December 2016

THE SA ATTORNEYS’ JOURNAL

DECEMBER 2016

ZONING MATTERS: A ‘SPLUMA’ SCORE-CARD ONE YEAR ON Creating trusts – Patent claim construction: what should your client know? Numerical limitations A smokey issue – the law relating to Appraisal rights and the distribution of e-cigarettes protection of minority shareholders

Reckless credit – both sides of the story

New Public Protector holds first media briefing LSSA on – withdrawal from ICC New International Finance Minister Arbitration Bill State of Capture report GLOBAL INDIA BUSINESS LAW JOURNAL chambersAND PARTNERS 2016 Managing 2016 6 IntellectualTM TOP FOREIGN Property LAW FIRMS top tier firm top tier firm top tier firm team of the year SA firm of the year top tier firm top foreign law firm elite law firm recommended firm recommended firm

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ENSafricaAd210x297Mar2016_award_strip.indd 1 2016/10/10 11:27:26 AM THE SA ATTORNEYS’ JOURNAL CONTENTS THE SA ATTORNEYS’ JOURNAL DECEMBER 2016 Issue 569 ISSN 0250-0329

THE SA ATTORNEYS’ JOURNAL

DECEMBER 2016

Zoning matters: a ‘sPLUma’ score-card 26 one year on Creating trusts – Patent claim construction: 32 what should your client know? Numerical limitations 34 Regular columns A smokey issue – the law relating to Appraisal rights and the distribution of e-cigarettes 36 protection of minority Editorial 3 30 shareholders

Letters to the editor 4 AGM News Role of lawyers in a democratic society discussed at Reckless credit – 24 both sides of the story KwaZulu-Natal Law Society AGM 6

New Public Protector holds Examination dates for 2017 8 13 first media briefing LSSA on – withdrawal from ICC Activism with a purpose discussed at BLA AGM 9 New International Finance Minister 18 14 Arbitration Bill State of Capture report ‘I-generation’ law student discussed at FSLS AGM 11 News Office of the Public Protector will not name investigation reports to avoid tension with the state 13 South Africa’s new International Arbitration Bill brings new dawn of new area 14 Government obliged to give accessible quality education 14 Tax master a middle man for reasonable billing between attorney and client 15 National Moot School Court Competition: Opportunity 6 9 for learners to understand the Constitution 17 LSSA News LSSA speaks out against withdrawal from ICC; welcomes withdrawal of charges against Finance Minister and release of State of Capture report 18 LSSA recognises service to the profession by former Council members 19

People and practices 21

Practice management Susceptible to scams? 22 19 Practice note Reckless credit – both sides of the story 24 No more delays on criminal trials 25

The law reports 40

New legislation 47

Employment law update 48

Book announcements 50

13 14 Recent articles and research 51

DE REBUS – DECEMBER 2016 - 1 - EDITOR: FEATURES Mapula Thebe 26 Zoning matters: A ‘SPLUMA’ score-card one NDip Journ (DUT) BTech (Journ) (TUT) year on PRODUCTION EDITOR: Kathleen Kriel – lanning law shapes and determines our daily activities in important and BTech (Journ) (TUT) pervasive ways. Peter Murray writes that many participants in the prop- SUB-EDITOR: SUB-EDITOR: Perty industry have, for some time believed, that a systemic overhaul of Kevin O’ Reilly – Isabel Joubert – planning law was needed. The Spatial Planning and Land Use Management Act MA (NMMU) BIS Publishing (Hons) (UP) 16 of 2013 (SPLUMA) was passed into law on 1 July 2015. This article examines NEWS REPORTER: EDITORIAL SECRETARY: whether – one year since its commencement – SPLUMA has changed our un- Kgomotso Ramotsho– Shireen Mahomed derstanding of and approaches to spatial planning and land use management, Cert Journ (Boston) and whether it has succeeded – from the perspective of planning practice – in Cert Photography (Vega) its stated aim of ushering in a unified and coherent system of planning law. EDITORIAL COMMITTEE: Mohamed Randera (Chairperson), Denise Lenyai, Appraisal rights and protection of minority Giusi Harper, Peter Horn, Lutendo Sigogo 30 EDITORIAL OFFICE: 304 Brooks Street, Menlo Park, shareholders Pretoria. PO Box 36626, Menlo Park 0102. Docex 82, Pretoria. he purpose of this article is to briefly introduce a discussion around ap- Tel (012) 366 8800 Fax (012) 362 0969. E-mail: [email protected] praisal rights, their history and background, how they find application Tunder our Companies Act 71 of 2008 (the Companies Act) and the impact DE REBUS ONLINE: www.derebus.org.za they have had so far in our company law regime as far as the protection of mi- CONTENTS: Acceptance of material for publication is not a guarantee nority shareholders is concerned. The article, written by Basil Mashabane, has that it will in fact be included in a particular issue since this depends on the space available. Views and opinions of this journal are, unless otherwise been written in a contextual manner and focuses on appraisal rights and how stated, those of the authors. Editorial opinion or comment is, unless other- they apply to fundamental transactions and, also includes a brief discussion of wise stated, that of the editor and publication thereof does not indicate the a recent High Court judgment, where the court was approached to make a rul- agreement of the Law Society, unless so stated. Contributions may be edited for clarity, space and/or language. The appearance of an advertisemen t in ing on a case involving the question of appraisal rights raised by shareholders. this publication does not necessar ily indicate approval by the Law Society for the product or service advertised. Creating trusts – what should your client De Rebus editorial staff use online products from: 32 • LexisNexis online product: MyLexisNexis. Go to: www.lexisnexis.co.za; know? and • Juta. Go to: www.jutalaw.co.za. hen performing any given task, using the right tool for the job will make the task significantly easier to accomplish and will also en- PRINTER: Ince (Pty) Ltd, PO Box 38200, Booysens 2016. Wsure that the quality of the task is superior. The same holds true AUDIO VERSION: The audio version of this journal is available for estate planning exercises and there are few tools that are on par with a free of charge to all blind and print-handicapped members of Tape Aids for the Blind. trust in this regard. A trust is a unique vehicle, which involves the exchange ADVERTISEMENTS: of assets for a complete separation of ownership and enjoyment of these as- Main magazine: Ince Custom Publishing sets from the personal estate of an estate planner, and with all things in life, Contact: Dean Cumberlege • Tel (011) 305 7334 there are some key elements that must be present before a trust will be able Cell: 082 805 1257 • E-mail: [email protected] to serve the needs of the estate planner effectively. This article, written by Classifieds supplement: Contact: Isabel Joubert Edrick Roux and Bindiya Desai is a brief discussion of the significance of Tel (012) 366 8800 • Fax (012) 362 0969 PO Box 36626, Menlo Park 0102 • E-mail: [email protected] the respective parties at the relevant stages. ACCOUNT INQUIRIES: David Madonsela Tel (012) 366 8800 E-mail: [email protected] Patent claim construction: Numerical 34 CIRCULATION: De Rebus, the South African Attorneys’ Journal, is limitations published monthly, 11 times a year, by the Law Society of South Africa, 304 Brooks Street, Menlo Park, Pretoria. It circulates free of atent attorneys spend a great deal of time trying to find the ‘perfect’ charge to all practising attorneys and candidate attorneys and is word for a technical element of an apparatus or method in patent appli- also available on general subscription. Pcations. They are required to conduct the same analysis for numerical ATTORNEYS’ MAILING LIST INQUIRIES: Gail Mason limitations, including, numerical ranges. The construction of both words Tel (012) 441 4629 E-mail: [email protected] and numerals needs to take place in patent attorneys’ daily practices; with All inquiries and notifications by practising attorneys and candidate attorneys should be addressed to the relevant law society the latter equally applying to all fields of technology: Electrical, chemi- which, in turn, will notify the Law Society of SA. cal, mechanical, biotechnological, etcetera. In this article, Ryan Tucker SUBSCRIPTIONS: examines numerical limitations in patent claims in the United Kingdom General, and non-practising attorneys: R 920 p/a (and by implication, South Africa), given their impact on patent drafting and Retired attorneys and full-time law students: R 710 p/a prosecution, as well as on patent enforcement/litigation. Cover price: R 95 each Subscribers from African Postal Union countries (surface mail): R 1 465 (VAT excl) 36 A smokey issue – the law relating to the Overseas subscribers (surface mail): R 1 790 (VAT excl) distribution of e-cigarettes NEW SUBSCRIPTIONS AND ORDERS: David Madonsela Tel: (012) 366 8800 • E-mail: [email protected] ill electronic-cigarettes or e-cigarettes prevent people from smoking cigarettes? Are we just replacing one harmful device, namely, regu- Wlar tobacco cigarettes, with another harmful and toxic device? These questions make legal minds struggle all around the world. In recent years the © Copyright 2016: e-cigarette industry became a 3 billion dollar industry, with approximately Law Society of South Africa 021-21-NPO Tel: (012) 366 8800 466 different brands of e-cigarettes on the market worldwide. In this article, Yda van Aartsen summarises the general impact and views of e-cigarettes,

the health implications thereof, the regulation by legislation, the regulatory Member of The Audit Bureau of struggle and recent developments in legislation. Circulations of Southern Africa

DE REBUS – DECEMBER 2016 - 2 - EDITOR’S NOTE Conveyancing work encroached upon

s 2016 draws to an end the conveyancing work, then surely any we ponder on the hap- other litigation can be split into reserved Would you like to write for penings of the year. and non-reserved work for attorneys, De Rebus? This is an opportune which will mean that there will be very De Rebus welcomes article contri- time to lament on the little left for attorneys to do. He added butions in all 11 official languages, many instances the that some attorneys support it, espe- especially from legal practitioners. attorneys’ profession cially those starting out. Mr van Rens- Practitioners and others who wish Ahas been encroached upon. One such in- burg stressed the fact that if the money to submit feature articles, practice stance is the proposed business model does not go into trust accounts and goes notes, case notes, opinion pieces and by Proxi Smart Services (Pty) Limited to banks instead, the AFF will not have letters can e-mail their contributions (Proxi Smart). money to protect the public and to assist to [email protected]. Proxi Smart seeks to render certain the profession (see p 12). The decision on whether to pub- conveyancing-related services, which The matter is, understandably, of lish a particular submission is that are currently exclusively performed by grave concern to the profession and of the De Rebus Editorial Commit- conveyancers – who are regulated by the the LSSA is prioritising the matter and tee, whose decision is final. In gen- statutory, provincial law societies. The is dealing with the interests of both the eral, contributions should be useful view of the Law Society of South Africa profession and the public. Attorneys are or of interest to practising attorneys (LSSA), the provincial law societies and cautioned against participating in the and must be original and not pub- the Attorneys Fidelity Fund (AFF) is that Proxi Smart initiative and other initia- lished elsewhere. For more informa- the proposal by Proxi Smart cannot be tives of a similar nature and are advised tion, see the ‘Guidelines for articles supported as the full conveyancing pro- that those who participate in such initia- in De Rebus’ on our website (www. cess is regarded as reserved work, and tives may find themselves acting in con- derebus.org.za). should remain so in the interest of the travention of the Attorneys Act and the • Please note that the word limit is public. Proxi Smart has been informed Rules of conduct of the Law Society. 2000 words. accordingly. • Upcoming deadlines for article An application to the Gauteng Division • To read the full notice of motion go to submissions: 23 January and 20 of the High Court has subsequently been February 2017. served on the LSSA for an order to the www.lssa.org.za. following effect: Declaring that the steps in the transfer process identified by Proxi Smart do not contravene the Attorneys Act 53 of 1979, the Legal Practice Act 28 of 2014, the Deeds Registries Act 47 of 1957 and the Regulations made under the Deeds Registries Act and that it does also not constitute the performance of conveyancing work reserved to attorneys or conveyancers. The LSSA is opposing the matter and, by agreement, must submit an answering affidavit by 28 February 2017. The AFF, the Chief Registrar of Deeds and the Jus- tice Minister are also respondents. The AFF has filed its notice to oppose. At this stage, a joinder of the four provincial law societies as regulatory bodies of the attorneys’ profession is being considered. During the annual general meeting The De Rebus Editorial Committee and staff wish all of our readers compliments of the season and a prosperous new year. of the Free State Law Society, Co-chair- De Rebus will be back in 2017 with its combined January/February person of the LSSA Jan van Rensburg edition, which will be sent out at the beginning of February 2017. said that if Proxi Smart manages to split

De Rebus, The SA @derebusjournal Attorneys’ Journal www.derebus.org.za

DE REBUS – DECEMBER 2016 - 3 - 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.

Interpretation and drafting In that case, the domicilium provi- appellant from complying with the re- sion required that the summons should quirements of the domicilium provision. of domicilium provisions be addressed to a specific person and The appellant did not adhere to the re- Domicilium provisions in contracts are served on the second floor of the build- quirements of the contractually agreed largely considered to be standard provi- ing. It read: ‘Routledge Modise Moss Mor- method of service and the service of the sions, which are often copied and pasted ris, 2 Pybus Road, Sandton (Marked for D summons was found to be defective. The from one contract to another. A major- Janks 2nd Floor).’ appeal was dismissed. ity of contracts contain some form of a The appellant served the summons on This case illustrates that the way in domicilium provision, which in turn sets the first floor of the building and was not which a domicilium provision is drafted out the manner in which notices and pro- marked for the attention of D Janks. The could have an impact in the manner in cesses are delivered to the parties to the service did not strictly comply with the which the provision is interpreted and contract. These provisions can either re- provisions of the domicilium provision ultimately enforced. Not only does this late to the service of judicial processes and the question on appeal was whether case show that the manner in which (such as a summons) or contractual no- the summons was properly served. the domicilium provision is drafted can tices. Judicial processes and contractual The issue pivoted around how the have far reaching consequences, but it notices can either be dealt with separate- domicilium provision was drafted and also embodies the presumption of inter- ly or be bundled into a single provision, whether the summons had been prop- pretation contracts in that there are no which the courts have dubbed as a ‘dou- erly served. The court a quo found that superfluous words in a contract (see: SJ ble provision’ (see for example: Loryan where there was a specific method of Cornelius Principles of the Interpretation (Pty) Ltd v Solarsh Tea and Coffee (Pty) service that was contractually agreed, of Contracts in South Africa 2ed (Durban: Ltd [1984] 3 All SA 625 (W) at 641; Mul- it should be strictly complied with. The LexisNexis 2007) at 122). Therefore, ac- ler v Mulbarton Gardens (Pty) Ltd [1972] court a quo cited three foreign cases to count must be taken of each word in a 1 All SA 190 (W) at 197; and SA Wimpy support this argument, namely, McMul- contract, even that of a domicilium provi- (Pty) Ltd v Tzouras 1977 (4) SA 244 (W) len Group Holdings Ltd v Harwood [2011] sion. The mere copying and pasting and at 247). The way in which a provision CSOH 132; Anglian Water Services Ltd v use of precedence must be cautioned is drafted will determine whether it is a Liang O’Rourke Utilities Ltd [2010] EWHC and used with circumspection to ensure double provision or not. 1529 (TCC); and Argo Capital Investors that unintended consequences do not The manner in which a domicilium pro- Fund SPC for Argo Global Special Situ- occur in the interpretation and enforce- vision is drafted will also influence the tations Fund SP v Essar Steel Ltd [2005] ment of the contract. requirements of the service of a sum- EWHC 2587 (Comm). The Appeal Court mons. This was confirmed on appeal by found the court a quo’s argument to be Shepard v Emmerich 2015 (3) SA 309 persuasive. Also, the court found that Michele van Eck, legal adviser, (GJ). there was nothing that prevented the Johannesburg

DE REBUS – DECEMBER 2016 - 4 - LETTERS

Are court officials and thereafter the three separately, by 1977 (Act No. 51 of 1977), or in terms of petition applied to the President of the any other criminal procedure law.’ adequately protected? Supreme Court of Appeal (SCA) for leave Appeals in criminal cases heard by a The question to be answered is whether to appeal. (They must have done so in High Court are regulated by ss 315 and court officials are protected during the terms of s 316(8)(a)(iii) of the Criminal 316 of the CPA. Such appeals are, there- criminal proceedings in court? Who has Procedure Act 51 of 1977 (CPA).) fore, excluded from Ch 5 of the Superi- a duty to protect court officials while Two of the convicted persons were or Courts Act (see A Kruger Hiemstra’s conducting their scope of employment each granted leave to appeal by four Criminal Procedure (Durban: LexisNexis in court? judges in the two separate applications. 2008) at 31-1 to 31-2). It is not clear how The true story is that as an attorney, In the Ntlanyeni matter the application the SCA could have applied s 17(2)(f) of I was physically attacked by the com- was subsequently dismissed by two the Superior Courts Act to the Ntlanyeni plainant as I was cross-examining the other judges. The President of the SCA, matter. complainant. The complainant attacked acting mero motu, considered the cir- Some criminal law practitioners and me and was instructed by court to apolo- cumstances as exceptional in terms of even ‘clever’ offenders serving sentenc- gise. Indeed she apologised, but I noticed s 17(2)(f) of the Superior Courts Act 10 es and whose applications to the Presi- that the complainant was not remorse- of 2013 and referred the decision in the dent of the SCA in terms of s 316(8)(a) ful and did not see anything wrong with Ntlanyeni matter to the court for recon- (iii) have been refused, now consider her actions. The question that pops up sideration. that their next step could be in terms of is: Whether we are protected as court The matter was argued and the result s 17(2)(f) of the Superior Courts Act. officials during court proceedings and was that he was also granted leave to ap- I cannot agree and am anxious to by whom exactly? I feel that we are not peal to the full Bench of the High Court. learn whether I am missing a point here protected at all. What is puzzling is how the SCA could as the next possible step after a s 316(8) have acted in terms of s 17(2)(f) of the (a)(iii) application has been refused, is Nokhanyo Makonco, candidate Superior Courts Act as the case origi- to approach the Constitutional Court attorney, Mthatha nated from a criminal trial in the High provided a constitutional question is in- Court sitting as a court of first instance, volved. More to the point: Can the SCA a process that is regulated by the CPA. decision in the Ntlanyeni matter be cor- A criminal appeal puzzle The definition of ‘appeal’ in the Supe- rect? In S v Ntlanyeni 2016 (1) SACR 581 (SCA) rior Courts Act is: three accused were convicted in the High ‘“Appeal” in Chapter 5, does not in- JO van Schalkwyk, attorney, Court for, inter alia, charges of rape. clude an appeal in a matter regulated Johannesburg The trial judge refused leave to appeal in terms of the Criminal Procedure Act, q

DE REBUS – DECEMBER 2016 - 5 - AGM NEWS Role of lawyers in a democratic society discussed at KwaZulu-Natal Law Society AGM

he KwaZulu-Natal Law So- need to discuss who will be the members ciety (KZNLS) held its an- of such a body and ensure the independ- nual general meeting (AGM) ence of the profession. The organisation on 14 October in Durban. will also ensure that practitioners ad- Former President, Kgalema here to creating a just society and pro- Motlanthe, delivered the tect our constitutional values. Through Tkeynote address. consultation, before the organisation is Former President Motlanthe began his formed, we will look at the needs of the address by saying that during the days profession so as to ascertain the best of the freedom struggle, lawyers helped value proposition and ensure that prac- usher South Africa into democracy. He titioners benefit from such an organisa- went on to name a few ‘giants in the tion. Other issues that will be looked at noble profession’, such as Nelson Man- through consultation with the profes- dela, Oliver Tambo, Bram Fischer, Robert sion are, the leadership, governance, Sobukwe and Duma Nokwe. ‘Oliver Tam- branding and sustainability of the or- bo led the team that led a path for de- ganisation.’ mocracy in South Africa. He would have • See editorial ‘A new home for legal celebrated his 99th birthday this year. In practitioners: What’s in it for you? (2016 1994 Tambo led the ANC leadership in (Nov) DR 3). the deliberations of the future that we Former President Kgalema hoped for,’ he added. Motlanthe delivered the keynote Words from the AFF Former President Motlanthe asked: address at the KwaZulu-Natal In the absence of the Chairperson of What is the role of a lawyer in the con- annual general meeting. the Attorneys Fidelity Fund (AFF), Non- struction of a new society? He attempted duduzo Khanyile-Kheswa, Ebi Moolla to answer the question by saying that the presented the Chairperson’s report. Mr role of a lawyer in society is to be worthy natory practices that are experienced by Moolla said the AFF is a fund set up in of being called an officer of the court. legal practitioners when it comes to the terms of the Attorneys Act 53 of 1979 ‘I do not have an answer, but we need distribution of work and briefing. with the primary objective to provide to attempt to analyse what it means to Speaking about the National Forum compensation to members of the public practice law during democracy. As we go on the Legal Profession (NF) – the transi- against misappropriation of trust funds ahead and formulise our state based on tional body setting in place the new dis- by practitioners. non-racialism, society is still struggling pensation for the Legal Practice Council Mr Moolla went on further to say: ‘In to emerge from the remnants of the (LPC) – Mr Scott said that the NF has met the last financial year the AFF experi- Apartheid regime. Against this context, six times since it was set up when ch 10 enced a deterioration in growth of 1,4% how will the lawyer of this new society of the Legal Practice Act 28 of 2014 (LPA) and is currently valued at R 4,451 bil- practice? As the organised profession, came into effect in February 2015. ‘The lion, which may seem huge but when there are a number of ways you can in- NF is grappling with the rules for legal fluence legislation and ensure public practitioners, the staffing and costs re- participation,’ he said. lating to the future Legal Practice Coun- Speaking about the future of the legal cil, as well as where provincial councils fraternity, former President Motlanthe and committees will be located in the said: ‘If we want to invest in the future, new dispensation, among other aspects,’ the future lawyers should have a culture he added. (To view the full mid-term of fighting for human rights and rein- report visit www.LSSA.org.za.) forcing constitutionalism. Lawyers of Mr Scott noted that the legal landscape the future should be equipped with legal is changing due to the changes brought skills that will enable them to work to- about by the LPA. He said that the profes- wards the realisation of justice for all.’ sion will be regulated through the LPC. ‘Since the four provincial law societies Words from the LSSA will disappear, it means that the LSSA In the absence of the Co-chairpersons of will also disappear. This will then leave the Law Society of South Africa (LSSA), a vacuum, we need a professional asso- immediate past Co-chairperson of the ciation that will represent the interest LSSA, Richard Scott, presented the Co- of practitioners, promote the profession Risk Manager of the Attorneys chairpersons Mid-term Report. Mr Scott and promote the rule of law. In 2015 a Insurance Indemnity Fund (NPC) said that the LSSA has been working unanimous decision was taken that such (AIIF), Thomas Harban, said towards implementing two resolutions a body should be formed. Remember the that in the future practitioners that came from its 2016 AGM, namely, function of the LPC is to regulate the would be called on to make a enhancing the role of women in the pro- profession and it will not represent the contribution towards their AIIF fession and creating an action group to interest of practitioners,’ he added. indemnity insurance. deal with the past and present discrimi- Mr Scott went on further to say: ‘We

DE REBUS – DECEMBER 2016 - 6 - HELPING YOU TO REALISE YOUR CLIENTS’ AFRICAN SUCCESS STORY

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titioners would be called on to make a Fund (ADF) should they qualify to apply contribution towards their AIIF indem- for same. ‘To this end the society has nity insurance. He stressed that the vast participated in joint venture workshops majority of claims are avoidable and are with the ADF and the AIIF in promoting caused by negligence. ‘We have seen in- the services offered by the ADF and the stances where practitioners are blatantly AIIF,’ he added. reckless,’ he added. Mr Peter said that the National Law The AIIF tabled a report written by its Library continues to provide a valu- Managing Director, Sipho Mbelle. The re- able service to members nationally and port stated that the AIIF has seen an an- has established as a national resource nual increase in the number and value of library. ‘As part of the awareness cam- claims. ‘The outstanding claims liability paign around the library’s benefits the was calculated at R 388 million as at the society has arranged workshops nation- end of March 2016. Professional indem- ally in association with the ADF and the nity claims have increased at a rate in AIIF. The society records its gratitude to excess of the official inflation rate on an the AFF for its funding contribution to- annual basis,’ the report states. wards the escalating costs of operating The report further states that the sole the library,’ Mr Peter said. Outgoing President of the KZNLS, source of the AIIF’s funding remains the Lunga Peter, presenting his annual premium received from the AFF. New councillors report during the conference. ‘The consideration of the sustainability 2016/2017 of the AIIF includes re-looking at the • Umesh Jivan (President) funding model of the company. Prac- • John Christie (Vice-President) titioners will be called upon to make a looked at against the backdrop of its an- • Vernon O’Connell (Vice-President) contribution to the premium funding nual spending, the opposite is true. For • Lunga Peter (Black Lawyers Association in the near future. We have warned the instance in the last six years the fund (BLA)) (Vice-President) profession of this in our reports to the spent just over R 1,6 billion on funding • Charmane Pillay (National Association various structures in the last few years. the activities of the profession to the ex- of Democratic Lawyers (NADEL)) (Vice- The rates at which the members of the clusion of its own activities. President) profession will be expected to contribute The LPA has brought with it certain • Dee Takalo (BLA) are being actuarially calculated. We are fundamental changes in the regulatory • Eric Zaca (BLA) sensitive to the fact that the introduction environment of the practitioners. In the • Nonduduzo Khanyile-Kheswa (BLA) of the payment regime should not create current environment, only the law soci- • Matodzi Neluheni (BLA) a barrier to entry into the profession,’ eties have the power to carry out func- • Raj Badal (NADEL) the report states. tions such as inspections of books of • Asif Essa (NADEL) accounting, applications for the appoint- Words from the KZNLS • Poobie Govindasamy (NADEL) ment of curators, as well as initiating • Xolile Ntshulana (NADEL) prosecutions against practitioners guilty President • Richard Scott of theft although in certain amending Outgoing President of the KZNLS, Lunga • Praveen Sham legislation the fund has similar powers. Peter, presented his report during the • Manette Strauss The LPA vests these powers in the fund conference. Speaking about the volun- • Eric Barry originally including the power to deter- tary association for legal practitioners, • Saber Jazbhay mine the rules associated with inspec- Mr Peter said that the profession has • Gavin McLachlan tions, which it might carry out. This has agreed that it was imperative that a na- • Ebi Moolla necessitated the fund to adapt its busi- tional voluntary association must be ness model to be able to carry out these established as the unified voice of the Alternate councillors functions in its own right.’ profession representing members’ inter- • Russell Sobey ests as the LPA only addresses issues of • Sthembiso Kunene (BLA) Words from the AIIF regulation of the legal profession. • Ilan Lax (NADEL) Risk Manager of the Attorneys Insurance Mr Peter encouraged members of the Indemnity Fund (NPC) (AIIF), Thomas profession to make use of the facilities Mapula Thebe, Harban, said that in the future prac- offered by the Attorneys Development [email protected]

Examination dates for 2017 Admission examination: Notarial examination: • 14 February • 7 June • 15 February • 11 October • 22 August • 23 August • For the Attorneys’ admission examination syllabus, see 2016 (Jan/Feb) DR 19. Conveyancing examination: • 10 May • For the Notarial examination syllabus, • 6 September see 2016 (April) DR 19. Registration for the examinations must be done with the relevant provincial law society.

