News

As anticipated, Ashley Madison data leak results in a Class Action Lawsuit.

The company behind the AshleyMadison.com website – and latest victim of an online hack – faces a $760 million (approximately R10.640bil) class action brought by users of the website ‘outed’ in the hack.

AshleyMadison.com essentially facilitates extra marital connections between users. As a result of the hack 37 million users have had their personal data, including names and email addresses, made available online.

See the full article here.

While the mechanisms for class action lawsuits do exist in South African law, they are by no means as frequent as in the US, where they have become somewhat common place with specialist ‘class action’ firms that fund the litigation, often with lucrative contingency fee agreements well in place.

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New European Union inheritance laws should prompt reviews of wills

A new succession law came into effect throughout the European Union last week. In terms of this rule, the law of the country where the deceased was a habitual resident will govern succession to their estate as a whole, including any assets held in different European jurisdictions.

For example a woman in the UK with a property in France would have been obliged to leave it to her husband and children under French forced heirship rules. Under the new rule, she could instead choose to apply UK law to the property, which would allow her to leave the house to her brother.

The intention of the rule is to simplify a frequently encountered and complex area of international law.

See full article at http://www.lawgazette.co.uk/law/new-eu-inheritance-law-should-prompt-wills-reviews-say-experts/5050595.fullarticle

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Genetic-link requirement in surrogacy declared unconstitutional

This month, the Pretoria High Court struck down the genetic-link requirement in surrogacy, declaring it unconstitutional.

Under the Children’s Act of 2005, surrogacy is only allowed when at least one of the commissioning parents contributes an egg or sperm.

If there was no genetic link, there could be no surrogacy agreement. This was unlike in vitro fertilisation (IVF), where no genetic link is required.

The Court found that the genetic-link requirement in surrogacy infringed the Constitutional rights to dignity and equality. Judge Anneli Basson emphasized that “a family cannot be defined with reference to the question whether a genetic link between the parent and the child exists. Our society does not regard a family consisting of an adopted child as less valuable or less equal than a family where children are the natural or genetically linked children of the parents. A family can therefore not be defined by genetic lineage.”

As orders of constitutional invalidity must be confirmed by the apex Court on these matters, the Surrogacy Advisory Group are to approach the Constitutional Court to confirm the High Court order.

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Recent Indonesian addition to the TerraLex Network, Lee Tai & Partners

We are pleased to welcome Lee Tai & Partners to the Terralex Global Network of Lawyers of Excellence.

This firm “has been recognized by Corporate INTL in 2013, as the Full Service Law Firm of the Year in Taiwan.  They have more than a decade of experience…an in-depth understanding of the demands and concerns of the legal market…[and] focuses on assisting multinational clients with joint venture, strategic alliance, distribution, licensing, real estate, employment, and merger and acquisition matters in the region.”

 http://www.terralex.org/publication/pa20a4f59d2/terralex-announces-new-member-firm-in-taiwan

 For more on TerraLex Members and news, go to http://www.terralex.org/

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FWB Consultant, Monty Hacker, does SA proud at World Masters Athletics Championship

Our very own Monty Hacker, represented South Africa in the World Masters Athletics Championship in Lyon, France earlier this month and did exceptionally well.

The WMAC took place between the 4th and 16th of August 2015, where over 114 countries were represented and approximately 8000 athletes competed.

Monty competed against 25 others in his Masters category, in the age group 80 – 84. In the finals he took first place in the 200m sprint in a record breaking time of 31,82 seconds, and third in the 100m sprint.

This is truly a remarkable achievement Monty!

Monty Hacker is a consultant at FWB Attorneys who has been in practice for 54 years. His areas of experience include general litigation with a focus on insolvency and liquidations. Monty is well known for insolvency law interrogations and has extensive experience in corporate and commercial work, administration of deceased and insolvent estates and the administration of trusts. In addition to his busy practice, Monty sits as Arbitrator in the Court of Arbitration for Sports (CAS), and was formerly the Chairperson of the South African Institute for Drug Free Sports which adjudicates doping cases both in South Africa and internationally.

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Is conciliation at the CCMA a pre-requisite to institute action in the Labour Court?

The Labour Court (Pillay v Automa Multi Styrene (Pty) Ltd ) recently confirmed that one cannot approach that Court without having first attempted conciliation.

Conciliation is the first regulated step provided for parties to settle a matter. It often limits legal costs and provides a conciliatory platform for parties to resolve their issues. Only if the conciliation fails may the matter be referred to the Labour Court or arbitration at the CCMA – depending on the nature of the dispute.

Failure to attempt conciliation first may form the basis for a finding that the referral to the Labour Court was premature, resulting in a dismissal of the entire case.

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Progress Report from the Davis Tax Committee and Finance Minister’s comments on South Africa’s Tax system

Last week, the Davis Tax committee provided an interim report to Parliament on their inquiry into the role of the South African tax system. Judge Denis Davis referred to a study by the World Bank who positively confirmed South’s Africa’s tax system, as “progressive and pro-poor.” Davis spoke of the difficulty in “closing the inequality gap” due to “socio-economic challenges, the electricity shortage, and an inherited system of unequal distribution of wealth”.

Davis noted that although our tax system has assisted in minimising this inequality gap, it would not be able to solve all of South Africa’s problems. “There is higher tax morality when people know their money is being well spent,” he explained, expressing the need to eradicate corruption. “People need to pay their fair share, it is as simple as that,” he said, but that “You cannot keep taxing at the lower end, you just cannot… people are battling.”

At the Bureau for Economic Research Annual Conference, Minister Nhlanhla Nene referred to the Davis Tax Committee and negative feedback recently received by those individuals who are likely to be effected by the proposed changes. He noted that there is “no ad hoc approach to implementing major tax changes” and that “tax policy and tax legislation need to provide certainty to business. For this reason, tax policy needs to be boring and where new taxes come into being, like the carbon tax or mining royalty, we take a deeply consultative approach over many years before we legislate and implement the new measures.”

See https://sait.site-ym.com/news/236768/Nene-says-SA-tax-processes-are-by-necessity-boring-.htm and https://sait.site-ym.com/news/236742/Current-tax-system-not-one-size-fits-all-Davis-.htm, for more.

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Indian Government seeks damages from Swiss food giant after banning Maggi noodles for containing unsafe levels of lead.

Earlier this month the Indian Government took Nestle to the country’s highest consumer court, the National Consumer Disputes Redressal Commission (NCDRC).

The State is suing the Swiss food conglomerate for 6,400 million rupees (R1 268 784 800) in damages.

This claim is based on laboratory results which revealed that the popular brand, Maggi Noodles, contained higher levels of lead than were legally permissible. MSG was also found in the product but not listed as an ingredient.

If Nestle loses the case, it has said that it would destroy $50m worth of Noodles.

See full article at http://www.aljazeera.com/news/2015/08/india-sues-nestle-100m-food-safety-maggi-noodle-150812071954193.html

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Market division: the penalties and remedies

The Competition Act prohibits agreements that divide markets by allocating customers, suppliers, territories, or specific types of goods or services. For 30 years, two locksmith companies had agreed to restrict their business to the Free State and Northern Cape respectively so that neither would face competition from the other in these provinces.

In July 2015, the Competition Tribunal (Tribunal) published its reasons for prohibiting this agreement and applied the new formulae prescribed in the Guidelines for Administrative Penalties for Prohibited Practices, which took effect on 1 May 2015, to determine the appropriate penalty for their contravention. Despite the potential market division, no profits were actually derived from the conduct and the Competition Commission could not provide any proof that the conduct had an exclusionary effect. Observing that the locksmith market is also largely based on trust and customers will usually use the same locksmith, the Tribunal reduced the penalty amount by 90% and provided that if the companies placed weekly advertisements of their businesses in newspapers which circulate both in the Free State and Northern Provinces, a further 50% would be taken off the penalty amount. This was a practical means of remedying the exclusionary effect of the market division.

Read the judgment here: http://www.comptrib.co.za/assets/Uploads/017731-signed-version4.pdf

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Attorneys' Admission Examinations: 18-19 August

This week many candidate attorneys have been hard at work preparing for the Law Society’s Attorneys’ Admission Examinations. After months of weekly Practical Legal Training lectures hosted by the Legal Education & Development branch of the Law Society of South Africa, candidate attorneys will have the opportunity to write exams covering civil and criminal court procedure, personal injury claims, administration of deceased estates, drafting of wills, succession, bookkeeping and the duties and ethics of being an attorney. Best of luck to all those writing on 18 and 19 August, and the Fairbridges Wertheim Becker crew:  Palesa Mohale, Prelene Naicker, Nosiphiwo Qwabi, Bilqees Parker, Julia Rushton, Graham Houston and Richard Hutchinson.

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City of Cape Town to provide free Wifi to commuters

The City of Cape Town has issued a tender for a service provider to install and operate Wi-Fi zones on MyCiti busses. The service will be free to all passengers and is expected to include a minimum of 50mb per day. The City hopes to have the Tender process completed by the end of the year, and that the service will become available in 2016.

See full article here.

Similarly, Cape Town Taxi ranks are also in line to receive free WiFi . Project Isizwe whose primary aim is to provide free WiFi to South Africa, have announced that commuters using both the Gugulethu and Khayelitsha Taxi ranks will also be in line to receive free WiFi in the near future.The organisation has already succeeded in rolling out a similar project in the City of Tswhane and has outgoing projects in rural parts of the Eastern Cape. Isizwe offer commuters a minimum cap of 250mb at a speed of 15mb per second.

These projects come at a time where a number of major international organisations have announced plans to provide internet access to the entire planet. Google Space X and OneWeb are two such examples. Current estimates are that half the world’s population will have access to the internet by 2018.

Providing internet access to more people theoretically opens up untapped markets, resources and opportunities. The implications for the business sector are huge.

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TB Davie Memorial Academic Freedom Lecture at the University of Cape Town

UCT hosts the Memorial Academic Freedom Lecture, this Thursday, 13 August 2015, at Lunch time, in the Smuts Dining Hall, Upper Campus.

Topic: Free speech in the age of identity politics

Presented by: Kenan Malik

“The rise of identity politics in recent decades has transformed the landscape of free speech. Free speech is no longer seen as a universal good, while censorship is often seen as a progressive act, a means of protecting vulnerable people and social groups without power, and a tool with which to cut the powerful down to size. In this year’s TB Davie Memorial Academic Freedom Lecture, Kenan Malik examines the impact of identity politics on ideas of free speech, challenges the idea of censorship as a progressive act, and, in an age in which many embrace the politics of identity, remakes the case for free speech as a universal good.”

To make a booking, go to http://www.uct.ac.za/events?e=TB_Davie_Lecture

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Women's day

“Women’s Day is celebrated in many countries around the world. It is a day when women are recognized for their achievements without regard to divisions, whether national, ethnic, linguistic, cultural, economic or political. It is an occasion for looking back on past struggles and accomplishments, and more importantly, for looking ahead to the untapped potential and opportunities that await future generations of women.”

http://www.un.org/womenwatch/feature/iwd/history.html

There are so many phenomenal women working in science, tech, engineering and maths in South Africa who are making great strides, representing the power women possess and are paving the way for other young girls to follow in their footsteps.  – http://www.htxt.co.za/2014/08/09/womens-day-meet-three-young-sa-women-doing-amazing-things-in-stem/

Read about women entrepreneurs in South Africa and how they turned their venture into a successful business. – http://www.entrepreneurmag.co.za/category/advice/women-entrepreneurs/women-entrepreneur-successes/

Happy Women’s Day, 9th July 2015

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Nkunzi Milkway and Clover merger prohibited by Competition Commission

In December 2014, the Competition Commission prohibited Clover S.A. (Pty) Ltd from merging with Nkunzi Milkway (Pty) Ltd. Clover is a branded consumer goods company that sells a range of dairy and non-dairy products in South Africa and certain other African countries. Nkunzi primarily manufactures fresh dairy products including Ayrshire, organic and lactose-free items and derives most of its revenue from the sale of fresh dairy products to Woolworths. Post-merger, Clover would have sole control of Nkunzi.

One of the concerns raised about the potential merger was that there was the possibility that Clover would increase the number of products it supplies to Woolworths which would compromise the businesses of smaller suppliers/processors of dairy products because of Clover’s relative position in the market. Competitors submitted that there is a shortage of Ayrshire milk in the country and it was likely that Clover would offer the competitors’ independent suppliers of Ayrshire milk a better price in order for Clover to increase its own supply to Woolworths. This would result in the competitors not being in a position to supply Woolworths and they may lose Woolworths as a customer.

There was also the concern that Clover may not pay farmers the correct value for the Ayrshire milk that makes it sustainable and profitable for producers to continue to breed Ayrshire cows. This would be anti-competitive and lead to more farmers exiting the market. The Competition Commission therefore prohibited the merger, as it was likely to lead to a substantial prevention or lessening of competition in the market for the manufacturing and supply of dairy products and raise public interest concerns in the market for the procurement of milk.

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Validity Of Automatic Dismissal Clauses

SATAWU (on behalf of DUBE) took Fidelity Supercare Cleaning Services Group (Pty) Ltd, to Court recently. Several persons, employed by Fidelity to provide cleaning services to Wits University, brought the action for what they perceived to be the unlawful termination of their employment agreements.

What led to the litigation was the following: Wits University had concluded a service agreement with Fidelity, in terms of which Fidelity would provide cleaning services to it.Pursuant to the conclusion of this agreement, and as is quite customary, Wits engaged the services of several employees on the basis that the contracts would come to an end either on date of retirement University or the date the contract between Fidelity and the University terminated, whichever occurred first.

