THE SA ATTORNEYS’ JOURNAL
OCTOBER 2019
Should retirement funds be named or identified in divorce orders? Do trust account advocates need a Jurisdiction of the Labour Court – mind shift to deal with FICA? the conundrum continues
How FICA affects you KPIs: What are they and and your legal practice how do we use them?
Eeny, meeny, miny, moe, to which court will foreclosures go?
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Johannesburg - Tel: 011 705 3512 Western Cape -Tel: 021 674 7395 Kwa-Zulu Natal - Tel: 082 875 6244 E-mail: [email protected] THE SA ATTORNEYS’ JOURNAL THE SA ATTORNEYS’ JOURNAL
THE SA ATTORNEYS’ JOURNAL
OCTOBER 2019
Should retirement fundS be named or identified in divorce orderS? 10 CONTENTS Do trust account advocates need a Jurisdiction of the Labour Court – 13 mind shift to deal with FICA? the conundrum continues 16 How FICA affects you 8 KPIs: What are they and and your legal practice 6 how do we use them? October 2019 Issue 600 ISSN 0250-0329 Eeny, meeny, miny, moe, to which court 31 will foreclosures go?
Individual employees cannot rely on s 189(1)(c) of the LRA Regular columns 23 to claim thattheir dismissals are automatically unfair Editorial 3
Letters to the editor 4
Articles on the De Rebus website: Practice management How FICA affects you and your legal practice 6 If Sars fails, democracy fails KPIs: What are they and how do we use them? 8 The judiciary should be left to do its work Decent work discussed at the labour law conference Seen on social media 15 Justice Edwin Cameron retires from the Constitutional Court The law reports 18 Legal Aid SA strike over employee benefits suspended Case notes Minister Lamola visits candidate legal practitioners at Individual employees cannot rely on s 189(1)(c) of the LEAD LRA to claim that their dismissals are automatically Female legal practitioners shine at WOZA Awards unfair 23 People and practices – October 2019 Law Society welcomes president’s withdrawal of SA’s New legislation 24 signature on SADC 2014 Protocol Employment law update Apex court dismisses Proxi Smart’s leave to appeal Striking in support of a demand for equal pay 25 application with costs Conveyancing examination update: LSSA launches pilot Recent articles and research 27 project for Conveyancing Mentorship Programme Book announcement 30
Opinion Eeny, meeny, miny, moe, to which court will foreclosures go? A brief analysis of recent foreclosure proceedings and a consideration of the need for specialised foreclosure courts in SA 31
DE REBUS – OCTOBER 2019 - 1 - EDITOR: FEATURES Mapula Sedutla NDip Journ (DUT) BTech (Journ) (TUT)
10 Should retirement funds be named or PRODUCTION EDITOR: Kathleen Kriel identified in divorce orders? BTech (Journ) (TUT)
n practice, non-member spouses whose marriages are ei- sUB-EDITOR: sUB-EDITOR: Kevin O’ Reilly Isabel Joubert ther in community of property or out of community of MA (NMMU) BIS Publishing (Hons) (UP) property with the application for the accrual system, con- N ews reporter: Editorial secretary: tinue to be frustrated by many retirement funds. Accord- Kgomotso Ramotsho Shireen Mahomed I Cert Journ (Boston) Clement Marumoagae ing to legal practitioner, , retirement Cert Photography (Vega) funds generally refuse to pay them their portion of their mem- ber spouses’ pension interests on the basis that their decrees Editorial Committee: of divorce do not comply with s 7(8) of the Divorce Act 70 of Giusi Harper (Chairperson), Peter Horn, Denise Lenyai, Maboku Mangena, Mohamed Randera 1979. The retirement funds’ strict and often incorrect applica- Editorial Office: 304 Brooks Street, Menlo Park, tion of this provision force non-member spouses to unneces- Pretoria. PO Box 36626, Menlo Park 0102. Docex 82, Pretoria. sarily undertake costly post-divorce court processes aimed at Tel (012) 366 8800 Fax (012) 362 0969. ‘correcting’ divorce orders. This article aims to illustrate that E-mail: [email protected] retirement funds regulated by the Pension Funds Act 24 of DE REBUS ONLINE: www.derebus.org.za 1956 (the PFA) are not entitled to reject divorce orders that Contents: Acceptance of material for publication is not a guar- they deem not in compliance with s 7(8) of the Divorce Act if antee that it will in fact be included in a particular issue since this such orders comply with s 37D(4)(a)(i) of the PFA. depends on the space available. Views and opinions of this jour- nal are, unless otherwise stated, those of the authors. Editorial opinion or c omment is, unless otherwise stated, that of the editor and publication thereof does not indicate the agreement of the Do trust account advocates need a mind Law Society, unless so stated. Contributions may be edited for 13 clarity, space and/or language. The appearance of an advertise shift to deal with FICA? ment in this publication does not necessar ily indicate approval by the Law Society for the product or service advertised. enerally, legal practitioners operate within a given set De Rebus editorial staff use online products from: of specified rules and procedures. With these, come • LexisNexis online product: MyLexisNexis. Go to: www.lexis- certainty. One such key notable development is the nexis.co.za; and • Juta. Go to: www.jutalaw.co.za. Legal Practice Act 28 of 2014 (LPA), which came into G Printer: Ince (Pty) Ltd, PO Box 38200, Booysens 2016. effect last year. The LPA brings with it, various changes and
provision has now been made for advocates with trust ac- Audio version: The audio version of this journal is available counts, who are allowed to accept instructions directly from free of charge to all blind and print-handicapped members of the general public. This ‘new’ type of advocate will have to Tape Aids for the Blind. operate a trust accounts on behalf of their client and, as a re- Advertisements: sult will have to be in possession of a Fidelity Fund Certificate. Main magazine: Ince Custom Publishing Contact: Greg Stewart • Tel (011) 305 7337 Other than complying with legislative requirements these legal Cell: 074 552 0280 • E-mail: [email protected] practitioners will have to do administrative work as well. One Classifieds supplement: Contact: Isabel Joubert Tel (012) 366 8800 • Fax (012) 362 0969 of the key legislative requirements, which will need to be com- PO Box 36626, Menlo Park 0102 • E-mail: [email protected] plied with, is the Financial Intelligence Centre Act 38 of 2001 Account inquiries: David Madonsela (FICA). In terms of FICA, attorneys (or legal practitioners, as Tel (012) 366 8800 E-mail: [email protected] they are now called, including advocates with trust accounts) are deemed or called accountable institutions and will have to Circulation: De Rebus, the South African Attorneys’ Journal, is published monthly, 11 times a year, by the Law Society of South discharge certain responsibilities in terms of FICA writes ana- Africa, 304 Brooks Street, Menlo Park, Pretoria. It circulates free of lyst, Nkateko Nkhwashu. charge to all practising attorneys and candidate attorneys and is also available on general subscription.
New subscriptions and orders: David Madonsela 16 Jurisdiction of the Labour Court – the Tel: (012) 366 8800 • E-mail: [email protected] conundrum continues Subscriptions: Postage within South Africa: R 1 500 (including VAT). Postage outside South Africa: R 1 700. n 4 March, the Labour Court (LC) delivered a semi- nal judgment in the matter between Vodacom (Pty) Ltd and Others v National Association of South Afri- can Workers and Another (LC) (unreported case no De Rebus subscribes to the Code O © Copyright 2019: of Ethics and Conduct for South J256/19, 4-3-2019) (Lagrange J). Essentially, the court found Law Society of South Africa 021-21-NPO African Print and Online Media that Tel: (012) 366 8800 prescribes news that is truthful, that non-employers are entitled to approach the LC for inter- accurate, fair and balanced. If we do not live up to the Code, contact the Public Advocate at (011) 484 3612 dictory relief. In this article, legal practitioner, Sihle Mdludla, or fax: (011) 484 3619. You can also contact our Case Officer on does not focus on the merits of the case, but on the matter of Member of Member of [email protected] or The Audit Bureau of The Interactive lodge a complaint on the Press Circulations of Southern Africa Advertising Bureau Council website: jurisdiction. www.presscouncil.org.za
DE REBUS – OCTOBER 2019 - 2 - EDITORIAL Interpreting Practice Directive 2 of 2019
n July, the Office of the Judge to a litigant by that litigants own le- President Gauteng Division of gal practitioners.’ the High Court issued Prac- As can be seen from the above, this tice Directive 2 of 2019 (www. directive has the potential to cause derebus.org.za). The directive issues for legal practitioners. In re- relates to the – sponse to the directive and the is- I• case management, trial allocation sues it has caused, on 16 September and enrolment of civil trial mat- several legal practitioners filed a no- ters; and tice in terms of r 16A (www. derebus. • issuing of process, electronic ser- org.za). The applicants raised the fol- vice and filing of practice notes lowing constitutional issues: and heads of argument. • Whether the contents of the direc- The directive is to be read with tive is contrary to the principle r 36, 37 and 37A of the Uniform of legality as it does not display Rules of Court, as amended, which a rational connection between the have been in force since July. The di- procedures prescribed therein rective applies to both the Gauteng and the ends, which such proce- Division of the High Court in Preto- dures are intended to achieve, Mapula Sedutla – Editor ria and the Gauteng Local Division being to alleviate the causes of of the High Court in Johannesburg litigation delay and/or increased however, legal practitioners and liti- and its provisions prevail over any costs. gants should not be prejudiced in provision in the practice manuals • Whether the contents of the direc- the process. of either court. All trial matters in tive unjustifiably breaches the ap- • What experience have you had which the defendant is the Road Ac- plicants’ right of access to courts with applying Practice Directive cident Fund or the Member of the as protected by s 34 of the Consti- 2 of 2019? Send your views to Executive Council of Health Gaut- tution in the following respects – [email protected] eng, or the Passenger Rail Agency – it unfairly limits a litigant’s ex- q of South Africa constitutes the isting right in terms of the rule category in respect of which paras of party presentation as it is ac- 6 – 14 of the directive will apply. knowledged within the adversari- Would you like to write Legal practitioners need to fully al system of civil litigation; for De Rebus? understand and interpret the prin- – it does not strike a balance be- ciples of the directive correctly be- tween the rights of litigants in De Rebus welcomes article contri- cause, as the directive states: ‘This terms of the rule of party presen- butions in all 11 official languages, directive shall be construed and ap- tation and the goals of case man- especially from legal practitioners. plied in accordance with the princi- agement; Practitioners and others who wish ple that notwithstanding the provi- – it unfairly creates delays in the to submit feature articles, practice sions herein providing for judicial finalisation of damages claims notes, case notes, opinion pieces and case management, the primary re- against the state and further un- letters can e-mail their contributions sponsibility remains with the par- fairly provides the state with to [email protected]. ties and their legal representatives grounds on which to create fur- The decision on whether to pub- to prepare properly, to comply with ther delays; lish a particular submission is that all rules of court, the practice man- – it unfairly impairs the long-stand- of the De Rebus Editorial Committee, ual and this directive and to act pro- ing and untrammeled right of a whose decision is final. In general, fessionally in expediting the matter litigant to obtain a trial date on contributions should be useful or of towards trial and adjudication. The the close of pleadings and un- interest to practising attorneys and objectives of judicial case manage- fairly creates further obstacles must be original and not published ment in the interests of justice are and procedures before a trial date elsewhere. For more information, to alleviate congested trial rolls may be obtained; and see the ‘Guidelines for articles in and to address the problems which – it introduces a system of case De Rebus’ on our website (www.der- cause delays in the finalisation of management that provides no ebus.org.za). cases. Any failure by a party to ad- remedy to a litigant who believes • Please note that the word limit is here to these principles may be pe- that they have been unfairly re- 2000 words. nalised by way of an adverse costs fused a trial date. • Upcoming deadlines for article order on a punitive scale, de bonis In the interest of access to justice, submissions: 21 October, 18 Novem- propriis, and may further include an it is imperative that cases are dealt ber and 20 January 2019. order disallowing fees to be charged with expeditiously by the courts,
DE REBUS – OCTOBER 2019 - 3 - LETTERS TO THE EDITOR LETTERS TO THE EDITOR
PO Box 36626, Menlo Park 0102 Docex 82, Pretoria E-mail: [email protected] Fax (012) 362 0969
Letters are not published under noms de plume. However, letters from practising attorneys who make their identities and addresses known to the editor may be considered for publication anonymously.
Responses to fraternity to represent the demographics paper in the same language unlike in the of South Africa (SA). past. #Conveyancingmatters The Legal Practice Act 28 of 2014 (the The high failure rate is attributable to a LPA) in s 26(2) provides that a legal prac- variety of factors and gatekeeping is not assing the conveyancing exami- titioner qualifies to be enrolled as a con- one of them. One of the biggest causes of nation is indeed not easy, not be- veyancer, if they have passed a compe- the high failure rate is the sheer volume cause it is difficult, but because it tency-based examination or assessment of work/studying that a candidate has to Pcovers such a vast field of compli- of conveyancers as determined in the go through in preparing for the examina- cated legislation and law, and the work is rules by the Legal Practice Council (LPC). tion. Another contributing factor is the indeed very technical: There is only one The above implies that before one can lack of exposure to the conveyancing correct outcome. be enrolled as a conveyancer, one must field by many of the candidates. Is the answer not to create two grades have been admitted as a legal practition- There are other matters the legal pro- of conveyancers? In grade 1, the can- er. What is the reason for this require- fession will have to contend with going didate is allowed to prepare only run ment? I suspect that the reason might forward. of the mill work, such as transfers and have to do with making qualifying as a There are candidates who complain bonds. When more experience is gained, conveyancer a choice that individual le- that the Board Examinations are too the candidate can write the grade 2 ex- gal practitioners make. strenuous and that they should be amination, which will allow them to do Once that choice is made, one has to changed. They argue that they should more complicated work. sit for the competence-based examina- be written over a period of at least a In other words, the amount of material tion of conveyancers. No one is forced or month, with one paper written per week. to master is spread over two examina- obliged to take the examination. Furthermore, other candidates argue tions, but grade 1 allows a candidate to The recent Law Society of South Africa that the notarial examination should be get a foot in the door immediately. (LSSA) conference, in my humble opin- divided into two papers, and written on ion, did not discuss the conveyancing ex- separate days, with at least a few days Anville van Wyk BA LLB (Stell) amination matter thoroughly and mean- between the papers. Post Grad Dip Tax (UCT) is a legal ingfully. I do not recall a resolution being There is another school of thought, practitioner at van Wyk van Heerden taken to establish the LSSA Conveyanc- which calls for the scrapping of the con- Attorneys in Cape Town. ing Task Team. This team, I respectfully veyancing exam, as in their opinion, it submit, was established without a man- serves no purpose as any person can ap- refer to your editorial ‘Conveyancing date from the participants at the confer- pear at the Deeds Office. examination update: What has the ence. As we are all aware, there are some LSSA done so far?’ 2019 (Aug) DR 3. I am of the view that there is no gate- legal practitioners who support Proxi I I want to put it on record that I fully keeping in the conveyancing field. All Smart in their ongoing legal battle to support the transformation of the legal candidates write the same conveyancing take some work from conveyancers.