DE REBUS – DECEMBER 2016 - 8 - Activism with a purpose discussed at BLA AGM

he Black Lawyers Associa- Update on the National tion (BLA) held its 39th annual general meeting and Forum conference on 21 and 22 On the second day of the conference, October in Kimberley un- member of the National Forum on the Le- der the theme: ‘Urgent need gal Profession (NF) Kathleen Dlepu gave Tto redress skewed briefing patterns for delegates an update on the workings of quality legal work for all’. the NF. She said that the NF is a body Proceedings of the conference began that will pave the way for the Legal Prac- with a gala dinner, which incorporated tice Council (LPC). She added that the the Second Annual Godfrey Pitje Memo- President of the BLA, Lutendo Sigogo, is rial Lecture. The lecture was to be deliv- chairing one of the committees that is ered by advocate Mojanku Gumbi, in her tasked to deal with difficult issues such absence, Judge George Maluleke of the as employees and the assets. ‘There are Gauteng Division of the High Court, de- various other tasks carried out by the livered the address. various committees to ensure consensus Judge Maluleke began his address by and that what is decided is endorsed by welcoming the Pitje family and all those The Second Annual Godfrey the broader profession,’ she added. present at the dinner. He went on to say Pitje Memorial Lecture was to be Ms Dlepu said that the NF meets al- that Mr Pitje was the first director of the delivered by advocate Mojanku most every Saturday and it hopes to not BLA Legal Education Center while he was Gumbi, in her absence, Judge extend the time frame of its mandate. the chairman of the legal education trust George Maluleke of the Gauteng She noted that no resolution has been at the time. Reading from the speech, Division of the High Court reached in terms of the elections for the Judge Maluleke said: delivered the address. LPC as some are advocating for quotas ‘The heading of this address is “Activ- as in line with s 7 of the Legal Practice ism with a purpose”. … We meet today at Act 28 of 2014. ‘A decision has been a time of great uncertainty in the world. racialism, but he could have just as well made that there will be two voter rolls, The global south is suffering from the been an African nationalist or an advo- one for attorneys and another for advo- negative effect of economies that are cate of black consciousness. cates,’ she added. growing at a pedestrian rate. Coupled … Speaking about the funding of the LPC, with instances of insecurity, brought In the inaugural lecture, then Deputy Ms Dlepu said that after a cost analysis about by such activities of those credited Chief Justice Dikgang Moseneke referred has been done, recommendations will out by groups such as Boko Haram and to the well-known case of R v Pitje [1960 be made to the Justice Minister with the Al-Shabaab. Thrown into that is the slow- (4) SA 709 (A)], which had at its subject view of efficient implementation of the ing down in growth in China, the politi- the defiance that came to be identified LPA. ‘One of the challenges we have to cal and economic difficulties in Brazil, in with Mr Pitje. Mr Pitje had refused to sit deal with is that attorneys have clear Russia the disintegration of Serbia and in a corner reserved for Bantu lawyers in data in terms of numbers in the profes- its surrounds. the courtroom in Boksburg, as a result of The global north is also not doing well, which he was charged with contempt of with the unknown long-term effects of court. There are many other instances of Brexit, the rise of total authoritarianism defiance associated with Mr Pitje. represented by the fact that a man such I am raising these two characteristics as Donald Trump would even get to the of Mr Pitje, defiance and unity, in an at- stage where he is … . The countries in tempt to see if we can learn anything the south of Europe are barely surviving from that to find solutions to one of the with unemployment levels among the most urgent national challenges in the youth reaching as high as 43,9% in Spain. cry of our young people under the ban- Our country is also facing a myriad of ner of “fees must fall”. When the “fees challenges. It is at times like these when must fall” movement started there was we remember that men such as Godfrey a unity of purpose exhibited by students Mokgonane Pitje represented the best from across party political lines, they that this country had to offer. In his life- identified their common enemy as the time one found many manifestations of unaffordable costs of tertiary education. both defiance and compliance, non-ra- Soon after the movement started, it be- cialism and anti-racism, anti-sexism and came clear that we the adults started try- a healthy dose of patriarchal practices, ing to pull the students into some politi- internationalism and African national- cal camps. … Deputy Minister of Public ism, and other seemingly contradic- I want to suggest that if we may step Enterprises, tory tendencies. … I realised that what back a little and allow the students de- Bulelani Gratitude Magwanishe, I thought were contradictory tendencies bate the matter of the cost of higher edu- delivered the keynote address were in fact complimentary. … cation as a united force, as personified at the 39th Black Lawyers Mr Pitje was an ANC supporter, he by Mr Pitje, we would have taken an im- Association AGM. believed totally in the principle of non- portant step towards resolution. …’

DE REBUS – DECEMBER 2016 - 9 - AGM NEWS

Government’s commitment to transformation Deputy Minister of Public Enterprises, Bulelani Gratitude Magwanishe, delivered the keynote address. Mr Magwan- ishe reiterated government’s commitment to the transformation of the legal profession. He added: ‘We recognise the critical role of lawyers in the broader transformation of our society. … The emergence of black law firms served to strengthen the fight against race domi- nance. This was evident in the coming into being of the Mandela and Tambo law firm. The democratic government has a constitutional responsibility to correct the imbalances created by the past. … In the context of the South African economy Deputy President of the Black Lawyers Association, dialogue the traditional white companies Mashudu Kutama (left), and President of the BLA, Lutendo Sigogo have for centuries dominated the eco- at the 39th AGM held in October. nomic space insofar as procurement of goods and services is concerned. Out of the six state owned companies sion, whereas the advocates do not have Professional association reporting to the department of public such,’ she added. update enterprises, four are being audited by black auditing firms and the remaining Update from AFF Former President of the BLA, Busani Ma- two by the auditor general of South Af- Chairperson of the Attorneys Fidel- bunda, noted that the issue of a profes- rica. … ity Fund (AFF), Nonduduzo Khanyile- sional association was not a new topic. An environment is being created Kheswa, said that the primary objective He added: ‘There are implications which where the genius of black legal practi- of the fund is to provide compensation have arisen out of the LPA, things are not tioners can thus forth shine. The frame- to members of the public, while its sec- going to be the same. … The LPC creates work for the transformation of the state ondary objective is to provide for pro- a new regime, if we do not formulate an legal services issued by the Department fessional indemnity insurance. ‘The AFF association for legal practitioners, we of Justice and the promotion of capac- also funds the regulators to conduct its ity building by ensuring that historically will be in a situation where we are left activities including education. … With re- disadvantaged practitioners have access in a lurch. We have been made to under- gard to the financial position of the fund, to legal matters of substantive value stand that there are certain members of the AFF has to mull over some of the ac- [and the] promotion of sufficient flow of the profession that do not see a need of tivities that the AFF currently funds such instructions to the historically disadvan- as education and professional indemnity an association. The new association will taged legal practitioners.’ insurance,’ she added. not be a perpetuation of the status quo.’ • See also ‘Role of lawyers in a democrat- • See also ‘Role of lawyers in a democratic society discussed at KwaZulu-Natal ic society discussed at KwaZulu-Natal Mapula Thebe, Law Society AGM’ at p 7. Law Society AGM’ at p 7. [email protected]

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DE REBUS – DECEMBER 2016 - 10 - ‘I-generation’ law student discussed at FSLS AGM

he Law Society of the Free facts. I have experimented with open State (FSLS) held its annual book assessments and invited the stu- general meeting (AGM) in Cla- dents to bring any material they wish to rens on 21 October. the assessments. The assessments are The AGM was preceded by problem based. In this manner they re- Ta gala dinner where the North West Uni- ally start understanding how legislation versity’s (NWU) Professor Pieter du Toit works … . It allows for deeper learning was the guest speaker. Prof du Toit who and the assessment itself becomes a is a professor in the law faculty of the learning process. They do not necessar- NWU spoke on the ‘i-generation’ law stu- ily fare better in these types of assess- dent. ments and they tend to underestimate the extent of research and studying re- The ‘i-generation’ law quired. However, it also became clear to student me that when the responsibility is placed in their hands and they fail to succeed, Explaining what the ‘i-generation’ law they tend to accept responsibility for the student is, Prof du Toit said it is ‘the stu- failure,’ he said. dent that we find in our university class- North West University He suggested that the Law Society of rooms these days. They know no other Professor Pieter du Toit was the South Africa (LSSA) should also start re- world than the world of iPhones, Google, guest speaker at the Law Society thinking the manner in which candidates YouTube and the Internet.’ He then went of the Free State’s annual general are assessed in the admissions exams. on to provide an overview of the charac- meeting in Clarens. He concluded by stating: ‘In this re- teristics of ‘i-generation’ students. gard it must also be mentioned that they According to Prof du Toit, ‘i-gen- value feedback. They constantly want to eration’ students relate to the world might find that they relied on an outdat- know how they are doing and I expect through technology. He added that they ed electronic version. they would also want to know this from have already started to filter through to Prof du Toit said: ‘Since they have im- their principal when they do their arti- legal practice and soon they will do so mediate access to more information than cles. They get impatient if marks are not in much larger numbers. ‘These students one person could ever know or dissemi- made available quickly. And they always present huge challenges to legal educa- nate they simply do not see the profes- want to know what the precise answer to tion and the legal practice. However, I sor as a front of all knowledge. They are a question is and as we all know in law it also believe that they have unique attrib- often critical of what persons in posi- is not always as simple as that. It is now utes and therefore have great potential tions of authority tell them. They see settled practice at most universities to as legal practitioners,’ he said, adding them merely as facilitators in their learn- provide detailed feedback.’ that information has always just been a ing process. Research has found that He questioned what the legal profes- click away for the ‘i-generation’. ‘Tech- they want more hands on, inquiry-based sion was doing to understand the ‘i- nology is more than just a tool, it is part approaches to learning and are less will- generation’ and get the best out of them of who they are. This has a number of ing simply to absorb what is put before and added that it cannot be business as implications for legal education,’ he said. them by teachers.’ usual. Prof du Toit said that through their Prof du Toit said many of the stu- cellphones students have immediate ac- dents are indifferent to authority and How to improve your law cess to legislation and judgments even send communication such as e-mails in while the class is being presented. ‘When- informal telegraphic style, adding that firm ever any uncertainty regarding an aspect they ‘need strong guidance regarding The outgoing president of the FSLS, Deir- of the law arises during a lecture they the etiquette of a relatively conservative dré Milton reflected on the International can be asked to follow it up there and environment such as the law office and Bar Association (IBA) conference that then and in fact they often do so of own the court room, as well as guidance on she had attended a few weeks before the accord. Make no mistake they also force certain societal skills.’ FSLS AGM took place. She said that at the us to be better law teachers – we are kept According to Prof du Toit, with a conference there was a session on how on our toes. We must know the newest world of information at their fingertips, to increase your fees by 30% in order to developments in the field we are teach- ‘i-generation’ students find memorising stay in the profession. She highlighted ing otherwise we may be embarrassed by senseless. He said: ‘They focus on find- a few suggestions that were made that students who do some research in class ing, interpreting and benefitting from stood out for her. These were: whilst we are teaching,’ he said. information,’ adding that he also finds • Analysing your financial portfolio as Prof du Toit, however, noted that one memorising a waste of time. ‘Very few of firms do not know when they are making of the challenges faced is that students us had learnt much by memorising. Let money or losing it. Ms Milton said that often lack the ability to distinguish re- us be honest, these days they are con- firms should appoint consultants on liable material from unreliable and out- fronted with an overwhelmingly com- an annual basis to analyse their finan- dated material. He added that they may plex legal dispensation. In my view the cial portfolio every year and be advised for instance tell you that you are feeding traditional forms of assessment (which where the problem areas are, so that them incorrect information because they still persist in most law schools) will not those areas can be corrected. cannot find it in the legislation you are achieve much. There should be a reduc- • To introduce and include the juniors referring to. But on closer inspection one tion of rote learning and memorising of in your firm to take part in your finan-

DE REBUS – DECEMBER 2016 - 11 - AGM NEWS

without the corruption of public officials. In other words, all these crimes are being aided and abated by public officials who will approve passports being passed and allow illegal immigrants to cross borders as legal. Public officials accept bribes because they are low paid for their services and for this reason, this crime has been successfully practiced on an ongoing basis,’ she said. Proxi Smart On the day of the AGM Ms Milton welcomed delegates to the AGM. Awards were given to the top three highest inter- Outgoing president of the est earners in small, medium and large Law Society of South Africa Co- Law Society of the Free State, law firms. chairperson, Jan van Rensburg Deirdré Milton, speaking at Co-chairperson of the LSSA, Jan van speaking at the Law Society of the annual general meeting Rensburg gave the LSSA’s report. He also the Free State annual general in October. spoke on the establishment of a Legal meeting in Clarens in October. Practitioner’s Association for South Af- rica. cial discussions and that the finances are Mr van Rensburg also spoke on the Subscription fees made open to them so that they can un- Proxi Smart case. He explained that Proxi derstand early on in their careers what Smart approached the LSSA with a pro- FSLS council member, Vuyo Marabane, probability means and what must be posal stating that it would like to do the spoke on the identification cards for done to achieve certain goals. administration work (or non-reserved practitioners. He said that the subscrip- • To investigate the possibility of merg- work) that conveyancers are currently tion fee for 2017 is R 1 881, which is in- ing with smaller firms in the fields of doing, and that it wanted the LSSA’s clusive of R 50 for the cards. The cards expertise that your firm does not have. approval. Proxi Smart would, from the will be issued to all practicing attorneys. She added that to improve billing pro- purchase agreement, gather all the infor- Candidate attorneys will not receive cesses, attendances should be billed im- mation from clearance certificates to re- them. He said that the cards will serve as mediately while working on a file and ceiving deposits and arranging finances proof that that individual is an attorney. that billing should not be left for a later and issuing of guarantees. They would stage. ‘As you might forget exactly what prepare a pack for the conveyancer, 2016/2017 Council: you have done,’ she said. ‘Devise a dif- which he or she will check and draft a The council of the FSLS will remain the ferent fee structure for different mat- deed of transfer and sign which is the re- same. Its new president is Sizane Jonase. ters. For example in certain matters, served work. The conveyancer will then • Sizane Jonase (National Association of only have an hour fee and in others, just get 15%. Democratic Lawyers (NADEL)) (President) a success fee, depending on the kind of Mr van Rensburg said that if Proxi • Vuyo Morobane (Black Lawyers Asso- work you are doing,’ she said. Smart manages to split the work, then ciation (BLA)) (Vice-President) Ms Milton said that another issue that surely any other litigation can be split • David Bekker was highlighted at the IBA conference into reserved and non-reserved work for • Johan Fouchè was human trafficking. She said that attorneys, which will mean that there • Etienne Horn many countries are generally unable to will be very little left for attorneys to do. • Noxolo Maduba (BLA) curtail human trafficking and that it is He added that some attorneys support • Tsiu Matsepe (BLA) a crime that is growing daily. She added it, especially those starting out. Mr van • Joseph Mhlambi (NADEL) that at the moment human trafficking – Rensburg stressed the fact that if the • Deirdré Milton next to drug trafficking – is one of the money does not go into trust accounts • Jan Maree biggest income generating crimes world- and goes to banks instead, the Attorneys • Cuma Siyo (NADEL) wide. ‘Twenty-one million people are Fidelity Fund will not have money to pro- • Henri van Rooyen. currently in forced labour positions, not tect the public and to assist the profes- only sexual practices but also for cheap sion. labour. $ 150 million change hands every • To read the full notice of motion go to Nomfundo Manyathi-Jele, Communications year across the borders due to the fact www.lssa.org.za. Officer, Law Society of South Africa, [email protected] that organised crime cannot take place • See editorial at p 3. q LEAD SEMINARS

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DE REBUS – DECEMBER 2016 - 12 - NEWS Office of the Public Protector will not name investigation reports to avoid tension with the state

he new Public Protector (PP), Busisiwe Mkhwebane, took office on 15 October, at her first media briefing at the offices of the PP in Preto- ria, Ms Mkhwebane said her Toffice will no longer name investigation reports to avoid unnecessary tension between the PP’s office and the state. She also announced that the office of the PP will no longer have use of consultants for investigative work, but will rather invest in building internal capacity to include the expertise that the PP offices do not have, such as forensics and auditing or utilising other government or public institutions as provided for by s 7(3) of the Public Protector Act 23 of 1994. Ms Mkhwebane further said that the office of the PP will no longer use do- nor funds because of some of the risk The new Public Protector, Busisiwe Mkhwebane, at her office in Pretoria associated with it. She said that she was where she held her first media briefing in Pretoria on 20 October. She not comfortable with foreign donors and said her office will no longer use consultants for investigative work. that led to some of the changes and decisions she made when she took office. Ms Mkhwebane indicated that the matter said she wants to make it possible for to enhance access and visibility of the of foreign donors and other information an African child in Umhlabuyalingana to PP’s office among far-flung communities she presented to the Portfolio Commit- also enjoy the fruits of democracy and through public awareness programmes. tee on 19 October was already in the An- empower people to be able to hold their She said that she informed Parliament nual Report that the former PP, advocate leaders to account. However, she said, that in that area she plans to – Thuli Madonsela, prepared. unfortunately some people in society • negotiate and enter into a memoran- Ms Mkhwebane added that, among have mischievously misconstrued her dum of understanding with the Depart- other things, the office of the PP under message as meaning she will turn a blind ment of Justice for the use of magis- her leadership, will prioritise aging cases eye on the so-called high profile cases. trates’ courts to bring the services of the through the establishment of a backlog Ms Mkhwebane said the office of the office of the PP closer to the doorstep of project team that will be focusing on dis- PP is first to indicate that the ‘improp- their clients; posing of all cases older than two years. er conduct’, that the Constitution, in s • negotiate and enter into a memoran- ‘We have a total of 260 cases older than 182(1)(a), states that the office of the PP dum of understanding with the Public two years under our Good Governance has the power to investigate allegations Broadcaster and other media houses and integrity branch and 47 under Ad- or suspicions of, is not limited to service for partnership that will enhance public ministrative Justice and Services Deliv- delivery failure. awareness; and ery: We will also prioritise critical posts, Ms Mkhwebane said it also includes • engage strategic stakeholders such including that of a senior security per- instances of abuse of power and abuse as universities, schools and traditional sonnel,’ she added. of state resources. ‘In any event, when leaders to assist the office of the PP in Ms Mkhwebane stressed that it was a Member of Parliament requests me whichever way they can to advance its important that both offices of the PP to investigate allegations of contraven- public awareness agenda. are secure, as well as the safe-keeping tions of the Executive Ethics Code, I am Ms Mkhwebane said the ‘how’ part of of sensitive information that is handled. obliged to investigate and report in 30 the plans she has for her office will be She noted that the office of the PP has days, failing which, I must advise the worked out during the strategic planning placed a moratorium on international President that I will not meet the dead- session. However, in a nutshell, taking travel, especially benchmarking exer- line. For the record there is no merit in the office of the PP to the grassroots and cises: ‘We believe that enough exchang- claims that I am going to turn a blind eye increasing visibility among peripheral ing of notes with our counterparts else- in such cases. It is simply not true,’ she communities are the key aspects of her where in the world has been done and said. vision for the office over the next seven I will be getting reports on the lessons Ms Mkhwebane pointed out that the years. we have learnt from all trips that have mandate of the office of the PP is not been undertaken so that we can assess only limited to investigation. She re- how we have benefited from the engage- ferred to s 182(4) of the Constitution ments,’ she said. that enjoins the PP to be accessible to all Kgomotso Ramotsho, Ms Mkhwebane said she will do her persons and communities. Ms Mkhwe- [email protected] job as the PP without fear or favour. She bane added that her other priority was

DE REBUS – DECEMBER 2016 - 13 - South Africa’s new International Arbitration Bill brings new dawn of new area

he Deputy Minister of Justice based on the United Nations Commis- will not apply to the proceedings for the and Constitutional Develop- sion on International Trade Law (UNCI- enforcement of awards under the Recog- ment, John Jeffery, said South TRAL) Model Law. nition and Enforcement of Foreign Arbi- Africa’s (SA) development of a Mr Jeffery said the International Ar- tral Awards Act or for the enforcement, new International Arbitration bitration Bill emanates from a report of setting aside or remittal or an award un- TBill, brings a new dawn of era in arbitra- South African Law Reform Commission der the Arbitration Act. tion. Mr Jeffery was speaking at the In- dealing with international arbitration. Mr Jeffery pointed out that the pro- ternational Arbitration – the Dawn of a ‘The main thrust of the Bill is the incor- posed legislation will not only assist New Era in South Africa Seminar held in poration of the United Nations Commis- SA businesses in resolving their inter- Johannesburg on 14 October. He said the sion on International Trade Law Model national commercial disputes, but will new Bill comes at an opportune time for Law, as the cornerstone of the interna- ensure that SA is an attractive venue for SA, to opt into the international stand- tional arbitration regime in SA.’ He said: parties around the world to resolve their ard for the resolution of commercial dis- ‘The Model Law defines arbitration as commercial disputes. He said that after pute. ‘Not only does it have the poten- “international” if parties to an arbitra- Cabinet had approved the introduction tial to attract foreign direct investment, tion agreement have, at the time of the of the Bill into Parliament, the Depart- but also give greater legal protection to conclusion of that agreement, their plac- ment of Justice received advice that the South African investments abroad,’ he es of business in different States. This UNCITRAL Model Law could be adapted said. definition is used to determine, which in order to accommodate local circum- Mr Jeffery said SA was a party to the arbitration matters qualify as “interna- stances. New York Convention and in 1976, SA tional” and are, therefore, subject to the ‘We are now in the process of going acceded to the Convention without res- Model Law,’ he added. back to Cabinet, with the suggested ervation. He added that SA enacted the Mr Jeffery noted that the Bill seeks to amendments, for noting and endorse- Recognition and Enforcement of For- incorporate the Model Law into SA law ment before proceeding with the intro- eign Arbitral Awards Act 40 of 1977 in and that the provisions of the Bill reflect duction of the Bill into Parliament. And order to give effect to the principles of many of the provisions of the Model Law. we expect that it will be introduced be- the Convention. He stated that the Ar- He said provision is made for the Model fore the end of this year,’ he said. bitration Act 42 of 1965 governs arbi- Law to apply to all international agree- tration proceedings in SA, however, he ments, irrespective of whether the agree- added that the Act makes no distinction ment was entered into before or after the Kgomotso Ramotsho, between domestic and international ar- commencement of the envisaged legisla- [email protected] bitration and the Arbitration Act is not tion. Mr Jeffery, however, said the Bill

Government obliged to give accessible quality education

ormer Deputy Chief Justice, Justice Moseneke said since 1994, gov- Dikgang Moseneke, said the de- ernment must oblige, devise and imple- mand for access to further edu- ment a masterplan that would afford, at cation, including higher educa- the very least, its citizens universal and tion and further education and quality basic and adult education and Ftraining is legally valid. Justice Moseneke increase access to higher education. He was speaking at the 2016 Founders Lec- said government cannot hike fees every ture held at the University of South Af- year, because the higher the fees the rica on 27 October. He said the plea for more education will be commoditised. the doors of education to open to all has Justice Moseneke said the debate been a core demand of a ‘long glorious of ‘fees must fall’ must start where it struggle over centuries’. should, which is with the Constitution. Justice Moseneke noted that the Con- He said rising student fees, will reduce stitution is silent on whether access to progressive access in higher education, further education is subject to available and that only the rich will afford higher state resources. He said government education. He pointed out that the vio- must prioritise or re-prioritise resources lence that is connected to the ‘fees must in order to give quality education. Justice Former Deputy Chief Justice, fall’ campaign is totally unacceptable Moseneke added that the entitlement of Dikgang Moseneke, speaking at and should stop immediately. He said further education is to be contrasted the 2016 Founders Lecture held that the violence bares no justification with the right to basic education and at the University of South Africa whatsoever and said it amounts to pun- adult education, which government must on 27 October. He called for vio- ishable conduct. ‘I urge young university provide universally and without qualifi- lence connected to the ‘fees must students not lightly to flirt with terms cation of progressive access or availabil- fall’ movement to end. like revolution and violence uprising. A ity of government resources. revolution may be apt only when there is

DE REBUS – DECEMBER 2016 - 14 - NEWS no real prospect for a democratic accom- ment and that universities can never an accommodative way. He further said modation,’ he added. give the right to access to free quality that government has not persuaded stu- Justice Moseneke said that students in education. He stressed that society can- dents that there is a solution to the fees tertiary institutions are in a good posi- not sit and watch while universities get crisis. ‘What we need to collectively do, tion to resort to electoral correction if destroyed. in my humble view, is convene a negoti- they are unhappy. He pointed out that Justice Moseneke said the question ating forum a CODESA [Convention for universities are wrong targets for violent must be asked: What has been done in a Democratic South Africa] of education. uprising, adding that universities have 22 years for the country to find itself in This should be convened not by the state no effective means to deal with violent a fight for education? He said it was not but by civil society,’ he advised. protest and disruption. He further said clear on the call for ‘fees must fall’ if eve- universities were meant to be open spac- ry student irrespective of financial needs es to enrich ideas and new knowledge, must be fully funded by government. Jus- and that the true counterpart to claim tice Moseneke said young people must Kgomotso Ramotsho, [email protected] the ‘fees must fall’ campaign is govern- be given an opportunity to be heard in