Sometime thereafter, Wits cancelled its agreement with Fidelity, and later equivocated and retained Fidelity’s services, this time on a much smaller scale. Fidelity then invited all affected Employees to apply for the available positions at Wits University, which invitation they neglected to accept.

This matter was then referred to Court on the basis that the employees were dismissed for operational reasons without severance pay. The court had to decide whether the clause – stipulating the termination based on the occurrence of an event -was valid, which it confirmed in the affirmative.

This finding is in line with Item 11 of the Code of Good Practice which provides ‘If an employee either accepted or unreasonably refused to accept an offer of alternative employment, the employees statutory right to severance pay is forfeited’. In cases such as these, termination is by operation of law.

This judgment aligns itself with the employment demands of companies whose employee requirements are dynamic, particularly those providing services on a fixed term contractual basis.

Read the judgment here:

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FWB Delegates at Terralex Global Meeting in Munich

Peter Watts, Bob Groeneveld and Louis Rood represented Fairbridges Wertheim Becker at the TerraLex Global Meeting in Munich, Germany in June2015,joining almost 300 delegates and guests from over 60 countries and 110 member firms.

TerraLex is one of the largest worldwide networks of leading, independent law firms. The members of TerraLex provide each other with access to expertise from around the globe and local connections necessary to provide seamless service to clients no matter where their needs arise.

Lawyers came from as far afield as Ecuador, Hong Kong, Iceland, Japan, Paraguay, Mexico, Philippines, Russia, Senegal and Vietnam.  Some firms sent team of delegates – 4 from Austria, 7 from China, 5 from Czech Republic, 7 from England, 5 from France, 5 from Norway, 4 from Poland, 5 from Spain.  The host firm SKW Schwarz has offices in Munich, Berlin, Dusseldorf, Frankfurt and Hamburg.

Fairbridges Wertheim Becker is the exclusive South African member of TerraLex.

As always, the calibre of the lawyers and their firms was impressive and we are certainly privileged to have access for ourselves and our clients to the over 17,000 lawyers of the TerraLex member firms.

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FWB receive PMR.africa Diamond Arrow Award

Louis Rood, represented Fairbridges Wertheim Becker to receive the PMR.africa Diamond Arrow Award 2015 awarded to our firm, as first overall winner among law firms in the City of Cape Town and Cape Peninsula Regional Survey.

This is based on a random, regional sample of over 100 respondents comprising of CEOs, MDs, business owners, company directors and managers, and senior local and national government officials based in the City of Cape Town and Cape Peninsula Regions. Our winning rating was 4.3 out of 5 (86%). This is the first time we have received an accolade in the name of Fairbridges Wertheim Becker. Long may that continue. Congratulations!

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Further updates from the Davis Tax Committee and its interim report – Estate Duty

While the initial proposal and expectation in regards to estate duty was that it be removed from our current tax system, the Davis Tax Committee has recommended in its recent interim report on estate duty, that it be retained, subject to a few changes. The focus was on estate duty avoidance, use of trusts, inter-spouse bequests, donations tax, capital gains tax, retirement funds and abatements.

The Report recommends an increase of the primary abatement of R3.5 million to R6 million, to accommodate inflation, but then suggests that all inter-spouse exemptions and roll-overs should either be withdrawn or limited.

In addition, the committee has suggested that trusts should be taxed as separate taxpayers, instead of our current position which places the tax duty on beneficiaries. This stems from the committee’s findings that where “the attribution principle, which underpins taxation of a beneficiary in a trust, was intended as an anti-avoidance principle to prevent a trust from being used as an income splitting device”, taxpayers are now diverting income away from the trusts and effectively making use of lower tax rates. It is further recommended by the committee that distributions of foreign trusts be taxed as income, in the hopes that this will “discourage offshore trust formation”.

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What is the small claims court?

Unfortunately, civil disputes are a fact of daily life; accounts are left unpaid; reckless drivers smash into parked cars and neighbours are forced to cut down thorn bushes that have encroached upon their lovely lawns. What is perhaps more unfortunate is the cost of legal advice and civil litigation.

Anyone who has been slighted in one of the instances above may think that it is not worth their while to approach a lawyer. And in most cases they would be right. The costs of litigating in these matters far outweighs the possible benefits.

In 1985 the Small Claims Court was established in order to address this particular problem. The State needed a way to increase access to just outcomes in small civil disputes.

As of 1 April 2015 if the amount in dispute is R15 000.00 or below, it will qualify as a small claim that can be brought before the court. And if the Plaintiff’s claim exceeds R15 000, the Plaintiff can surrender the difference in order to bring it within that limit.

No legal representatives are permitted in the court hearings. The Plaintiff, the person bringing the claim, and the Defendant are on their own. In this way costs are kept to a minimum.

The presiding officer is known as a commissioner. The position is unpaid and is ordinarily filled by a lawyer as a way to meet their mandatory community service hours.

There are 345 courts in the country and all can be found here.

For a more in depth discussion on the the small claims court and the process  see Bert van Hees’ full article.

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Disbarring representatives of Financial Service Providers

Representatives of Financial Service Providers (FSPs) render financial services to clients for or on behalf of a FSP. This may involve selling financial products such as insurance policies and unit trusts to the public. According to the legislation governing FSPs (Financial Advisory and Intermediary Services Act 2002), a FSP must ensure that its representatives meet the fit and proper requirements and are competent to act. It is imperative that representatives are not dishonest or lack integrity.If a FSP does not satisfy this requirement, it may be guilty of an offence and be liable on conviction to a fine not exceeding R10 million or to imprisonment not exceeding 10 years or to both such a fine and imprisonment.

Last month, in Financial Services Board v Barthram, the Supreme Court of Appeal (“SCA”) held that if a person who is debarred by a FSP; is also debarred from working in the financial services industry and are prevented from rendering financial services in order to protect the investing public. Therefore, a representative who is dishonest and acts without integrity, may be debarred by his or her employer and the Registrar of FSPs on an industry-wide basis.

The correct due process before any disbarment is critical, however, and before a FSP may disbar a representative, the FSP must provide the representative with any necessary information and allow for a reasonable time to make representations.

Read the judgment here: http://www.justice.gov.za/sca/judgments/sca_2015/sca2015-096.pdf

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Court rules on the Constitutionality of emolument attachment orders

Judgment was handed down by Judge Desai, last  Wednesday, in the Western Cape High Court, in favour of a group of consumers, joined and represented by the University of Stellenbosch’s Legal Aid Clinic, where deductions from those consumers’ salaries were found to be invalid and unlawful.

These orders, known as emolument attachment orders (“EAO”), and regulated under the Magistrates Court Act  32 of 1944 (“the Act”), allows for the attachment of a judgment debtor’s salary or wages, obliging his or her employer to pay to the judgment creditor, instalments out of his or her earnings, to make good on the debt due, including all legal costs incurred.

The provisions in the Act, dealing with EAOs, authorise the Court to may make such an order as it deems “just and equitable”. In this instance, the clerk of the court issued these orders without any evaluation of the debtors economic circumstances, whether they were able to afford these deductions, and whether such an order would be just and equitable in the circumstances.

Judge Desai noted in his judgment that,

“It is common cause that most of the orders were obtained from courts located a great distance from where the debtors resided and worked. The debtors’ rights to access the courts and enjoy the protection of the law were clearly compromised in these instances.

The right of access to courts is fundamental to the rule of law in a constitutional state…respondents are obtaining judgments and EAOs against the applicants in courts far from their homes and in places they could not reach. The right to access the courts was seriously jeopardised, if not effectively denied.

It seems to be firmly established in international law that states have a duty to protect their citizens against the abuse of human rights by business enterprises in their territory. Where such abuses do occur, states have a duty to provide victims with an effective remedy”

Judge Desai thus found that the relevant sections of the Act, dealing with EAOs are constitutionally invalid.

“Section 65J(2)(b)(i) and section 65J(2)(b)(ii) of the MCA are in the circumstances constitutionally invalid to the extent that they allow for EAOs to be issued by a clerk of the court without judicial oversight. This is so both with regard to international law and to the current jurisprudence of the Constitutional Court. “

He further declared that section 45 of the Act, which provides parties with the option to consent to the juris
diction of the Magistrates Courts, cannot apply to agreements that fall within the scope of the National Credit Act, and cannot give creditors the discretion to obtain judgment and EAOs far away from where the debtor resides or works. This provision is often found in standard agreements.

“It is declared that in proceedings brought by a creditor for the enforcement of any credit agreement to which the National Credit Act 34 of 2005 applies, section 45 of the Magistrates’ Courts Act does not permit a debtor to consent in writing to the jurisdiction of a magistrates’ court other than that in which that debtor resides or is employed.”

To view this judgment, go to http://www.saflii.org/za/cases/ZAWCHC/2015/99.html

“I think this sends a strong message to those who continue to engage in extractive financial practices that impoverish the poor, exploit their lack of financial literacy, and make money on the backs of the poor.” –  Elroy Paulus and http://mg.co.za/article/2015-07-09-victory-for-consumers-as-court-rules-against-salary-deductions 

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The Competition Commission approves of the Vodacom/Neotel merger

Earlier this month, the Competition Commission approved Vodacom’s decision to acquire Neotel for R 7 billion. The result :Neotel will be a wholly-owned subsidiary of, and under the control of Vodacom.

The Commission found that the merger is likely to substantially lessen or prevent competition in the mobile services market as Vodacom already holds the dominant position in the market with roughly 30 million subscribers.

The merger will benefit Vodacom, the Commission has found, as competitors are unlikely to match Vodacom’s network speed, capacity and mobile offerings.

The Commission has as a result recommended to the Competition Tribunal that the merger be approved. This approval, as expected, is subject to conditions, some of which are that Vodacom will not use the Neotel spectrum for wholesale or retail mobile services to any of its customers for two years, and that Vodacom will not retrench any of the Neotel employees as a result of the merger. As for transformation, within 24 months of the approval date, Vodacom must ensure that its share capital held by Black Economic Empowerment (BEE) shareholders will increase by R1.4 billion.

Read the Competition Commission’s media release on http://www.compcom.co.za/wp-content/uploads/2015/01/Commission-recommends-approval-of-Vodacom-Neotel-merger-with-conditions.pdf 

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Book Review: International Tax Law - Offshore Tax Avoidance in South Africa

“The avoidance of taxes is the only pursuit that still carries any reward”

– John Maynard Keynes (1883 – 1946)

This significant new publication in the already crowded tax–commentary sphere comprehensively examines tax avoidance schemes employed by South African residents in an international context.

Difficult international tax concepts are logically explained. The effectiveness of South African legislation in countering offshore tax-avoidance schemes is critically analysed, and compared in detail with similar provisions in the United Kingdom and United States of America.

The recommendations of international organisations such as the Organisation for Economic Co-operation and Development (OECD), that seek to prevent international tax avoidance, are considered, as well as the role of tax havens in encouraging tax avoidance.

The subject matter is extensive and dealt with in depth. This includes curbing tax avoidance that results from investments in offshore “protected cell companies”, in derivative financial instruments, in offshore trusts, transfer pricing, cross-border leasing transactions, and the abuse of tax treaties. The text is supported by a wealth of authorities, an extensive bibliography, references to South African and foreign legislation, domestic and international case law and academic commentary.

This impressive work will undoubtedly prove to be an invaluable resource to tax practitioners, tax administrators, legislators, financial advisors, and investors. The distinguished author Professor of Mercantile Law at UNISA, Annet Oguttu, LLB, LLM, LLD (Tax Law), H.Dip International Tax Law, and publishers Juta are to be commended for the production of a world-class treatise on this increasingly important and complex aspect of economic and fiscal evolution.

Review by Louis Rood BA, LLB (UCT) of Fairbridges Wertheim Becker.

International Tax Law – Offshore Tax Avoidance in South Africa

by Annet Wanyana Oguttu

(822 pages)

Juta & Co Ltd

www.jutalaw.co.za

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Eastern Cape Liquor Act upheld by the Constitutional Court

Shoprite Checkers (Pty) Ltd took government and the Eastern Cape Liquor Board to Court to challenge the constitutionality of the provisions of the ‘new’ Eastern Cape Liquor Act, introduced in 2004.

According to the Act, commercial trading licenses which allow the selling of wine in grocery stores (‘grocers’ wine licenses’) would lapse 10 years after the commencement of the Act (2014).  Shoprite Checkers would be forced to apply for the standard off-consumption liquor license, entitling them to sell all types of liquor. The question posed before the Constitutional Court was whether grocers’ wine licenses constitute property under Section 25 of the Constitution, and if so, whether the legislative termination of the license would amount to an ‘arbitrary deprivation of property’. A novel argument to say the least.

 Shoprite Checkers succeeded in the High Court, where it was held that certain provisions of the Eastern Cape Liquor Act were constitutionally invalid. Confirmation of this order was therefore sought in the Constitutional Court.

 The Court found that although a grocer’s wine license constitutes property under Section 25 of the Constitution, there was no arbitrary deprivation of this property as Shoprite had an opportunity to convert this license so that it would fall within the ambit of the Eastern Cape Liquor Act, and it chose not to.  In the words of the Court:

 “Objectively viewed, the change in regulatory regime brought about by the Eastern Cape Act did not extinguish any fundamental rights of holders of grocer’s wine licences or fundamental constitutional values. Rationality would thus be sufficient reason to avoid a finding of arbitrariness. And, on the facts on record before us, it is quite rational to change the regulatory regime of liquor sales to provide for simplification in the licensing system.” [at para 83 of Froneman J’s judgment]

 Judgment found at –  http://saflii.org/za/cases/ZACC/2015/23.html

 Incidentally,  the Eastern Cape is the only province that chose to terminate the grocer’s wine license.

