Economic review

In world affairs what you say matters less than how you are perceived by others: the IMF has slashed our growth outlook to 0.1%. We are reassured by those who govern that whatever is necessary is being done to ensure the retention of our international credit rating. The reality is that South Africa is reeling under the societal consequences of unemployment and retrenchments. Whilst there are conflicting reports on this, the fact is that confidence in our economy is quite probably at an all-time low.

This week past I listened to a radio programme on savings in South Africa. The commentator said that South Africans have had an average negative savings rate over the past 10 years. This places pressure on consumers following on increased interest rates and job losses. If we continue thus, South Africa will be ever dependent on external funding for expansion and the like. This is when the reason why FDI is a big deal in South Africa.

Business review

An article appeared this week about underground coal gasification which explained that coal is ignited underground and the volatile gasses harvested. The suggestion is that this would enable us to utilise low quality coal not otherwise suitable for exploitation. Sounds interesting but if you thought fracking was bad this cannot be far behind?

On an allied subject: a Finn has unveiled a process which extracts saleable metals from acid mine water and produces clean water at huge costs savings.

Mine is bigger than yours? Amcu has made a 47% wage increase demand of the three largest platinum producers in South Africa. The possibility that it will achieve this is probably quite small and one can but assume that it makes such a demand for membership purposes only.

The archetypical American candy is a Hershey bar. The Empire built on that candy has been challenged by an offer to buy.

Terminology: “attribution bias”: one attributes the success to one’s own ability and failures to external stuff one cannot do anything about.

Next year KZN schools can expect a pilot project in which pupils are streamed into one of an academic, technical vocational and a technical occupational stream.

Property review

Is the market value of a property the key factor in determining payment where land claims are concerned? No. This week past a land claims court judgement took into account that an equitable balance between the public interest and the interest of those affected by the appropriation must be reached. This judgement may prove a landmark in both our courts’ approach to the problem and how farmers view redistribution. The constitution lists five factors which should be taken into consideration but, to date, market value has weighed most heavily.

It’s an ill wind..: listed property in the UK has taken a massive hit on the back of Brexit. If you are an anglophile, now is the time to buy.

Interestingly, Britain plans to lower its corporation tax to less than 15% in an attempt to lure businesses back to London. How about such measures here?

The type of action that one might expect in London is typified by JP Morgan, which has indicated that, if the market in London drops, it will relocate an enormous number of employees. The question is whether you believe that Britain will bounce back and how long it will take.

It would be the Swiss: a Swiss banker has said that, the reason why Brexit was voted for, was the weak education Britain had visited upon its population; Britain is now paying for its failures of the past in that it’s badly educated population made the wrong choice. If he is correct, we in South Africa are doomed.

Nedbank will be providing finance for the re-development of existing commercial buildings into affordable residential space. This development is set to take place in Randburg and serves to remind us that such developments has the advantage of placing those less fortunate at the source of opportunities.

Practice review

Do you remember MDP’s? Multi-disciplinary practices: some 25 years ago, a debate raged on whether attorneys could become involved in such practices which would be capable of offering a greater breadth of allied services. The idea floundered as the shared responsibilities and allegiances to the respective governing bodies of each profession did not mesh. This concept has again come to the fore in a recommendation by Levenstein, a doctorandus investigating business rescue legislation. He has made a recommendation that business rescue legislation should be updated to provide for an analysis of the financial distress of the relevant company to be conducted by a legal and accounting team prior to business rescue proceedings. Not a bad idea and, if one could work together as attorney and accountant, there could presumably be much business to be had out there.

Cases and such

Sessions of bonds

It has become quite common that existing bonds are ceded to a sister company of the bank or that one borrows from a bank but bonds to that sister company. The sister company then provides the bank with an indemnity that, should the borrower not repay the loan, the sister company will reimburse the bank. In one such matter, the debtor was sued on the bond and raised the defence that he had not contracted with the current bondholder. The defence was brushed aside by the court.

