Gentle Reader,

I have, for the first time in twenty years, taken a two-month break from producing this newsletter: one can raise and refurbish the Titanic in the time that it takes to fix and replace a computer. Please accept my apologies for the hiatus in the publication of this newsletter caused by this.

The two months past produced trends:

a swathe of apparently damning revelations of improper and corrupt conduct implicating numerous of our leaders – more than sufficient one would think to terminate any political career. Yet our politicians soldier on seemingly untouched by the raging storms about them - emboldened by the knowledge of untouchability;
increasingly violent public protests, fanned no doubt by the appreciation that only extraordinary conduct would distinguish such protests from the by now mundane spectacle of placard-wielding citizens;
the descent into junk of our currency and increasingly aggressive BEE policies, driven by political activity insensitive of mainstream financial opinion, inspired by the need to promise more.

As a South African, one becomes inured to political impropriety, violence and accepting of the damage done to our currency by those desperate to resist flagging political fortune (“normalisation of deviance”). It takes an outsider to reawaken one: in my case a son who visited and was astounded by conduct which would certainly tank any political career (outside of the third world?). His views, however, reinforced my understanding that, despite the above, we enjoy a standard of living which is difficult to emulate elsewhere.

Daan

Economic review

There a are more than 17 million South Africans dependent on social grants, compared to some 15.5 million South Africans with jobs last year. This, the SAIRR says, is a recipe for social and political chaos.

Demand for offshore investments among South Africans is growing, understandably owing to lack of investor confidence, investment downgrades and the like.

FAANG (Apple, Amazon, Netflix & Google) stocks have increased beyond the average to such an extent that there is talk of a dot.com Bubble.

The BER Business Confidence Index, at 29, has plunged to its lowest levels since 2009. Understandably so; the World Bank predicts our economic growth outlook at 0.6% for this year on the back of “higher than anticipated policy uncertainty”.

Business review

Techno-capitalism: this term refers to the next step beyond the industrial age and, with it, a decoupling of economic growth and the take-up of labour. It is debatable whether South Africa can and must make this shift.

Namibia has followed suit and a draft indigenous law, compelling white-owned companies to cede at least 25% of she is to the historically disadvantaged majority black population, is on the cards. A similar argument to that in South Africa prevails, namely that 27 years of independence has not yielded genuine economic transformation.

An interesting result of the larger maize crop is that many farmers Will receive much the same income from a much larger crop at lower prices as they did for a much smaller crop at higher prices.

Disposable salaries in South Africa have outpaced inflation for the second month in a row, reports BankservAfrica.

An interesting aside that I came across was a view by Toyota which said that the increased reliance on AI was leading to it having too many average workers and not enough experts in the trade, which is undesirable. One sees this in conveyancing also: there is much automation and most of the standard work can easily be automated. This leads to many colleagues coping quite easily with standard work but who are unable to address anything other than that.

Hewlett-Packard has unveiled for a new computer capable of handling vast amounts of data at very high speeds using light waves to transmit data instead of electrical impulses.

Whilst the inclusion of this in a business section might be questionable I am sure that our Muslim readers would find this interesting: the Triple Talaq practice (whereby a Muslim may divorce his wife by reciting the word “divorce” thrice) is under reconsideration by India’s highest court.

Property review

On 1 July the Pietermaritzburg municipality will change its financial system and delays in the issuing of rate certificates is expected.

The Pretoria deeds office has lost a great many of its 2007 records: https://southafricatoday.net/south-africa-news/gauteng/pretoria-deeds-office-in-chaos-after-thousands-of-documents-disappeared/

An eleven point drop in confidence in the building industry, to 32 points, was reported by the BER – a descent sufficiently radical to qualify as one of only five such dips since this index commenced twenty years ago. Expect a contraction in building activity.

This development is mirrored by a 21.9% yoy decline in building plans submitted to larger municipalities in the first four months of this year. The largest drop was for non-residential buildings such as factories, offices and shopping malls.

Industrial property may be the ugly cousin in the real-estate sector, but, for more than a year, it has outperformed the retail and office sectors. The reason for this is attributable to the growth of distribution warehouses necessitated by online shopping and imported product.

