by Kate Barnard | Feb 7, 2025 | Mediation
As many of you might know, litigation can become costly, especially if the parties are unable to reach settlement and the matter goes to trial. It also tends to be a lengthy process, as you could be waiting months, if not years before you get your day in Court due to the massive backlog of cases in the judicial system.
On 9 March 2020, the not so new Rule 41A of the Uniform Rules of Court of South Africa came into effect. The aim of the rule is to reduce the backlog of cases in the judicial system and promote alternative dispute resolution mechanisms by encouraging litigants to consider mediation.
The Rule requires a Plaintiff/Applicant in every new Action or Application to serve a Notice on the Defendant/Respondent together with the Summons or Notice of Motion, indicating whether such Plaintiff/Applicant agrees to or opposes the dispute being referred to mediation.
So, what is mediation?
Meditation is a completely voluntary process entered into by agreement between the parties to a dispute. It is a structured process, facilitated by an independent, impartial third party (the mediator) to assist the parties to either resolve the dispute between them or to identify issues on which agreement can be reached and where the parties are willing to compromise.
It is a confidential, Without Prejudice process, meaning that if the parties can’t resolve their dispute in mediation, nothing that was disclosed during mediation can later be used in Court.
If the dispute is resolved or an agreement reached, same is recorded by the Mediator, signed by the parties and becomes legally binding on the parties. Should either party want to enforce the agreement, they would need to approach the Court.
What are the benefits of mediation?
- Mediation can be faster and cheaper than litigation;
- It reduces the number of cases that end up in Court thus relieving the burden on the judicial system;
- It promotes reconciliation as it requires compromise that can be a win-win solution for both parties instead of an “all or nothing” win or lose outcome;
- It is a more flexible process than litigation and avoids technicalities and unnecessary delays;
- Mediation tends to be a less adversarial way to resolve disputes and can therefore preserve the relationship between the parties; and
- Mediation can be conducted remotely, avoiding unnecessary costs of travelling, and other inconveniences to the parties.
Embracing mediation as an alternative to litigation can alleviate the strain on the Courts, reduce delays and costs, and enhance access to justice. This shift towards a more proactive and collaborative approach reflects not only the changing dynamics within South Africa, but also aligns with the broader continental trend towards embracing alternative dispute resolution mechanisms.
For more information on alternative dispute resolution mechanisms kindly contact our offices or send us an email to Kate Barnard (Family and Commercial attorney at Webb Attorneys; kate@webbinc.law).
by Chelsea Swanepoel | Dec 15, 2024 | Leases
Having a non-paying tenant vacate the leased premises sooner rather than later is the hope of every landlord. While the landlord might be impatient and not want to afford the tenant 20 business days to remedy its breach; a 20-business day delay is nothing in comparison to the delay that may be caused should one fail to follow the legislative timelines and must restart legal proceedings from scratch. Below we explore the timelines envisaged in s 14(2)(b)(ii) of the Consumer Protection Act 68 of 2008 (CPA) and how the courts have applied this notice period.
Legislation: Consumer Protection Act
The supplier (landlord) may cancel the agreement 20 business days after giving written notice to the consumer (tenant) of a material failure (s 14(2)(b)(ii) of the CPA) where the consumer fails or refuses to remedy the breach within the given period. The landlord’s point of departure is to issue a notice of breach and letter of demand, affording the tenant 20 business days to cure their breach, failing which the landlord may issue a notice of cancellation or demand specific performance thereafter.
Judicial interpretation
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The Centpret Properties case
To summarise the facts of Centpret Properties (Pty) Ltd v Shandukane [2023] JOL 61090 (GJ); the lease agreement stipulated that the landlord may issue a notice of breach and letter of demand (notice), stating that the material breach must be cured in seven days. Failing which, the landlord may issue a letter of cancellation, terminating the lease agreement.
