7 reasons to avoid the trap of the free or bargain-basement will (or: How is a professionally drawn will like car insurance?)

 

Car insurance is a grudge purchase. So much so that a leading insurer is offering cash incentives to prospective clients, simply to get them on the phone long enough to sign them up. But if you are a careful, reasonably lucky driver, you may pay premiums year after year and never make a claim.

Along comes Penny Wise Pound Foolish Car Insurance (“Penny Wise”). They guarantee the lowest premiums or a free holiday to Disney World. Naturally, you are on the line to their call centre in minutes – and discover to your great joy that you can save R1000,00 a month in premiums! It’s a no brainer. Each month, you admire the teeny premium on your bank statement, and pity those poor suckers still insured by No Corners Cut Car Insurance (“No Corners”).

And then the worst happens. You are in your first-ever car wreck. Thankfully no one is hurt, but your beloved car is a write-off. To replace it would cost R100 000,00. Penny Wise informs you that your excess is R25 000,00, and that your car was insured for a total value of R50 000,00. It’s time to dust the cobwebs off your bicycle. Or prepare to take on a mountain of debt to replace your fully paid-up car.

So what does car insurance have to do with wills?

Legal fees, like insurance, are a grudge purchase. No one gets a bonus at work and enthuses: “It’s finally time to draft the co-habitation agreement of my dreams!” No one writes on their wedding invitation: “Instead of gifts, please consider a donation to our fund to finally sue that dodgy contractor that left us with an uneven, potholed driveway!”

Legal fees, like insurance, are an area where one can be “penny wise and pound foolish”. Especially in the area of wills. Why see a lawyer to prepare your will when your bank is offering to do it for free? Or you can pick up a fill-in-the-gaps version at PNA?

I visited a prominent bank’s website this morning. The website suggests that legal advice is a “nice to have” when drawing your will – only really necessary when you want to put “lots of special conditions” in your will. The website concedes that a will drafted by a lawyer is unlikely to be open to interpretation and so end up in legal disputes. That’s a pretty big advantage, I would say. If you want to put in “lots of special conditions”, the website concedes that professional advice would be worthwhile, and hyperlinks to a terrifyingly pared-down website that promises you a downloadable will for R350,00 in six easy steps (the first of which is “sign up” and the last of which is “print” – so actually four steps).

As an attorney with 16 years’ experience, I charge R1500,00 for a will. On the face of it, a bank customer who uses the web-based service is saving R1150,00. However, a client who sees me for their will gets a lot more than 4 answers plugged into a template:

  1. There are a wealth of different options available to testators to achieve exactly what they want with their estate. The best option in each case depends on the testator, the size of their estate, the nature of their assets, and even the personalities of their heirs. Is your youngest son terrible with money and in need of a trustee to look after his financial interests? Is your eldest daughter a home owner who would benefit more from a cash bequest than from inheriting a third of your house? Will it mean a lot to Aunt Mildred that she gets Granny’s emerald ring even though you are leaving the rest of your jewellery to your cousins? Come drink a cup of coffee with me and tell me about your family. There is no algorithm for that.
  2. Lawyers are trained to ask “what if” – and to confront head-on the worst case scenarios that most of us like to avoid thinking about. This is where things can go badly wrong. When I consult with a client for a will, I try to look around all the corners, and provide for every eventuality. You cannot assume that life will unfold as you expect it to, and there is tremendous benefit to being led to apply your mind to the unexpected, and covering all the bases.
  3. Once we have selected the options that make the best sense for you and your heirs, I will ensure that your wishes are put to paper in unambiguous terms. Your executor will know exactly what you meant. Your heirs will understand what they are getting. The aim is to enable an easy process to wind up your estate, and not leave confusion and conflict in the wake of your passing.
  4. You don’t have to use your own paper to print my wills. Seriously, I will print it for you (not on R1000 paper, but still.) I will supply a sturdy cover to store the will in. I will help you sign the will in accordance with all legal formalities. You do NOT want to sign a will incorrectly and have it rejected by the Master when your heirs try to wind up your estate. If that happens, your heirs must apply to the High Court to have your will accepted, and your initial saving of R1150,00 from Penny Wise Wills Ltd will fade into insignificance when those fees start rolling in.
  5. Once your will has been signed, our relationship continues. I will register your will online so that it can be easily located when needed. I will store the original will for you, should you so choose. I will make contact with you each year to ask: how has your life changed since we met, and does your will need to change to keep up with it?
  6. In my view, banks do not offer free wills to benefit their customers. They offer free wills to snag lucrative executors’ fees when their customers pass away. Should your estate be deemed small potatoes, the bank will drop it like a hot potato and your heirs will need to get the Master to appoint another executor in their place. Should it be sufficiently large, a bank official who probably never met you will wind up the estate and charge the maximum allowable fee (3,5% of asset value) for doing so. I recommend to my clients that they appoint their major heir as the executor, unless there is good reason not to do so. The heir can then approach an attorney of their choice for assistance in winding up the estate. That may be me. It may be their own attorney. Some clients prefer to appoint me as their executor, as they trust me to treat their heirs with care. We have a relationship, and winding up a client’s estate is generally the last service I can offer them. My fees for winding up an estate are negotiable, and unlikely to be the maximum fee unless the estate is very small in value and the work still considerable.
  7. And the website offering a four-step will for R350,00? Whoever owns it has a great passive income business and may be getting quite rich. I hope they have had a professional draw up their will. Ha.

