September 26, 2023
Suing for a Supermarket “Slip ‘n Trip” – What Must You Prove?
“The path is smooth that leadeth on to danger” (William Shakespeare)
Tripping over aisle blockages or slipping on floors made slick by spillages can happen in even the best-managed supermarkets, and injured shoppers regularly turn to our courts to claim damages from shopkeepers and building owners.
It’s no surprise therefore that this sort of claim has its own (informal) name – the “slip ‘n trip” case. A recent High Court judgment provides some clarity on what you will need to prove should you be one of the unfortunate shoppers who are injured in this way.
A shopper slips, and sues
- A shopper slipped on an unidentified spillage, injuring herself and needing hospitalisation and further treatment for unspecified orthopaedic injuries.
- Supermarket employees initially undertook to cover her medical expenses but later the supermarket denied liability.
- It admitted that it had a “general duty of care to customers visiting its store to ensure that it afforded them a safe environment within in which to shop”, but claimed the shopper’s fall was “due to her sole negligence in that she failed to keep a proper lookout, failed to take reasonable steps to prevent her fall and failed to avoid injury to herself.” In the alternative it alleged contributory negligence on her part. It also sought to blame its cleaning service contractors and/or an independent merchandiser who had been working in the aisle in question.
- The shopper took her claim for damages to the High Court, which confirmed that what you will have to prove is that the shop –
- Should have foreseen the reasonable possibility of its conduct causing your injury and monetary loss; and
- Should have taken reasonable steps to avoid that loss; and
- Didn’t do so.
- The Court held that, on the evidence presented, the shopper had proved that “she took proper care for her own safety on the morning in question. The fact that she may have moved down aisle 5 at more than a leisurely dawdle did not occasion her fall: she did not slip or trip because of haste or inattention but because she stepped in some spillage of unknown origin.” (i.e., you need to prove you weren’t negligent)
- And even if the spillage was a small one (supposedly the size of a R2 coin in this case) “it really matters not what the extent thereof was as its mere presence on the supermarket floor presented a risk to any unassuming shopper, who would be expected to spend her morning looking at the merchandise on the shelves and not peering down at the floor ahead of her.” (i.e., keeping a proper lookout doesn’t necessarily mean peering down at the floor ahead of you all the time)
- In principle, once a shopper has “testified to the circumstances in which he fell, and the apparent cause of the fall, and has shown that he was taking proper care for his own safety, he has ordinarily done as much as it is possible to do to prove that the cause of the fall was negligence on the part of the [supermarket] who, as a matter of law, has the duty to take reasonable steps to keep his premises reasonably safe at all times when members of the public may be using them.
- The shopper in this case had done all that, raising a rebuttable presumption of negligence by the supermarket so that, in the absence of an explanation from it, it was inferred that a negligent failure on its part to perform its duty must have been the cause of the fall. In this case it provided no evidence of how long the spillage had been on the floor or how long it was reasonably necessary for it to discover the spillage and clean it up. (i.e., once you prove what happened and that you took proper care for your own safety, it’s for the supermarket to prove that it wasn’t negligent)
- The shopper is entitled to whatever level of damages she can prove.
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
July 26, 2023
How to Stop Someone Damaging Your Good Name on Social Media
“He that filches from me my good name robs me of that which not enriches him and makes me poor indeed.” (Shakespeare)
As our lives move increasingly online, more and more of us will be subjected to the distress and damage of online attacks. Whether they are aimed at hurting us personally or at harming our businesses, they can take a substantial toll both materially and psychologically.
What can you do if you (or your business) falls victim? The good news is that in appropriate cases our courts will come to your rescue robustly and with speed, as evidenced by a recent High Court decision.
Your legal protections
Before we discuss the facts and outcome of that case, let’s make a general note that as a victim of any defamation you have a choice of legal weapons available to you. A claim for damages can be highly effective but it is, as the Court here put it, a backward-looking remedy essentially suitable for redressing past defamation.
Where on the other hand you are being subjected to, or fear being subjected to, ongoing defamatory attacks, ask your lawyer about applying urgently for an interdict. As in the case we discuss below, it can provide powerful, quick and effective protection.
You could also try laying a criminal charge of crimen injuria (criminal impairment of another’s dignity) but perhaps don’t hold your breath on that one.
