VZK | January 2024 Newsletter

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January 2024
Dear Client / Geagte Kliënt

Duties of Trustees

Trustees have a fiduciary duty which can best be described as a duty of trust towards the Body Corporate of a Sectional Title Scheme. This means that trustees must exercise their powers in good faith on behalf of all the owners of the Sectional Title units whom they represent. They may not act in their own interest or for another’s gain. They must also display reasonable care and skill in managing the affairs of the Body Corporate. If trustees fail to do so they could be accused of having breached their fiduciary duty which may result in them being held personally liable for any losses suffered by the Body Corporate (the owners of the Sectional Title Units).

Recently, in the case of Body Corporate of Sunnyside Gardens v Perreira ZAGPPHC 1960 (28 November 2023) the conduct of members of the Board of Trustees was considered.

A summary of the case

The Chairperson of the Board of Trustees and another trustee had a long history of conflict with Perreira (owner of a Unit in the Scheme and a co-trustee). They did not hide the fact that they disliked him and found him to be a nuisance. They apparently received complaints about Perreira running a carpentry business from his garage and illegitimately using the common property electricity for his business. Without notifying Perreira about these complaints and giving him an opportunity to respond thereto, attorneys were instructed to send him a letter. The letter was circulated to the Managing Agent and all members of the Board of Trustees.

The Attorney’s letter claimed that Perreira was using his garage for an impermissible purpose (a carpentry business) and in doing so, he was illegitimately using the electricity of the common property and causing a nuisance to his neighbours. He was asked to immediately stop being a nuisance to other owners, to cease running his business from his garage and to cease using the electricity of the common property to sustain his business.

Perreira believed the letter to be slanderous and he was disgusted at the accusations against him. He further felt threatened by it. He responded by sending a letter to the attorneys, denying the allegations, and requesting an apology, but received no reply. He instituted legal action against the Body Corporate for defamation and claimed payment of R100 000 in damages.

The Magistrate concluded, amongst other, that

The letter did not merely inform Perreira of complaints that have been received and provide
an opportunity to respond thereto. The letter was defamatory of Perreira and clearly indicates that Perreira was both accused and found guilty of wrongdoing.
The inference can be drawn on the evidence that the intention of the responsible members of the Board of Trustees was to defame the plaintiff and injure his reputation amongst the members of the Body Corporate. Both witnesses disliked Perreira and made no attempt to hide it.
There was no evidence that Perreira had indeed contravened the conduct rules as alleged in the letter. There was no plug point from which Perreira could have drawn electricity. No investigation was conducted after complaints were allegedly received. There were no incident reports reflecting any complaints received by the trustees from any owner.

Perreira’s defamation action against the Body Corporate was successful. He was awarded R50 000 in damages with interest and costs. The Body Corporate appealed to the High Court and asked that the magistrate’s order be set aside with costs. Perreira, however, defended the judgment and order. The appeal was unsuccessful and was accordingly dismissed with costs.

On appeal, the Court mentioned that the matter concerned the conduct of members of Board of Trustees, who are duty bound to act in good faith and cannot advance their personal agendas as had ensued.

In Closing: Whether the Body Corporate considered the conduct of the members of the Board of Trustees as a breach of their fiduciary duty towards them or whether they were held personally liable by the Body Corporate for the aforesaid amounts which they were ordered to pay Perreira is unknown.

Groete / Regards

Eberhard, Cheryl-Anne, Andre, Marzanne & Kume

		Property Insight: Alternative Power Supply Installations PART II – Certificates of Compliance
		Following *Part I* where we discussed the permanence of an APS (alternative power supply) and when such installation can be deemed a fixture or fitting, we are now exploring further into the legality of such APS in terms of compliance.

Kan jy wette en regulasies oor die gebruik van grond gebruik om 'n buurman se besigheid te sluit?
Jy vind dalk dat jy tot raserny gedryf word deur die oorlas van 'n buurman se sakebedrywighede. As jou vele pogings om 'n vreedsame middeweg te vind, tot op hede onsuksesvol was en bly, gaan jy die regsroete moet oorweeg. Dit is iets wat jy so ver moonlik wil vermy, maar as daar geen ander keuse vir jou oorbly nie, moet jy hof toe gaan. Ons bespreek twee sake waar die bure sake van hul persele bedryf het in stryd met die toepaslike sonering van die eiendomme. Ter afsluiting bespreek ons hoe jy 'n eiendom se sonering en toegelate grondgebruike kan nagaan voordat jy dit koop.

