Economic review



Cash flow: like an individual, a country’s cash flow is all-important. In recent years our economy recorded large current account deficits. The combination of a weak exchange rate coupled with weak domestic spending growth should curb imports and support export volumes… hopefully.


Our Treasury is said to be most likely to fund its shortfall on its budget by a higher taxes and there is talk of the government cutting its expenditure ceiling. Ceiling, what ceiling?


South Africa’s CPI should breach the 6% upper limit of the target band for the next two years averaging 6.8% this year and 7% next year.


Least encouraging of all is the Bloomberg ranking of South Africa as third in the 2015 Misery Index. We are described as: “One of the five most painful economies in which to live and work in the world.”


Johnny Steinbeck is a long-standing commentator on economics in South Africa. He recently wrote a very interesting article on our sacrosanct, cursed and resented need for monetary transfers “disguised as pensions and disability grants”. He describes these as a substitute for work but also a way of staving off disaster in a world that cannot employ enough people. Depressing but true.


Business review


Tingatinga: the Swahili name given to the new Tanzanian president. He has made a startling (in African terms) start to tackling waste, graft and corruption. One wishes him the best, but history is against him.


An interesting development is that Joyce Mujuru has started a new political party to challenge the ruling Zanu party in Zimbabwe. Again, one wishes her the best, but history is against her.


Many professionals hold PPS insurance. That insurer has now opened up an office in Australia targeting its market of approximately a half million professionals.


A new method of 3D printing can produce bones, muscle and cartilage that survives when implanted into animals.


The carrot or the stick? New research seems to prove that rewards don’t work nearly as well as penalties. Eina, so much for being nice.


Of late South Africa has a faith policeman who protects the public against being ripped off by those peddling religion for profit. In Zim this has gone a step further, in step with the worsening water situation in Harare. “The Prophet’s drinking water is safe by faith. We don’t need stupid tests to prove it!”


Oliver wanting more: SA Express will be approaching the government for “funding options” for the acquisition of new aircraft to replace its ageing fleet. Nummawan has just made promises of built – tightening by non-profitable state enterprises. It will be most interesting to see what happens.


Practice review


Our Minister of Health has again accused attorneys of focusing on the health care system with the advent of the Road Accident Fund trough being shut down. We are accused of taking advantage of problems in the public service system knowing that especially specialists have expensive indemnity insurance waiting to be tapped.


Gardening leave: this is the term applied when an employee does not come to work whilst serving notice. Gardening leave clauses are inserted in employee contacts where the employee has access to significant confidential and proprietary information and is designed to sterilise such access. This has been found to apply to South African law by our Labour Court in Johannesburg.


 Volte-face: after 33 years our NPA has decided (after significant political interference) to institute criminal proceedings against an apartheid-era perpetrator. This has raised fears that this may undo much of the work of the TRC.


The Competition Commission will again investigate removal firms for collusion.


The top EU court has decided that an airline may be liable towards an institution where that institution’s employee is not carried on time.


Property review


Section 118 revisited: the recent Appeal Court decision which holds that a municipality can take legal action against the present owner of a property for any amounts, owing by the previous owner of property, has caused widespread dismay. The Supreme Court of Appeal held that the hypothec that exists in favour of a local municipality to secure sums owing by the owner of a property to that municipality for rates and services, is not extinguished by transferring the property, even if the sale was by way of execution. This decision has major implications for all property owners and those who lend money for such transactions. A further problem is difficulties with billing, faulty meters and the like, as it would make it very difficult for a new owner to contest an account. (2015 ZASCA 1)




NCA: The Rubicon


At what point is it too late to rescue oneself from a creditor acting against you in terms of a credit agreement? At any time before the sale in execution. Up to that time you may halt all proceedings against you by paying the overdue amount together with costs.

FRB v Nomsa Nkata [2015] ZASCA 44


Mora & demand


A recent case revolved around the disenchantment of a purchaser with the rate of completion of extras in an equestrian estate. The claimant had bought and, six years thereafter, these had not yet been completed. As a result, the claimant sued, alleging that it was an implied term that the equestrian facilities would be installed within a reasonable time after registration of transfer of the transfer of the property into his name. The court held that, even if the seller had neglected to provide these within a reasonable time, it was not, necessarily in mora. The plaintiff had to serve a notice calling upon it to complete these facilities within a reasonable time and, only on non-compliance therewith, would the developer be in mora. The lesson to be taken from this is to provide for clear timelines in a contract when buying into a major development.

Myburg [2016] ZAW CHC


Speeding rules and access in a sectional title development


In this case and owner took on the home owners Association of Mount Edgecombe which had revoked his rights of access to his property following on his refusal to play speeding fines issued by the homeowners association. This case is too broad to summarise in a paragraph. The judgement affirms the right to contract into rules. It does not allow the prevention of access to a home on the basis of spoliation. If one wishes to take on a homeowners association, this case certainly is obligatory reading.

Singh [2016] ZAKZDHC 2


More on levies


If the rules of a sectional title scheme is changed, which change adversely affects the rights of a homeowner by increasing his levy liability, his consent should first be on obtained in terms of section 32 (4) of the Sectional Titles Act.

Extra Dimensions [2016] ZAKZDHC 1


Taxable revenue or capital?


The latest case in the hoary and ongoing saga of taxable revenue versus capital, is a case between SARS and Capstone, in which shares were bought as a long-term capital investment to be sold shortly afterwards as a result of an unsolicited offer to purchase. In this case the court upheld the taxpayer’s contention that its intent had been to purchase the shares as a capital asset and that this sale thereof was therefore not taxable but revenue.

SCA case 20844/14




It is never difficult to distinguish between a Scotsman with a grievance and a ray of sunshine. Wodehouse


Lighten up


Can you remember the quote: “The difficult we do immediately. The impossible takes a little longer.” Attributed to the US Army engineers. The modern take on this is as follows: Accomplishing the impossible means only that the boss will add it to your regular duties. Larson


The definition of a Yorkshireman is a Scotsman with all the generosity squeezed out of him….


Old Sandy McPherson was dying. Tenderly, his wife Maggie knelt by his bedside and asked, 'Anything I can get you, Sandy?'

No reply.

'Have ye no' a last wish, Sandy?'

Faintly, came the answer ...  'A wee bit of yon boiled ham.'

'Wheesht, man,' said Maggie, 'ye ken fine that's for the funeral.'


How do you recognize a left-handed Scotsman?

He keeps all his money in his right-hand pocket.