Daan's Snippets during Covid

Practice

Derivative action: I was intrigued to read of the failure of the application for certification of a class action against Steinhoff: reading the judgement it is clear that Judge Unterhalter handed out a lesson in company law to the applicants. Eina  http://www.saflii.org.za/za/cases/ZAGPJHC/2020/145.html

In the same vein is an SCA judgement Hlumisa/Kirkinis which was kindly passed on to me by Adv. Crots – ask me for a copy.

In passing:

  • Section 13 (7) of the SAPS act, allowing search and seizure without warrant, has been declared unconstitutional. http://www.saflii.org.za/za/cases/ZAGPJHC/2020/146.html
  • the unintended but expected benefit of lockdown: divorces are up by 20%;
  • we often receive special notarial bonds for registration which do not comply with the relevant legislation. The following article sets out what may be so hypothecated; the NCA and parate executie: worth a read https://www.golegal.co.za/notarial-bond-considerations/
  • sessions in securitatem debiti: https://www.golegal.co.za/security-cession-debt/
  • expropriation without compensation is back on the agenda and a committee of the National Assembly has been re-established to deal with this;
  • marriage officers will soon not be able to refuse to solemnise a civil union between persons of the same sex, even if they find the marriage objectionable; 
  • there is, reportedly, rampant corruption in the Gauteng and Eastern Cape State Attorney offices; and 
  • Lexis, obviously, is pushing so-called virtual practices. I don’t believe that we are fully ready for this, but the fact is that we are halfway there; small practices have all the resources that large practices do at their fingertips, provided that they pay for access. https://www.tech4law.co.za/business/remote-working/covid-19-gives-rise-to-virtual-law-firms/

This appears to be self-evident: in RAF matters, where a complainant is mentally impaired, he cannot settle a claim – this has to be done by a duly appointed curator bonis. http://www.saflii.org.za/za/cases/ZAGPJHC/2020/140.html

Does a clause in a contract, requiring parties to submit any dispute to arbitration, bind the aggrieved party where the contract has been induced by fraud? No, one can hardly be expected to give notice to cure fraud. http://www.saflii.org.za/za/cases/ZASCA/2020/74.html

Wrong, but I would buy that man a Bells: an assailant slashed his wife with a panga – two weeks later the 67-year-old husband cut off the fingers of the assailant. One hopes that the magistrate would sentence both with a stern warning; justice of sorts having been done.

A reformed man? Judge for yourself: https://www.news24.com/news24/SouthAfrica/News/top-advocate-seth-nthai-moonlighted-for-government-after-being-disbarred-20200705?

Economy

More or less? I am confused as to where we should go, economically speaking. Should we tighten our economic belt, spend more, or both? Tito has called for the former; this week a bunch of PhD’s and similar, called for more expenditure. My gut says that you cannot spend more than you have and I am mystified by calls for increased spend, financed through solidarity taxation, increased borrowing and mobilising domestic quasi-public funds. I have (unfortunately , see below) come to the conclusion that the latter choice will probably prevail by inaction.

In the week past, the South African current account surplus (the first in 17 years) was celebrated – as a nation we are spending less overseas than others pay us! The dark side of this is that such a surplus is also indicative of a country in recession, unable to import, and losing external investments in our economy with a resultant drop in our export of the return payable on those investments.

Never… was so much owed by so many to so few (Churchill). In South Africa 4 out of every 100 persons work for themselves – in Uganda 28 do (Schussler). We are not a nation of entrepreneurs; taxpayers who create new business are few.

Business

Ask? Do ask successful businessman and, yes, colleagues with whom you do not compete directly, to what they ascribe their success; the answers may surprise you. This week past I asked this of a local businessman; he pointed out that their business had entered lockdown with a warchest (think of both opportunity and threat) and a market that was not affected by local vagaries. He was at pains to explain that their corporate resilience was the product of 25 years of build and the introduction of a balanced board. The wonderful thing about a crisis is that the clutter of competition is cleared whilst the strong remain standing. The trick, as I will touch on below, is to be one of those. Take a look at the following: https://www.mpdps.com/provocate/Pro010720/provocate_0107.html

The Vodacom please call me saga continues to the detriment of that company: the Pretoria High Court has ordered it to hand over the financial records relating to this service. It is clear that the employee concerned is probably being greedy but also that Vodacom would have not been in the difficulty it is in, had it not been miserly.