Tax master a middle man for reasonable billing between attorney and client

etired Gauteng Local Division, ing that he did not regard contingency Pretoria, Judge Eberhard Ber- fees as a commodity, but said it is closer telsmann, said taxing masters to a bespoke service. He said contin- are gatekeepers of fairness, gency relates to the fact that the client is between attorneys’ and their unable to pay. Therefore, there is a risk Rclients. They are there to see to it that in the preparation of the case as there clients are charged reasonably. Mr Ber- are expenses that need to be negotiated telsmann was speaking at the first Legal and experts who need to be consulted. Costs Indaba, on 7 October in Johannes- He said, in his experience, most experts burg. are prepared to wait to get paid at the Judge Bertelsmann said that many end of a case. years ago, contingency fees were regard- Judge Bertelsmann pointed out his ed as unacceptable, but in 1997 follow- concerns, that a huge amount of money ing a British example, the Contingency has been spent on matters that could Fees Act 66 of 1997 was implemented. have been settled on the first day. He He explained that, the existence of the Retired Gauteng Division High gave an example of Road Accident Fund Contingency Fees Act was to facilitate ac- Court Judge Eberhard Bertels- (RAF) matters where, in his opinion, the cess to justice. He added that the focus mann was the keynote speaker at moment summons arrive at the RAF, the of the contingency fees in 1997, was to the first Legal Cost Indaba on 7 RAF should have done the assessment of ensure that people who could not afford October. the merits and assessments of the inju- to prosecute cases, were given an op- ries and asked attorneys for a couple of portunity to through positively minded Northern Provinces, Anthony Millar said weeks or months to complete all the as- practitioners, to enforce claims. How- contingency fees have been a burning sessments and not go to court. ever, Judge Bertelsmann said the ques- issue for many years. Mr Millar posed a He said it was unfortunate that the tion remained, whether that motivation question to Judge Bertelsmann asking if current cash flow problems experienced of the Contingency Fees Act is still the lawyers are selling a commodity or sell- by the RAF started because someone de- same. ing a bespoke service? cided to virtually oppose all matters. The President of Law Society of the Judge Bertelsmann responded by say- Mr Millar asked, what influence does the defendants’ ability to pay, play in the contingency system? He said in an assessment of the risk the attorney will think before entering in agreement with the client and also consider the prospect that there will be no money at the end. Judge Bertelsmann answered the question by saying that the fact that the defendant cannot pay should not concern the judge. Mr Millard asked Judge Bertelsmann to comment on how the RAF and other state entities, such as the Department of Health, have been seen as easy targets Retired Gauteng Division High Court Judge Eberhard Bertelsmann, for attorneys, in order to commoditise discussing contingency fees with the President of the Law Society litigation. Judge Bertelsmann answered of the Northern Provinces, Anthony Millar, at the first by saying that it was tragic that the Legal Cost Indaba on 7 October. standard of the administration of in-

DE REBUS – DECEMBER 2016 - 15 - stitutions such as the RAF and Depart- it is all about. She noted that it was im- ment of Health and legal services they portant that legal practitioners not cor- are bound to employ is perceived to be rect the cost bill during taxation, which less than effective. He stressed that the they omitted to ask for in open court. issues of contingency fees where the De- Ms Zeelie said should legal practition- partment of Health is concerned, has to ers have a portion of their costs reserved, be addressed and that there is a huge costs have to be specifically unreserved number of contingency agreements re- or practitioners do not have those costs. lating to medical negligence. She said if counsel in an open court did not see fit to raise it with the presiding Taxation: No tailor made officer to tell the judge to disallow the solution affidavit, the taxing master has no power to correct the bill. She added that the Taxing master at the Gauteng Local Divi- taxing master is empowered to interpret sion, Johannesburg, Trudie Zeelie, said the judge’s order and give effect. ‘A tax- there are no easy answers or tailor made ing master can only work with what you solutions, when it comes to taxation. Ms give them,’ she added. Zeelie was speaking about the general- Ms Zeelie said between party and par- ity of taxing client’s costs and counsel’s Taxing Master at the Johannes- ty, the court order does not make pro- fees. burg High Court, Trudie Zeelie, vision for the costs of more than one Ms Zeelie said that, the application for was a guest speaker at the first counsel, the practitioner cannot have a taxation date must be submitted elec- Legal Cost Indaba on 7 October. the costs of more than one counsel. She tronically to the taxation clerk. She said added that the taxing master has no dis- the application must include the case cretion on such a matter. She said that number, the citation of the parties, the torney to appear at taxation. She went on on liquidation matters, if a legal practi- number of items on the bill and the date to speak about the dress code when legal tioner does not take an order that does the dies was completed on. She added practitioners and consultant’s present not specifically deal with costs, the prac- that there are taxation principles and cost bills, she said the presentation and titioner does not have those costs. that no bill of taxation should be taxed taxation of bills of cost is the culmina- Ms Zeelie added that when a taxing if these principles are not met. tion of the civil legal process, she said master is taking on a review, the legal Ms Zeelie stated the following princi- it is expected of legal practitioners and practitioner must attach the taxing mas- ples – consultants to dress accordingly. ‘It goes ter copy of the marked bill, to the appli- • the presenter of the bill, must be in without saying, that it is unworthy of at- cation. She said even when it is not stipu- possession of the office file of the attor- torneys and consultants to present the lated in r 48 of the Uniform Rules of the ney of record; bill, without being properly attired. In High Courts, attaching the copy of the • the certificate of r 70 of the Rules general a gentleman must at least wear taxing masters marked bill assists the Board for Courts of Law Act 107 of 1985, a coat, a formal shirt and tie, and a lady taxing master and will enable the taxing signed by the de facto attorney of record should wear formal shoes and a jacket,’ master to deal with the review sensibly in the matter must accompany the bill; she said. and timeously. and Ms Zeelie also spoke about profes- Ms Zeelie said in recent years, much • a signed original court order has to be sionalism and ethics, she said that in the has been said about counsel’s fees. She attached to the bill. current economic climate, money has added that there is a debate regarding Ms Zeelie said, in the event of the taxa- been an extremely emotive matter and the commercial site of the practice to tion being unopposed, the attorney on that taxation can turn into screaming be balanced with the duty of care and record must send a letter to the taxing matches. She urged that legal practition- service to the taxing master at the Jo- master, confirming that the matter is ers provide taxing masters with copies hannesburg High Court. She stated that infact unopposed. She added that in the of the cases that practitioners will use access to justice turns to be severely matter of a settlement, the attorney on during taxation and also give the taxing restricted because of astronomical le- record must also send a letter confirm- master full judgment on the matter, to gal fees being charged. Ms Zeelie said ing the settlement. She also spoke about enable the taxing master to understand it would be helpful if counsel were to the appearance of the cost of a tax con- the matter that they are going to deal specify in their invoice in detail the pro- sultant at the Gauteng Local Division, with. fessional services they have rendered. she said cost consultant appear and pre- Ms Zeelie said legal practitioners must She said it would help in determination sent the bill of cost. also be in a position to briefly address on both reasonableness and fairness of Ms Zeelie said in the event of an objec- the taxing master on the nature and the counsel’s charges. tion to a cost consultant presenting a bill merits of the matter, she said practition- of cost or opposing it, taxation must be ers do not have to read the particulars of Kgomotso Ramotsho, [email protected] postponed to enable the instructing at- the plea, but tell the taxing master what

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DE REBUS – DECEMBER 2016 - 16 - NEWS

National Schools Moot Court Competition: Opportunity for learners to understand the Constitution

n 9 October learners, Them- binkosi Msiza (17), Surprise Mahlangu (17) from Gaut- eng and Aviwe Vilane (16) and Emihle Majikija from OKwaZulu-Natal were crowned champions at the sixth National School Moot Court Competition, held at the Constitutional Court. The team argued for the respondent. Mr Mahlangu said he was shocked when they called out their names to an- nounce his team as the winning team. ‘Everyone wanted it badly, I am quite ex- cited that we won, it shows that we went Winners of the sixth National School Moot Court Competition, an extra mile,’ he said. from left: Emihle Majikija, Aviwe Vilane, Thembinkosi Msiza, The hypothetical case focused on hu- Surprise Mahlangu with Justice Nonkosi Mhlantla (middle) man dignity, equality, supremacy of the and director of the Pro Bono and Human Rights department at Constitution, freedom of expression and Cliffe Dekker Hofmeyr, Jacquie Cassette (right), assembly, demonstration, picketing and at the Constitutional Court. petition. The first leg of the competition, saw an approximate 64 learners, of takes place at the Constitutional Court. partment. He announced that the Justice teams of four from eight provinces. The It reminded him of the words of late Department created a slimline version of Mpumalanga province was the only prov- President Nelson Mandela when he for- the Constitution, and distributed over ince that did not participate at this year’s mally opened the Constitutional Court 500 000 copies to grade 11 and 12 learn- competition. on 14 February 1995, when he said – ‘The ers in schools countrywide. The keynote speaker of the day, Dep- last time I appeared in court was to hear Mr Jeffery said for most learners it was uty Minister of Justice and Constitu- whether or not I was going to be sen- the very first time they had ever read or tional Development, John Jeffery, said tenced to death. Fortunately for myself had a copy of their own Constitution, as the annual competition was established and my colleagues we were not. Today well as the Bill of Rights. He said during in 2011 to create greater understanding I rise not as an accused, but on behalf a dialogue the Justice Department held of the Constitution and human rights in of the people of South Africa, to inaugu- at Uitenhage, a leaner from Phaphane South African schools. ‘This year is par- rate a court South Africa has never had, High School, Ntombizanele Klaas, said ticularly special for us as we celebrate a court on which hinges the future of our the Constitution will help her with her the 20th anniversary of our Constitution. democracy.’ school projects. ‘This competition aims The competition aims to celebrate our Mr Jeffery said, he would argue that the to create greater awareness in schools Constitution, our constitutional rights future of democracy is further enhanced and communities in South Africa, and and responsibilities, and strive to de- by the calibre of learners and their par- the values that it embodies through ac- velop the potential of each participating ticipation in the National Schools Moot tive participation,’ he said. learner,’ he said. Court Competition. He said that having Mr Jeffery said that the moot com- Mr Jeffery said it was always special learners knowing the Constitution and petition has many benefits and allows that the final round of the competition human rights is of importance to his de- learners to improve their public speaking skills, learn to structure a legal argument, analyse cases and develop writing skills. Acting Chief Justice of the day, Justice Nonkosi Mhlantla, thanked the learners for entering the competition, she further thanked them for having interest in the legal fraternity. ‘Hopefully some of you would consider law as a career,’ she said. Winners received prizes that included bursaries from Cliffe Dekker Hofmeyr to study law. Thando Mtombeni (17), Catelyn Cum- beriege (17), Nompendulo Cele (15) and Kwanele Shange (15), who argued for the applicant, walked away with the runner- up prizes.

From left: Former Constitutional Court Judge, Justice Joseph Goldstone with the runner-up team, Thando Mtombeni, Nompendulo Cele, Kwanele Shange, Catelyn Cumberiege and University of Kgomotso Ramotsho, Pretoria’s Professor, Dire Tladi, at the Constitutional Court. [email protected] q DE REBUS – DECEMBER 2016 - 17 - LSSA NEWS LSSA speaks out against withdrawal from ICC; welcomes withdrawal of charges against Finance Minister and release of State of Capture report

t the end of October and appears to be consistent with the pub- rious concerns about our government’s early in November 2016, lic perception that there is a politically interpretation of its commitment to the Law Society of South motivated link,’ said Mr Notyesi and Mr fighting impunity and providing accessi- Africa (LSSA) spoke out van Rensburg. ble forums for victims of crimes against publically against the The LSSA urges Mr Abrahams to con- humanity and human rights abuses by government’s decision to sider his position in the light of the se- those in power,’ said Mr van Rensburg withdrawA from the Rome Statute of the vere consequences his actions had on and Mr Notyesi. International Criminal Court (ICC); then South Africa’s (SA) economy. They added: ‘As we have said previ- welcomed the decision by the National The Co-chairpersons added: ‘Mr Abra- ously, we are currently in the fortunate Director of Public Prosecutions (NDPP) to hams seems oblivious to and unrepent- position of having a strong and inde- withdraw charges against the Minister of ant for the damage – both at home pendent judiciary and other institutions Finance, Pravin Gordhan, and then also and internationally – caused by the un- supporting democracy. We can turn to welcomed the Gauteng Division of the substantiated charge of fraud brought these to challenge abuses of power by High Court order that the Public Protec- against the country’s sitting Minister the state. However, this may not always tor’s State of Capture report should be of Finance by the country’s prosecu- be the case in future. Our Government published. tion services. Mr Abrahams himself an- appears hell-bent on closing and imped- In welcoming the order by the Gaut- nounced the intention to institute charg- ing access to regional, continental and eng Division of the High Court that the es at a public press conference. It would international courts should a time come Public Protector’s report on the State of be fair to assume that the NDPP would when South Africans can no longer rely Capture had to be released by the Office have gone out of his way in this matter, on domestic remedies.’ of the Public Protector, on 2 November, but also in all matters – be they high pro- The LSSA aligned itself with the state- the LSSA urged the court to consider file or routine matters – to ensure that all ment by the International Bar Associa- punitive costs against the President for relevant information had been reviewed tion that, ‘South Africa was one of the bringing what was patently an unfound- and that criminal intent had been estab- leading African countries in establishing ed application to interdict the release of lished. However, when the charges relate the permanent court with a mandate to the report and then withdrawing it. ‘The to fraud or theft by a high profile individ- address atrocity crimes, yet it may be cost of all the teams of counsel should ual such as the Minister of Finance, the one of the earliest to walk away. If this not be borne by the taxpayer,’ said LSSA NDPP should have made doubly certain decision holds, it would be an extraor- Co-chairpersons Mvuzo Notyesi and Jan of the facts before inflicting the trauma dinary and detrimental development for van Rensburg. he has on the economy, the image of the both international justice and for South The LSSA also welcomed the remedial country as well as on the public. Mr Abra- Africa.’ action by the previous Public Protector, hams made the public announcement, he In considering the preamble to our lo- advocate Thuli Madonsela, that the Presi- should take responsibility for bringing cal Implementation of the Rome Statute dent was to appoint a commission of in- the National Prosecuting Authority, the of the International Criminal Court Act quiry within 30 days headed by a judge criminal justice system and the country 27 of 2002 – solely selected by Chief Justice Mogoeng into disrepute.’ ‘Mindful that – Mogoeng. The LSSA called on Parliament to ini- • throughout the history of human-kind, In addition, the LSSA welcomed the tiate an investigation into the actions millions of children, women and men fact that the Portfolio Committee on Jus- of the Directorate for Priority Crime In- have suffered as a result of atrocities tice and Correctional Services had called vestigation – the Hawks – in this matter, which constitute the crimes of genocide, National Director of Public Prosecutions as well as in other cases involving high- crimes against humanity, war crimes and (NDPP), advocate Shaun Abrahams, to profile persons. Alternatively, the LSSA the crime of aggression in terms of inter- brief it on the developments in the Na- said the President should consider a ju- national law: tional Prosecuting Authority and specifi- dicial commission of inquiry into the ac- • the Republic of South Africa, with cally the withdrawal of charges against tions of the Hawks. ‘Failing that, and as it its own history of atrocities, has, since Finance Minister Gordhan. stands, it is doubtful whether the Hawks, 1994, become an integral and accepted On 31 October, the LSSA welcomed as an institution, have the public trust,’ member of the community of nations; the belated decision by the NDPP, Mr said the Co-chairpersons. • the Republic of South Africa is com- Abrahams, to withdraw charges against mitted to – bringing persons who com- Finance Minister Gordhan, Oupa Ma- ICC mit such atrocities to justice, either in a gashula and Ivan Pillay. ‘The LSSA, how- On 25 October, the LSSA added its voice court of law of the Republic in terms of ever, remains gravely disappointed that to those calling on the South African its domestic laws where possible, pur- a matter of this magnitude and implica- government to reconsider its withdrawal suant to its international obligations to tions was decided clearly without first from the ICC. The LSSA said it was grave- do so when the Republic became party obtaining all the necessary information ly disappointed at the unilateral decision to the Rome Statute of the International and that the charges were instituted in by the government to initiate SA’s with- Criminal Court, or in the event of the the first place. The action of bringing drawal process from the Rome Statute of national prosecuting authority of the Re- the charges and then dropping them the ICC by executive act. ‘This raises se- public declining or being unable to do so,

DE REBUS – DECEMBER 2016 - 18 - in line with the principle of complemen- ernment to the SADC Tribunal if they fail laration accepting the competence of the tarity as contemplated in the Statute, in to find relief in their own courts. Only AfCHPR to receive cases under art 5(3) the International Criminal Court … .’ states can refer disputes to the SADC of the protocol. At least two cases from The LSSA asked what had changed in Tribunal. ‘The LSSA is challenging this in SA had been brought before the AfCHPR, our government’s commitment to the the Gauteng High Court,’ they said. but the court had to dismiss these cases fight against impunity? The LSSA also stressed that the Afri- due to lack of jurisdiction in the absence Mr van Rensburg and Mr Notyesi point- can Court on Human and Peoples’ Rights of the declaration by our government, as ed out that the withdrawal from the ICC (AfCHPR) had the potential to enforce the AfCHPR may not receive any petition followed our government’s agreement human rights through proper judicial under art 5(3) involving a state party, to changes brought about in 2014 to the processes and has relative independ- which has not made such a declaration. Southern African Development Com- ence from political leaders. However, al- munity (SADC) Summit Protocol. As it though SA had ratified the Protocol to the now stands, the SADC Protocol deprives African Charter on Human and Peoples’ citizens in the SADC region – including Rights on the Establishment of the Afri- Barbara Whittle, South Africans – of the right to refer a can Court on Human and Peoples’ Rights Communication Manager, Law Society of dispute between citizens and their gov- on 3 July 2002, it has yet to submit a dec- South Africa, [email protected]

LSSA recognises service to the profession by former council members

he council of the Law Society of • David MacDonald (former Co-chairper- South Africa (LSSA) resolved ear- son) lier this year to present certifi- • Strike Madiba Tcates to council members who • Pumzile Majeke had served on council and completed • Judge Babalwa Mantame their term of service. The certificates are • Clayton Manxiwa to recognise the contribution to the at- • Jan Maree (former Co-chairperson) torneys’ profession made by attorneys – • Percival Maseti many of who are now judges – who have • Kathleen Matolo-Dlepu (former Co-chair- served as council members of the LSSA. person) It was also resolved that to present the • Judge Yvonne Mbatha certificates to former councillors attend- Former Co-chairperson of the • Davies Mculu ing the annual general meetings of their Law Society of South Africa • Sithembele Mgxaji relevant provincial law society during (LSSA), Krish Govender, (pictured • Judge Atkins Moleko October and November this year. with former Co-chairperson of • Judge Jake Moloi (former Co-chairper- Service by the following councillors the LSSA, Richard Scott (right)) son) (who are no longer on the LSSA’s council) received a certificate of • Saloshna Moodley was recognised: recognition for serving on the • the late George Moolman • Susan Abro (former Co-chairperson) LSSA council. • McDonald Moroka • Koos Alberts • Judge Segopotje Sheila Mphahlele • Allison Alexander • Krish Govender (former Co-chairperson) • Henry Msimang (former Co-chairperson) • John Anderson • Judge David Gush (former Co-chairper- • Janine Myburgh • Eric Barry son) • Nosidima Ndlovu (former Co-chairper- • William Booth • Etienne Horn (former Co-chairperson) son) • Daryl Burman • Mohamed Husain • the late Edward Mvuseni Ngubane (for- • Peter Chidi • Judge Maake Kganyago mer Co-chairperson) • Llewelyn Curlewis • Judge Elizabeth Kubushi • Silas Nkanunu (former Co-chairperson) • Mara de Klerk • Lulama Lobi • Judge Lister Nuku • CP Fourie • Busani Mabunda (former Co-chairper- • Christoff Pauw • Iqbal Ganie son) • Judge Thoba Poyo-Dlwati (former Co- chairperson) • David Randles • Judge Vincent Saldanha (former Co- chairperson) • Praveen Sham (former Co-chairperson) • Lesane Sesele • Judge Zukiswa Tshiqi • Henri van Rooyen (former Co-chairperson) • Julian von Klemperer (former Co-chairperson) • Adrian Watermeyer.

Judge Lister Nuku (centre) and Judge Vincent Saldanha ((right) former Co-chairperson) receiving their certificates from LSSA Barbara Whittle, Communication Manager, Law Society of Co-Chairperson Jan van Rensburg. South Africa, [email protected] q

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DE REBUS – DECEMBER 2016 - 21 - PRACTICE MANAGEMENT – LEGAL PRACTICE

By the Risk Management Unit of the Attorneys Susceptible Fidelity Fund to scams?

unning a business opens one to susceptibility to fraudsters who are continuously looking for new Forms of scams Considerations to be made ways to make money. Scams against legal firms by the legal firm have been, and continue to be, on the rise. No firm is immune and should be on the lookout for potential Rscams attempted against them. The perpetrator • Check if the quoted amount was In order to position yourself and limit the probability of be- will call the firm received in your trust or business ac- ing scammed and – ultimately losing money to fraudsters – it purporting to be a count as claimed. is important that you have a good understanding of how your client of the firm • Check on the bank statement if the stakeholders operate, what their service offering is and how and ask for banking amount was paid in cash or cheque. they would interact with you. Some of the attempts made by details of the firm • If the amount was received as a the fraudsters may appear to be obvious, but these may not in order to make a cheque deposit, do not be pressured be so obvious to everyone, and continue to be experienced by deposit. A few days to make a refund until the cheque some legal firms. In this article, the Attorneys Fidelity Fund later, the perpetra- has been cleared and confirmed as (AFF) will, in an attempt to raise awareness, share some of the tor will make anoth- such with the bank. The perpetrator scams perpetrated against attorneys. er call suggesting will apply pressure on you to refund It is recommended that this article is read together with the that they incorrectly them, do not succumb to the pres- following articles – paid money into the sure. • ‘Are you losing money through EFTs?’ (2014 (June) DR 18); account. • Inform the person requesting a re- and fund that you will process a refund • ‘Scam fraudsters: Beware’ (2014 (Nov) DR 14). of the money as soon as it is cleared Fraudsters often purport to be a stakeholder, for example, on your account and ask for proof of the AFF. It, therefore, becomes very important for the legal the deposit. firm to take note of the following: The perpetrator will • Ask the person requiring a refund send an e-mail to to provide you with their banking the firm advising details. It is important to know your Forms of scams Considerations to be made that an amount was stakeholders’ bankers and perhaps by the legal firm incorrectly paid into their bank details. Remember, the the firm’s trust or banking system recognises an ac- The perpetrator will Depending on the form of the at- business account count number and not an account call the firm and tempted scam, a legal firm should when it was meant name. The perpetrator can, therefore, advise that they consider the following: for another firm. give you an account name of your mistakenly depos- • Know your clients and check any stakeholder that they are purportedly ited an amount into and all provided details against the representing, but the account number the firm’s trust or details that you already have in your will not be that of the stakeholder. business account records. • Inform the stakeholder affected be- when it was meant • Ascertain if your firm is expecting fore you even consider a refund. for another firm any refunds, whether for audit fees or The perpetrator will • When informing the purported and would like a bank charges and what the amounts send post mail to stakeholder, do not use any of the refund. applied for are. the firm advising contact details provided by the pur- • Check if the letterhead used is that that an amount was ported stakeholder representative, of the purported stakeholder. This incorrectly paid into check the legitimate contact details necessitates knowledge of the correct the firm’s trust or on the stakeholder’s website or in- name of the stakeholder, the current business account quire with your provincial law society. logo of the stakeholder and the direc- when it was meant The perpetrator will tors or senior personnel of the stake- for another firm. advise the firm that holder, which would be reflected on an incorrect amount the letterhead. was refunded in • Check if the e-mail address used is respect of a refund that of the purported stakeholder. It Fraudsters may Whenever a client that you are pro- application for is important to know the extension of purport to be an viding legal services to provides or audit fees and/or the e-mail addresses of the purported existing client and changes an account number to pay bank charges. They stakeholder. For instance, the e-mail provide a different into, insist on a bank stamped proof will then ask for a addresses of the AFF have the exten- account number of that account. refund of a portion sion fidfund.co.za after the @ sign, into which money of the amount. fraudsters would perhaps use an e- due to them should mail address with an extension fideli- be paid. tyfund.co.za after the @ sign.

DE REBUS – DECEMBER 2016 - 22 - Forms of scams Considerations to be made by the legal firm

THE SA ATTORNEYS’ JOURNAL A fraudster may Carefully check the sender’s e-mail hijack the identity address to establish its veracity, and of a senior partner if there is any doubt, obtain confirma- De Rebus welcomes contributions in any of the in the practice, and tion that the e-mail is genuine. 11 official languages, especially from practitioners. send an e-mail to The following guidelines should be complied with: the bookkeeper con- • Contributions should be original and not published or taining a payment submitted for publication elsewhere. This includes publi- instruction. cation in electronic form, such as on websites and in electronic newsletters. As a general rule, the AFF would never advise attorneys to re- • De Rebus only accepts articles directly from authors and tain a portion of an amount that was erroneously paid into not from public relations officers or marketers. your account. If this should happen, it is guaranteed to be attempted fraud. Be on the lookout. • Contributions should be useful or of interest to practising It is important to realise that should you fall victim of a attorneys, whose journal De Rebus is. Preference is given, all fraudulent scam, specifically on your trust account, you will other things being equal, to articles by attorneys. The deci- end up with a trust deficit position, and that has a number of sion of the editorial committee is final. negative implications for you as a practitioner and for your firm. Stay alert and do not fall victim. • Authors are required to disclose their involvement or interest in any matter discussed in their contributions. The Risk Management Unit of the Attorneys Fidelity Fund • Authors are required to give word counts. Articles should in Centurion. q not exceed 2 000 words. Case notes, opinions and similar items should not exceed 1 000 words. Letters should be as short as possible.