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DE REBUS – OCTOBER 2019 - 4 - What will be the end game? adequate time to find legal representa- without legal representation. The magis- The conveyancing examination con- tion. The magistrate warned that if they trate contacted Legal Aid SA herself and sists of two papers. I submit, the pro- do not return with legal representation instructed the respondents to return to posed format to write the conveyancing in February 2019, that they would be Legal Aid SA and to secure legal repre- examination as two separate distinct pa- evicted. sentation before the next date, being the pers is absurd and will lead to the low- On return to the court in February end of July 2019. ering of standards. To pass the exami- 2019, I was informed by the respond- We returned to court during the end of nation, candidates must obtain the pass ents that their application to Legal Aid July 2019. My concerned client contact- mark for the examination as a whole as South Africa (Legal Aid SA) was denied ed me early that morning. She informed it is presently applicable. due to the fact that their household in- me that the respondents’ son had been I fully support the recommendations come exceeded the minimum threshold. engaged in criminal activities and that to increase the pool of examiners, to This time the matter was before another youngsters from the neighbourhood make the past examination papers and magistrate who decided to postpone the threatened to break her property down model answers freely available, to intro- matter in order for the respondents to as they believed that he was hiding at my duce mentorship programmes and for appeal Legal Aid SA’s decision and to client’s property. The court commenced the LSSA to overhaul and improve the allow the respondent’s time to seek as- and the respondents presented the court Legal Education and Development con- sistance from the Legal Practice Council with a letter from Legal Aid SA stipulat- veyancing course. (LPC), therefore, denying the direction is- ing that their application for legal rep- Transformation of the conveyancing sued by the previous magistrate. resentation had been completed, but field must never equate to the lowering The matter was heard again in April had not yet been approved as a ‘merits of standards. 2019. The respondent’s presented the investigation’ had to be done. I yet again The LPC must resist any attempts to court with a letter from the LPC, dated pleaded to the court that my client finds tamper with the various competency- two days before the date we appeared herself in a difficult situation and that based examinations, as provided for in in court. The letter stated that the re- the court has not assisted her since De- the LPA. spondents sought pro bono legal assis- cember 2018. The court delayed justice tance from the LPC, but that no attorney for my client again and the matter has Matome Lawrence Selepe was available to represent them at court. now been postponed for the sixth time. BSc Dip Higher Education (University I addressed the court and pleaded that I firmly believe that justice delayed of Limpopo) Post Grad Dip Marketing my client was being prejudiced by the is justice denied. This matter has been Management LLB (Unisa) is a legal constant delay as she was continuously presided over by three magistrates, who practitioner at Van Rensburg paying towards a property of which she each allowed the respondents more Attorneys in Pretoria. enjoyed no use of. I also brought it to time to find legal representation. I be- the court’s attention that my client had lieve that everyone has the right to legal further been prejudiced as she could not representation, however, you can lead a Justice delayed is justice provide accommodation to her children horse to water but you cannot make it denied although she was the owner of another drink. These respondents have been af- property to which she had no access. forded more than enough opportunity find myself writing out of anger and The court, yet again turned a blind eye to to seek legal representation: They never frustration as I am at my wits’ end. my client’s prejudice and postponed the appealed the Legal Aid SA’s decision to My client has – yet again – been de- matter affording the respondents more refuse them legal representation and nied justice due to an eviction mat- time to find legal representation. they did not contact the LPC timeously I We appeared before the court again in to enable the LPC to assist them with a ter being postponed for the sixth time. We have followed all the correct proce- June 2019, again before a different mag- pro bono attorney. Although a previous dures and rules and yet illegal occupants istrate. The respondents presented the application to Legal Aid SA had been re- are still living a carefree life on my cli- court with another letter from the LPC. fused due to the respondents exceeding ent’s property, while my client has to This time the letter was dated four days the threshold, the magistrate instructed carry the financial burden. before the date we appeared in court. I the respondents to go back there. I am The property was awarded to my cli- addressed the court again regarding the convinced that the respondents will re- ent in accordance with her late mother’s merits, the possibility of alternative ac- turn to court on the next date without will and was registered in her name in commodation, the continuous delays, legal representation. It is a magistrate’s May 2018. My client’s sister, her hus- the threat made to my client and my duty to adjudicate the law and to let jus- band and their adult children, who have client’s financial position. The first re- tice be done. It is not a magistrate’s duty been residing in a wendy house on the spondent was sworn in and the court es- to fight for a litigant who has no respect same grounds for some time, decided to tablished that the first respondent was for the law and it is simply unjust and take occupation of the main house when employed and that no minor children unfair to trample on a law-abiding citi- my client’s mother, the previous owner were residing with the first respond- zen. of the property, fell ill. They were never ent. The magistrate informed me that given permission to move into the main it would be unreasonable to expect the Mariëtte Wright LLB (UP) is house and have never contributed to- respondents to pay rent at another prop- candidate legal practitioner at wards the maintenance of the property. erty. She also instructed me to liaise with Welgemoed Attorneys in Cape Town. My client, after registration of the the City of Cape Town and to assist the q property, tried to negotiate with her respondents in securing legal represen- sister to vacate the property, but the re- tation as it was my duty as an ‘officer of Do you have an issue that you spondents threatened that they would court’. The matter was postponed to the would like to share with the rather burn the house down than move beginning of July 2019. readers of De Rebus? out. She, thereafter, decided to turn to I followed the magistrate’s instruc- the law for assistance. tions and presented her with an affida- Send your letter to: The matter was heard for the first time vit confirming same with the relevant [email protected] in December 2018 and was postponed e-mails attached thereto in July 2019. for two months to allow the respondents The respondents again came to court
DE REBUS – OCTOBER 2019 - 5 - PRACTICE MANAGEMENT – LEGAL PRACTICE How FICA affects you
By and your legal Simthandile Kholelwa Myemane practice
ll legal practitioners practis- guidelines dealing with the reporting spective of the number of entities that ing for their own account requirements of the accountable institu- may be involved in terms of structures are required, in terms of tions, and these can be accessed from formed, there is an ultimate individual s 84 of the Legal Practice Act www.fic.gov.za. It is not the intention who benefits, and accountable institu- 28 of 2014, to hold a valid of this article to go into detail on what tions must establish that individual. FidelityA Fund Certificate (FFC). In sup- is contained in those guidelines, but all • Section 21C requires an ongoing due port of an application for the FFC by a readers are encouraged to read this ar- diligence of the client in respect of a legal practitioner, the legal practitioner’s ticle together with those guidelines to business relationship by the account- annual statement on trust accounts is obtain benefit. I will now consider the able institution. required to be submitted to the Legal specific sections of FICA as contained in • Section 21D empowers the accounta- Practice Council by the legal practition- the statement. ble institution to repeat the steps con- ers of a legal practice. In terms of this tained in ss 21 and 21B should there statement clause 2 deals with attorney’s Section 43B of FICA be doubts about the veracity of previ- compliance requirements, with sub- This section requires a legal practice to ously obtained information. clauses 2(i) – (n) specifically dealing with register with the FIC as an accountable • Section 21E deals with the inability by the Financial Intelligence Centre Act 38 institution. Schedule 1 to FICA lists ac- an accountable institution to perform of 2001 (FICA) requirements. countable institutions, and legal practi- the steps contemplated under ss 21, The Financial Intelligence Centre (FIC) tioners are included on the list. On reg- 21A, 21B and 21C and states under is South Africa’s national centre for the istration with the FIC utilising the FIC’s s 21E ‘[i]f an accountable institution is receipt of financial data, analysis and registration and reporting platform, the unable to – dissemination of financial intelligence to legal practice is issued with a unique reg- (a) … the competent authorities (www.fic.gov. istration number. (b) … za, accessed 16-8-2019). The FIC was es- (c) conduct ongoing due diligence as tablished by FICA and has the mandate Section 21 of FICA contemplated in section 21C, the in- to identify the proceeds of crime, com- This section requires the accountable stitution – bat money laundering and terror financ- institutions to establish and verify the (i) may not establish a business rela- ing. It does this by seeking to: identity of their clients, whether for a tionship or conclude a single trans- • ‘Supervise and enforce compliance single transaction or for a business rela- action with a client; with the FIC Act; tionship. In addition to the requirements (ii) may not conclude a transaction in • Facilitate effective supervision and en- of this section, other specific require- the course of a business relationship, forcement by supervisory bodies; ments are as follows: or perform any act to give effect to a • Receive financial data from account- • Section 21A requires of the account- single transaction; or able and reporting institutions; able institution – when establishing a (iii) must terminate, in accordance with • Share information with law enforce- business relationship with a prospec- its Risk Management and Compli- ment authorities, intelligence services, tive client – to obtain information to ance Programme, an existing busi- the South African Revenue Service, in- reasonably enable the accountable in- ness relationship with a client, ternational counterparts and supervi- stitution to determine whether future as the case may be, and consider sory bodies; transactions, which will be performed making a report under section 29 of • Formulate policy regarding money during the course of the business re- the Act.’ laundering and the financing of ter- lationship concerned are consistent • Sections 21F and 21G address how to rorism; with the institution’s knowledge of deal with a prospective client estab- • Provide policy advice to the Minister that prospective client. lished to be a foreign public official or of Finance; and • Section 21B of FICA deals with ad- a domestic public official respectively. • Uphold the international obligations ditional due diligence measures re- • Section 21H deals with family members and commitments required by the lating to legal persons, trusts and and close associates of clients deter- country in respect of anti-money laun- partnerships. The section requires an mined under ss 21F and G. dering and combating financing of ter- accountable institution to, in addition rorism’. to the requirements of ss 21 and 21A, Section 42 of FICA This article seeks to address the sali- establish the nature of the client’s ent requirements imposed on the legal business and the ownership and con- At this point I direct the attention of the practice as an accountable institution trol of the client. Beneficial ownership readers to s 42 of FICA, dealing with the and on a legal practitioner as a person of the client becomes the most cru- requirement for an accountable institu- who carries on a business or oversees or cial element of this section. Readers tion to prepare and maintain a Risk Man- manages a business or is employed by should note that beneficial ownership agement and Compliance Programme. a business. The FIC has issued several can only refer to an individual, so irre- Subsection 42(2) details various things
DE REBUS – OCTOBER 2019 - 6 - to be achieved by the Risk Management the report relates to a transaction or a • On 30 April around 10:00 am a cash and Compliance Programme. series of transactions between two or amount of R 24 000 is received into With the understanding of the require- more parties.’ the trust bank account of the legal ments of ss 21 and 42 that has been es- practice, a further R 24 000 is received tablished in the foregoing paragraphs, I Scenario 1 – illustration of into the trust bank account of the legal now focus on the reporting requirements a suspicious activity practice around 15:15 pm on the same of an accountable institution. day. This is an attempt at splitting the A representative of a prospective client amount to fall below the R 24 999,99 approaches a legal practice for a busi- Section 28 of FICA threshold. Because the total cash ness relationship. The accountable insti- The section imposes a duty on the ac- amount of R 48 000 happened within tution employs the requirements of s 21 countable institution to report to the a 24-hour period from each other, the to the prospective client. The prospective FIC, within the prescribed period. Cash amount is reportable in terms of s 28. client fails to satisfy the requirements, paid by or received by an accountable On 30 April another amount of by failing to disclose to the legal practice • institution to/from the client, a person R 102 000 is received via an electronic the nature of business that the prospec- acting on behalf of the client, or a per- funds transfer into the trust bank ac- tive client engages in and the beneficial son on whose behalf the client is acting count of the legal practice. ownership of the client despite requests in excess of the threshold. The thresh- On 22 May, the representative of the by the legal practice for the information. • old is currently set at R 24 999,99 with client approaches the legal practice The legal practice then declines to enter any amount above that reportable to the and advises that the client no longer the business relationship with the pro- FIC in terms of FICA, and is not limited wishes to continue with the purchase spective client as required by s 21E. to cash transactions at the office of the of a property and would, therefore, In this illustration, no transaction has legal practice but includes cash trans- wish to withdraw the amounts paid been concluded, purely an activity has actions where cash is paid directly into into the trust account of the legal taken place. The accountable institution the bank account held with a financial practice. The representative provides is, therefore, required in terms of s 29 of institution in the name of the account- a bank account into which the refund FICA to file a suspicious activity report able institution. In this regard, both the should be paid. Section 29(1) report- with the FIC. financial institution at which the bank ing by the legal practice. account is held, and the accountable in- Scenario 2 – illustration of In this entire scenario, indications are stitution have the duty to report the cash that there is potentially an attempt to transaction to the FIC. a suspicious transaction conceal the proceeds of unlawful activi- Section 28A deals with reporting prop- On 23 April a prospective client of a legal ties, and to launder the money using the erty associated with terrorist and related practice approaches the legal practice trust account of a legal practice. activities and financial sanctions pursu- and advises that he would like to pur- ant to Resolutions of United Nations Se- chase a property in future, but wishes Conclusion curity Council. to make a deposit into the trust account Legal practitioners are cautioned of ways of the legal practice while identifying in which they may find themselves be- Section 29 of FICA the property as he would like the legal ing party to money laundering activities This section imposes a duty on the ac- practice to be involved with the trans- and to protect themselves and their legal countable institution to report suspi- fer of the property. After deliberations practices from such. It is in the best in- cious or unusual transactions and ac- with the legal practitioner at the legal terest of every legal practice to prepare tivities to the FIC within the prescribed practice, the parties reach an agreement and maintain a Risk Management and period. Suspicious or unusual activity in terms of which the amount paid in Compliance Programme, which guides deals with circumstances where a trans- by the client would be invested by the and protects the legal practice from fall- action is not concluded, but there has legal practice pending the purchase of ing foul of such attempts by potentially been an attempt or anticipation for a a property, and subsequently the client corrupt clients. If in doubt regarding a transaction to take place; whereas sus- deposits an amount of R 2,5 million into business relationship, terminate that re- picious or unusual transaction suggest the trust account of the legal practice as lationship and report your suspicions to that a transaction has been concluded follows: the FIC. and can be traced. • On 24 April the client deposits a cash A draft guidance notes, Guidance Note amount of R 500 000 into the legal • See also Nkateko Nkhwashu ‘Do trust 4A, by the FIC defines: practice’s trust bank account held account advocates need a mind shift • Suspicious activity reporting as refer- with one of the financial institutions to deal with FICA?’ on p 13. ring to ‘a suspicious or unusual activi- within South Africa (SA) – ss 28 and ty report submitted in terms of section 29(1) reporting by both the financial Simthandile Kholelwa Myemane 29(1) or 29(2) of the FIC Act in respect institution and the legal practice. BCom Dip Advanced Business Man- of the proceeds of unlawful activities • On 24 April the client transfers an agement (UJ) Cert Forensic and In- or money laundering where the report amount of R 800 000 from an invest- vestigative Auditing (Unisa) Certi- relates to an activity which does not ment account held with a financial in- fied Control Self Assessor (Institute involve a transaction between two or stitution within the SA. of Internal Auditors) is the Practi- more parties or in respect of a transac- • On 26 April an amount of R 600 000 is tioner Support Manager at the Legal tion or a series of transactions about received into the trust account of the Practitioners’ Fidelity Fund in Cen- which enquiries are made, but which legal practice from a financial institu- turion. has not been concluded, respectively.’ tion outside SA. q • Suspicious transaction reporting as • On 29 April the client walks into the referring to ‘a suspicious or unusual offices of the legal practice with a transaction report submitted in terms bag full of cash to the amount of of section 29(1) of the FIC Act in re- R 450 000. Sections 28 and 29(1) re- spect of the proceeds of unlawful ac- porting by both the financial institu- tivities or money laundering where tion and the legal practice.
DE REBUS – OCTOBER 2019 - 7 - PRACTICE MANAGEMENT – LEGAL PRACTICE KPIs: What are they and how do we By Carl Holliday use them?
ey Performance Indicators (KPIs) are management combination of KPIs that best support achieving those goals. measurement tools, values used to determine the Review those goals and the supporting KPIs periodically. state of the business and typically expressed as a number. The word metric is often used in a simi- Marketing lar way and refers to any measurable value used A new firm may place a very high value on marketing relat- Kto track and measure performance. KPIs in themselves are ed KPIs. This should support the goals of business growth not valuable and should be considered tools to be used in the through new client acquisition. Profitability may in fact be process of reaching business goals. Metrics are typically time, negatively affected by strong growth. Some terms used in mar- often measured by hours, months, quarters and years. Metrics keting, include: can also be measured in hard number value, for example, how • New client acquisition – the number of new clients recruited long does it take a legal practitioner to make x amount of mon- in a given amount of time. ey? KPIs typically have forward looking or historical aspects, • New matter opened – the number of new matters opened in in other words, are legal practitioners reporting (historical) or a given amount of time. forecasting (predictive)? • Matters closed – number of matters finalised in a given KPIs are all around us. We feel the business is doing better amount of time. and we know the business is growing. Intuitive management • Total clients and total matters – a simple count of the total is, however, almost always doomed to failure. Adopting de- on a date. fined KPIs places management on an analytical, objective level, • Client acquisition cost – the cost involved in acquiring this which is based on accurate, quantifiable information. Reducing client. complex business information to simple KPI results allows for easy comparison: Actual to potential, peer-to-peer or year-on- Operations year. Operational KPIs deal with how efficiently we work. Given an There are no magical or universally applicable KPIs. Certain eight-hour work day, how much of our time was converted into business requirements appear perennial, but do not necessar- billed hours. These KPIs include: ily apply universally to all businesses, nor continuously. The • Fees month-to-date – a count of value of work done for the easiest application of KPIs is to consider current business month. goals. The KPIs selected must support our efforts to achieve • Fees year-to-date – cumulative value of work done for the goals as KPIs are not goals in themselves. Over time, goals may year. change and using the same KPIs indefinitely reflects a misun- • Daily billable hours – the number of hours a professional is derstanding of their purpose and complacency in the status expected to bill. quo. • Actual hours billed, or average per client or day – a measure It is anecdotal that the two most commonly used KPIs are: of performance. What are my fees for the month? • • Fees to target – the gap between current fees month-to-date • How much money do we have in the bank? and monthly fee target. Although valid, these KPIs are limited in scope and only re- veal limited information. In order to be successful, we need to Human Resources know more. • Professional staff to support staff ratio – who works in our Finding KPIs business and in what roles? Professional/support staff churn – how often do we replace KPIs are usually numbers, which represent the answer to de- • staff? fined questions. We can simply and clearly express the answer to questions such as ‘what are my fees for the month?’ using Profitability the KPI ‘fees month-to-date’ principle as guidance. KPIs do not have special names. Certain concepts have crystallised over Profitability is a high-level goal of interest to businesses own- time, but a KPI may be given any name, as long as its con- ers. The information contained in these KPIs typically cover tents and meaning are clearly understood. Once a legal practi- longer time frames and deal with the success of the entire busi- tioner knows what they want to manage they can create tools ness. These KPIs include: to measure. Once clarity exists on business goals, supporting • Income to budget – the difference between budgeted income KPIs can be defined. The practice support systems in use to- and actual income. day contain vast amounts of information applicable to a legal • Expenses to budget – the difference between budgeted ex- practitioner’s business. The answers to the questions we seek pense and actual expenses. are contained in those systems. Often it is simply a question of • Debtor days – the time we wait for clients to pay. knowing where to look, of how to interpret the information in • Fees to cash – the value or rate at which our fees billed are a manner that makes sense in our business environment. converted to cash in the bank. The discussion which follows is intended to provide insight into a few of the most common areas affecting law firms, with- Selecting KPIs to track out in any way being exhaustive. Consider KPIs as a basket When selecting KPIs to track, it is essential to first know why of options. Based on current business requirements, select a the KPI is needed, and secondly who will use the KPI?
