Economic review

Vrot with risk? It is not often that one sees a brave economic experiment. We are set to see this happen in Argentina – if political promises hold good. Its president-elect has pledged to scrap all foreign exchange controls upon taking office next month. His intent follows on a massive difference between the official and black-market exchange rates of the peso. The risk is a Peso plunge and a shrinking economy.

A limitless world view reigned in? “All brands of politics and economics are now deeply rooted in the idea of a robust economic growth, combined with the belief that governments and central bankers can exert a substantial control over the economy to bring this about. No one wants to confront the possibility of significantly lower economic growth in the future.” Das

Business review

The uproar that accompanied the publication of an opinion on SAL trading in insolvent circumstances was a pleasure to behold. Management stated that our national carrier could pay its debts, i.e. that it was commercially solvent (implying nevertheless that it is technically insolvent). Detractors harped on the fact that SAL would need yet another bailout. Factually, one has to be blind not to recognise that SAL must be technically insolvent. Any business, that will only be profitable 5 years hence and is suffering the losses that SAL currently does, is blind to realities.

Investment yield: the US yields are in the region of 2 to 3% compared to a very low interest rate. In South Africa our dividend yield looks better but is in fact lower than our interest rate. If one takes into account the expected weakening of the Rand, investing overseas is a no-brainer. The only question is when to take one’s money out.

Public distrust in our president has jumped to 66%. If the survey is correct, then only arrogance can keep him in office.

The VW scandal has resulted in all manner of other exposés: Renault was found to have its 1.6 Espace delivering up to 25 times higher nitrogen oxide emissions than the current Euro-6 limit.

US regulators have approved the first genetically altered animal for human consumption. This is salmon which is intended to be raised inland in contained areas and which grows to market size in half the time ordinary fish do.

Property review

Office vacancy rates in Johannesburg, and indeed in general, declined in the third quarter of this year. JLL warns that office stock in Johannesburg is expected to increase by more than 400,000 m² by 2017 and that the slow growth in this market suggests that an oversupply will occur in the next few years. An interesting aside is a note that central nodes of development attract occupation whilst decentralised nodes are noticeably less occupied.

If one considers the above, it is interesting to see that many listed property funds are now pushing money into residential property, as it appears to promise higher returns than that which is offered by some older office and retail assets. One example is Vukile.

It is increasingly likely that property stocks will turn out to again be the more lucrative bid for investors than general equities, cash or bonds. Last year that class offered a total return of 26%. To date this class has achieved a 16% total return.

Ooba says that 1^st-time buyers are increasingly buying sectional title properties owing to the perceived lower prices, lower maintenance costs and security.

Does a close Corporation require a Fidelity Fund Certificate in order to act as an estate agent where its sole member holds such a certificate? Yes. Regulation 9 (2) requires this.

Abel Hendrik Erasmus [2015] ZAFSHC 198

Practice review

Last dates for lodgement of deeds in December: theoretically, if one wished to register a deed by December 23, one would have to lodge on about the 11^th. Given the dynamics of the Deeds Office safe lodgement would be by the 8^th; you might make it if you lodged on the 9^th, but thereafter, lodgement for registration by the 23^rd would be dicey at best. Consider also that if one the registers a transaction in which one must pay out on the 23^rd, one would have to work on the 24^th in order to ensure that the monies are paid over.

The Women’s Legal Centre says that it is taking the government to court for failing to pass legislation that recognises Muslim marriages. Good

May an attorney, who is an interested party in an action, commission an affidavit in support of a creditor’s claim submitted against an insolvent estate? It used to be prohibited but is no longer; thus, yes.

Breda SCA case 20537/14

Description of sectional title schemes laid out on farms: I understand that the latest Deeds Office policy is that, whenever a scheme was laid out on a farm, the situation of the property will have to reflect the full farm description as well as the registration division, province and municipal area. A circular is to be issued.

Cases

Habitation and ownership

Can the owner of property, over which another has the right of habitation, legally occupy that property and ignore the rights of the habitation holder? No.

Hendricks SCA 20519/14

Trading in competition with a restraint clause in a lease agreement

Much was made of the challenge that Masstores initiated against restraint clauses in lease agreements between the owners of shopping centres and anchor tenants. Typically these are entered into in order to prevent competition with that anchor tenant within the shopping centre. Our Supreme Court of Appeal upheld such clauses.

Masstores SCA case 2071

Fraudulent misrepresentation and transfer

If property is transferred as a result of fraudulent misrepresentation and the owner did not intend to transfer that property: that registration is void. Consequently, the “owner” of that property cannot give a valid bond. This is important as bonds are essentially loans granted on security of property. If the transfer is void and the lender cannot recover the sum lent, the conveyancer may well be liable for the loss that may be suffered by the lender.

Absa v Moore SCA case 20719/14

When is a compromise a compromise?

An agreement of compromise is a contract like any other. The terms must be certain. If one seeks a mere softening up of one of the terms of any agreement, thas is not tantamount to a compromise.

African banking [2015] JOL 34634 (ZH)

Quotables

“I fear the man of a single book.” Thomas Aquinas

“I am a realist. We need profitable companies for a trade union to be successful.” Vavi

Weird & wonderful

What’s that again? “SAA has over the past 12 months placed considerable effort behind what is known as the ’90-day turnaround plan’. Its success is well known and every effort is made to continue the progress.” Myeni

Another worthy, whose understanding of economics does not extend to reality, is Transnet’s CEO, who implores the private sector to invest its lazy cash. If the opportunities were sound, such a call would not be required.

On sin: “Men are now marrying men, and that is why we are currently facing this curse of the hot sun and drought.”

Lighten up

It is a very swish restaurant. The head waiter recoils in disgust as one of the diners approaches him in boots, torn jeans and a leather jacket. “Hey man, where is the toilet?” “Go down the hall and turn left. You will see a sign marked ‘gentleman’. Pay no attention, go on in.” Ex The Idler

“Bigamy is having one wife to many. Monogamy is the same.” Wilde

A colleague reported having seen a minibus for the Church of the Overcomers. He assumed that they were missionaries….