 

 

The 11 Things an Executor Must Do

The administration of a deceased estate is a cloaked and murky process. As laypeople, we may hand over the task to an attorney or bank, wait a long time, see a sizeable fee deducted for executor’s remuneration, and never quite understand what happened in the intervening period. What do executors actually do, and why do even small estates take months (or even years!) to wind up? In this blog, we cover the 11 step process an executor follows to wind up a deceased estate.

Step 1: Meeting the family

The nominated executor will start off by meeting with the deceased’s loved ones to commence the process of winding up the estate.

Step 2: Reporting the estate

At this early stage, she will take possession of the deceased’s original will (if any) and assist the loved ones in completing the necessary documents to report the estate to the Master of the High Court. There will be an initial assessment of the size of the estate to determine whether a full administration process is needed or whether a truncated procedure can be followed if the estate assets are valued at less than R250 000,00.

Step 3: Obtaining letters of executorship

She will send off the reporting documents to the Master, who will then issue Letters of Executorship in her favour, which empower her to handle the estate and liaise with debtors and creditors.

Step 4: Notice to creditors

She will place a notice in the Government Gazette and a local newspaper, advertising the estate and calling on all creditors to come forward and lodge their claims against the estate, within a 30 day period. The executor will receive and assess all claims received.

Step 5: Open estate cheque account

She will open a cheque account in the name of the estate as soon as there is cash in hand. All cash assets and monies due to the estate will be deposited into this estate.

Step 6: Valuations of assets and liabilities

She will determine what the assets in the estate are valued at, and the amount of the estate’s debts. Assets include immovable property, movable property, cash and investments, and claims in favour of the estate. Liabilities include debts and administration expenses.

Step 7: Draft liquidation and distribution account

This is the core of the administration process. Having gathered the necessary information, the executor will draw up a comprehensive account that sets out all assets and liabilities, their values, any cash surplus or shortfall, how the estate must be distributed in terms of the will or law of intestate succession, estate duty calculations, and handling of fiduciary assets. This account goes to the Master for scrutiny.

Step 8: Respond to Master’s queries

In response, the Master will send a query sheet giving details of documents and information required at different stages of the process.

Step 9: Inspection period

Once the Master’s initial queries have been responded to and he is satisfied with the account, the executor will place a notice in the Government Gazette and a local newspaper, advertising the account as lying for inspection for a period of 21 days. During this period, any interested person may inspect the account and lodge objections to it. Any objections are responded to by the Master.

Step 10: Distribution

Once the account has lain for inspection and any objections have been dealt with, the executor must distribute the estate assets by transferring immovable property, delivering movable property, and/or paying cash inheritances over to the heirs.

Step 11: Discharge of executor

The executor will be paid her remuneration and send the necessary proof to the Master to demonstrate that all assets have been distributed as required, as well as a full set of bank statements and unpaid cheques. She can then apply for a discharge as executor, supported by affidavit. At this stage, her duties have been completed.

The administration of a deceased estate is a process with many stages, all of which take time. A professional executor should keep you informed at all stages of where the process is, and what comes next.

For assistance in winding up a loved one’s estate in a timely, sensitive and cost-effective manner, contact us below or at camilla@roseattorneys.co.za

Divorce and the forgotten will

Divorce inevitably affects one’s estate. If you were married in community of property, your joint estate is divided up. If you were married with accrual, some money or property would have changed hands, or one of you would have waived a claim. Even if you were married out of community, some division exercise would have taken place in the common home to sort out what is yours and what was your spouse’s.

Yet the last thing on your mind when going through a divorce may be your will. It may have been signed years earlier – in happier times – and the chances are that your spouse would have been your primary heir.

