Economic review

The SARS tax collection for the first three months of this year reflects a R4.5bn shortfall.

A bellwether of the demand for commodities is steel. New demand for steel imports across South-East Asia is indicative of momentum building up and serves as a proxy for commodities.

Gems, the government employees medical scheme, is said to be on the brink of insolvency. Its solvency ratio is said to be almost 20% below the required levels.

Business review

It was reported a while ago that WhatsApp was considering methods of “monetizing” the operation of this app. This organisation has now announced a change to its privacy policy, allowing businesses to communicate with users. Expect advertisements.

Uber has begun offering scheduled rides in some overseas cities. Wait.

Suisse tax breaks: at the end of this month Geneva will propose cutting its corporate tax rate to 13.49%. Why would one want to go elsewhere?

The latest in the SAA saga is that a former head of that entity’s audit and risk committee has resigned saying that she feared damage to her citing the possibility of the liquidation/business rescue of SAA. SAA again wants a (R5bn) loan guarantee from Treasury in order to be considered a going concern. Factually it cannot be thus if it needs that kind of propping up.

Bankserv Africa reports real term decrease in take-home pay since January. The decline is said to be 2.2% year on year in the real terms, which is the biggest since early 2015.

Shades of Ventersdorp: German citizens have been asked by its cabinet, no less, to stockpile water and food in case of a terrorist attack. Kinda feels familiar?

Gerd: the Grand Ethiopian Renaissance Dam is being constructed on the Blue Nile near the Ethiopian-Sudanese border and is about 50% complete.

Property review

Loos reports a slow-down of retail property developments. He stressed that retail building space levels need to taper off if the retail sector is to avoid significant vacancy rates.

Practice review

The continuing challenges by High Court judges against investigation of their conduct by the Judicial Services Commission is truly becoming ridiculous. The latest challenge, just as the JSC was starting to gird its loins, is by Judge Motata, which holds that the whole process for dealing with misconduct complaints against judges is unconstitutional. Speaking for myself, I believe that those who judge us cannot command our respect unless they are truly squeaky clean. To continually take any possible evasive action (because one is legally entitled thereto) to prevent investigation against oneself, must raise the question whether one is indeed innocent of the complaint. Being legally right is not always equal to being morally right. We deserve better.

The Constitutional Court has been asked by Corruption Watch to allow private organisations to conduct private prosecutions in a bid to combat corruption. The difficulty is that whilst private prosecutions may well be desirable (in that they would allow parties who might be untainted by political interference - if such exist) to prosecute corrupt politicians, this would open a parallel system of prosecution which may well result in chaos.

A new statistic is that divorce rates spike after holidays! Christmas will have much greater meaning for lawyers in future!

Cases and such

Does the National Credit Act apply to the sale of residential properties in instalments?

Section 20 of the Alienation of Land Act provides for the registration of instalment sales against a title in order to protect the purchaser against the seller re-selling the property multiple times. Such contracts are relatively scarce. Would the National Credit Act necessarily apply to this? It would appear to be the case. One therefore has to deal with such matters by ensuring that for other reasons, the contract falls outside the ambit of the NCA. Are there any readers of this that would wish to comment on this?

Families and interest rates?

Another interesting question asked of us was whether a mother could charge her daughter any interest rate on a loan. One’s knee-jerk reaction is that the parties are not at arms-length and therefore such a contract would be excluded from the operation of the NCA. However, sections 4(2)(b) iii and iv require a dependency of the lender and borrower on each other for the exclusion of such contracts from the reach of the Act. In this case, the interest that was to be charged was 10% per month, which is indicative of an arms-length relationship!

Destruction of sectional title buildings

A body corporate applied for an order deeming the destruction of certain exclusive use areas within a scheme. Can a court legally make such an order? No, deemed destruction cannot be used to expropriate an owner from his right of ownership and is intended to dissolve an entire scheme.

Harbour Terrace [2016] JOL 36402 (WCC)

Can you prevent a surety squandering assets where the principal debtor has been declared insolvent?

In this case the surety had sold properties but not transferred them. The court held that a plaintiff should not have an injustice done to him by reason of leaving his debtor possessed of funds sufficient to satisfy the claim when circumstances show that such debtor is wasting or getting rid of such funds to defeat his creditors, or is likely to do so. One needs to prove a particular state of mind.

Endeto Engineering http://saflii.org/za/cases/ZAGPPHC/2016/713.html

Must you try debt counselling before being sequestrated?

If one accepts that the NCA’s provisions, in assisting over-indebted debtors, is far more beneficial than sequestration, can a debtor be obliged first to apply for debt relief before surrendering his estate? The court held that the purpose of sequestration is primarily to provide relief to creditors. If it can be objectively shown that debt counselling will be to the advantage of creditors over sequestration, then a court might well order debt counselling rather than sequestration.

Fuls http://www.saflii.org/za/cases/ZAGPPHC/2016/490.html

Derivative action

A shareholder or director of a company is entitled to have a court order the company in which he holds an interest, to take certain steps if his application is in good faith and would serve to protect the legal interests of the company concerned. In this case, a very large manganese mining company had terminated a BEE contract which, the director alleged, would negatively affect that company’s mining rights. For company nerds only.

Mbethe v United Manganese of Kalahari [2016] JOL 35242 (GJ)

Quotables

'No, that is the great fallacy: the wisdom of old men. They do not grow wise. They grow careful.' Hemingway

Comment

The somewhat surreal resurrection of long dead criminal charges against our Minister of Finance calls up what Reader refers to as a Monty Python-esque show, starring pathologically dishonest people. I loved one of his comments: “We allow deranged cooks to occupy positions with in our defence hierarchy, and the majority of the female ministers President Zuma has appointed to his cabinet, resemble a sort of frumpy, ill-tempered Amazonian Guard”. I cannot make up my mind whether those directing the show have lost touch with reality or whether they are possibly politically more secure than one can ever imagine.

One wonders whether the ANC traditionalists and those in thrall (beholden?) to the current hierarchy, will actually square up and whether a winner will emerge.

The latest saga involving the PRASA chair (nogal) saying that the ANC had skimmed off R80m in locomotive deal will be interesting to watch. If he were a commoner, one could well give the ANC the benefit of the doubt. Popo Molefe is not a commoner.

Lighten up

“Cricket is a game invented by the English, not being a spiritual people, to give them some sort of conception of eternity.” Lord Mancroft

Said of an employee: “A room temperature IQ”

Telling a girl to "calm down" is like trying to baptize a cat.

On what seems inevitable; greater taxes....