A property developer’s reputation vindicated, and an extortion attempt punished
- A company undertaking a large property development employed a roofing contractor which, after a fall out, started publishing defamatory statements about the developer on a local WhatsApp group and Facebook.
- Amongst other things the posts accused the developer of acting unlawfully for financial gain, creating a potentially life-threatening situation, dishonesty, not carrying out necessary remedial actions, defrauding the Municipality, exploiting elderly clients, selling uninspected and potentially dangerous homes, not following proper safety standards – the list goes on.
- The Court found no truth at all in any of these allegations and rejected for lack of proof the roofing contractor’s defence of “truth and the public benefit”.
- Particularly damningly perhaps, it held that the contractor had tried to extort payment of its outstanding invoices in return for its silence.
- The Court accordingly interdicted the contractor from continuing with the defamatory posts (online or otherwise), directed it to publish a copy of the court order on the online channels in question, and ordered it to pay legal costs on the punitive attorney and client scale.
The end result, which is a vindication of the developer’s position and an expensive lesson in the law for the roofing contractor, will give much heart to other victims of this sort of harassment.
Bottom line for victims – don’t take social media defamation lying down!
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
June 27, 2023
“Bad Dog!” Why a Husky’s Owner Must Pay R100,000 Damages
“…in general, ownership of an animal should carry with it strict liability for any harm done by the animal.” (Extract from judgment below)
Owning a pet comes with both joys and responsibilities, and a recent High Court award of almost R100,000 in damages to the victim of a dog attack is yet another reminder of the potential dangers of animal ownership and the legal responsibilities that come with it.
A social invite goes horribly wrong
- 17 years old at the time, a young woman was invited to a social gathering at a private house. As the gate was opened to let her in, two dogs came running out and the one (a large Siberian Husky) ran towards her and without warning launched itself towards her throat. She raised her arms to ward off the attack which resulted in both her forearms being bitten.
- Rushed to hospital, she was operated on by a plastic surgeon and has been left (nine years on) with scarring, physical disability and pain requiring physiotherapy, as well as counselling for psychological trauma in the form of PTSD (post-traumatic stress disorder).
- The dog’s owner suggested in court papers that when the dog jumped up to greet the victim, she had provoked it and acted negligently by retaliating, hitting it and pulling its hair. She was, he said, injured when the dog fended off her “unwarranted attack”. However, as the owner led no evidence to support this (the onus being on him to do so) the Court accepted that there was no provocation or negligence from the victim’s side.
- On the basis of our law’s general legal principle that “…in general, ownership of an animal should carry with it strict liability for any harm done by the animal”, the Court ordered the dog’s owner to pay the victim a total of just under R100,000 in damages.
The danger for pet owners – liability without fault
To understand that outcome, we need to go back to an old Roman law remedy, the pauperian action (“actio de pauperie”).
Under that action, which is still very much part of our modern law, the victim does not need to prove that the animal’s owner was negligent in any way. If your dog (or any other domesticated animal) causes someone else harm you are held liable on a “no fault” or “strict liability” basis.
There are a few limited exceptions to this rule, so if for example the dog’s owner in this case had been able to show that the victim had provoked the attack, she would no longer have been able to rely on the “no fault” concept. She would then have had to prove negligence and fault on the dog owner’s part – a much harder task.
But the general risk for animal owners remains this – you can be held liable for damage caused by your animals without the slightest fault on your part.
Dog Owners – how to manage the risks
So let’s end off with a few practical tips on how to protect your pet, ensure the safety of others, and reduce your risk of legal liability –
- Understand the risk: You could be held legally responsible for any harm caused by your pet, including injuries to people and other animals, property damage, and emotional distress suffered by the victims.
- Check your insurance cover: Make sure you have in place Public Liability insurance that will cover you for any claim of this nature.
- Socialise and train your dog: Proper socialisation and training are vital to prevent aggressive behavior in dogs. Ensure that your dog interacts well with people and other animals.
- Supervision and restraint: Keep your dogs supervised and under control at all times. Follow leash laws in public spaces or whenever there is any risk of harm.
- Watch for the warning signs: Be aware of any signs or history of aggression or fear in your dog, and if necessary, seek professional help from a qualified animal behaviorist or trainer.
