Economic review

This year we shall probably see a hike in taxes. Individual taxpayers now pay some 35% of all of our tax income, 10% more than a year ago. Set against the djinn of politically motivated resistance, the perception of rampant corruption, declining middle class income and little value for one’s money, this has given rise to mutterings about taxpayers becoming “gatvol”. We see this already; think non-payment of use charges, traffic fines, and so on. Tax theory holds that where dissatisfaction reaches an inflection point, raising taxes return less income. We shall see.

How times have changed from the heady days of South African economic growth of 5% and more. Our economic growth for this year is predicted at less than 2%: we herald this as a recovery and rejoice!

Shaking it up! Trump has appointed businessmen, and wealthy ones at that, to his cabinet. It will be most interesting to see whether this produces a greater benefit for America than would having career politicians lead that country (Dare one say: leaders professing commercial rather than visionary intent).

Africa

Very recently Nigeria was held up as our major African competitor. That nation’s economy is set to contract this year for the 1^st time in more than 2 decades. Nigerian stocks have lost some 42% of their value in dollar terms: which outside investor would want to invest there?
Zimbabwe is faced with liquidity “challenges”: wonderfully descriptive/obfuscatory terms are bandied around such as “eliminating the external payment backlog” and “addressing the cost competitiveness” of the economy. Broke.
Mozambique will default on the repayment on government guaranteed bonds issued by the Mozambican Tuna Company. Its Minister of Economy has said that the country did not have the money to service its commercial debt. Broke.

Grant Thornton has publicised an international indirect tax guide; tax nerds and evaders only: http://www.grantthornton.global/globalassets/1.-member-firms/global/insights/article-pdfs/2016/19611-gti-iit-guide-2016-l.pdf

Business review

The following almost unreported upon events might change our world:

Nestlé has devised new technology that has the potential to reduce sugar in confectionery products by up to 40% without affecting its taste. This is done by hollowing out sugar crystals.
The technology used in the manufacture of soft contact lenses has led to the development of high energy density super capacitors which charge very quickly and can potentially hold between ten and a thousand fold more power than current battery alternatives. Electric cars especially will benefit.
WeChat has launched a platform that calls up useful features from 3^rd parties and use them instantly with no downloading or installation. This addresses the problems of the size of apps and registration. This is said to be the biggest long-term threat to the iPhone.
Boom intends resuscitating supersonic jet travel at speeds well in excess of what the Concorde used to travel at.
Blockchain going mainstream.
The New Silk Road: a train freight service from China to London.

Property review

The predictions are that slower sales, stalling house prices, rising consumer debt and affordability will impact on the residential property market. Having said that, the expected modest economic growth is expected to keep the market stable.

Property counters last year differed in their return by about 100%. The best performer was Hospitality Property Fund B at 45.9% followed by Equities Property Fund at 33.3%. The worst returns came from Capital & Regional at -39.8% and Atlantic Leaf Properties at -32.5%. Those counters which invested primarily in South Africa, out-performed the foreign-focused funds, primarily owing to Rand strength.

The following link will take you to-

a discussion and calculation of the difference between renting and buying your own house: http://www.biznews.com/wealth-building/2017/01/16/buy-rent-controversial-debate/?utm_source=BizNews.com&utm_campaign=7f8b79f88e-EMAIL_CAMPAIGN_2017_01_16&utm_medium=email&utm_term=0_d5e2e8a496-7f8b79f88e-100768273
a report on a managing estate agent as well as the owner of the underlying property who both want to tap into a bad tenant’s deposit: http://www.iolproperty.co.za/roller/news/entry/rental_agencies_in_whose_interest

The Department of Public Works will be publishing new built environment regulations by the end of February.

Trends driving the market are:

1^st-time buyers;
arising investment in mixed-used developments; and
a transition to green/sustainable living.

A multi-million Rand logistics and retail Park between the King Shaka airport and the Cornubia development will be built by M&F Giuricich.

