Economics review

When our Public Protector sought to widen the Reserve Bank mandate her recommendation elicited a chorus of protest arguing for the retention of the status quo. A lone voice amongst the non-politically aligned, supports her recommendation arguing that the UK interest rates were allowed to drop well below the CPI for prolonged periods thus maintaining growth and employment in the UK during the recession years of 2009-2016. He argues that one of the reasons why such actions in UK works is that the UK Reserve Bank reacts immediately, to counter negative economic effects, whilst our Reserve Bank does not. Essentially, he says that our obsessive guard against inflation, does serious damage and is out of line with international standards.

Rightly or not this discussion is perceived as a struggle for the soul of the bank (and it has been said that politicians ultimately beat central bankers).

Draghi says that the factors weighing on the Euro Zone are temporary; his optimism resulted in a surge by the euro. Go there on holiday now.

A state-owned bank to assist in bridging black businesses’ funding obstacles, is soon to be a reality. No doubt, tax revenues will be employed to fund this bank.

Business review

SARS has issued a ruling that non-executive directors earning more than R1m per annum must register and charge VAT. If you want a copy of this ruling, ask me.

Capitec Bank has been rated the best bank in the world for the second successive year: take that big guys!

National Health Insurance is set to be implemented in 2025. Some of the interesting proposals are that-

the government will do away with the medical scheme subs that it currently gives to employees;
the scheme is to be paid for by a general 2% payroll tax and a 2% surcharge on taxable income; and
medical schemes should ultimately provide complementary cover only to the NHI.

An interesting note came from BUSA on the subject of accelerating transformation in business. It has adopted an approach which holds, amongst other things, that ownership as a measure of transformation should be de-emphasised. In practice this is difficult to achieve and has not produced the control in favour of black people that was hoped. The new approach argues for greater emphasis to be placed on asset-sales transactions and endorses the government Back Industrialist Programme as a vehicle for achieving such transactions. It feels that greater emphasis should be given to, for instance, transformation at executive-management level where decision-making resides. To achieve this, it proposes a focus on small business development and education and training.

Dreamland? Zimbabwe has signed an agreement with Chinese investors to develop a “Disneyland in Africa” near the Victoria Falls. The intent is to lure short-stay visitors to hang around and spend more.

That market disruptor, Uber, is slowly being reeled in as the view that its non-compliance with safety standards and the like, is a risk to public safety.

The recent anti-trust fine slapped on Google in the EU for anti-competitive conduct, elicited interesting responses: one of them was why anyone, providing a free service, should be fair to its competitors?

Turning to international development; I came across a prediction that Berlin, rather than London will become Europe’s silicon valley. The reason for this is said to lie in the number of international investors coming into Germany, being greater than anywhere else in Europe.

Property review

Standard Bank has launched a provincial house-price index and a regional house-price index. This will be very useful and that bank must be commended.

The FNB/BER Civil Confidence Index shows a sharp decline in construction activity in the second quarter of this year, to levels last seen in 2011.

Predictably for SA, property has declined mildly, says Loos. Foreign buyers accounted for some 5.28% of house- purchasers in South Africa last year. One of the reasons in the fall of international investors in this market, is the strengthening Rand which has caused a foreign currency cost rise of 21% for US purchasers, 24% for those buying in Euro and 36% for those buying in Pounds.

An ill wind? The slow-down of house-price growth may well advantage the investors who buy to let.

Not lekker local. An interesting snippet is that more than 60%, of investments, of the JSE-listed property funds, are invested overseas.

Time period for development:

Developers often sell portions of a right to further develop a sectional title scheme, rather than develop it themselves. These rights typically should be developed within a certain time to ensure that the development is fully tenanted. Recently, we came across titles in a scheme where no such time limit was specified. The deeds office refused to register a cession of those rights on the basis of a decision taken by some years back. What to do? The same procedure that is required when a body corporate issues rights to develop, must be followed when changing such a right. These are contained in section 5(b) of the Sectional Titles Schemes Management Act. This requires the written consent of all the owners within that scheme, as well as the consent of the mortgagee of each unit in that scheme. Eina. The seller had taken a defective title, issued by a conveyancer, and suffered substantial damage.