- Take legal advice: If you are ever involved in a dog-related incident, consult immediately with your lawyer to assess your case, explain your legal rights, and guide you through the necessary legal processes.
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
March 3, 2023
Can You Claim Damages After Hitting a Pothole?
“The American Automobile Association estimated in the five years prior to 2016 that 16 million drivers in the United States have suffered damage from potholes to their vehicle including tire punctures, bent wheels, and damaged suspensions with a cost of $3 billion a year.” (Wikipedia)
Pothole problems are by no means exclusive to South Africa, but we certainly do seem to have more than our fair share of them.
As a recent High Court decision illustrates, if you suffer any form of loss as a result of a pothole, hold whoever is responsible to account. Sue for your damages!
Injured motorcyclist awarded damages
- Descending a pass on a provincial road with a group of fellow bikers, a motorcyclist leaned into a corner on a sharp bend then hit and went over a pothole. He lost control of the bike which then skidded across the road surface, injuring his shoulder and arm and damaging his clothing and motorbike.
- He was taken by ambulance to hospital, underwent surgery, and although discharged after four days, still two years later is taking painkillers and undergoing physiotherapy for ongoing pain and restricted use of his shoulder and arm.
- An expert confirmed that he had had no opportunity to avoid the pothole and thus the accident. It was also clear that an attempt had been made to repair the pothole.
- He had suffered permanent injuries which “have left him greatly compromised and vulnerable.”
- He sued the Province for damages, and was no doubt pleasantly surprised when the MEC made no effort to defend the action. However, he still had to prove his claim…
Proving negligence, and loss
The Court confirmed that the onus is on a claimant to prove negligence on the part of the local authority, even when, as in this case, the MEC had taken no steps to defend the claim and it was uncontested.
Finding from the uncontradicted evidence of the biker and his expert witnesses that the MEC was solely negligent for the accident in failing to live up to the responsibility “of building, maintaining road infrastructure and putting up road signs cautioning road users of the dangers of potholes”, the Court held him liable for the claimant’s proved damages.
The Court awarded the claimant damages of R850,000 in respect only of those aspects of his claim that he had led evidence to support (future medical treatment and general damages). That figure could increase – although he had failed to produce evidence in support of his further claims (for loss of earnings and damage to property), he can still re-institute action for them.
So, do you have a claim?
You quite possibly do have a claim for any losses you suffer after hitting a pothole. Considering our courts’ attitude to the responsibility of local authorities for road maintenance, proving negligence may not be that hard. Line up also evidence to support all aspects of your claim.
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
November 28, 2022
A “Running Down” Damages Claim – Elite Athlete v Happy Snapper
“This is a running down case: literally” (Extract from judgment below)
The scene is Cape Town’s iconic Sea Point Promenade. An elite runner participating in a race knocks down a pedestrian out for a Sunday walk, causing serious injuries. The pedestrian sues both the runner and the race organiser for damages of R718,000.
The outcome is another reminder to us all to be aware of our surroundings at all times – a moment’s inattention can change everything in a split second. As the facts here illustrate…
The race-day collision and the R718,000 claim
- Although the Court heard conflicting evidence as to detail, the setting for this unfortunate collision was common cause. A popular public space on a Sunday, replete with not only the normal pedestrians, cyclists, dog walkers and kite-flyers, but on this particular day also thousands of participants in a “Ladies Race”, ranging from athletes competing in an “elite race” to costumed “Fun Walk” entrants.
- Going for a Sunday stroll with a friend and “in the wrong place at the wrong time” whilst blissfully unaware of the misfortune about to be visited upon her for her act of goodwill, the claimant happily consented to a request from a group of “Fun Walk” participants to take a “happy snap” of them.
- Picture taken, she moved across the sidewalk to hand the camera back to its owner and a participant in the “elite race” ran straight into her, then ran off to finish her race.
- Suggestions that the runner (approaching it seems at about 20 kph) shouted a warning to the effect of “get out of my way” and forcefully pushed the claimant aside were in dispute, but what was clear was that she was knocked to the ground and sustained a hip injury which resulted in an ambulance trip to hospital and hip replacement surgery.
- The claimant sued both the runner and the race organiser for R718,000 in damages. The Court’s findings hold lessons for us all.
The race organiser off the hook
On the evidence, the race organiser and the race Marshall in the vicinity of the collision were cleared of any negligence.