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DE REBUS – DECEMBER 2016 - 23 - PRACTICE NOTE – CONSUMER LAW

By Kris Harmse Reckless credit – both sides of the story

ne of the purposes of the obligations of the proposed consumer. s 82(1) does not place an obligation on National Credit Act 34 of Thus, a credit provider’s obligations the credit provider insofar as determin- 2005 (as amended) (the come into existence when a consumer ing its own evaluative mechanisms or Act) as set out in its pre- applies for credit. models and procedures. However, a cred- amble, is ‘to promote re- The requirement that a credit pro- it provider is ultimately not left with any sponsible credit granting vider must take ‘reasonable steps’ in its alternative if it wishes to comply with its Oand use and for that purpose to prohibit assessment was described by Louw J at obligations in terms of the s 82(1). reckless credit granting.’ It is, therefore, para 60 in the judgment of Absa Bank This was illustrated in the Kganakga clear that, in the prevention of reckless Ltd v De Beer and Others 2016 (3) SA 432 judgment, where it was found that no credit, obligations exist not only for a (GP) as an assessment which is done ‘rea- proper assessment was done by the credit provider, but also for a prospec- sonably, ie not irrationally.’ credit provider even though ‘reasonable tive consumer. A credit provider’s obligation to con- steps’ were in place to conduct the nec- duct an assessment in terms of s 81(2) essary assessment. When does reckless credit was discussed at some length by Satch- The obligations of a credit provider occur? well J at paras 24 to 28 in the judgment are, however, not limited to the require- of Absa Bank Limited v Kganakga (GJ) ments of s 81(2). In what can almost be When making a determination whether (unreported case no 26467/2012, 18-3- described as a verbatim repetition of a credit agreement is reckless, one must 16) (Satchwell J). The issues to be cov- s 81(2) (and perhaps a further reminder focus one’s attention on the period when ered by the assessment are – to credit providers not to enter into reck- the consumer applied for credit (s 80 (1) • a consumer’s state of mind as it relates less credit agreements with consumers). of the Act). to his or her understanding of the risks Section 81(3) spells out that the credit If, during this period, a credit provider and costs of the proposed credit and the provider must not enter into a reckless failed to conduct an assessment in terms consumer’s right and obligations under credit agreement with a prospective con- of s 81(2) of the Act or if, having con- a credit agreement; sumer. It is unlikely that the legislature ducted such an assessment, a credit pro- • a consumer’s previous experience and ever intended to unintentionally repeat vider entered into the credit agreement behaviour as a consumer under a credit itself and this peremptory provision cre- with the consumer despite the fact that agreement; and ates a further obligation for credit pro- the preponderance of information avail- • the finances of a prospective consumer viders. able to the credit provider indicated that at the time of the application must be the consumer did not understand or ap- disclosed to ensure that the consumer What are a consumer’s preciate the risks, costs or obligations can afford to pay the instalments in obligations and when are under the proposed credit agreement terms of the credit agreement. or entering into that credit agreement A further assessment is required in these obligations created? would make the consumer over-indebt- terms whereof, a credit provider must Before examining the nature and dura- ed, the credit agreement is reckless in assess whether there is a reasonable ba- tion of a prospective consumer’s obliga- terms of s 80(1). sis to conclude that any commercial pur- tions, one must consider their underly- pose may prove to be successful, if the ing purpose – to assist a credit provider What are a credit consumer has such a purpose for apply- with its assessment as contemplated in provider’s obligations and ing for that credit agreement. The com- s 81(2). when are these obligations mercial purpose must, therefore, relate The obligations of a prospective con- directly to the application for credit and, sumer in the prevention of reckless created? as appears at para 31 of the Kganakga credit are set out in s 81(1), which states The obligations of a credit provider judgment, the ‘commercial purpose does that: ‘[W]hen applying for a credit agree- are set out in s 81(2), which states that not pertain to any other or underlying ment, and while that application is being a credit provider must not enter into a agreement with other persons.’ considered by the credit provider, the reckless credit agreement, and requires For purposes of conducting the as- prospective consumer must fully and ‘reasonable steps’ to be taken to first assessment contemplated in s 81, the cred- truthfully answer any requests for infor- sess the proposed consumer’s general it provider may in terms of s 82(1) of the mation made by the credit provider as understanding and appreciation of the Act, determine for itself the evaluative part of the assessment… .’ risks, costs, rights and obligations under mechanisms or models and procedures A prospective consumer’s obligations the credit agreement, the proposed con- to be used, provided that this will result therefore come into existence at the mo- sumer’s debt repayment history, and the in a fair and objective assessment. It is ment when applying for credit, and con- existing financial means, prospects and interesting to note that the wording of tinue to exist while the application for

DE REBUS – DECEMBER 2016 - 24 - PRACTICE NOTE – LEGAL PRACTICE credit is being considered by the credit Should a consumer be successful in credit provider may still have a defence provider. During this time, a prospec- proving that a credit agreement was con- regardless of whether a consumer made tive consumer must fully and truthfully cluded recklessly, the court or tribunal a full and truthful disclosure. disclose the information required by the may make an order in terms of s 83(2) To illustrate this point, one can refer credit provider in making its assessment. of the Act whereby all or part of the con- to the judgment by Ebrahim J in Stand- sumer’s rights and obligations under the ard Bank of South Africa Ltd v Herselman What remedies are agreement are set aside, or suspend the (FB) (unreported case no 328/2015, 3-3- available to a consumer force and effect of the agreement. 2016) (Ebrahim J), where the consumer Again with reference to the De Beer was found to have made a full and truthful disclosure. However, the credit pro- when a credit agreement is judgment, the court or tribunal should vider complied with its obligations in be mindful that the remedy must be ‘just believed to be reckless? that it conducted the required assess- and equitable’, taking into account fac- Depending on the circumstances, a con- ment. It was, therefore, held that the tors such as the ‘extent of the reckless- sumer may either raise reckless credit as defence of reckless credit was without ness’. a defence, or make application to court merit. or to the National Consumer Tribunal A consumer must, therefore, be very (the tribunal) to have a credit agreement What defences are careful in circumstances where he or she declared reckless. available to the credit may, in fact, be the one throwing stones If a consumer alleges that a credit provider? in a glass house. agreement was concluded recklessly, sufficient facts must be presented in Although the Act clearly creates more Conclusion support of such an allegation. Our courts obligations for a credit provider than Reckless credit is not a one-way street. have not been inclined to declare credit for a consumer, it does provide a credit The Act creates obligations for both the agreements reckless in the absence of provider with a complete defence to an consumer and the credit provider, and substantiated and detailed allegations. allegation of reckless credit. each party is therefore, in its own way, This was clearly illustrated in the judg- The defence is set out in s 81(4) and equally responsible for preventing the ment of SA Taxi Securitisation (Pty) Ltd states that, if a consumer failed to fully conclusion of a reckless credit agree- v Mbatha and Two Similar Cases 2011 and truthfully answer any requests for ment. (1) SA 310 (GSJ). At para 26 of this judg- information made by a credit provider ment, Levenberg AJ noted with some as part of its assessment, and such fail- concern that there is a tendency for de- ure materially affected the ability of the fendants to make bland allegations that credit provider to make a proper assess- they are ‘over-indebted’ or that there has ment, the credit provider will have a Kris Harmse LLB (UJ) is an attorney been ‘reckless credit’. He continued by complete defence to the consumer’s al- at Smit Sewgoolam Inc in Johannes- saying that a bald allegation that there legation of reckless credit. burg. was ‘reckless credit’ will not suffice. Despite the provisions of s 81(4), a q

By Kgomotso No more delays on Ramotsho criminal trials

he office of the Judge President courts to the High Court roll for the first It also states that all parties may seek Gauteng Division of the High time shall be subject to a pre-trial con- directives from the judge presiding in Courts of South Africa, released ference. In terms of the Practice Note any pre-trial conference in regard to the Ta new Practice Note that intends all notifications regarding the holding implementation of any pre-trial proce- to remove unnecessary delays in crimi- of pre-trail conferences, as well as other dures. nal trails and introduce necessary en- related matters, where necessary will be The new Practice Note applies to all hancements, as well as trial dates. issued by the Chief Registrar. criminal trials to be heard in the Gaut- The Practice Note states that amend- Furthermore, pre-trial conferences eng Division, Gauteng Local Division, ments to the process and procedures held in terms of the new Practice Note and Gauteng Division Acting as the Mpu- set out in it will be considered on an will be presided over by judges desig- malanga Division of the High Court. The ongoing basis in light of the experience nated by the Judge President and the Practice Note took effect on 7 October. gained by all participants in the course pre-trial conference in all cases must be of the application of the Practice Note. attended by – All criminal trials shall be preceded by a • the accused; pre-trial conference to be held in terms • the legal representative of the accused; Kgomotso Ramotsho Cert Journ (Bos- of the Practice Note. and ton) Cert Photography (Vega) is the The Practice Note also states that all • a representative of the Director of Pub- news reporter at De Rebus. trials transferred from the magistrates’ lic Prosecutions. q

DE REBUS – DECEMBER 2016 - 25 - Zoning matters: A ‘SPLUMA’ score-card one year on

By Peter Murray

Picture source: Gallo Images/iStock

lanning law shapes and determines our daily activities in important and pervasive ways. The buildings Pin which we work and live; the roads on which we drive; the reservoirs and sub- stations that supply water and electric- ity, were all planned, authorised, and continue to exist within a complex legal system of interlinked Acts, ordinances, regulations and town planning schemes. nisable and comprehensive Many participants in the property in- system of spatial planning dustry have, for some time believed, that and land use management a systemic overhaul of planning law was throughout South Africa (SA). needed. In 2001 the White Paper on Spa- This article examines whether – one tial Planning and Land Use Management year since its commencement – SPLUMA described as part of its findings ‘an ex- has changed our understanding of and traordinarily complex and inefficient le- approaches to spatial planning and land pre-date democratic constitutionalism. gal framework, with planning officials in use management, and whether it has Although SPLUMA now applies nation- all spheres of government having to deal succeeded – from the perspective of ally, pre-existing provincial legislation with numerous different systems within planning practice – in its stated aim of has not been repealed and it remains the jurisdiction of each province, and in- ushering in a unified and coherent sys- in force. A more coordinated approach deed within most municipalities.’ tem of planning law. would have been to enact SPLUMA only Pursuant to the White Paper, the Spa- when the provinces were in a position to tial Planning and Land Use Management Pre-existing legislation repeal their planning legislation. SPLU- Act 16 of 2013 (SPLUMA) was passed into Prior to SPLUMA planning legislation MA is, therefore, an overlay to – rather law on 1 July 2015. SPLUMA refers in its consisted principally of provincial or- than a replacement of – existing provin- preamble to the fragmentation, duplica- dinances and Acts. Only two provinces cial acts and ordinances. It is not clear tion and unfair discrimination, which (Northern Cape and KwaZulu-Natal) how long it will take to phase out the ex- characterised pre-existing planning law. adopted post-1994 legislation to deal isting provincial legislation. One of the main aims of the legislation with planning matters; the other prov- The existence of coinciding national is, therefore, to create a uniform, recog- inces continue to utilise ordinances that and provincial planning regimes inevi-

DE REBUS – DECEMBER 2016 - 26 - FEATURE – CONSTRUCTION LAW

prescribe ‘an alternative or parallel proliferation of interpretive difficulties mechanism, measure, institution or sys- and disputes. However, practitioners tem on spatial planning, land use, land should be aware that all land use appli- use management and land development cations must be motivated in terms of in a manner inconsistent with the pro- the five principles. visions of this Act’. In practice, decid- Furthermore, the Minister of Rural ing whether an alternative or parallel Development and Land Reform, must in mechanism is inconsistent with terms of s 8 of SPLUMA prescribe a set of SPLUMA presents considerable norms and standards for land use man- interpretive difficulties, and agement and land development. These conflicting legal interpreta- must reflect national policy and pro- tions. mote social inclusion and spatial equity. Rather than introducing The norms and standards have not yet a uniform system, SPLUMA been published; it is also not clear how has added another legisla- they will relate to and intersect with the tive layer to the already development principles. complex myriad of legislation which it Spatial development sought to replace. frameworks In terms of s 12 of SPLUMA each sphere of government must prepare its own spatial development framework (SDF). The framework interprets and repre- sents the spatial development vision of that sphere of government. SPLUMA sets out extensive checklists for the contents of an SDF. Three conceptual difficulties arise, namely: • The courts have held that planning is, constitutionally, an exclusive area of municipal competence (see, for example, City of Johannesburg Metropoli- tan Municipality v Gauteng Develop- ment Tribunal and Others 2010 (6) SA 182 (CC)). The role and function of national and provincial SDFs is, therefore, not clear, and SPLUMA provides no guidance. This appar- ent conflict between the constitution and SPLUMA’s reference to SDFs is still to be resolved. • The Local Government: Municipal Systems Act 32 of 2000 already deals with SDFs. It is not clear why the mechanism has been repeated in SPLUMA and how conflicts between the two enact- ments must be understood. • Section 18 of SPLUMA provides that the Minister may publish an SDF for ‘any region of the Republic’, however, a Development region is not defined and it is not clear how this will work in practice. principles, norms and An intractable problem, which causes standards practical difficulties on a daily basis, One of SPLUMA’s innovations is the in- arises from s 22 of SPLUMA, which de- troduction of a set of five nationally ap- termines the legal status of SDFs. Sec- plicable development principles (s 7), tion 22(1) provides that neither a plan- namely – ning tribunal nor any other authority • spatial justice; may make a decision ‘which is incon- tably causes practical difficulties. Both • spatial sustainability; sistent with a municipal spatial devel- sets of legislation must be read and ap- • efficiency; opment framework’; in terms of s 22(2) plied in conjunction and at present re- • spatial resilience; and decision-makers may depart from the zoning and township applications are • good administration. provisions of an SDF ‘only if site-specific simultaneously advertised, motivated, Although the modernisation provided circumstances justify a departure’. and decided in terms of SPLUMA and the by an overarching, nationally applicable Although this formulation gives sig- applicable provincial enactment. set of normative standards is sound, the nificant flexibility to decision-makers, SPLUMA attempts to address this dif- legislature has not provided concrete the sub-sections appear contradictory. ficulty in s 2(2), which provides that and practical definitions of these con- In their written motivations, and in oral legislation other than SPLUMA may not cepts and this will inevitably lead to a arguments before the tribunal, practi-

DE REBUS – DECEMBER 2016 - 27 - FEATURE – CONSTRUCTION LAW tioners will have to set out clearly and agent, or any person in terms of a land objectivity. This might now have been with appropriate evidence the site spe- availability agreement. An innovation is lost. cific circumstances, which justify a deci- that a service provider responsible for sion which departs from the SDF. the provision of infrastructure to the Land use management land may also apply for the rezoning of systems Land use change land. Chapter 5 of SPLUMA deals with land use Chapter 6 of SPLUMA sets out a proce- One of the most notable omissions management. dural framework for land use change. In from SPLUMA is that in providing land Section 24 of SPLUMA is a welcome terms of s 33 all land development appli- use change procedures it does not men- innovation in terms of which every mu- cations must be submitted to a munici- tion that interested and affected parties nicipality must, after public consulta- pality as the authority of first instance. may object to applications. This has been tion, and within five years from the com- Municipalities are required to estab- a key feature of planning procedures for mencement of SPLUMA, approve a single lish a municipal planning tribunal (s 35), many decades, and it has provided a val- land use scheme for its entire area of and they may authorise that certain land uable procedural remedy to neighbour- jurisdiction. At present some municipali- use and land development applications ing property owners, residents, activists, ties have more than one scheme. Many may be considered and determined by ei- and even competitors who oppose pro- areas within SA fall outside of the area ther an official in the employ of the mu- posed land use change. Regulation 14(1) of a scheme. Areas, which previously did nicipality or by the tribunal. The tribunal (d) of the SPLUMA regulations (GN R239 not fall under a town planning scheme, consists of at least five members who GG38594/23-3-2015) provides that mu- will in the future fall within a unified are either municipal officials or council nicipalities must provide – in terms of scheme area. appointees who have knowledge and ex- by-laws – for ‘the manner and extent of SPLUMA sets out a checklist of impor- perience of spatial planning and land use the public participation process for each tant matters, which must be included in management. The SPLUMA mechanisms type of land development and land use any new land use scheme. Furthermore, for co-opting experts and expertise are application.’ Some by-laws provide for an s 25 modernises the purpose of a land innovative and will hopefully be utilised objection procedure. It is not inconceiv- use scheme and now refers to economic extensively in practice. able, however, that some by-laws might growth, social inclusion, efficient land Tribunals have powers to – not provide one. Practitioners will have development and minimum impact on • approve or refuse land use applica- to consider the by-laws of the municipal- public health, the environment and natu- tions; ity concerned before deciding how best ral resources. A further innovation is • impose reasonable conditions; to oppose a land use application or to that a municipality must review its land • conduct investigations; resist an objection. use scheme at least every five years. Pre- • give directions relevant to their func- Although SPLUMA does not provide a viously land use schemes were not re- tions to any person in the service of a uniform objection remedy across SA it viewed for years or even decades. municipality; and does introduce a new intervener petition • decide questions of their own jurisdic- process (s 45(2)). Any person who is in- Conclusion tion. terested in or affected by proposed land Prior to the advent of SPLUMA planning Various different types of applications use change may apply for intervener sta- law was severely fragmented, consisting are mentioned in s 41, namely – tus. The intervener petition may seem- as it did of levels and layers of confus- • township establishment; ingly be launched at any time, even if the ing, disparate legislation. There was a • subdivision of land; window period for objections (in terms dire need for reform. • consolidation of land; of the applicable by-laws) has closed. SPLUMA constitutes an important step • the amendment of a town planning Any person whose rights are affected towards a uniform system, which is na- scheme; or by a decision taken by a tribunal may, tionally applicable and more modern in • the removal amendment, or suspen- within 21 days, lodge an appeal. This is its approach to planning. However, given sion of a restrictive condition. a wider formulation than previous ones the central role of planning in guiding Section 42 sets out the factors, which where only objectors could lodge ap- and regulating the manner in which our a tribunal must take into considera- peals. cities, towns and rural areas develop tion in deciding applications. Previously Appeals are heard either by the execu- and change, a valuable opportunity has decision-makers would take into con- tive authority of the municipality (the ex- been missed. SPLUMA should have re- sideration the need for and desirability ecutive committee or the executive may- placed the provincial planning regimes; of proposed land use change. In terms or) or by a body or institution outside of the time lapse between SPLUMA and the of SPLUMA these factors have been re- the municipality. In terms of reg 23 the new by-laws is problematic in practice; placed with – appeal authority may hear the appeal by and the new schemes should have been • public interest; means of a ‘written hearing’ or an ‘oral ready for simultaneous implementation. • constitutional transformation impera- hearing’. I submit that both formulations This is particularly regrettable given the tives; are unfortunate. Firstly, in some munici- lapse of 15 years between the White Pa- • facts and circumstances relative to the palities the executive authority will serve per and the SPLUMA effective date. Fur- application; as the appeal authority. In others, an out- thermore, some of the procedures in and • respective rights and obligations of all side body will be designated. A greater substance of SPLUMA appear not to have those affected; degree of objectivity can, naturally, be been conceived having sufficient regard • the state of and impact on engineering expected from outside bodies. Secondly, for the practice of planning law, and with services, social infrastructure, and open the decision to hold a hearing or not is a clear vision of the systemic change that space requirements; or discretionary and no objective criteria was and is required. It will remain, un- • any factors that may be prescribed. are set out for purposes of exercising fortunately, for the courts, and future The nature and extent of factors that the discretion. In practice, very few ap- legislative amendments, to iron out the must be taken into consideration in de- peal hearings are held. In the previous creases. ciding land use applications has, there- planning paradigm most provinces con- fore, been considerably widened and vened a Townships Board for purposes Peter Murray BA (Hons) LLB (Rhodes) modernised. of hearing appeals. Large amounts of is an attorney at Murray van Rens- In terms of s 45 of SPLUMA applica- institutional expertise developed within burg Inc in Johannesburg. tions may be submitted by an owner, an the boards, as well as a high degree of q

DE REBUS – DECEMBER 2016 - 28 - CLIMATE CHANGE Law and Governance in South Africa

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3878-10-16 ClimateChangeDeRebus.indd 1 2016/10/07 1:21 PM Picture source: Gallo Images/iStock source: Picture

Appraisal rights and protection By Basil of minority shareholders Mashabane

he purpose of this article is without creating a great burden for the the overall and accepted premise is that to briefly introduce a dis- corporation,’ (Julián J Garza Castañeda ‘fair value of the shares paid to the discussion around appraisal ‘Appraisal Rights: The “Fair” Valuation senters must compensate shareholders rights, their history and Of Shares In Case Of Dissent’ (1999) for their investments, expectations, and background, how they find September – December The University of results in a corporation’ (Garza Castañe- application under our Com- Mexico Law Journal 809 at 814). da (op cit) at 821) taking into account Tpanies Act 71 of 2008 (the Companies The appraisal rights under the MBCA the inherent risks involved in running Act) and the impact they have had so far are available only under limited circum- a business including the highs and lows in our company law regime as far as the stances that result in a change of control and the lack of luck involved sometimes. protection of minority shareholders is of a company and involve – concerned. • implementation of a proposed merger Application of appraisal The article is written in a contextual involving the company; rights in South Africa manner and focuses on appraisal rights • a share exchange agreement resulting and how they apply to fundamental in a control acquisition of the company The Companies Act came into effect in transactions and, also includes a brief shares; May 2011 and the Act has, as one of its discussion of a recent High Court judg- • a sale of all or a substantial part of the main aims and purposes, the provision ment, where the court was approached company’s property other than in the of appropriate redress for investors and to make a ruling on a case involving the usual and regular course of business; third parties involved in companies and question of appraisal rights raised by and in particular, minority shareholders. To shareholders. • an amendment to the company’s arti- that end, the Companies Act has estab- cles that has a material and/or adverse lished entities that have the responsi- History and background effect on the rights of the dissenter’s bility of interpreting and applying the The concept of appraisal rights accord- shares. provisions designed to achieve this pur- ing to available literature on the subject, From the above, it is clear that the pose, one of them being the Takeover originated in the United States of Amer- US lawmakers – in enacting this law – Regulation Panel, which has, as its main ica (US) under a law known as the Model sought to strike a balance between the purpose, the protection of the rights of Business Corporation Act, 1984 (MBCA) rights and powers that the majority have minority shareholders during offers to and the idea behind it was to enable in running the affairs of a company, in- ensure that the shareholders are pro- shareholders who disagree and/or dis- cluding making decisions that could fun- vided with sufficient information and sent from a corporate decision of a com- damentally change the nature and char- adequate time to make informed deci- pany to be provided with a right to exit acter of a company, while at the same sions about offers and transactions un- the company by having the company pay time, providing minority shareholders dertaken by a company. them for the fair value of their shares to with an opportunity to – The Companies Tribunal is also estab- enable them to exit. • express their dissent to the decisions lished as an alternative dispute resolu- Viewed from a different perspective adopted; and tion body to deal with mainly sharehold- an argument has been made that the ra- • also to be allowed to exit the company ers’ and other company law-related in a tionale for the development of appraisal by being paid a fair value for their shares relatively quick and less costly manner. rights is to ensure that the ‘minority should they be uncomfortable with the The main provisions of the Companies shareholder should not stand in the way changes. Act created to serve the above purposes of a transaction approved by the major- The concept of ‘fair value’ and how it is s 163, which seeks to provide relief to ity shareholders, and second, appraisal is determined has been and continues to shareholders or directors from oppres- rights should assist the dissenters be a source of contention in the US but sive or prejudicial conduct enabling a

DE REBUS – DECEMBER 2016 - 30 - FEATURE – COMMERCIAL LAW shareholder to apply to court for relief Case law The court flatly rejected the argument where he or she believes that conduct by holding that the failure to waive or The case of Justpoint Nominees (Pty) Ltd by the company is unfairly prejudicial to fulfil the condition precedent meant and Others v Sovereign Food Investments his or her rights and interests as a share- that the initial transaction could not be Limited and Others (BNS Nominees (Pty) holder, or that the business of the com- operative, therefore, the shareholders Ltd and Others Intervening) (ECP) (un- could not be prevented from voting on pany is being run in an unfair or preju- reported case no 878/16, 26-4-2016) the revised transaction on this basis and dicial manner to his or her rights and/or (Stretch J) is one of the first cases heard that their rights as shareholders includ- interests as a shareholder. on appraisal rights. ing the right to vote as protected under The second major provision is s 164, The brief facts of the case are that s 37 must be respected. which deals with appraisal rights avail- Justpoint Nominees (Pty) Ltd (Justpoint) The court also accepted the argument able to dissenting shareholders. The pro- were the registered shareholders in Sov- of BNS based on s 163 of the Compa- vision and the manner in which it is writ- ereign Foods Investments Limited (Sov- nies Act, that the conduct of Sovereign ereign Foods) and the latter proposed ten borrows extensively from the MBCA Foods was both oppressive and un- a fundamental transaction, in terms of under the US laws. fairly prejudicial to its rights and inter- which, it sought to have a scheme of It enables a dissenting shareholder ests and the court determined that the arrangement proposed between itself during an offer and under very limited conduct of Sovereign Foods in denying circumstances – and its shareholders enabling it to re- purchase its own shares in Sovereign the shareholders to vote on the revised • to inform the company of his or her Foods using the provisions of s 48(8) of transaction on the basis that they must intention to vote against a special resolu- the Companies Act read with s 114 re- first withdraw their appraisal rights on tion; and quiring that the transaction be effected a transaction that was not operative was • within a prescribed time to require that in terms of a scheme of arrangement, manifestly unjust, unfair and ‘denies the the company pay him or her the fair val- which among others, requires that a spe- dissenting shareholders fair participa- ue for all the shares he or she holds in cial resolution approving the transaction tion in the affairs of Sovereign’, being the company. be adopted and passed at a properly con- the company. As with the MBCA, the provision stituted meeting of shareholders before The important outcome of this case also makes reference to ‘fair value’ but it could be implemented. in my view is on its interpretation of takes it a step further by stating under Justpoint expressed unhappiness with s 164(9) by arguing that non-waiver or s 164(15) that the court will determine the proposed resolution and sent their fulfilment of a condition precedent effectively means that a transaction has ‘fair value’ and may use its discretion to written demand in terms of s 164(6) to failed, and therefore, cannot be used to appoint one or more appraisers to assist be paid fair value for their shares in or- rely on s 164(9) in order to deny share- in determining same and very interest- der to exit the company. holders their right to vote on a separate ingly, the court has a discretion to allow Sovereign Foods had included in its transaction documents, a condition transaction unless if they withdrew their reasonable interest to be added to the precedent, to the effect that the trans- appraisal rights. amount payable to a dissenting share- action would not be implemented if it holder from date of the adoption of the had received objections in the aggregate Conclusion special resolution to date of payment. of 5% of its shares from shareholders The remedy of appraisal rights is an in- The Companies Act does not, howev- exercising their appraisal rights. Sover- teresting inclusion in our company law er, provide guidance as to how the court eign Foods sent notices to shareholders and as seen above also a very strong needs to go about in determining ‘fair in terms of ss 164(5) and 164(8) unless weapon that shareholders can use to value’. Therefore, one foresees a similar it decided to waive the condition prec- protect their rights and to withdraw situation as in the US, in terms of which, edent within 25 days from the date on from a company that has experienced a the courts will rely on to determine what which the notices had been sent to the profound change from the one they had constitutes ‘fair value’ and the appropri- shareholders by the company. initially invested in. ate mechanics of determining same. Justpoint and an intervening party Further that and as seen from the As is also the case under the MBCA, to the case, BNS Nominees (Pty) Ltd ob- Justpoint case, the courts will adopt an the appraisal rights enabling a dissent- jected to the resolutions in terms of equity-based approach when deciding s 164(4) and the objections received ing shareholder to exit by being paid on matters such as these which means amounted to more than 5%, which meant the fair value are limited to a company effectively that companies cannot use that Sovereign Foods would have had to effecting material amendments to its technical arguments to deny minority make a decision on whether the condi- shareholders the right to participate in Memorandum of Incorporation or a com- tion precedent had been fulfilled or have the affairs of a company including ex- pany involved in a fundamental transac- same waived in terms of the provisions ercising or withdrawing their appraisal tion that involves – indicated above. rights. • a company effecting a disposal of a ma- Sovereign Foods failed to waive the A question has been asked on the role jority of its assets or major part of its condition precedent within the stipu- of the Takeover Regulation Panel in this business; lated time, but instead it conjured up process. Reading through the provisions • a scheme of arrangement whose pur- a new transaction (revised transaction) of the Act, it is clear that the legislature pose is mainly to expropriate sharehold- in terms of which it intended to re- deemed it appropriate that matters relat- ers; or purchase less than 5% of its shares, which ing to appraisal rights must be primarily • a proposed amalgamation or merger in would mean that the revised transaction and directly handled by the courts. terms of s 113 of the Companies Act. would not fall under s 48(8) read with Therefore, the panel does not have a A company proposing any of the above s 114 and that the appraisal rights would significant role to play and whether this be excluded and could not apply to the corporate actions is further required un- is correct or not remains to be seen tak- transaction. der s 164(2)(b) to include a statement ing into account the role and function of The revised transaction also sought the regulatory body. in the transaction document informing to exclude dissenting shareholders from shareholders of their rights in terms of voting on it on the basis that they had, the provision and it is important that by exercising their rights in the initial Basil Mashabane LLB (UP) LLM Cert the statement be provided without any transaction, lost their normal sharehold- in Corporate and Securities Law interpretation and merely as a summary er rights in terms of s 164(9) except for (Unisa) is an attorney at the Take- of the provision with a copy of the s 164 receiving fair value for their shares and, over Regulation Panel in Johannes- part of the Companies Act also attached therefore, could not vote on the resolu- burg. to the transaction document. tions of the revised transaction. q