Practice review

Legal developments that bear watching this year are:

The executive versus Parliament: who decides whether South Africa may withdraw (or enter into?) from international treaties? The direct issue is the withdrawal from the ICC by South Africa.
An action by industrialists in Brits against its municipality for damages, after the latter had defaulted in payments to Eskom resulting in death being cut off from the grid.
The Dutch Reformed Church being compelled via Paja to disclose source documents relating to same-sex relationships.
A promised appeal to the Constitutional Court on assisted dying.
The NCR’s take on set-off by banks.

The High Court, found the Department of Mineral Resources to have been irrational and incompetent, leading to the obstruction of mining investments that it was meant to facilitate. Such cases are not new but the repetition is worrying.

Cases

Contingency fee agreements

The above are old hat for experienced practitioners. For a summary of what such agreements should contain and on overreaching, the case below makes for interesting reading.

Mfingwana v RAF case number 1753/2015, Eastern Cape Division

Section 126B (1) (b)(ii) NCA

This section came into operation on 13 March, 2015. This section provides that no person may sell debt that has been extinguished by prescription. The subsection says that no person may continue to collect debt under a credit agreement where the consumer raises the defence of prescription or would reasonably have raised the defence had the consumer had been aware of the defence. The consumer in question pleaded prescription whilst the respondent bank contended that the consumer, by concluding an acknowledgement of debt, had renounced his right to rely on prescription. These actions happened before the above section came into effect. The Constitutional Court held that this subsection does not apply to pre-existing agreements.

Kaknis v Absa, case number CCT 08/16

Prescription of arbitration award

Does an arbitration award issued in terms of the Labour Relations Act prescribe within 3 years? The Labour Appeal Court had concluded that such a date is not a judgement debt but a simple debt that prescribes on the expiry of 3 years. It also concluded that the institution of a review application does not interrupt the running of prescription. The Constitutional Court pointed out that section 16 of the Prescription Act states that chapter 3 shall not apply to matters regulated by an act of Parliament that is inconsistent with The Prescription Act. Furthermore, section 210 of the LRA declares that the LRA takes precedence over legislation with which it is in conflict. Resultantly the court found that the Prescription Act does not apply to such an award.

Myathaza v Johannesburg Metropolitan Bus Services, case number CCT 232/15

Lost trial record in a criminal case

Trial records are lost from time to time and this case deals with the adequacy of the reconstruction of such a record in which the accused was not involved. For specialists.

Schoombie v S CCT 154/16

Quotables

Prejudices are rarely overcome by argument: not being founded in the reason, they cannot be destroyed by logic. Edwards

Comment

Leadership beyond reproach? The 4^th economic revolution is upon us and leadership in the following years will determine what a country makes of this. The ANC speaks of “organisational renewal” but what it really means is how it will deal with leadership in the future. South Africa has made it on to a new Time magazine list of the ten biggest risks that the planet faces in 2017. The infighting over succession must needs taint the discussion that the ANC is facing and quite probably prejudice us all.

Lighten up

One can think whatever one wants about Mr Zuma’s preferred successor, Ms Dlamini Zuma: yet Mr Zuma must have managed his divorce from her better than most!

On the matter of marriage:

My missus packed my bags, and as I walked out the front door. She screamed: "I wish you a slow and painful death, you b@stard!" I replied: "Oh, so now you want me to stay!”
Wife gets naked and asks hubby: “What turns you on more, my pretty face or my sexy body?” Hubby looks her up and down and replies: “Your sense of humour!”
John is getting ready to become a father – he has changed his phone number and living address.
The most helpful tool in housekeeping is the guilty husband.
My husband is on the roof - only a few inches away from an insurance claim that could completely change my life.

Great replies from Hollywood Squares -- from a long time ago:

Q. Which of your five senses tends to diminish as you get older?

Charley Weaver: My sense of decency.

Q. During a tornado, are you safer in the bedroom or in the closet?

A Rose Marie: Unfortunately, Peter, I'm always safe in the bedroom.