The runner’s negligence
The runner, found the Court, was in a public space and should have been alive to the possibility of encountering other sidewalk users at close quarters. She had a duty to keep a proper look out and should have taken into account “the nonchalance and lack of interest of ordinary pedestrians who were out and about enjoying the fresh air rather than watching an athletics race. Ordinary human experience tells one that such persons might behave irrationally and get in the way, as it were.” (Emphasis added).
The runner was negligent in focussing only on the ground immediately ahead of her, “running as if in a bubble, oblivious to what was happening around her and intent only on achieving her goal of winning the race.” She could have avoided the collision with little effort and without seriously affecting her chances in the race.
The pedestrian’s 70% contributory negligence
However, in all the circumstances the Court held that the claimant (actually the executor of her estate as she had later died from unrelated causes) was only entitled to 30% of whatever damages could be proved.
She had been, said the Court, considerably more negligent than the runner. She had to be aware of the race, she knew runners were “whizzing” past her, and she had been warned of runners coming through.
The old ironic saying “no good deed goes unpunished” springs to mind, but the hard fact (in life as in law) is that we are often the architects of our own misfortune.
Be aware of your surroundings at all times!
It’s a hard lesson, but the law holds us to certain standards, and one of those is to keep a proper look out, particularly when in a public space. A moment’s inattention, and in a split second your life could change forever, with physical injuries compounded by the risk of damages claims and counterclaims of contributory negligence.
Take legal advice immediately if you are unlucky enough to be involved in an incident causing injury or other loss!
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
April 26, 2022
Property Owner and Body Corporate Liable After Child’s Electrocution?
A recent High Court decision saw both a sectional title unit owner and his cupboard contractor held liable for damages suffered by an 11-year-old boy electrocuted by a communal tap. The complex’s body corporate and an electrician were also sued but escaped liability. The reasons given by the Court for these contrasting outcomes provide valuable lessons for property owners, contractors, and bodies corporate.Electrocuted when he turned on a tap
- You don’t expect to be electrocuted when you turn on a tap, but that is what happened to an unfortunate boy, aged 11, who had offered to wash his mother’s car in a residential complex.
- When he touched a communal tap to fill up a bucket of water he was electrocuted and unable to remove his hand for 1 to 2 minutes. Fortunately the tenant of the unit which was the source of the electric current arrived home in time to switch off the electricity so that the boy could be rescued.
- He was rushed to hospital with serious injuries and his mother sued all the role-players for more than R3m in damages on his behalf.
- To simplify as much as possible some very complicated facts, a cupboard contractor had been brought in to do work in the unit by the owner’s agent/employee at the request of a tenant. The contractor employed two workers who caused the initial problem by drilling through a wall and damaging the electrical insulation.
- The owner’s agent then contracted an electrician to fix the problem, but he only compounded the danger by bungling the repair job and leaving the plumbing live.
- The tenant, shocked (electrically, presumably also figuratively) when she turned on taps in the unit, switched off the electricity and reported the danger to the agent. Unfortunately the two workers, in her absence the next day, switched it on again – thus creating anew the dangerous situation that later that day led to the boy’s electrocution.
Your agent or employee doesn’t tell you of a dangerous situation – are you liable?
There was a dispute over whether the owner’s “agent” was legally an agent or an employee, and whether or not he had told the owner of the dangerous situation. But it made no difference, held the Court – the “agent’s” knowledge of the dangerous situation in the unit was attributed to the owner because (1) he had acquired that knowledge in the course of his employment, and (2) in the circumstances he had a duty to report it to the owner. Make sure your agents and employees are trustworthy enough to tell you about any dangerous situations in your property!Are you liable for your contractor’s negligence?
Clearly the workers employed by the contractor had caused the dangerous situation, firstly by damaging the electrical insulation and secondly by turning the electricity back on knowing of the danger. The contractor was accordingly liable, but what about the property owner who had employed him? Our law is that you are not automatically liable for your contractor’s negligence, but you must “exercise that degree of care that the circumstances demand”. On the basis that “It is the principal, who selects his agent and represents him as a trustworthy person, and not the other party to a contract who has no say in the selection, who bears the risk……” (emphasis supplied), the Court found both the contractor and the unit’s owner liable for “the negligent omissions and/or acts on the part of their agents/employees.” In any event both the “agent’s” inaction and the actions of the two workers “jointly contributed to the cause of the electrocution of the minor. Had either acted as they ought to have, the minor would not have been electrocuted.” You are at risk for the conduct of any contractors and employees on your property, so again make sure they are trustworthy!When is a body corporate liable?