Home Obligors Mortgage Enhanced Securities v Louw http://www.saflii.org/za/cases/ZAKZPHC/2016/44.html

Repudiation of a contract

When a party to a contract acts in such a manner as to convey a deliberate and unequivocal intention to no longer be bound by that contract, his adversary may either deny or accept that breach. If the adversary accepts the breach, then it no longer needs to perform under the contract and may sue for damages.

Lobelia Investments http://www.saflii.org/za/cases/ZAKZDHC/2016/21.html

Sections 417 and 418 of the Companies Act

Where a company in liquidation is unable to pay its debts an application may be made to the Master for an examination or enquiry relating to the affairs of the company. Any person who is known or suspected to have in their position any property of the company or is believed to be indebted to the company or is deemed capable of giving information regarding the trade dealings and so on of the company may be summoned to give evidence or produce documents. In this case, the then MEC was asked to attend. She initially did and then, when the enquiry reconvened, was represented by a whole bunch of people objecting to her attendance on the basis that it amounted an abuse of process. The court found that the mere fact that the examination of a witness will be advantageous in future litigation, does not constitute an abuse of process.

Roering v Mahlangu SCA case 581/2015

Damages in terms of section 18 (8) of the Insolvency Act

The above section provides that if property was sold in contravention of section 80 of the Insolvency Act the purchase shall be valid but the seller (the trustee) shall be liable to make good to the estate twice the amount of the loss which the estate may have sustained. This is a rarely used section. Nevertheless, my interest in this case lies with the comments in clause 22 of the judgement, in which the judge explains the so-called abstract theory of transfer; i.e. the validity of the transfer of ownership is not dependent on the validity of the underlying transaction. The abstract theory postulates two requirements for the passing of ownership of immovable property, namely delivery (read the registration of transfer in the deeds office) coupled with an intent to give and take ownership.

Swart v Starbuck SCA case 20785/2014

Comment

The battle rages: those who corrupt and those who fight it are clearly having it out in our politics. This, judging by the past and elsewhere, is nothing new. What is heartening is that corruption is still exposed as such in South Africa.

An interesting struggle is said to be playing out in Luthuli House; those in favour of press freedom and those who would want some restraint. It is interesting that the Minister was not called to Parliament but to the political party that deployed her. The assimilation of State and party seems to escape those in power or be relevant to them. ”The SABC cannot be equated with a private citizen or a broadcaster…. whereas a private citizen or broadcaster may freely take political sides and promote party-political objectives, a public broadcaster may not use public money to do so.” Judge Claassen, 2011.

An interesting note was penned by prof Estherhuize and Bruggemans: it suggests that when political events do not turn out right, there is the temptation to rewrite history. You can see this in South Africa now; the Constitution wasn’t fair, whites control the economy, democracy isn’t what it’s cracked up to be and so on. They suggest that we are entering an era of repressive tolerance in which the Constitution will be blamed for the political failures to date.

Politics in Zimbabwe has taken an interesting turn: how does one control people who stay at home? Beat them for being at home rather than work? Mugabe has a problem; one hopes that something will come of this.

The threat of the ANC losing its grip on metropolitan centres calls into mind a comment by Van Zyl Slabbert that the most pitiless moment for any new-born African state was not its moment of liberation, but the moment the party of liberation first faces the prospect of defeat at the polls. Sparks says that liberation parties tend to believe that, because they fought the great fight for freedom, suffered depredations and so on, they are entitled to rule for ever; hence the comments locally that the ANC will remain there until the second coming. Amen?

Quotables

You will find the key to success under the alarm clock. Benjamin Franklin (I love this!)

When a thing is funny, search it carefully for a hidden truth. Shaw

Lighten up

He reports for his first day of work at the supermarket. The manager hands him a broom.

“Your first job will be to sweep out the warehouse.”

“But I’m a graduate.”

“Oh, sorry, I didn’t know that. Give me the broom and I’ll show you how.”

The Adult VR Fest in Tokyo was cancelled owing to its unprecedented popularity…. I wonder what those in attendance told their loved ones?

Q: How does an attorney sleep?

A: First he lies on one side and then on the other.

"It is interesting to note that criminals have multiplied of late, and lawyers have also; but I repeat myself." Mark Twain