DE REBUS – DECEMBER 2016 - 31 - Picture source: Gallo Images/iStock

Creating trusts – By Edrick Roux and Bindiya what should your client know? Desai

hen performing any given • The tax consequences surrounding the Of the above, only the founder and the task, using the right tool use of a trust must be considered. This trustees will have a role in the creation for the job will make the discussion should not confine itself to a of the trust and the conclusion of the task significantly easier tactical discussion, but should instead agreement to create the trust will make to accomplish and will extend to a strategic discussion, par- the parties enter into an agreement, Walso ensure that the quality of the task ticularly in light of the recent proposals which is essentially a stipulatio alteri. is superior. The same holds true for es- made by the Davis Tax Committee. tate planning exercises and there are few Each party involved in the creation of The founder tools that are on par with a trust in this a trust deed is exceptionally important, The identity of the founder merits some regard. and each has their own unique consid- consideration, particularly since the A trust is a unique vehicle, which in- erations to take into account. founder of a trust can never be amended volves the exchange of assets for a com- The parties involved in the creation or replaced in any way and will likely plete separation of ownership and enjoy- of the trust, and those who are later in- continually play a role in the trust. ment of these assets from the personal volved in the administration of the trust, The founder may be involved with the estate of an estate planner, which in turn are of critical importance. trust as a trustee, a beneficiary or could leads to enhanced protection from credi- It should be noted that not all of the even be required to take part in decisions tors. Flexibility when making use of the parties who are involved in the trust in respect of any future amendment of funds held in trust and of course the re- deed will necessarily be involved in the the trust. Where the founder of a trust moval of assets will also reduce estate administration of the trust. What follows is chosen carelessly or simply based on duty payable by an estate planner in fu- is a brief discussion of the significance convenience, far reaching consequences ture as these assets can no longer be at- of the respective parties at the relevant could arise. tributed to him. stages. These consequences could range from As with all things in life, there are unnecessarily incurring transfer duty, some key elements that must be present Parties to a trust which could be limited to some degree before a trust will be able to serve the The parties involved with a trust deed by careful planning, or could even render needs of the estate planner effectively, can generally be divided into three cat- the amendment of the trust deed next to among others: egories: impossible in the event where the found- • The trust deed must be drafted meticu- • The founder of the trust – this is the er is required for the amendment and lously and it is crucial that it be drafted individual who has created the trust and can no longer be traced. specifically with the needs of the estate makes the initial donation of funds to planner in mind. Making use of a tem- the trust. This is usually, but not always, Trustees of the trust plate could lead to undesired, and some- the estate planner. In South African law a trust is not a legal times disastrous, consequences such as • The trustees of the trust – these are person, save in terms of certain pieces the situation which arose in the case of those individuals or entities who take re- of legislation, but is regarded as a sui Potgieter and Another v Potgieter NO and sponsibility for the effective administra- generis entity – which can only operate Others 2012 (1) SA 637 (SCA). tion of the trust and will ultimately han- through the trustees – which must be ap- • The parties to the trust should be iden- dle the day to day activities of the trust. pointed by the Master of the High Court, tified – not only with convenience in • The beneficiaries of a trust – these are who has jurisdiction over the area where mind – but also in respect of potential those individuals or entities, which may the trust is created. benefits, which may be available. benefit from the trust. Arguably, this makes the appointment

DE REBUS – DECEMBER 2016 - 32 - FEATURE – ESTATE PLANNING, WILLS, TRUSTS of the trustees of the trust the most im- The independent trustee These beneficiaries, who must be de- portant decision that needs to be made fined in the trust deed itself, can com- The designation of a trustee as an ‘inde- when creating a trust. The individuals prise of natural persons, juristic persons pendent trustee’ has become relatively appointed as trustees must act in a fi- or even in some instances further trusts common in practice and the norm has duciary capacity, in accordance with the that are created as part of an estate plan- become that a trust will have an inde- provisions of the trust deed and must ning process. pendent trustee appointed. An inde- ensure that the best interests of the ben- Practically the difference between an pendent trustee is essentially a trustee eficiaries are paramount when taking identified beneficiary and identifiable that will act in the best interests of the any action in their capacity as trustee. beneficiaries can be illustrated as fol- beneficiaries at all times. Who can, and for that matter who lows – By the very nature of the designation, should, act as trustees of a trust is a • an identified beneficiary is one who is an independent trustee should not be a matter of great importance, yet from a specifically mentioned in the trust deed beneficiary of the trust. Where a trust practical point of view it is often treated for example, John Doe (ID No: XXX); or does not contain an independent trus- almost casually. • an identifiable beneficiary generally tee, the measure of control afforded to The question is often raised as to how refers to a specific class of beneficiaries the trustees of the trust, provided that the following individuals fit into the for example, the children of John Doe. they are also beneficiaries of the trust, is scope of trusteeship, namely – What is important to note, however, is substantial and accordingly the risk fac- • the estate planner; that a group of beneficiaries must not be tor of the trust increases. • an independent trustee; and too widely defined, as a lack of identifi- The concept originally came into the • a protector. able beneficiaries could lead to the trust limelight as a result of the case of Parker What follows is a brief discussion of being invalid and could lead to uninten- (Land and Agricultural Bank of South Af- tional consequences. the above. rica v Parker and Others 2005 (2) SA 77 Although the beneficiaries are part of Estate planner as trustee (SCA); Parker NO and Others v Land and the trust deed, they have no control over Agricultural Bank of SA [2003] 1 All SA the trust or the management thereof and and the concept of a ‘sham 258 (T)). An aspect which is often over- unless they are in possession of a vested trust’ looked, however, is that the mention of interest in the trust assets, which can In the past it was regarded as a risk for the independent trustee does not form only occur in certain circumstances, they the estate planner to be intricately in- part of the ratio dicadendi at all, but was only have a hope to be benefitted, known volved in the trust administration. in fact only mentioned as an obiter dic- as a ‘spes’ and thus can have no claim on It was seen as creating the impression tum. performance by the trustees. of control over the trust assets, which Quite often it is misconstrued as being could later be used against him or her a legal requirement to have an independ- Conclusion should creditors, or even a spouse in the ent trustee appointed to a trust deed, The importance of ensuring that one process of instituting divorce proceed- but this is simply not the case. Failure obtains expert advice when dealing with ings, wish to lay a claim on the assets to appoint an independent trustee will an estate planning exercise cannot be held in trust. not have any effect on the validity of the emphasised enough. Every step taken This would be done on the basis of trust, however, it may affect the level of in the process, beginning with the first such a trust being an alter ego of the es- control of the estate planner. consultation with your client through to tate planner. Thus it is always preferable, but strict- the delivery of the final draft of a trust This is often referred to, incorrectly, as ly speaking not necessary from a legal deed needs to be tailored to cater for the a claim that the trust is a so-called ‘sham perspective, to have an independent specific needs of each individual client trust’ and, therefore, the assets should trustee appointed. at hand. There is only one way to achieve be regarded as being that of the estate this level of personal service and that planner. Although the terms ‘sham’ and A protector is by ensuring that you have a skilled ‘alter ego’ are often used interchange- A concept which is foreign to our law, and trusted adviser who can assist you ably, from a legal technical point of view the protector, is the ultimate guardian of throughout the entire process. If such an this is incorrect and could theoretically the trust and although the protector has expert is not involved in the process, the lead to pleadings being excipiable. no authority to actively administer the risk of having ones estate planning re- The term ‘sham trust’ refers to a trust trust, as such power always remains with sulting in unwanted costs, which could which is created incorrectly, thus due to the trustees, the protector does possess likely have been avoided, becomes much a failure to ensure that one or more of the authority to dismiss trustees should higher. they fail to adhere to their duties. the essentiallia of a trust are present, the Importantly it is necessary to take into Similar powers could easily be drafted trust never validly came into existence account that such an adviser must not into a trust deed by a skilled drafter, and is, therefore, void ab initio. only be versed in the laws surrounding however, great care should be taken to It is for this reason that an investiga- trusts and estates, but should ideally be ensure that the estate planner is not ex- tion surrounding a ‘sham trust’ will in- skilled in virtually all areas of law, with posed to unnecessary risks. volve an investigation of the trust deed particular emphasis on the laws of taxa- The appointment of a protector could to determine whether all of the essen- tion. tiallia are present, whereas an alter ego also lead to unintended tax consequenc- These advisers, although generally few investigation will revolve around the use es as the effective management of the and far between, are well worth seeking of the trust assets and the measure of trust may then be deemed to follow the out as they can ensure that the wishes control, which is afforded to an estate location of the protector and not the of the estate planner are catered for as planner. trustees. far as possible while also adding value Although there is no prohibition on to any discussions surrounding estate an estate planner being a trustee of his The beneficiaries planning. or her own trust, such an appointment One of the cornerstones of trust law is must be done with the proper checks that there must be identifiable, or clearly Edrick Roux LLB (UP) and Bindiya and balances taken into account to mini- ascertainable, individuals who are to re- Desai BCom Law LLB (UJ) are senior mise the risk that a trust may be found ceive the benefit of the trust, colloquially associates at PricewaterhouseCoo- to be the alter ego of an estate planner. known as the beneficiaries of the trust. pers Africa in Johannesburg. q

DE REBUS – DECEMBER 2016 - 33 - Picture source: Gallo Images/iStock source: Picture

By Ryan Tucker Patent claim construction: Numerical limitations

atent attorneys spend a great tion of binding agent to no more than necessary skill and expertise would have deal of time trying to find the 0,77%, and this required an interpreta- understood from the patent, including ‘perfect’ word for a techni- tion of the numerical limitations of the the description and drawings? cal element of an apparatus bracketed phrase in the above integer. • It follows that the claims must not be or method in patent applica- In a nutshell: Did Smith & Nephew’s construed as if they stood alone – the tions. They are required to ‘modified process’ infringe on NovaTec’s drawings and description only being Pconduct the same analysis for numerical patent, which allowed for a range, name- used to resolve any ambiguity. Purpose limitations, including, numerical ranges. ly, between 1% and 25%? is vital to the construction of claims. The construction of both words and • When ascertaining the inventor’s pur- numerals needs to take place in patent Court of Appeal’s pose, it must be remembered that he or attorneys’ daily practices; with the lat- judgment she may have several purposes depend- ter equally applying to all fields of tech- The Court of Appeal dealt, ultimately, ing on the level of generality of his or nology: Electrical, chemical, mechanical, with one principal issue: The correct her invention. Purpose and meaning are biotechnological, etcetera. construction of the phrase ‘the agent different concepts. The patentee may Using Smith & Nephew Plc v ConvaTec being present in a concentration of be- have several purposes depending on the Technologies Inc [2015] EWCA Civ 607, tween 1% and 25%.’ generality of his or her invention. Gener- this article will examine numerical limi- The court began its assessment by re- ally, a patentee may have one or more tations in patent claims in the United stating the approach to interpretation specific embodiments of his or her in- Kingdom (UK) (and by implication, South of patent claims as considered by Lord vention, as well as a generalised concept. Africa (SA)), given their impact on patent Hoffman in Kirin-Amgen Inc v Hoechst However, there is no presumption that drafting and prosecution, as well as on Marion Roussel Ltd & Ors [2004] UKHL the patentee intended the widest possi- patent enforcement/litigation. 46. ble meaning consistent with the purpose As explained, interpretation of claims to be given to the wording he or she used Facts of the case is objective and the question is always in the patent. The critical issue for the court was decid- ‘what would a skilled person have under- • Thus purpose is not the be-all and end- ing the numerical limits of the first claim stood the patentee’s words (or numerals) all. One is still at the end of the day con- of ConvaTec’s UK method Patent No. 1, to mean?’ cerned with the meaning of the language 343, 510, entitled ‘Light Stabilized An- Furthermore, Lord Hoffman’s princi- used. Hence the other extreme of proto- timicrobial Materials’ (the patent). This ples were summarised by Jacob L.J. in col – a mere guideline – is also ruled out contained a third integer, which read – Virgin Atlantic Airways Ltd v Premium by art 69 itself. It is the words or terms ‘(c) subjecting said polymer, during Aircraft Interiors UK Ltd [2009] EWCA of the claims that delineate the paten- or after step (b) to one or more agents Civ 1062 at para 5 as follows: tee’s monopoly. selected from the group consisting of • The first overarching principle is that • It follows that if the patentee has in- ammonium salts, thiosulphates, chlo- contained in art 69 of the European Pat- cluded what is obviously a deliberate rides and peroxides which facilitate the ent Convention, which provides that the limitation in these claims, it must have a binding of said silver on said polymer monopoly conferred by the patent must meaning. One cannot disregard obvious- [the agent being present in a concentra- be determined by the claims. However, ly intentional elements or limitations. tion between 1% and 25% of the total the description and drawings may be • It also follows that where a patentee volume of treatment], which material is used to interpret the claims. In short has used a word or phrase that, acontex- substantially photostable upon drying, the claims are to be construed in con- tually, might have a particular meaning but which will dissociate to release said text. It follows that the claims are to be (narrow or wide), it does not necessarily silver upon rehydration of said material.’ construed purposively – the inventor’s have that meaning in context. Smith & Nephew had developed a pro- purpose being ascertained from the de- • It further follows that there is no ‘doc- cess that it thought would not infringe scription and drawings. The question to trine of equivalents’. the patent, by changing the concentra- ask is what a skilled person having the • On the other hand, purposive con-

DE REBUS – DECEMBER 2016 - 34 - FEATURE – INTELLECTUAL PROPERTY

struction can lead to the conclusion that ascertained in light of common general iv) in the absence of a decimal point, a technically trivial or minor difference knowledge and in the context of the trailing zeros are not generally signifi- between an element of a claim and the specification as a whole. cant unless stated otherwise … .’ corresponding elements of the alleged • It may be that a skilled person would Taking first the bottom of the range, infringement nonetheless falls within understand that the patentee has chosen 1%, and the top of the range, 25%, there the meaning of the element when read to express the numerals in the claim to is asymmetry around these numbers (in purposively. This is not because there is a particular but limited degree of pre- relation to ‘1’ – greater than or equal a doctrine of equivalents: It is because cision, and so intends it to include all to 0,95% and less than 1,5%; and ‘25’ – that is a fair way to read the claims in values within the claimed range when greater than or equal to 24,5% and less context. stated with the same degree of precision. than 25,5%). • Finally, purposive construction needs • Finally, whether this is so will depend The court opined that the ‘significant one to eschew the kind of meticulous on all of the circumstances, including figures’ approach gives rise to ‘very verbal analysis, which lawyers are too of- the number of decimal places to which strange results if applied to the teach- ten tempted by their training to indulge. the numerals in the claim have been ex- ing in the body of specification’, citing The Court of Appeal went on to add pressed. examples from ConvaTec’s diagrams. On two further principles to the above prin- The critical phrase in the patent claim the contrary, the ‘number rounding’ ap- ciples: is ‘the agent being present in a concen- proach produces a symmetrical distribu- • First, the reader comes to the specifica- tration between 1% and 25% of the total tion of random errors around a number tion with the benefit of the common gen- volume of treatment’, which raised two (namely, ‘1’ incorporates all values great- Patent claim construction: eral knowledge of the art and on the as- questions for the court: er than or equal to 0,5% and less than sumption that its purpose is to describe • Would a skilled person believe that 1,5%). and demarcate an invention. the patentee intended the values of 1% The court stated that there can be • Second, the patentee is likely to have and 25% to be taken as exact/absolute no logical basis for preferring the ‘sig- Numerical limitations chosen the words appearing in the claim values, or would this person understand nificant figures’ approach over the with the benefit of skilled advice and, that the patentee used a standard num- ‘whole number’ (or zero decimal place) insofar as he or she has cast his or her ber convention to express the limits of approach in interpreting numerals in claim in specific rather than general the claim to a lesser degree of accuracy? claims, ultimately siding with Conva terms, is likely to have done so deliber- • On the assumption that the numerical Tech’s view that it is not the number ately. limits in the claim did not define exact/ of significant figures that is important The court went on to say that the absolute values, would a skilled person in this context, but the precision with above principles are just as applicable understand the numbers to be expressed which the number is written. to a claim containing a numerical range in terms of whole numbers (zero decimal or limitation as they are to one contain- places) or in terms of significant figures? Comments ing words or phrases. In the UK (as in The court affirmed the court a quo’s In this judgment the UK Court of Appeal SA), the objective of art 69 is achieved rejection of Smith & Nephew’s primary has shown a preference for the ‘number by ‘contextual interpretation’ or ‘purpo- case, that the limits of the claim be the rounding’ approach over the ‘exact val- sive construction’, namely, what would range exactly between 1% and 25%. This ues’ and ‘significant figures’ approaches, a skilled person have understood the left the court in no doubt that a skilled unless the description of the specifica- words (or numerals) to mean? reader would not believe that this is how tion indicates expressly otherwise. The court emphasised three possible the patentee intended the claim limits to However, the ‘number rounding’ ap- ways to construe numerical values in a be understood. Instead, a skilled reader proach, although simple to apply when claim: would believe that the patentee intended construing numerical limitations and • an ‘exact values’ approach, where any- the limits to be understood in a less pre- ranges, is not without its weaknesses. In thing below ‘1’ or above ‘25’ (exactly ie, cise way. this case, the result lead to 0,5% being absolute numerical values) does not in- the lowest value to be below (relative to fringe; Number rounding vs the number ‘1’) in order to overcome the • a ‘significant figures’ approach, where significant figures patent, which is a relatively large margin ‘1’ to one significant figure or value, to overcome (0,5%), in my view. which includes all values greater than or approaches Other foreign jurisdictions may inter- equal to 0,95 and less than 1,5, such that The court went on to discuss the ‘number pret numerical ranges and limitations 0,77 does not infringe; and rounding’ or ‘whole number’ approach. differently. Therefore, there is the pos- • a ‘number rounding’ approach, where At the bottom of the range, 1% includes sibility for variation in solutions on the ‘1’ includes all values greater or equal all those values, which round to 1% when same inquiry – territory by territory. to 0,5 and less than 1,5, such that 0,77 expressed to the nearest whole number. This is important to take into account, infringes. At the top of the range, 25% includes all as South African courts, driven by the Discussing several previous judg- those values, which round to 25% when constitutional imperative, may refer to ments on numerical limitations, the expressed to the nearest whole number. any foreign judgments in its own assess- Court of Appeal distilled certain points Looking at the claimed range as a whole, ment of a particular case. This is of par- of particular relevance to these types of it embraces all values greater than or ticular relevance in intellectual property claims: equal to 0,5% and less than 25,5%. (including patent) matters. • Whether one is considering infringe- The court held the ‘significant figures’ ment or validity, the scope of any such approach to be a little more complex, claim must be exactly the same. summarising the relevant rules as fol- • There can be no justification for using lows – rounding or any other kind of approxi- ‘i) non-zero digits are always signifi- Ryan Tucker BSc Genetics Devel- mation to change the disclosure of the cant; opmental Biology Microbiology Bio- prior art or modify the alleged infringe- ii) zeros between non-zero digits are technology LLB (Wits) is an attorney ment. always significant; at RM Tucker Attorneys in Johan- • The meaning and scope of a numeri- iii) leading zeros are never significant nesburg. cal range in the patent claim must be …; and q

DE REBUS – DECEMBER 2016 - 35 - Picture source: Gallo Images/iStock , - - - - These questions make legal minds struggle all around struggle minds legal make questions These ill electronic-cigarettes or e-cigarettes prevent people prevent e-cigarettes or ill electronic-cigarettes harm- one replacing just Are we cigarettes? smoking from anoth with cigarettes, regular tobacco namely, device, ful er harmful and toxic device? - 36 - – DECEMBER 2016

I will and views e-cigarettes, the I summarisegeneral impact of the The similarities between e-cigarettes and regular tobacco cigarettes regular tobacco and similarities e-cigarettes The between the world. In recent years the e-cigarette industry became a 3 billion dol- a 3 industry became e-cigarette years the recent world. In the brands e-cigarettes on different of lar 466 industry, with approximately to slowway the – ‘E-cigarettes Rose-Innes marketworldwide(Olivia the poison yourself?’ www.news24.com, accessed 26-7-2016). regulatory the legislation, by regulation the thereof, implications health struggle and recent developments in legislation. accessed 4-11-2016). tox harmful a also and is addictive which nicotine, contain both are that amounts different contain e-cigarettes brands of different in. Although also e-cigarettes surprising is that more consumed, when nicotine of of anti-freeze (‘Summary in is found which compound, toxic the contain by FDA’ conducted results: electronic-cigarettes Laboratory analysis of labels the on Another problem is that www.fda.gov, accessed18-7-2016). con actually nicotine levels of the as to misleading are very e-cigarettes tained in the product (see table on the next page): pert, Rachel Grana and Stanton A Glantz ‘The importance of product defi- product of importance ‘The Glantz A Stanton and Grana Rachel pert, https://tobacco.ucsf.edu regulations’ and laws E-cigarette US in nitions W e-cigarettes of Composition cigarettes alternatives is that two the between major difference one The that mean not does This, however, not. do tar, while e-cigarettes contain the will cause e-cigarette an of smoking The harmful. are not e-cigarettes nitrosa- tobacco-specific nicotine, of consists which liquid, a of heating and/or glycerine, glycol alkaloids, aldehydes, propylene mines, tobacco Lem K (Lauren agents flavouring and compounds organic volatile metals, DE REBUS

By Yda van Aartsen distribution of e-cigarettesdistribution the law relating to the to relating the law A smokey issue – issue A smokey FEATURE – INTERNATIONAL LAW

them to be ‘tobacco products’. This was Study conducted Matrix: Deviation from affirmed by the Appeal Court. by: label: Congress already promulgated Family Goniewics Refill solution -75% to 28% Smoking Prevention and Tobacco Con- trol Act in 2009 to regulate all tobacco Kirscner Refill solution -50% to 40% products, as well as e-cigarettes contain- Cameron Refill solution -66% to 42% ing tobacco derivatives (‘Family Smoking Prevention and Tobacco Control Act of Cheah Cartridge -89% to 105% 2009’ www.govtrack.us, accessed 4-11- Trehy Refill solution -100% to 100% 2016). Cartridge -100% to 100% Regulation and legislation Cobb Cartridge -80% to 77% of e-cigarettes in the US Imperative to the solution to regulate e- (Tianrong Cheng ‘Chemical evaluation of shows that after six to 12 months on e- cigarettes and keep intact the anti-smok- Electronic-cigarettes’ www.tobaccocon- cigarettes, smokers could not be cured ing legislation, is to include e-cigarettes trol.bmj.com, accessed 2-8-2016). from their tobacco cravings and were in the definition of ‘tobacco products’, still smoking regular tobacco cigarettes or to include in the definition of ‘smok- Health outcomes (Brandel France de Bravo, Sarah Miller, ing’ the smoking of e-cigarettes. This will E-cigarettes have an inflammatory effect Jessica Becker and Laura Gottschalk automatically subject e-cigarettes under on the epithelial cells lining the inside ‘Are e-cigarettes safer than regular ciga- the same anti-smoking legislation, regu- of the lungs. Even without the nicotine rettes?’ www.stopcancerfund.org, ac- lations and tax. By June 2014 there were in the e-cigarettes, the other substances cessed on 18-7-2016). The result is that already 46 laws in 40 states of the US, in e-cigarettes cause harm to these cells e-cigarettes have created a population of which established a proper definition for and make them more susceptible to in- dual-smokers, and access to smoking to e-cigarettes and the health advocates in fections, especially in younger persons the younger population, who cannot pur- the US are fighting to include e-cigarettes (‘Link between e-cigarettes and respira- chase regular tobacco cigarettes. Mark in all ‘clean air and tax laws’ as a ‘tobac- tory infections’ www.health24.com, ac- van der Heever, Deputy Director of Com- co product’ or ‘product derived from to- cessed 19-7-2016). munication for the Western Cape Depart- bacco’. The onus will then fall on the tax The carcinogen formaldehyde, con- ment of Health, stated that e-cigarettes payer to demonstrate that their products tained in e-cigarettes, can be up to 15 renormalised smoking. Resultantly, the do not contain a tobacco derivative to be times more toxic and cancer causing province is seriously looking at amend- excluded from tobacco taxes (Lempert et when consumed with higher voltages va- ment to the current tobacco legislation al (op cit)). pour released in e-cigarettes (‘Watch out to prevent this trend from continuing for cancer-causing formaldehyde in new (Rose-Innes (op cit)). Other parts of the world generation e-cigarettes’ www.health24. E-cigarettes should thus not be exclud- on e-cigarettes com, accessed on 19-7-2016). ed from tobacco products legislation, as Other health issues is that nicotine has this will undermine the intention of the The World Health Organisation (WHO) a stimulating effect on the cardiovascu- legislator of tobacco legislation (Lempert described the uncertainty about the reg- lar system, increasing the blood pres- et al (op cit)). ulation of e-cigarettes as a ‘loophole’ to sure and heart rate and it carries risk of legally use nicotine, a tobacco derivative. negative effect on foetal development. E-cigarettes in the United Switzerland, Brazil and Singapore have There is no research showing that a reg- States (US) banned indoor smoking altogether, while ular inhalation of vapour into our lungs Canada and France have regulated their can have any long term benefits to our After several years of uncertainty, the use (Sheree Bega and Kashiefa Ajam ‘Bid health (Rose-Innes (op cit)). District of Columbia Circuit Court as- to stub out all smoking’ www.iol.co.za, We should consequently not substi- sisted with this dilemma when it gave accessed 19-7-2016). The WHO also in- tute tobacco containing cigarettes with judgment in the matter of Sottera Inc v dicated that e-cigarettes should be cat- e-cigarettes for the reason that they are US Food & Drug Administration 627 F.3d egorised either as tobacco products, or healthier to smoke. They may cause more 891 (D.C Cir 2010). The question was used for prescribed medicinal purposes. harm than regular tobacco cigarettes. whether e-cigarettes should be regulated The American Heart Association and the by the same regulations as tobacco prod- European Respiratory Society concurred Regulations and legislation ucts by the Food and Drug Administra- herewith. While the smoking of tobacco products tion (FDA) or under the Tobacco Act. Britain is the only country (so far) to are prohibited in any public area, the The e-cigarette manufacturers argued take a different approach towards e- smoking of e-cigarettes are not spe- that their products were promoted as cigarettes. During 2015 the British have cifically prohibited by legislation. Linda being for ‘smoking pleasure’, rather than welcomed the use of e-cigarette as a Curling, a pharmacist from the Poison therapeutic or for smoking cessation. Be- healthier and safer alternative to regu- Information Centre at Red Cross Chil- cause the product was not promoted to lar tobacco cigarettes, which does not dren’s Hospital said that there seems to be falling in the ‘therapeutic’ category, carry the health risks associated with be a ‘fairly high use’ in the young adult it does not fall within the ambit of the regular tobacco cigarette smoking. They population of South Africa, which is a group of products, which the FDA could would like to get it licensed to be used as severe concern for them (Rose-Innes (op regulate. a cure for smoking (‘UK health officials cit)). The court decided that e-cigarettes endorse e-cigarettes’ www.health24.com, Smokers use e-cigarettes as a device could not be regulated under the FDA’s accessed 19-7-2016). to assist them to quit smoking regular drugs/devices authority unless they are Certainly, this worldwide dilemma tobacco cigarettes. There is, however, ‘marketed for therapeutic purposes,’ and is causing the opposing views on e-cig- no long term study showing that this also not regulated under FDA’s tobacco arettes, will only be resolved after the is true. The only studies done so far, product authority, unless FDA deems long effects of e-cigarettes are studied.