A body corporate is as much at risk of being sued as any individual owner in a case such as this – it was presumably sued in this matter on the basis that the tap in question was a “communal” one and therefore under its control. Its security officers had become aware of the situation when they queried the presence of the workers in the complex. However the claim against it failed as the evidence was that the child’s electrocution “was unforeseeable as far as it [the body corporate] was concerned. It had no duty to do anything while it was unaware of the danger posed. There had never been any problem with the electrical installation and it follows that what occurred was not reasonably foreseeable to it. Immediately the dangerous situation was brought to its attention it acted immediately.” As a body corporate, take all reasonable steps to prevent dangerous situations arising in the complex in the first place, and take immediate action to rectify any that come to your notice!What about the negligent electrician and the “chain of causation”?
Our law is that you are only liable if there is a “chain of causation” between your negligence and the damage resulting. So you can sometimes escape liability if there is a new “intervening cause” that interrupts that chain of causation. In this case, the electrician’s failure to do the repairs properly was held to have been a “direct cause” of the incident. But his bacon was saved by the fact that the two workers, in switching the electricity back on, knew they were creating a dangerous situation anew. This made it sufficiently “unusual”, “unexpected” and not “reasonably foreseeable” for there to be – from the electrician’s point of view – a new “intervening cause” which interrupted the “chain of causation” between his negligence and the electrocution. The claim against him failed accordingly. Any break in the “chain of causation” may come to your rescue if you are sued. But don’t count on it! Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.© LawDotNews
April 26, 2022
Exemption Clauses and Thieving Employees: Can You Sue (or Be Sued)?
“Where one of the parties wishes to be absolved either wholly or partially from an obligation or liability which would or could arise at common law under a contract of the kind which the parties intend to conclude, it is for that party to ensure that the extent to which he, she or it is to be absolved is plainly spelt out.” (Extract from judgment below)Employee theft has been a headache for employers from the dawn of history, and no business should ignore the dangers it poses, particularly if your business handles third-party high value goods. Your chances of being sued if one of your employees steals a customer’s asset/s are high, the reason being of course the concept of “vicarious liability” – the legal rule that can make you generally liable for your employee’s actions. Your best defence (other naturally than taking steps to stop light-fingered employees from stealing in the first place!) is the “exemption” or “disclaimer” clause. It can present a formidable obstacle to any customer (or their insurer) seeking to hold you liable, but it needs to be professionally drawn, unambiguous, and tailored to suit your particular industry, circumstances and contracts. A recent Supreme Court of Appeal (SCA) decision illustrates –
The cargo thief who stole R4.5m worth of computers
A customer imported by air freight some R4.5m worth of computers and accessories, and contracted a clearing and forwarding agent to receive and forward them to the customer from the SAA cargo warehouse. The agent’s employee, armed with his “identity verification system” card and the necessary custom release documents, collected and loaded the consignment into an unmarked truck, signed the cargo delivery slip, and disappeared with his loot. Sued by the customer for its losses, the agent relied on the exemption clauses in its Standard Trading Terms and Conditions. These clauses were comprehensive and widely worded which, as we shall see below, proved central to the agent’s legal victory here. On appeal the SCA dismissed the claim against the agent on the basis that it had been able to prove that its liability was excluded by the exemption clauses. Let’s see how it achieved that…Employers – can you be sued?
Without an enforceable exemption clause in its standard contract, the employer in this case would have been liable for R4.5m (plus substantial legal costs). Critically, the forwarding agent’s success here resulted from the Court’s interpretation of the wording of these particular clauses, in the context of this particular contract, and in the particular circumstances of this matter. Any ambiguity in meaning would have been fatal for it, and it was particularly assisted in this case by the fact that it had made special provision in the contract for “goods requiring special arrangements”. In other words, make sure your contracts all contain unambiguously worded exemption clauses tailored to your specific industry and circumstances.Customers – can you sue?
