DEVELOPERS: GREEN LAWS GROW SHARPER TEETH

Property owners and developers who breach environmental legislation face substantial penalties, and our courts are getting tougher in applying them.

That’s of course great news for environmentalists, but property owners generally (and developers in particular) need to be aware of the increasing danger of falling foul, even inadvertently, of the raft of environmental laws out there.

For example, if you as a property owner fail to obtain environmental authorisation before undertaking a “listed activity” (the lists are long and varied – take advice in doubt) you risk criminal prosecution and a whopping R5m fine (up from R1m).

Now a recent Regional Court decision has fired a warning shot across the bows of all property owners of yet further risk – penalisation in terms of POCA (the Prevention of Organised Crime Act). You may not think of a statutory contravention as having any relation to organised crime, but POCA’s reach is a lot wider than its name suggests. You could well end up not only paying a hefty fine, but also forfeiting, as “proceeds of crime”, the value of any benefit that the court assesses you to have received through the contravention – your losses could be huge.

The prosecution …..

A forestry company decided to widen a forest road on its property by more than 6m. That’s one of the many “listed” activities requiring an EIA (Environmental Impact Assessment),

It commenced construction without obtaining the necessary prior environmental authorisation,

It was duly prosecuted, and pleaded guilty to a statutory contravention.

….. and the confiscation order

The Court, holding that offences of this sort are prevalent, with “big companies…….getting away with murder” by disregarding laws relating to the environment, ordered the offending company to pay –

A fine of R180,000, and

On the application of the Asset Forfeiture Unit, a confiscation order of R450,000 (plus interest) representing the amount the company saved by failing to obtain authorisation, and

Costs of the confiscation order application on the punitive attorney and client scale.

The company has been granted leave to appeal the confiscation order but regardless of the outcome there is a clear warning here. Environmental legislation has teeth that are sharp and getting sharper – ignore them at your peril!

FACEBOOK: MORE DEFAMATION DANGER, AND NAVIGATING THE MINEFIELD

“…..’tis slander, whose edge is sharper than the sword…..” (Shakespeare)

A recent High Court decision confirms the dangers of posting (or even just allowing yourself to be associated with) any form of defamatory content on the Internet.

An explosive mixture

An explosive mixture underlay the case: an acrimonious divorce, on-going litigation still smouldering, and – the spark that lit the fuse – Facebook posts attacking the ex-wife.

Two of the posts, authored by the ex-husband’s new wife and appearing on her Facebook page, were found by the Court to have been defamatory –

A comment which effectively painted the ex-wife as being meddlesome and interfering, and

A far more serious comment that implied impropriety relating to a photograph showing the ex-wife’s 16 year old stepson being pelted with a wet sponge by one of her two minor children (a girl of 6 and a boy of 4) in the bathroom. Commenting that “only a depraved mind can see impropriety” in what was obviously a “jovial domestic moment”, the Court held that this second comment was “scandalous to the extreme”, suggesting that the ex-wife “encourages and tolerates sexual deviation, even paedophilia”. The damage to her reputation was compounded by “snide comments” added to the posting by friends of the poster.

In the end result both the poster (the new wife) and the ex-husband were ordered to pay R40,000 in damages to the ex-wife, together with legal costs.

Navigating the minefield

Reduce your risk with these pointers (take advice in doubt) –

The first rule of thumb is obvious but also vital: “Post in haste, regret at leisure” – if a comment is construed as defamatory you could be sued for millions (think of posts going viral), and you could even risk criminal liability in some cases. Think twice before letting off steam on Facebook, Twitter or any other online platform!

Bear in mind that you may not be able to recall something once it’s online. Social media sharing means that as soon as a comment is out in cyberspace, you lose control of it. It could easily live on out there forever.

Keep an eye on posts etc in which you are tagged. In this case for example, although it was his wife who had actually written and posted the defamatory comments, the ex-husband was held to be equally liable for them because he knew he had been tagged in them and allowed his name to be coupled to them.

Even sharing or re-posting someone else’s post (“re-tweeting” a tweet in Twitter) exposes you to the same level of liability as the original poster.

It is no protection to only hint at the identity of someone. Whether the subject is specifically identified or not, the court will look at whether “a reasonable Facebook member” would in all the circumstances understand the posting to refer to that person. Thus in this case both posts were held to have referred to the ex-wife even though she was identified only by her first name in one post, and not named at all in the second.