The Wills Act acknowledges that it can take some time to get one’s affairs in order after a divorce. Section 2B provides that, if (1) you made a will before your divorce (or annulment) and (2) you die within three months of your divorce (or annulment), then your will will be implemented as if your former spouse died before you. An exception is made where it is clear from the will that the bequest is made regardless of divorce.

Three months after a divorce, however, any outdated will that benefits your former spouse becomes of full force once again. If you die three months and one day after your divorce, and your old will made your former spouse your heir, then they will still inherit.

It is thus important to think about the need to update one’s will whenever there is a major change in status such as a divorce. Births, deaths, marriages and divorces, and major changes in one’s estate, should all trigger a review of your will to ensure that it still reflects your wishes.

Contact us to draw or revise your last will and testament and/or living will: camilla@roseattorneys.co.za / 074 697 2048.

 

FWIW cncllg cntrct TTYL B4N

If you have a smartphone, you probably use Whatsapp daily. This handy little app has 1,3 billion monthly active users, but is often controversial – sending your data to Facebook for targeted adverts and friend suggestions, and encrypting communications to lock out cybercriminals but also government agencies investigating terror networks.

Our whatsapp conversations are increasingly being entered into evidence in court proceedings.

A Saudi man reported that he divorced his wife after the app showed that she had received and read his messages, but failed to respond to any of them. This process, known as “blue ticking” in reference to the little blue ticks that show that your message has been displayed on the recipient’s phone, also played a role in a Taiwanese woman’s divorce. She submitted evidence of her husband continually ignoring her messages, and this was accepted as evidence that the marriage had irreparably broken down.

An Italian divorce lawyer reported that evidence of whatsapp messages between spouses and their extra-marital partners was being used in around half of the divorce cases going to trial there.

Closer to home, the country scrutinised emotional whatsapp messages exchanged between murder convict Oscar Pistorius and his victim Reeva Steenkamp, provided as evidence of a tumultuous and emotionally abusive relationship.

Increasingly, even business negotiations may take place via whatsapp. But are these communications legally binding?

The Electronic Communications and Transactions Act of 2002 (ECTA) gives formal legal recognition to transactions concluded by email. The Act obliges courts interpreting its provisions to recognise and accommodate electronic communications in applying statute or common law.

Our law recognises a data message (such as an email or whatsapp message) as adequate in most cases where the law or an agreement requires something to be in writing. Notable exceptions where agreements cannot be concluded electronically include deeds of sale of immovable property, and last wills and testaments – even where an advanced electronic signature is used.

The law or an agreement may also require that a document be signed by a party. The question then arises as to whether one can sign a document via email or whatsapp. This question was recently considered by the Supreme Court of Appeal (SCA), in the case of Spring Forest Trading (SFT) versus Wilberry (W).

W owned car wash equipment, and contracted with SFT to operate car washes at several locations, using its equipment, for which SFT paid W rentals. SFT fell into arrears, and the parties entered into discussions to remedy the situation. A face-to-face meeting was held, after which SFT’s representative emailed W’s representative, recording in writing four proposals which W had offered it. The second proposal was recorded as “Cancel agreement and walk away.” SFT sought confirmation that, if this proposal was pursued, there would be no legal claims by either party.

W’s representative responded by email, confirming that, provided all rental arrears were paid, there would be no legal claims.

SFT then emailed W, advising that it accepted the second offer.

SFT returned the car wash equipment and paid the rental arrears. That might have been the end of the matter. It was not, however – SFT continued to run car washes from the same locations, now renting equipment from W’s competitor – probably not the outcome that W had foreseen.

W rushed to court on an urgent basis, claiming that its agreements with SFT had not been validly cancelled, and seeking an interdict to prevent SFT from operating car washes while it prosecuted a claim for damages. The High Court was sympathetic, and granted an interdict, agreeing that the agreements had not been validly cancelled. The judge deciding the matter found that the agreements – which required consensual cancellations to be reduced to writing and signed by both parties – did not allow for cancellation via an exchange of emails.

SFT appealed this judgment to the SCA. It relied upon ECTA, which states that, where parties to an electronic transaction require an electronic signature, but have not agreed upon the type of electronic signature, then the requirement is met if (1) a method is used which identifies the person and indicates their approval of the information communicated and (2) the method was as reliable as was appropriate for the purposes for which the information was communicated, having regard to all the circumstances. It argued that the consensual cancellation had been reduced to writing in the form of the exchange of emails, and had been signed by the parties when they ended each email by typing their full names.

W disagreed, arguing that (1) the emails were evidence of negotiations but could not constitute an actual agreement to cancel, (2) at best, the emails only referred to the rental agreements and not the master agreement between the parties, and (3) even if ECTA applied, then an advanced electronic signature was required, and this was absent.