In para 11, the judge describes the right afforded to the tenant, whereby the tenant may reject the seven days stipulated in the lease agreement to cure the breach and is entitled to request the 20 business days as prescribed in the CPA. The tenant may then make use of the full 20 days to cure the breach.
However, the tenant may not treat the notice as defective and refuse to comply with the landlord’s instruction to remedy the material breach. When the notice is received by the tenant, despite the specified time frame of seven days, the legislative notice period starts running. If the material breach is not cured within 20 days, the landlord may exercise their right to cancel the lease after the expiry of the 20-business day period.
If the landlord cancels after seven days his actions may constitute a repudiation.
In Balwin Rental (Pty) Limited v Mathaba and Another [2021] JOL 53718 (GJ), the landlord gave the tenants seven business days to remedy their breach of non-payment. The tenant argued that the notice did not satisfy s 14(2)(b)(ii) of the CPA which affords 20 business days for the defaulting party to remedy its breach.
The judge found that a notice allowing the tenant seven days to remedy their breach is sufficient under the CPA, provided that the landlord waits at least 20 business days before cancelling the lease (para 22).
The notice was delivered in December 2019; however, the lease was subsequently cancelled in August 2020. The defaulting party had made three payments in January 2020, April 2020, and May 2020, but did not satisfy the outstanding amounts owed to the landlord and failed to satisfy the demand timeously.
The court found that the landlord’s delay in cancelling did not constitute a waiver of his right to cancel the lease agreement. The landlord’s cancellation notice delivered in August 2020, after the 20 business days to remedy the breach in December 2019 had expired, despite an eight-month delay, is sufficient and valid.
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The Transcend Residential Property Fund case
The tenants in Transcend Residential Property Fund Ltd v Mati and Others 2018 (4) SA 515 (WCC) made partial payment towards the outstanding debt after the seven days stipulated within the notice – but within the legislated 20 business days. However, the tenants failed to satisfy the debt in full within the 20 business days. The landlord was within its right to issue a letter of cancellation and accordingly terminate the contract.
The judge explained that the landlord is not obliged to inform the tenant of the legislative 20 business days to cure their default. If the notice of cancellation was delivered after the expiry of the 20 business days as per s 14 of the CPA, the supplier (landlord) has complied with s 14 of the CPA (para 56).
Conclusion
The Gauteng Local Division High Court in Johannesburg (Centpret Properties and Balwin Rental) and the Western Cape Division High Court in Cape Town (Transcend Residential Property Fund) agree that the seven days allotted to cure a material breach is not unlawful. The landlord is not saddled with the responsibility of advising their tenants as to the legislative timeline to cure their breach. In contrast, should the tenant receive a notice indicating seven days to remedy their breach; the tenant may invoke their right under s 14(2)(b)(ii) of the CPA to remedy their default within 20 days. Balwin Rental makes it clear that the landlord’s right to cancellation arises after the 20 business days has expired and the landlord may exercise that right any reasonable time thereafter.
To conclude, if you intend to institute proceedings against your defaulting tenant, you must afford the tenant 20 business days before issuing a notice of cancellation.
Karlynne Josephus LLB (UWC) is a candidate legal practitioner and Chelsea Lee Swanepoel LLB LLM (Stell) is a legal practitioner at Webb Attorneys Inc in Cape Town.
This article was first published in De Rebus in 2024 (December) DR 23.
by Mpho Matubatuba | Jan 31, 2023 | Fraud, Landlord Tips, Tenant Tips
I paid my rental into the wrong bank account due to fraud! What do I do now?
– tenant
My tenant paid the rental, but to a fraudulent account! What do I do now?
– landlord
Electronic Fraud
Payments are made by Electronic Fund Transfers (EFTs) on a daily basis. With the increase in the frequency and ease of EFT payments, we have seen an increase in associated fraud. Webb Attorneys was recently instructed to advise on this very issue.
