SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - latest Issue
Volume 27, Issue 2, 2015
Author Philip N. StoopSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 191 –217 (2015)More Less
The issue of fairness in contracts is often described in terms of juxtapositions such as freedom of contract as against fairness, or individualism as against paternalism, collectivism, or welfarism. The concept 'fairness' has been implemented in full in consumer contracts by the Consumer Protection Act (CPA), and the emphasis therefore moved from freedom of contract to fairness. To understand what the concept 'fairness' entails, one has to understand its philosophical context. In this article, I shall therefore explain the philosophical context within which the regulation of fairness in the law of contract, with specific reference to the CPA, must be understood. This article examines a freedom-oriented approach as against a fairness-oriented approach with specific reference to procedural and substantive factors.
The economic substance doctrine against abusive tax shelters in the United States : lessons for South AfricaAuthor Benjamin KujingaSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 218 –245 (2015)More Less
The avoidance of income tax is a practice that is common in tax systems across the whole world. As Jensen notes, '[n]othing is certain but death and taxes? Not true. If taxes are certain, then so too are tax avoidance, tax evasion, and governmental efforts to contain the avoidance and evasion'. Being an inevitable concomitant of tax, tax avoidance, if left unchecked, can result in the substantial erosion of tax bases. A common way of controlling tax avoidance is introducing legislation that regulates the limits of permissible tax avoidance and targets impermissible tax avoidance. This legislation comes in the form of general anti-avoidance rules (GAARs) or specific anti-avoidance rules. The term GAAR means that the rule is broad and is a weapon against all forms of impermissible tax avoidance, which differentiates it from specific anti-avoidance rules, which are only applicable to specific forms of impermissible tax avoidance. In countries such as the United States, the United Kingdom (up until July 2013 when a GAAR was introduced) and the Netherlands (where both a GAAR and judicial doctrines are in place), reliance is placed on judicially created doctrines against impermissible tax avoidance. These judicial anti-avoidance doctrines function as GAARs because they serve a general anti-avoidance purpose and apply to all forms of impermissible tax avoidance.
Author Reghard BritsSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 246 –274 (2015)More Less
It has been just over two decades since the Security by Means of Movable Property Act 57 of 1993 (SMPA) came into operation on 7 May 1993.1 For someone who knows little about its historical context and field of application, the Act's title might create the impression that it is a comprehensive piece of legislation that is at the pinnacle of the South African legal regime regarding the use of movable property as objects of credit security. However, the Act only deals with a specific real security right, namely a pledge that vests in favour of the creditor if the notarial bond is registered in compliance with the requirements of the SMPA. The bond must be registered in accordance with the Deeds Registries Act 47 of 1937 and the object of security must be 'specified and described in the bond in a manner which renders it readily recognizable'. Unlike the traditional common-law pledge, the special notarial bond requires no delivery of the hypothecated movable in order to constitute a real right in favour of the creditor. Instead, the creation of a right of pledge is deemed to be as effective as if there had been valid delivery, notwithstanding that there was none.
The reshaping of the co-operatives legal architecture as a result of the 2013 amendments to the 2005 Co-operatives Act : promoting democratic governance and economic sustainability or control and overregulation?Author Jeremy SarkinSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 275 –307 (2015)More Less
In 2013 Parliament enacted broad amendments to the Co-operatives Act 14 of 2005. These were signed into law on 2 August 2013 by the President and published in the Government Gazette of 5 August 2013. These amendments were adopted, as it was believed that while the state has done various things, including establishing state-driven incentive schemes and interventions, there has been little appreciation for the importance, significance and potential of the co-operatives model, and much had to be done to assist and strengthen co-operatives in the country. Government recognised that despite the initiatives and interventions by government it had not been sufficient to allow co-operatives to develop as is envisioned 'despite government having raised its game in an effort to support co-operatives'. In July 2013 the Minister of Trade and Industry, Dr Rob Davies, commented that there was still a lot of work that needs to be done in the country to ensure that co-operatives 'occupy the same position in the economy that co-operatives in other countries do'.
Credit provider - who should that be, and how should that be determined under the National Credit Act 34 of 2005? : analysesAuthor Paul NkoaneSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 308 –324 (2015)More Less
The case of National Credit Regulator v Opperman 2013 (2) SA 1 (CC) (Opperman) has brought clarity as far as the constitutional validity of the now-deleted s 89(5)(c) of the National Credit Act 34 of 2005 (NCA/the Act) is concerned (s 89(5)(c) was deleted by s 27 of the National Credit Amendment Act 19 of 2014). The facts of the case are as follows:
The respondent, Mr Opperman (Opperman), a Namibian and a farmer by trade, lent a total sum of R7 million to a Mr Boonzaaier (Boonzaaier) for the purpose of the latter's property development scheme. Opperman was not registered as a credit provider at the time of providing the loan, as was required by s 40(1) of the NCA. He was not in the business of providing credit, was unaware of the requirement to register and had no intention of violating the NCA. Boonzaaier was unable to meet his obligations to repay the loan and informed Opperman accordingly. Opperman applied to the High Court for the sequestration of Boonzaaier's estate and a provisional sequestration order was granted. The court in its own discretion raised concerns about provisions of the NCA, and refused to grant a final sequestration order. The High Court found that, under the terms of the NCA, the loans concerned were 'credit agreements'; that Opperman, as the lender, was a 'credit provider'; and that Boonzaaier, as the borrower, was a 'consumer'. Because strict application of the NCA unjustly deprived Opperman of his property, the High Court found s 89(5)(c) of the Act to be in conflict with the Constitution of the Republic of South Africa, 1996. The matter was brought to the Constitutional Court for confirmation. The Constitutional Court was, therefore, vested with a duty to fathom the constitutionality of that controversial provision (that is, s 89(5)(c)).
