Gentle Reader,

In the coming week I shall desert my post in favour of a gatsaag, an overdone banting diet, liquid refreshments and the company of old farts in the Loodsberg area. The publication of this newsletter will be suspended for at least two weeks pending my return to normality.

Best

Daan

Economic review

KPMG reports that its Global Tax Dispute Benchmarking Survey indicates that the majority of SA respondents were experiencing increased difficulty in reaching resolutions with SARS. This is attributed to increased aggressiveness by SARS.

Patronage politics: An interesting, if deeply pessimistic, view from Prof Friedman is that a captured Treasury does not necessarily lead to ruin: businesses and government may dislike each other but are interdependent and find ways to cooperate to keep the market economy afloat.

Remarkably, the Rand endured our recent political turmoil and it would appear that economic growth in South Africa will gain traction later this year.

If you think we are having a tough economic time; pity the Saudis: its government is shelving or restructuring unfinished infrastructure and development projects owing to the crude-slide.

Business review

It is reported that Eskom will apply to the Treasury for a series of waivers and exemptions from procurement regulations in its endeavours to build 6 to 8 nuclear plants. No doubt there are reasons for this intent, but the repeated failure by this parastatal to adhere to transparent procurement and the political furore about its hand-ups to dubious partners and future graft, must raise concerns about the wisdom of such relaxations.

Sanral is reportedly considering alternatives to tolling as a means of financing road infrastructure. A comparison with Australia, where toll compliance is total, indicates that tolling might not be the most effective way of raising the necessary finance. It is reported that “the chances of building huge freeways and infrastructure through the Fiscus is limited.” We all know this to be true, but this knowledge does pose the question why the state should not be the agent for introducing public infrastructure.

Predictably the cost of new vehicles has increased and, in tandem, that of used vehicles also. The cost of new vehicles for the 1^st quarter of this year rose by 8.8% and that of used vehicles by 3.7%.

It has now been announced that a 6 month amnesty has been approved by our cabinet to allow holders of illegal firearms to hand them over to the SAPS without being arrested. This is set to run from June 1 until year end. One wonders whether this will include relicensing of such arms?

The theft of the century: a businessman was found guilty by a Moldovaian court of fraud of R13.1bn on 3 of its largest banks over a period of 2 years. This is the equivalent of 18% of that republic’s GDP. Interestingly, the court ruled that he should repay the money and serve 18 years in prison.

Do consider registering a dotAfrica domain: if you do not do so before June 2, you might have to buy your brand name domain from a cyber squatter.

The British government is working on a proposal to scrap diesel cars in Britain.

This is not really business news but interesting nevertheless: Russia’s Supreme Court has issued a ruling banning Jehovah’s Witnesses and seizing church property after that organisation had been classified as an extremist. Whatever one’s religious persuasion, this is certainly going to be a fight worth watching.

0° Kelvin is the point at which all particles stop moving? Perhaps not. Take a look at this: https://phys.org/news/2013-01-atoms-negative-absolute-temperature-hottest.html

You have to love Zimbabwe: commercial banks will soon be compelled to accept livestock as collateral for loans under the Movable Property Security Interests Bill. Certainly different!

https://www.bloomberg.com/news/articles/2017-04-11/new-law-to-compel-zimbabwe-banks-to-accept-cattle-as-collateral

Property review

The trend of the value growth of smaller-sized homes outpacing that of medium and larger sized homes continues. The prices of smaller houses grew by 6.1% year-on-year, that of medium sized houses by 2.9% and that of large houses at 4.1% in the 1^st quarter of this year. Interestingly, the FNB House Price Index shows an inflation of 395%, 374% and 281% for such groupings respectively, since 2001.

The Annual Property Index shows that are listed and unlisted real estate achieved an ungeared total return of 11.1% in 2016. This is the lowest recorded total return since 2009.

I had very recently published a note by Kilbourn in which the writer opines that the Sectional Title Schemes Management does not replace existing rules created under the Sectional Titles Acts of 1971 and 1986. This week I attended a seminar by the Christo Smit Group: the presenter held, quoting S21 of the new act that, given that the Minister has made the regulations prescribing management and conduct rules, all existing rules have been replaced by the new Act. I confess to being sceptical: if this were the case, chaos would reign as all special arrangements would be lost (I generalise). Factually, there are those who are currently marketing replacement strategies and being paid for this.

Rates payable in advance

The Nelson Mandela municipality had a regulation which compelled an applicant for a rates certificate to pay property rates for the whole of the financial year, i.e partly in advance. The Supreme Court of Appeal found that this policy was inconsistent with the Rates Act and thus invalid.