Equally, a statement which viewed individually doesn’t seem defamatory may still be held to be defamatory when viewed collectively with other postings. It is the collective effect of your postings that counts.

Nor can you escape liability by framing something defamatory as a question rather than as a statement. That’s exactly what happened with the second post in this case, the Court holding that whilst the post was grammatically framed as a question, there was a defamatory statement implicit in it.

Last, but certainly not least, regularly check and adjust your privacy settings to control who can see your posts, and to ensure that you review all posts, updates, photos etc in which you are tagged before they are published on your Facebook wall (see https://www.facebook.com/about/tagging/ for instructions on removing/reporting tags).

LIQUIDATION CLAIMS: LIABILITY INSURANCE TO THE RESCUE?

It’s unfortunately an all too familiar story in these hard times – your debtor fails and is liquidated, and you are left with nothing but a worthless concurrent claim.

But before you write your claim off, there is one specific circumstance in which you might still recover your losses – quite possibly in full.
If – and unfortunately only if – your claim against the company in liquidation is covered by the liquidated company’s liability insurance, you are entitled to recover your loss directly from the insurer. In other words, you won’t have to wait in line with other creditors in the hope of receiving some form of dividend, nor must you share the pay-out from the insurer with other creditors. You can recover direct from the insurer whatever the debtor could have claimed from it. In other words, provided you can prove that the liquidated debtor had a valid claim against the insurer, you – rather than the liquidator – can claim up to the limit of the applicable cover.

A warning here – don’t delay in claiming on the insurance, or your claim could prescribe. That’s exactly what happened in a matter recently heard by the Supreme Court of Appeal –

A cattle feedlot business had sued a supplier of tallow for almost R2m as damages for defective tallow sold and delivered.

The tallow supplier denied liability but was liquidated just prior to trial of the matter.

The liquidated supplier held insurance cover for such claims up to a limit of R1,5m. The creditor duly claimed R1,5m from the insurer.

The claim was repudiated, and the insurer was able to show that the creditor’s claim had prescribed, because it had issued Summons more than 3 years after the supplier’s liquidation. The creditor, in other words, lost R1,5m by not suing timeously.

Don’t delay!

As soon as your debtor is liquidated (“sequestrated” if your debtor is an individual), check whether the debtor held insurance cover that might apply to your claim – if it did, seek legal assistance immediately.

SELLING PROPERTY? WATCH YOUR WORDING!

When you agree on a sale, ensure that your agreement is both clear and comprehensive – or risk the pitfalls of litigation.

A case recently before the High Court (on appeal from a District Magistrates Court) involved the sale of a furnished apartment, which the buyer intended to let out as holiday accommodation. A clause in the sale agreement provided that all furniture and crockery in the apartment was included in the sale at a cost of R80,000, but no inventory of the movables was attached to the agreement.

Subsequently the seller prepared an inventory, which the buyer signed under the impression that it listed the entire contents of the apartment at date of sale. It didn’t – and the seller was found to have removed several items of furniture subsequent to the sale.

The seller asked the Court to “rectify” the agreement by including reference in it to the inventory, arguing that the buyer had, in signing the inventory, agreed to limit the movables sold to those listed. Rejecting this argument, the Court instead allowed the buyer’s request for rectification to make it clear that all movables were included in the sale. The matter was referred back to the magistrate for further consideration of damages claims by the buyer.

The inventory imperative

Avoid dispute, delay and cost – annex to your sale agreement a detailed inventory of any movables, and all fixtures and fittings to be included in the sale.

Most importantly – take advice before you sign anything!

EMPLOYERS: YOUR 31 OCTOBER DEADLINE

Your EMP 501 Employer Interim Reconciliation Declaration (for the period 1 March to 31 August) must be submitted by 31 October 2013.

Don’t leave it to the last minute, and read the SARS guide and checklist at http://www.sars.gov.za/TaxTypes/PAYE/Pages/Employer-Interim-Reconciliation.aspx to make sure you comply fully – any failure will incur penalties.

THE OCTOBER WEBSITE: PROFIT FROM AN ELEVATOR PITCH!

What is it you do?”

A common question, and one that presents you with a perfect (and profitable) opportunity to showcase your business to a potential customer or client.

Seize that opportunity with a powerful “elevator pitch” – perfect yours with the tips in “The Elevator Pitch” by Jamiesons Strategic Growth Solutions at http://www.jamiesonco.com.au/_blog/Business_Advice/post/The_Elevator_Pitch/.

Have a Great October!