DE REBUS – DECEMBER 2016 - 37 - FEATURE – INTERNATIONAL LAW

E-cigarettes in South Africa or promote, a tobacco product through that proves that second hand smoke any direct or indirect means, including of e-cigarettes emissions are safe for (SA) through sponsorship of any organisa- non-users (Ingrid Torjesen ‘E-cigarette Due to the nicotine composition of dif- tion, event, service, physical establish- vapour could damage health of non- ferent e-cigarettes of the same brand ment, programme, project, bursary, smokers’ www.bmj.com, accessed 27-10- and batch differing from cigarette to cig- scholarship or any other method.’ 2016). arette, complicates the process of defin- It can be assumed that e-cigarette ing e-cigarettes in a single ‘all including’ advertisements, promoting e-cigarette Discussion and conclusion category or group (Lempert et al (op cit)). smoking, will cause the public to have Not all e-cigarettes contain nicotine or Twisp, SA’s largest e-cigarette distribu- an increased tendency to have a more the same concentrations of nicotine, tor promotes their product as available positive attitude towards buying of to- making it difficult to regulate all e-cig- in ‘all major shopping centres’ in SA. bacco products as well (SE Adkison, RJ arettes under one ‘all inclusive’ ban. The Their glamorisation of their product O’Connor, M Bansal-Travers, A Hyland, issue with e-cigarettes is that the ab- certainly attract more e-cigarette con- R Borland, HH Yong, KM Cummings, A sence of tar causes it to be less harmful sumers. Interesting to note is that their McNeill, JF Thrasher, D Hammond and in certain instances but it is more harm- product is not advertised as an anti- GT Fong ‘Electronic nicotine delivery ful if smoked at high voltages (‘Watch smoking device, neither to assist smok- systems: International tobacco control out for cancer-causing formaldehyde in ers to quit smoking. Twisp promote four-country survey’ www.ncbi.nlm.nih. new generation e-cigarettes’ (op cit)). their ‘unique’ product to be available in gov, accessed 19-7-2016). My opinion of the only feasible solu- different flavours to ‘tantalises all your tion to this dilemma is to regulate e-ciga- senses’ (www.twisp.co.za, accessed on Effects of e-cigarettes on rettes on two levels: 26-7-2016). It might be argued that this non-smokers • Firstly, prescribed as medicinal treat- suggests the product is marketed for en- ment in specific quantities and voltages joyment purposes. E-cigarette smoke cause a visible vapour according to specific medicinal require- The Medicines and Substances Related that is able to be smelled by non-smok- ments to stop and/or cure smoking reg- Act 101 of 1965 was amended in 2012 ers depending on the flavours and other ular tobacco cigarettes. to state that e-cigarettes are scheduled contents of the fluid. The vapour is dis- • Secondly and together herewith, to devices that should be bought only from charged into the air only when the user include all other consumption of e-cig- a pharmacy with a doctor’s prescription. exhales. This is in contrast to regular arettes in the tobacco products regula- Unfortunately, the e-cigarette distribu- cigarettes that discharge smoke continu- tion legislation (‘Watch out for cancer- tors found a loophole around this, by ously while kept alight, and when the causing formaldehyde in new generation selling e-cigarettes over the counter in user exhales. Research shows that e-cig- E-cigarettes’ (op cit)). any shopping mall by not mentioning arette smoke can cause a 20% increase in The reality is, that all tobacco and to- that e-cigarettes can be a therapeutic de- the concentration of polycyclic aromatic bacco-related product consumption con- vice, have health benefits, or help with hydrocarbons in the air of a ventilated tain risks to develop cancer and other smoking cessation (Rose-Innes (op cit)). room, after volunteers smoked e-ciga- health issues. Simply put, it causes the With these controversial views, SA’s rettes for two hours in the room (‘E-cig- same harm as regular tobacco cigarettes Minister of Health, Aaron Motsoaledi, arette vapour exposes people sharing a and should be regulated accordingly. has taken a firm stand against e-ciga- room with an e-cigarette user to contam- rettes and indicated that he will push inants, including nicotine, particulates for new legislation against all forms of and hydrocarbons’ www.treatobacco. Yda van Aartsen BHSc (Wits) LLB smoking of e-cigarettes in 2016 (Bega net, accessed 27-10-16). The new trend (Unisa) is an advocate at the Island and Ajam (op cit)). to smoke e-cigarettes due to their ad- Group of Advocates in Johannes- The Tobacco Products Control Act 83 vantages, causes more people to smoke burg. of 1993 (the Act) does not include any them indoors, for example, in shopping q specific reference to e-cigarettes, and malls, churches, offices and their own currently reads as follows: homes. Although e-cigarettes do not ‘…a product containing tobacco that is contain the harmful smoke of regular For full links to the intended for human consumption, and cigarettes, there are still very harmful includes, but is not limited to, any de- emissions, which can cause health issues articles referenced vice, pipe, water pipe, papers, tubes, fil- to non-smokers. The vapour, or aerosol, ters, portion pouches or similar objects contains different concentrations of nic- in this article, visit manufactured for use in the consump- otine, ultrafine particles and low levels tion of tobacco… .’ of toxins that are known to cause cancer the De Rebus The promotion of e-cigarettes also re- (‘Electronic Smoking Devices and Sec- website at lates to s 3(1)(a) of the Act: ondhand Aerosol’ www.no-smoke.org, ‘No person shall advertise or promote, accessed 27-10-2016). www.derebus.org.za or cause any other person to advertise There is currently no research at all

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DE REBUS – DECEMBER 2016 - 38 - S G U I D E ’

SECOND EDITION Commercial Mediation CommercialA U S E R Mediation

ABOUT THE CONTEMPORARY LEGAL AND APPLIED RESEARCH SERIES

Emanating from the work of the erstwhile Centre for Legal and Applied Research at the University of JOHN BRAND ABOUT THE Juta Cape Town, the Contemporary Legal and Applied S G U I D E CONTEMPORARY ’ LEGAL AND APPLIED Research series (CLARS) provides a platform for 7mm RESEARCH SERIES the dissemination of studies across a broad range of law-related subjects. It aims to promote a culture of Emanating from the work of the erstwhile Centre for Legal discourse, and hence publishes edited collections FELICITY STEADMAN and Applied Research at the of essays around a particular topic, pursuant to the University of Cape Town, CHRISTOPHER TODD J BRAND • F STEADMAN • C TODD conceptualisation of the collection at a conference the Contemporary Legal or workshop. and Applied Research Series A U Sis the E first R South African publication that explains how to conduct Commercial Mediation (CLARS) provides a platform for the dissemination of studies across a broad range of law-related subjects. It aims to

promote a culture of discourse, and hence publishes edited Commercial Mediation collections of essays around a mediation in commercial matters. While mediation is well established in many parts of the particular topic, pursuant to world as a speedier, less costly and more effective method of resolving commercial disputes the conceptualisation of the than traditional litigation, it is only beginning to emerge as an option in the dispute resolution collection at a conference or landscape of South Africa. In March 2014, the Department of Justice and Constitutional workshop. Development promulgated a mediation rule. The rule is set out and discussed in this second MEMBERS OF THE Latest Legal edition of the book. CONTEMPORARY LEGAL AND SECOND EDITION Commercial Mediation explains the processes that take place before and during commercial MEMBERS APPLIEDOF THE RESEARCH SERIES mediation. The book analyses the different types of consensus-seeking approaches and the key (CLARS) EDITORIALDee COMMITTEE: Smythe principles of mediation. The book includes specimen agreements to mediate and a specimen CONTEMPORARY LEGAL clause which allows for referral to mediation or arbitration. Each chapter concludes with a useful AND APPLIEDCOMMITTEE: RESEARCH summary. Labour Dispute Resolution (2008) andSERIES (CLARS) EDITORIAL Dee Smythe Jaco Barnard-Naude John Brand, BA LLB (Wits), is a consultant at Bowman Gilfillan attorneys and member of the (Law Faculty ResearchDebbie Director)Collier advisory board of the African Centre for Dispute Settlement at Stellenbosch University. He is an Alistair Price International Mediation Institute (IMI) certified mediator and also serves as a member on the (Law FacultyJaco Research Barnard-Naude Director) IMI’s Independent Standards Commission. He specialises in dispute resolution and the training of Debbie Collier Hannah Woolaver negotiators, mediators and arbitrators and is a Centre for Effective Dispute Resolution (CEDR UK) Alistair Price Caroline Ncube accredited mediator. John is co-author of Labour Dispute Resolution (Juta). 9,9mm 9,9mm Business Transfers and Employment Waheeda Amien Felicity Steadman, BA Hons (Wits) MA (Warwick), has worked as an independent mediator since Hannah Woolaver 1989. She was accredited as a mediator by the South African Independent Mediation Service of Caroline Ncube SERIESHanri EDITOR: Mostert South Africa (1989), and then by the Centre for Effective Dispute Resolution in the UK (2003). She Waheeda Amien was trained as a conciliator by the UK Advisory, Conciliation and Arbitration Council (1991), and is an ILM Qualified Workplace Mediator (2015). Felicity is registered with the UK Civil Mediation ([email protected]) Council in the UK and certified by the International Mediation Institute.Contracts ofFelicity Employment regularly (2008), and the author of SERIESHanri EDITOR: Mostert mediates commercial, employment and workplace disputes. She is a mediator trainer with CEDR, Lamize Viljoen Information Solutions IndigenousIndigenous KnowledgeKnowledge && IntellectualIntellectual PropertyProperty Conflict Dynamics and she has trained mediators and conciliators for the International Labour ([email protected]) Organisation for many years. She is a co-author of the book SERVICING PROJECT OFFICER: OFFICER:([email protected]) contributed to Dispute Resolution (1993). SERVICING PROJECT Lamize Viljoen Chris Todd, BA (Hons) (UCT), BA (Hons) (Jurisprudence) (Oxon), is a director at Bowman Gilfillan attorneys. In his dispute resolution practice, Chris has represented parties to pension and employment litigation at various levels – in tribunals, the High Court, the Labour Courts and the ([email protected])FORTHCOMING TITLES & Constitutional Court – and in related mediation and other ADR processes. His dispute resolution career includes two periods as an acting judge of the Labour Court. He was accredited by CEDR LandAfrican Law and perspectives Governance: on 171mm as a commercial mediator in April 2007. Chris is co-author of Rights in South Africa (2004), co-author of FORTHCOMINGindividualisation TITLES of land title Collective Bargaining Law (2004). Indigenous Knowledge LandAfrican Law and perspectives Governance: on Individualisation of Land Title Intellectual Property

IndigenousIndigenous Knowledge Knowledge 7mm IntellectualIntellectual Property Property CONTEMPORARY LEGAL AND APPLIED RESEARCH SERIES

EDITORS: C B NCUBE & E DU PLESSIS

CONTEMPORARY LEGAL AND APPLIED RESEARCH SERIES This title flows from several panels at the Commission on Legal Pluralism Jubilee Conference, entitled Living Realities of Legal Pluralism, that was organised 100mm EDITORS: The Law of Banking and Payment in South Africa inin conjunctionconjunction withwith thethe Centre Centre forfor Legal Legal andand AppliedApplied Research Research (CLEAR), (CLEAR), thethe Research Chair in Customary Law and the Chair for Comparative Law in Africa, of the University of Cape Town. The panels highlighted controversial aspects of the legal protection of indigenous knowledge with which the contributors CAROLINE B NCUBE & toto thisthis volumevolume havehave criticallycritically engaged.engaged. ThisThis engagementengagement isis informedinformed byby recentrecent ELMIEN DU PLESSIS legislativelegislative and and policy policy developments developments in in several several countries countries in in the the global global South, South, includingincluding SouthSouth Africa.Africa. The Law of

Robert Sharrock (managing editor) Banking and Payment in ARTIST: Commercial Mediation: A User’s Guide (2nd edition)South Africa Indigenous Knowledge & Intellectual Property MATILDA VAN DER WALT (HELLO IT’S MATILDA) IMPRESSION: Robert Sharrock (managing editor)

A PAPERIMAGES WEAVE OF INCORPORATING INDIGENOUS J Brand, F Steadman, C Todd (Contemporary Studies in Law and Applied Research)

PATTERNS AND ART SYMBOLISING INDIGENOUS KNOWLEDGE BEING WEAVEDWESTERN INTOAND THE KNOWLEDGE CULTURE. FABRIC OF TITLE: WJ du Plessis, C Ncube

Commercial Mediation sets out the processes for court-referred and INDIGENOUSARTIST: PAPERMEDIUM: WEAVE

WATERCOLOUR, www.jutalaw.co.za PAPER COLLAGE IMPRESSION: voluntary mediation in commercial matters.The Law ofIt Bankingincludes specimen MATILDA VAN DER WALT (HELLO IT’S MATILDA) The United Nations Declaration on the Rights of Indigenous People and Payment in A PAPER WEAVE INCORPORATINGAND CULTURE. IMAGES OF agreements, chapter summaries, and discusses the new mediation rule. INDIGENOUS PATTERNS AND ART TITLE:SYMBOLISING has extended the rights of indigenous people to the protection of their THE FABRIC OF WESTERN KNOWLEDGE South Africa INDIGENOUS KNOWLEDGE BEING WEAVED INTO

INDIGENOUS PAPERMEDIUM: WEAVE Met od ma pro od experci usdandante nissit re qui dist, cullaut lab WATERCOLOUR, illandae non pedi tem repres ab in eturerition nat. knowledge and culture. This book is concerned with how to craft an PAPER COLLAGE Ut magnatusam, nos eum expel et el ipis eumque sequo ent quatem et aliaspid que minima quidige ndebitas eium alibus dolupture sam con corionsed etur alignimene pelis nonet libus, iderorestis dolorrum ex eicae pelluptae pro veliquunt quaeria volorio. Metusam appropriate regulatory scheme to achieve protection for indigenous ZAR acearcium velit, nonet eos veria nestrum ex eiur? Quis dolupis alis cus, quae core si omnihicit et que apienim pelestion pra doluptur, odignis eossusa ectusam faces dia im consedi cabore et iurempore possinv endandam et laborerat earchil molorec temporum aut aut que sinulla borrum erunt. knowledge. Its chapters are premised on the realisation of the Net, et harciis nisitio nsedicil etur acepudi orempor poremqui aperendi ius dolupta spellup tatissunte dolut vendio beatia cus consequi voluptur, sus apersped ut que quis id quid quiatur? Ut et quis eos ad quostem faciis consequo ipsam, as es nis essiminctur shortcomings of a legal paradigm based on a market economy. seque con conse si bea derorro dolorro intem non nost, que accusda Soft cover 170 pages R300 quod etur, sam fugia doluptassit

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ZAR The Law of Banking and Payment in South Africa explains some of the more important aspects of the law applicable to banks and banking in Soft cover 362 pages R475 South Africa, along with the principles that govern payment and payment systems in this country.

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The Medicines Act provides a visual comparison of the amending Acts and the effects of their amendments, which will aid in understanding the new Principles of Criminal Law (5th edition) Act when it is in effect. JM Burchell

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3960-11-16 LatestInfoSolutionsDeRebus.indd 1 2016/11/11 1:47 PM LAW REPORTS THE LAW REPORTS

October 2016 (5) South African Law Reports (pp 335 – 667); [2016] 3 All South African Law Reports August (pp 345 – 667); [2016] 3 All South African Law Reports September (pp 669 – 959); and 2016 (10) Butterworths Constitutional Law Reports – October (pp 1253 – 1388)

David Matlala BProc (University of This column discusses judgments as and when they are published in the South African Law Re- the North) LLB (Wits) LLM (UCT) ports, the All South African Law Reports and the South African Criminal Law Reports. Readers LLM (Harvard) LLD (Fort Hare) should note that some reported judgments may have been overruled or overturned on appeal HDip Tax Law (Wits) is an adjunct or have an appeal pending against them: Readers should not rely on a judgment discussed here professor of law at the University of without checking on that possibility – Editor. Fort Hare.

Abbreviations (CC), was not about the sub- followed and over a period hearings concerned, it was stance but the process by of five days public hearings held that Parliament, through CC: Constitutional Court which the Amendment Act were to be held in all provinc- NCOP, had failed to satisfy its ECG: Eastern Cape Division, was brought about. The applies, after which on the fourth obligation to facilitate public Grahamstown cants, the Land Access Move- day after such hearings, prov- involvement in accordance GP: Gauteng Division, Pretoria ment of South Africa and oth- inces were to hold their nego- with s 72(1)(a). As a result KZD: KwaZulu-Natal Local Di- ers, sought in the main, a CC tiating mandate meetings to the Amendment Act was de- vision, Durban order declaring the Amend- discuss their position regard- clared invalid, effective from KZP: KwaZulu-Natal Division, ment Act unlawful for having ing the Amendment Act and the date of the judgment. The Pietermaritzburg been passed by the National seven days thereafter, hold purpose of prospective opera- LAC: Labour Appeal Court Council of Provinces (NCOP) a final mandate meeting and tion of the order of invalidity LC: Labour Court contrary to s 72(1)(a) of the prepare a report. Because of a was to save some 80 000 new LCC: Land Claims Court Constitution, which requires very tight time-frame the en- claims, which had since been SCA: Supreme Court of Appeal the NCOP to facilitate public visaged public hearings were lodged after the Amendment WCC: Western Cape Division, involvement in its legislative not well-advertised, attend- Act came into operation on 1 Cape Town and other processes, as well ance was poor, some pub- July 2014. However, the Chief Constitutional law as those of its committees. lic hearings were very short Land Claims Commissioner The gist of the complaint was while at some hearings no (the Commissioner) was in- Invalidity of legislation for that there was ‘unexplained questions were entertained. terdicted from processing failure to facilitate adequate rush’ in the manner in which For example, in the Northern those new claims. If Parlia- public involvement in the the first respondent, the Cape only one municipality ment were to fail to re-enact legislative process: The Res- NCOP and its select commit- was involved and held a sin- a properly done Amendment titution of Land Rights Act tee, passed the Amendment gle public hearing while in Act within two years of the 22 of 1994, which deals with Act, which was done in a very the Western Cape one public court order, the Commis- restitution of land rights or short period of one month. hearing was held, attended by sioner or any other interested compensation for individuals The main reason for the ‘un- 30 people and lasted 90 min- party, was given leave to ap- and communities deprived of explained rush’ was the de- utes. In Gauteng one meet- proach the court, within two rights in land as a result of sire to have it passed before ing was held and lasted three months after the expiration racially discriminatory laws dissolution of Parliament and hours but no questions were of the two-year period, for an or practices, set the cut-off holding of general elections allowed. In the North West appropriate order on the pro- date for lodging claims for in May 2014. In that rush a all public hearings were ad- cessing of claims lodged from restitution as 31 December lot of rough justice was mani- dressed in Setswana only, 1 July 2014. The NCOP was 1998. Desirous of extending fested. For example, after del- while in the Free State all ordered to pay costs. the cut-off date to a new date egating the task of facilitating hearings were conducted pre- Delivering a unanimous Parliament passed the Resti- public involvement to pro- dominantly in Sesotho. The judgment of the court, Mad- tution of Land Rights Amend- vincial legislatures, as it was list of deficiencies in the plan- langa J held that the Constitu- ment Act 15 of 2014 (the entitled to do, rather than ning and conduct of public tion demanded that the public Amendment Act) that came facilitating public involve- hearings was simply endless. should be afforded a mean- into operation on 1 July 2014 ment itself, on being briefed The CC held that in terms ingful chance of participating and extended the cut-off date by the Department of Land of s 167(4)(e) of the Constitu- in the legislative process. The for lodging claims to 30 June Affairs and Rural Develop- tion it had exclusive jurisdic- standard to be applied in de- 2019. ment at the end of February tion in respect of matters in termining whether Parliament The issue in Land Access 2014, the Select Committee which it was alleged that the had met its obligation of fa- Movement of South Africa (the Committee) of the NCOP President or Parliament had cilitating public participation and Others v Chairperson, had to brief all provincial leg- failed to fulfil a constitution- was one of reasonableness National Council of Provinces islatures the following week, al obligation. After careful and depended on the circum- and Others 2016 (5) SA 635 within a very short period of analysis of all the deficien- stances, as well as the facts (CC); 2016 (10) BCLR 1277 three days. In the week that cies attendant on the public of each case. In the instant

DE REBUS – DECEMBER 2016 - 40 - matter the NCOP adopted a Firstrand Bank, applied for Delict by delaying commencement truncated time line for itself default judgment in which it of its business activities. It and provincial legislatures to sought against the respond- Doctrine of abuse of rights: was alleged that K had acted facilitate the involvement of ents, Mr and Mrs Mdletye, In Koukoudis and Another v with the specific intention the public in the legislative payment of the total contract Abrina 1772 (Pty) Ltd and An- of frustrating development process. That time line was amount outstanding, as pro- other 2016 (5) SA 352 (SCA); of the shopping centre and the root cause of all the defi- vided for in the acceleration [2016] 3 All SA 398 (SCA), the causing financial harm. The ciencies in the process. Given clause, interest and costs on first respondent, Abrina, was GP, per Tolmay J, upheld the the gravitas of the legislation attorney and client scale. Fur- the owner of property situated claim for damages. and the thoroughgoing pub- thermore, it sought an order in Centurion, City of Tshwane An appeal against the High lic participation process that declaring the property, which Municipality (Pretoria), which Court order was upheld with was warranted, the truncated was the respondents’ pri- was zoned ‘agricultural’. As costs by the SCA. Leach JA time line was inherently un- mary residence, executable. the first respondent wanted (Majiedt, Pillay JJA, Victor reasonable. Objectively, on The court granted the order to develop it into a shopping and Baartman AJJA concur- the terms stipulated by the relating to payment of the centre and conduct a steak- ring) held that the weight of time line, it was simply im- outstanding contract amount, house business there, it ap- academic opinion was to the possible for the NCOP, and by interest and costs but ad- plied for its rezoning into a effect that conduct should extension the provincial leg- journed sine die the issue re- township. The first appellant, not be regarded as being un- islatures, to afford the public lating to executability of the Koukoudis (K), lodged an ob- lawful where it advanced a a meaningful opportunity to property. jection against the rezoning legitimate right of the person participate. Gorven J held that if the and thus started a long delay exercising it, even if in doing arrears could be eliminated caused by the appeal process so another could be preju- Consumer credit and the amounts referred that followed, which also in- diced. In order to constitute agreements – to in s 129(3) paid (default cluded litigation and court an abuse of right both the charges and reasonable costs orders. The reasons given by subjective requirement that execution against of enforcing the agreement K for his objection, included an act be done with the sole primary residence up to the time of reinstate- failure by the respondent to or predominant intention to ment) the agreement would address fundamental issues harm another and the objec- Primary home should not be be reinstated. From the date such as environment impact tive requirement that the act declared executable if there of reinstatement the default assessments, traffic issues serve no appreciable or legiti- are good prospects of rein- judgment would have no le- and requirements of statutes mate interest should be pre- statement of the credit agree- gal force. If the property was such as the National Envi- sent. In considering the ques- ment: Before its amendment sold by virtue of an attach- ronmental Affairs Act 107 of tion of the appellant’s liability in 2014, and which came into ment following a declaration 1998 and the like. However, one had to have regard, first, effect in March 2015, s 129(3) of executability, the agree- as it later transpired, the real to the subjective require- of the National Credit Act 34 ment would not be capable reason for the objection was ment, namely whether the of 2005 (the NCA) provided of being reinstated and the to prevent the establishment objection to the development among others that at any time respondents would lose their of a shopping centre in the was done with the sole or pre- before the credit provider had home. The potential for that vicinity of a shopping mall, dominant intention to harm cancelled the agreement, the to occur had to be a factor which was only some 600 the respondents; and then consumer could reinstate it to be taken into account in metres away and was owned second, the objective require- by paying all amounts that an application to declare the by companies in which K had ment, namely whether the ob- were overdue together with property executable. The sig- an interest as a director and jection served no appreciable default charges and reason- nificance thereof was that, shareholder. In brief, the pur- or legitimate interest of the able costs of enforcing the unlike many of the other fac- pose of the objection was to appellants. Such was not the agreement up to the time of tors that relate to alternative protect the commercial inter- case in the present matter as reinstatement. Subsection (4) ways of satisfying the entire ests of K and his companies. the appellants sought to pro- provided that a consumer judgment debt, reinstatement Eventually approval to es- tect their commercial interest could not reinstate a credit did not require payment of tablish a shopping centre in the nearby shopping mall. agreement after the sale of the full contract amount but was granted. Thereafter, the The respondents had thus any property in terms of an only the arrears and other first respondent instituted a failed to prove an abuse of attachment order or in the ex- specified charges. In the in- claim for damages against the the right to object to rezoning ecution of any other court or- stant case there was a reason- first appellant and one of his of the property. der enforcing that agreement. able prospect that the agree- companies, alleging that their In Firstrand Bank Ltd v Md- ment was capable of being objection to its rezoning was letye and Another 2016 (5) reinstated within a relatively an abuse of the right to object Intentional interference by SA 550 (KZD) the applicant, short period. and resulted in financial loss third party with contractual 2531 Legalserve DeRebus 1-6 ad.pdf 1 2016/09/09 12:11 PM