DE REBUS – OCTOBER 2019 - 8 - • A junior professional may be given a simple set of KPIs does make it easy to spot. Adding fees year-to-date, year-on- mainly from the operations basket, to encourage dedicated year may reveal annual recurring trends. hard work. Fees month-to-date is a very clear measure of productivity, but not profitability. Dealing with matters on a daily basis requires dedication and focus, as well as the Month New matters Fee total Target ability to convert work done into billable hours. Typically, a March 2 R 20 765 R 20 000 legal practitioner is directly responsible for matters under their control. KPIs are short term, should be updated daily April 4 R 23 490 R 20 000 and deal with individual performance, for example, ‘Produc- May 1 R 24 006 R 20 000 tivity: Fees and files.’ June 1 R 16 014 R 20 000 • Heads of departments may be tasked with KPIs, such as: New matters opened, fees year-to-date and debtor days. July 3 R 19 056 R 20 000 Dealing with issues, such as how effectively a given depart- August 5 R 21 050 R 20 000 ment is functioning and daily operational control of activi- ties and staff line management. Typically, an experienced le- September 9 R 22 012 R 20 000 gal practitioner in charge of other legal practitioners would October R 20 000 be tasked with KPIs that fall in the short to medium term, and would be updated weekly and deal with ‘Profitability: November R 20 000 People and activities’. December R 20 000 • Partners and business owners should be tasked with human January R 20 000 resources, new client acquisition, client acquisition cost, and profitability KPIs. The success of the entire business rests February R 20 000 with them. Senior management is responsible for the entire business. KPIs deal with all aspects of the business, but at a higher, more abstract level and should be updated monthly with ‘Profitability: Strategy and direction.’
A KPI productivity example
Monthly fee target R 20 000 Actual fees month-to-date R 16 014
Number of files billed or invoices sent 23
These KPIs are closely related. They show the fee earner’s ex- pected monthly fee target of R 20 000 and the actual fees writ- ten of R 16 014. On the 15th of the month, this would indicate an 80% achievement of target, with time to spare. Reaching tar- get is very likely. But, at the end of the month, the numbers tell a different story of targets not being reached. It also reveals an expected billing rate of R 80 per hour, with an actual billing rate of R 64 per hour. This is based on a 31-day month, and eight-hour work day. In addition, the nett invoice value equals R 696,26 fees per file. KPIs are often presented in visual format to provide ‘at-a- glance’ management reports. A common visual tool is the busi- ness dashboard. Business dashboards A business dashboard is a graphical display of management information. If a picture does paint a thousand words, a busi- ness dashboard may be the display of a master’s in business administrations worth of management information. Even if the system in place does not provide a dashboard, these can quite easily be built using spreadsheets, based on standard information. The simple example below shows new matters and fees, monthly. The strength of a business dash- board is its visual appeal, it should be easy to use and easy to interpret. This may necessarily truncate certain details, but these should be available from supporting documents. An example of a simple business dash- board The table contains three sets of data for the year-to-date; new matters opened; fees month-to-month; and fee target. The fee target column is used to present the fees to target chart. The example visually illustrates a trend: Those months with low Carl Holliday BProc LLB (NWU) is a non-practising legal numbers of new files, also show lower fees. Reasons for this practitioner in Pretoria. trend may not be apparent from the business dashboard but q
DE REBUS – OCTOBER 2019 - 9 - Should retirement funds be named or identified in divorce orders?
By Clement Marumoagae Picture source: Gallo Images/Getty
n practice, non-member spouses whose marriages are The legal framework either in community of property or out of community of property with the application for the accrual system, Section 7(8) of the Divorce Act provides the court granting a continue to be frustrated by many retirement funds. divorce, discretion to make an order that a portion of the mem- Retirement funds generally refuse to pay them their ber spouse’s pension interest ‘shall’ be paid by the member portion of their member spouses’ pension interests on spouse’s retirement fund to the non-member spouse when the the basis that their decrees of divorce do not comply pension interest accrues to the non-member spouse. This is an Iwith s 7(8) of the Divorce Act 70 of 1979 (the Divorce Act). The extraordinary power that the legislature vested in the courts, retirement funds’ strict and often incorrect application of this which entitles courts to make orders against retirement funds provision force non-member spouses to unnecessarily under- that are usually not parties to divorce proceedings. Naleen take costly post-divorce court processes aimed at ‘correcting’ Jeram correctly argues that ‘it is still necessary to obtain an divorce orders. This article aims to illustrate that retirement order in terms of s 7(8) … if the fund is to be co-opted into funds regulated by the Pension Funds Act 24 of 1956 (the PFA) payment of any assigned pension interest’ (‘Is it still neces- are not entitled to reject divorce orders that they deem not in sary to obtain a court order against a fund? A rebuttal’ 2017 compliance with s 7(8) of the Divorce Act if such orders com- (June) DR 28). I have also argued elsewhere that ‘[t]he current ply with s 37D(4)(a)(i) of the PFA. legal position is indeed that in order for retirement funds to
DE REBUS – October 2019 - 10 - FEATURE – Pension Fund Law make payment of portions of their members’ pension inter- est to non-member spouses, they should be served with court ‘Not only do retirement funds refuse orders, which direct them to make such payment’ (‘Enforce- able orders against retirement funds after divorce: A rejoinder’ to make payment of pension interests to 2017 (June) DR 34). In other words, without a court ordering non-member spouses on the basis that a retirement fund to pay to the non-member spouse a portion divorce orders are ‘defective’ because of the member spouse’s pension interest, the retirement fund can refuse to make such payment notwithstanding, the fact they do not order them to make such that the fund has satisfied itself that the member spouse is its payments, they also refuse to pay when contributing member. their names are incorrectly cited Not only do retirement funds refuse to make payment of pension interests to non-member spouses on the basis that di- in divorce orders.’ vorce orders are ‘defective’ because they do not order them to make such payments, they also refuse to pay when their names are incorrectly cited in divorce orders. I have argued elsewhere of the PFA is twofold. First, and most preferably, this provi- that: sion requires that the name of the retirement fund that will ‘This strict approach negatively affects litigants who are in- be ordered to pay in accordance with s 7(8) of the Divorce Act stituting divorce proceedings either on their own or with the must be named in the divorce order. Secondly, if such a retire- assistance of legal practitioners who lack the necessary ex- ment fund is not named, at the very least, it should be identifi- pertise in this area of law. In most “do it yourself” divorces able from the order. It is easier to identify a retirement fund wherein the instituting party will be given a proforma divorce in a settlement agreement that will be made an order of court summons to fill out for themselves or with the assistance of as opposed to where there is no settlement agreement. It is the Registrar of the court, chances of failing to properly make nonetheless, possible to identify the relevant retirement fund out a case for a pension interest remains high and can be dis- in the pleadings and request the court to state some of the astrous leading to such a party not being able to claim his or identifying features of the fund in the divorce order such as her share of the member spouse’s pension interest. It could the member’s employment or retirement fund number if it is not have been the intention of the Legislature for legally un- known. In short, notwithstanding, the fact that they are not assisted or poorly assisted divorce litigants to be prejudiced precisely stated in divorce orders, retirement funds have no by the requirement that they must ensure that the names of legislative basis to reject divorce orders that identifies them retirement funds are stated in their divorce decrees’ (C Maru- as retirement funds that member spouses involved in divorce moagae ‘Prejudice emanating from non payment of pension litigations are contributing to. In other words, it does not make interests due to what is contained in or omitted from divorce sense to force non-member spouses to make applications to decrees’ (2018) 51.1 De Jure 102). court to vary orders at great costs, where retirement funds I note that there are judicial officers who – when realising have satisfied themselves that they are the relevant funds that that the manner in which the pension interest has been plead- will eventually make payment to non-member spouses. In Dos- ed or dealt with in the settlement agreement may lead to re- son v Cape Municipal Pension Fund [2009] 1 BPLR 12 (PFA) para tirement funds refusing to pay – may attempt to assist either 5.13, the Adjudicator correctly noted that: the legally unassisted litigants or legal practitioners who might ‘It is true that the present position may lead to much hard- have dealt with this aspect in a manner that might prejudice ship. The many complaints before this tribunal indicate that their clients. This assistance might be borne out of the frus- pension funds are frequently incorrectly cited, or not men- tration relating to many post-divorce applications intended tioned by name at all, although they can usually be identified to vary divorce orders where retirement funds have refused from the context. In circumstances where the fund is clearly to pay former non-member spouses’ their entitled portions of identifiable, although not named, it seems unduly onerous to their former non-member spouse’s pension interests. Retire- require a party whose claim has fallen due to make formal ap- ment funds continue to force former non-member spouses plication for rectification of the divorce order’. to make such applications despite the fact that these former I am of the view that the relevant retirement fund will always non-member spouses are entitled to their former non-member be identifiable. In my view, the fact that the member spouse is spouses’ pension interests (GN v JN 2017 (1) SA 342 (SCA) at cited on the divorce order, there can be no better identifying para 25). feature than that. It is possible for the member spouse not to Section 7(8) of the Divorce Act is an effective legislative tool know the name of their retirement fund, because in most in- that empowers retirement funds to frustrate non-retirement stances, members’ payslips merely indicate their contribution fund members, because as the law stands, this provision must to either a pension fund or provident fund without stating the be complied with. It is interesting to note that nowhere in this full names of the members’ retirement fund. The second most provision is it stated that when exercising its discretion, the obvious identifying feature that would be stated in the plead- court must either state the name of the retirement fund con- ing as opposed to the divorce order is the member spouse’s cerned or must precisely state the name of the retirement fund workplace or profession. If there is a standalone fund, umbrel- that it orders to pay to the non-member spouse their portion of la fund or industry related fund that the employer participates the member’s pension interest. However, context is provided in, then by virtue of employment, the member spouse will be- by s 37D(4)(a)(i)(aa) of the PFA, which mandates that for the long to that fund and the employer should provide relevant purposes of s 7(8) of the Divorce Act the portion of the mem- information thereto. Divorce as a contingent event makes non- ber spouse’s pension interest that accrues due to the divorce member spouses beneficiaries of their member spouses’ pen- and thus, should be paid to the non-member spouse ‘must be sion interests. In terms of s 7D(1)(c) of the PFA, one of the deducted by – duties of the board is to ‘ensure that adequate and appropriate (aa) the pension fund or pension funds named in or identifi- information is communicated to … beneficiaries of the fund able from the decree’. informing them of their rights, benefits and duties in terms of It can be argued that this provision – at least in part – illus- the rules of the fund’. trates that retirement funds that have been rejecting divorce Assuming that it might be difficult to identify the relevant orders on the basis that they are not specifically named in retirement fund, particularly when the relevant fund is neither the divorce orders were empowered by legislation to do so. named nor identifiable from the divorce order – as the law However, that argument loses the fact that s 37D(4)(a)(i)(aa) stands – retirement funds will be within their rights to refuse
DE REBUS – October 2019 - 11 - FEATURE – Pension Fund Law
then be ordered to be paid to the non-member spouse in terms of s 7(8) of the Divorce Act. In other words, ‘as ordinary assets’ ‘Divorce practitioners should, however, retirement savings will automatically constitute part of the note that they need to comply with the law joint estate when members are married in community of prop- erty and part of the member’s accrual if the accrual system is as it is currently applied and make applicable to the parties’ marriage. I submit that the legislative adequate provision of the member spouses’ burden created by s 7(8) of the Divorce Act is unnecessary and pension interests in order for the practical hardships that results from its strict application by retirement funds makes it clear that amendments to the retirement funds to pay portions thereof Divorce Act are necessary to repeal this provision. In order to to non-member spouses.’ lessen the burden, the legislature should also amend s 37D(4) (a)(i)(aa) of the PFA to simply read ‘the pension interest should be deducted by the member spouse’s retirement fund’. In other to make payments to non-member spouse. This assumption words, I submit that it should not be a legislative requirement leads to the strict application of s 7(8) of the Divorce Act that that in order to pay there should first be reference to the af- without an order that the retirement fund must pay to the non- fected retirement fund in the divorce order. member spouse a portion of the member spouse’s pension Conclusion interest the affected retirement fund cannot make such pay- ment. This is despite the fact that the non-member spouse is Divorce practitioners should, however, note that they need to entitled to receive that payment (GN v JN at para 25). The issue comply with the law as it is currently applied and make ad- in almost all pension interest related disputes has never been equate provision of the member spouses’ pension interests the fact that the non-member spouse struggled to identify the in order for retirement funds to pay portions thereof to non- relevant fund, but that such a fund was either not named in the member spouses. In other words, practitioners should assist divorce order or incorrectly cited. the court to either name or identify the relevant fund in di- I submit that the legislature must honestly assess how the vorce decrees. I recommend that the following clause to be in- fact that ‘retirement savings’, which are contributed from serted either in the pleadings or settlement agreement, which I member’s salaries and invested on their behalf by their retire- believe will enable the court to exercise its discretion in terms ment funds are not ‘real’ assets is prejudicing non-member of s 7(8) of the Divorce Act: spouses (C Marumoagae ‘An argument for necessary amend- ‘The plaintiff/defendant is a member of ABC pension/provi- ments to the legislative provisions regulating the sharing of dent fund (whichever is applicable). The defendant/plaintiff is retirement savings upon divorce in South Africa’ (2018) 30 SA entitled to be paid 50% of the defendant/plaintiff’s pension Merc LJ 280). Should ‘retirement savings’ be elevated to the sta- interest held by ABC pension/provident fund.’ tus of ordinary assets, there will be no need for them to first be If the name of the relevant retirement fund is unknown, deemed to be assets in terms of s 7(7) of the Divorce Act and rather than incorrectly citing such retirement fund, it is ideal to draft the pension interest clause using known information with a view to identify such a fund. I propose the following: ‘The plaintiff/defendant is employed at Marumoagae Enter- prises and contributes to a retirement fund (a neutral term) which his/her employer participates, which is administered by A/B/C (applicable underwriter). The defendant/plaintiff is entitled to be paid 50% of the plaintiff/defendant’s pension interest held by the retirement fund which plaintiff/defendant is a contributing member.’ Where the practitioner is unsure of the type of fund to which the member spouse belongs, I submit that the phrase ‘retire- ment fund’ should be used. This is a general phrase that ad- equately captures different kinds of funds such as: Pension funds; provident funds; preservation funds; deferred funds and retirement annuity funds.
Clement Marumoagae LLB LLM (Wits) LLM (NWU) Dip Insolvency Practice (UP) is a legal practitioner at Thipa Attorneys and senior lecturer at the University of Wit- watersrand in Johannesburg. Mr Marumoagae is also a council member of the Legal Practice Council. q
Did you know? • In 2016 statistics showed that four in ten divorces, in South Africa, were marriages that lasted less than ten years. • According to a report by Statistics South Africa, men tend to marry younger women. More than 76% of bride- grooms were older than their brides, compared to near- ly 16% who were younger than their brides. Only 8% were the same age as their brides. Men are also more likely to marry women who had never been married be- fore.