The facts
The tenant received the rental invoice from the landlord via email, the date on the invoice was incorrect and the tenant requested that the landlord resend a revised invoice with the correct date. Within a few minutes, an updated invoice was sent to the tenant from the same email address, with the correct date, as well as a request to make all future payments to new banking details. The tenant proceeded to pay the rental to the new bank account. When the landlord had not received the monthly rental she followed up with the tenant for payment only to discover that it had been paid but into an account that was unknown to the landlord. . Investigations revealed that the emails had been intercepted and the banking details were traced to a third party who is not known by the landlord or the tenant.
So what next? Who is liable?
Is the tenant obligated to pay again, or should the landlord forfeit her monthly rental income?
The contractual basis for the landlord’s claim is the tenant’s contractual obligation to pay rental to the landlord as compensation for the use and enjoyment of the leased premises.
The tenant argued that they had made payment of the rental (the amount had left their bank account) and that the landlord was entitled, as per the lease, to change her bank account details via email, which “she” appeared to do.
The legal position
This dispute was heard by the Western Cape Rental Housing Tribunal. It found, as per our advice, that the tenant had not fulfilled its contractual obligation to pay the landlord, as payment had not been received by the landlord.
The Western Cape Rental Housing Tribunal highlighted the duty of a tenant (payor) and any debtor, to “seek out the creditor” and ensure that payment is received. Hence there is an obligation on any tenant/debtor to confirm whether the banking details for payment are correct.
In Galactic Auto (Pty) Ltd v Venter (4052/2017) [2019] ZALMPPHC 27, Venter (the debtor) made payment into the wrong bank account as per an email sent by a hacker. Galactic Auto delivered the vehicle to Venter but did not receive payment from Venter. Furthermore, Venter benefited from the continued possession of the vehicle. Venter testified that he bona fide believed that the money was paid to Galactic Auto and received in their account. The Court found that:
“The Defendant failed to verify the banking details with Pulane [Plaintiff] before he made payment of the purchase price by way of EFT. The Defendant merely assumed that the e-mail with banking details attached to it came from Pulane” [para 49.2 of the judgement];
“The Defendant had in fact paid the money into a wrong and fraudulent account. He had been defrauded by hackers who stole his money after they have changed the banking details on the said e-mail” [para 49.3 of the judgement];
“If the Defendant had only verified the banking details with Pulane he would have prevented his loss. His failure to do so was at his own peril” [para 49.4 of the judgement];
“The principles to be applied in cases where payment has been intercepted and misappropriated by a thief have been concisely summarized by Nienaber J (as he then was) in Mannesmann Demag (Pty) Ltd v Romatex thus: When a debtor tenders payment by cheque, and the creditor accepts it, the payment remains conditional and is only finalised once the cheque is honoured… That risk is the debtor’s since it is the debtor’s duty to seek out the creditor” [para 51 of the judgement].
Here are some useful tips:
1. Check, check, check! Don’t take anything at face value. Scrutinise the email address, look for spelling and grammatical errors;
2. Many agreements contain a non-variation clause which provide that any and all changes to the agreement are to be made in writing and signed by all parties; ensure that your banking details cannot be changed simply by sending an email;
3. Ensure that your electronic device is up to date with malware;
4. Verify the bank account on your banking app or via online banking; and
5. Confirm the invoice and banking details or any change thereof sent via email by making a telephone call and/or sending a WhatsApp.
Where does this leave the tenant?
The tenant has been defrauded, which is not without recourse, but falls outside the ambit of the tenant/landlord relationship. The tenant would have to follow the bank’s fraud procedure and report the theft/fraud to SAPS.
While it is clear that it is the tenant’s responsibility to ensure that the banking details are correct and that the landlord receives the payment, we advise that all debtors and creditors be aware and triple-check before making payment. Contact Webb Attorneys for further assistance.
Written by Mpho Matubatuba and Chelsea Swanepoel (January 2023)
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