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Ostrich farmer takes on Standard Bank over securitised loan

An Eastern Cape farmer and his legal team have deployed an unusual strategy to defend an action for repayment of a loan instituted by Standard Bank.

Davenport, the farmer in question, has placed a securitisation audit before the Grahamstown High Court which aims to prove that the loan has been sold to a Taiwanese Bank.

Securitisation refers to the process where assets (such as contractual debts or residential mortgages) are transformed or bundled into financial instruments through a process of financial engineering. These instruments are then sold to investors who expect returns from the recovery of the principal debt and interest.

It would seem that Davenport’s argument is that once the securitisation has taken place, the bank loses the right to enforce the loan. In other words, Standard Bank has no legal standing to bring the matter court. This argument is backed up by United States jurisprudence, but has yet to be argued in South African courts.  We watch with interest.

Full article available at: http://news.acts.co.za/blog/2015/06/ostrich-farmer-from-eastern-cape-shows-court-his-mortgage-loan-is-now-in-taiwan

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Constitutional Court confirms no more delictual claims in respect of acts of adultery

The Constitutional Court has confirmed the ruling of the Supreme Court of Appeal (SCA) that the act of adultery by a third party lacks wrongfulness for the purposes of a damages claim, in particular that of loss of companionship of the spouse.

The husband instituted legal proceedings against the third party for damages on the basis of an adulterous relationship between the third party the husband’s former wife. The husband was successful in the High Court.

The third party appealed to the SCA, where a claim based on adultery was abolished. The husband appealed to the Constitutional Court.

Justice Madlanga concludes that the potential infringement of dignity on the innocent spouse must be balanced with the right to privacy and freedom of association:-

“Nevertheless, this potential infringement of dignity must be weighed against the infringement of the fundamental rights of the adulterous spouse and the third party to privacy, freedom of association and freedom and security of the person. These rights demand protection from state intervention in the intimate choices of, and relationships between, people. This must be viewed in light of current trends and attitudes towards adultery both nationally and internationally. These attitudes also demonstrate a repugnance towards state interference in the intimate personal affairs of individuals.

 I am led to the conclusion that the act of adultery by a third party lacks wrongfulness …That is what public policy dictates. At this day and age it just seems mistaken to assess marital fidelity in terms of money.”

 

 

 Read the full judgment here:- http://www.saflii.org/za/cases/ZACC/2015/18.pdf

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Book review: LAW OF DIVORCE AND DISSOLUTION OF LIFE PARTNERSHIPS IN SOUTH AFRICA By Jacqueline Heaton (Editor)

(796 pages)

Juta & Co Ltd
www.jutalaw.co.za

“Marriage,n. The state or condition of a community consisting of a master, a mistress and two slaves, making in all, two.”

– – Devil’s Dictionary (1911) by Ambrose Bierce

This comprehensive new publication provides within its covers an in-depth and detailed analysis of the law in South Africa relating to the termination by divorce of civil unions, civil marriages, customary marriages, Muslim marriages and Hindu marriages as well as the dissolution of life partnerships.

Various sections of the book deal with the grounds for divorce, the personal and financial consequences of divorce, and the situation of minor and dependent children. Issues covered include domestic violence, procedure, costs, conflict of laws, and alternative dispute resolutions options such as mediation.

Publishers Juta and editor Professor Jacqueline Heaton, BLC, LLB, LLM, have assembled as contributors a distinguished panel of practitioners and academics from the Universities of Witwatersrand, Free State, North-West, Western Cape, Cape Town, Pretoria, Johannesburg and the University of South Africa. Their combined expertise make this work an exceptional resource for all professionals who deal on a daily basis with the important decisions to be made and steps to be taken on all these intimate personal relationships which form the core of our social, cultural and economic fabric.
A significant and valuable feature of this work is the well-indexed references to local and foreign legislation, applicable case law, an extensive bibliography and pertinent footnotes providing the essential authorities for a truly outstanding exposition of the law in a field which has recently been somewhat neglected and fragmented. That gap has been more than handsomely filled and the publishers and team of authors are to be congratulated.

Review by Louis Rood, BA LLB (UCT), of Fairbridges Wertheim Becker.

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Debt re-arrangement agreements: may creditors obtain judgment without notice?

In Jili v Firstrand Bank Ltd, the Supreme Court of Appeal (SCA) held that if a debtor has breached a debt re-arrangement agreement, a creditor has the right to enforce its rights without further notice to the debtor and may issue summons immediately after the breach.

In this case, the appellant had failed to pay instalments due and had entered into a debt re-arrangement agreement with her creditors. The consumer didn’t make her reduced payments for two months and the Kwa-Zulu Natal High Court granted a summary judgment against her –without her having received notice of the proceedings -, on the basis that she had no defence to the Bank’s claim, and that she had defended the litigation just to delay it.

The consumer claimed that the creditor had no right to proceed without notifying her and those similar to her who were a party to a debt restructuring agreement. On appeal, the SCA disagreed, and confirmed that when a consumer has breached a debt restructuring agreement, a creditor, such as the Bank, may obtain judgment against that person, without giving any notice of its intention to do so.

Read the judgment here: http://www.saflii.org/za/cases/ZASCA/2014/183.html

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Equal Pay For Equal Work – New Code of Good Practice

The Minister of Labour has issued a code of good practice which regulates remuneration for work of equal value.

The code’s application extends to all employers and employees covered by the Employment Equity Act and compels employers to take steps to eliminate differences in terms and conditions of employment, including the payment terms of those employees who perform the same or substantially the same work or work of equal value.

The code sets out three key issues which require scrutiny when examining whether the obligation to apply remuneration equity is applicable:
1. Are the jobs that are being objectively compared the same or substantially so?
2. Is there a difference in the terms and conditions of employment, including payment?
3. Are the differences justifiable?

Read the code here:
http://www.polity.org.za/article/employment-equity-act-code-of-good-practice-on-equal-payremuneration-for-work-of-equal-value-gazette-38837-notice-r448-2015-06-09

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Terms of Service - too long, didn´t read?

“I have read and agree to the Terms” is the biggest lie on the web. We aim to fix that.”

Terms of service agreements typically require a user to agree to or abide by a certain set of rules before making use of the service provided. Millions of such agreements are conconcluded on a daily basis, yet very seldom are the terms even considered by the user before they have agreed to them. In the United States, the courts have held such agreements to be both binding and enforceable. These agreements have not yet been tested in our courts, but in principle it seems they may stand up as valid contracts.

Terms of service: Didn’t Read is a browser add-on which essentially provides crowd sourced summaries, ratings and labels for the common terms and service agreements that web users encounter on a daily basis.

Google’s Privacy and terms [http://www.google.fr/intl/en/policies/privacy/key-terms/] has been given a “Classic C” rating and summarised as follows:

– Google keeps your searches and other identifiable user information for an undefined period of time;

– Google can use your content for all their existing and future services;

– This service tracks you on other websites;

– Google can share your personal information with other parties; and

– Google may stop providing services to you at any time.

SoundCloud on the other hand has been awarded a Class B for the following reasons:

+ You stay in control of your copyright;

+ Collected personal data used for limited purposes;

+ 6 weeks to review changes;

– Indemnification from claims related to your content or your account; and

– Personal information can be disclosed in case of business transfer or insolvency.

To download the extension yourself click here [http://tosdr.org/downloads.html]

To learn more about the service click here [http://tosdr.org/index.html]

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A copyright case – involving dictionaries

Media24 has filed their application for leave to appeal following judgment by Gamble J in Media24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd.

Media24 applied for a final interdict against Oxford University Press, requesting an order prohibiting further infringement of its rights under the Copyright Act 98 of 1976. Media24 alleged that Oxford University Press had plagiarised a number of their example sentences from their Afrikaans/English school dictionary. Judge Gamble found in favour of Oxford University Press and dismissed the application brought by Media24, due to their failure to show “sufficient objective similarity”, and its actual harm suffered. Gamble focussed on the “quality” of the work alleged to be plagiarised “and not quantity” .

Gamble noted in his judgment –

“I am accordingly not persuaded that Media 24 has discharged the onus of establishing the requisite right, or the breach thereof, sufficient to entitle it to final relief at this stage”

“ the OUP [Oxford University Press]work has been in the public domain for more than 4 years now and to terminate the right to publish now when its denials are likely be fully ventilated at trial, will be highly detrimental to OUP. I would therefore be inclined to exercise that discretion in favour of OUP.”

http://www.saflii.org/za/cases/ZAWCHC/2015/68.html

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Shark-cage diving vessels and negligence

In 2008, a shark-cage diving vessel, MV Shark Team, was struck by a wave whilst anchored at the Geldsteen reef near Gansbaai. The vessel capsized and three people on board drowned. The wife of one of the deceased brought a claim for damages against the vessel (in rem), the skipper and the owner. She claimed that the defendants were negligent because the skipper should have realised that the vessel was anchored in an area prone to large swell and the vessel should have left the area before the capsizing swell arrived. The defendants’ claimed, however, that the wave was a ‘freak’ wave of at least 11m high that could not reasonably have been foreseen.

In December 2014, the Western Cape High Court held that the test is not whether a wave of the size of the freak wave that struck the vessel could have been foreseen but whether the skipper could have reasonably foreseen a wave breaking over the vessel. The court held that the rough swell in the area meant that a wave breaking over the vessel was reasonably foreseeable and therefore the death of a passenger was reasonably foreseeable. The skipper had therefore acted negligently and the Court found the defendants liable for damages as the claimant might prove in consequence of the death of her husband.

Access the judgment here.

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Davis Tax Committee report released for public comment

On 5 June 2015, the Davis Tax committee released its first interim report for public comment. The committee was formed 2013 in order to “assess South Africa’s tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability.”

The report is a macro analysis of the tax policy framework currently in operation within South Africa. It aims to articulate a set of overarching principles to guide an assessment of the current South African tax system so as to identify the needs for reforms and to make relevant recommendations in this respect.

The report is available here and an abridged version here.

The report seems to suggest that an increase in Value Added Tax would be more probable than increases in other forms of taxation. Sceptics of the policy have cautioned that any such increase will likely stem economic growth.

The closing date for comment is 31 August 2015.

See full article at http://www.bdlive.co.za/economy/2015/06/08/davis-committee-prefers-less-severe-vat-hikes

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Book review: PERSPECTIVES ON THE LAW OF PARTNERSHIP IN SOUTH AFRICA

PERSPECTIVES ON THE LAW OF PARTNERSHIP IN SOUTH AFRICA
By J J Henning
(335 pages)

Juta & Co Ltd
 www.jutalaw.co.za

“Men are made for society and mutual fellowship.”
– Edmund Calamy (1671 – 1732)

Partnerships are one of the oldest concepts of our law but remain very much a part of modern commercial law, as well as in other areas such as family law.

This welcome work provides an in depth examination of the various principles, doctrines and characteristics of partnerships and deals in detail with complex areas of partnership law. The legal status of partnerships, limited partnerships, universal and general partnerships and anonymous or silent partnerships are all discussed from a comparative perspective.

The distinguished author Professor J J Henning, B Iur, LLB, LLD, Dean of the Faculty of Law of the University of Free State, is the unrivalled specialist expert in South Africa on this branch of the law. He writes:
“The partnership concept is one of great antiquity. Some of its oldest forms have their origins in ancient family arrangements. As a profit-seeking and profit-sharing device it is as old as joint economic endeavour for mutual benefit.”

Rich in cited authorities, with a comprehensive bibliography, schedules of relevant case law and South African and foreign legislation, well-indexed and organised, this authoritative resource will be welcomed by legal practitioners, judicial officers, and commercial and corporate law specialists. It will undoubtedly invigorate interest and stimulate a new awareness of partnership in all its manifestations. Congratulations are due to publishers Juta and the learned author for this meritorious and meticulously researched publication.

“Having regard to Prof Henning’s general status as an academic researcher and his stature as the undisputed leader in the particular field of partnership, the present publication is to be acclaimed with enthuasiasm.” – Appeal Court Judge Fritz Brand.

Review by Louis Rood BA, LLB (UCT) of Fairbridges Wertheim Becker.

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Unlawful Credit Agreements - Section 89(5)(b) of the NCA declared Constitutionally invalid

In a unanimous judgment the Constitutional Court has upheld the judgment of the Western Cape High Court declaring section 89(5)(b) of the National Credit Act constitutionally invalid.

Previously Section 89(5)(b) provided that

“[i]f a credit agreement is unlawful in terms of this section, despite any provision of common law, any other legislation or any provision of an agreement to the contrary, a court must order that—(b) the credit provider must refund to the consumer any money paid by the consumer under that agreement to the credit provider, with interest calculated—

(i) at the rate set out in that agreement; and

(ii) for the period from the date on which the consumer paid the money to the credit provider, until the date the money is refunded to the consumer”.

The matter came before the High Court prior to the operation of the National Credit Amendment Act, which provides that a court should make a just and equitable order when faced with unlawful credit agreements.

As the Amendment Act had not yet come into operation at the time the matter was in the High Court the Constitutional Court has in the interim clarified the position by echoing the words of the Amendment Act as follows:- To remedy the defect, from 5 June 2014 to 13 March 2015, section 89(5) of the National Credit Act is deemed to read as follows:

“(5) If a credit agreement is unlawful in terms of this section, despite any other legislation or any provision of an agreement to the contrary, a court must make a just and equitable order including but not limited to an order that:
(a) The credit agreement is void as from the date the agreement was entered into.”

Read the judgment here:- http://www.saflii.org/za/cases/ZACC/2015/15.html

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SCA decision: Non-South African Companies can be asked to furnish security for costs

According to a recent judgment of the SCA, a foreign company may be asked to provide security that it is able to settle the legal costs of its opponent in the event that it is unsuccessful in litigation. The purpose of this rule is to discourage foreign companies from instituting frivolous litigation in South Africa. The litigation in this case was brought by a shell company funded by its four shareholders. The company pleaded that it did not have the finances to provide security.