Amber Mt investments http://www.saflii.org/za/cases/ZASCA/2017/36.html

The Conservation of Agricultural Resources Act (CARA) deals with the protection of grazing land from deterioration. An executive officer, acting in terms of CARA is empowered to order a land user to adopt measures to protect the veld against deterioration; this does not preclude a landowner from approaching a court for additional relief by way of an interdict.

Adendorffs Boerderye http://www.saflii.org/za/cases/ZASCA/2017/37.html

Practice review

South Africa has 255 judges of whom 44% are black (African?), 34% are white, 11% are Indian and 11% are coloured.

The KZN health Department has formed its own medical litigation unit which will review records from both a legal and medical point of view and advise the Department to concede, mediate or defend. Pragmatically speaking, this is a better response to medico-legal issues than blaming lawyers.

An even better response would be to address the “challenge” of fixing the inadequate public health system.

Judge Hlope has instructed courts in the Western Cape to adopt English as the only official language of record of courts in that province. This is in accordance with a resolution taken in October 2014.

Duty of care for directors

The legal nature of the duty of care of directors in terms of the Companies Act may be sought in legislation, contract and delict. I hold an article on the subject by Stevens published in PER. Ask me for a copy.

The Justice Administered Fund aims to provide for holding funds emanating from maintenance orders, bail monies and other sums held on behalf of third parties; take a look: http://hsf.org.za/resource-centre/hsf-briefs/the-justice-administered-fund-bill

Non-variation clauses

So-called Shifren or non-variation clauses are a common contractual term in many contracts. The harm they guard against is the difficulty of proof when dealing with oral variations of written contracts. A recent SALJ article examines the variation of contracts by way of e-mail communications. Ask me for a copy.

Quotables

“All Utopias that have hitherto been constructed are intolerably dull….[Utopians] do not realize that much the greater part of a man’s happiness depends upon activity, and only a very small remnant consists in passive enjoyment. Even the pleasures which do consist in enjoyment are only satisfactory, to most men, when they come in the intervals of activity.” Bertrand Russell

This and that

Statistics holding that the US leads world obesity with a 34% prevalence of obese persons of its population is hardly news. What was interesting to me was that we are equal New Zealand and the Seychelles at approximately 26% of our inhabitants classified as obese.

Very few would dispute that Hlaudi Motsoeneng is a dangerous person to be placed in a position of power. He will be remembered for narcissism, a take on news coverage which held that 70% had to consist of good news and his 90% local content rule. Strangely enough, as regards the latter, he is probably right that our public broadcaster should support local artists as far as possible. The problem really was that he took this too far.

Orwellian future: “They made sure we were given minimum education just to allow us to take commands from white people. In this country there were jobs that were reserved for whites. So the education system was to ensure that the whites are trained and skilled while black people supply cheap labour.” Dlamini-Zuma, the would-be presidential successor-in-title repeating a half truth to the point of it becoming true.

It seems that almost every public political commentator and prominent politician has by now weighed in with opinions on the possibility of a secret vote by MPs at a no-confidence motion. Reduced to its essence, the question is whether people or parties rule.

Is farming profitable? The inability of the KZN Royal Trust to turn a profit on the King’s farming enterprises, lends credence to the take on farming capital as funds to be used until exhausted.

A minor furore was caused when Prof Malikane, our Finance Minister’s newly-appointed adviser, was discovered to be a radical: what one should rather ask, is whether students (at Wits) should be taught by ones such as he.

Less is more: the International Naturalist Federation says that we are missing out on the growth 😊 benefits that would be coupled to declaring the Mpenjati beach a nudist haven.

Whilst on this topic: The G-spot,situate in De Vlugt near the Prince Alfred Pass, is set to be demolished as it was built too close to the Keurbooms river. This place of pilgrimage for bikers, run by a has-been hippy for many years, has finally ticked off the local authority to the point where a demolition order was issued by a local court. A pity; my last visit there was most pleasurable.

Lighten up

The worst time to have a heart attack is during a game of charades.

Employee of the month is a good example of how somebody can be both a winner and a loser at the same time. Martin

Directeur: Waarom hebt u uw laatste job opgegeven? Sollicitante: Hoe bedoelt u? Ik vraag toch ook niet waarom mijn voorgangster het niet langer bij u uitgehouden heeft!

Although golf was originally restricted to wealthy, overweight Protestants, today it is open to anybody who owns hideous clothing. Barry