Daan's Snippets

ShoemanLaw Inc has proposed the use of Blockchain technology to store computer-generated wills. This, methinks is a great idea – but it is not new. A colleague in Camperdown had tried some 20 years ago to sell the idea of a national virtual vault for wills, to no avail. 

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Everyone and his dog is now opining on force majeure; this is one of the better examples: https://www.fasken.com/en/knowledge/2020/03/force-majeure-in-light-of-covid-19

If one wants to prevent the common law position from regulating the legal results of difficulty of performance or impossibility, then force majeure clauses should be inserted into contracts. This is, by way of example, is a common clause in rental contracts – most of these deal with the destruction or partial destruction of buildings and so on.

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Off the top of one’s head: assuming a three-week hiatus in earnings (see under Economy) with no consequent follow-on effect on earnings, most practices would, in the absence of recession, take an 8% drop in income whilst retaining most of its expenses. If one throws in the recessionary effect of business slowdown then one could quite easily see a 15% reduction in income this year. I have already seen a notice allegedly published by one of the big four attorneys’ practices, addressed to counsel, stating that it cannot unconditionally accept an obligation to pay counsel’s fees raised during the lockdown unless these have been specifically authorised.

I confess to having a loathing for any business that delays payment for goods or services to its own advantage. Any business should carry a cash reserve at least sufficient to cover one’s monthly expenses. When you live off an overdraft you do so because you cannot contemplate taking home less, which is tantamount to greed or bad management.

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Estate advertisements: where one advertises an estate where the deceased was resident in the platteland, one must file a copy of the L&D account with the local magistrate so that the public might inspect it. Will one have to re-advertise if that magistrate’s office is closed?

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Wills: in the case at hand the court found that a signed document, containing a will in dispute, was not in fact intended to be the deceased’s last will and declined validating the document.

http://www.saflii.org.za/za/cases/ZAWCHC/2020/13.html

Economy

The endless economic breast-beating and death updates are really becoming quite tiresome: what, economically speaking, happens after our isolation?

Interestingly, it appears that economies rebound after wars but don’t after depressions. It remains to be seen what happens to South Africa, as we were teetering on an economic depression when we were hit by our war against the coronavirus. The use of the term war is not mine – this was used by Bloomberg as a comparison between the current state of affairs and the Second World War in the US. The best scenario appears to be that we will simply return to our tottering economic situation as it was in February: pragmatically, this is unlikely, and we will probably face a recession of sorts.

I hold an article by the London Business School showing, towards the end thereof, economic predictions and so on. From this I took three pieces of information which appeared particularly interesting:

  • a major recession is probable;
  • government intervention requires a massive stimulus – which our state simply cannot afford; and
  • if one assumes a 50% drop in economic activities for a month with a further 25% in the following 2 months then a GDP drop of some 10% may be expected.

Ask me for a copy.

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What is fun though, is the conspiracy theories that are now coming to the fore: somebody orchestrated this to their advantage. Even worse is the invocation of the Lord’s wrath upon sinners!

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Oh yes, Moody’s has finally downgraded us to junk; and, of course, it is not the government’s fault, it’s the coronavirus! Predictions of a forced sell-off in the local market could result in a loss as high as $8bn to our economy.

Business

It is reported that the business rescue practitioners for SAA will be publishing their business rescue plan at the end of May. If the government intent holds true, there is little doubt that we will see a diminished entity with continued state support. At the same time, the SA Express liquidators reportedly intend liquidating this airline. I have three recent experiences with airlines:

  • SA Express: recent bookings were moved twice by the airline, after which I cancelled. The refund is promised for 3 weeks hence – by which time, no doubt, that airline will be insolvent.
  • Air Namibia: our bookings to Namibia had to be moved owing to the lockdown. This airline charges virtually 50% of the flight fee to rebook. A rip-off?
  • Royal Air Morocco: this airline misplaced my luggage and gave me a voucher to purchase replacement package. They simply don’t honour their undertaking and don’t reply to emails. Don’t even bother phoning.

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A lazy balance sheet may be defined as being cash heavy rather than investing such cash in profitable undertakings – your money must work, right? My parents survived both world wars and standard practice was a cash reserve and extra food in the pantry: experience. What one would give for a lazy balance sheet today rather than having deferred to the investment experts of yesteryear.

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If one looks at the support packages for business announced by government (https://www.bakermckenzie.com/en/insight/publications/2020/03/south-africa-lockdown-assistance-small-businesses) it is clear that these are not going to rescue businesses in trouble. In fact, the meagre R500m made immediately available by the state is an indication of our national bankruptcy (3 individuals donated a total of six times as much!).

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I was overjoyed to hear that the wine harvesting industry had been exempted from lockdown: a national crisis might have resulted which would make our corona-drama insignificant! On the same tack: imagine SAB closing down!

Property

There has been much debate about the payment of rentals during the lockdown. Hardship caused by such an event is not a force majeure situation and rentals remain payable. A force majeure event is something, beyond one’s control, that prevents one from delivering. If one could successfully argue that tenancy guarantees a certain number of feet or continuous full beneficial use, that position might change. This is not to say that landlords should not seriously consider a rental reduction as, pragmatically speaking, it is easier to take a small hit than to lose a tenant in good standing. This writer partially disagrees on the issue of force majeure: https://propertyprofessional.co.za/2020/03/26/lockdown-how-to-deal-with-rent-and-levies/

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The FNB/BER Building Confidence Index has reached a two-decade low of 13 points in the first quarter of this year. This indicates that 90% of respondents were dissatisfied with the prevailing business conditions.

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The Department of Human Settlements is now implementing a de-densifying (sounds much better than forced removals) strategy for large informal settlements. A little late; one wonders where the money has come from and where these unfortunates will be resettled?

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The LPC has published a list of municipalities that will/will not issue rates certificates during the lockdown. If you have not received this, Ask me for a copy.

Quotables

Cabin Fever noun: the distressing claustrophobic irritability or restlessness experienced when a person, or group, is stuck at an isolated location or in confined quarters for an extended period.

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Hypochondriasis noun: A debilitating condition in which a person is unduly worried about having a serious illness.

Comment

Hypochondriacs must be in their element?

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An interesting comparison being bandied around is the varying death rates in countries following on coronavirus infections. The difficulty with these is that there is so much data missing from the statistics that one cannot really pinpoint a single cause for this. Older populations will quite reasonably more affected and so on. One interesting take, that I heard emanating from an immunologist on  RSG, was a discussion on the effect of European viruses, to which Europeans had become partially resistant, brought to Africa and especially the mid- and Southern Americas. His conclusion was that African populations would probably be more vulnerable to the corona virus than would European communities. This, combined with poverty and overpopulation, might produce a higher death rate in African cities than in Europe.

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Traditional health practitioners are complaining saying that they have been disregarded as healthcare providers during our lockdown. One wonders why?

Lighten up

All countries eventually got coronavirus, but China got it right off the bat.

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At my funeral, take the bouquet off my casket and throw it into the crowd to see who’s next…

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Neurosis isn’t a disorder – it may be a prerequisite for greatness.

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What you call a suicidal hypochondriac?

Disappointed

Contributed by:
Daan Steenkamp Attorneys
LinkedIn Profile

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