May 2014


Editor's Note - May 2014 Editor's Note May 2014

The endless, very slow moving queues; people setting up bridge tables to pass the time; enterprising people rushing off to buy cool drinks and fast food to sell to those standing with amazing patience in the human traffic jam; the announcement of an extra day's voting because not everyone had been given the opportunity to make their cross and photographs of the elderly who walked for miles to ensure that at last, in their twilight years, they would be able to vote as a person equal to all others – these images and more are fresh in my memory.

Read More

Does the in duplum rule limit interest payable on a tax debt? Tax May 2014

The in duplum rule is a South African common law rule, which originated in Roman law and provides that interest on a loan or debt will cease to run when the amount of outstanding interest reaches the amount of the outstanding capital. The in duplum rule is based on public policy and protects debtors who are in financial difficulty and are unable to service their debts from an ever-increasing accumulation of interest.1

Read More

Mauritius becomes FATCA compliant Africa May 2014

FATCA is a piece of United States legislation enacted in 2010 with the aim of reducing tax evasion by US citizens and residents who hold assets through non-US financial institutions. The most controversial aspect of this legislation is that, despite being US legislation, it imposes obligations to withhold tax on behalf of, and report and disclose information to the US Internal Revenue Service (IRS) on, every foreign financial institution (FFI) established outside the US. In other words, foreign institutions within the scope of FATCA are technically required to comply with US tax rules even if they are incorporated and tax resident outside the US.

Read More

Just and equitable grounds for winding-up Company Law May 2014

A solvent company may be wound up on just and equitable grounds in terms of s81(1)(d)(iii) of the Companies Act (71 of 2008). The court, in the matter of Knipe and Others v Kameelhoek (Pty) Ltd and Another 2014 (1) SA 52 (FB), considered a winding-up on this ground, in circumstances where the court was asked to grant a final liquidation order in respect of Kameelhoek Proprietary Limited and Schaapplaats 978 Proprietary Limited.

Read More

The problem of compelling shareholders to approve business rescue plans Company Law May 2014

With the recent conflicting decisions handed down in African Bank Corporation of Botswana Limited v Kariba Furniture Manufacturers (Pty) Ltd & Others 2013 (6) SA 471 and DH Brothers Industries (Pty) Ltd v Gribnitz NO & Others 2014 (1) SA 103, the courts have adopted a varied approach regarding whether or not, in pursuing a business rescue plan, the creditors and/or shareholders who vote against prospective business plans can be compelled to accept the plan on the basis that the creditors' voting interests are acquired through a binding offer.

Read More

Social and Ethics Committee: Application for an exemption Company Law May 2014

Before the advent of the Companies Act (71 of 2008) and with it, the Companies Regulations, 1 2011 , there was no direct statutory provision for the governance of social and ethics responsibilities of companies in South Africa.2

Read More

A dematerialised principle Company Law May 2014

Under the old Companies Act it became settled law that shares had become "dematerialised" – that is, that ownership of shares could be lawfully transferred without the necessity of delivering an instrument of title. This article considers whether the new Companies Act may constitute a retrogressive step on the path of dematerialisation.

Read More

Misdescription of plaintiff: a misnomer or the introduction of a new party to the action? Company Law May 2014

In accordance with s15(1) of the Prescription Act (68 of 1969), the running of prescription is interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt.

Read More

Criminally liable? Company Law May 2014

The interests of the members of a retirement fund can be highly compromised if the participating employer fails to pay contributions to the fund in which they participate. Not only does the with-holding of contributions constitute a breach of the employment contract, but the member also forfeits the interest that could be earned on that money and the employees' risk cover could lapse.

Read More

Common law actions in contract and delict Human Rights Law May 2014

In Loureiro and Others v Imvula Quality Protection (Pty) Ltd [2014] ZACC 4, the Constitutional Court overturned a decision of the Supreme Court of Appeal (SCA), which upheld an appeal from the South Gauteng High Court. The latter held Imvula Quality Protection (Pty) Ltd (Imvula) liable for losses suffered by Licinio Loureiro (Loureiro) and members of his family arising out of an armed robbery.

Read More

Distributing beer: SAB in the clear Competition Law May 2014

After a drawn out legal process of nearly 10 years, the Competition Tribunal handed down its decision in the Competition Commission/SAB “Distribution System" case, on Monday, March 24 2014. The reasons for the decision justify further detailed analysis to discern all the nuances and potential implications. However, some preliminary remarks are informative.

Read More

Acceleration clauses – contra bonos mores? Financial Law May 2014

When a party to a contract defaults on one of their payments, one of the questions that arises is whether the creditor is entitled to accelerate payment for the entire amount. An acceleration clause is typically phrased in a manner that makes the full amount of a loan immediately due and payable. Any security the creditor may hold also becomes immediately executable.

Read More

Regulation of Hedge Funds Financial Law May 2014

The regulation of hedge funds in terms of the Collective Investment Scheme Control Act 2002 is a step closer. On February 10 the National Treasury announced that the draft regulations would be published by the end of March. At the time of writing they have not yet been promulgated but it can be assumed that this is imminent.

Read More

Any protection for Goliath? Financial Law May 2014

Unsecured loans, or consumer and small business loans that are not backed by assets, are the fastest growing sector of South Africa's credit market. That said, there is a growing trend of over indebtedness among consumers and a tidal wave of those seeking relief from their debt obligations.

Read More

Stop the sale of my house Financial Law May 2014

When you are at your lowest point, any offers of assistance are normally welcomed with open arms. It is at these times that you have to be most alert and scrutinise those who offer to solve your difficulties.

Read More