Read and understand the contracts you sign, follow any requirements applying to specified or “valuable” goods, and take professional advice if you are unhappy with any of the terms. The reality is however that few service providers will be prepared to compromise on exemption clauses, which leaves you vulnerable unless you have the right type of insurance cover – check upfront! Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.© LawDotNews
September 7, 2021
Don’t Risk Consequential “Loss of Profits” Damages: Check Your Contracts and Insurance!
“Consequential Loss: This is loss not directly caused by the insured event, but is an indirect result of the event. This is loss or damage that was not foreseen by the insurer or the policyholder at the time the policy was taken out. Consequential loss is in many instances not covered and cover is dependent on the risk that the policy covers” (South African Insurance Association definition)
One of the risks you run in any business is being sued for losses you cause to someone else. Although normally your risk of legal liability is linked to the claimant proving some form of negligence on your part (i.e. the onus is on the claimant to prove your negligence), there are exceptions. To take one example (as seen in the case discussed below) a “carrier of goods for reward by land” has “absolute liability” to deliver goods undamaged; and thus the onus switches to the carrier to prove a lack of fault.
No matter who has to prove what there could be serious money at stake here, so taking upfront measures to protect yourself is prudent.
Protecting your business with insurance
Your first line of defence is of course always the practical one of minimising the actual risks of causing any form of harm or loss to any and all role-players – customers/clients, suppliers, employees etc. On the legal side, disclaimers and exclusion clauses are commonly used for the purpose but they have their limitations and should never be relied on as foolproof.
That is where taking out commercial (business) insurance can make sense – if all else fails, you can look to your insurer to cover you for whatever damages you may be found liable to pay.
Beware however – as a recent High Court judgment aptly illustrates, even with insurance you could find yourself up the creek without a paddle if you are found liable for “consequential damages”.
What are “consequential damages”?
Before we get into the details of this particular High Court case however, it’s important to know that several types of damages could be awarded against you –
- What are often called “general damages”, i.e. “those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach.” An electrician for example negligently frying a business customer’s distribution board is likely to be sued firstly for the cost of replacing it.
- What are often called “special”, “consequential” or “indirect” damages, i.e. “those damages that, although caused by the breach of contract are ordinarily in law regarded as too remote to be recoverable unless in the special circumstances attending the conclusion of the contract, the parties actually or presumptively contemplated that they would probably result from the breach.” To stick with the negligent electrician example above, the business might also sue for consequential loss such as the sales it lost because it had no electricity. The test then would be whether the electrician and the business had in mind that loss of sales would probably result from the distribution board’s failure.
Let’s see that distinction playing out in action…
Sued for R2.2m “loss of profits” and not covered by insurance
- A transport company (a “carrier”) agreed to move two valuable machines for a customer which intended to rent them out to the film industry.
- Both machines were substantially damaged in transit and the carrier was found to have breached the contract of carriage and to have caused the losses through negligence.
- The carrier claimed from its insurers to cover its liability (it had taken out “goods in transit” cover of R1m for each machine), and the insurer duly paid out a total of R1.7m for direct losses in the form of the repair of one machine and the replacement of the other.
- No problem for the carrier there; but it was a different story with the second part of the damages claim. This was for “loss of profits” suffered by the customer through being unable to rent out the machines whilst waiting for them to be repaired/replaced.
- The insurer refused to pay out this second part of the claim (R2,218,464) because it had agreed to cover only “actual” damage to the machines. The goods in transit policy specifically excluded “consequential financial loss as a result of any cause whatsoever”. That left the carrier fighting the customer without the safety net of insurance cover.
- The carrier argued that its liability to the customer was limited to the R1m goods in transit cover per machine. But to no avail, the Court holding that the contract of insurance was between the transport company and its insurers and therefore it did not prevent the customer from claiming damages for losses beyond those covered by the carrier’s insurance.
- Critically, the Court found on the facts that “This type of loss must have been contemplated and reasonably foreseen when the carriage contract was concluded by the parties” and that the customer’s loss of income followed logically from the fact that it could not hire out the machines.
- The end result – the transport company must pay, out of its own pocket, whatever consequential damages the customer can prove (presumably the customer will go for its original R2.2m claim).
Check your contracts, and your insurance cover!
