Section 23, a company can only reside at its registered office, which means that only a single court can have jurisdiction.

Companies should be aware of this judgement and make sure that they register their principal place of business as their registered address.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.

Common law marriage in South Africa

A4_BIn South African law there is no such thing as a common law marriage. People simply believe that living together with another person for a continuous period of time establishes legal rights and duties between them. This is a common misunderstanding especially with young adults.

The only way to be protected in our law is to enter into a universal partnership agreement. Such an agreement clarifies the rights and duties of the partners. The agreement will determine what would happen to property and assets of the couple if they should decide to separate. The agreement is, however, not enforceable in so far as third parties are concerned. Only a valid marriage is enforceable against third parties. It is important to note that partners can sometimes be jointly and severally liable if they acted within the scope of the partnership. An agreement such as this will be legally binding as long as it contains no provisions that are immoral or illegal. If there is no agreement on the dissolution of a universal partnership agreement, a party would only be entitled to retain those assets which he or she has purchased and owns and further would be entitled to share in the assets proportionately in terms of the contribution which they have made to the partnership.

To prove the existence of such a partnership it must be shown that:

  • The aim of the partnership was to make profit.
  • Both parties must have contributed to the enterprise.
  • The partnership must operate to benefit both parties.
  • The contract between the parties must be legitimate.
  • There must be valid consent.
  • There is an intention to create a legally binding agreement.

Where there is no express agreement, a tacit agreement may be proved if it is found that it is more probable than not that such an agreement had been reached between the parties at the time of cohabitation.

Because the existence of a universal partnership is somewhat difficult to prove, and it may not be a claim that you wish to have to make or defend, it is advisable to consider entering into a contract that spells out how property should be dealt with on termination of the relationship by death or otherwise. Such a contract would provide some certainty for cohabitees regarding the division of assets and settlements of liability on termination of the relationship.

Some of the consequences of the absence of a legal ground between parties in such relationships are:

  • No exemption from donations tax in respect of donations between them.
  • Cohabitees do not benefit from the laws relating to the exemption from estate duty of bequests to spouses.
  • There is no reciprocal obligation of maintenance.
  • Cohabitee is not a recognised claimant if his/her partner dies intestate.
  • There is no right to property or assets that belong to cohabitee.
  • There is no reciprocal duty to contribute to household necessities.

The Domestic Partnerships Bill of 2008 is still in its formulation stage and it remains to be seen how it is to be implemented. In the current constitutional dispensation it is unlikely that a partner will be left in despair, taking into account the Domestic Partnerships Bill.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.

Succeed with Self-defence…

A5_BIn South Africa violent crime has become a massive concern for many who call this wonderful place home, but what can we do about it? In our law we are entitled to protect our own interest and those of others, but unfortunately many citizens do not know the ambit of these defences.

A person acts in private or self-defence, and his act is therefore lawful, if he uses force to repel an unlawful attack which has commenced, or is imminently threatening upon his life, bodily integrity, property or other interest which deserves to be protected, provided that the defensive act is necessary to protect the interest threatened, is directed against the attacker, and is reasonably proportionate to the attack.

The requirements to succeed with this defence are as follows:

  1. The attack must be unlawful (without legal justification). An example of a lawful attack will be if the parties consented to the attack, like in sport, for example a boxing match. The list of situations where an attack will be lawful is unfortunately not a closed list and public policy will determine if the attack was justifiable; and
  2. The attack must be directed at an interest which legally deserves to be protected; and
  3. The attack must be imminent but not yet completed; and
  4. Private defence must be directed at the attacker; and
  5. The defensive act must be necessary in order to protect the interest threatened (it must be the only way in which the attacked party can avert the threat to his rights or interests); and
  6. There must be a reasonable link between the attack and the defensive act.

The last two requirements listed as “e” and “f” will in most cases be the two problematic requirements. To decide if the defensive act was necessary in the circumstances will be determined after the fact (post facto). This, off course, makes it very difficult for a person to determine in the heat of the moment if the act will be necessary. The court will take all the facts of the matter into consideration and then decide if the person’s actions were necessary to protect his interest.

The next problematic requirement is that there must be a reasonable link between the attack and the defensive act. Here the same difficulties will arise as above, because the courts will determine the reasonability of the defence in relation to the attack after the fact. It stands to reason that there ought to be a certain balance between the attack and the defence. After all, you may not shoot and kill another person who strikes you with a fly-swatter. If the ambit of self-defence is therefore understood properly and used correctly, we as South Africans will, to a certain extent, be able to protect ourselves better.

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This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.