Economic review

BankservAfrica reports that real take-home salaries have increased for the fourth month in a row; the highest reported over the past 2 ½ years. The reason is owing to a slower increase in inflation compared to nominal wage growth. In this respect, the forecast for inflation for next year is 4.9% yoy, which will, so it is said, probably lead to a rate-cutting cycle by the Reserve Bank.

The IMF expects our economy to shrug off the current sluggish consumer and business confidence and grow…by 1% this year! The mere fact that we regard this as good news, is indicative of how bad things really are.

This week past Rob Davies urged us to grow and diversify our economy. He says ours is a country of endless opportunities which may be unlocked through ambition, perseverance and hard work. He refers to the issues of economic governance as a morass of negative noise and holds up as example, a new start-up which has gone from zero to the stars in three years flat. BS; the entity he refers to is a service provider to Eskom and lives on a straight diet of preferential SOE work. He speaks blithely of unlocking social and economic capital which will remain a pipe dream for those not so favoured.

The PIC expects a further sovereign downgrade of our economy by credit rating agencies, owing to sluggish growth and low consumer confidence.

Absip (don’t bother looking it up) complains that black stockbroking firms receive a very small proportion of work allocated by large asset houses. Whilst one understands and supports the sentiment, it is entirely consistent with investment practice that one would not give large sums of money to small and relatively inexperienced businesses. In the same fashion multinationals would never entrust legal work, that carries serious financial consequences, to small legal firms.

German consumer confidence is at its highest level since 2001. It’s manufacturing economy is also in rude health. Truly, one cannot keep a good men down!

Business review

Hot on the heels of a report that aeroplane ticket prices are set to decline, is a report that Ryanair expects fees to slide by 8% in the following months; this after a fee slide of 5% in the past few months.

Two airlines have discontinued their Durban routes from King Shaka airport, namely Ethiopian airlines and air Seychelles.

The average monthly cost of keeping a passenger vehicle in South Africa is calculated at R7119 per month, with the price of an average car being R300 181. Of the monthly expenses, fuel accounts for about 1/3.

More smartphones were sold globally during the three months past than any other equivalent quarter on record. Owning a smartphone has become a must.

Efficiency versus productivity: efficiency is about doing the same with less. Productivity is about doing more with the same.

Stuttafords is closing down after a 159-year-old run.

Property review

The increased mobility of South Africans sees home owners relocating in search of work and electing to hang on to their properties and let them out.

Practice review

An allegedly fake lawyer is being prosecuted in Port Elizabeth and intends to conduct her own defence. Good. That is putting your money where your mouth is!

Norton Rose Fulbright has headed up a call for a dedicated business rescue court. The fact is that specialist courts, like any other specialisation, makes sense.

Cases

Rights of pre-emption in a lease:

Generally speaking, when one extends a lease and no specific provision is made therefore, then a right of pre-emption contained within the lease contract, is regarded as collateral to the main contract and is not renewed. In the case below, the Constitutional Court rejected this approach, holding that it was unreasonable to expect lay people to be able to draw a distinction between terms that are collateral to the main contract and those which are incidental. Therefore, unless an overt arrangement is made, an extension of a lease extends any pre-emption included within the lease.

Mokone, ask me for a copy

The doctrine of fictional fulfilment

Pacta sunt servanda

The above doctrine has its origins in the Roman law principle that a party to a conditional contract who deliberately circumvents the fulfilment of the condition is liable as if the condition had been met.

The Latin quote is used to express the principle that one should be held to any contract that one (freely) enters into.

In the case below, our Constitutional Court dealt with both of these principles and declined to enforce a contract which held unduly harsh conditions. Henceforth, contracts which have unduly harsh, unfair or oppressive terms, may be struck down – the onus is upon the party seeking to avoid enforcement of a clause to demonstrate its unfairness.

Binta, http://www.saflii.org/za/cases/ZAECPEHC/2017/35.html

Quotables

The power of accurate observation is commonly called cynicism by those who have not got it. George Bernard Shaw

Comment

Two interesting asides on democracy within SADAC came up this week:

Grace Mugabe has called upon her husband to name a successor. This in a democracy?
Another democracy is said to be sliding into tyranny; Zambia.

Birds of a feather flock? (traces of this may be seen in SA also).

One has to step back and look at what is happening in South Africa: we have become so inured to systematic corruption that the flood of openly reported on thievery merely warrants a tut-tut disapproval. It is incredible that those in power simply disregard this. It would appear that the push-back from citizens is gaining ground: the latest is a report that Eskom’s CFO was suspended owing to pressure having been brought to bear on it by lenders. The tide appears to be turning and the edifice of state corruption, ineptitude, and impunity is starting to crumble. A report holds that the bank of Baroda also apparently dumped the Gupta clan; it would be so nice for them (and those who support them) to receive their just deserts.

Lighten up

The sole purpose of a child's middle name is so he can tell when he's really in trouble.

I never married because there was no need. I have three pets at home which answer the same purpose as a husband. I have a dog which growls every morning, a parrot which swears all afternoon, and a cat that comes home late at night.

Marie Corelli

Marriage is like a deck of cards: in the beginning, all you need is two hearts and a diamond. By the end you wish you had a club and a spade.