LEARN FROM THE PITFALLS ARISING FROM ORAL MANDATES
Gilfillan v Renico Construction (Pty) Ltd (36734/2021) [2024] ZAGPPHC 241 (11 March 2024)
Nowadays, with so much business activity conducted digitally, it comes almost as a surprise to find that persons in business transactions do not record the details of their oral engagements via, at least, an email or Whatsapp. This matter illustrates the pitfalls that can arise from entering into oral mandates. The estate agent, mandated by the purchaser, was successful in bringing a seller and purchaser together and was mentioned in the sale agreement as the effective cause of the sale. However, when the purchaser elected to cancel the sale, it argued that it was not liable for commission. The agent, on the other hand, contended that their oral agreement did not make the payment of commission dependent on transfer. Absent a recordal of the terms of their engagement, it was necessary to approach a court for a finding, many months and extensive legal fees later.
The Judgment
Summary of the Judgment
PRESCRIPTION OF OUTSTANDING LEVIES: IS IT ALWAYS 3 YEARS?
L.A and Another v Body Corporate of London Place and Others (11463/2023) [2024] ZAWCHC 92 (27 March 2024)
Generally, by virtue of the Prescription Act, a debt prescribes three years from the date upon which it became due. Section 13(1)(e) of that Act adds a pragmatic twist: if the creditor is a juristic person and the debtor a member of its governing body, then the prescription period will extend for another 12 months after the debtor has ceased to be a governing body member. The legislature’s rationale is realistic: the close relationship that exists between, for example, a company and one of its directors, may impede the company’s decision to sue the director for an outstanding debt. Does the same apply where the creditor is a body corporate and the debtor is a member of the sectional title scheme? No – and the judgment below explains why.
