Economic Review

By now it has become clear that the State and the underfunding of tertiary education is at the heart of the student riots. Funding of students by the Aid Scheme stands at 16% of undergraduates compared to the target of 25%. The fund shortfall is R51bn. To reach international benchmark levels, funding to universities will require an additional R19.7bn. Minister Blade has offered R14.1bn to a range of needy recipients .. not nearly what is needed. And all of this was expected but not taken care of until it became a crisis. In fact free education (i.e. others pay) was decided upon three years ago but Blade did nothing; a heaven-sent opportunity for the EFF. This has now been “reprioritised” by our Minister entrapped by his incumbency. Interestingly the demographics of students in all of our universities, more or less reflect our national race make-up.

A further problem lies in the make-up of our workforce. The average age of a unionised worker is 43. The average age of a jobseeker is 27. The 1 million jobs created between 2008 and the beginning of this year were on account of job gains amongst adults, whilst job losses amongst the youth amounted to 221,000. Factually our youth bears the brunt of unemployment in this country. It is not surprising that they are unhappy.

Saki Macozoma says of this:”The problem with a discourse of free education is that people believe it is free and thus fail to appreciate that it is a scarce resource that must be used with a patriotic conscience. The trouble starts when people do not want to accept that society has scarce resources.”

Business Review

Oops.. human error…really!.. led to Lewis stores selling 50,000 unemployment policies together with credit given for purchases.

PetroSA is “illiquid” and is looking to sell 49% equity in 10 blocks of West Coast exploration areas. Business to the rescue.

The IDC, in conjunction with the Chinese, is committed to building a new steel mill in SA. It had better bring serious efficiencies to the table or it may well make a very costly mistake…

Property Review

Loos says home prices also fluctuate like that of shares but says that home prices have only dropped three years in Absa’s 49 year records.

Seeff says property price growth is still positive but that demand will weaken. FNB says that (as usual in hard times) demand at the upper end of the market is weakening less than at the bottom end.

Practice review

Putting your money where your mouth is? Much is presently being said about black advocates not being briefed in favour of white advocates. “When the State or its functionaries are in a legal crunch, they opt for expediency. They allow their historical complex to get the better of them and opt for practitioners who appear accomplished and do not seemingly need to be affirmed.” Judge Moseneke. Leader of the pack is Nummawan whose preference, when his ass is on the line, is firmly expedient. Leadership (!) not doing what they ask of others.

An interesting aside on the failure of business rescue in South Africa was published by Moneyweb. The allegation is that business rescue has not been particularly successful since its introduction. Why? The blame is placed on our lack of experience in dealing with bankruptcy restructurings. One of the problems is that SARS will not support any business rescue proceedings unless its claims are dealt with adequately. The reason for this is that it has no preference in business rescue – only in liquidation.

Cases & such

Effect of a sale in execution

An interesting case was reported this week: it deals with a number of problems often encountered in conveyancing. A property, subject to a bond, was sold. The purchaser’s took longer than expected to pay and eventually the bondholder put the property up for execution. Then would-be purchasers paid all but R34,000 of the purchase price. The property was auctioned and the court authorised transfer to the new purchasers. The principle that was applied is that one cannot easily set aside a sale in execution unless there are very good reasons for this. One of these is if the underlying cause of the warrant in execution has fallen away by, for instance, full payment of the debt. In this case the debt had not been fully paid and the court ordered transfer to the new purchasers.

Mamogale [2015] ZAGPPHC 629

Leases and breach

When a lessor cancels a lease owing to non-payment, it is entitled to claim damages in addition to the cancellation of the contract. This is typically equivalent to the rent for the time during which the property remains un-paid, provided that that time would have been with in the period of operation of the lease which has been cancelled.

Land and Agricultural Development Bank [2015] JOL 34131 (GJ)

Section 118 (3) Municipal Systems Act

One of the evergreen sources of disputes in property sales, is the collection of arrear and future rates from sellers and purchasers by the local authorities. The topic, to a certain extent, is old hat but worth a read for those involved. I refer to an article by Prof Delport published in the THRHR earlier this year. Ask me for a copy

Unreasonable contractual terms and enforcement thereof

An interesting article, written by Sharrock, was published in the Mercantile Law Journal. Our courts have, in the past, adopted a dogmatic position that merely because a contractual provision would have an unfair or unreasonable result does not make the enforcement thereof offensive to public policy. This was rejected by Concourt which accepted the proposition that unfairness was in itself a sufficient ground for declining the enforcement of a contractual provision.

Unfair enforcement of a contract: a step in the right direction? Ask me for a copy.

Quotables

Debt allows us to spend more on what we want today @ the expense of what we need in the future.

The opposite for courage is not cowardice, it is conformity… even a dead fish can go with the flow. Hightower

Weird & wonderful

Again, this might be on the dark side, but it does say something… The scaffold construction that collapsed in Gauteng had been subcontracted to Waco … why would anybody (in their right mind) call a construction company wac(k)o?

Losing it: Research emanating from the Arizona State University concludes that when losing their cool, women were less influential, whilst men were more so.

An Aussie lecturer has developed a theory as to how the strange Aussie accent arose. It was caused by slurring whilst drunk. Jip. Now we have this strange Afrikaans spoken in the Cape which, incidentally produces wine….

And on the same topic: King Zwelethini is worried about Zulu liquor intake. “We should find out if it’s (the Liquor Board) agenda is to protect the Zulu nation or destroy it.” And then there the Oirish, the Skots…

To pastures pinker: “The Dutch Reformed Church synod is selling its soul for a pink dollar.” Mercury reader.

Ag sies man! A Cape Town gut Dr is normalising guts with faecal transplants… Perhaps those leading the EFF should become donors?

Lighten up

He is a self-made man and worships his creator. Bright

Winston has devoted the best years of his life to preparing his impromptu speeches. Smith

He not only overflowed with learning, but stood in the slop.