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DE REBUS – DECEMBER 2016 - 41 - LAW REPORTS relationship is actionable: In orders were granted with interference in contractual while the owner contended Shoprite Checkers (Pty) Ltd v costs. relationship in the context of that the market value of the Masstores (Pty) Ltd and Anoth- Lowe J held that the Aq- the usurpation of a right. property should be looked at er [2016] 3 All SA 926 (ECG) uilian action was available in terms of its potential for the applicant, Shoprite, had a against a third party for the Expropriation development as a township, lease agreement with the sec- intentional interference with Calculation of compensa- which value was R 4,36 mil- ond respondent, Whirlprops, contractual relationship, tion: Section 16 of the Land lion. The LCC rejected both which gave it the exclusive which had the effect that a Reform (Labour Tenants) Act contentions and held that the right to operate a supermar- contracting party was de- 3 of 1996 (the Land Reform just and equitable compensa- ket at the Mthatha Mall in the prived of the opportunity of Act) gives the LCC the power tion was an amount that was Eastern Cape. The first re- obtaining the performance to award a part of the farm adjusted downwards to R 1,5 spondent, Masstores (Game), to which he was entitled, to a labour tenant, meaning a million. No order as costs was also had a lease agreement arising from the contract or farm worker who lives on the made. with the second respondent, where the contracting parties’ farm, to use as his homestead, Ngcukaitobi AJ (Canca AJ which gave it the right to con- contractual obligations were for grazing his livestock and concurring) held that the mar- duct the business of a general increased. The requisites of sowing crops. As that is obvi- ket value was not the basis merchandiser, which did not a delict had to be satisfied ously expropriation, the Land for the determination of com- include selling fresh fruit and in each case. Once such req- Reform Act provides that the pensation under s 25 of the vegetables or fresh meat and uisites were satisfied, liabil- owner of the land so expro- Constitution where property poultry products, all of which ity would arise. Provided the priated should be awarded or land had been acquired formed part of the exclusive requirements for the inter- compensation as provided for by the state in a compulsory business of a supermarket dict had also been met, the in s 25 of the Constitution, fashion, as was the case in operated by the applicant. wronged party would be en- which deals with the issue. the instant matter. The point The first respondent started titled to an order restraining Section 25(3) provides that of departure for determina- expanding its business to that unlawful conduct. the amount of compensation, tion of compensation was of a supermarket and in 2014 Dolus eventualis was suffi- the time and manner of pay- justice and equity. Market the old lease agreement was cient as far as intent was con- ment has to be just and equi- value was simply one of the cancelled and a new one concerned. Concerning wrongful- table, reflecting an equitable considerations to be borne in cluded, which gave the first ness, the first respondent had balance between the public mind when a court assessed respondent the right to oper- acted unlawfully and wrong- interest and the interests of the just and equitable com- ate a supermarket business in fully by at least usurping the those affected, having regard pensation. Market value was, the mall, notwithstanding the applicant’s exclusivity entitle- to all relevant circumstances, therefore, not a pre-eminent exclusive right that had been ment to conduct the business including – consideration. The object was granted to the applicant. As of a supermarket. As a result, ‘(a) the current use of the always to determine compen- a result the applicant sought a prima facie right had been property; sation which was just and by way of urgent application established by an unlawful act (b) the history of the acqui- equitable, not to determine an interim interdict restrain- of the first respondent, which sition and use of the prop- the market value of the prop- ing the first respondent from constituted interference in erty; erty. In determining what was operating a supermarket the contractual relationship (c) the market value of the just and equitable, a balance business. It also sought an between the applicant and property; had to be struck between the interim interdict directing the the second respondent and (d) the extent of direct state interests of the private land- second respondent to take all which had been committed investment and subsidy in owner and the public inter- necessary reasonable steps to with the necessary form of the acquisition and beneficial est. Therefore, compensation prevent the first respondent intent. That satisfied the re- capital improvement of the which was below the market from operating a supermar- quirements to be met for a property; and value could be compliant with ket business in the mall. Both successful claim based on the (e) the purpose of the ex- the Constitution, if it quali- propriation.’ fied as just and equitable. In Msiza v Director-General, The development potential Department of Rural Develop- of the property, as a factor ment and Land Reform and in the calculation of market Others 2016 (5) SA 513 (LCC) value, was far-fetched and the LCC having awarded Msiza speculative as there were no a portion of the farm for resi- development plans in place dential, cropping and grazing but only a remote hope. Fol- purposes, the issue was the lowing that approach, would amount of just and equitable distort the real value of the compensation to be paid for land and produce outcomes, that portion. The parties, the which were inconsistent with Department of Rural Develop- the purposes of compensa- ment and Land Reform (the tion. That approach could Department) and the owner of also create a perverse incen- the farm, the Dee Cee Trust, tive for landowners to artifi- agreed that the market value cially raise the potential value would be just and equitable of their land if they knew that compensation. However, the by the simple device of gener- Department contended that ating interest in the land, its the market value should be market value could be signifi- determined on the basis of cantly altered. The purpose of use of the land, namely, as s 25 of the Constitution was agricultural land, the value not to reward property specu- of which was R 1,8 million, lators but to serve public in-

DE REBUS – DECEMBER 2016 - 42 - terest. Accordingly, it would wanted a court order confirm- to enforce, was not one for right to adequate housing be unfair to the national fis- ing this. The order was denied the benefit of the media but is infringed by defective cus to reward the landowner by the court, which held that rather for the benefit of all construction of houses for on the scale sought in the the decision to grant access citizens. As a general rule dis- low-income group: In City of instant case, with no discern- was an administrative action, ciplinary disputes relating to Cape Town v Khaya Projects ible public benefit. which remained valid until it employees of the state might (Pty) Ltd and Others 2016 (5) was challenged. not attract public attention SA 579 (SCA) the appellant, Fundamental rights In the case of those chair- but that did not mean that City of Cape Town (the City), Right of media to access to persons who had not made because they could be regu- entered into an agreement in disciplinary proceedings a ruling on whether to grant lated in terms of a contract, terms of which the second of state employees: In Me- access, the applicants sought they were all private and respondent, Peer Africa, was dia 24 (Pty) Ltd and Others v a declaratory order to the ef- confidential with the result to oversee development of Department of Public Works fect that the ruling should be that the media was not en- an informal settlement in At- and Others [2016] 3 All SA made within ten days of the titled to access. The discre- lantis, a small coastal town 870 (KZP) the first respond- court order. The court grant- tion whether or not to grant outside Cape Town, into a ent, the Department of Public ed an order directing the deci- media access vested in the formal residential area. Con- Works, instituted discipli- sion of the chairpersons to be presiding chairperson. Such struction work was done by nary proceedings against 11 made within a month, and not discretion had to be exercised the first respondent, Khaya, of its employees, regarding ten days, of the court order. In independently. Openness and with whom Peer Africa con- involvement in unauthor- those cases where the chair- transparency demanded the cluded an agreement to do ised expenditure relating to persons had denied access, hearings should not be held so. There was no contract President Zuma’s private resi- the rulings were reviewed and behind closed doors, as much between the City and Khaya. dence, Nkandla, in KwaZulu- set aside, with the applicants as publicity would not be wel- After completion of construc- Natal. Because of massive granted access to the hear- comed by the employees or tion work the second republic interest in the debacle, ings. The respondents, ex- for that matter witnesses who spondent issued certificates the applicants, three media cluding the first respondent, would be required to give evi- signifying acceptance of the houses, wanted to have their which abided by the decision dence. In brief, public interest houses. Shortly thereafter it reporters attend the hearings of the court and did not op- favoured that proceedings, turned out that a number of and report thereon. The hear- pose the application, were or- including disciplinary pro- the houses built had severe ings proceeding separately dered to pay the costs of one, ceedings generally, should be defects. As a result the City, rather than in a consolidated and not two, counsel. open (to the public and the seeking to put a stop to the form, the chairperson in one Koen J held that the right media). alleged widespread prob- hearing granting access, in re- to freedom of expression, lem of contractors building spect of which the applicants which the applicants sought Whether the constitutional government-funded low-cost

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DE REBUS – DECEMBER 2016 - 43 - LAW REPORTS houses, which were defective, fied in a tender document: In non-responsive and liable to tender, as well as an order sought a court order declar- Afriline Civils (Pty) Ltd v Min- be disqualified. If unaccepta- directing that the tender be ing that the first respond- ister of Rural Development & ble or non-responsive tenders awarded to it and a contract ent failed to comply with a Land Reform and Another; were to be further considered between the parties be con- constitutional obligation to Asla Construction (Pty) Ltd v despite failing to comply with cluded. The GP, per Makgoba construct adequate houses in Head of the Department of the mandatory requirements, J, dismissed the application, terms of s 26 of the Constitu- Rural Development and Land the consequences would be holding that extension of the tion. The WCC, per Mantame Reform and Another [2016] 3 that the tender process as a tender period was invalid as J, dismissed the application. All SA 686 (WCC) the first re- whole would not be transpar- it was done after lapse of the An appeal against that order spondent, the Department of ent as required by the provi- tender in January 2011. An was dismissed with costs by Rural Development and Land sions of the Preferential Pro- appeal to the SCA was dis- the SCA. Reform (the Department), in- curement Policy Framework missed with costs. Victor AJA (Maya DP, Ma- vited tenders for construction Act 5 of 2000 and s 217(1) of Mpati P (Cachalia, Theron, jiedt, Seriti and Willis JJA of bulk irrigation revitalisa- the Constitution. Non-compli- Wallis JJA and Victor AJA concurring) held that the tion in the Western Cape. The ance with the specifications concurring) held that when second respondent under- tender documents specified as stated in the tender docu- the SAPS, as an organ of state, took to make sure that the the requirements, which the ment could be condoned only took the decision to procure buildings would comply with tenderers had to meet, which if the document conferred the command solution and all legal requirements and included, among others, a a discretion on the adminis- later cancel the tender relat- regulations. However, there valid tax clearance certificate trative authority to condone ing thereto, it did so in the was no contractual nexus be- issued by the South African such non-compliance with exercise of executive author- tween the City and the first Revenue Service and valid reg- a mandatory requirement, ity. Therefore, its decision to respondent. Also, there was istration as a contractor with which was not the case in the cancel the tender was not sus- no reference at all to any con- the Construction Industry instant matter. ceptible to review in terms of stitutional obligation on the Development Board (CIDB). If the Promotion of Administra- part of the first respondent a tenderer were to make use tive Justice Act 3 of 2000. As when it concluded the agree- of a sub-contractor the name Decision to cancel a tender a result, the submission that ment with the second re- thereof had to be specified, is non-reviewable execu- SAPS’s decision to cancel the spondent. That being the case each sub-contractor in turn tive action and not admin- tender constituted an admin- there was, therefore, no basis having to comply with the re- istrative action: The facts in istrative action was not cor- for a finding that the first quirements of tax clearance SAAB Grintek Defence (Pty) rect. It was inconceivable that respondent, a construction certificate and registration Ltd v South African Police the decision of SAPS to cancel company, which was neither with the CIDB. The tender bid Service and Others [2016] 3 the tender, which would oth- controlled by the appellant of Afriline Civils (Afriline) was All SA 669 (SCA) were that erwise have been taken in the nor performed a nationwide rejected as it did not attach in 2009 the first respondent, exercise of executive author- public function, was an entity the tax clearance certificate the South African Police Ser- ity could suddenly change in the position of an organ of one of its sub-contractors, vice (SAPS), acting through character and become one of of state. The first respond- namely TT Innovations (TT). the second respondent, the an administrative nature. A ent agreed with the second Furthermore, Afriline’s regis- State Information Technol- decision as to procurement of respondent, and not the ap- tration with the CIDB lapsed ogy Agency (SITA), invited goods and services by an or- pellant, to construct houses. before the tenders could be tenders for the supply of mo- gan of state was one that lay It did not enter into any con- considered. In the case of bile vehicle data command within the heartland of the tract with the appellant, and Asla, its tender bid also failed and control solution (com- exercise of executive author- also did not undertake that to attach the tax clearance mand solution). The validity ity by that organ of state. the appellant’s constitutional certificate of TT. The tender period of the tender bid was obligations would be effective- was awarded to Exeo because to expire in January 2011. Labour law ly achieved in regard to the it was able to attach the tax The appellant, SAAB Grintek Affirmative action – legality housing project. Accordingly, clearance certificate of TT, (SAAB), together with another of exclusion of adequately it would be wrong to impose which the other two tender- company, Britehouse, were represented or overrepre- a constitutional obligation ex ers did not do. As a result shortlisted. However, the ten- sented groups from appoint- post facto the procurement Afriline and Asla applied for der was never awarded. After ment: Before its amendment event. Doing so would be in- an order reviewing and set- the expiry date of the ten- by the Employment Equity consistent with the principles ting aside the award of the der period an extension was Amendment Act 47 of 2013 of fairness. It would also not tender to Exeo. The appli- granted, followed by further the Employment Equity Act 55 be equitable or transparent. cation was dismissed with extensions. The appellant’s of 1998 (the EE Act) provided In light of a finding that there costs. tender bid was recommended that when assessing whether was no constitutional obliga- Dlodlo J held that the by the Procurement Commit- a designated employer was tion on the first respondent, award of a tender by an or- tee but no award was made. implementing employment the declaration sought could gan of state constituted ad- In August 2012 the first re- equity in compliance with the not be granted. ministrative action under the spondent advised SAAB that EE Act, one of the factors that • See law reports ‘Fundamen- Promotion of Administrative the tender had been cancelled ‘must’ be taken into account tal rights’ 2015 (April) DR 41. Justice Act 3 of 2000 and as a long period had elapsed, was the extent to which suit- had to be lawful, procedur- this rendering the technology ably qualified people from Government ally fair and justifiable. It was offered out of date in rela- different designated groups an established principle that tion to its business needs. were equitably represented procurement non-compliance with specifi- As a result the appellant ap- within each occupational A tender bid is required to cations, requirements or con- proached the High Court for group level in that employer’s comply with all the specifi- ditions included in the tender an order reviewing and set- workforce in relation to the cations, prescripts, require- documents would render a ting aside the decision of the demographic profile of the ments or conditions speci- tender bid unacceptable or first respondent to cancel the national and regional profile

DE REBUS – DECEMBER 2016 - 44 - of the ‘national’ and ‘regional’ In the case of the positions • See ‘Employment law up- Because of the Orange River economically active popula- which had since been filled, date’ 2015 (July) DR 55. the area offered great poten- tion. After the amendment the applicants were ordered tial for irrigation. For that the word ‘must’ was changed to keep their current lower Land reform reason commercial farmers to ‘may’, thus making taking positions but were entitled Calculation of equitable re- came up with several strate- the relevant factors into ac- to receive, with retrospective dress in the form of finan- gies to dispossess the Col- count a discretionary rather effect, the remuneration and cial compensation for loss of oured people of their land. than obligatory function. other benefits which they land: The facts in Jacobs v De- After the death of September, In Solidarity and Others v would have received had they partment of Land Affairs and his sons – who had inherited Department of Correctional been appointed. Others 2016 (5) SA 382 (LCC) the farm – ‘sold’ it to a com- Services and Others 2016 (5) Delivering the majority were that by 1889 the Gor- mercial farmer, one Thorne, SA 594 (CC); 2016 (10) BCLR judgment, Zondo J (Nugent donia area (now Upington in in 1906 in what turned out to 1349 (CC), members of the AJ dissenting and Cameron the Northern Cape) was under have been a fraudulent sale first applicant trade union, J concurring in that dissent- control of British Government as Thorne took advantage of Solidarity, and who were col- ing judgment) held that the and administered as part of the illiteracy of the sellers. oured persons, applied for Barnard principle, namely the British Bechuanaland (now Moreover, afterwards Thorne certain positions in the re- case of South African Police Botswana) and occupied by a confessed that he bought spondent Department of Cor- Service v Solidarity obo Bar- Coloured community known the land for nothing as he rectional Services (the Depart- nard 2014 (6) SA 123 (CC); as Basters (NB Although the did not pay anything. An at- ment). Although they were 2014 (10) BCLR 1195, was not name may seem derogatory, torney acting for the sellers suitably qualified for the po- limited to overrepresenta- the community neverthe- was also attorney for the sitions and were recommend- tion of White candidates only. less called themselves such). buyer Thorne and became an ed by the interviewing panels, Black candidates, whether One Abraham September was accomplice to the fraud per- the Department rejected their they were African, Coloured granted permanent quit-rent petuated by Thorne. As if that appointment on the ground or Indian people, were also rights (rights of occupation, was not enough an officer in that coloured persons were subject to the overrepresen- use and enjoyment) over a the Deeds Registry turned a overrepresented in the oc- tation principle. That had to farm in the area. Thereaf- blind eye to the fraud, report- cupational levels for which be so as transformation of ter, Gordonia was annexed, ing that everything appeared they sought appointment. In the workplace entailed that with the consent of the Brit- normal. Thorne having in reaching that decision the De- the workforce of a designated ish Government, by the Cape turn sold the farm to a new partment took into account employer had to be broadly Colonial Government and be- owner at a market value of the ‘national’ profile of the representative of the people came part of the Cape Colony. 5 000 pounds sterling, the lat- economically active popula- of South Africa. The level of tion to the exclusion of the representation of each group ‘regional’ profile, the region had to be broadly in accord- being the Western Cape where ance with its level of repre- coloured persons were in the sentation among the people majority. of the country. Therefore, a The LC held that the De- designated employer was en- partment had discriminated titled, as a matter of law, to against the job applicants un- deny an African, Coloured or fairly and had also engaged in Indian person appointment unfair labour practice. How- to a certain occupational level ever, it did not declare the on the basis that African, Col- decision of the Department oured or Indian people, as the Association of Arbitrators (Southern Africa) NPC unlawful so as to set it aside. case might be, were already Moreover, it did not grant the overrepresented or adequate- The leading Alternative Dispute Resolution organisation in Southern Africa. applicants the relief sought ly represented in that occupa- but instead left it to the De- tional level. Equally, an em- The benefits of being a Member of the Association are: partment to take necessary ployer was entitled to refuse measures. The LAC dismissed to appoint a man or woman to • Education and training – which enables members to an appeal to it. a particular level on the basis elevate their status from that of Associate to Fellow; The CC granted leave to ap- that men or women, as the peal and upheld the appeal, case might be, were already • Once Fellowship status has been acquired – upon making no order as to costs. overrepresented or adequate- successful completion of the two-year Fellowship The decision of the Depart- ly represented at that occupa- Admission Course – Members are eligible for admission ment not to appoint the ap- tional level. to the panel of arbitrators from which appointments are plicants was declared unlaw- However, the Department made. ful and set aside. The court used a wrong benchmark to The following courses are now open for registration in 2017: denied, by word only, that it determine the overrepresen- was granting the applicants a tation, namely by taking into • Certificate in Arbitration; ‘protective promotion’ (but of account the national profile, • Fellowship Admission Course; course did exactly so). In the to the exclusion of the region- • Specialisation in Construction Law. case of applicants who sought al profile, of the economically posts which were still vacant, active population. In doing Closing date for all registrations: they were appointed with ret- so the Department acted in 28 February 2017 rospective effect to the date breach of its obligations in To enroll, kindly send an email to: when they should have been terms of s 42(a) and accord- [email protected] appointed in the first place. ingly acted unlawfully.

DE REBUS – DECEMBER 2016 - 45 - LAW REPORTS ter evicted September’s sons the value of the land would prejudice offer, did not inter- prejudice negotiations the al- from the land in 1921. have been affected over time. rupt prescription. As a result leged debtor would not make In the present case the The starting point was that the plaintiff’s claim had pre- any admission of liability. claimants, Jacobs and 393 the claimants were entitled to scribed and was, therefore, Although such negotiations others, all being direct de- the amount of R 2 423 000, dismissed with costs. could appear to be worth scendants of Abraham Sep- which was the current equiva- The court held that the pursuing, the running of pre- tember and his wife Eliza- lent of the actual financial without prejudice rule was scription was not suspended. beth, sought compensation loss suffered as a result of based on public policy. Par- The three-year period of pre- for the lost farm, from the uncompensated racial dis- ties to disputes were to be scription was not an ungener- defendant, Department of possession. However, that encouraged to avoid litiga- ous allowance of time. If the Land Affairs and Rural Devel- amount failed to have regard tion, with the expense, delay, parties needed more time, the opment, and not from past or to the particular hardship vis- hostility and inconvenience it creditor could make further present owners of the farm, ited upon the Septembers as usually entailed, by resolving talks conditional on agree- in terms of s 2(1)(c) of the a result of their dispossession their differences amicably in ment to hold prescription Restitution of Land Rights and ejectment from the land. full and frank discussions, in abeyance. That was often Act 22 of 1994 (the Restitu- Accordingly, the amount was without the fear that any ad- done in practice. tion Act). Restitution of the adjusted upwards to R 10 mil- missions made by them dur- farm not being feasible, they lion since the market value of ing such discussions could Other cases sought an order which was the property lost, was a factor be used against them in the Apart from the cases and ma- just and equitable in the form and not a goal in itself. The ensuing litigation. The law al- terial dealt with or referred of financial compensation. adjusted amount of R 10 mil- lowed some exceptions to the to above the material under The value of the farm at the lion determined as just and without prejudice rule. One review also contained cases time of dispossession was equitable applied to the value such exception was where a dealing with: Abuse of pro- 5000 pounds sterling, which of the land and its use. The party alleged that the settle- cess of enquiry into the af- translated into R 2 423 000 Department was ordered to ment discussions resulted fairs of a company, business in current monetary terms. pay costs, less payments al- in a compromise agreement. rescue, contempt of court, However, apart from that ready made to the claimants. Certain other exceptions derivative action, destruc- amount the claimants sought based on public policy have tion of sectional title scheme a further R 36 454 000 for Prescription also been recognised. If the and certain exclusive use ar- loss of the land and addition- When without prejudice of- without prejudice commu- eas, effect of delay in serving al R 58 330 000 for loss of use fer of settlement does not in- nication contained a threat sentence, fraud and money of the land. Their approach terrupt prescription: In KLD or constituted an act of in- laundering, granting of bail was based on the ‘fiction’ of Residential CC v Empire Earth solvency, and if the making pending application for direct undisturbed perpetual owner- Investments 17 (Pty) Ltd 2016 of the threat or the commis- access to the Constitutional ship and commercial exploi- (5) 485 (WCC); [2016] 3 All SA sion of an act of insolvency Court, interruption of extinc- tation of the land. 832 (WCC) the plaintiff, KLD, was relevant to particular tive prescription, jurisdiction The LCC held, per Ngcu- sued the defendant, Empire proceedings, evidence of the of Advertising Standards kaitobi and Mpshe AJJ, that Earth, for commission earned communication could be ad- Authority on non-members, the ‘fiction’ approach was at after selling certain erven in duced despite its without jurisdiction of Consumer Af- odds with the views endorsed a development project and prejudice character. A further fairs Court, loss of earnings by the CC with regard to the transferring ownership to exception was an admission in personal injury claims, object of compensation un- buyers. The commission was by a company of its commer- member of Parliament not al- der the Restitution Act. If earned between October 2008 cial insolvency. An admission lowed to impugn integrity of the court were to follow that and November 2009 when of part of a liability was suf- other members, recognition approach it would not only the transfers took place. The ficient to interrupt prescrip- of foreign court order, pre- be acting contrary to the CC summons claiming commis- tion. Before a creditor could scribed minimum sentence authority as decided in Flor- sion was issued and served rely on an acknowledgment for rape, right of farm worker ence v Government of the Re- in June 2013, being a period of part of the liability as an to bury family members on public of South Africa 2014 (6) that was more than three interruption of prescription the farm and sale of insolvent SA 456 (CC); 2014 (10) BCLR years after the last commis- there had to be admissible ev- estate’s property prior to sec- 1137, but would also open a sion was earned, which meant idence of the partial acknowl- ond meeting of creditors. vortex of speculative claims that the claim had prescribed. edgment. In many without q premised on unknown vari- However, the plaintiff alleged ables of the trajectory of the that the running of prescrip- land and its use absent the tion had been interrupted dispossession. when, in July 2011, the de- The law was clear, that the fendant’s attorneys, acting as On the lighter side: object of just and equitable the defendant’s authorised compensation was to place representatives, wrote a let- t was Benjamin Franklin who first gave the dispossessed persons in ter to the plaintiff’s attor- voice to the quip “Necessity knows no law; the same financial position neys in which they acknowl- they would have been in im- edged that, after taking into I know some attorneys of the same”, in its mediately after the disposses- account certain deductions, ‘Imodern form calling a judge Old Neces- sion. There was logic in that the plaintiff was entitled to sity.’ approach as nobody knew a certain amount in respect what would have happened to of which a cheque was at- Prof Ellison Kahn ‘The seven lamps of legal hu- the land had it not been for tached. Rogers J held that the mour’ 1984 (June) DR 251. the racially motivated dispos- acknowledgment of debt, and session. Furthermore, it was the offer of settlement made q not known in what manner to the plaintiff in a without