DE REBUS – October 2019 - 12 - FEATURE – COMMERCIAL LAW
FICA Picture source: Gallo Images/Getty
Do trust account advocates need a mind shift to deal with FICA?
enerally, legal practition- is the Legal Practice Act 28 of 2014 ers operate within a given (LPA), which came into effect last year. set of specified rules and The LPA brings with it, various changes, procedures. With these, some stemming from its key overriding come certainty. Thus, the objectives. One such objective is to en- preference for legisla- sure transformation, as well as ‘greater Gtion to be captured in writing, as well access’ to the legal profession. Greater as gaps in law to be settled in court, in access refers to those seeking admission judgment form. This obsession of hav- into the legal profession and practise, as ing everything spelled out in writing or well as the accessing of legal services by captured in ‘black and white’, shapes the general public. In relation to the for- and reinforces a certain mind shift in mer (access by prospective legal practi- every legal practitioner. Although, there tioners), and taking into account some of are benefits to it, it is not always the the known barriers to enter the legal pro- case. There are developments underway fession, the LPA seeks to unite attorneys By within the legal field, which are going to and advocates. Provision has now been Nkateko require legal practitioners to tweak or made for advocates with trust accounts, Nkhwashu shift their minds with regard to certain who are allowed to accept instructions things or how they conduct and run their directly from the general public. This practices. is in contrast to the previous regime One such key notable development where advocates could only be engaged
DE REBUS – OCTOBER 2019 - 13 - on a referral basis through the services ual will no longer suffice going forward. guidance or analysis, it did, however, of an attorney. This ‘new’ type of advo- There is no doubt that this is going to be note some of the fundamentals of the cate will have to operate a trust accounts challenging for some legal practitioners. Risk Management and Compliance Pro- on behalf of their client and, as a result Under the previous rules-based system, gramme, which are: will have to be in possession of a Fidelity there were legal practitioners and/or law • governance architecture; Fund Certificate. Additionally, the advo- firms that never really understood their • risk assessments; cate will have to have completed, among obligations under FICA. With the ad- • customer due diligence; others, Practice Management Training. vent of the current amendments, I was • reporting; and Again, as the advocate will be looking engaged by one of the top ten boutique • monitoring, etcetera. after their clients’ funds and operating law firms as to how they could better Due to these developments and other accounts they will have to comply with position themselves in future under the on-going engagements between the Fi- some of the legislative requirements, new framework. From some of the en- nancial Intelligence Centre (FIC) and the which are now within the purview of at- gagements with their FICA Officer, it was legal profession there appears to be a torneys. established that not much attention was consensus among them that the legal Other than complying with the afore- given to their FICA obligations. Some di- profession stands in a unique position mentioned legislative requirements rectors in the firm readily admitted that compared to other accountable institu- these legal practitioners will have to do they knew nothing about FICA matters tions when it comes to, among others, administrative work as well, which was and that all queries had to be directed to discharging their legislative duties and previously never carried out by the tra- the FICA Officer. thus being FICA complaint. This was also ditional advocate. One of the key legis- acknowledged and noted within the FIC lative requirements, which will need to issued Guidance Note 7, which was fol- be complied with, is the Financial Intel- ‘With the advent of the lowed by the FIC’s invitation to the legal ligence Centre Act 38 of 2001 (FICA). In current amendments, I was profession for public consultation in re- terms of FICA, attorneys (or legal prac- lation to the new requirements. A pro- titioners, as they are now called, includ- engaged by one of the top ten posed solution being discussed in this ing advocates with trust accounts) are boutique law firms as to how regard is to issue a separate guidance deemed or called accountable institu- they could better position note in order to assist legal practitioners tions and will have to discharge certain in carrying out their legal duties. I would responsibilities in terms of FICA in order themselves in future under like to submit and caution, however, that to, among others – the new framework. From such a guidance note will not prove to • assist in combating money laundering some of the engagements be a silver-bullet for all compliance chal- and terrorist financing activities by for with their FICA Officer, it lenges. One reason for this is the various example carrying out customer due services offered by legal practitioners, as diligence; was established that not well as the size of their law firms. It is • have internal controls; and much attention was given to also important to note that even under • train staff and others to address vul- their FICA obligations.’ the united profession it is not all legal nerabilities in their systems or firms. services or legal practitioners who will Thus, often at times they are referred fall within the purview of FICA. to as gatekeepers in this regard and held Internationally the legal profession to a high standard. Legal practitioners should move away has been thrown into the spotlight as Previously it was easy for attorneys to from the tick box mentality to one, which being ineffective, as well as aiding crimi- comply. This was largely due to the fact will, among others, require risk manage- nals launder ill-gotten gains. Take the that the provincial law societies and oth- ment skills. Directors of law firms will Paradise and Panama Papers as exam- er relevant stakeholders, traditionally is- no longer have the luxury of hiding be- ples. Recently the G20 has recognised sued what was termed a ‘FICA Manual’. hind their staff or FICA Officers when it this fact and pleaded with the legal pro- This manual discussed each relevant comes to complying. The Amendment fession to play its part in this regard. The provision of FICA, which legal practition- Act makes provision of what is termed International Bar Association and the ers had to comply with. This was largely the Risk Management and Compliance Secretariat of the Organisation for Eco- a tick-box exercise, which arguably and Programme. This programme is very in- nomic Co-operation and Development perfectly suited the mind set of tradi- strumental in successfully implement- has issued an interesting report titled: tional legal practitioners. The Financial ing a risk-based approach system by ac- ‘Report of the Task Force on the Role of Intelligence Centre Amendment Act 1 countable institutions. It also calls for a Lawyers and International Commercial of 2017 (Amendment Act) has signifi- hands-on approach by the directors of Structures’. Partly this report urges self- cantly changed the regulatory landscape a law firm, for instance, in approving regulatory bodies (like the LPC) to take and will require a mind shift by all legal much of its content and relevant poli- their regulatory duties seriously or else practitioners with trust accounts and the cies. In terms of the new requirements run the risk of the government taking Legal Practice Council (LPC), among oth- within the Amendment Act, it is the over. The Financial Action Task Force ers. One of the key reasons for this, is responsibility of directors or top man- (FATF) (under the presidency of Argen- the new regulatory framework envisaged agement to ensure compliance with the tina) took a very important initiative to within the FIC Amendment Act, namely Amendment Act and failure to do so will educate and capacitate prosecutors and the risk-based approach system. result in directors or top management judges in relation to anti-money laun- Under a risk-based approach system being held personally liable. dering and counter terrorist financing threats and vulnerabilities are dealt with After the promulgation of the Amend- efforts. This is an important initiative and addressed based on assessed risks, ment Act the Law Society of South Af- as more often than not, criminals get because the way one legal practitioner or rica recognised the importance of the away with various deeds owning to the firm deals with its own assessed risk/s Risk Management and Compliance Pro- fact that the prosecutor or magistrate in or vulnerabilities will differ from the gramme for legal practitioners and pub- question did not really understand how next. It is for that reason why a ‘one- lished the specific section on their web- to deal with such. Finally, and important size-fits-all’ approach, which used to be site (www.LSSA.org.za). Although this to note for the LPC was the recently is- the norm under the previous FICA Man- did not go into much detail to provide sued FATF ‘Guidance for a Risk-Based
DE REBUS – OCTOBER 2019 - 14 - FEATURE – COMMERCIAL LAW
Approach – Legal Professionals’. I sub- excuse. Their customer due diligence vocates that where the LPC may be leni- mit that as this guide is aimed at appeal- must be up to scratch and where they ent the courts are willing to look at the ing to smaller law firms. It could also cosy up to the political elite they need framework, which comprises of FICA, be instrumental in assisting the LPC to to be cautioned that the full might of the the Prevention of Organised Crime Act come up with its own guide. law reaches even that far. Besides, there 121 of 1998, the Protection of Constitu- are new mandatory requirements for tional Democracy against Terrorist and Conclusion dealing with politically exposed persons. Related Activities Act 33 of 2004, etcet- In short, the message sought to be con- The courts, recently by various judg- era, in order to ensure that those who veyed by this article is that all legal prac- ments or ongoing cases, have shown that are found to be guilty will be held to titioners who fall within the purview of they are not shy to punish those who account. This is especially bad for legal FICA will need a mind shift in order to aid and abet criminals to launder illicit practitioners as they are held to a high meaningfully comply with the new risk- money. For example, the case of John standard. based approach system requirements. Block case (Scholtz and Others v S [2018] The regulator – being the LPC – will 4 All SA 14 (SCA)) or that involving the need to be well-capacitated on the new previous head of the Independent Com- monitoring requirements as they are munications Authority of South Africa. more demanding as opposed to the pre- What is shockingly interesting about vious tick-box regime. Under the previ- the latter case ((Specialised Commercial Nkateko Nkhwashu LLB (Univen) ous regime it seems regulation was lax Crimes Court, Pretoria) (unreported case LLM (UJ) Cert in Legislative Drafting as noted by the FATF. The new breed no 111/86/2012)), which is being taken (UP) Cert in Compliance Manage- of advocates with trust accounts must on appeal is (justifiably or not) the sen- ment (UJ) Cert in Money Laundering also be up to the challenge and comply tence given to the legal practitioner in- Control (UJ) Cert in Policy Develop- meaningfully. They also need to be cau- volved. There are various factors other ment (ProActive College) is an ana- tioned that compliance failures carry than deterring someone when it comes lyst at the Financial Sector Conduct with them dire consequences. Ignorance to sentencing. Be that as it may, let that Authority in Pretoria. q of the law or one’s obligation is not an sound caution to the new breed of ad-
SEEN ON SOCIAL MEDIA
Seen on social media This month, social media users gave their view on the following:
Legal practitioner, Meshack Fhatuwani NADEL held a women’s talk session under Minister of Justice and Correctional Netshithuthuni, discusses the duty to the theme ‘#TIMESUP – Sexual Services, Ronald Lamola, provided legal consult affected and interested parties Harassment in the Legal Profession: It’s advice to members of the public at Legal before awarding mining and prospecting Time for Change.’ Aid South Africa’s Advice Line. rights in this month’s case notes column.
Interesting read. The issue of The things we have to do for our Great work Minister. Looking meaningful consultation and principals while under the pe- forward to seeing more devel- negotiating access to land is riod of clerkship are disgusting opments in the access to jus- always a thorn in the mining really. Candidate attorneys have tice issue especially for those industry. subject themselves to hideous less fortunate. relationships so be able to complete these Phambili. Sibongile Booi, terms or face being fired and as they’re not @BooiMsuthukazi protected under the ‘Act’. Sibongile Booi, @BooiMsuthukazi Senzi, @Senzi23946887 Remembering the Law Society of South Africa’s Communication Manager, Follow De Rebus on LinkedIn and Twitter: Barbara Whittle.
May her soul rest in perfect peace.
Adeboboye Adekunle, De Rebus, The SA Principal Partner at @derebusjournal BathoPele Chambers Attorneys’ Journal q
DE REBUS – OCTOBER 2019 - 15 - Jurisdiction of the Labour Court – the conundrum continues
or agreement and held a meeting with the Bidvest employees. By As a result of the above Bidvest – through its lawyers – de- Sihle manded a written undertaking from the Union by 1 February Mdludla that Union officials should stop entering the premises and cease from holding meetings with its members. On 4 February, the Union’s attorneys wrote to Vodacom’s attorneys advising them that the Union was unable to give the undertaking sought n 4 March, the Labour Court (LC) delivered a semi- by Vodacom, because it would effectively dissociate the Union nal judgment in the matter between Vodacom (Pty) from the workers. Consequently, Vodacom launched an urgent Ltd and Others v National Association of South Af- interdict against the Union and Mr Morolane. rican Workers and Another (LC) (unreported case In this article, I shall not focus on the merits of the case. I no J256/19, 4-3-2019) (Lagrange J). Essentially, the will only deal with the matter of jurisdiction. In the Vodacom Ocourt found that non-employers are entitled to approach the case, Vodacom was not the employer of the Union members. LC for interdictory relief. Bidvest was the employer and the Vodacom premises was the In brief, the facts of the matter relate to the National Associa- site at which Bidvest employees executed their duties. tion of South African Workers members, an unregistered un- Section 157 of the Labour Relations Act 66 of 1995 (LRA) ion, (the Union) who entered the premises of Vodacom to meet provides for the jurisdiction of the LC as follows: and communicate with its members. The members of the Un- ‘(1) Subject to the Constitution and section 173, and except ion were employed by Bidvest Facilities Management (Pty) Ltd where this Act provides otherwise, the Labour Court has ex- (Bidvest) who were contracted by Vodacom to provide cleaning clusive jurisdiction in respect of all matters that elsewhere in and gardening services on Vodacom’s premises. terms of this Act or in terms of any other law are to be deter- Vodacom was unhappy with the meetings and alleged that mined by the Labour Court. the meetings were disruptive. In addition, it was alleged that (2) The Labour Court has concurrent jurisdiction with the Union members were not holding the meetings at the desig- High Court in respect of any alleged or threatened violation of nated areas that had been previously agreed on between the any fundamental right entrenched in Chapter 2 of the Consti- parties. On 25 January Mpho Morolane, the General Secretary tution of the Republic of South Africa,1996, and arising from – of the Union, entered Vodacom’s premises without prior notice (a) employment and from labour relations.’ In considering the above, s 157(1) of the LRA provides that the LC has exclusive jurisdiction over matters that are specifically conferred to it in terms of the LRA or any other legislation. In the case of Gcaba v Minister for Safety and Security and Others 2010 (1) SA 238 (CC) at para 70, the Constitutional Court (CC) interpreted s 157(1) as follows: ‘Section 157(1) confirms that the Labour Court has exclusive jurisdiction over any matter that the LRA prescribes should be determined by it. That includes, amongst other things, reviews of the decisions of the CCMA under section 145.’ From the above, Vodacom could not rely on s 157(1) as it does not empower the LC to adjudicate such matters. Section 157(1) strictly empowers the LC to hear matters that are ex- plicitly assigned within its exclusive jurisdiction in terms of legislation. On the other hand, s 157(2)(a) bestows on the LC concur- rent jurisdiction with the High Court in respect of any alleged or threatened violation of any fundamental right entrenched in ch 2 of the Constitution, which arises from employment and labour relations. Accordingly, for a proper interpretation Picture source: Gallo Images/Getty of the above, the highlighted portions ought to be considered further. Concurrent jurisdiction In the ordinary course, the concept of concurrent jurisdiction can be defined as follows: ‘Overlapping jurisdiction; jurisdiction exercised by more than one court at the same time over the same subject matter and within the same territory, the litigant having the initial discretion of choosing the court that will adjudicate the mat- ter’ (see Bryan A Garner A dictionary of modern legal usage 2ed (Oxford University Press 2011)).
DE REBUS – OCTOBER 2019 - 16 - FEATURE – LABOUR LAW
Insofar as the LC is concerned, the above interpretation can- If the legislature wanted to restrict the interpretation solely to not coexist with the clearly intended objectives of the LRA. In disputes concerning infringement of fundamental rights aris- this regard, the above interpretation culminates in a position ing between employers and their employees, it would surely whereby an applicant would ‘forum shop’ for a court to adjudi- have stated this explicitly, rather than using a phrase which es- cate a matter. In the case of Chirwa v Transnet Ltd and Others sentially describes a context from which the alleged infringe- 2008 (4) SA 367 (CC) at para 124 the CC made the following ment arises.’ observation: It is my view that the court erred in the above interpretation. ‘It could not have been the intention of the legislature to al- Had the court had regard to the definition of ‘employee’ as set low an employee to raise what is essentially a labour dispute out in s 213 of the LRA, it would have been clear that the term under the LRA as a constitutional issue under the provisions should be construed to mean that an employment relationship of s 157(2). To hold otherwise would frustrate the primary ob- must exist. jects of the LRA and permit an astute litigant to bypass the The LRA does not define the concept of labour relations, dispute resolution provisions of the LRA. This would inevitably however, in my view, it encompasses all such matters that give rise to forum shopping simply because it is convenient to arise as a consequence of the establishment of an employment do so or as the applicant alleges, convenient in this case “for relationship. In the Vodacom matter, the judge further makes practical considerations”.’ a finding that employment and labour relations ought to be Considering the above, it is then appropriate to ascertain the read conjunctively. In this regard, the court makes the follow- proper context in terms of which the term ‘concurrent jurisdic- ing finding: tion’ ought to be construed considering the objectives of the ‘The union’s submission is that the terms “employment” and LRA. In determining the objective purpose of particular words “labour relations” are distinct and both criteria must be met. in legislation, the case of Secretary for Inland Revenue v Brey In my view, proper interpretation of the phrase “employment 1980 (1) SA 472 (A) at 478 provides guidance as follows: and labour relations” is that it describes an entire sphere of ‘[T]he meaning of particular words is to be found not so relations embracing both issues of employment and labour much in a strict etymological propriety of language, nor even relations.’ in popular use, as in the subject or occasion on which they are I am of the view that the judge erred in reaching this conclu- used and the object that is intended to be attained.’ sion for the following reasons: Accordingly, the objective meaning of the above phrase may • First, as referred to above, if regard is had to the term ‘em- not lie in its popular everyday use. In the case of Manyathi v ployee’ and its definition as contained in s 213 of the LRA, MEC for Transport, KwaZulu-Natal, and Another 2002 (2) SA it would have been clear that it ought to be read separately 262 (N) the court found that the word concurrent jurisdiction from the term ‘labour relations’. in s 157(2) must be construed to mean ‘jurisdiction equivalent • Secondly, the use of the word ‘and’ clearly, in the context of with’ and that for matters falling within paras (a), (b) and (c) of interpretation, requires that the terms be read as two dis- s 157(2), the LC has exclusive jurisdiction, and the jurisdiction junctive requirements. of the High Court is excluded. Accordingly, I am of the view that the matters focussed on I submit that the above interpretation is correct. This posi- above show that the conclusion of the court that a non-em- tion was further confirmed in the case of Jones and Another ployer may approach the LC to seek relief is misplaced. One v Telkom SA Ltd and Others [2006] 5 BLLR 513 (T) where the would have to watch case development in this regard, includ- court found that s 157(2) does not confer jurisdiction on the ing whether the Union challenges this decision further. High Court that it does not otherwise have. It confers jurisdic- tion on the LC, which it would not otherwise have had. Sihle Mdludla LLB (UNIZULU) is a legal practitioner at Alleged or threatened violation of a fun- Ndzabandzaba Attorneys in Johannesburg. Mr Mdludla damental right acted on behalf of the first and second respondents in the matter. Although the LRA is primarily concerned with giving effect to q s 23 of the Constitution, s 157(2) seems to extend the jurisdic- tion of the LC to that of equal status to the High Court, provid- ed the dispute arises out of employment and labour relations. Put differently, the LC is endowed with the status of the High Court where alleged or threatened violation of a fundamental right is as a result of labour relations. This would follow where, for example, an employee’s right to dignity is threatened in the workplace. The LC would have the same powers as the High Court in adjudicating such a matter. Employment and labour relations According to s 157(2)(a), the LC will have concurrent jurisdic- tion with the High Court provided that the matter arises from employment and labour relations. Section 213 of the LRA de- fines ‘employee’ as follows: ‘(a) any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and (b) any other person who in any manner assists in carry- ing on or conducting the business of an employer, and “em- ployed” and “employment” have meanings corresponding to that of “employee”.’ In interpreting the term ‘employment’, the case of Vodacom the LC found at para 23 as follows: ‘However, the section [s 157(2)(a)] does not specify that the parties to the litigation must be in an employment relationship.
DE REBUS – OCTOBER 2019 - 17 - LAW REPORTS THE LAW REPORTS
August [2019] 3 All South African Law Reports (pp 321 – 672); 2019 (8) Butterworths Constitutional Law Reports (pp 919 – 1047)
By Merilyn This column discusses judgments as and when they are published in the South Rowena African Law Reports, the All South African Law Reports and the South African Kader Criminal Law Reports. Readers should note that some reported judgments may have been overruled or overturned on appeal or have an appeal pending against them: Readers should not rely on a judgment discussed here without checking on that possibility – Editor.