By way of explanation, once legal proceedings are finalised, a costs order will usually be made against the unsuccessful party. If such an order is made against a Plaintiff (the party instituting the proceedings) located outside of South Africa, and the Plaintiff refuses to pay the successful party’s costs, recovery can be challenging where – as is often the case – there are no company owned assets within the Republic to attach and sell in execution.

It is no secret that the legal costs required to run a trial can, and often do, outweigh the capital claimed. Once one is sued, there is very little option but to defend at great cost. This judgment may have the effect of reducing the number of frivolous actions brought or, at least, ensuring the recovery of costs once the litigation is concluded.

Access the full judgment here: http://www.justice.gov.za/sca/judgments/sca_2015/sca2015-093.pdf

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New requirements for travelling with children

Director-General Mkuseli Apleni called for a briefing to clarify a few issues ahead of the 1st of June 2015 implementation.

There has been much hype leading up to the implementation of these requirements. In summary, children leaving South Africa are required to produce parental consent affidavits and unabridged birth certificates, where one parent or another person is travelling with somebody else’s child. Due to the backlog of +/- 4000 applications for unabridged birth certificates, Director-General Apleni has relaxed these requirements, by allowing those who have applied for unabridged birth certificates, who are planning to travel, and who are still waiting for their unabridged birth certificates, to travel, subject to a visit to their nearest Home Affairs office to obtain a ‘letter of consent’.

The Director-General noted that –
“We do not understand the claims that our requirements are unique, not applicable elsewhere, and would have consequences for tourism and the economy in general. Our regulations were benchmarked even with countries attracting more tourists. SA citizens are also required to have these documents when going to some countries of the world. It was also due to requirements expected of our citizens by other countries that we decided to move towards issuing the unabridged birth certificate with the child’s and parent(s) particulars in it.”

http://www.home-affairs.gov.za/index.php/statements-speeches/632-statement-by-home-affairs-director-general-mkuseli-apleni-at-the-media-briefing-on-new-requirements-for-travelling-with-children-coming-into-effect-on-1-june-2015

The hype surrounding these requirements continue and “the concerns may not be unfounded. Reports emerged last week that Air China had cancelled the launch of direct flights to South Africa over the regulations” (http://www.southafrica.info/travel/visa-rules-010615.htm#.VW_5S1KJgaI)

Minister Jeff Radebe commented on the regulations, stating that –
“We are looking at all issues that have been raised pertaining the visa regulations. Despite the noble intentions of these immigration policies, they have had an unintended consequence which needs to be addressed”

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Carbon tax for 2016?

During the annual budget speech, the Minister of Finance announced that draft carbon tax legislation will be published in 2015 for public consultation in the hope that it will become law in 2016. The carbon tax will apply to all direct greenhouse gas emissions that are released from sources owned or controlled by the specific entity.

The tax will be imposed at a rate of R120 per tonne of carbon dioxide equivalent and increase by 10% per annum. For liquid or transport fuels and other non-stationary greenhouse emissions, the carbon tax will be incorporated into the current fuel tax regime. Entities that are liable to pay carbon tax may reduce their liabilities by buying carbon credits from entities that are not liable for carbon tax, provided that certain requirements are met.

Companies from all sectors will need to come to terms with the broader implications of the carbon tax because even if an entity itself is not liable for carbon tax, it will be indirectly affected by other entities in the supply chain that are liable to pay the carbon tax.

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FWB Attorney hits the red carpet!

Our very own Andrew Hewitt attended the Cannes Film festival last month. Andrew is our resident entertainment law specialist. His clients include inter alia artists, filmmakers, musicians, production studios and business start-ups.

You can read a bit more about Andrew and his practice here. 

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Draft gambling policy gazetted for public comment

The National Gambling Board has released a draft policy for public comment.

Some of the contentious issues covered include the illegality of an act of online gambling as well as the winnings associated with it. The policy suggests the implementation of certain penalties for perpetual transgressors as well as the empowerment of the inspectorate to investigate and prosecute matters.

The possible expansion of animal racing has been restricted taking into consideration animal welfare and proliferation, and the policy envisages statutory regulations for horse racing to minimise animal welfare concerns.

An invitation has been extended for public comment until 5 July 2015.

Read more here:-
http://www.ngb.org.za/organisational-areas/news/invitation-for-the-public-to-comment-on-the-national-gambling-policy.aspx

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Time to save?

Tax-free saving accounts were introduced on 1 March 2015 in order to encourage more people to start saving. The annual contribution limit is R30 000 and the lifetime limit is R500 000 per person. This means that if R30 000 is invested per annum, after approximately 17 years a person can accrue a tax-free investment of R500 000. If a person makes a contribution of over R30 000 per annum, however, SARS will penalise them when submitting their tax returns. It appears to be a good way to save or invest as the amounts that are received or accrued from the investment will not be subject to income tax, dividend withholding tax or capital gains tax.

See a related article on Moneyweb:http://www.moneyweb.co.za/mymoney/moneyweb-personal-finance/coronation-allan-gray-launch-tax-free-savings-accounts/

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The concept of a binding offer by creditors in business rescue now clarified.

A landmark decision has been made by the Supreme Court of Appeal whereby the concept of a binding offer in the business rescue context has now been clarified.

Previously in circumstances where a business rescue plan cannot be adopted due to opposition, creditors in support of the plan would make binding offers to those creditors opposed to it. Offers are made to buy the opposing creditors’ claim, in order to obtain more voting rights in support of the plan. In other words, if Creditor 1 made a binding offer to Creditor 2, Creditor 2 would in essence lose their voting rights. Creditor 2 was not given opportunity to either accept or decline the offer.

The SCA has now clarified the position in that the nature of a binding offer should be construed in a similar light to that of the common law position, whereby both offer and acceptance need to take place. “The settled meaning both in general use and in the more technical legal use of the word ‘offer’ is that it is only on acceptance that an offer creates rights and obligations”.

Access the judgment here:- http://www.saflii.org/za/cases/ZASCA/2015/69.html

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The NCA and prescription

The NCA requires, as a precursor to litigation on a credit agreement, that one sends a ‘s129’ notice, advising the debtor of his rights in terms of the NCA, and a few other formalities. Where a credit provider institutes an action to enforce payment of a debt arising from a credit agreement, the running of prescription in respect of the debt –which in SA is 3 years – is interrupted by service of the summons. This is also the case where one has neglected to serve the notice prior to issuing summons.

Therefore if a credit provider issues summons and fails to attach a s129(1) notice, the summons is not considered void and prescription is still interrupted.

Link to full judgment here

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Retirement of Fairbridges Chair

Messages of goodwill flowed in for long-serving Chair of Fairbridges, Louis Rood, who has retired after 42 years at the firm, 34 on the board, and 10 years as Chair. He was only the 15th Chair of the firm, in 203 years since it was established in Cape Town in 1812. He has been an exceptional and influential leader of both the firm and the legal profession.

A BA LLB graduate of the University of Cape Town, Louis served his articles at Fairbridges in 1973 and 1974 and became a partner of the firm in 1981, and Chair in 2005. He has had an outstanding career, as a litigator, with more than 15 of his cases having been reported in the SA Law Reports. Over 40 of his articles have been published in various law journals, and he has appeared in panel discussions on national radio and television. More than 30 of his book reviews of legal works have been published. He was general editor of Fairbridges Law Letter for 27 years.

Louis is Chairman of the Library Committee of the Cape Law Society. In 2012 he received an Award in Recognition of a Lifetime Contribution to the Profession from the Cape Law Society.

He has served as a board member for 13 years of the international network of independent law firms, TerraLex, and as its Regional Vice-Chair for Africa & Middle-East. He served as Senior Vice-Chair, Chair of the Nominating Committee and Compensation Committee, on the Executive Committee and has also chaired special committees on corporate governance. He is one of only two recipients of the TerraLex Lifetime Achievement Award, and in 2013 was namedTerraLex Lawyer of the Year. Louis is a member and trustee of various cultural, education and literary organisations and funds.

Fairbridges Wertheim Becker is grateful for the enormous contribution Louis has made over so many years. Fortunately he remains with the firm in his new capacity as a Consultant.

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New Chairperson Appointed

Deirdré Olivier has been appointed Chairperson of Fairbridges Wertheim Becker. A BA LLB graduate of the University of Cape Town. She served her articles at Fairbridges, was admitted as an attorney in 1995, and later qualified as a notary public. She has been a director of the firm since 1997 and heads up litigation at the Cape Town office. She is a long-serving member of the firm’s management team. Her appointment as the 16th Chair of the firm has been widely acclaimed and welcomed. Her exceptional professional reputation and leadership credentials make this a well-deserved appointment.

Deidré is a member of the Institute of Forensic Practitioners and a qualified mediator with FAMSA. She specializes in commercial and civil litigation, corporate litigation, property, housing and planning law, constitutional law, forensic investigations, administrative law, contract and delict, dispute resolution, environmental law, immigration law and debt recoveries. She has extensive experience in drafting opinions, policies and legislation and advising on local authority law.

She represents various municipalities and other organs of state, universities, the South African National Biodiversity Institute, The Publishers Association of South Africa and other corporate and private clients. Deirdre has conducted a number of high profile cases over the years in the Constitutional Court, the Supreme Court of Appeal, High Courts, Magistrates Courts and the Land Claims court. She has also represented clients in important mediation proceedings and public commissions of enquiry. Her experience includes successful litigation against illegal drug and liquor dealers in state housing, to demolish unsafe buildings, and the enforcement of property and planning legislation.

Fairbridges Wertheim Becker is privileged to again have at its head a leader of truly outstanding calibre.

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Leading South African Law Firms Merge

Two of South Africa’s longest established law firms have joined forces in a significant mid-market merger. Fairbridges is the oldest law firm in Africa and the Southern Hemisphere, having been established in Cape Town in 1812. Wertheim Becker was founded over a century ago in 1904 in Johannesburg. From 01 March 2015 these well-respected firms will combine to practise as Fairbridges Wertheim Becker.

“This is a carefully considered strategic and logical convergence of two well-matched firms which will significantly enhance our combined resources and capacity,”says Fairbridges managing partner, Dick Cheeseman. His sentiments are echoed by Wertheim Becker’s senior partner,  Bernard Joffe; “The two firms are a complimentary fit with exciting synergies, which we are confident will be of considerable benefit to all our clients.” The merger creates a full-service corporate and commercial law firm, with significant specialist expertise and professional experience across the board. “Through our active and exclusive South African membership of leading international law firm network, TerraLex, we are able to offer our clients world class, cross-border legal services throughout Africa and around the globe,” says Amish Kika of Wertheim Becker. “The reputations of both firms are solidly based on an unwavering commitment to providing the highest quality representation and our network membership enables us to benchmark ourselves against world class best practices.” David Short of Fairbridges emphasises that both firms are proud of their deep roots, rich heritage and solid professional values which have sustained and invigorated the firms for so long. “While we rely on our experience and maturity, we constantly seek to refresh, renew and adapt our services -and the way we deliver them – to add value. There is a massive demand in South Africa for affordable, practical and constructive legal support. We believe that we are well positioned to meet that need while upholding the highest standards of the legal profession.” This development in the domestic South African legal market by these influential firms will be welcomed by many who have demonstrated their desire for mid-tier, accessible, relationship-building and enterprising local law firms.

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The Alienation of Land Act

In the recent Constitutional Court case of Botha v Rich NO the court decided that a purchaser may force a transfer of land in terms of Section 27 of the Alienation of Land Act, provided that more than half the purchase price has been paid and that the purchaser is not in arrears.

The court further held that the principle of good faith underlying the law of contract dictates that land should be transferred to a purchaser in this situation against the furnishing of appropriate guarantees, even if the purchaser is in arrears with installments.
http://www.legalbrief.co.za/filemgmt_data/files/Botha%20&%20Another%20v%20Rich%20N.O%20&%20Others.pdf

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Bangladesh extends territory

The Permanent Court of Arbitration in The Hague has awarded Bangladesh more than 9 700 square miles in the Bay of Bengal, ending a three decade-long maritime dispute between Bangladesh and India.

Bangladesh initiated the arbitral proceedings against India.
The dispute originated from the partition of British India into the two states of India and Pakistan in 1947 http://www.pca-cpa.org/showpage.asp?pag_id=1376[/fa-maintext]

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Insight into POPI (Protection of Personal Information Act)

Did you know that in terms of Section 5(f) of the POPI, you have the right not to be solicited by direct marketing by means of unsolicited electronic communications (text, voice, sound or image message) without your consent. Such direct marketing must contain the details of the sender, together with the contact details necessary to direct a request that the communications cease.

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Advertising Standards Authority Ruling

In a recent Advertising Standards Authority (ASA) matter involving a billboard on the Soweto Highway, Mini Cooper undertook not to use the phrase “DRIVE IT LIKE IT’S STOLEN” again to promote its products. According to the complainants the advertisement, which featured a billboard with the shape of a Mini Cooper cut out of it, was irresponsible and offensive in that it promoted and glorified the stealing of cars, speeding and reckless driving. The billboard had been stolen by the time the ASA heard the matter http://www.asasa.org.za/ResultDetail.aspx?Ruling=6898

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Women´s day

“The fastest way to change society is to mobilize the women of the world.” – Charles Malik

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Mergers and acquisitions picking up

According to UK research firm Mergermarket, mergers and acquisitions are starting to pick up after six years of stagnation. It is likely that companies in South Africa and other African countries will follow this trend, particularly those countries unconstrained by competition regulations. These sorts of deals are expected to find the most growth in the mining sector and in renewable energy projects http://www.financialmail.co.za/moneyinvesting/2014/07/10/mergers-acquisitions-africa-s-resurgence

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Mediation FAQ 5

How is the mediator appointed? It is essential that the mediator is seen as independent and impartial. The mediator is appointed either by the parties themselves, after agreeing on a mediator from a list of nominations, by the Chair of an independent institution, after having been requested to do so. Where particular expertise is required, such as an accounting background where the valuation of shares is at issue, a mediator with industry-specific experience is appointed.

