October 2016


Editor's Note - October 2016 Editor's Note October 2016

without prejudice turns 15

October marks the 15th anniversary of the first issue of without prejudice. A comment by Dr Christel Marshall of Spoor & Fisher made me realise that many attorneys will have no idea how many years the magazine has been published or, for that matter, anything about its provenance. It was also her observation that lawyers would find this interesting, that has resulted in this potted history of without prejudice.

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In the matter of the moratorium Company Law October 2016

It's hard to let new stuff in. And whether that admits a weakness, I don't know. Martin Scorsese

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The Honest-to-Goodness Truth of whistle blowing Company Law October 2016

"Good governance involves fairness, accountability, responsibility and transparency on a foundation of intellectual honesty… in making a decision that is in the best interests of the company." – Mervyn King.

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Saved at the expense of others? Company Law October 2016

The case of Kythera Court v Le Rendez-Vous Café CC trading as Newscafé Bedfordview (case number 2016/11853 GLDJ) held that an agreement can be cancelled during business rescue as the unilateral act of cancellation does not constitute enforcement action in terms of s133(1) of the Companies Act (71 of 2008). This reiterated the decision of the Supreme Court of Appeal (SCA) in Cloete Murray NO & another v Firstrand Bank Ltd T/A Wesbank 2015 (3) SA 438 (SCA).

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A session on cessions of debtors in business rescue Company Law October 2016

There has been considerable controversy about the extent of the powers, and the extent of obligations of a business rescue practitioner in relation to a cession of book debts by the company in rescue. This is an important issue in business rescue because most financially distressed companies have an overdraft facility with a bank which is secured by a cession of debtors. Many practitioners want or need to use the overdraft facility as working capital.

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A shifting tide in interpretation Insurance Law October 2016

On 8 May 2005, shortly after midnight, a fishing vessel, the Lindsay, collided with a bulk fruit juice carrier, the Ouro Do Brasil, off the South African coast near Cape St Francis. The Lindsay capsized and sank quickly, with the tragic result that 14 of her 16 crew members drowned. The only survivors were the Master, who was off duty and asleep in his cabin near the bridge at the time of the collision, and a sparehand who had been on watch.

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The parol evidence rule Insurance Law October 2016

One aspect of the parol evidence rule, which applies to all contracts including insurance contracts, has been abolished. This should put insurers on their guard to ensure that their proposal forms, schedules and policy wordings clearly reflect their intention, because their intention is irrelevant in considering the meaning of disputed provisions when the matter is litigated.

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Is the FSR Bill a fly on the crowd-funding wall? Financial Law October 2016

Crowdfunding seems to be the trend that is stealing the spotlight at the moment. From raising US$40 000 for Zach Brown's potato salad, funding the Oscar winning film Innocente in 2013 or simply providing start-up capital for a small business, crowdfunding purports to be the answer to everyone's unfunded dreams – without the hassle involved in obtaining traditional funding.

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Credit providers beware Financial Law October 2016

The National Credit Act (34 of 2005) provides for, amongst other things, the regulation of consumer credit, promotion of responsible credit-granting, prohibition of granting reckless credit; providing for debt re-organisation in cases of over-indebtedness.

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Beyond the realms of comprehension Platteland Perspective October 2016

Sometimes it's hard to work out how people keep their jobs, even when they are lawyers. This is about the extraordinary case of such a lawyer, a provincial employee, who keeps going to court against his employers – while his personal legal bill just grows and grows.

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Executive share incentives at the crossroads Tax October 2016

Recent and proposed tax amendments have put a spotlight on the equity compensation of top management. Share schemes are traditionally designed as a long-term incentive intended to bolster employee retention and reward. Such incentives, however, typically make up a far larger portion of potential executive pay compared with rank and file employees; usually on the basis that management must have more skin in the game if their interests are to be properly aligned with shareholders.

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The last opportunity to come clean Tax October 2016

Part 1

During the course of the February 2016 National Budget presentation, the Minister of Finance announced a last opportunity for South Africans holding funds abroad, which are not known to the South African Revenue Service or the South African Reserve Bank, to regularise those assets. Draft legislation was released during February, and a subsequent draft during April, for public comment. Subsequently on 20 July, the National Treasury released a revised draft of the legislation dealing with the income tax aspects of the Special Voluntary Disclosure Programme (SVDP). On 13 July the South African Reserve Bank issued a Circular on the exchange control aspects of the SVDP.

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Legal and tax consequences of emigration Tax October 2016

Anyone who is considering leaving South Africa permanently should carefully consider both the tax implications of ceasing to be a tax resident here, and the further consequences for exchange control purposes should he/she formally emigrate. Emigration could have immediate tax consequences with a possible liability for tax. This liability is often missed and could result in incorrect disclosures being made or the late payment of tax. This, in turn, could attract penalties and interest.

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THE DELATOY CASE – IMPLICATIONS FOR MERGERS AND INTERNAL RESTRUCTURING Accounting October 2016

In the recently decided Delatoy case, the Competition Tribunal found that several independent private companies described as the "Delatoy Group" constitute a single "firm" for purposes of the Competition Act.

The decision concerned a prohibited practice under Chapter 2 of the Competition Act. This article explores the extended implications of the decision for mergers under Chapter 3.

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Cars, taxable supplies and input VAT Tax October 2016

In modern society where convenience is key, it is common for businesses to deliver purchased goods to their clients. For these businesses, especially those which specialise in providing delivery and logistical services, it is important to note the applicable VAT considerations when purchasing a vehicle.

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