The SCA found: (1) the emails clearly amounted to an agreement and not mere negotiations, as the parties reached consensus that they could walk away once arrears were settled and equipment returned, with no further legal consequences and (2) “walking away” could only mean that all agreements would be cancelled.

On (3), the court examined ECTA in more detail, finding that:

  • a data message could unquestionably satisfy the requirement that an agreement be in writing;
  • an advanced electronic signature was only required where imposed by law, and not in private agreements: it involved an elaborate and strict application process, for accredited products and services only. The parties did not deal in such products or services;
  • between private parties who required a signature, a standard electronic signature would suffice.

W argued that the recordal of a party’s full names at the end of an email did not meet the ECTA requirements for an ordinary electronic signature – there was no reliable method to identify the parties and indicate their approval of the information communicated.

The court disagreed, pointing out that courts have always taken a pragmatic approach to signatures, and required that a signature authenticates a signatory’s identity, without insisting on specific forms. In appropriate cases, a witness touching the pen while a magistrate made a mark on her behalf, had been accepted as a valid signature. The typed names identified the parties, were logically connected with the information that preceded them, and satisfied the ECTA requirements for an ordinary electronic signature.

The appeal was accordingly upheld, and the interdict against SFT set aside.

Had the parties not appended their names or another form of signature to their emails, however, the requirement that a consensual cancellation be signed by both parties would not have been met, and the purported cancellation would have been ineffective.

In summary, electronic communications via email, whatsapp and other means are increasingly relied upon in commerce. Parties engaging in electronic communications in business matters should be aware that these communications may feel casual but can be legally binding upon them. Where a party is negotiating by text or email but intends for any resultant agreement to be written up and signed on the printed page before it will be binding, this should be spelled out clearly – before an “in principle” agreement is reached. Failure to do so can mean that a party is bound by the terms set out in the text exchange, while other pertinent clauses the party may have wished to insist upon will be excluded.

While email and text are convenient, in cases such as the one above, the presence or absence of a signature can have far-reaching and costly implications. When emails and texts are intended to have legal consequences, a party would be wise to ensure that these communications still fulfill all legal requirements – such as a full signature where one is required. Had the parties’ representatives ended their emails with an unsigned greetings (“Best”) or an initial for shorthand (“C”), the outcome of the case may have been quite different – and a business potentially ruined in the process.

The abrasive, confrontational employee – you’re fired?

An employment relationship is inherently unequal. The employer dishes out instructions, and the employee is duty-bound to follow those instructions (if they are lawful and reasonable), and in general to be respectful of the employer and her authority.

For that reason, our law recognises insolence and insubordination by an employee as misconduct that, if wilful and sufficiently serious, could justify dismissal after a single offence.

An employee can be both insolent and insubordinate, or merely insolent.

Insolence refers to rudeness and disrespect. An employee might make a snide, sarcastic comment, slam a door, or ignore you when speaking. The insolence can be directed towards a senior, equal or junior in the workplace.

Insubordination goes further, and refers to a deliberate, persistent and serious challenge to, or defiance of, an employer’s authority, whether through words or conduct. Insubordinate conduct may include refusal to carry out a lawful and reasonable instruction from an employer, but could also include such actions as a verbal or physical altercation with the employer that clearly challenges the employer’s authority. The insubordination can only be directed upward, to a senior in the workplace.

A couple of weeks back, a prospective client telephoned and related an alarming incident at her office: a member of staff had screamed and shouted at her, stormed out of the office, slamming the door, stormed back in, grabbed her handbag, and announced that she was leaving and would be back in the morning. The employer concerned implored: “I need to dismiss her, I cannot accept her back in the office. This is unacceptable – other employees witnessed this incident.”

On the face of it, the employee’s conduct was certainly insolent and possibly insubordinate. But would it be grounds for dismissal?

A similar case came before the Labour Appeal Court. That employee had an acknowledged abrasive style, loud voice, and sense of justice that compelled her to speak up when she felt her rights were being infringed upon. The relationship with the employer was deteriorating, as they were unhappy with her performance and with her abrasive manner with colleagues. The employer was concerned that she had allowed staff to use a work phone and run up a sizeable bill. The employer threatened to deduct the cost from her salary, and in fact did so.

The employee was aggrieved, and approached the employer to challenge the deduction, which had in fact been unlawful. The employer refused to discuss the matter with her, and turned his back on her when she tried to talk to him. The employee than raised her voice at him, telling him not to turn his back on her. The employer claimed in evidence that she had screamed and shouted at him, calling him unprofessional and “not an MD”, but this was disputed by the evidence of witnesses to the incident.