The lesson here of course is to make sure that your contracts protect you from liability for “consequential damages” and the like, and/or to check that your insurance cover will protect you if you get sued for any liability beyond “general damages”. If there is an “exclusion” clause in the policy such as the one discussed above, you’re on your own!
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
July 2, 2021
Landlord Liable for a Tragic “Freak” Flood Drowning
“Nature has the ability to spring a surprise when least expected” (extract from the judgment below)
A recent High Court decision dealing with the tragic drowning of a toddler highlights once again the legal dangers faced by property owners who let out accommodation to the public.
This particular case related specifically to a Holiday Let on a guest farm and a natural disaster in the form of a flood, but of course any loss however caused could lead to your visitors/guests suing you.
And weather-related disasters – think storms, floods, wildfires and the like – will almost certainly increase in both frequency and intensity if climate change predictions hold true.
A “freak” flood and a tragic drowning
- It should have been an idyllic holiday on a riverbank. A family booked a week’s vacation in one of three chalets built by a farmer on the banks of a river. The family was particularly attracted by the fact that this was the closest chalet to the river, with a wooden balcony from which the children could fish.
- The family arrived in fair weather but a violent storm and heavy rains in the river’s catchment area led to overnight flooding when the river burst its banks. They awoke at midnight to flooded rooms, struggled to escape from the chalet and were unable to save their toddler, who was swept away and drowned in the flood (according to media reports at the time, he was torn from his father’s arms whilst his father and an older brother clung to a tree in the raging flood).
- The family sued the farmer as owner of the farm, chalet and guest house business. They also claimed against his wife, but this part of the claim failed as she was married to the farmer out of community of property, and had merely assisted him with bookings and administration.
- As regards the farmer as property owner, although he denied any element of “wrongfulness” (unlawfulness), the Court found that he had built the chalets in a dangerous area, known to experience occasional flooding, and therefore had a legal duty to ensure that they were safe for use by members of the public.
- The owner also denied any negligence. The flood, he said, was a “freak of nature” and not foreseeable, no such event having been experienced for over 40 years. He had built the chalet 6m above the normal river level and 2.8m over the high water mark pointed out to him by the previous owner.
- Expert evidence was that the year in question had seen a normal rainfall pattern and that the day in question experienced “high but not abnormal” rainfall. The chalet was built in the “dangerous area” of a 100-year flood line area with no escape route nor flood warning mechanism. Such floods, the expert said, could be expected once every 17-18 years.
- Critically, the Court found on the evidence that the possibility of heavy flooding was “foreseeable” and that the owner’s failure to take steps to protect chalet occupants rendered him liable.
- The owner also argued that the family had no right to sue because of disclaimer notices which he said were at the farm entrance warning visitors that they entered at their own risk. He also claimed to have taken reasonable steps to warn occupants of the danger of flooding. On its assessment of conflicting evidence however the Court found that even if there were warning and indemnity notices as claimed, the owner had not proved that they were brought to the family’s attention. In any event, said the Court, it would in this case be unjust and unfair to deny the family its claim.
- The owner is accordingly liable for whatever damages the family can prove.
Property owners – protect yourself!
- From a practical point of view you will want to pro-actively investigate any potential risks, manage them, warn your guests/tenants about them and make sure they know how to protect themselves should Mother Nature suddenly spring one of her nasty surprises.
- The legal side to all that of course is that you should always be able to show that you have taken reasonable steps to protect your guests from all foreseeable risks.
- Comply also with all building and safety regulations – not doing so immediately puts you in the wrong.
- Take advice on the use of indemnity/disclaimer/exemption notices on your website, all advertising materials, booking platforms etc, also on the premises themselves and in your contracts. Bear in mind that there are limits to their effectiveness particularly where the Consumer Protection Act or constitutional considerations apply.
- Insurance – make sure you are covered for any claims of this nature, and that you comply fully with any requirements imposed on you by the insurers.
Most important of all, take professional advice specific to your circumstances!
Disclaimer: The information provided herein should not be used or relied on as professional 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 professional adviser for specific and detailed advice.
© LawDotNews
February 20, 2020
Can You Sue a Bad Investment Advisor? It depends…
“I always advise people never to give advice” (P. G. Wodehouse)
If you want to send shivers down the spine of any investor, mention “Steinhoff”, or “Sharemax”, or any one of the many other spectacular corporate collapses that have plagued both local and overseas investors in recent times.