Abbreviations: settlement agreement. The dismissal of duty to ensure that they do not grant or- the application led to the present appeal. ders that are contra bonos mores, or that • CC: Constitutional Court The appellant’s case was that once amount to an abuse of process. A court • GJ: Gauteng Local Division, they had concluded the settlement there cannot act as a mere rubber stamp of the Johannesburg was no longer a lis between the parties. parties. Public funds are being disbursed • GP: Gauteng Division, Pretoria The effect was to deprive the judge of and the interests of the community as • LAC: Labour Appeal Court jurisdiction to adjudicate that non- a whole demand that more scrutiny be • LCC: Land Claims Court existent lis. Her jurisdiction extended involved in the disbursement of such • SCA: Supreme Court of Appeal only to making the order that the parties funds. The appeal was dismissed. asked her to make. Accordingly, when Civil procedure she refused to make the settlement an Consumer law order of court and required evidence to Consumer information with credit bu- Settlement agreement an order of reau: In National Credit Regulator v South- court: Weiner AJA at para 32 held: ‘Our ern African Fraud Prevention Services NPC courts have a duty to ensure that they ‘... courts have a duty to [2019] 3 All SA 378 (SCA), the National do not grant orders that are contra bonos ensure that they do not Credit Regulator (NCR), acting in terms of mores, or that amount to an abuse of grant orders that are s 140(1) of the National Credit Act 34 of process. Section 173 of the Constitution 2005 (the Act), lodged a complaint with specifically empowers the Court to pre- contra bonos mores, or the National Consumer Tribunal (the Tri- vent any such abuses.’ that amount to an abuse of bunal) against the Southern African Fraud In the case of PM v Road Accident Fund process. A court cannot act Prevention Services NPC (SAFPS). [2019] 3 All SA 409 (SCA), a mother sued as a mere rubber stamp of SAFPS, a registered credit bureau, the Road Accident Fund (RAF) on behalf the parties. Public funds are was accused of various contraventions of her minor child, averring that the of provisions of the Act and the regu- child’s father had been killed in a colli- being disbursed and the lations made thereunder. A settlement sion and that the sole cause of the col- interests of the community agreement disposed of all but one of the lision was the negligence of the insured as a whole demand that contraventions. The Tribunal was left to driver, the minor child being deprived of more scrutiny be involved in determine an alleged contravention of maintenance and support. On the date the disbursement of s 70(2)(f) of the Act, read with reg 17. of the trial, the court was requested to The issue was whether SAFPS was re- make a settlement agreement an order such funds.’ taining information for longer than per- of court. The agreement provided that mitted by the Act. The NCR contended the RAF was liable to pay the appellant that the information in question was 100% of her proven or agreed damages. be led on the question whether the in- consumer credit information as defined Not satisfied that the agreement sured driver had been negligent to any in s 70(1) and that it could not be re- should be made an order of court, be- degree, she overstepped the limits of her tained for longer than one year. SAFPS cause there was no indication that the jurisdiction. The majority of the court on said that it was what it described as insured driver was negligent at all, the appeal disagreed. It was held that when ‘fraud information’, which was not regu- court declined to make the agreement an the parties arrive at a settlement, and lated and which it was entitled to keep order of court. The trial proceeded and wish it to be made a consent order, they for the period determined by it, namely was postponed after one witness gave do not withdraw the case, but ask that ten years. The Tribunal upheld the con- evidence. it be resolved in a particular way. The tentions of the NCR that SAFPS had con- The appellant then applied for the jurisdiction of the court to resolve the travened s 70(2)(f). SAFPS successfully abandonment and annulment of the pleaded issues does not terminate when appealed to the High Court. The present part-heard trial, and for a declaration the parties arrive at a settlement of those further appeal related to the issue of the that the lis between the parties had been issues. contravention and the imposition of an fully and finally settled in terms of the The court held that our courts have a administrative fine.
DE REBUS – OCTOBER 2019 - 18 - The court, per Wallis and Schippers tice Directive by the plaintiff’s attorney. JJA, held that an obligation to expunge The files were found to be in a shambol- ‘The court found that consumer credit information arises un- ic state and had not been indexed and Mr Manuel had met the der s 70(2)(f). The obligation to expunge paginated in accordance with the prac- information arises in relation to any tice directions. Costs de bonis propriis requirements for an consumer credit information that is so are awarded against erring attorneys interdict and issued a prescribed. Any information not so pre- only in reasonably serious cases such as declaratory order in favour scribed is not subject to compulsory ex- cases of dishonesty, wilfulness or negli- of Mr Manuel, ordered the pungement. The issue was whether the gence in a serious degree. The plaintiff’s respondents to apologise to fraud information was so prescribed. attorney persistently failed to comply That required a determination of wheth- with Practice Directions 8 and 10, which him, and awarded R 500 000 er fraud information fell within the term required her to index and paginate the damages payable ‘adverse classification of consumer be- court files as prescribed, and file the by the respondents.’ haviour’ – in which case it had to be ex- requisite practice note from the time of punged after one year. The court could her appointment, and that she continued not find that fraud information fell not to comply thereafter, notwithstand- candidates (Mr Kieswetter) because he within the relevant category and it was, ing a direction from the court to make had previously worked at Sars, while Mr therefore, not subject to the time limit. amends. A court direction is tantamount Manuel was the Minister of Finance. Mr Confirming that there was no obliga- to a court order and failure to comply is Kieswetter was duly appointed by the tion on SAFPS to expunge the fraud in- not only disrespectful to the court and President as the Commissioner of Sars, formation in its possession, the court other parties but can be contemptuous. as being the most suitable and preferred dismissed the appeal. The cumulative effect of the plaintiff’s candidate. attorney failure to comply on multiple The Economic Freedom Fighters, a occasions, notwithstanding various ad- Costs political party, published a tweet on its monishments by the court, was a fla- Costs de bonis propriis: In Ebenhaeser official Twitter account, criticising the grant disregard for the rules, practice Communal Property Association and interview process and referring to nepo- directions and further directions of the Others v Minister of Department of Rural tism and corruption. Mr Manuel sought court. That ultimately constituted the Development and Land Reform and Oth- final interdictory relief against the re- sole cause for the trial being adjourned. ers [2019] 3 All SA 530 (LCC) the claim, spondents relating to the publication of The conduct of the plaintiff’s attorney, by agreement, was to be heard over a the alleged defamatory statement. The substantially and materially, deviated three-week period. The LCC mero motu court found that Mr Manuel had met the from the standard expected of legal raised the question of costs de bonis pro- requirements for an interdict and issued practitioners, was irresponsible, grossly priis at a pre-trial conference and gave a declaratory order in favour of Mr Ma- negligent and displayed lack of care. The notice to both the plaintiff’s attorney nuel, ordered the respondents to apolo- circumstances of this case warranted pu- and the State Attorney to show cause gise to him, and awarded R 500 000 nitive costs to be paid de bonis propriis why costs de bonis propriis should not damages payable by the respondents. by plaintiff’s attorney on an attorney be awarded against them. The third to On application for leave to appeal, and client scale so that the landowner the 26th defendants (the landowner the court referred to s 17(1)(a) of the defendants would not be out of pocket. defendants) claimed such costs against Superior Courts Act 10 of 2013, which plaintiff’s attorney on the basis that her provides that a judge may only grant non-compliance, inter alia, with the Prac- Delict leave to appeal if they are of the opinion tice Directions and her failure to get the Defamation: The facts in Manuel v Eco- that the appeal would have a reasonable files properly indexed, paginated and nomic Freedom Fighters and Others prospect of success. The court rejected ready for trial, was the cause of the trial (judgment and appeal) [2019] 3 All SA the applicants’ claim that the respond- not proceeding. 584 (GJ) were as follows: In the wake of ent was obliged to specify the defama- It was held that the procedure in r 38 the removal of the former Commission- tory portions of the statement. It was of the Land Claims Court Rules is to be er of the Revenue Services (Sars), a new confirmed that the defamatory meaning followed once a claim for restitution of Commissioner had to be appointed. The was explicit, and that there was no need rights in land is referred to the court. President of South Africa appointed a to have them pointed out. The applicants The court detailed a litany of instances panel, headed by Trevor Manuel to short- had accused the respondent of corrup- of non-compliance with its request for list interviewees. Mr Manuel recused tion and nepotism, and the likelihood of compliance with the rules and the Prac- himself from the interview of one of the serious harm to reputation was plain.
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• 484_19 Spring Sale 175 w x 57 h mm DeRebus quart pg FA.indd 1 2019/08/29 12:20 DE REBUS – OCTOBER 2019 - 19 - LAW REPORTS
All the grounds of appeal were dis- of the Uniform Rules of Court were re- missed as lacking in merit and the court ferred for hearing before the Full Court ‘The court held that confirmed the reasonableness of the as a result of two conflicting judgments quantum awarded as damages. in the division. The parties were found the government had not to have departed from delivering a state- shown why it was Environment ment in the nature of a declaration and a necessary that spouses reply in the nature of plea, having regard Waste disposal site: Navsa ADP at para 1 and children of South to r 43(2) and (3). The referral to the Full held: ‘This case demonstrates how, if liti- African citizens or Court was intended to address the ques- gating parties misconceive their rights tion of whether the court has a discretion permanent residents and misidentify the main issue for adju- to permit the filing of applications that must leave the RSA to dication, the decision by the court before have departed from the strict provisions apply for a change of which it is presented, inevitably, will be of r 43(2) and (3). If such discretion did flawed.’ visitor’s visa status. ’ exist, the question was whether the Prac- The appeal in Gauteng Department of tice Manual should direct that all r 43 Agriculture and Rural Development and applications conform to a specific form, Others v Interwaste (Pty) Ltd and Others dutu and Others v Minister of Home Af- particularly regarding length. Finally, if [2019] 3 All SA 344 (SCA) concerned the fairs and Others 2019 (8) BCLR 938 (CC) the court had a discretion, the factors validity of a compliance notice issued by challenged the constitutionality of reg necessary for the reasonable exercise of an environmental management inspec- 9(9)(a) of the Immigration Regulations the discretion had to be identified. The tor, under s 31L of the National Environ- made in terms of the Immigration Act applicants sought relief pendente lite for mental Management Act 107 of 1998. The 13 of 2002 (the Act). The applicants ap- interim maintenance, custody and con- High Court at the instance of Interwaste plied for a change in status attached to a tribution to costs pending the finalisa- reviewed and set aside the decision of an visitor’s visa. Section 10(6)(b) of the Act tion of their divorce actions. environmental management inspector provides that such application shall not It was held that r 43 as it presently employed by the Gauteng Department be made by the visa holder while in the reads provides an interim remedy to as- of Agriculture and Rural Development Republic of South Africa (RSA), except in sist an applicant to obtain – (GDARD), to issue the compliance notice. prescribed exceptional circumstances. relief speedily and expeditiously in That led to the present appeal. • The applicants challenged the regulation respect of interim care, residency and Interwaste operated a waste disposal on the basis that the rights accorded by contact with the child/children; site in Gauteng, pursuant to a waste means of the ‘exceptional circumstanc- management licence issued in terms of • maintenance for a spouse and/or es’ contemplated in s 10(6)(b) were not the Act. The licence was to be renewed child/children; extended to a foreign spouse or child of within a period of four years from date • enforcement of specified necessary a citizen or permanent resident. Appli- of issue, but was not. In the interven- payments; and cants applied directly to the CC after the ing period, the GDARD amended the li- • contribution towards legal costs of the High Court dismissed their application. cence, mainly increasing the total daily divorce action. The majority (Mhlantla J with Camer- and annual tonnage of waste that the The procedure envisaged in r 43 is on, Jafta, Khampepe, Madlanga, Theron site was entitled to receive. Interwaste, not that of a normal application com- JJ and Nicholls AJ concurring) held that in opposing the compliance notice, first menced by way of notice of motion. It is the impugned provision was unconstitu- of all denied that there was a four-year a succinct application, aimed at provid- tional. The CC observed that the right to renewal period stipulated and submitted ing the applicant interim relief, speedily dignity is extended to include the right that even if it was stipulated, an amend- and expeditiously. In all three applica- to family life and referred to Dawood v ment to the licence meant that the four- tions, one or two respondents applied Minister of Home Affairs; Shalabi v Min- year renewal period ran from that date, for the dismissal of the application or ister of Home Affairs; Thomas v Minister and not from the date of first issue of for a punitive costs order on the basis of Home Affairs 2000 (8) BCLR 837 (CC). the licence. In its view, the licence was of prolixity and failure to comply with The court held that the government had still valid at the time of the issuing of the the strict provisions of r 43(2) and (3). not shown why it was necessary that compliance notice. The question to be answered related to spouses and children of South African The court held that in terms of the the interpretation of r 43, which would citizens or permanent residents must compliance notice showed confusion as ensure a speedy and efficient resolution leave the RSA to apply for a change of to its purpose. The period for renewal of the application, while at the same time visitor’s visa status. An order was made had passed. Compliance could thus not protecting the rights of women and chil- declaring reg 9(9)(a) of the Immigration be enforced. In the circumstances set dren vulnerable in r 43 applications. The Regulations to be inconsistent with the out above, the compliance notice was court decided that the best solution was Constitution and, therefore, invalid to superfluous. It served no practical pur- for the judge allocated to such a mat- the extent that the rights accorded by pose. Instead, the validity of the licence ter to issue a directive to the parties in means of the exceptional circumstances terminated because of the effluxion of terms of r 43(5) calling on the parties to contemplated in s 10(6)(b) of the Act are time. The High Court ought not to have file a supplementary affidavit making a not extended to the foreign spouse or granted Interwaste any relief at all and full and frank disclosure of their finan- child of a South African citizen or per- ought to have concluded that there was cial and other relevant circumstances to manent resident. The declaration of in- no purpose or profit to be gained in deal- the court and to the other party. The affi- validity was suspended for 24 months ing with the question of the propriety of davits in question must be accompanied and during this period, the following the compliance notices. The appeal was by a financial disclosure form. Finally, words are to be read into reg 9(9)(a) of upheld. affidavits filed in terms of r 43(2) and (3) the Immigration Regulations: ‘(iii) is the shall only contain material or averments spouse or child of a South African citi- Family law relevant to the issues for consideration. zen or permanent resident’. Rule 43 applications: In E v E and relat- ed matters [2019] 3 All SA 519 (GJ) three Immigration Legal practice applications brought in terms of r 43(1) Visitor’s visa status: The case of Nan- Removal from the roll: In General Coun-
DE REBUS – OCTOBER 2019 - 20 - cil of the Bar of South Africa v Jiba and sought to have the respondents’ names costs order, however, the CC had juris- Others 2019 (8) BCLR 919 (CC) the case removed from the roll of advocates on diction. An application by the GCB aimed concerned a High Court application by the grounds that they were no longer fit at removing an advocate from the roll of the General Council of the Bar of South and proper persons to continue to prac- advocates for misconduct is not in the Africa (the GCB) for the removal of Ms tise as advocates. Reliance was placed nature of ordinary civil proceedings. In Jiba, Mr Mrwebi and Mr Mzinyathi, who on the making of false statements under such proceedings the GCB is not in the were senior officials in the National Pros- oath, the suppressing of information to position of an ordinary litigant; it is per- ecuting Authority, from the roll of advo- mislead the court and the abuse of pow- forming a public duty aimed at enabling cates due to misconduct. ers of the office they held. This did not the court to exercise its disciplinary The High Court found that Ms Jiba and raise any constitutional issue, nor was powers. An order of costs against such Mr Mrwebi were not fit and proper per- there an arguable point of law, so the ap- a body should not be made except in sons to continue to practice and ordered peal could not be entertained. circumstances where the body has con- that their names be struck from the roll Regarding the dismissal by the SCA ducted itself in a manner unacceptable of advocates. Costs were awarded in fa- of GCB’s cross-appeal in respect of the to the court before which proceedings vour of Mr Mzinyathi against the GCB. were brought. Ms Jiba and Mr Mrwebi appealed to the • See law reports ‘advocates’ 2017 (Jan/ SCA. By a majority (Shongwe ADP with Feb) DR 40 for the GP judgment and Seriti and Mocumie JJA concurring) the ‘An application by the ‘advocates’ 2018 (Dec) DR 26 for the SCA upheld the appeal of first and sec- GCB aimed at removing an SCA judgment. ond respondents and dismissed the advocate from the roll of • See also Kgomotso Ramotsho ‘The in- GCB’s cross-appeal. The minority (Leach advocates for misconduct is terpretation and application of s 7 of and Van der Merwe JJA) would have dis- the Admission of Advocates Act does missed the appeals of Ms Jiba and Mr not in the nature of ordinary not itself alone raise a constitutional Mrwebi and upheld the cross-appeal of civil proceedings. In such issue’ 2019 (Sept) DR 26. the GCB in relation to the costs order proceedings the GCB is not granted to Mr Mzinyathi. in the position of an Property The GCB approached the CC. The CC ordinary litigant; it is Labour tenants: In the case of Kubheka v in a unanimous judgment, per Jafta J, Adendorf and Others [2019] 3 All SA 566 observed that jurisdiction is determined performing a public duty (LCC), the plaintiff, a pensioner residing on the basis of the pleadings and not the aimed at enabling the on a farm owned by the first defendant, substantive merits. It must be clear from court to exercise its sought a declaratory order to the effect the claim advanced that a constitutional disciplinary powers.’ that he was a labour tenant, as well as issue or an arguable point of law of gen- an award of land in terms of s 16 of the eral public importance is raised. The GCB Land Reform (Labour Tenants) Act 3 of