The employer charged the employee with insubordination and dismissed her.

At the CCMA, the commissioner agreed that the employee had been guilty of insubordination, and upheld her dismissal.

The employee took the matter on review to the Labour Court, who agreed with her that the CCMA award could not stand. The Labour Court’s decision is problematic, as it wrongly held that insubordination required a prior instruction. It ruled that the employee’s conduct was not insubordination but gross insolence, and that dismissal was too harsh a penalty. The employee did not want to be reinstated and was awarded 10 months’ salary as compensation.

On appeal by the employer to the Labour Appeal Court, the court rubbished the Labour Court’s finding that insubordination only arose from non-compliance with an instruction. But it agreed that the award was unreasonable and could not stand. Significantly, the employer’s conduct in unlawfully deducting money from the employee’s salary and then condescendingly refusing to discuss the matter with her, was found to have been serious provocation. In the circumstances, the seriousness of the employee’s conduct was reduced. It was found that she had been insolent but not insubordinate, as she had not persistently, wilfully and seriously challenged the employer’s authority – she had reacted in a knee jerk manner to provocation in the heat of the moment.

In the case of mere insolence or mere insubordination, not of a particularly gross nature, a prior warning was required before dismissal. The warning had to be given after the employee had enjoyed a full opportunity to be heard on the matter. There had been no prior warning in this case, although there had been allegations of past rude conduct, and so dismissal had been inappropriate. The finding of unfair dismissal and award of compensation were upheld.

And so, could the prospective client fire the employee who had shouted at her and stormed out of their meeting? The answer is more complex than it might first appear, and what preceded the incident is important. If the employee was responding to an intolerable provocation by the employer, then the seriousness of the offence may be mitigated, and a hearing may result in a warning.

 

 

Fair play: the role of “ground rules” in a mediation

You have made an appointment with the mediator, you have signed and returned the mediation agreement, and now you are in the chair in the mediator’s consulting room, not entirely sure what comes next.

Many mediators will start the first mediation meeting by going through ground rules for the mediation process.

Ground rules set the stage for a respectful and productive conversation. Many of them provide for the rules of etiquette that apply in any good social interaction, but which are often forgotten when tempers are raised. By agreeing upon and abiding by ground rules, a safe environment is created in which to engage fruitfully. This may not be possible outside of the mediator’s consulting room.

A mediator may suggest her own set of ground rules and ask the parties to agree to them, or may ask the parties to come up with their own ground rules. The sort of ground rules a mediator may ask parties to agree to, include:

  • Speak for yourself. Avoid engaging in blame and criticism of the other person.
  • One person speaks at a time. Do not interrupt. (The mediator reserves the right to interrupt in order to keep proceedings on track.)
  • Each person is entitled to a fair opportunity to express themselves fully.
  • Listen to understand, and delay formulating a response until you are sure that you understand what the other person is trying to communicate.
  • Treat one another with dignity and respect. No raised voices or abusive language.
  • Focus on building an agreement for the future, not rehashing the past.
  • Cell phones should be turned off, and placed out of sight, so as not to be a distraction.
  • Keep what is said in the mediation sessions, confidential.

Having agreed to these rules of engagement, the mediator will gently remind the parties of their agreement, should their communication stray away from what was agreed. In this way, the mediator aims to hold the space for both parties to fully and frankly express themselves, be heard, and offer constructive input.

Some mediators do not like to introduce ground rules, as they feel it places them in the position of a parent, refereeing squabbles between two ill-disciplined children. They prefer to expect the best from the parties, and only intervene with guidance if and when problems arise. The difficulty that arises with this approach, is that one party may feel that the mediator is showing bias against him or her, should the mediator raise ground rules after the process is already underway.

Rose Attorneys offers mediation services, with a special focus on divorce mediation.

In any divorce proceedings, a dialogue facilitated by a mediator can bring matters to a quicker and more peaceful resolution than proceeding at once to issuing summons and exchanging proposals via attorneys and court documents.

Especially where a divorcing couple must co-parent in future, a mediation process can be invaluable. While litigating tends to harden positions and further damage the parties’ relationship, mediation offers the possibility of reducing tensions, and building new foundations for a constructive future co-parenting relationship.

If you are interested in more information about divorce mediation, contact Camilla Rose at camilla@roseattorneys.co.za or 074 697 2048.

“Hoping for the best, prepared for the worst, and unsurprised by anything in between”: the case for signing a living will today

What is a living will?

The living will (also known as an advance healthcare directive) is a document which sets out your wishes for medical care, and directs your medical caregivers in the event that you become permanently incapacitated, with no reasonable prospect of recovery, and unable to make your own decisions.