Vacancies in the residential property market increased slightly to 6.6% in the fourth quarter of last year. TPN says that our demand for rental housing was still greater than the supply thereof. Paradoxically, the number of quality tenant applications have started to deteriorate but the number of quality tenants actually placed, continued to improve.

Office vacancies remain static and consideration is reportedly being given to the conversion of office space to residents in areas such as Rosebank.

Loos says that house price growth is expected to weaken for the next year or so. The yoy house price growth of 4.7% remains below the CPI.

The Human Settlements Development Bank was formed by integrating the National Housing Financial Corporation, the Housing Loan Fund, the National Urban Reconstruction and Housing Agency. The government expects this entity to play a significant role in facilitating faster access to housing finance for those earning between R3,500 and R15,000 per month. One hopes so. I confess to being sceptical; one cannot change the nature of the creditor by changing the structure of the lender.

Almost 2 million ha. of agricultural land has been transferred to communal property associations since 1994.

The NCC has launched a public enquiry into the timeshare industry following on thousands of consumer complaints involving, primarily, holiday clubs. Many years ago I was taught that the cost of a timeshare unit was built up from approximately three equal blocks i.e. capital cost, profit and marketing cost. If this is correct, the then an owner can hardly recoup his capital on resale. Such a purchase is, at best, an investment in affordable holiday accommodation rather than any growth in value.

You may wish to read the following note on a municipal claim for unduly advanced future payments of rates prior to transfer: http://www.tmj.co.za/Blog/Read/3

Practice review

The NPA will review our plea-bargain system, which has reportedly led to, especially fraudsters, receiving unduly light sentences.

As jy met die semels meng? It is reported that the Guptas’ attorney had been implicated in 2013 and is now, again, embroiled in money laundering.

Judge Hlope has landed himself in hot water with the SCA for failing to recuse himself in a situation where a reasonable apprehension of bias existed.

Some months ago, the Master of the High Court, Pietermaritzburg cancelled its contract with the owner of the archives in which its files were stored. This caused a massive backlog in files drawn from that warehouse, as only 500 a day could be called for. This backlog is not yet sorted out.

Nationally 30/50 of those who sat for the insolvency practitioner’s exams have passed.

Cases

Pactum de contrahendo

The Latin phrase above refers to an agreement to enter into a contract. In this case the parties had orally entered into an agreement to contract to buy and sell land at a later date. Such an agreement cannot be valid as the requirement for contracts, for the purchase of land under the Alienation of Land Act, must be in writing and signed by both parties.

Abigak 1 General Trading & Investment CC v Gani http://www.saflii.org/za/cases/ZAGPJHC/2017/126.html

ESTA and improvements

An occupier of agricultural land may improve the buildings that he occupies to make it more habitable without consent of the farmer/owner.

Daniels v Scribante http://www.saflii.org/za/cases/ZACC/2017/13.html

Lease of property to a company under business rescue

If a company is placed in business rescue and does not pay its rent, one may cancel the lease but, depending on the circumstances, the business rescue practitioner may prevent the landlord from evicting its tenant.

Kythera Court v Le Rendez-Vous Café CC

[2017] JOL 37744 (GJ

Quotables

The past is always tense, the future perfect.”

Zadie Smith

Those who will not reason, are bigots, those who cannot, are fools, and those who dare not, are slaves.

George Byron

Comment

Our current Public Protector had been silent for so long (reports hold that she is keeping State capture reports under wraps?) that I had assumed that she would busy herself with problems less political. Her broadside on the Reserve Bank proved otherwise. Coupled with key political replacements in our financial sector, I confess that I now see her as a Trojan horse, installed by a master strategist. The appointment of Chris Malikane as adviser to our Minister of Finance, was clearly not taken merely to broaden his perspective.

Lighten up

Relationships are a lot like algebra. Have you ever looked at your X and wondered Y?

A girl was visiting her blonde friend, who had acquired two new dogs, and asked

her what their names were.

The blonde responded by saying that one was named “Rolex” and one was named “Timex”.

Her friend said, “Whoever heard of someone naming dogs like that?”

“Helllooooo...! ,” answered the blonde. “They're watchdogs.”

Wife: Why do you go out in the balcony, when I start singing.

Husband: Because the people would think I am beating you.