Boring but relevant labour law:

Most of us have, justifiably, ignored POPI as something to be dealt with later – you will benefit from reading this if your understanding of what must be done is still a bit woolly: https://www.cliffedekkerhofmeyr.com/export/sites/cdh/en/news/publications/2020/corporate/Downloads/POPI-Bumper-Special-Alert-30-June-2020.pdf

Some sanity is returning to sanitisation practice: schools have now been told that they do not need to close if a CV19 case is identified in the ranks of learners or teachers. Sanitise and move on.

Property

One Day Only is a website selling discounts-of-the-day: think office equipment and so on. It made history as we passed by auctioning off its first property at a R225k discount; possibly the way to go if pressed.

Building plans for new properties passed are 30% down, year on year.

Viruly says that, of commercial property, the office sector is currently the most vulnerable with high vacancy rates. Not far behind is the retail sector. Hang on to your tenants.

An interesting statistic is that shopping centres, in rural areas, have recovered faster from the lockdown, owing partly to those areas being less locked down!

Going down: in March inflation sat at 4.1% and average rental growth at 2.9%. Eina.

As regards residential property, the sombre outlook is softened by a surge of purchases by first-time-home-buyers.

An evergreen question: should you fix your interest rates, now that rates are low? I would not but the following link might guide you: https://everythingproperty.co.za/fixing-your-interest-rate-consider-the-variables/

It is cheaper to share rental than to rent separately: so, if you intend getting married, why are not shack up together – especially now that properties are, relatively speaking, cheap? Sure, but get yourselves a contract. Provide for a deadlock breaker which says, for example, that if either wishes to leave and the other cannot buy him out, the property must be sold – not at what you think it is worth but at the best achievable price. For more on the topic https://www.mondaq.com/southafrica/divorce/959808/untying-the-knot-divorce-and-joint-ownership-of-property?

Quotables

I grow old… I grow old…

I shall wear the bottoms of my trousers rolled.

TS Elliot

Comment

As you were: if a majority tolerates cadre deployment and its sibling, corruption, both an abandonment of merit, who is to blame? The abandonment of merit in favour of unbridled redress has led South Africa to widespread failure of state and para-statal entities. Redirects is founded upon policies which may sound just but, if badly implemented as a result of ineptitude or with sectional gain in mind, are disastrous. Words such as upliftment, redistribution and reprioritising are misinterpreted and give hope where there is none. South Africa is in dire financial, structural and confidence straits; I expect that our state will not act beyond superficial repairs to address its policy failures. Hence the lack of direction post-covid: the ANC believes that its policies are justifiable and will not bring itself to implement the brutal cuts which are necessary to stabilise South Africa across all three of those fields. Post-covid politics will be much like before; dusted off with nouveau riche liberation heroes leading us. I cannot imagine that things will get better from here onwards, on the contrary…

You can leave, but should do so now. If you stay, those who are prepared, can still do well. Include in your warchest of preparation, alternative systems for the provision of water, electricity and communications. Get a car that can cope with potholes. Get tax and investment advice. Adjust your expectations.

Vaccine nationalism: an interesting debate on our doorstep, is who is to get first bite of the vaccines which will be available in a few month’s time. From a capitalist perspective, those who pay; from a social perspective, those most in need? The USA has already secured worldwide rights for three months to the drug remdesivir. When it comes to us or them, Uncle Sam is right up there!

Lighten up

On growing old..er:

  • To me ,  “drink responsibly” means don’t spill it;
  • when I say, “the other day” I could be referring to any time between yesterday and 15 years ago;
  • I run like a winded; and
  • when someone asks what I did over the weekend, I squint and ask, “Why, what did you hear?”

Contributed by:
Daan Steenkamp Attorneys
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