It is generally used to record a wish to refuse medical treatment that keeps one alive by artificial means, when one faces a hopeless prognosis and is either suffering great distress or left incapable of rational existence.

The living will can direct that any medication (including powerful painkillers) that eases suffering, should be provided, even if such medication hastens one’s death. In short, the living will aims to prevent the fruitless prolonging of death, once medical treatment can no longer meaningfully extend life.

How is a living will made?

A living will should be in writing, and one can be made by any adult of full mental capacity. It is wise to sign the living will similarly to a last will and testament – dated and signed before two independent witnesses aged over 16 years, who also sign the document, each signatory signing in the presence of each other signatory. The witnesses should ideally exclude your next of kin, your doctor, and your heirs in terms of your will, so that there is no possible conflict of interest.

Should a living will form part of your last will and testament?

The living will has an entirely separate function to a last will and testament, and should stand as a separate document in its own right. Families will generally consult a last will only after a death, by which time the medical directives are no longer useful. Living wills can be registered free of charge, along with your last will, with the online SA Registry of Wills and Testaments (www.sarwt.org) , for ease of location when needed.

Is a general power of attorney a better option?

A living will must be distinguished from a general power of attorney (POA). While a POA enables you to appoint another person to exercise your legal rights on your behalf and in your stead, it is only valid for so long as you are yourself mentally capable. Once your mental capacity is compromised, the power of attorney becomes void. A living will prepared before you need it, is a simple, cost-effective route to convey your medical wishes when you are no longer able to communicate. A living will signed while you are of full mental capacity, remains valid even if you lose mental capacity thereafter.

Must my doctors respect my living will?

There is not yet a specific law in South Africa which renders living wills legally binding, but in practice they are to be respected.

The South African Medical Association (SAMA) has issued guidelines for the handling of living wills by South African doctors. SAMA advises its members to respect and uphold a living will as embodying the patient’s expressed wishes, unless there is evidence to the contrary. It counsels patients to ensure that their family members and treating doctors are aware of the existence of their living will and where it can be located, or preferably to lodge copies with their family and doctors. If the living will document is not immediately available, the doctor may treat the patient and should not withhold treatment pending discovery of the document. Treatment can be halted once a document refusing such treatment has been found. Doctors who have moral objections to withholding treatment, should volunteer a referral to another doctor, as the patient has the right to refuse treatment.

What about my loved ones?

When a patient is incapacitated and unable to give directions as to medical treatment, their doctors will look to their next of kin for consent to a specific course of treatment. A living will relieves loved ones of some of the emotional and psychological burden of making end-of-life decisions on behalf of their incapacitated family member. Such direction is particularly useful where there may be disagreement as to the best course of action, sowing conflict among loved ones and leading to guilt and recriminations.

If you would like to draw and sign a living will, contact us at camilla@roseattorneys.co.za or 074 697 2048.

 

Halting the harassment: the scope of protection available under the Protection from Harassment Act of 2011

The Protection from Harassment Act became law four years ago. In The new Protection from Harassment Act we examined the new Act, which vastly strengthened the capacity of magistrates to bring harassment to a decisive halt, by means of a cost-effective and user-friendly process.

In the intervening period, very little jurisprudence has developed to guide the future interpretation and application of the Act. One judgment emerged in 2016, from the KZN High Court, however, and has significant implications for the scope of protection available under the Act.

In Mnyandu versus Padayachi, the complainant and respondent were colleagues. The respondent was aggrieved by the conduct of the complainant (her immediate senior) and others at a meeting. As a result, she sent a single email to various people in the workplace, in which she accused the complainant and others of verbally and emotionally abusing her in the meeting. The complainant was in turn aggrieved that the allegations were untrue, and approached the magistrates court for a protection order in terms of the Act. The magistrate found that the respondent’s allegations of abuse were wholly untrue, and issued a protection order as requested, restraining the complainant from defaming the complainant or sending further malicious emails. The respondent appealed the order to the High Court.

The High Court found no basis to interfere with the magistrate’s assessment of the evidence. An email had been sent, which had contained malicious falsehoods about the complainant. For the High Court, however, this was not the end of the story.

The High Court reflected that the ambit of the Act is comprehensive. On the face of it, it covers all sorts of conduct causing all sorts of harm. The court was concerned that too wide a construction of the term “harassment” would result in a flood of applications arising from conduct that the Act was simply not intended to cover. On the other hand, the Act could not be interpreted too restrictively, or the Act would fail to meet its objectives.