The legitimacy of the triangular merger structures : the incompatibility of sections 113(2) and 115(4) of the Companies Act 71 of 2008 : analysesAuthor Marko KershoffSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 325 –337 (2015)More Less
The statutory amalgamation or merger, encompassed in ss 113, 115 and 116 of the Companies Act 71 of 2008 (hereafter 'the Act'), is fundamentally flawed in the context of triangular mergers. This is because, while s 113(2) of the Act seemingly permits the use of the triangular merger structures to achieve an amalgamation or a merger of two or more corporate entities, s 115(4) effectively inhibits an acquiring party, a person related to an acquiring party, or a person acting in concert with either of them from (i) forming part of the quorum at a shareholders' meeting called to vote on the proposed amalgamation or merger; and (ii) casting a vote on the proposed amalgamation or merger.
This article sets out and studies the abovementioned legislative discrepancy. This is done by first providing an overview of the relevant legislative provisions. Thereafter, so as to illustrate the ramifications of the said inconsistency, two hypothetical scenarios are provided and deliberated on in detail.
Servants of God or employees of the Church? - Reflections on Universal Church of the Kingdom of God v CCMA and Others : case noteSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 338 –347 (2015)More Less
An employment relationship is the product of an agreement concluded between the employer and the employee (Basson et al, Essential Labour Law (MACE 2009) 8, 21). An employment contract can be concluded either verbally or in writing (McGregor et al, Labour Law Rules! (Siber Ink 2012) 34). The contract contains the terms and conditions agreed to by the parties and regulates their employment relationship (Basson et al at 8; see also Kerr, The Principles of the Law of Contract (Butterworths 1998) 3). Once the agreement is met between the parties, and provided also that the agreement is lawful, it is binding and enforceable amongst them as parties to the contract (McGregor et al at 33-34). The relationship between an employer and an employee is called an individual relationship because it relates to the employee as an individual (Basson et al at 3). The initiation of the contract is solely the employer-employee's province to which nobody, not even the court, may have a say unless there is ambiguity that needs the court's interpretation. This is founded on the principle of freedom to contract (Basson et al at 8).
Proving damages under the common law in labour cases : a discussion of South African Football Association v Mangope (2013) 34 ILJ 311 (LAC) : case noteSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 348 –357 (2015)More Less
The decision in South African Football Association v Mangope (2013) 34 ILJ 311 (LAC) (Mangope LAC) concerned the premature termination of the respondent employee's fixed three year contract of employment. The employee did not seek to enforce his right not to be unfairly dismissed via the channel of the Labour Relations Act 66 of 1995 (LRA). Instead he instituted action for the unlawful termination of his employment contract under the common law and s 77(3) of the Basic Conditions of Employment Act 75 of 1997 (BCEA).
The Labour Appeal Court (LAC) examined the interface between statutory law and common law labour rights and ultimately found in the employee's favour, awarding him damages for breach of contract. In ascertaining the quantum of damages, the LAC deviated from previous decisions in which the courts had often awarded damages in the full amount that the employee would have earned had his/her contract run to completion. In this case, the LAC took the view that the appropriate damages that should be awarded to an employee for breach of the employment contract should be limited to damages actually proved by the employee. This note will consider these aspects.
Rehashing the truth about polygraph testing in the workplace - a look at Mustek Ltd v Tsabadi NO & Others in legal context : case noteSource: SA Mercantile Law Journal = SA Tydskrif vir Handelsreg 27, pp 358 –381 (2015)More Less
Speaking the truth has become somewhat of a rare commodity in modern society. It is estimated that people lie at least once or twice daily and in approximately 30-38 per cent in all interactions (Sridhar, 'Polygraph/narco-analysis testing' (2011) The Practical Lawyer December S-15). It is therefore not surprising that, in the search for the ever elusive truth, polygraph testing is no longer a novel concept in the workplace. Employers in all sectors, ranging from security companies and retailers to corporate giants and governmental divisions, are increasingly enticed by this forensic investigative tool for various purposes ('Pre-employment polygraph tests prevent crime' http://www.bizcommunity.com/Article/196/22/87876.html, accessed on 15 September 2014; De Ryhove, 'Polygraphs and the test of fairness' http://www.polity.org.za/print-version/polygraphs-and-the-test-of-fairness-2012-02-29, accessed on 15 September 2014). In instances of misconduct, where the misappropriation of company property has a crippling effect on a business, employers often resort to the use of polygraphs in desperation (Rheeder, 'Polygraph testing in the employment environment' http://www.jrattorneys.co.za/south-african-labourlaw-case-articles/disciplinary-hearings/11-polygraph-tests-in-the-employment-environment.html, accessed on 15 September 2014). Here employers make use of this investigative tool in specific incident testing to facilitate the enquiry into the misconduct, to narrow the focus where there are a number of suspects who are employees, to corroborate statements or to exonerate innocent parties who are surrounded by circumstantial evidence (De Ryhove).