On reading up on the new sectional title regulations, it is interesting to see how service of legal documentation on members is dealt with.

The service of the legal process to a member is the address of the primary section registered in that member's name. A member is entitled to change that address to another physical address or postal address or (South African) fax or email address.

Practice review

On 1 October this year, changes to the legal framework and regulation of business rescue, including the registration of such practitioners, will be implemented. Those who seek to practice as business rescue professionals, will need a licence by the CIPC.

Briefing patterns: on 28 June a protocol, urging the transformation of briefing patterns with particular emphasis on women and black lawyers, was signed. It is reported that only 20 of the 480 senior counsel in this country are women, of whom 9 are black.

Cases

Inappropriate voting on Business Rescue

A recent note by ENS dealt with this issue: where a creditor votes in its own subjective interest on the adoption of the business rescue plan, one may apply to have the vote set aside by a court on the grounds that his vote is inappropriate. What does this mean? The test is a value judgement to be made after consideration of all the facts and circumstances of the situation. This involves the balancing of the rights of all role players; and the court inclined towards the preservation of the rights of workers, rather than allow immediate liquidation.

KJ Foods http://www.saflii.org/cgi-bin/disp.pl?file=za/cases/ZAGPPHC/2015/221.html&query=kj%20foods

Repudiation and choice

When a party to a contract repudiates a contract, the aggrieved party may elect to abide by the contract and enforce performance or accept that repudiation, cancel and claim damages. Once this call is made, our law generally does not allow one to change one’s mind. A recent judgement by the SCA holds that if the defaulting party persists in his breach of repudiation after having been given the opportunity to repent, the innocent party may change this election.

Primat Constrction http://www.saflii.org/za/cases/ZASCA/2017/73.html

Illegal immigrants

This week past our Constitutional Court handed down a judgement holding that persons arrested, for the purpose of deportation in terms of section 34 of the Immigration Act, should be brought before a court within 48 hours from the time of arrest or not later than the first day after the expiry of that time. Parliament was given 24 months to amend this section appropriately.

Lawyers for Human Rights v Minister of Home Affairs CCT 38/16

Breach of lease: remedy

An interesting argument was flighted by a lessee was in breach of its lease. It argued that, as tenant, it could demand that the landlord cancel the lease rather than claim compliance. The argument was given short shrift by the relevant court.

Clemlen Investments http://www.saflii.org/za/cases/ZAECPEHC/2017/32.html

Quotable

Here's how I think of my money - as soldiers - I send them out to war everyday. I want them to take prisoners and come home, so there's more of them.

Kevin O'Leary

Comment

Our Minister of Health has said that “health is the ultimate dividend of freedom and democracy”. He was trying to say that, if dead, the other benefits of freedom such as free housing or free water or social grants are meaningless. Sounds great, but I’m not sure that he thought this through. Interestingly, he equates freedom with free things.

Clearly out of step (given the recent judgement on religious schooling) is the KZN MEC of Health who believes that homosexuality, driven by evil spirits, should be combatted by bringing back religious studies in schools. Eish!

The Dunning-Kruger effect: a 1999 born description of how people, with low ability, suffer from illusory superiority when they mistakenly assess that their ability is greater than what they possess; i.e. a phenomenon, in which the incompetent person, is too incompetent to understand his own incompetence.

Lighten up

Gemeentelid: 'Dominee, hoekom is u so maer en u perd in so 'n goeie toestand?' Dominee: 'Seker maar omdat ek die perd kos gee en die gemeente vir my kos gee.'

Q: What does one call an Arsenal fan who has done well on an IQ test?

A: A cheat

If God had wanted man to play soccer, he wouldn't have given us arms.

Dika

Q: What is the difference between a Liverpool supporter and a baby?

A: The baby will stop whining after a while.