The court considered a Law Reform Commission discussion paper on stalking, which contributed to the development of the Act, as well as the wording and interpretation of similar laws in other countries around the world. It then formulated the following test for harassment in terms of the Act:

1. the conduct complained of had to be “oppressive and unreasonable” in order to qualify as harassment under the Act;
2. this was to be assessed objectively, by considering the qualities of the respondent’s conduct rather than the subjective impact on the complainant, although the social context could be relevant; and
3. such conduct had to be sufficiently serious that it was objectively likely to cause not merely a degree of alarm, but serious fear, alarm and distress.

The court further expressed a non-binding view that, while the Act does not refer in its definition of harassment to a “course of conduct”, the conduct complained of should probably:

1. Have a repetitive element that made it oppressive and unreasonable, tormenting or inculcating serious fear or distress in the victim; or
2. Be of such an overwhelmingly oppressive nature that a single act had the same consequences.

The court found that the respondent’s conduct in sending the untrue email was unreasonable, but not objectively oppressive or of sufficient gravity. It therefore did not constitute harassment for the purposes of the Act. The final protection order was set aside on appeal.

This judgment indicates that, while the Act itself is incredibly broad and seems to encompass a huge range of misdemeanours, it will be interpreted on narrower grounds. Protection orders are likely to be refused when the incidents complained of are deemed minor, or unreasonable but not oppressive. The conduct must be such that it would cause a reasonable person serious fear or distress, and not merely annoyance or mild alarm.

 

The enforcability of restraints of trade

Employing a key staff member can feel like risky business. They will get to know your clients, your systems, your “tricks of the trade”. All well and good: you want your staff to be well-liked by your customers, and knowledgeable and effective in their work. But what if, having accepted your training and support to become a true asset to your organisation, your employee leaves and goes to work for your competition? Can you include clauses in your employment contract to prevent this?

A well-known labour law consultancy certainly hoped so when they employed Mr DJ in 2014. His employment contract included extensive confidentiality and restraint of trade clauses, which the Labour Appeal Court adjudicated upon last week.

After about 15 months’ employment, DJ resigned to take up employment with an employer’s organisation who competed with the consultancy to offer similar services to similar clients. His employment contract restrained him in perpetuity from disclosing any client lists, trade secrets of other company information received from the consultancy during his employment. It went on to restrain him from having any interest in any other entity providing similar services to the consultancy, engaging in any similar transactions with any of the consultancy’s clients, or in any way poaching the consultancy’s staff, for a period of 3 years after his resignation, throughout two provinces of South Africa.

The consultancy immediately drew DJ’s attention to the above restraints, and alerted him to their view that he was about to breach his obligations by taking up employment with the employers’ organisation. DJ disagreed that the two organisations were in competition with one another, but nevertheless undertook not to contact any of the consultancy’s clients to attempt to lure their business away.

The consultancy was not satisfied, and launched urgent proceedings  to interdict DJ and the employers’ organisation concerned, from entering into an employment relationship. The consultancy expressed the fear that DJ would take unfair advantage of his knowledge of its clients, pricing and business strategies, and abuse the strong relationships he built up with its clients to lure them away. DJ denied having any special access to the consultancy’s business strategies, saying that he had learned these before starting work for it and that the information was in any event readily available on the internet. He aso denied having any special bond with any of the consultancy’s clients.

The Labour Court was not satisfied that there was special, confidential information in DJ’s possession which could be abused to the detriment of the consultancy. Neither was it satisfied that DJ had been shown to enjoy especially close relationships with the consultancy’s clients. The consultancy had not proven that it had any protectable interest, and to enforce the restraint would be unreasonable as against DJ and only have the effect of stifling competition.

The consultancy approached the Labour Appeal Court with an appeal against this decision. It complained that DJ had entered employment with it as a blank slate, and had only become a valuable asset worthy of being head-hunted by its competitors, as a result of the training and resources it had invested in him. It argued that it was unfair to allow such an employee, who had signed a restraint when accepting employment, to go over to a competitor who would reap the benefits of this investment.

The Appeal Court noted that restraints of trade are enforceable unless they are proven to be unreasonable. Their reasonableness is determined by balancing the need for parties to comply with their contractual promises and the right to freely exercise one’s trade or occupation. A restraint would only be reasonable if it protected an interest worthy of protection, such as confidential information and trade secrets, or customer and trade connections. For information to be confidential it had to be useful, restricted to a small number of people, and have economic value to the employer. Customer or trade connections could be protectable if they were of such a nature that the employee could induce such connections to follow him or her to a new employer. An interest in preventing competition was not in itself protectable.

The employer’s protectable interest had to outweigh the employee’s interest in being economically productive. It stated that an employee cannot be restrained from taking away and using his or her skills, experience and knowledge, even if these were acquired chiefly through the employer’s training of the employee. These skills were not the property of the employer.