DE REBUS – DECEMBER 2016 - 46 - NEW LEGISLATION New legislation

Legislation published from 3 – 28 October 2016

Defence Act 42 of 2002 for the area of Mookgophong. GN1249 Individual Grievances Regulations. GN GG40346/14-10-2016. R1263 GG40347/14-10-2016. Establishment of a small claims court Development Bank of Southern Africa for the area of Atamelang. GN1250 Act 13 of 1997 GG40346/14-10-2016. Amendment of regulations. GenN643 Establishment of a small claims court Philip Stoop BCom LLM (UP) LLD GG40334/7-10-2016. for the area of Makwane. GN1251 (Unisa) is an associate professor in the Liquor Act 60 of 1989 GG40346/14-10-2016. Prohibition of the use of geographical in- Establishment of a small claims court department of mercantile law at Unisa. dications of the European Union in con- for the area of Ottosdal. GN1252 nection with the sale of liquor products. GG40346/14-10-2016. Bills introduced GenN722 GG40382/28-10-2016. Establishment of a small claims court for Rates and Monetary Amounts and Military Pensions Act 84 of 1976 the area of Hewu. GN1253 GG40346/14- Amendment of Revenue Laws (Adminis- Determination of amounts. GN R1234 10-2016. tration) Bill B20 of 2016. GG40335/7-10-2016. Establishment of a small claims court Finance Bill B21 of 2016. National Environmental Management for the area of Tarkastad. GN1254 Division of Revenue Bill B15 of 2016. Act 107 of 1998 GG40346/14-10-2016. Adjustment Appropriation Bill B16 of Amendments to the Financial Provi- Establishment of a small claims court 2016. sioning Regulations, 2015. GN1314 for the area of Wepener. GN1321 Taxations Laws Amendment Bill B17 of GG40371/26-10-2016. GG40375/28-10-2016. 2016. National Health Act 61 of 2003 Establishment of a small claims court Tax Administration Laws Amendment Procedural regulations pertaining to for the area of Galeshewe. GN1322 Bill B18 of 2016. the functioning of the Office of Health GG40375/28-10-2016. Rates and Monetary Amounts and Standards Compliance and handling Establishment of a small claims court for Amendment of Revenue Laws Bill B19 of of complaints by the ombud. GN1275 the area of Tsomo. GN1323 GG40375/28- 2016. GG40350/13-10-2016. 10-2016. Judicial Matters Amendment Bill B14 of Promotion of National Unity and Rec- Social Assistance Act 13 of 2004 2016. onciliation Act 34 of 1995 Increase in respect of social grants. GN Red Tape Impact Assessment Bill B13 of Amendment to the regulations on exhu- R1210 GG40323/3-10-2016. 2016. mation, reburial or symbolic burial of de- Tax Administration Act 28 of 2011 ceased victims. GN R1305 GG40362/21- Duty to keep records, books of account Commencement of Acts 10-2016. or documents. GN1334 GG40375/28-10- Property Valuers Profession Act 47 of Community Schemes Ombud Services 2016. 2000 Water Research Act 34 of 1971 Act 9 of 2011. Commencement: 7 Octo- Amendment of the rules for the property Water Research Fund: Increase of rates ber 2016. Proc55 GG40334/7-10-2016. Criminal Procedure Amendment Act 65 valuers profession. BN166 GG40359/21- and charges. GN1341 GG40375/28-10- of 2008, s 1, in respect of the subdis- 10-2016. 2016. Public Service Act 103 of 1994 trict of Alexandra. Commencement: 30 Amendment of sch 1 (Secretary for the September 2016. Proc R53 GG40322/3- Draft delegated legislation Police Service). Proc 56 GG40334/7-10- 10-2016. Regulations relating to the registration Sectional Titles Schemes Management 2016. of a speciality in forensic social work Public Service Commission Act 46 of Act 8 of 2011. Commencement: 7 Octo- in terms of the Social Service Profes- 1997 ber 2016. Proc54 GG40334/7-10-2016. sions Act 110 of 1978 for comments. GN Rules on referral and investigation of R1274 GG40349/14-10-2016. Selected list of delegated grievances of employees in public ser- Declaration of certain substances as vice. GenN682 GG40359/21-10-2016. Group I or II hazardous substances in legislation Road Accident Fund Act 56 of 1996 terms of the Hazardous Substances Act Civil Aviation Act 13 of 2009 Adjustment of the statutory limit in 15 of 1973 for comments. GN1242 and Fourteenth Amendment of the Civil respect of claims for loss of income GN1243 GG40346/14-10-2016, GN1291 Aviation Regulations, 2016. GN R1349 and loss of support to R 251 990 with and GN1292 GG40359/21-10-2016. GG40376/28-10-2016. effect from 31 October 2016. BN167 Regulations relating to the registration Community Schemes Ombud Service GG40375/28-10-2016. of a speciality in clinical social work in Act 9 of 2011 Sectional Titles Schemes Management terms of the Social Service Professions Regulations on community schemes om- Act 8 of 2011 Act 110 of 1978 for comments. GN bud service. GN R1233 GG40335/7-10- Sectional Titles Schemes Management R1304 GG40361/21-10-2016. 2016. Regulations. GN R1231 GG40335/7-10- Draft Prevention and Combating of Hate Levies and fees payable. GN R1232 2016. Crimes and Hate Speech Bill. GenN698 GG40335/7-10-2016. Small Claims Courts Act 61 of 1984 GG40367/24-10-2016. Criminal Procedure Act 51 of 1977 Establishment of a small claims Amendment of the Civil Aviation Regula- Designation of correctional facili- court for the area of Soweto. GN1248 tions, 2011 in terms of the Civil Aviation ties in terms of s 159B(2). GN R1209 GG40346/14-10-2016. Act 13 of 2009 for comments. GN R1354 GG40322/3-10-2016. Establishment of a small claims court GG40380/28-10-2016. q

DE REBUS – DECEMBER 2016 - 47 - EMPLOYMENT LAW – LABOUR LAW Employment law update

Intervalve and agreed that a party cannot be possible to reconstruct the record not be joined to proceedings if it was as no notes of the evidence lead at the not a party to the conciliation process. arbitration had been taken. It advised the However, it interpreted the CC’s decision employee that the municipality would in Intervalve to mean that in disputes stand and fall by the partial record and involving s 197 of the LRA it was not invited the employee to file an answering necessary to refer both the old employer affidavit based on the partial record. and the new employer to conciliation The LC, per Morgan AJ, refused to de- and the new employer could in fact be termine the review based on the partial subsequently joined to proceedings. record as there were missing parts that The Labour Appeal Court (LAC), per were material to the dispute. In deter- Waglay JP, held that the general principle mining whether to dismiss the review Monique Jefferson BA (Wits) LLB (Rho- is that a referral to conciliation is a pre- application or remit it to the bargaining condition to the LC having jurisdiction council, Morgan AJ found that a diligent des) is an attorney at Bowman Gilfillan in to determine a dispute about an unfair attempt had not been made to recon- Johannesburg. dismissal and thus, it is not permissible struct the record. The review application to join a party that was not party to the was accordingly dismissed. Section 197 transfers: conciliation proceedings at a later stage. The municipality appealed against the However, the LAC held that this principle decision of the LC on the basis that the Can the new employer be is not applicable where a dismissed em- LC’s decision was incorrect as the mat- joined to proceedings sub- ployee refers an unfair dismissal dispute ter could have been determined based against his or her employer and then on the partial record, failing which, the sequent to the conciliation subsequently discovers that the business matter should have been remitted to the process? has changed hands and thus their relief bargaining council for a fresh hearing. It lies against a new employer in terms of s was also argued that sufficient weight In Temba Big Save CC v Kunyuza and 197 of the LRA. had not been given to the municipality’s Others [2016] 10 BLLR 1016 (LAC), the This is because the consequences of s right to institute review proceedings. respondent employees alleged that their 197 are that the new employer steps into The LAC, per Musi JA, held that it is dismissals were automatically unfair as the shoes of the old employer in respect the duty of the applicant in review pro- Big Save had not complied with s 197 of of all rights and obligations of the old ceedings to take all reasonable steps to the Labour Relations Act 66 of 1995 (the employer, including pending litigation. ensure that the record placed before LRA) when it purchased the business of Thus, if the dispute is referred to concili- the court is as complete as possible. In ACE Wholesalers. Big Save had not been ation in respect of the old employer, it circumstances where there is an incom- a party to the conciliation proceedings would not be necessary to refer the dis- plete record before the court, the court and the respondent employees then pute to conciliation in respect of the new must determine whether the missing sought to join Big Save to the proceed- employer as the new employer would parts of the record are material to the ings in the Labour Court (LC). Big Save simply step into the shoes of the old em- dispute. The next inquiry is whether the filed an answering affidavit out of time. ployer. applicant took all reasonable steps to The LC, per Steenkamp J, joined Big Save The LAC found that there was no ba- reconstruct the record. This must be de- to the proceedings and refused to allow sis to interfere with the LC’s decision re- termined by the facts on a case by case Big Save’s answering affidavit on the ba- garding joinder as it was up to the trial basis. In this case, the municipality had sis that it was filed out of time. Big Save court to determine whether or not s 197 refused to try and reconstruct the record then appealed the decision of the LC. applied. The appeal was accordingly dis- as per the employee’s suggestion. Big Save argued that the LC should not missed with costs. As regards the right to review proceed- have granted the joinder because the ings, Musi AJ held that review proceed- respondent employees had not referred Reconstruction of record ings should not be dismissed lightly. the automatically unfair dispute against in review proceedings However, after considering the facts of Big Save for conciliation. Instead, the this case, Musi AJ was of the view that referral had only been made in respect In Francis Baard District Municipality v the other factors outweighed the right to of the ‘old employer’, ACE Wholesalers. Rex NO and Others [2016] 10 BLLR 1009 review proceedings and the municipality In this regard, Big Save relied on the (LAC), the municipality instituted review only had itself to blame for the situation Constitutional Court (CC) decision in proceedings in respect of an arbitra- it found itself in. The appeal was accord- National Union of Metalworkers of SA v tion award in which reinstatement was ingly dismissed with costs. Intervalve (Pty) Ltd and Others (2015) 36 ordered. The record of the arbitration ILJ 363 (CC) (see employment law update proceedings was only partially complete Have you come across an ‘Joinder v Jurisdiction’ 2015 (March) DR in that the testimonies of some of the interesting case and would like to 39), in which it was held that referral for witnesses were not transcribed. Further- share it with the profession? conciliation is a prerequisite to the LC more, the evidence of the employee was having jurisdiction over unfair dismissal only partly transcribed. The employee De Rebus welcomes letters, disputes and thus the LC was not per- objected to the record and suggested to practice notes, articles, case notes mitted to join a party to the proceedings the municipality that the parties attempt and opinons. when that party had not been a party to to reconstruct the record. Send your case note to: the conciliation process. A few months later, the attorneys for [email protected] The LC considered the judgments in the municipality responded that it would

DE REBUS – DECEMBER 2016 - 48 - Material to this appeal was s 16(1) of an inconsistency’. Put differently, do the the Prescription Act, as well as s 210 of relevant sections in the LRA and that of the LRA. the Prescription Act share the same pur- Section 16(1) reads: poses; if so there would be no inconsist- ‘Subject to the provisions of subsec- ency between the two statutes. tion (2)(b), the provisions of this chapter The employer argued that the LRA and shall, save in so far as they are inconsist- the Prescription Act are not inconsistent ent with the provisions of any Act of Par- with one another. In arguing this point liament which prescribes a specified pe- the employer gave the following inter- riod within which a claim is to be made pretation: or an action is to be instituted in respect ‘An appropriate and useful approach of a debt or imposes conditions on the to the interpretation of the two statutes institution of an action for the recovery is to imagine each as constructing a re- Moksha Naidoo BA (Wits) LLB (UKZN) of a debt, apply to any debt arising after gime which may be overlaid upon one is an advocate at the Johannesburg Bar. the commencement of this Act.’ another as a pair of concentric circles. Section 210 reads: The outer circle is the Prescription Act ‘If any conflict, relating to the matters which extinguishes debts upon the ex- The Prescription Act: dealt with in this Act, arises between this piry of three years. The inner circle is the Consistent or inconsistent Act and the provisions of any other law LRA which requires of parties to refer save the Constitution or any Act express- a dispute within 30 or 90 days during with the LRA? ly amending this Act, the provisions of which conciliation may occur, and upon FAWU obo Gaoshubelwe and Others v this Act will prevail.’ expiry and the failure of conciliation ef- Pieman’s Pantry (Pty) Ltd (unreported Among FAWU’s arguments on appeal forts, a party has 90 more days to refer case no: JA20/15, 8-9-2016) (Sutherland was that an extinction of a labour dis- the matter to the Labour Court or go to JA (Ndlovu JA and Murphy AJA concur- pute by way of prescription runs contra- arbitration as the case may. In the pre- ring)). ry to the aims and purpose of the LRA, sent case, that next step was to the La- Does the Prescription Act 68 of 1969 which is to promote labour stability and bour Court by the filing of statement of apply to unfair dismissal disputes re- peace. Hence in light of the public inter- case. The discretion of the Labour Court ferred to the Commission for Concilia- est placed on labour peace, due weight to condone late filing operates within, tion, Mediation and Arbitration (CCMA) should be given to the effect of s 210 and not in competition with, the scope and if so, is prescription interrupted of the LRA, which – as a result thereof – of the periods stipulated by the Prescrip- when a dispute is referred to the CCMA ought to exclude the Prescription Act in tion Act.’ in terms of s 191(1) of the Labour Rela- matters dealt with under the LRA. Therefore according to the employer, tions Act 66 of 1995 (the LRA)? The LAC noted that the argument s 191 creates time bars and not an alter- These were the questions before the based on public policy and equity were native to the Prescription Act, and thus Labour Appeal Court (LAC). rejected in Myathaza where the LAC held there was no inconsistency between the Prior to the hearing of this appeal, that once the requirements for a plea of two statutes. the LAC, in three consolidated matters prescription have been met, a court is In accepting this argument the LAC of Myathaza v Johannesburg Metropoli- bound to uphold such a plea without held that the powers of a court to grant tan Bus Service (SOC) Ltd t/a Metrobus having regard to the considerations of condonation is not a substitution or al- Mazibuko v Concor Plant Cellucity (Pty) equity and public policy. The LAC in casu ternative to prescription. Ltd v Communication Workers Union on saw no need to disturb the legal position The court further rejected the argu- behalf of Peters (2016) 37 ILJ 413 (LAC) as set out in Myathaza. ment that a claim for reinstatement, as had recently held that the Prescription A further argument advanced by FAWU was the claim made by FAWU on behalf Act did apply to arbitration awards. This was that the LRA sets out specific time of its members at the LC, was not a debt decision, however, did not dispose of frames for disputes to be referred to as envisaged in the Prescription Act. the aforestated questions, which sought the CCMA, for conciliation to take place Having made these findings and in to determine whether litigation under and for adjudication thereafter. Thus answering the first question posed, the the LRA, prior to rendering an award or the LRA created its own time frames for court found that the Prescription Act ap- judgment, is subject to the Prescription when claims are made and actions insti- plied to all litigation conducted under Act. tuted and in addition, gives a court or an the LRA including disputes referred un- arbitrator the power to condone a party der s 191. Background for not adhering to such time frames. The next issue was whether FAWU’s re- The appellant union, Food and Allied Not only was this an inconsistency, be- ferral to the CCMA on 7 August 2001, in- Workers Union (FAWU) referred an un- tween the two statutes as contemplated terrupted prescription in terms of s 15(1) fair dismissal dispute to the CCMA on in s 16(1) of the Prescription Act, this of the Prescription Act which reads: behalf of its members on 7 August 2001. inconsistency further meant that neither ‘The running of prescription shall, An arbitrator found that the CCMA did the LC nor an arbitrator could condone subject to the provisions of subsection not have jurisdiction to hear the dispute a period longer than three years even (2), be interrupted by the service on the and directed the parties to the Labour if the party applying for condonation debtor of any process whereby the credi- Court (LC). FAWU’s application to review could establish good cause. tor claims payment of the debt’ (my ital- the arbitrator’s ruling was dismissed by In addressing this argument the court ics). the LC on 9 December 2003, whereafter began by stating that inconsistency Section 15(6) defines the word ‘pro- FAWU filed a statement of claim at the between statutes is not borne out of a cess’ as: LC in March 2005 in pursuit of its mem- mere difference in procedure between ‘… includes a petition, a notice of mo- bers unfair dismissal claim. the two statutes. ‘What is required is an tion, a rule nisi, … a third party notice The respondent pleaded prescription examination of the relevant provisions referred to in any rule of court, and any of the claim, which was eventually up- to determine whether the two statutory document whereby legal proceedings are held by the LC at trial, in May 2014. regimes are functionally “inconsistent”; commenced’ (my italics). FAWU turned to the LAC. if they can be reconciled, there cannot be FAWU argued that the debt arose on

DE REBUS – DECEMBER 2016 - 49 - BOOK ANNOUNCEMENTS dismissal and that the referral to the do so because a referral does not com- cordance with Rule 6(1) of the Labour CCMA interrupted prescription in terms mence legal proceedings. … A referral is Court Rules, the filing of a statement of of s 15(1) of the Prescription Act. no more than a condition to be fulfilled case, which, in terms of section 191(11) While the LAC agreed with the submis- to obtain access to a forum that can ad- (a), must be done within 90 days of the sion that the debt arose on dismissal, it judicate a dispute. certificate of non-resolution. This is the nevertheless rejected the argument that In the case of a matter that must, like act [which] initiates, as the text expressly a referral to the CCMA interrupts pre- the present one, be ventilated in the states, “adjudication” (as distinct from scription. The court held: Labour Court, the referring party must conciliation) and which, for that reason ‘What section 15(1) of the Prescription after the referral and exhaustion of con- constitutes the “process” which inter- Act requires to interrupt prescription is ciliation in terms of section 191(5)(b) rupts prescription.’ a “process … whereby legal proceedings “refer the dispute to the Labour Court The appeal was dismissed with no or- are commenced”. A referral does not for adjudication”, which involves, in ac- der as to costs. q Book announcements

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DE REBUS – DECEMBER 2016 - 50 - RECENT ARTICLES AND RESEARCH

By Meryl Federl Recent articles and research

Please note that the below abbreviations are to be found in italics Accessing articles from publishers at the end of the title of articles • For LexisNexis articles contact: [email protected] for the and are there to give reference to publication details. the title of the journal the article is published in. To access the ar- • For individual journal articles pricing and orders from Juta contact ticle, please contact the publisher Michelle Govender at [email protected]. directly. Where articles are available on an open access platform, • For journal articles not published by LexisNexis or Juta, contact the Kwa- articles will be hyperlinked on the Zulu-Natal Law Society Library through their helpdesk at help@lawlibrary. De Rebus website at www.derebus. co.za (their terms and conditions can be viewed at www.lawlibrary.co.za). org.za

Abbreviation Title Publisher Volume/issue EL Employment law LexisNexis (2016) 32.5 ILJ Industrial Law Journal Juta (2016) 37 October LDD Law, Democracy and Development University of the Western Cape (2016) 20

LitNet LitNet Akademies (Regte) Trust vir Afrikaanse Onderwys (2016) 13(3) Septem- ber PER Potchefstroom Electronic Law Journal/ North West University, Faculty (2016) September Potchefstroomse Elektroniese Regsblad of Law SALJ South African Law Journal Juta (2016) 133.3 SLR Stellenbosch Law Review Juta (2016) 27.2

Administrative law Jacobs, L and Neethling, J ‘Die sorg- of contract: A further instalment’ (2016) same ondernemingsreddingspraktisyn: 27.2 SLR 238. Konstant, A ‘Administrative action and ’n Ondersoek na die gepaste maatstaf’ Naudé, T ‘The principle of reciprocity procedural fairness – Minister of Defence (2016) 13(3) September LitNet. in continuous contracts like lease: What and Military Veterans v Motau’ (2016) is and should be the role of the exceptio 133.3 SALJ 491. non adimpleti contractus (defence of the Marais, EJ ‘A common-law presumption, Consumer law unfulfilled contract)?’ (2016) 27.2 SLR statutory interpretation and s 25(2) of Lim Tung, OJ ‘Genetically modified food 323. the Constitution – a tale of three falla- and feed in South Africa: Labelling and Nienaber, PM ‘Toegepaste kontraktereg cies. A critical analysis of the Constitu- the right to disclosure of information’ oor arbitrasies en dies meer’ (2016) 27.2 tional Court’s Arun judgment – Arun (2016) 133.3 SALJ 600. SLR 393. Property Development (Pty) Ltd v Cape Reinecke, MFB ‘Die aard en indeling van Town City’ (2016) 133.3 SALJ 629. Constitutional law kontrakbreuk’ (2016) 27.2 SLR 309. Cession French, D ‘“Brexit”: A constitutional, Smits, JM ‘The expanding circle of con- diplomatic and democratic crisis. A view tract law’ (2016) 27.2 SLR 227. Hutchison, D ‘Agreements in restraint of from the trenches’ (2016) September Zimmermann, R ‘Right to damages in cession: Time for a new approach’ (2016) PER. European contract law’ (2016) 27.2 SLR 27.2 SLR 273. Rautenbach, IM ‘Vonnisbespreking: 354. Commercial law Teenmaatreëls vir die uitvoerende gesag se kaping van wetgewende kontrolefunk- Costs Wallis, M ‘Commercial certainty and sies in ’n parlementêre uitvoerende stel- constitutionalism: Are they compatible?’ Du Plessis, J ‘The right of an attorney sel – Economic Freedom Fighters v Speak- (2016) 133.3 SALJ 545. to claim payment of costs from a third er of the National Assembly 2016 5 BCLR party’ (2016) 27.2 SLR 292. Company law 618 (KH)’ (2016) 13(3) September LitNet. Cassim, R ‘Delinquent Directors under Customary law the Companies Act 71 of 2008: Gihwala Contract law Chigwata, T ‘The role of traditional lead- v Grancy Property Limited 2016 ZASCA Brand, FDJ ‘The role of good faith, equi- ers in Zimbabwe: Are they still relevant?’ 35’ (2016) September PER. ty and fairness in the South African law (2016) 20 LDD 69.

DE REBUS – DECEMBER 2016 - 51 - RECENT ARTICLES AND RESEARCH

Estoppel Cohen T and Gosai, N ‘Making a case for Property law work life balances for the South African Erlank, W ‘Don’t touch my virtual prop- Myburgh, F ‘On constitutive formalities, employee’ (2016) 37 October ILJ 2237. erty: Justifications for the recognition of estoppel and breaking the rules’ (2016) Ebrahim, S ‘Equal pay for work of equal virtual property’ (2016) 133.3 SALJ 664. 27.2 SLR 254. value in terms of the Employment Equity Act 55 of 1998: Lessons from the Inter- Sentencing law Harmonisation of laws national Labour Organisation and the Du Toit, PG ‘Publisiteitsbevele as von- Lehloenya, PM and Mpya, MN ‘Exploring United Kingdom’ 2016 September PER. nisopsie vir regspersone – publicity or- the citizen inclusiveness and micro-eco- Fergus, E and Godfrey, S ‘Organising ders as sentencing option for juristic nomic empowerment aspects of regional and bargaining across sectors in South persons’ (2016) September PER. integration in Africa’ (2016) 20 LDD 91. Africa: Recent developments and potential problems’ (2016) 37 October ILJ Sporting law Health law 2211. Plasket, C ‘The fundamental principles Grogan, J ‘Levelling the playing fields Pieterse, M ‘Geography, marginalisation of justice and legal vacuums: The regula- and the performance of the right to have who can be locked out, and when?’ tory powers of national sporting bodies’ access to health care services in Johan- (2016) 32.5 EL. (2016) 133.3 SALJ 569. nesburg’ (2016) 20 LDD 1. Grogan, J ‘Watch the boss – strict liability for harassment’ (2016) 32.5 EL. Tax law Human rights Myburgh, A ‘Reviewing CCMA rewards: Titus, A ‘May an investment in interest- Stevens, C and Ntlama, N ‘An overview Undecided and controversial issues’ bearing securities constitute a trade for of South Africa’s institutional frame- (2016) 37 October ILJ 2193. the purposes of the Income Tax Act?’ work in promoting women’s right to de- Nkhumise, RW ‘Dismissal of an employ- (2016) 133.3 SALJ 504. velopment’ (2016) 20 LDD 40. ee at the instance of a client: Revisiting Nape v INTCS Corporate Solutions (Pty) Unjust enrichment International trade Ltd in the context of the Labour Rela- Sonnekus, JC ‘Subsidiêriteit as kernbe- tions Amendment Act 6 of 2014’ (2016) grip by verrykingseise, sekerheidsregte Vinti, C ‘A spring without water: The 20 LDD 106. én statutêr nie-uitwinbare vorderings’ conundrum of anti-dumping duties in (2016) 27.2 SLR 415. South African law’ (2016) September Rycroft, A ‘Is evidence of the breakdown PER. in the trust relationship always necessary?’ (2016) 37 October ILJ 2260. Meryl Federl BA HDip Lib (Wits) is Judicial reasoning an archivist at the Johannesburg So- Olivier, P ‘Deriving the ratio of an over- Pension law ciety of Advocates library. E-mail: determined judgment: The law after Marumoagae, MC ‘Concern Regarding [email protected] q Turnbull-Jackson v Hibiscus Coast Mu- the “debt” created by rule 14.10.9 of the nicipality’ (2016) 133.3 SALJ 522. Government Employees’ Pension Fund Rules’ (2016) September PER. Judiciary Mhango, M ‘Does the South African For links to open Masengu, T ‘Gender transformation as Pension Funds Adjudicator perform an access law journals a means of enhancing perceptions of administrative or a judicial function?’ impartiality on the Bench’ (2016) 133.3 (2016) 20 LDD 20. and open access SALJ 475. websites visit the Labour law Prescription law Bassuday, K ‘Disciplinary sanctions in Loubser, M ‘The prescription period ap- De Rebus website at the alternative’175x78REPRO.pdf (2016) 371 October2012/05/02 ILJ 11:09plicable AM to a debt secured by notarial www.derebus.org.za 2251. bond’ (2016) 27.2 SLR 374.

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DE REBUS – DECEMBER 2016 - 52 - The Co-Chairpersons of the Law Society of South Africa, Mvuzo Notyesi and Jan van Rensburg, as well as the Council, Management and Staff of the Law Society of South Africa wish you a peaceful festive season and a happy and prosperous New Year.

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