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DE REBUS – OCTOBER 2019 - 21 - LAW REPORTS
1996 (the Act). Section 1 of the Act de- ous approach to the definition of labour • division of joint estate; fines a labour tenant as – tenant. The plaintiff provided labour to • inter vivos trust; • a person who is residing or has the the other owners and lessees of the farm • litigation test in shipping; right to reside on a farm; for a cumulative period of 18 years. On • obligations of political parties under • who has or has had the right to use a holistic and continuous interpretation the Electoral Code of Conduct; cropping or grazing land on the farm of the labour tenant definition, that con- • r 43 order – application for rescission; in exchange for providing labour to stituted compliance with para (b). The • refurbishment of terminal at port; the owner or lessee; and evidence further established that the • Road Accident Fund passenger claim; • whose parent or grandparent resided plaintiff complied with the third part of • s 13(1)(g) of the Sectional Titles or resides on a farm and had the use the definition as his parents lived on the Schemes Management Act; of cropping or grazing land on such farm, had cropping and grazing rights • security arrest made in terms of s 5(3) farm or another farm of the owner in on the farm and provided labour to the of the Admiralty Jurisdiction Regula- exchange for providing labour to the owner. Furthermore, it was not proven tion Act; owner or lessee. that the plaintiff was a farm worker. • summary judgment existence of bona The plaintiff bore the onus of proving In terms of s 16 of the Act, a labour fide defence; that he was a labour tenant. In terms of tenant may apply before the cut-off date • taxation of decision by taxing mis- s 2(5) of the Act, once a plaintiff proves for the award of land, which he was enti- tress; and that he complies with the definition of a tled to occupy in terms of s 3. The court • termination of lease agreement. labour tenant, then the onus shifts to the was satisfied that the plaintiff had made defendant to prove that the plaintiff is a a valid application for the award of land farmworker. and was thus entitled to the award of the To view more cases reported in land he was using and occupying as at 2 The plaintiff had resided on the farm LexisNexis law reports, please visit June 1995. since 1975 with cropping and grazing www.lexisnexis.co.za and for rights, providing labour to successive assistance or feedback on the law owners of the farm. However, it was ar- Other cases reports e-mail LexisNexis gued that from 1986 to 1995, the plain- Apart from the cases and material dealt at: [email protected] tiff worked for a person who was neither with or referred to above, the material the owner nor the lessee of the farm, under review also contained cases deal- he did not comply with para (b) of the ing with – definition during that period and was, • cancellation of agreement due to Merilyn Rowena Kader LLB (Unisa) therefore, not a labour tenant. The main breach; is a Legal Editor at LexisNexis in problem with that argument was that it • claim for damages – unlawful arrest Durban. failed to adopt a holistic and continu- and detention; q
DE REBUS – OCTOBER 2019 - 22 - CASE NOTE – LABOUR LAW Individual employees cannot rely on s 187(1)(c) of the LRA to claim that their dismissals By Nadia are automatically unfair Froneman
Jacobson v Vitalab (LC) (unreported case no JS 1042/19, 28-5-219) (Van Niekerk J)
an Niekerk J recently held proposed agreement to Jacobson in respect of any matter of mutual inter- that s 187(1)(c) of the Labour terms of which – est between them and their employer’ Relations Act 66 of 1995 he would agree to retire from active (my italics). (LRA), which provides that practice and resign as an employee of • The purpose of the amendment – ac- a dismissal is automatically Vitalab; cording to the Explanatory Memoran- Vunfair if the reason is ‘a refusal by em- • he would sell his shares in Vitalab for dum that accompanied the Amend- ployees to accept a demand in respect of a stipulated price; and ment Bill – was to ‘protect the integrity any matter of mutual interest between • Vitalab would reemploy him until 31 of the process of collective bargaining them and their employer’, cannot be re- May 2019 at a stipulated nett salary. under the LRA’. That process, by defi- lied on by individual employees. • Jacobson refused the offer. nition, contemplates combined action On 26 July 2018, Jacobson was ad- and participation by more than one Facts vised that unless he signed the agree- employee. Jacobson (the applicant) was a found- ment by 30 July 2018, his services would • The new section’s wording refers to ing director and shareholder of Vitalab be terminated. Jacobson did not accept more than one employee. This dem- (the respondent), as well as an employ- the offer and Vitalab terminated his ser- onstrates that the prohibition only ee thereof. He was also, a director and vices on 1 August 2018, with effect from applies when employers seek to force shareholder of a property-owning com- 31 August 2018. employees (plural) to extract a conces- pany, Strawberry Bush, the owner of the Jacobson argued that his dismissal sion by employees to demands made premises in which Vitalab is situated. was automatically unfair in that the main in the collective context. During 2016, the directors and share- cause of his dismissal was his refusal to As such, the s 187(1)(cc) only applies holders of Vitalab implemented a retire- accept a demand in respect of a matter where – ment age of 70 years. Jacobson sought of mutual interest between himself and • an employer makes a demand; to continue working until the age of 75 Vitalab. • more than one employee is involved; – subject to his good health. To effect • the employees refuse to accept the de- this wish, the parties agreed to conclude Court findings mand made; and various fixed term contracts of employ- The court had to determine whether • as a result, they are dismissed. ment, the first of which, would be ter- s 187(1)(c) of the LRA finds any applica- In the circumstances, the court held minated on 30 June 2018. During 2017, tion in a dismissal dispute concerning that the dispute before it did not fall Jacobson resigned as a director of Vi- an individual employee. The court found within the realm of s 187(1)(c) of the talab and Strawberry Bush but remained that it did not because of the following: LRA. a shareholder. A dispute arose regarding • Before 2014, the section provided that This judgment is important given that the value of Jacobson’s shares in Straw- it was automatically unfair to dismiss a number of individual employees legiti- berry Bush. an employee if the reason for the dis- mately relied on the pre-amendment ver- In May 2018 Vitalab offered Jacobson missal was to compel the employee to sion of the section. This is no longer pos- another agreement, which suggested a accept a demand in respect of a matter sible since the advent of the new section settlement of the dispute regarding his of mutual interest between employer and this recent judgment. shareholdings in Vitalab and Strawberry and employee. Bush. Jacobson did not accept the offer • In 2014 the section was amended to Nadia Froneman BSocSci LLB (Rhodes) and, instead, continued working at Vi- provide that a dismissal is automati- is a legal practitioner at Eversheds talab on the same terms. cally unfair if the reason is ‘a refusal Sutherland in Johannesburg. q On 9 July 2018 Vitalab sent a second by employees to accept a demand in
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DE REBUS – OCTOBER 2019 - 23 - NEW LEGISLATION New legislation Legislation published from 2 – 31 August 2019
Levies on medical schemes. GenN418 the National Energy Regulator Act GG42622/8-8-2019. 40 of 2004 for comment. GN1083 Council for the Built Environment Act GG42650/19-8-2019. Philip Stoop BCom LLM (UP) LLD 43 of 2000 • Non-detriment findings for black rhi- (Unisa) is an associate professor in the Scope of work for categories of registra- noceros in terms of the National Envi- tion of Quantity Surveying Profession. ronmental Management: Biodiversity department of mercantile law at Unisa. GN1025 GG42608/2-8-2019. Act 10 of 2004 for comment. GN1104 Immigration Act 13 of 2002 GG42660/22-8-2019. • Non-detriment findings for white rhi- Bills Determination of places of detention of illegal foreigners pending deportation. noceros in terms of the National Envi- National Health Insurance Bill B11 of GN1046 GG42622/8-8-2019. ronmental Management: Biodiversity 2019. Labour Relations Amendment Act 8 of Act 10 of 2004 for comment. GN1105 GG42660/22-8-2019. 2018 Commencement of Acts • Non-detriment findings for aloe ferox List of commissioners to be considered (bitter aloe) in terms of the National Financial Sector Regulation Act 9 of for facilitation of disputes before the La- Environmental Management: Biodi- 2017. Amendment and correction of bour and Business Advisory Arbitration versity Act 10 of 2004 for comment. commencement: See notice for various Panel. GN R1035 GG42614/2-8-2019. GN1106 GG42660/22-8-2019. amended dates. GN1130 GG42677/30-8- Bargaining councils and statutory coun- 2019 (also available in Sesotho). • Proposed amendment of regulations cils accredited by the Commission of for the Accounting Standards Board Promulgation of Acts Conciliation, Mediation and Arbitration in terms of the Public Finance Man- for conciliation and/or arbitration and/ Administrative Adjudication of Road agement Act 1 of 1999 for comment. or inquiry by arbitrator from 1 August GenN438 GG42657/23-8-2019. Traffic Offences Amendment Act 4 of 2019 to 31 August 2021. GenN455 • Draft general discharge authorisation 2019. Commencement: To be proclaimed GG42669/30-8-2019. in terms of s 69(2) of the National En- GN1080 GG42648/19-8-2019 (also avail- Legal Aid South Africa Act 39 of 2014 vironmental Management: Integrated able in Afrikaans). Amendment of the Legal Aid Manual. GN Coastal Management Act 24 of 2008 Protection, Promotion, Development R1108 GG42663/27-8-2019 (also avail- for comment. GN1089 GG42657/23- and Management of Indigenous Knowl- able in Afrikaans). 8-2019. edge Act 6 of 2019. Commencement: To Marine Living Resources Act 18 of 1998 • Revised programme accreditation be proclaimed. GN1082 GG42647/19-8- Abolishment of the Fisheries Transfor- policy in terms of the Project and 2019 (also available in Tshivenda). mation Council. GN1021 GG42608/2-8- Construction Management Profes- National Credit Amendment Act 7 2019. sions Act 48 of 2000 for comment. of 2019. Commencement: To be pro- Public Finance Management Act 1 of BN157 GG 2676/30-8-2019. claimed. GN1086 GG42653/19-8-2019 1999 • Repeal of regulations relating to in- (also available in isiZulu). Statement of revenue, expenditure and spection of premises in a dust control National Qualifications Framework borrowings as at 31 July 2019. GenN461 area in terms of the National Environ- Amendment Act 12 of 2019. Com- GG42671/30-8-2019. mental Management: Air Quality Act mencement: To be proclaimed. GN1078 Public Service Act 103 of 1994 39 of 2004 for comment. GN1115 GG42646/19-8-2019 (also available in Amendment of sch 2: Limpopo and North GG42669/30-8-2019. Repeal of the smoke control regula- isiZulu). West Provinces. Proc 50 GG42669/30-8- • tions and smoke control zone orders Appropriation Act 24 of 2019. Com- 2019 (also available in Afrikaans). in terms of the National Environ- mencement: 12 August 2019. GN1061 Recognition of Customary Marriages mental Management: Air Quality Act GG42632/12-8-2019 (also available in Act 120 of 1998 39 of 2004 for comment. GN1114 Setswana). Period for registration of customary GG42669/30-8-2019. Selected list of delegated marriages: Extended to 30 June 2024. • Proposed regulations relating to GN1045 GG42622/8-8-2019. coffee, chicory and tea and related legislation products for sale in South African Basic Conditions of Employment Act 75 Draft delegated legislation in terms of the Agricultural Product of 1997 • Proposed amendments to regulations Standards Act 119 of 1990 for com- Amendment of sectoral determination 9: in terms of the Banks Act 94 of 1990 ment. GN1112 GG42669/30-8-2019. Wholesale and retail sector, South Africa. for comment. GenN425 GG42634/14- • Repeal of regulations regarding fuel GN R1036 GG42615/2-8-2019. 8-2019 and GenN433 GG42642/16-8- burning appliances in dwelling hous- Constitution of the Republic of South 2019. es in terms of the National Environ- Africa, 1996 • Proposed amendment of the regu- mental Management: Air Quality Act: Transfer of administration, powers and lations under s 17 of the Develop- 39 of 2004 for comment. GN1113 functions entrusted by legislation to cer- ment Bank of Southern Africa Act GG42669/30-8-2019. tain cabinet members into s 97. Proc 49 13 of 1997 for comment. GenN428 GG42657/23-8-2019 (also available in GG42636/16-8-2019 and GenN439 Draft Bills isiZulu). GG42657/23-8-2019. Housing Consumer Protection Bill, 2019 Council for Medical Schemes Levies • Draft NERSA rules for licensable dis- for comment. GN1118 GG42669/30-8- Act 58 of 2000 tribution areas of supply in terms of 2019. q
DE REBUS – OCTOBER 2019 - 24 - EMPLOYMENT LAW – LABOUR LAW Employment law update
dispute, NUMSA served a notice of inten- than its black workers and had accused tion to strike on Comair. Comair of being a ‘racist company’, la- Nadine Mather BA LLB (cum laude) (Rho- Comair approached the Labour Court belling the pay discrepancies as ‘modern des) is a legal practitioner at Bowmans in (LC) on an urgent basis seeking an order day Apartheid’. Johannesburg. declaring the strike action by NUMSA un- An assessment of NUMSA’s case protected and further interdicting them showed that it demanded that employ- Striking in support of a from participating in such strike action. ees who perform the same work in the Comair contended that the strike action bargaining unit should receive the same demand for equal pay was unprotected for three reasons: pay. Although the difference in pay was In Comair Ltd v National Union of Met- • The true nature of the dispute was no longer alleged to be based on race alworkers of South Africa and Others that of an equal pay dispute, which is or ethnicity, what NUMSA asserted was [2019] 8 BLLR 812 (LC), Comair had es- to be resolved by way of adjudication that there was no substantively good tablished an Employment Equity Forum or arbitration in terms of the provi- reason or justification for the difference. (the EEF) in accordance with the provi- sions of the EEA. Accordingly, the court held that the es- sions of the Employment Equity Act 55 • The dispute was regulated by the wage sence of the dispute was equal pay for of 1998 (the EEA) to deal with, inter alia, agreement entered into between the equal work. A demand for equal pay for equal issues relating to allegations of discrimi- parties. work falls squarely within the scope of nation in the workplace. The National • In the absence of a secret ballot, NUM- s 6(4) of the EEA and has to be referred Union of Metalworkers of South Africa SA’s members could not engage in to the LC for adjudication or, by consent, (NUMSA) raised an equal pay grievance strike action. to the CCMA for arbitration. As NUMSA with the EEF, claiming pay differentiation NUMSA claimed in turn that, pursuant was no longer alleging that the discrimi- on the basis of race or ethnicity. NUMSA to Comair disclosing its pay information, nation was based on the grounds of race demanded that Comair eliminate the al- it was satisfied that the pay differences or ethnicity, the court found it must, were not in fact based on race or ethnic- leged unfair discrimination and referred therefore, be alleging discrimination ity and accordingly, the dispute did not a dispute to the Commission for Concili- on an ‘arbitrary ground’. That being so, ation, Mediation and Arbitration (CCMA). fall within the scope of the EEA. The dis- NUMSA would have to prove that the pay At the CCMA, the parties reached an pute was rather a matter of mutual inter- differentiation was based on an arbitrary agreement that the matter would be est relating to the terms and conditions ground before the LC or the CCMA in dealt with by an internal working com- of employment. Moreover, the wage terms of s 10 of the EEA. mittee. At the first meeting of the work- agreement between the parties did not Since the dispute giving rise to the ing committee, Comair tabled several regulate the issue of pay differentiation. strike could be resolved by way of ad- proposals to deal with the pay differ- The LC held that the starting point was judication or arbitration, the strike was entiation dispute, but NUMSA rejected to determine the true nature of the dis- precluded by s 65(1)(c) of the Labour the proposals and demanded that the pute from all the relevant facts. In these Relations Act 66 of 1995, which section wages of the majority of the employees circumstances, the court must have re- provides that no person may take part be increased to those of the highest paid gard to the substance and not the form in a strike if the issue in dispute is one employees. The parties in the meantime of the dispute and the court is not bound that a party may refer to arbitration or entered into a two-year wage agreement. by the CCMA’s characterisation of a dis- to the LC. Notwithstanding this, NUMSA again re- pute. Having regard to the history of the The strike action was declared unpro- ferred a pay differentiation dispute, as a matter, the court noted that NUMSA had tected and NUMSA was interdicted from dispute of mutual interest, to the CCMA. publicly declared that the majority of participating in strike action over the After an unsuccessful conciliation of the Comair’s white workers were paid more demand.