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New Practice Rule - Cape Town Regional Court

Last month the Cape Town Regional Court introduced a practice rule that all applications for default judgment take place in open court and that a representative of the applicant be present. Previously a default judgment was decided by a Magistrate on the papers, which would be sent back to the applicant with queries. The new procedure will simplify and expedite this process by allowing a Magistrate to raise and deal with any queries immediately.

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Prescribed Rate of Interest Increases

As of 1 August of this year, the prescribed (default) rate of interest on all claims has been reduced from 15% to 9%. This means that a litigant will not be able to claim more than 9% on any monetary claim brought to court, unless a different rate of interest has been agreed between the parties beforehand.

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Miss Soweto

The Miss Soweto beauty pageant takes place today at the New Soweto Theatre in Jabulani. The pageant, which was first established in 1979, has produced two Miss South Africa’s and one Miss Universe, and is often as a professional springboard for its winners. Each year a percentage of the pageant’s proceeds contribute towards funding a worthy cause or charity in the entertainment industry.

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Law Firm Leadership - Louis Rood

Congratulations to our Chairman, Louis Rood, whose article “Law Firm Leadership” appeared in the July 2014 issue of De Rebus http://www.myvirtualpaper.com/doc/derebus/de_rebus_digital_july_2014/2014061802/24.html#24

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Who´s who in the Fairbridges Zoo?

Wickaum Smith, a Director at Fairbridges, specialising in Medical Law, Administrative Law, Insurance Law and general litigation. http://www.fairbridges.co.za/attorneys/27/

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Whistle-blowers can face prison time

Whistle-blowers who deliberately disclose false information could face up to two years in prison, and fines. These penalties are contained in new amendments to the Protected Disclosures Act, recently published for public comment. Should the amendments be signed into law, it will be a criminal offence to knowingly disclose false information.

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Albie Sachs´ view of the Constitutional Court

In a recent interview, former Constitutional Court judge Albie Sachs, in explaining his role in setting up the Constitutitional Court, expressed his love for the court and his former colleagues. ‘We were from such different backgrounds, philosophically, culturally and professionally, and were all motivated to try and make operational sense of this beautiful document we’d produced. I don’t think there’s another court in the world which had debates like we had to get better quality for our Constitutional Court.’

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Prescription period waived in negligence case

Judge Tshiqi in the Supreme Court of Appeal in Macleod v Kweyiya, recently decided that the claimant was entitled to sue her attorney 25 years after her case against the Road Accident Fund was settled negligently.

The claimant was rendered a paraplegic after a motor vehicle accident and the attorney was appointed by her mother to claim damages. Irrespective of the three year prescription period in terms of the Prescription Act the court decided that she could sue her former attorney for damages, as she was entitled to rely on her mother and her attorney to act in her best interests in settling the matter.
She claimed she was due R2.1m at the time of the settlement and quantified the monetary value of this amount at the time she sued her former attorney to be R4.8m. They settled at a mere R99500. The court decided that prescription would only start to run from the date that she became aware of the terms of the settlement agreement. http://www.saflii.org/za/cases/ZASCA/2013/28.html

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New Anti-Avoidance Measures

New anti-avoidance measure for employee-share incentive schemes. The treasury has recognised that employee-share incentive schemes have created “disguised” salaries for employees that are tax free. How? Equity shares are held on behalf of employees, with the sole intention of generating dividends for employees, without the employees taking ownership of the shares, thereby creating tax-free dividends.

A new proviso, inserted into Section 10(1)(k) of the Income Tax Act 58 of 1962 has rendered dividends received by or accrued to an employee by virtue of their employment, taxable.
https://sait.site-ym.com/news/175144/Employee-share-incentive-schemes-new-anti-avoidance-measures.htm

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Cape Town Fashion Week

Cape Town Fashion Week begins today and runs until Saturday at the CTICC. The event showcases the work of some of South Africa’s most innovative designers, including Gavin Rajah and David Tlale, as well as a conference where speakers give budding designers business advice, and a show featuring the work of fashion students studying at institutions affiliated to African Fashion International.

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Insight into POPI (Protection of Personal Information Act)

What happens if a business does not follow POPI? Apart from being subject to fines and other penalties, the reputation of a business may be compromised as customers will not do business with a company which does not handle their personal information with care.

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Mandarin introduced as a new elective in schools

According to a recent media statement by the Department of Basic Education, Mandarin will be introduced as a new elective subject in schools, in terms of a a co-operation agreement signed last year by South Africa and China on formalising the teaching of Mandarin in South African schools. The Minister has appointed a task team to determine whether Mandarin should be taught as a first or second additional language – or both. http://www.legalbrief.co.za/article.php?story=20140613052640445

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Judge Goldstone

“I am concerned when I read about inadequate facilities in the Magistrates Court; it is really in the lower courts where justice affects the people.” – former Constitutional Court judge, Justice Richard Goldstone

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Mandela Day

Mandela Day was officially adopted by the United Nations as an international day in 2009. The initiative, held each year on Mandela’s birthday, asks each of us to give 67 minutes of our time to a positive initiative in our communities. The initiative is no longer limited to South Africa and people all over the world are encouraged to take part.

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Mediation FAQ

Mediation FAQ 4: Is mediation voluntary? Yes. No legislation has yet been published in the Government Gazette making pre-litigation mediation compulsory. Court-assisted consensual mediation has now been provided for in recent amendments to the Magistrates Court Rules. As such, mediation, both pre-litigation and during litigation, is commenced only by agreement.

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Customary Marriages

In the recent judgment of Moropane v Southon, the Supreme Court of Appeal affirmed developing jurisprudence on customary marriage, which seeks to place African customary marriage ‘on the same pedestal as civil marriages’. During divorce proceedings a Pedi man argued that he had not entered into a customary marriage with his long-time partner as it was not ‘negotiated and entered into or celebrated in accordance with customary law’ as required by the Recognition of Customary Marriages Act. The court decided that, in this instance, this requirement had been fulfilled. http://www.justice.gov.za/sca/judgments/sca_2014/sca2014-076.pdf

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Dagga laws

Pro-medical dagga activist, Sheldon Cramer, has instituted a High Court action against the state, calling for the laws on dagga to be reviewed, ‘given the evidence that dagga is actually a well-documented potent medicine capable of curing cancer.’ According to Cramer, the legalisation of dagga poses a huge financial threat to the pharmaceutical industry – as confirmed recently by the Health Department – replacing 60% of their product lines.

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POPI

Insight into POPI (Protection of Personal Information Act): What is the purpose of the POPI? It gives effect to the right to privacy, enshrined in Section 14 of the Constitution, while still attempting to strike a balance with other constitutional values, such as the right of access to information.

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KayaFM Mandela Day relay

The second annual KayaFM 67km relay will be held on Sunday at the Waterfall Country Estate in Sunninghill, Gauteng, in celebration of the upcoming Mandela day on 18 July. Last year, 1102 corporate relay teams and over a thousand fun-run entrants participated. The proceeds of the run will again go to the Nelson Mandela Foundation http://eventful.com/johannesburg/events/kaya-fm-67km-relay-mandela-day-/E0-001-071118081-4

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Feedback

We are always appreciative of our client’s comments and feedback. Louis Rood, Chair of Fairbridges Attorneys recently received praise for our quarterly Law Letter – “an excellent publication, quick and easy read and generally informative.” If you would like to subscribe to our Law Letter, contact attorneys@fairbridges.co.za.

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Mediation FAQ 4

Is mediation voluntary? Yes. As at January 2014 no legislation has yet been published in the Government Gazette making pre-litigation mediation compulsory. Court-assisted consensual mediation has now been provided for in recent amendments to the Magistrates Court Rules. As such, mediation, both pre-litigation and during litigation, is commenced only by agreement.

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Restaurant review battle resolved

A decade-long court battle over a restaurant review, comprising 8 court cases in total, has finally been decided in favour of the restaurant by Australia’s Supreme Court. The Sydney Morning Herald, which printed a review describing a pork belly dish as ‘the porcine equal of a parched Weetbix’, was ordered to pay restaurant Coco Roco the equivalent of R6.2m after the court ruled that the review failed to adequately point out that Coco Roco was in fact two restaurants and that the critic had eaten at the up-market Coco and was not reviewing the bistro-style Roco.

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Spam

Did you know that it is possible to opt out of spam? Simply visit the DMA (Direct Marketing Association of Southern Africa) website and remove your personal details from the database so they can no longer be used by DMA members to spam you with unsolicited offers and unwanted direct marketing. You can also do this by contacting certain companies directly and asking them not to contact you.

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Electric vehicle patents opened

Tesla Motors recently announced that it would be opening up all patents it holds for the electric vehicle market, including those for its Supercharger stations which charge its electric vehicles. This will allow other competitors to enter the electric vehicle market and potentially expand it exponentially. Initially Tesla obtained the patents to protect itself against large vehicle manufacturers but quickly realised that electric vehicle programs at these manufacturers were virtually non-existent. The company has vowed not to sue anyone that uses its technology in good faith http://www.iflscience.com/technology/tesla-release-electric-car-patents-public

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Knysna Oyster Festival

The Pick ‘n Pay Knysna Oyster Festival starts today and runs through to 13 July 2014. This festival invites seafood lovers to tuck into ocean-fresh fare and is enjoyed in the beautiful Garden Route town of Knysna.

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Book review - Applied Law for Police Officials by C Joubert (Fourth Edition)

Book Review – Applied Law for Police Officials by C Joubert (Fourth Edition). Review by Louis Rood, BA LLB, Chairman of Fairbridges Attorneys http://www.fairbridges.co.za/news-and-publications/articles–interesting-legal-developments/

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Certain tax debts, the duty of shareholders?

Can shareholders be held liable for company tax debts? In terms of Section 181 of the Tax Administration Act 28 of 2011, shareholders can be held jointly or severally liable for certain tax debts of their company. This is the case where a company is in voluntary liquidation and has an outstanding tax debt, and shareholders have received assets of the company in their capacity as shareholders, within one year prior to winding up. https://sait.site-ym.com/news/174175/The-liability-of-shareholders-for-the-tax-debts-of-a-company.htm

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Egypt´s wealth tax

Egypt is to impose a 5% surtax on incomes greater than R1.46 million a year and will last three years. This meausre still needs to be passed by the interim President before it can be implemented. https://sait.site-ym.com/news/172682/Egypt-Wealth-tax-to-last-three-years.htm

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John Bromley

Who’s who in the Fairbridges Zoo – John Bromley, a Director at Fairbridges, specialising in Medical Law and Litigation. http://www.fairbridges.co.za/attorneys/3/

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APPEAL AGAINST CONTROVERSIAL LAND INVASION JUDGMENT UPHELD BY THE SUPREME COURT OF APPEAL

APPEAL AGAINST CONTROVERSIAL LAND INVASION JUDGMENT UPHELD BY THE SUPREME COURT OF APPEAL

The shortage of housing in the Western Cape has again been cast in the spotlight as the Courts are called upon to balance the rights of private land owners, those of the homeless and indigent and the obligation of local government to provide housing and emergency shelter. The Supreme Court of Appeal has upheld an appeal brought by the City of Cape Town and Ms IA Fischer against a judgment handed down by the Western Cape High Court in terms of which the City was interdicted from dismantling informal structures which had unlawfully been erected on privately owned land.

The City was directed to construct temporary habitable dwellings, affording shelter, privacy and amenities for those occupants who had unlawfully erected informal structures on that land.
The dispute arose around orchestrated land invasions which resulted in numerous structures being erected by individuals on privately owned land in early 2014. The City dismantled all structures which were vacant, unoccupied or partially built. The City at all stages contended that the structures were not occupied, and were accordingly not ‘homes’ as contemplated by Section 26(3) of the Constitution. The approach adopted by the City was that if the illegal structures were not homes as envisaged in terms of the Prevention of Illegal Evictions and Occupations Act (“PIE”), it was not necessary to obtain a court order to dismantle them. The occupants argued that the structures were their homes and that a court order was therefore necessary to evict them.

The City readily accepted and acknowledged that it was not authorised to dismantle structures that had become homes without a court order authorising it to do so and that any structures that were proved to be homes and been dismantled, would be re-built. It also contended that structures that were already built and occupied on the day were left undisturbed. Due to the disparity in evidence the parties agreed that the matter would have to be referred to oral evidence at a later stage, to ascertain whether the structures dismantled were indeed vacant and unoccupied.
The High Court, however, disagreed that the matter required oral evidence. It’s view was that there were legal points that would resolve of the matter. The Court also disagreed with the City’s argument that the test was ultimately ‘whether or not the structures were homes’, and ruled instead that the question was whether the structures were occupied at the time that they were dismantled, thereby arguably extending the PIE Act beyond Section 26(3) of the Constitution – which provides only that no one can be evicted from their ‘home’. The High Court held that the completed structures qualified for the protection of PIE, and as such, the provisions of PIE not having been followed, that the removal of the structures was unlawful.

