February 2012


From My Window - February 2012 From My Window February 2012

The Boeing Business Jet used to transport President Jacob Zuma seems a perfectly satisfactory aircraft. A variant of the Boeing 737 range it can carry 25 passengers in luxury a distance of 11 000km, has a service ceiling of 41 000ft and a maximum speed of 890km/hour. "Luxury," by the way, includes a master bedroom, a washroom with showers, conference and dining area and a living area. Boeing 737 aircraft have been in service for many years and the airplane enjoys a solid safety record. I cannot think there is any reason to presume that the South African president would be at risk from mechanical or electrical failure when aboard. Why then was it necessary for the Presidential aircraft to be accompanied by two aircraft for part of the recent journey to New York and by one for the entire journey?

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Editor's Note - February 2012 Editor's Note February 2012

It is said that one of the certainties of life is change. Of course there is also the French saying Le plus ça change le plus c'est la même chose. Effectively they are one and the same for eventually the change becomes the certainty, if only for a while. For those of us who do not object to change it is seen as a challenge and a break from routine, which is the killer. The current state of the economy and the consequent strategic plans that firms make have ensured that change is very visible. This is particularly so in the legal sector where, for many years, people started out as candidate attorneys and retired as partner. Ten years ago in South Africa there were few partners who moved and even fewer teams who left en masse.

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Uncertain consequences Tax February 2012

Amendments to s24J in the Taxation Laws Amendment Bill

S24J of the Income Tax Act (58 of 1962) contains specific rules for the calculation and timing of the incurral and accrual of interest on debt instruments. In particular, interest is deemed to have been incurred/accrued on a "yield to maturity" basis and the deduction/accrual of the interest is spread over the term of the debt instrument.

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Liquidation rollover provisions when transferring a business Tax February 2012

An interesting issue is whether the provisions of s47 of the Income Tax Act may be used in circumstances where a company transfers a business, including liabilities, to its parent company.

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The dialogue continues Competition Law February 2012

The Health Professions Council of South Africa (HPCSA) brought an exemption application to the Competition Commission which led to the Commission considering the Ethical Rules of Conduct of Practitioners registered under the Health Professions Act to ascertain whether the application of these rules potentially contravened the Competition Act.

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Being pushed to promote government policies* Competition Law February 2012

Recent public interest conditions prescribed by the competition authorities in the Kansai-Freeworld merger (Kansai) and Wal-Mart-Massmart merger (Wal-Mart) invite a closer look at the potential for merger approval under competition law to be used as a forum for achieving government objectives that are not mandated in the Competition Act (89 of 1998).

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Understanding public policy exemptions Competition Law February 2012

This article argues that the Competition Act envisages only a limited role for the Competition Commission in adjudicating exemption applications1.

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Private arbitration removes choice in the court's review test Arbitration Labour Law February 2012

Alternate dispute resolution has long been established in employment law. The Ministerial Legal Task Team which highlighted the main innovations in the present Labour Relations Act, 1995, also placed great emphasis on alternate dispute resolution. While the vast majority of employment disputes continue to be resolved by way of compulsory statutory arbitration, this form of arbitration often gives way to consensual private arbitration.

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Complications at birth Medical Law February 2012

Khanyi v Premier of Gauteng and Premier of the Western Cape and Dr du Plessis v Johannes Hendrik Loots NO

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Rehabilitating mines Mining Law February 2012

Mining activities in South Africa are governed by three interlocking Acts. These are the Mineral and Petroleum Resources Development Act (28 of 2002) (the MPRDA), the National Environmental Management Act (107 of 1998) (NEMA) and the National Water Act (36 of 1998) (NWA) and their regulations. These prescribe statutory duties in respect of, inter alia, environmental standards, the mitigation of environmental impacts and rehabilitation of the affected environment. Criminal and civil liability is also created under all three acts.

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Casting s15 (3A) of the Copyright Act into outer darkness Intellectual Property February 2012

The Copyright Review Commission, under the chairmanship of Justice Ian Farlam, was established in November 2010 to review certain aspects of the music industry and their interface with South African copyright law – or, rather, vice versa. Its report is awaited, and there is, in my experience,much to be said for amendment to the legislation in this regard.

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America (re-) invents Patent Law Intellectual Property February 2012

South African patent practitioners and patent applicants alike will appreciate the fact that the US patent system has some peculiarities in respect of patent systems compared with most other countries. The recently enacted Leahy-Smith America Invents Act (the AIA), however, heralds a significant change in the patent system of the United States, bringing it into closer alignment with more common international practices in patent law. The AIA was signed into law by US Pres. Barack Obama on September 16 last year and most of its provisions will come into force during 2012.

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Author’s Rights – Celebration or Electric Shock Intellectual Property February 2012

In the recent case between Rafael Vergara Hermosilla and The Cola-Cola Company, Coca-Cola was accused of infringing copyright in a translation of a song used in promotions for the 2010 FIFA WORLD CUP. The United States Court of Appeals for the Eleventh Circuit held that it had a perfect defence because the copyright had been assigned to it as the result of an ordinary exchange of e-mails. Will the position be the same in South Africa?

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Laying it on the line Company Law February 2012

It is well known that one of the fundamental duties of a director is not to allow any personal financial interests to interfere with his or her corporate responsibilities – hence the statutory duty to disclose these interests to the board of directors. It is important to note, however, that this duty is no longer confined to directors but has now, by virtue of the new Companies Act (71 of 2008), been imposed on a broad spectrum of company officers.

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One size doesn’t fit all Company Law February 2012

The Companies Act (71 of 2008) requires boards to comprise: • Private and personal liability companies: at least one director in addition to the minimum number of directors required (in terms of the company Memorandum of Incorporation (MOI) or in terms of the Companies Act) to appoint an audit committee or a social and ethics committee; • Public and non-profit companies: at least three directors in addition to the minimum number of directors required (in terms of the company MOI or in terms of the Companies Act) to appoint an audit committee or a social and ethics committee.

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