		Estate Planning: Remember your Pets!
		In planning our estates and drafting our wills, our focus is inevitably on protecting our (human) loved ones. But spare a thought also for your pets. What will become of them when you are no longer around to look after them? We’ll share three ideas for ensuring that they don’t end up needlessly euthanised or consigned to a shelter. First however we discuss the concept of a “pets’ living will” – similar to your own living will, and equally designed to save your pets from needless distress and suffering.

Krediteure kan ook nou by die hof aansoek doen vir direkteure om as misdadig verklaar te word.
Maatskappydirekteure moet 'n lys van verpligtinge nakom. Anders kan hul persoonlik aanspreeklik gehou word vir verliese en skulde van hul maatskappy, of strafregtelik aanspreeklik gehou word vir die maatskappy se optrede. Die hof sou ‘n direkteur ook in uitsonderlike omstandighede as misdadig kan verklaar. Enige persoon wat as ‘n misdadige direkteur verklaar word, sal dit as 'n ernstige en benadelende klad en sanksie op sy of haar loopbaan ervaar. Tot nou toe kon skuldeisers nie self aansoek doen om afvallige direkteure as misdadig te laat verklaar nie, selfs al kon hulle hul verliese direk aan die optrede van die spesifieke direkteur koppel. Dit het nou verander na ‘n onlangse beslissing van die hooggeregshof. Ons kyk hierna om te bepaal onder watter omstandighede die hof skuldeisers sal magtig om so ‘n aansoek te bring en wat skuldeisers moet bewys om hiermee te slaag.

		Moonlighting Without Consent is Misconduct – A Firing Offence
		Moonlighting is reportedly common in South Africa, and that seems unlikely to change any time soon. Everyone should therefore take note of a recent Labour Court finding that a highly qualified university lecturer’s decision to take a second full-time job without permission justified her dismissal. We’ll discuss the facts of the case and the Court’s analysis of what our law has to say on the matter, with a specific focus on when moonlighting is unacceptable and when an employer will be justified in dismissing an offender. We’ll end off with some important practical advice for both employees and employers.

Legal Speak Made Easy
*“Copyright” or “Copywrite”?* Commonly confused, and sometimes incorrectly switched out by spell-checkers, these two terms are pronounced identically but have completely different meanings. “Copyright” is one of our intellectual property legal protections for creators of artistic and creative works. In South Africa it is automatic and doesn’t require registration; but adding a copyright notice with a “©” symbol and the year of creation to your work tells would-be plagiarists that you are serious about protecting your rights. “Copywrite” on the other hand is what a “copywriter” does – literally, “writes copy”, usually for some form of advertising or other marketing communication.

Our Directors

Eberhard
Kruger
DIRECTOR
021 180 4552 / 082 789 1706
ekruger@vzk.co.za

Cheryl-Anne
Ehrenreich
DIRECTOR
021 180 4564 / 082 783 7242
cheryl@vzk.co.za

Andre
Van Greunen
DIRECTOR
021 180 4550
andre@vzk.co.za

Full Bio →



		Marzanne Van Wyk DIRECTOR 021 180 4551 marzanne@vzk.co.za				Kumedzani Muloiwa DIRECTOR 021 180 4578 kume@vzk.co.za

© LawDotNews & Van Zyl Kruger Inc. This newsletter is a general information sheet and should not be used or relied on as legal 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.

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DIRECTORS: E S KRUGER (B.COMM LL.B MPRE); C A EHRENREICH (BA.LL.B LL.M); AJ VAN GREUNEN (BPROC, LLB, LLM);
M VAN WYK (B.COM LLB); K MULOIWA (LLB)
ASSOCIATES: S JANSE VAN RENSBURG (B.COM LL.B); L J CHANTLER (B.COMM LL.B);
A BARNARD (B.COM LL.B DIP.FIN PLANNING); B SCHOLTZ (LL.B)
PRACTICE MANAGER: F BRAVENBOER (NDIP FIS)
EXECUTIVE CONSULTANT: HL VAN ZYL (B.PROC) CONSULTANTS: JAL VAN ZYL (B.JURIS LL.B);
C I’ANSON-SPARKS Solicitor in England and Wales (LL.B(HONS), DIP LEGAL PRACTICE)