The Supreme Court of Appeal disagreed. It upheld the appeal against the declaration of unlawfulness of the dismantling of the structures, as well as the order that the City reconstruct them. It ordered that oral evidence was necessary before the Court could competently come to a final decision, and remitted the matter back to the High Court for the hearing of that evidence. The reasons for the decision will be published in the written judgment, which should be available soon. The interdict, initially brought by Ms Fischer and the City, prohibiting the erection of any further structures on Ms Fischer’s land, has been extended to 1 September 2014.
The City and Ms Fischer are represented by Fairbridges attorneys. The Legal Resources Centre acts for the Occupiers.

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Mediation FAQ 5

How is the mediator appointed? It is essential that the mediator is seen as independent and impartial. The mediator is appointed either by the parties themselves, after agreeing on a mediator from a list of nominations, by the Chairman of an independent institution, after having been requested to do so. Where particular expertise is required, such as an accounting background where the valuation of shares is at issue, a mediator with industry-specific experience is appointed.

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Education

“By education I mean that training in excellence from youth upward which makes a man passionately desire to be a perfect citizen, and teachers him to rule, and to obey, with justice. This is the only eduction which deserves the name” – Plato

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Terralex Insight

Terralex Insight – Nixon Peabody is the Terralex member firm for New York, Massachusettes and Rhode Island.  Its former chairman Harry Trueheart is the current Chair of Terralex.

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Terralex Insight

Nixon Peabody is the Terralex member firm for New York, Massachusettes and Rhode Island. Its former chairman Harry Trueheart is the current Chair of Terralex.

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Mediation FAQ 3

May statements made during mediation ever be used in court? Unless the commission of a crime is disclosed, or the intention to commit a crime, statements made during a mediation are regarded as statements made during the course of settlement negotiations, which are protected by the doctrine commonly referred to as ‘without prejudice’.

These disclosures cannot be used as evidence in Court, to the extent that they are actually made in good faith, and for the purposes of settlement. This aids the mediation process, as it enables parties to play open cards with one another without fear that their disclosures will later be presented as evidence in Court.

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Mediation FAQ 2

Is mediation confidential? Yes. Nothing that is said during mediation may be disclosed to outside third parties without consent. Documents, other than those which are subject to ‘discovery’, (i.e. which are in any event required to be disclosed in court proceedings) cannot be used in Court, or in any other manner against a party to the mediation.

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Simon Cooper

Our former Managing Partner Simon Cooper recently celebrated 10 years of theatrical and musical productions at his Kalk Bay Theatre which has become a landmark of the arts in Cape Town. Congratulations Simon Cooper!

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Youth Day on Monday

A youth is to be regarded with respect. How do you know that his future will not be equal to our present? – Confucius

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2014 FIFA World Cup

The 2014 FIFA World Cup kicks off today in Brazil. The tournament, which occurs every four years, will run from 12 June 2014 to 13 July 2014. FIFA celebrates its 20th World Cup tournament this year!

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Book Review - Applied Law for Police Officials

Book Review
APPLIED LAW FOR POLICE OFFICIALS

(546 pages)
By C. Joubert
[Fourth Edition]
Juta & Co. Ltd – www.jutalaw.co.za

“There are not enough jails, not enough policemen, not enough courts to enforce a law not supported by the people.”
– Hubert Humphrey (1911 – 1978)

Review by Louis Rood, BA LLB, Chairman of Fairbridges Attorneys.
The fourth edition of this comprehensive book (also published by Juta in Afrikaans as Toegepaste Reg vir Polisiebeamptes) is an essential tool for not only members of the South African Police Service, but all citizens and organisations involved in the prevention and prosecution of crime.

The Constitution mandates the police to uphold safety and security for all in the country. Major General Leon Gossman, Head of the General Research and Curriculum Development Division of SAPS, considers this book as a work of reference that will “adequately equip police officials with hands-on knowledge of legislation to allow them to make informed legal and investigative judgments in the execution of their duties… It will support the nurturing of a new generation of police officials and enhance professionalism in the South African Police Service”.

The 20 chapters deal clearly and logically with policing powers and responsibilities, criminal prosecution, offences against person and property, the criminal justice process, arrest, detention and the use of force, bail, the law of evidence and numerous other key elements of policing. Relevant statutes and case law are set out, together with extracts from the Criminal Procedure Act and the Child Justice Act.

Author Cerita Joubert B Iur LLB (Unisa) LLM (Leiden) ND Pol Admin (TSA) highlights the importance of effective co-operation between an investigating officer and the victim of crime, other witnesses and the prosecutor, all of which will greatly improve the prospects of a successful criminal prosecution.

“Adv Cerita Joubert must be commended for her proficiency in updating and enhancing this publication and the South African Police Service must be lauded for every endeavour to empower police officials in the proper fulfilment of their duties.”
– Judge P.J.Schabort

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Forfeiture of leave benefits

In the recent judgment of Ludick v Rural Maintenance (Pty) Ltd the Labour Court was called upon to decide between two conflicting judgments. The case dealt with whether annual leave pay not taken within 18 months of the beginning of an employee’s leave cycle should be forfeited. The court decided that leave governed by the Basic Conditions of Employment Act, which applies only to the statutory minimum of 15 days per year, would be forfeited if not taken within this time period.

Employers and employees cannot contract out of this. However, any leave given by the company over and above this minimum is considered contractual leave and the company itself will have to insert a forfeiture provision if it does not want this leave to be accumulated indefinitely.

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Labour Court Judgment

In the recent judgment of Ludick v Rural Maintenance (Pty) Ltd the Labour Court was called upon to decide between two conflicting judgments. The case dealt with whether annual leave pay not taken within 18 months of the beginning of an employee’s leave cycle should be forfeited.

The court decided that leave governed by the Basic Conditions of Employment Act, which applies only to the statutory minimum of 15 days per year, would be forfeited if not taken within this time period. Employers and employees cannot contract out of this.
However, any leave given by the company over and above this minimum is considered contractual leave and the company itself will have to insert a forfeiture provision if it does not want this leave to be accumulated indefinitely.

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Surrogacy

SURROGACY: Did you know that it is unlawful to artificially fertilize a surrogate mother until a surrogate agreement dealing with the in’s and out’s of the surrogacy has been authorized by the Court? Failing endorsement, the child is deemed that of the surrogate.

See the Section 292 and Section 295 of the Childrens Act 38 of 2005 and Ex Parte MS and Others [2014] 2 ALL SA 312 GNP, where an agreement was endorsed by the Court 33 weeks after conception. http://www.legalbrief.co.za/article.php?story=20140508105029481

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Deirdre Olivier

Hear our expert in evictions and land invasions, Deirdre Olivier, a director of our Dispute Resolution Division, in an interview with John Maytham on 567 Cape Talk Radio

https://soundcloud.com/primediabroadcasting/deirdre-olivier-on-the-legality-of-the-evictions?utm_source=soundcloud&utm_campaign=share&utm_medium=email

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Mediation FAQ 1

Mediation FAQ 1: What is mediation? This is a private process, conducted outside of court, and is particularly useful in commercial disputes. The parties, assisted by an independent mediator, negotiate to reach a mutually acceptable settlement of their dispute.

It is less focused on what the law dictates, and more concerned with certainty, commercial reality, containment of legal costs and the preservation of relationships. It allows the parties to reach a settlement that suits their own commercial relationship, in the knowledge that failure to do so will result in the decision being placed before an outside party, whose hands are literally tied by the law.

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Mediation FAQs

Look out for our upcoming series of Mediation FAQs – where our own Natasha Steinberg shares insights and practical advice on the mediation process in South Africa.

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Monetary Jurisdication

The monetary jurisdiction of the Magistrate’s Courts increased yesterday, with the District Courts’ increasing from R100000 to R200000, andthe Regional Courts’ from R300000 to R400000. This means that claims of these amounts or less need no longer be brought in the High Courts, with their concomitant expense and delay.

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Herman Conradie

Who’s who in the Fairbridges Zoo – Herman Conradie, a Director at Fairbridges, specialising in Medical Law , Employment Law and Litigation. http://www.fairbridges.co.za/attorneys/5

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Trust Responsibility

In the recent judgment of Investec Bank Ltd v Adriaanse and Other NNO 2014(1) SA 84 (GNP), Judge Jody Kollapen found that it is the primary responsibility of a trust to satisfy itself that a contract it intends concluding (in this instance a suretyship contract) is for the benefit of the trust and its beneficiaries.

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"Simply creating just laws does not create a just society - it only gives us a legal framework by means of which we can discipline those whose behaviour deviates from this just law" - Deon Rossouw, CEO of the The Ethics Institute of South Africa

“Simply creating just laws does not create a just society – it only gives us a legal framework by means of which we can discipline those whose behaviour deviates from this just law” – Deon Rossouw, CEO of the The Ethics Institute of South Africa

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Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (2013)

South Africa’s diverse cultural heritage has again come under the spotlight in the case of Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (2013) where the Supreme Court of Appeal (SCA) had to decide whether the certificate of a traditional healer could be equated with a medical certificate for the purposes of sick leave.

The dispute was originally referred to the CCMA, which found that it was justified for Mrs. Mmoledi to stay away from work to attend a traditional healer’s course, despite her employer’s instructions not to do so, as she was deeply afraid of suffering serious misfortune if she failed to respond to the call of her ancestors.
This was equated to a sickness. The SCA agreed with these findings and dismissed the employer’s appeal. World Health Organisation statistics show that up to 80% of South Africans turn to traditional healers for their physical, spiritual and emotional well-being.

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First for Women commercial was not a negative stereotype of all men!

The Advertising Standards Authority(“ASA”) recently ruled that a First for Women commercial was not a negative stereotype of all men and that the depiction of men as irresponsible and negligent drivers was in fact reasonable and justifiable. The complainant claimed that the First for Women commercial was sexist and offensive to men. The court noted that a hypothetical reasonable person would accept that advertisers use a certain amount of humour and exaggeration and as such would interpret the commercial with a proverbial “pinch of salt”. The Directorate has previously ruled in favour of First for Women on a similar complaint. http://www.asasa.org.za/ResultDetail.aspx?Ruling=6815

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The Employment Tax Incentive

The Employment Tax Incentive (more commonly referred to as the youth wage subsidy) has already created 56000 jobs, according to the latest Budget Speech. The subsidy gives a tax incentive to employers for hiring young South Africans between the ages of 18 and 29, provided these employees earn between R2000 and R6000 per month. The subsidy aims to provide young people with work experience in order to make them more attractive to potential employers.

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Sugar Tax

The Department of Health is considering introducing a sugar tax to encourage South Africans to take responsibility for their own health and make changes to their diet and lifestyle. The Global Cancer Report 2014 notes that body fat increases the risk of cancer of the oesophagus, colon, pancreas, endometrium and kidneys, as well as breast cancer in post-menopausal women.

“Among the dietary factors related to excess body weight, reduction of consumption of sugar-sweetened beverages (SSB) should be a high priority.” Although it is not yet certain whether a sugar tax will be feasible, tax on SSBs has been introduced successfully in France and Mexico. https://sait.site-ym.com/news/167578/Government-considers-sugar-tax-for-South-Africa-and-more.htm

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Quote of the month

“Don’t raise your voices, improve your arguments” – wise advice from Archbishop Emeritus Desmond Tutu

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Mediate in the News!

The Mediation process shall shortly take the spotlight in a bid to find common ground and a negotiated settlement to continued industrial action in the platinum sector. The parties willingness to find a mutually acceptable settlement and the skill and assertiveness of the mediator to assist them to do so may be decisive of the outcome. We’re watching this space with great interest~full report on the Fin24.com site.

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Defamation on social media

A recent judgment by the South Gauteng High Court warns users to be careful when publishing, sharing, commenting on or allowing themselves to be tagged in potentially defamatory online postings. Merely repeating a defamatory statement made by another person also constitutes defamation. Isparta v Richter and Another (2013) ZAGPPHC

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WITS scraps its 4-year LLB

WITS announced last month that it was scrapping its 4-year LLB degree program. This means that students will now have to complete either a three-year BA or BCom degree before enrolling for the 2-year postgraduate LLB program. Whether other South African universities follow suit remains to be seen but the 4-year LLB has been heavily criticised in recent years, with its detractors stating that it does not adequately prepare students for a career in law.

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Consumers easily switch to rivals

“Research shows that 76% of South African consumers switched one of their service providers in the past year due to poor customer service.
http://www.bdlive.co.za/business/retail/2014/04/02/consumers-in-sa-easily-switch-to-rivals”

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US Apartheid Lawsuit

Today marks the deadline for the filing of a complaint in a US lawsuit against Ford and IBM for encouraging race-based human rights abuses in apartheid-era South Africa. Despite limitations being placed on the ambit of the Alien Tort Statute (ATS) (that lets non US-citizens pursue some cases in US courts over alleged violations of international law) in the case of Kiobel et al v. Royal Dutch Petroleum Co et al., US District Judge Shira Scheindlin in Manhattan gave the Plaintiffs a chance to meet the new, tighter standards set by that court. In the Kiobel case it was held that the ATS was presumed to cover only violations of international law occurring in the United States, and that violations elsewhere must “touch and concern” US territory “with sufficient force to displace the presumption.” http://www.fin24.com/Companies/Investment-Holdings/Ford-IBM-face-renewed-apartheid-era-suit-20140418

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Fairbridges History - Henry Arderne

In 1902 the then senior partner of Fairbridges, Henry Arderne, donated the sum of £ 1,250 payable in five annual instalments to the South African College, later the University of Cape Town, to endow a chair of English language and literature. Arderne was a partner of Fairbridges from 1864 to 1908 and a highly respected man. He was well travelled and his visitors book at his house in Claremont was signed by many distinguished persons including the author Rudyard Kipling. Arderne Professors have included Andre P Brink and J M Coetzee and the current Arderne Professor is John Higgens, who was appointed in 2013.

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Clean Power Africa Conference

Cape Town will play host to the Clean Power Africa conference on 13 and 14 May. The conference will take place at the CTICC and deal with the harnessing of hydro, wind and solar power.