DE REBUS – OCTOBER 2019 - 25 - EMPLOYMENT LAW – LABOUR LAW
Non-payment of a darity, on the other hand, argued that view that Solidarity’s argument on the the deduction ought not to have been applicability of s 34 of the BCEA was retention bonus made because Gijima Holdings had uni- misplaced and unsustainable. A deduc- In Solidarity obo Scholtz v Gijima Hold- laterally terminated the ELIS agreement tion in terms of s 34 is made to reim- ings (Pty) Ltd [2019] 8 BLLR 774 (LAC), and Scholtz was consequently no longer burse an employer for loss or damage in Mr Scholtz (Scholtz), employed by Gijima bound by its terms. circumstances set out in s 34(2) and was Holdings as a programmer, concluded The LC held that Gijima Holdings was not applicable in Scholtz’s case. an Employee Loyalty Incentive Scheme entitled to deduct the retention bonus The purpose of the ELIS agreement agreement (ELIS agreement) with Gijima because it had complied with the terms was to encourage employees to remain Holdings. In terms of the ELIS agree- of the ELIS agreement and that the de- in service for the period covered by the ment, Scholtz would be paid a retention duction did not breach s 34 of the Ba- retention bonus. The LAC found that the bonus equal to 50% of his annual salary sic Conditions of Employment Act 75 retention bonus created reciprocal obli- in September of each year and would be of 1997 (the BCEA) because it had been gations: Scholtz was not entitled to claim required to remain in the employ of Gi- made by agreement. payment of the bonus unless he had per- jima Holdings for a period of 12 months Aggrieved by the outcome, Solidarity formed by working for Gijima Holdings in respect of each retention bonus al- took the LC’s decision on appeal and for a period of 12 months after receipt ready paid. contended that the LC erred in hold- of the bonus. The provisions of the ELIS Gijima Holdings later notified Scholtz ing that the deduction was based on agreement made it clear that employees of its intention to terminate the ELIS an agreement because the ELIS agree- were to repay the whole of the bonus if agreement. Scholtz, dissatisfied with ment had been unilaterally terminated they terminated their services before the Gijima Holding’s decision, received his by Gijima Holdings. It also argued that expiry of the retention period. Scholtz final retention bonus in September 2014 assuming that Gijima Holdings was en- had failed to produce evidence to prove and, thereafter, tendered his resignation titled to make the deduction, it could his claim that Gijima Holdings had com- with effect from November 2014. Gijima not have deducted more than a quarter promised its right to claim counter-per- Holdings deducted the retention bonus of Scholtz’s remuneration as this is pre- formance from him by terminating the from Scholtz’s termination payments. cluded in terms of s 34(2)(d) of the BCEA. ELIS agreement. Solidarity, acting on behalf of Scholtz, The key issue on appeal was whether The LAC held that Scholtz had acted in instituted proceedings in the Labour Gijima Holdings was entitled to deduct bad faith by accepting the retention bo- Court (LC) claiming payment of the re- the retention bonus from Scholtz’s ter- nus and resigning a month later. Scholtz tention bonus. Gijima Holdings opposed mination payments following his resig- ought to have appreciated that the con- the proceedings and argued that it was nation. The Labour Appeal Court (LAC) sequence of accepting the retention bo- entitled to effect the deduction in terms noted that it had not been part of Soli- nus meant that he was obliged to remain of the provisions of the ELIS agreement darity’s pleaded case that the deduction in the employ of Gijima Holdings for a as Scholtz was bound to remain in its em- of the bonus was impermissible in terms further 12-month period. ploy for a period of 12 months following of s 34 of the BCEA, as Solidarity con- The appeal was dismissed with costs. the payment of the retention bonus. Soli- tended on appeal. The court was of the q
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DE REBUS – OCTOBER 2019 - 26 - RECENT ARTICLES AND RESEARCH Recent articles and research By Kathleen Kriel
Please note that the below abbreviations are to be found in italics at the end of the title of articles and are there to give reference to the title of the journal the article is published in. To access the article, please contact the publisher directly. Where articles are available on an open access platform, articles will be hyperlinked on the De Rebus website at www.derebus.org.za
Abbreviation Title Publisher Volume/issue Advocate Advocate General Council of the Bar (2019) 32.2 August
ADRY African Disability Rights Yearbook Pretoria University Law Press (PULP) (2018) 6 AHRLJ African Human Rights Law Journal Centre for Human Rights, Department (2019) 19.1 of Law, University of Pretoria EL Employment Law Journal LexisNexis (2019)35.4 ITJ Insurance and Tax Journal LexisNexis (2019) 34.2 JCLA Journal of Comparative Law in Africa Juta (2019) 6.1 Obiter Obiter Nelson Mandela University (2019) 40.1 PER Potchefstroom Electronic Law Journal North West University, Faculty of Law (2019) 22 PW Pensions World LexisNexis (2019) 22.2
SAJBL South African Journal of Bioethics Health and Medical Publishing Group (2019) 12.1 and Law SAJHR South African Journal on Human Taylor & Francis (2018) 35.2 Rights TPCP Tax Planning Corporate and Personal LexisNexis (2019) 33.4 THRHR Tydskrif vir Hedendaagse Romeinse- LexisNexis (2019) 82.3 Hollandse Reg TSAR Tydskrif vir die Suid-Afrikaanse Reg Juta (2019) 3
Administrative law of South African biomedical research Public Broadcasting Coalition v South ethics committee members on their own African Broadcasting Corporation SOC De Villiers, B ‘The duty on organs of ethics review outcomes’ (2019) 12.1 SA- Limited (81056/14) [2017] ZAGPJHC 289’ state to cooperate: Bundestreue, coop- JBL 8. (2019) 40.1 Obiter 147. erative government and the supply of Van Niekerk, AA ‘Is “decolonisation” a Madlela, V ‘The unqualified right of ac- electricity in a culture of non-payment’ legitimate and appropriate value in bio- cess to company records by non-holders (2019) 3 TSAR 605. medical research and teaching?’ (2019) of the company’s securities under South Alternative dispute 12.1 SAJBL 4. African company law – Nova Property Group Holdings Ltd v Cobbett (M and G resolution – arbitration Civil procedure Centre for Investigative Journalism NPC Snyckers SC, F ‘A haven for the stout- as amicus curiae) 2016 (4) SA 317 (SCA)’ Mabeka, Q and Songca, R ‘The interpre- boned? Which arbitrations should be left (2019) 40.1 Obiter 173. tation and evaluation of legislative provi- alone?’ (2019) 32.2 August Advocate 16. Reifarth, M ‘Distribution options’ (2019) sions relating to South African civil pro- 33.4 TPCP. cedure processes in the age of electronic Banking law Sonnekus, JC ‘Voortdurende inbreuk- technology’ (2019) 82.3 THRHR 429. Nadasen, S ‘Preliminary observations: making op ’n watergebruiksreg – verjar- The principle or proportionality and the ing, maar van welke remedie?’ (2019) 3 phrase “... the nature, size, scale and Company law TSAR 575. complexity of …” in the conduct of Fi- Cassim, MF ‘Enhancing corporate de- Swart, WJC ‘Section 41(3) of the Compa- nancial Institutions Bill’ (2019) 34.2 ITJ. mocracy by the use of shareholder prox- nies Act 71 of 2008 and treasury shares – ies’ (2019) 40.1 Obiter 47. something just does not add up – Reezen Biotechnology law Cassim, R ‘The removal of directors of Ltd v Excellerate Holdings Ltd’ (2019) Silaigwana, B and Wassenaar, D ‘Views state-owned companies – SOS Support 82.3 THRHR 517.
DE REBUS – OCTOBER 2019 - 27 - Constitutional law of Persons with Disabilities in South Af- to remedies for systemic resource re- rica: Reasonable accommodations for lated socio-economic rights violations in Ballot, DE; Ramdin, TD; White, DA and persons with communication disabili- South Africa’ (2019) 19.1 AHRLJ 290. Dhai, A ‘Ethical dilemmas in paediatric ties’ (2018) 6 ADRY 99. intensive care in the South African public International banking and healthcare sector’ (2019) 12.1 SAJBL 44. Customary law Chagopa, A; Makuwa, A; Shezi, N; Mhiri- finance law Manthwa, TA ‘A re-interpretation of the bidi, R; Ndelu, S and Kathi, T ‘Constitu- Aina, K ‘Advancing towards a more ef- families’ participation in customary law tional Court statistics for the 2017 term’ fective stakeholder engagement by mul- of marriage’ (2019) 82.3 THRHR 416. (2018) 35.2 SAJHR 237. tinational companies in Nigeria’ (2019) Jogee, F ‘The effect of the protecting Cyber law 6.1 JCLA 55. life in Global Health Assistance policy in Meyer, Y ‘The effectiveness of market- Musoni, M ‘The criminalisation of “re- South Africa: Possible implications for based initiatives for regulating develop- venge porn” in South Africa’ (2019) 40.1 ment projects by multinational corpo- local HIV/AIDS non-governmental or- Obiter 61. rations in Africa with regard to human ganisations’ (2019) 12.1 SAJBL 38. rights and environmental abuses’ (2019) Shai, I ‘The right to development, trans- Delictual law 19.1 AHRLJ 126. formative constitutionalism and radical Ahmed, R ‘“Reasonableness” and related Paige, N; Denenga, M; and Nyatsumba, transformation in South Africa: Post-co- jurisprudential concepts in the law of A ‘Private equity in Africa – unpacking lonial and de-colonial reflections’ (2019) the trends: A legal perspective’ (2019) delict’ (2019) 82.3 THRHR 381. 19.1 AHRLJ 494. 22.2 PW. Constitutional law – Estate planning, wills, International expropriation of land trusts constitutional law Marais, M ‘The unilateral buy-and-sell Sibanda, N ‘Amending section 25 of the Adigun, M ‘The process of giving domes- agreement and estate duty’ (2019) 34.2 ITJ. South African Constitution to allow for tic effect to treaties in Nigeria and the Stein, M ‘Death and trading’ (2019) 33.4 expropriation of land without compen- United States’ (2019) 6.1 JCLA 85. TPCP. sation: Some theoretical considerations Naluwairo, R ‘Improving the administra- Van der Spuy, P ‘Trusts under attack’ of the social-obligation norm of owner- tion of justice by Military Courts in Afri- (2019) 33.4 TPCP. ship’ (2018) 35.2 SAJHR 126. ca: An appraisal of the jurisprudence of Slade, BV ‘The effect of avoiding the Family law the African Commission on Human and FNB methodology in section 25 disputes’ Peoples’ Rights’ (2019) 19.1 AHRLJ 43. Prinsloo, J ‘The constitutionality of the (2019) 40.1 Obiter 36. Fee Exemption Regulations in South Af- International criminal law rican schools: A critical analysis of Mi- Consumer law De Beer, A and Bradley, MM ‘Die begin- chelle Saffer v Head of Department, West- Bobbink, R ‘A pledgee’s right and duty sel van bevelsverantwoordelikheid soos ern Cape Education Department’ (2019) to use the security object’ (2019) 82.3 vertolk deur die Internasionale Strafhof 19.1 AHRLJ 534. THRHR 466. in die Bemba-saak’ (2019) 3 TSAR 510. Sonnekus, JC ‘’n Skikkingsakte vir Van Heerden, CM and Barnard, BJ ‘Nar- Oyaro, LO ‘Rearticulating ubuntu as egskeiding en wysiging van ’n huwe- rowing the reach of the strict product lia- a viable framework for the realisation liksvoorwaardeskontrak moet deeglik bility provisions in section 61 of the Con- of legal capacity in sub-Saharan Africa’ onderskei word – HM v AM’ (2019) 82.3 sumer Protection Act 68 of 2008: Eskom (2018) 6 ADRY 82. THRHR 493. Holdings Ltd v Halstead-Cleak 2017 (1) Raleigh, A ‘Charging decisions, legal SA 333 (SCA)’ (2019) 82.3 THRHR 444. Human rights framing and transitional justice: The Van Wyk, JS ‘A comparative analysis of prosecution of Wouter Basson’ (2018) Dhai, A ‘Caster Semenya’s appalling the “regulatory independence” of the 35.2 SAJHR 194. treatment: The International Association Financial Sector Conduct Authority and Rukooko, AB and Silverman, J ‘The In- of Athletics Federations violates human the National Credit Regulator’ (2019) ternational Criminal Court and Africa: A rights and ethical principles with impu- 82.3 THRHR 392. fractious relationship assessed’ (2019) nity’ (2019) 12.1 SAJBL 2. 19.1 AHRLJ 85. Goldblatt, B ‘Social and economic rights Contractual law Tunamsifu, SP ‘Twelve years of judicial to challenge violence against women Thobela-Mkhulisi, J ‘Absent a contractu- cooperation between the Democratic – examining and extending strategies’ al undertaking to do so, homeowner asso- Republic of the Congo and the Interna- (2018) 35.2 SAJHR 169. ciations have no legal duty to protect resi- tional Criminal Court: Have expectations Kavuro, C ‘Housing and integrating dents’ (2019) 32.2 August Advocate 31. been met?’ (2019) 19.1 AHRLJ 105. refugees: South African exclusionary ap- Criminal law and proach’ (2019) 40.1 Obiter 75. Madondo, I ‘The role of the legal sector International cyber law procedure in developing a legally conscious society’ Kakungulu-Mayambala, R and Rukun- Combrinck, H ‘Rather bad than mad? A (2019) 82.3 THRHR 353. do, S ‘Digital activism and free expres- reconsideration of criminal incapacity Mswela, MM ‘Tagging and tracking of sion in Uganda’ (2019) 19.1 AHRLJ 167. and psychosocial disability in South Af- persons with albinism: A reflection of rican law in light of the Convention on some critical human rights and ethical International family law the Rights of Persons with Disabilities’ issues arising from the use of the glob- Mezmur, BD ‘No second chance for first (2018) 6 ADRY 3. al positioning system (GPS) as part of impressions: The first amicable settle- De Vos, W Le R and Broodryk, T ‘Fun- a solution to cracking down on violent ment under the African Children’s Char- damental procedural rights of civil liti- crimes against persons with albinism’ ter’ (2019) 19.1 AHRLJ 62. gants in Australia and South Africa: Is (2019) 22 PER. there cause for concern? (part 1)’ (2019) Niyi-Gafar, O ‘A conceptual framework International human rights 3 TSAR 425. for a human rights-based approach to Appiagyei-Atua, K ‘Students’ academic free- White, R and Msipa, D ‘Implementing ar- water’ (2019) 6.1 JCLA 149. dom in African universities and democratic ticle 13 of the Convention on the Rights Van der Berg, S ‘A capabilities approach enhancement’ (2019) 19.1 AHRLJ 151.