Quite apart from the high-profile failures it’s been a hard few years for investors generally, and if your nest egg has taken a painful tumble recently you may well wonder whether you can sue your financial advisor for giving you bad advice.
The short answer, as several recent cases have highlighted, is “It depends…”.
Case 1: A R2.5m claim succeeds
- A widow, still reeling from her husband’s death and unversed in financial products, invested R2m in Sharemax on the advice of her trusted financial advisor, an authorised Financial Services Provider (FSP).
- She made it clear that she needed a safe, low risk investment and “that she could not risk losing even two cents as the money was earmarked for her son’s upbringing”.
- The advisor did not explain any other investment products and emphasized that “it was so good that he did not even want to introduce other financial instruments and/or investments to her.”
- Sharemax of course collapsed, and the investor duly sued the advisor for her R2m plus interest – a total of almost R2.5m by the time this case found its way through the High Court and an appeal to the Supreme Court of Appeal (SCA).
- The advisor was found liable on the basis of having been negligent “and even dishonest” and to have “failed to exercise the degree of skill, care and diligence which one is entitled to expect from a FSP”.
Case 2: An R11m claim fails
- A UK couple temporarily in South African sought a local financial advisor’s advice on how best to invest some “spare cash”.
- They ended up putting GBP 565,000 and R700,000 (about R11m in all) into investment products offered by UK based investment companies. The companies failed and the investments were rendered worthless.
- The investors successfully sued the advisor in the High Court for R11m in damages, but on appeal to the SCA their claim was dismissed.
- The investors, said the Court, had failed on the evidence to “identify what a reasonably skilled financial service provider would know about products in the market place; what due diligence they would have done before making a presentation to a prospective client and what sources of information they would have consulted.” They had failed to prove that any negligence on the advisor’s part in “making a presentation without adequate knowledge of the proposed investments, resulted in advice materially different from that which a reasonably competent advisor would have given.” (Emphasis supplied).
- End result – the investors lose their R11m and face a (doubtless substantial) legal bill.
Case 3: A R5m claim fails
To the High Court now for some insight into the range of factors that a court is likely to take into account in deciding liability –
- This was another Sharemax investment, this time for R5m.
- The difference was that this investor was found to have been an astute and wealthy businessman who managed his own share portfolio and went into the investment understanding the risks and “with his eyes open” after taking independent advice.
- Claim dismissed.
The bottom line, and some advice for investors
Let’s start off with this thought – unless you are fully qualified to make your own investment decisions, seeking help from a financial advisor is a no-brainer. A trained and certified professional advisor brings elements of insight, knowledge and objectivity that you can never match on your own.
Just be sure that your chosen advisor is the right advisor for you and is both competent and trustworthy. As a first step check for FSCA (Financial Sector Conduct Authority) authorisation (and a list of products the advisor is approved to provide) here.
If worst comes to worst and you feel that your advisor has let you down and should refund you, the bottom line (in a nutshell) is that to successfully sue you will have to prove that you suffered loss in consequence of following your advisor’s negligent advice.
The million dollar question (literally perhaps) is of course – how do you establish that necessary element of negligence? Whilst it will never be easy, and whilst each case will be treated on its own merits, the SCA (in the R11m case above) usefully held that an advisor’s legal duties are mirrored in the FAIS (Financial Advisory and Intermediary Services) Act and its Codes of Conduct. So perhaps start off by proving a breach of the General Code of Conduct’s provision that “an authorised financial service provider ‘must at all times render financial services honestly, fairly, with due skill, care diligence and in the interests of clients and the integrity of the financial services industry‘.”
There’s also the FAIS Ombud option
You may not need to go to court to recover your losses, in that the “FAIS Ombud” (Ombudsman for Financial Services Providers) has the power to resolve complaints against FSPs. It can award “fair compensation for the financial prejudice or damage suffered” up to its jurisdictional limit of R800,000. In at least two Sharemax complaints, compensation orders have been issued, but many more have been dismissed.
Ask your lawyer which route is best for you.
And last but not least, some advice for financial advisors
Make sure that all your documentation protects you from liability as much as possible, that you have insurance cover in place in case you are sued (in the R2.5m case mentioned above, the insurers were ordered to indemnify the advisor against the claim), and that you comply strictly with FAIS and its Codes.
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