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Global Law Experts 2013

Fairbridges has been awarded the Administrative Law Firm of the Year in South Africa for 2013 by Global Law Experts, the leading international online resource for locating specialist legal advisors.

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PMR.Africa: Diamond Arrow Award 2014

Fairbridges is again the highest rated firm in South Africa in its category in the PMR.africa (Professional Management Review) annual independent survey, the fifth time in six years that Fairbridges has achieved the top ranking.

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Fairbridges Wins Big

Congratulations to Fairbridges Amabutho Warriors action soccer team for yet again winning the Five Futbol League (Law Firm Division) beating all the big guns on the way with style, finesse, tenacity and by far the best goal average in this highly competitive
and popular sport. The final league standings were:

1. Fairbridges
2. Norton Rose
3. Bowman Gilfillan
4. Edward Nathan
Sonnenbergs
5. Webber Wentzel
6. Werksmans

We are proud of our team players and their supporters on this well deserved victory.

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Top Billing

Louis Rood has been nominated for the exclusive Litigation position in South Africa on The Lawyer Network, a comprehensive international guide to legal services in over 95 countries.

Andrew Hewitt has been selected by Who’s Who Legal for inclusion in The International Who’s Who of Sport & Entertainment Lawyers 2013 as a leading expert in the specialist category.

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Success Rating

The August 2013 edition of Succeed magazine features lessons in longevity from three of South Africa’s oldest companies, including Fairbridges. The importance of consistency, adaptability and relationship-building is emphasised. Fairbridges Chairman Louis Rood is extensively quoted:

“Sustainability depends on not overpricing services, irrespective of the market conditions. If you remain grounded and take exceptional care of clients and employees, you will not only survive but be ready to take up opportunities when things turn around.”

The ability to build and maintain a lasting brand is no easy challenge. Over a third of small and medium enterprises in South Africa have experienced a threat to their survival in the past year. The article points out that Standard Bank and the City of Cape Town have been Fairbridges’ clients for over 150 years. Louis Rood’s advice: “That only happens if you constantly adapt to the ever changing needs of your clients – and satisfy those needs.”

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Fairbridges and the Chief Justice of of South Africa

Shortly after Fairbridges was founded in 1812, Christoffel Brand, on leaving school at the age of sixteen entered the office of our founder John Merrington and worked there for two years before proceeding to the University of Leiden in the Netherlands. His great-great-grandson was Michael Corbett, Chief Justice of South Africa from 1989 to 1996. He administered the oath to Nelson Mandela when he became President. His son, Peter Corbett, served his articles at Fairbridges from 1984.
On 28 August 1856, Christian Johannes Watermeyer was articled to Charles Fairbridge. His second son was Ernest Frederick “Billy” Watermeyer who became Chief Justice of South Africa from 1943 to 1950, and his grandson HEP “Jack” Watermeyer was Judge President of the Cape from 1979 to 1981.


Carl van der Merwe Rabie served his articles at Fairbridges under Tom Lawton from 1906. He was the father of Pieter Jacobus Rabie who served as Chief Justice of South Africa from 1982 to 1989. His son is Judge Pierre Rabie of the North Gauteng High Court.
In 1936 a committee of four was appointed to revise the Rules of the Supreme Court of South Africa, under the chairmanship of Judge Albert van der Sandt Centlivres. Fairbridges senior partner, Paul Fisher, was one of the committee members. In 1938 the new rules were published by Paul Fisher and Advocate Arenhold with an introduction by Judge Centlivres. A second edition appeared in 1949. Judge Centlivres was Chief Justice of South Africa from 1950 to 1957, and Chancellor of our client, the University of Cape Town.
Newton Ogilvie Thompson was Chief Justice of South Africa from 1971 to 1974. He was the nephew of Fairbridges senior partners, Tom Lawton and his brother Alf Lawton. He was thus first cousin of Wellesley Lawton, Tom’s son, also senior partner, and Dendy Lawton, Alf’s son, who was also at Fairbridges and became a Springbok rugby player. Judge Thompson’s wife was Joyce Newton Thompson, Mayor of the City of Cape Town from 1959 to 1961, and his brother Cyril Newton Thompson, was also a judge from 1946 to 1958.

Fairbridges is proud to have been a training ground for many generations of lawyers and their descendants, and we hope to continue doing so for many years to come.

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The State Attorney

“Nothing in all the world is more dangerous than sincere
ignorance and conscientious stupidity.”
– Martin luther King (1929 – 1968)

An important function of our courts was illustrated in a recent full bench decision of three judges in the North Gauteng High Court in Pretoria. An application for committal for contempt of court had been brought against the National Department of Transport, the director-General of Transport, and the Minister of Transport. The judges called it “exceptionally  unwise” that neither the department of Transport nor its director-General had delivered any answering affidavits. “This appears to be a startling dereliction of duty.” 

But the greatest criticism was reserved for Ms lithole of the office of the State Attorney in Pretoria. The court described her replying affidavit as “disgraceful”. They observed that in “a ludicrous attempt to justify her conduct” Ms lithole had disclosed in her affidavit that the office of the State Attorney in Pretoria was, to use her own word, “dysfunctional”. The court called this a “shocking state of affairs.” She offered only “a cursory apology.” Judge Tuchten said: “The explanation, if it may so be described, that Ms Lithole does not read the emails addressed to her by other attorneys relative to the matters which she is handling, is most disturbing. It appears to us, moreover,
to constitute unprofessional conduct on her part… I deprecate strongly the conduct of Ms Lithole as disclosed in her own affidavits before us and the correspondence admittedly sent and received. Her conduct seriously prejudices the administration of justice. Even more importantly, the dysfunctionality to which she refers demonstrates that the office of the state attorney, Pretoria, an important organ of state, is presently unable to comply with its constitutional and statutory obligations.” 

The judge concluded: “The ultimate responsibility in law to put matters right and ensure that the Office of the State Attorney Pretoria, complies with its constitutional and statutory obligations, rests on the Minister of Justice.”

In the order which it made, the court referred the judgment not only to the Minister of Justice and Constitutional development and the Parliamentary Portfolio Committee on Justice and Constitutional development, but also to the law Society of the northern Provinces “with the request that the Law Society investigate the conduct of Ms Constant Litholi as appears from this judgment with a view to taking such action as the Law Society may consider appropriate.” 

It is clearly a matter of great public concern that our courtsare compelled to go to such lengths. on the other hand, it demonstrates again how important it is for our courts to fearlessly exercise their role in our constitutional democracy.

Tasima (Pty) Ltd v. Department of Transport & Others 2013 (4) SA 134 (GNP). 

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Constitutional Law

“There are three ingredients in the good life:
learning, earning and yearning.”
– Christopher Morley (1890 – 1957)

Judge Plasket sitting in the Eastern Cape High Court in Grahamstown has given an important judgment concerning the fundamental right of children attending public schools to a basic education. This is enshrined, without qualification, in Section 29(1)(a) of the Constitution, which states that everyone has the right “to a basic education, including adult basic education.”

Asked to compel the South African Minister of Basic education, her director-General, the MeC for Basic education and the head of his department in the eastern

Cape Province not only to declare that posts had been established for both teaching staff and non-teaching staff for public schools in the province, but to fill those posts, Judge Plasket pointed out:

“At the heart of the problem lies the long-standing failure of the Provincial Department of Basic Education to attend to post provisioning. This failure has endured for over a decade. The result is that some schools have more teachers than necessary, while others have too few teachers, with consequent prejudicial effects on teaching and learning. As the Provincial
Department failed to take steps to transfer surplus teachers to where they were required, the budget spiralled out of control
because teachers at under-resourced schools were appointed to fill vacant posts on a temporary basis. 

“This created its own set of problems when, in order to cut costs, the Provincial Department dismissed some 4000 temporary teachers, only to be compelled by the court to reinstate them. Other casualties of this abject lack of management were the school nutrition programme, which provided a meal a day for schoolchildren, and the school transport scheme, which allowed for scholars to be conveyed to and from school instead of having to walk long distances.” 

The judge said that it was no exaggeration to say that this was “a crisis of immense and worrying proportions.” 

If the administration and support functions of a school cannot perform properly because of staff shortages, it has a knock-on
effect threatening the right to basic education enshrined in Section 29(1)(a) of the Constitution. The judge referred to the Public Service Act of 1994 which governs the appointment of non-teaching staff and to the Employment of Educators Act of 1998, as well as the South African Schools Act of 1996. The result of this legislation is that the Provincial MeC is empowered and obliged to determine the establishment requirements for both teaching staff and non-teaching staff at public schools in the province. The judge ordered that those posts be declared and be filled by specified dates.

Centre for Child Law & Others v. Minister of Basic Education & Others 2013 (3) SA 183 (ECG). 

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The Survivor´s Guide for Candidate Attorneys (2nd Ed, 2013) By Bhauna Hansjee & Fahreen Kader

 All Candidate Attorneys are required to serve a period of articles, usually two years, before becoming eligible to be admitted to practice. during that time they must pass the Attorneys’ Admission exams. More importantly, they have the opportunity for practical training under a principal attorney. It is a period where the aspirant attorney learns the trade, gains experience, and becomes familiar with the daily demands of a professional career. 

This completely revised and updated second edition of the popular handbook for candidate attorneys effectively bridges the
gap between the university campus, with its emphasis on theoretical knowledge, and the working environment, which requires hands on application of that knowledge. Written in a user-friendly style, there are handy checklists, helpful hints and plenty of sensible advice on just about everything the young candidate should know.

From time management to office behaviour, from conducting consultations to court appearances, from time-keeping to billing procedures, dealing with sheriffs and briefing advocates, this guide spells out common sense on every page.

A directory of courts and other bodies such as Bargaining Councils, the Public Protector, Family Advocates, deeds offices and the National Consumer Tribunal are included, as well as useful websites. Continuous legal education and lifelong learning is an inherent part of a career in the law. This excellent book is the ideal companion to instil that in fledgling practitioners from the outset.

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Law of Succession

“Most usually our virtues are only vices in disguise.”
– Francois, duc de la Rochefoucauld (1613 – 1680)

The Supreme Court of Appeal in Bloemfontein has heard a case where in terms of a will money had been left to a trust with the sole purpose of providing bursaries to assist white students completing a Master’s degree in organic Chemistry at four South African universities. It was further provided in the will that if the trustees were unable to carry out the terms of the trust, the trust income had to be distributed to certain named charities.

When all of the four South African universities declined to participate in the racially discriminatory nature of the bequest, the trustees approached the Western Cape High Court in Cape Town for an order that the discriminatory word “white” be deleted from the bequest in order to make it acceptable to the universities, thereby allowing the purpose of the bursaries to be achieved.

Acting Judge derek Mitchell in the Cape Town High Court decided that the trust income should go to the charities as set out in the will. The trustees appealed this decision.

The five judges hearing the appeal observed that although the attitude of the trustees and the purpose of the bursaries were commendable, this could not be decisive in giving effect to the terms of the will. Because the will had expressly provided that should it prove impossible to give effect to the provisions of the bursary bequest, the money had to go to the charitable organisations. There was accordingly provision for the eventuality which transpired when the universities refused to accept bequests because of the discriminatory conditions. Giving the trust income to the charities named in those circumstances was to give effect to the wishes of the deceased as set out in her will.

In Re BOE Trust Ltd & Others NNO 2013 (3) SA 236 (SCA). 

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Social Networks

“It takes your enemy and your friend, working together, to hurt you to the heart; the one to slander you and the other to get the news to you. ” – Mark Twain (1835 – 1910)

In one of his last judgments in the South Gauteng High Court in Johannesburg before being appointed to the Supreme Court of Appeal, Judge Nigel Willis considered the lawfulness of a posting on Facebook.

The respondent had posted a letter to the applicant on the public social networking site. That led to the applicant asking the court for an order preventing such further conduct on the part of the respondent and for an order requiring her to remove the postings already made. The applicant complained that the posting in question made allegations which were defamatory of him, in particular that he does not provide financially for his family, that he would rather go out drinking than caring for his family, and that he had a problem with drugs and alcohol.

The judge observed: “We have ancient, common law rights both to privacy and to freedom of expression. These rights have been enshrined in our Constitution. The social media, of which Facebook is a component, have created tensions for these rights in ways that could not have been foreseen by the ‘old authorities’ or the founders of our Constitution. It is the duty of the courts harmoniously to develop the common law in accordance with the principles enshrined in our Constitution. The pace of the
march of technological progress has quickened to the extent that the social changes that result therefrom require high levels of skill not only from the courts, which must respond appropriately, but also from the lawyers who prepare cases such as this for adjudication. ” 

The judge pointed out that in our law, it is not good enough, as a defense to or a ground of justification for a defamation, that the published words may be true. It must also be to the public benefit or in the public interest that they be published. A distinction must always be kept between what is “interesting to the public” as opposed to “what it is in the public interest to make known. ” The judge was satisfied that it was neither to the public benefit nor in the public interest that the words about which the applicant complained be published, even if it were accepted that they are true. The respondent claimed that the words complained of were “fair comment”. Judge Willis disagreed. She had been unable to justify her posting. He pointed out that malice or improper motive by the perpetrator of the comment also acts to defeat the defense of fair comment. The background to the posting, together with the words themselves, indicated that the respondent had acted out of malice when she posted the offending comments.

The judge ordered the respondent to remove all postings which she had posted on Facebook or any other site in the social media which referred to the applicant.