The Appeal Court found that DJ had been a relatively junior employee and had lacked access to truly confidential information. The forms he used for his work were freely available on the internet. He had no access to sensitive financial information or business strategies.  DJ’s evidence was that he only handled the simplest of tasks for clients and that he had no ongoing relationships with any clients such that they felt an attachment to him. He had no role in recruiting clients at either organisation.

As no protectable interest had been proven, the Appeal Court noted that it was unnecessary to weigh up the interests of the parties. DJ was entitled to pursue his career unfettered by the clear language of the restraint he had concluded with the consultancy.

Restraints of trade remain contested territory, with the enforceability of restraints coming down to the circumstances of individual cases. In general, they are of most use in the case of absolutely key personnel only, and should not be concluded with employees simply to fetter their career path and keep them from joining the competition.

NAME AND SHAME

Social media is vastly accessible. A post typed out on one’s phone in a moment can be immediately available to countless users around the globe. When one has been bitten by a bad business practice, it can be temptingly satisfying and even feel like the selfless discharge of a moral duty, to tap out and share a NAME AND SHAME post. The perpetrator will feel your rage and lose business, perhaps even contact you to make things right, and others will be saved from falling into the same position you find yourself in.

But is it a good idea? Specifically, is it safe from a legal point of view to mouth off online?

In a recent judgment, the High Court was called upon to decide the bounds of free speech when a nasty business encounter is publicised on social media.

Mr JE was an unhappy man. He had bought an expensive car part from company AMT. There was a dispute as to whether or not the part was supplied damaged. Either way, JE found himself out of R15 000,00 and with no usable part. Phone calls to the business became acrimonious and did not resolve the matter. JE turned to the popular consumer website Hello Peter and reportacrime.co.za and posted complaints about his experience, in emphatic terms.

Company F, mentioned in the complaints and run by family members of the people behind AMT (since liquidated), took exception to the unfavourable publicity and sued JE to remove the complaints and desist from publishing any untrue allegations on the internet or in print media.

The court noted that, as in any defamation case, the company had to prove that there had been a publication by JE of defamatory material infringing its good name or reputation. Even true statements could be defamatory. Wrongfulness and intention on the part of JE were then presumed unless he could establish a defence allowing him to escape liability.

It was common cause that JE had intentionally published the complaints about the company, but it was disputed whether the posts were defamatory, wrongful or justified.  JE claimed that he was exercising his right to free speech and that the statements were true and published in the public interest.

To determine wrongfulness and defamatory content, the court indicated that the ordinary meaning and any innuendo in the statements had to be established. Then, one had to consider whether these damaged the company’s reputation, in the opinion of a reasonable person. If the statements were wrongful and defamatory, then JE had to prove a justification in law for publishing them.

Fair comment would be acceptable if it was expressed as comment on true facts, was fair, was not prompted by spite or malice, and was in the public interest.

In this case, the complaints contained statements based not on reliably proven facts but on allegations passed on to JE from third parties.

Proof of substantial truth would ordinarily be sufficient, however as JE alleged fraud, dishonesty or criminal conduct on the part of the company, every aspect of his allegations had to be true. The posts complained of were in fact not strictly true. JE had extrapolated from his experience to warn all and sundry that company F was the same as AMT (it was not) and that the company would deliver defective goods and fail to refund customers as a general rule.

The publication was not fair as the company had had no opportunity to comment before publication was made.

The court found that JE did publish out of spite and malice, as he had had no dealings with company F but was angered that AMT had not refunded him.

The court noted that a defamatory publication which was untrue or only partly true, could never be in the public interest. The court mentioned that members of the media, who are bound by codes of conduct, enjoy special protections against defamation claims, in that they can be excused for publishing false defamatory statements if it was reasonable to do so. Private citizens do not have this right.

The court found that the publications were defamatory and that they were neither fair comment nor truth in the public interest. JE had unleashed falsehoods and half-truths into social media with “unlimited global reach” and had overstepped the bounds of his constitutional right of free speech.

In the premises, JE was ordered to remove his complaints, desist from publishing further untrue statements, and pay both parties’ legal costs.

This case should serve as a cautionary tale for all social media users. As satisfying as it is to unleash a torrent of complaint at a company with whom one has had a below par experience, the consequences can be serious.One should think twice and three times before posting angry words on a global platform.

The court mentioned that liability for defamation can attach not only to the original poster but also to any person who repeats, confirms or draws attention to it. The fact that the defamatory comment was already in the public domain was no defence. Thus one should also think carefully before hitting the “share” button.