|
SELLERS, WATCH OUT! DOUBLE COMMISSION DANGER
If you are selling a property, you need to be aware that you will have to pay commission to any agent who is the "effective cause" of a sale, even if you have terminated that agent's mandate before the actual sale takes place. Worse, if you brought in a second agent to replace the first, you risk having to pay double commission!
In awarding commission recently to an agent whose mandate had been terminated, the Court commented: "an unempowered agent may still be the effective cause of a sale and thus entitled to commission. The inquiry in such a case is normally whether despite the termination or non-existence of a prior mandate the work done by the unempowered agent was sufficiently significant to merit the award of commission even though not constituting the immediate or proximate cause of the ultimate transaction."
That's a wide definition, and every case will be decided on its particular facts. Briefly, the facts here were that the agent had, before the expiry of a sole mandate in her favour, made the initial introduction of the eventual purchaser to the property. The sale itself however was only concluded some 7 months later, long after the mandate had lapsed, and after relations between the seller and the agent had soured and become hostile. The parties concluded the sale themselves, and only after they had negotiated directly with each other for some time.
There's also a lot at stake. In this case, the seller is down R560.000, plus interest and costs - which, however fair it is to the agent, doubtless wreaks havoc on the seller's cash flow projections! Tread carefully, and take advice in doubt.
Agents on the other hand should take legal action to recover disputed commission without delay - the agent in this case risked losing to a defence that the claim had prescribed.
SCHOOL FEES - BOTH PARENTS LIABLE
Schools battling to recover unpaid fees will be heartened by a recent Supreme Court of Appeal decision to the effect that both parents are responsible for paying school fees, regardless of whether or not they have custody and/or guardianship of the learner.
In the case in question, the school sued the child's biological father for outstanding fees. The father countered that the school must look for payment only to the mother, as sole legal custodian of the child.
That argument failed on appeal, and the Court's finding against the father now allows schools to recover school fees from: - - Both biological parents
- Guardians
- Custodians
- Any other person who has undertaken to fulfil those persons' obligations in regard to the learner's education.
SERVITUDES: REGISTER THEM!
If you want to retain any form of usage of a property after selling it, make sure that you tell your attorney before you sign anything, so that the sale agreement will provide for registration of an appropriate servitude against the title deeds in the Deeds Office. That's the only way to ensure that all subsequent owners of the property will automatically be bound by it.
If you don't register the servitude, you will have to prove (and the onus of proof here is on you) that subsequent owners actually knew of it when purchasing the property.
That's not going to be easy, and the dangers of relying on an unregistered right of use are illustrated in a case recently before the High Court. The original owner of a farm had sold it subject to retaining a life-long right to remain in occupation of the farmhouse. However when the farm was sold on, he was unable to prove that the subsequent buyer had had any knowledge of his rights. The Court accordingly ordered his eviction from the farmhouse.
And although the final owner had initially granted him a right to keep his cattle on the farm, the Court held that this right - being unregistered - could be terminated on reasonable notice, which had been given. So his livestock had to go too.
MEDIATION: WHEN TO CONSIDER IT, AND THE DANGERS OF DECLINING
The High Court recently gave notice that it will use costs orders to punish litigants who engage in expensive litigation without first giving mediation a try in appropriate cases. Although normally a successful litigant is awarded his/her legal costs against the loser, the Court in this matter (a divorce dispute over division of assets and maintenance) required both parties to pay their own costs.
Of course mediation will not be appropriate in every case. But if your attorney advises you to consider it, not doing so could be an extremely expensive mistake - in the case in question for example, costs were estimated at between R500.000 and R750.000.
Note that although this case was a family dispute, there are strong indications in the judgment that the principle could well be applied - although perhaps to a lesser extent - in appropriate commercial matters as well.
FRAUD ON SARS = INVALID CONTRACT
When concluding any sale agreement, be careful not to lay yourself open to any suggestion of fraud on SARS. Even if the allegation is totally false, just a perception of tax evasion will give the other party "a stick to beat you with".
In a case recently before the High Court, the purchaser of a nightclub business sought to escape payment to the seller by alleging that the purchase price had been split between two separate contracts in order to reduce the seller's Capital Gains Tax liability. The Court confirmed that any transaction "one of the objectives of which was to perpetrate a fraud upon the revenue" is invalidated by statute.
Despite the seller's denial of any attempt at tax evasion, the Court also referred the papers to the Commissioner of SARS "for his consideration and any further action he may deem appropriate" - presumably not a happy prospect for the parties in light of the severe monetary and criminal penalties attaching to tax fraud.
CIPRO'S WARNING: SUBMIT ANNUAL RETURNS, OR ELSE!
The principals of all companies and close corporations are required by law to lodge annual returns with Cipro (with payment of the relevant fees), and Cipro has again warned that failure to do so timeously will result in the imposition of penalties, followed by deregistration.
Deregistration, warns Cipro, will expose directors/members to the following: -- Loss of limited liability (i.e. personal liability for all debts of the entity), and
- Loss of the entity's status as a separate legal entity (with a consequent inability to continue trading), and
- Forfeiture of the entity's assets to the state.
So check now that your corporate annual returns are all up to date!
THE JANUARY WEBSITES: NEW YEAR HIRING - THE QUEST FOR THE RIGHT EMPLOYEE, WITH THE RIGHT EQ
If you plan to hire new staff from January's latest crop of job hunters, make sure that you choose the right person for the job, by conducting your interviews to maximum effect.
Start off with Small Capital's "10 Tips for a good interview" at www.smallcapital.co.za/articles.htm?article=675.
Then focus on the candidate's Emotional Intelligence Quotient. As EQ supposedly accounts for "anywhere from 24% to 69% of performance success", you will want to identify high scorers, and weed out the others.
Use the sample interview questions in the Harvard Business Publishing article "Hiring for Emotional Intelligence" at http://blogs.harvardbusiness.org/hmu/2008/11/hiring-for-emotional-intellige.html.
Last but not least, look for the employee who will agree with Thomas Edison: "I never did a day's work in my life. It was all fun!"
Happiness and Success in 2010!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
|
 |