“Not only can items be posted and travel on the electronic media at a click on a computer in a moment, in an instant, at the twinkling of an eye, but also they can, with similar facility be removed therefrom. This can also be done at minimal cost. The situation is qualitatively different from the scenario when newspapers have been
or are about to be printed in hardcopy and distributed. The law has to take into account changing realities not only technologically but also socially or else it will lose credibility in the eyes of the people. Without credibility, law loses legitimacy. If law loses legitimacy, it loses acceptance. If it loses acceptance, it loses obedience. It is imperative that the courts respond appropriately to changing times, acting cautiously and with wisdom. ” 

Judge Willis quoted an article published in 1890 in the Harvard Law Review:

“Political, social and economic changes entail the recognition of new rights, and the common law, in its eternal youth, grows to meet the demands of society.” 

Former Chief Justice Michael Corbett was also quoted as an authority in a judgment which he handed down twenty years ago in 1993 in the Supreme Court of Appeal, where he said: “In a case of publication in the press of private facts about a person, the person’s interest in preventing the public disclosure of such facts must be weighed against the interest of the public, if any, to be informed about such facts.”

Finally, Judge Willis had this advice: “Those who make postings about others on the social media would be well advised to remove such postings immediately upon the request of an offended party. It will seldom be worth contesting one’s obligation to do so. After all, the social media is about building friendships around the world, rather than offending fellow human beings. Affirming bonds of affinity is what being ‘social’ is all about.”

H v. W [2013] 2 All SA 218 (GSJ).

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Administrative Law

“The world is disgracefully managed,
one hardly knows to whom to complain.”
– Ronald Firbank (1886 – 1926)

A High Court order which evicted a number of men, women and children from a certain block of flats in Jeppe Street, Johannesburg which they unlawfully occupied, gave the City of Johannesburg six months to make suitable arrangements to provide them with temporary shelter. eight months later, the court suspended the first order to allow the City more time to make the required arrangements.

When neither order was complied with, an application was made for a further order that would hold the executive Mayor, City Manager and director of Housing of Johannesburg personally responsible for ensuring that the City adhered to the earlier order.

Judge Kathy Satchwell set out the position:

“The obligation to shelter the occupiers has not been suddenly sprung upon the City of Johannesburg. Nothing  has leapt out of the blue. There has been a gradual process of enlightenment. There has been opportunity to absorb both the general and specific import of the court decision. There has been opportunity to understand and appreciate the role which the City is required to play in sheltering these occupiers. There has been opportunity to prepare the appropriate response to the obligations which the Constitution and our courts have placed upon the City.” 

The City had to act in a constitutional and professional manner and could not simply throw up its hands and cry “impossible
task”. Judge Satchwell ordered that the City and its officials were obliged to comply with the earlier court orders, directed
them to take the required administrative steps, suspended the eviction order of the occupiers pending compliance by the officials with the judge’s directions and ordered the City of Johannesburg to pay the costs of the application on the punitive scale as between attorney and client.

This case is a good example of the Judicial arm of government exercising its powers to compel the executive arm of government, in this case at Municipal level, to meet its constitutional and legal obligations not only in the interests of those it is required to serve, but also to ensure compliance with the rule of law. The judge went further and said that if the City officials failed again to comply with her orders, the occupiers were given leave to enrol the application again on five days’ notice for a hearing on and determination of any complaint for contempt of court or claims for constitutional damages.

Hlope & Others v. City of Johannesburg & Others 2013 (4) SA 212 (GSJ). 

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Professional Negligence

“I slept, and dreamed that life was Beauty;
I woke, and found that life was Duty.”
– Ellen Hooper (1816 – 1841)

The Supreme Court of Appeal recently had to evaluate the conduct of the conveyancing attorney of a seller of immovable property. There had been certain errors and mistakes which resulted in a considerable delay for bonds to be cancelled, as a result of which claims for damages were instituted.

Appeal Judge eric leach who delivered the judgment pointed out that not every act which causes harm to another gives rise to an action for damages.

The act complained of must be wrongful. That was conceded, so the court simply had to look at whether the conveyancing attorney had been negligent.

The judge observed: “Like any other professional, a conveyancer may make mistakes. But not every mistake is to be equated with negligence, and if a claim against a conveyancer is based on negligence, it must be shown that the conveyancer’s mistake resulted from a failure to exercise that degree of skill and care that would have been expected by a reasonable conveyancer in the same position.” 

He went on to point out that of course the gravity and likelihood of potential harm will determine the steps, if any,  which a reasonable person should take to prevent such harm occurring. Moreover, the more likely the harm the greater is the obligation to take such steps. no hard and fast rules can be prescribed. each case is to be determined in the light of its particular facts and circumstances. “But in the case of a conveyancer, it is necessary to remember that any mistakes which may lead to a transaction in the Deeds Office being delayed will almost inevitably cause adverse financial consequences for one or other of the parties to the transaction. … To avoid causing such harm, conveyancers should therefore be fastidious in their work and take great care in the preparation of their documents. Not only is that no more than common sense, but it is the inevitable consequence of the obligations imposed (by the Deeds Registries Act of 1937 and its Regulations) which oblige conveyancers to accept responsibility for the correctness of the facts stated in the deeds or documents prepared by them in connection with any application they file in the deeds office.” 

Judge leach concluded that the conveyancer had acted negligently. The potential of harm caused by a delay in the event of the application for cancellation of the bonds being defective was “obvious”. That harm could have been simply averted. The standard of care exercised “fell well short of what is expected of a reasonable conveyancer.” The judge expressed a critical view of this conduct. He said that “ . . . the inference is irresistible” that the conveyancer failed to check the documents. This evidenced “a slothful approach to the important task of ensuring that documents accord with the deeds office’s current practices and requirements.” He said that the excuse offered “is lame in the extreme.”

Margalit v. Standard Bank of South Africa Ltd & Another [2013] 2 All SA 377 (SCA). 

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Social Networks

“It takes your enemy and your friend, working together, to hurt you to the heart; the one to slander you and the other to get the news to you. ” – Mark Twain (1835 – 1910)

In one of his last judgments in the South Gauteng High Court in Johannesburg before being appointed to the Supreme Court of Appeal, Judge Nigel Willis considered the lawfulness of a posting on Facebook. The respondent had posted a letter to the applicant on the public social networking site. That led to the applicant asking the court for an order preventing such further conduct on the part of the respondent and for an order requiring her to remove the postings already made.

The applicant complained that the posting in question made allegations which were defamatory of him, in particular that he does not provide financially for his family, that he would rather go out drinking than caring for his family, and that he had a problem with drugs and alcohol.

The judge observed: “We have ancient, common law rights both to privacy and to freedom of expression. These rights have been enshrined in our Constitution. The social media, of which Facebook is a component, have created tensions for these rights in ways that could not have been foreseen by the ‘old authorities’ or the founders of our Constitution. It is the duty of the courts harmoniously to develop the common law in accordance with the principles enshrined in our Constitution. The pace of the
march of technological progress has quickened to the extent that the social changes that result therefrom require high levels of skill not only from the courts, which must respond appropriately, but also from the lawyers who prepare cases such as this for adjudication. ” 

The judge pointed out that in our law, it is not good enough, as a defense to or a ground of justification for a defamation, that the published words may be true. It must also be to the public benefit or in the public interest that they be published. A distinction must always be kept between what is “interesting to the public” as opposed to “what it is in the public interest to make known. ” The judge was satisfied that it was neither to the public benefit nor in the public interest that the words about which the applicant complained be published, even if it were accepted that they are true. The respondent claimed that the words complained of were “fair comment”. Judge Willis disagreed. She had been unable to justify her posting. He pointed out that malice or improper motive by the perpetrator of the comment also acts to defeat the defense of fair comment. The background to the posting, together with the words themselves, indicated that the respondent had acted out of malice when she posted the offending comments.

The judge ordered the respondent to remove all postings which she had posted on Facebook or any other site in the social media which referred to the applicant.

“Not only can items be posted and travel on the electronic media at a click on a computer in a moment, in an instant, at the twinkling of an eye, but also they can, with similar facility be removed therefrom. This can also be done at minimal cost. The situation is qualitatively different from the scenario when newspapers have been
or are about to be printed in hardcopy and distributed. The law has to take into account changing realities not only technologically but also socially or else it will lose credibility in the eyes of the people. Without credibility, law loses legitimacy. If law loses legitimacy, it loses acceptance. If it loses acceptance, it loses obedience. It is imperative that the courts respond appropriately to changing times, acting cautiously and with wisdom. ” 

Judge Willis quoted an article published in 1890 in the Harvard Law Review:

“Political, social and economic changes entail the recognition of new rights, and the common law, in its eternal youth, grows to meet the demands of society.” 

Former Chief Justice Michael Corbett was also quoted as an authority in a judgment which he handed down twenty years ago in 1993 in the Supreme Court of Appeal, where he said: “In a case of publication in the press of private facts about a person, the person’s interest in preventing the public disclosure of such facts must be weighed against the interest of the public, if any, to be informed about such facts.”

Finally, Judge Willis had this advice: “Those who make postings about others on the social media would be well advised to remove such postings immediately upon the request of an offended party. It will seldom be worth contesting one’s obligation to do so. After all, the social media is about building friendships around the world, rather than offending fellow human beings. Affirming bonds of affinity is what being ‘social’ is all about.”

H v. W [2013] 2 All SA 218 (GSJ).

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Animal Protection Act

“If we stop loving animals, aren’t we bound
to stop loving humans too?”
– Alexander Solzhenitsyn (1918 – 2008)

Carte Blanche recently aired a piece on the cruel treatment of circus animals. Protesters were seen outside Brian Boswell’s circus in Johannesburg after the show. A less public part of the campaign against performing circus animals played out in the
North Gauteng High Court.

An old piece of legislation – the Performing Animals Protection Act of 1935 – provides that no one may train or exhibit performing animals without a licence issued by a magistrate. the Minister of Agriculture, forestry and fisheries is responsible for Administering this legislation.

The National Society for Prevention of Cruelty to Animals (NSPCA) brought an application to have the relevant provisions of the Performing Animals Protection Act declared unconstitutional. the NSPCA argued that licences should be issued by the Department of Agriculture and not by a magistrate. the Act, said the NSPCA, blurred the lines between he judiciary and the executive, and breached the important constitutional principle of the separation of powers.

the high Court agreed, pointing out that the legislature makes laws, the judiciary interprets laws and the executive  implements laws. the independence of the judiciary is compromised if magistrates are expected to perform executive functions, such as the granting of licences. In the past, there was a “do it all” approach to magistrates, who were required to exercise a range of powers which more properly belonged with
government. the Constitution changed this, bringing about a firm separation of powers.

The high Court ordered that the relevant provisions of the Performing Animals Protection Act were invalid and gave the Department of Agriculture six months to amend the Act to remove this illegality. Legislation may only be finally declared constitutionally invalid by the Constitutional Court, so the order was also made subject to confirmation by the Constitutional Court. Interestingly, it was also ordered that, pending the Constitutional Court’s decision, licence applications for  performing circus animals should be made to a committee comprising representatives of the NSPCA, the Department of Agriculture and the South African Veterinary Council.

the Constitutional Court has now confirmed the invalidity of the sections of the Act in question, and has given Parliament the opportunity to amend the Act to cure the defect. But in the interim, Magistrates will continue to perform the function of issuing animal training and exhibition licences.

National Society for the Prevention of Cruelty to Animals v. the Minister of Agriculture, Forestry and Fisheries (North Gauteng high Court, Case No. 44001/2012, 15 November 2012). 

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From the Courts: Municipal Law

“There is no debt with so much prejudice put off as that of justice.”
– Plutarch (46 – 120 AD)

Before the adoption of the interim Constitution, rural landowners were not required to pay municipal rates, as rural properties did not fall within the area of jurisdiction of municipalities. this position changed with the transition to democracy and the introduction of ‘wall-to-wall’ municipalities. t

The Bergrivier Municipality levied charges against rural landowners within their municipal area from December 2000. The rural landowners refused to pay certain of the rates and levies imposed, but did not approach a court to adjudicate their dispute.

The Municipality sued the rural landowners for payment and the matter eventually reached the Constitutional Court. the defences raised by the rural landowners were of a technical nature and were dismissed by the Constitutional Court. the court found that municipal rates and levies imposed on rural landowners by the Bergrivier Municipality had been validly charged.

The court took the opportunity to note that municipalities have the power to raise revenue in order to finance the performance of municipal functions – including the provision of sustainable services and meeting the basic needs of a community. Municipalities have a constitutional right and duty to raise revenue (by imposing rates and service charges, amongst other things) in order to provide these services. the members of the community have a reciprocal right to access municipal services and a reciprocal duty to pay rates and service charges.

The Bergrivier Municipality had suffered a significant reduction in income as a result of the unlawful conduct of the rural landowners. this resulted in the municipality being unable to effectively meet its constitutional obligations to the rest of the local community. In fact, there had been no contention by the rural landowners that the Municipality failed to comply with its obligation to provide services – services from which the rural landowners had benefited.

The court noted that, even in cases where communities have genuine grievances with municipalities, they cannot take the law into their own hands by withholding payment of rates and service charges. this kind of conduct can result in chaos and lawlessness; circumstances in which local government cannot function efficiently and effectively. It is not for disgruntled individuals to decide what the appropriate relief should be
and to attempt to ‘punish’ local government by withholding payments due. That is the prerogative of the courts.

Jacobus Johannes Liebenberg N.O. and 84 Others v. Bergrivier Municipality (Minister for Local Government and Environmental Affairs and Development Planning, Western Cape Intervening), CCT 104/12 {2013} ZACC 16.

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Fairbridges Has Been Elected Administrative Law Firm of the Year

Fairbridges has been awarded the Administrative Law Firm of the Year in South Africa for South Africa 2012 by international ratings agency, Corporate INTL, confirming our pre-eminent position as the leading administrative law firm in the country.

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