DE REBUS – OCTOBER 2019 - 28 - RECENT ARTICLES AND RESEARCH
Damtew, SG ‘Land-grabbing and the International labour law right to adequate food in Ethiopia’ (2019) Chungu, C 19.1 AHRLJ 219. ‘The ghost of Mike Musonda De Man, A ‘The Sustainable Development Kabwe v BP Zambia and unilateral vari- Goals and the rights-based approach to ations of contract in Zambia’ (2019) 6.1 development: Compatible or missing the JCLA 131. point?’ (2019) 19.1 AHRLJ 445. International trade Igbinedion, SA ‘Finding value for the right to development in international Stevens, C ‘Reviving the right to devel- law’ (2019) 19.1 AHRLJ 395. opment within the multilateral trade Kajiru, I and Mubangizi, JC ‘Human framework affecting (African) countries rights violations of persons with albi- to actualise Agenda 2063 (2019)’ 19.1 nism in Tanzania: The case of children in AHRLJ 470. temporary holding shelters’ (2019) 19.1 AHRLJ 246. Insurance law Kamga, SD ‘A call for a “right to develop- Huneberg, S ‘English insurance law re- ment” – informed pan-Africanism in the forms: Lessons for South Africa’ (2019) twenty-first century’ (2019) 19.1 AHRLJ 418. 40.1 Obiter 18. Kalunga, FK and Nkhata, CM ‘Protection Subramanien, D and Govender, T ‘Road of the rights of persons with mental dis- Accident Fund steps into the shoes of the abilities to liberty and informed consent insured owner – Road Accident Fund v to treatment: A critique of Gordon Mad- Abrahams (276/2017) [2018] ZASCA 49 dox Mwewa and Others v Attorney-Gen- (29 March 2018)’ (2019) 40.1 Obiter 163. eral and Another’ (2018) 6 ADRY 60. Mezmur, BD ‘A step to zero attacks: Re- Jurisprudence flections on the rights of persons with al- Barrie, G ‘Presidential powers in South binism through the lens of X v United Re- Africa – more questions than answers’ public of Tanzania’ (2018) 6 ADRY 251. (2019) 40.1 Obiter 130. Mujuzi, JD ‘Private prosecution as a local Botha, L and Kok, A ‘An empirical study remedy before the African Commission of the early cases in the pilot equality on Human and Peoples’ Rights’ (2019) courts established in terms of the Pro- 19.1 AHRLJ 26. motion of Equality and Prevention of Un- Murray, R ‘Confidentiality and the im- fair Discrimination Act 4 of 2000’ (2019) plementation of the decisions of the 19.1 AHRLJ 317. African Commission on Human and Peo- Broekhuijse, I and van Staden, M ‘Recht- ples’ Rights’ (2019) 19.1 AHRLJ 1. spraak in Nederland en Zuid-Afrika: Een Ngang, CC ‘Systems problem and a prag- wederzijdse les?’ (2019) 3 TSAR 450. matic insight into the right to develop- Broughton, DWM ‘Accusatorial (ad- ment governance for Africa’ (2019) 19.1 versarial) process as a mechanism for AHRLJ 365. engendering or promoting judicial im- O’Connell, C ‘Reconceptualising the first partiality in the face of adverse pre-trial African Women’s Protocol case to work publicity’ (2019) 82.3 THRHR 363. for all women’ (2019) 19.1 AHRLJ 510. Holness, W and Rule, S ‘Legal capacity Shale, I ‘Historical perspective on the of parties with intellectual, psycho-social place of international human rights trea- and communication disabilities in tradi- ties in the legal system of Lesotho: Mov- tional courts in KwaZulu-Natal’ (2018) ing beyond the monist-dualist dichoto- 6 ADRY 27. my’ (2019) 19.1 AHRLJ 193. Rabkin, F ‘The Public Protector and the Tufuor, IK ‘Greasing the wheels of legal problem of binding remedial action’ aid in criminal proceedings in Ghana: An (2019) 32.2 August Advocate 37. evaluation of the legal and regulatory Labour law framework’ (2019) 19.1 AHRLJ 267. Benade, H ‘Values, mood and metaphor in International law Nampak’ (2019) 32.2 August Advocate 33. Ebrahim, S ‘Night work and the avail- De Villiers, B ‘Institutional design in ability of transport: What does it mean? deeply divided societies: South Africa – TFD Network Africa (Pty) Ltd v Singh’ and Kosovo and lessons for constitu- (2019) 82.3 THRHR 502. tion drafting in emerging democracies Grogan, J ‘Nasty, poor, brutish and short: – coalition and self-government’ (2019) Hounded out by the unions’ (2019) 35.4 EL. 3 TSAR 467. Grogan, J ‘Religious persecution: Dis- Kiye, ME ‘A critical appraisal of law re- crimination at work’ (2019) 35.4 EL. form in Cameroon: Pluralism and harmo- Du Toit, L ‘The practical implications of nisation of laws’ (2019) 6.1 JCLA 28. terminal illness benefits’ (2019) 34.2 ITJ. Lutta, J ‘Analysing the case of secession Manamela, T ‘When the lines are blurred in Kenya’ (2019) 6.1 JCLA 1. – a case of misconduct, incapacity or op- Onuora-Oguno, A ‘Leaving the woods to erational requirements: Are all dismissals see the trees: Locating and refocusing going operational?’ (2019) 40.1 Obiter 97. the activities of non-state actors towards the effective promotion of access to jus- tice of persons with disability’ (2018) 6 Legal education ADRY 121. Snyman-Van Deventer, E ‘Student en-
DE REBUS – OCTOBER 2019 - 29 - RECENT ARTICLES AND RESEARCH
gagement: More than bells and whistles’ Mhango, M ‘The right to equality and ac- Tax law (2019) 40.1 Obiter 1. cess to courts for government employ- Barker, P ‘After-tax returns – IV’ (2019) Venter, R ‘Official languages and higher ees in South Africa: Time to amend the 33.4 TPCP. education: The story of an African Uni- Government Employees Pension Law’ Burt, K ‘A trap for the unwary’ (2019) versity’ (2019) 3 TSAR 558. (2019) 19.1 AHRLJ 337. 33.4 TPCP. Sonnekus, JC ‘Terughouding van pensi- Clegg, D and Gardner, W ‘Capitalisation Legal practice oenbelang op aandrang van voormalige or merger’ (2019) 33.4 TPCP. werkgewer ’n uiters bedenklike onreg- Gabriel, P ‘Plain and simple’ (2019) 32.2 Fritz, C and Van Zyl, SP ‘The issue of August Advocate 23. matige dwangmiddel in menige geval’ (2019) 3 TSAR 527. prescription in tax – CSARS v Char- Namakula, CS ‘When the tongue ties Trade’ (2019) 82.3 THRHR 511. fair trial: The South African experience’ Persons and family law Mitchell, L ‘Trading stock basics’ (2019) (2018) 35.2 SAJHR 219. 33.4 TPCP. Scott, J ‘The “obscure” doctrine of vetus- Amien, W ‘A discussion of Moosa NO Moosa, F ‘Does the Tax Administration tas – ensuring equitable relief in modern and Others v Harnaker and Others illus- Act apply extraterritorially? A constitu- trating the need for legal recognition of times’ (2019) 3 TSAR 592. tional perspective’ (2019) 34.2 ITJ. Muslim marriages in South Africa’ (2019) Palmer, G ‘Deemed receipts’ (2019) 33.4 Medical law 6.1 JCLA 115. TPCP. Labuschaigne, M and Mahomed, S ‘Regu- Silke, J ‘Contractual damages’ (2019) latory challenges relating to tissue banks Protection of personal 33.4 TPCP. in South Africa: Impediments to access- information Surtees, P ‘Obligatory refurbishments’ ing healthcare’ (2019) 12.1 SAJBL 27. (2019) 33.4 TPCP. McQuoid-Mason, D ‘May doctors for re- Townsend, BA and Scott, RE ‘The de- Van der Walt, JJ ‘Prejudice’ (2019) 33.4 ligious reasons refuse to give patients velopment of ethical guidelines for tel- TPCP. blood transfusions under any circum- emedicine in South Africa’ (2019) 12.1 stances?’ (2019) 82.3 THRHR 478. SAJBL 19. Trusts McQuoid-Mason, DJ and Naidoo, N ‘Pal- Van Niekerk, M ‘Providing claimants Nel, E ‘From being in the audience to liative care ethical guidelines to assist with access to information: A compara- waiting in the wings: Can the ius expec- healthcare practitioners in their treat- tive analysis of the POPIA, PAIA and tati dominii improve the unenviable posi- ment of palliative care patients’ (2019) HPCSA guidelines’ (2019) 12.1 SAJBL 32. tion of the trust beneficiary in the own- 12.1 SAJBL 14. ership trust?’ (2019) 40.1 Obiter 118. Wessels, AB and Wewege, J ‘The State Li- Property law ability Amendment Bill – further evalua- Bolt, M and Masha, T ‘Recognising the tion and commentary’ (2019) 3 TSAR 484. family house: A problem of urban custom in South Africa’ (2018) 35.2 SAJHR 147. Kathleen Kriel BTech (Journ) is the Pension law Freedman, W ‘The principle of passivity Production Editor at De Rebus. q Carman, N and Hunter, R ‘Warning to and the obligation to build within a spec- employers: Check that you have been ified time – A critical analysis of Bondev paying contributions to your employees’ Midrand (Pty) Ltd v Pulling; Bondev Mid- retirement funds at the correct rates and rand (Pty) Ltd v Ramokgopa’ (2019) 82.3 Visit the De Rebus website THRHR 482. on time’ (2019) 22.2 PW. for links to open journals Davison, A ‘How to deal with default Van der Merwe, CG ‘The Community regulations’ (2019) 22.2 PW. Schemes Ombud Service (CSOS) circular and information on who to De la Harpe, L ‘Section 37C and settle- of 2018 on the application of unanimous contact to source the articles ment agreements’ (2019) 34.2 ITJ. and special resolutions in terms of the in the Recent articles and De la Harpe, L ‘Transfer of retirement Sectional Titles Schemes Management research column. interest to preservation funds’ (2019) Act brings more confusion than clarity’ 34.2 ITJ. (2019) 3 TSAR 546.
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DE REBUS – OCTOBER 2019 - 30 - OPINION – Jurisprudence
By Eeny, meeny, miny, moe, to which court will Ciresh Singh foreclosures go? A brief analysis of recent foreclosure proceedings and a consideration of the need for specialised foreclosure courts in SA
he foreclosure against a home practice of proceeding out of the High sure that access to justice is ensured, by involves a delicate balanc- Court as opposed to the magistrate’s exercising the appropriate judicial over- ing of homeowner and credi- courts, which were generally more acces- sight. tor rights, in particular, the sible and more financially viable, denied The effect of the Thobejane case creditor’s contractual security homeowners of their right of access to meant that foreclosure proceedings be- Trights and the homeowner’s constitu- justice and amounted to an abuse of pro- low R 400 000 had to be brought before tional rights. Foreclosure against a home cess. the magistrate’s court. A Practice Direc- has the potential to infringe on several The creditors, however, argued that tive was accordingly adopted to the ef- constitutional rights of a homeowner, it was a long-established principle that fect that all civil applications, within the inter alia – where more than one court had jurisdic- monetary jurisdiction of the magistrate’s • s 26 of the Constitution, which pro- tion to hear a matter, the plaintiff was courts should be instituted in the magis- vides that ‘[e]veryone has the right to entitled to choose in which court to in- trate’s court. Many academics and legal have access to adequate housing’; and stitute action. Furthermore, the credi- practitioners have criticised the Thobe- • s 34 of the Constitution, which pro- tors argued that the magistrate’s court jane decision arguing that the Full Bench vides for the right of access to courts. lacked the efficiency and uniformity to based its findings on the over clogging In the context of foreclosure, s 34 enti- adjudicate complicated foreclosure is- of the High Court rolls and the concur- tles a homeowner with the right to have sues, and it was, therefore, to the ben- rent jurisdiction of the Gauteng Courts. their foreclosure dispute heard in an efit of both homeowners and creditors The court failed to take into account the open and accessible court. The Universal that such cases be heard before the High complexity of foreclosure matters and Declaration of Human Rights and several Court. the competing constitutional rights and other international charters and conven- The Full Bench of the Gauteng Division issues that may arise. Accordingly, at the tions recognise the right of access to of the High Court found that the advent time of writing this article, the Thobe- courts as a fundamental human right, of the Constitution introduced access to jane judgment was brought on appeal which is a vital element in the protection justice as a primary consideration dur- before the Supreme Court of Appeal, and and enforcement of other human rights. ing court proceedings and this approach the effect of the Practice Directive was Over the decades, the right of access to required the High Court to regulate their suspended. courts have evolved into a basic human own processes with regard to access to right under international law and is pro- justice. The right of access to justice, Nedbank v Gqirana tected by most constitutions of demo- must be in accordance with constitu- The issue of whether or not foreclosure cratic countries across the world. Due to tional imperatives, in a broader context proceedings should be heard before the the intricate and sensitive nature of fore- and the rights of the plaintiff, as well magistrate’s court was recently heard closure disputes, namely the balancing as that of the defendants must be taken again by the Eastern Cape Division of of the homeowner’s constitutional rights into consideration, as well as the roles the High Court in Grahamstown in Ned- versus the creditor’s contractual rights, and functions of the different courts. bank Limited v Gqirana NO and Another; foreclosure proceedings in South Africa In principle, a plaintiff has the right to First Rand Bank Limited v Cornellisson (SA) have historically always been heard choose any court, which has jurisdiction and Another; Standard Bank of South in the High Court. However, the question in the dispute, but this choice should not Africa Limited v Msutu and Another; has recently been raised as to whether be at the expense of access to justice. If Nedbank Limited v Gcina; Firstrand Bank or not foreclosure proceedings should impecunious litigants are denied proper Limited t/a Wesbank v Twynham; FFS be heard in the magistrate’s court, which access to justice and the High Court is Finance SA (Pty) Limited t/a Ford Credit is generally more accessible to disadvan- unnecessarily overburdened, it would v Jabanga; FFS Finance SA (Pty) Limited taged homeowners, in order to promote constitute an abuse of process. t/a Ford Credit v Rolomane (ECG) (unre- the right of access to justice in s 34 of Hence, it was an abuse of process to al- ported case no 1203/2018; 1298/2018; the Constitution. low a matter, which could be decided in 1777/2018; 3434/2018; 3706/2018; the magistrate’s court to be heard in the 49/2019; 264/2019, 31-7-2019) (Lowe J Nedbank v Thobejane Provincial Division simply because it had and Hartle J concurring) (Jolwana dissent- On 26 September 2018, the Gauteng Di- concurrent jurisdiction. If a party is of ing). The Eastern Cape Division consid- vision of the High Court in Pretoria deliv- the view that a matter, which falls within ered the Full Bench decision in Thobejane, ered judgment in In re: Nedbank Limited the jurisdiction of the magistrate’s court, which had found that all civil applications v Thobejane and related matters [2018] should be more appropriately heard in falling within the monetary jurisdiction 4 All SA 694 (GP), which found, inter the High Court, an application must be of the magistrate’s court should be insti- alia, that foreclosure proceedings fall- made setting out reasonable grounds tuted in the magistrate’s court, and not ing within the monetary jurisdiction why the matter should be heard in the the High Court. of the magistrate’s court (ie, below R High Court. The inefficiency of other The court found that the defendants 400 000) must be referred to the magis- courts, whether real or perceived, and in matters involving credit transactions trate’s court. In this case, Nedbank and the convenience of the plaintiff, will not (applicable to the National Credit Act 34 several other creditors were questioned constitute such reasonable grounds. The of 2005 (NCA)) were usually historically over the practice of initiating foreclo- Full Bench further held that there is an disadvantaged individuals. Given the cat- sure proceedings at the High Court, as obligation on all litigants, not only finan- egory of these defendants the right of ac- opposed to the magistrate’s court, which cial institutions, to consider the question cess to court has become important, as was geographically located closer to the of access to justice when actions are is- generally the magistrate’s courts would defendants. It was argued that such a sued, and the courts have a duty to en- be the most appropriate forum for such
DE REBUS – OCTOBER 2019 - 31 - OPINION – JURISPRUDENCE
individuals to access justice. Accord- magistrate’s courts have the capability ingly, the common law practice that a and capacity to adjudicate such matters. plaintiff as dominus litis was entitled Foreclosure jurisprudence has recently to choose which court to litigate from become uncertain due to several recent must be reconsidered in light of funda- conflicting judgments and rules and mental constitutional principles and the there is need for certainty to be estab- right of access to justice. Section 34 of lished (see Nkata v FirstRand Bank Ltd the Constitution and NCA affords equal- 2016 (4) SA 257 (CC) and ABSA Bank Ltd ity and access to justice to financially v Mokebe and related cases 2018 (6) SA and previously disadvantaged persons, 492 (GJ)). Unfortunately, South African thus proper access to justice in all NCA law has not provided clarity on the bal- matters (including foreclosures) falling ancing of homeowner and creditor rights within the monetary jurisdiction of the during the foreclosure process, nor has magistrate’s court, must be brought in it provided a structured or uniform the magistrate’s court save only if there framework for foreclosure practice. This are exceptional circumstances justify- lacuna has resulted in much inconsist- ing otherwise. In other words, the court ency and opened the door for abuse of found that the NCA, properly interpreted process. through the prism of the Constitution, Accordingly, I submit that the time provided that the magistrate’s courts has come for government and the leg- be the court of first adjudication of all islature to consider the implementation NCA matters to the exclusion of the High of specialised courts to adjudicate fore- Court. The Gqirana judgment can thus closure matters, namely ‘Foreclosure be interpreted to have extended the ju- Courts’. The implementation of spe- risdiction of the magistrate’s court in all cialised foreclosure courts and judges matters falling within the ambit of the to hear foreclosure applications will be NCA, regardless of the amount involved. advantageous to both homeowners and creditors. Although foreclosures are gen- A need for clarity and erally negatively perceived as being the consideration of a process of executing against one’s home, the foreclosure process in a country also specialised ‘Foreclosure plays an important role of promoting Court’ foreign mortgage investment and capi- tal growth in the economy (see Standard The decisions in Thobejane and Gqirana Bank of South Africa Ltd v Saunderson can be applauded for being progressive and Others 2006 (2) SA 264 (SCA), and in developing the common law and ac- Niall Ferguson The Ascent of Money: A knowledging the deep-seated inequali- financial history of the world (The Pen- ties in our society by recognising that guin Press HC 2008)). Thus, the fore- access to justice is better served when closure process of a country has deeply courts are made accessible to the ma- rooted socio-economic traits that require jority of society. Nevertheless, it is im- specialised analysis and should not be portant to acknowledge that the fore- trivialised. Consequently, it is recom- closure against a home requires strict mended that every regional and district judicial scrutiny. This fact has been High Court and/or magistrate’s court es- emphasised by several Constitutional tablish a ‘Foreclosure Court’ (ie, special- Court (CC) judgments and court rules ised and separate court rooms) specifi- (see Jaftha v Schoeman and Others; Van cally for foreclosure applications. This Rooyen v Stoltz and Others 2005 (2) SA will create a specialised court structure 140 (CC); Gundwana v Steko Develop- for foreclosure applications and would ment and Others 2011 (3) SA 608 (CC); provide the necessary priority, uniform- r 46A of the Uniform Rules of Court; and ity and expertise for adjudicating these C Singh A critical analysis of the home important matters. Such a structure will mortgage foreclosure requirements and further reduce the time delays and liti- procedure in South Africa and proposals gious costs attached to foreclosure pro- for legislative reform (unpublished PhD ceedings. Most importantly, a specialised thesis, UKZN, 2018)). The involvement Foreclosure Court structure will provide of the court is paramount in the foreclo- ordinary South Africans with the ability sure process and this was emphasised to achieve their constitutional right of by the CC in Gundwana where the court access to justice and endeavour to en- confirmed that judicial oversight is ‘a sure that homeowners are on an equal must’ during foreclosure proceedings. legal footing with creditors during the The foreclosure against a home involves foreclosure process (see Singh (op cit) for a complex analysis of legal, financial a detailed review of the proposal for a and factual circumstances coupled with specialised Foreclosure Court structure). the interaction of competing constitu- tional rights of homeowners and credi- tors. Accordingly, such complex issues Ciresh Singh LLB LLM (UKZN) is a justify these cases being heard before PhD Candidate at the University of specialised courts and judges. It is thus KwaZulu-Natal. q questionable whether or not our current
DE REBUS – OCTOBER 2019 - 32 -
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1 Supplement to De Rebus, October 2019 ITALIAN LAWYERS For assistance on Italian law (litigation, commercial, company, successions, citizenship and non-contentious matters), contact Anthony V. Elisio South African attorney and member of the Italian Bar, who frequently visits colleagues and clients in South Africa.
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4 Supplement to De Rebus, October 2019