Bulletin 69 of Period: 121 February to 8 February 28 February

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1 Bulletin 69 of 2013 Period: 121 February 2013 to 8 February 28 February 2013 IMPORTANT NEWS INSOLVENCY PRACTITIONERS LIST UNDER CONSTRUCTION The Justice Department has called for all insolvency practitioners to confirm their status via an information form. The Department is in the process of drawing up a final National Master s list of insolvency practitioners. The Department published an insolvency practitioners policy in Government Gazette According to the notice, the policy is intended to create a transparent, consistent and fair appointment process for the insolvency industry. Insolvency practitioners are appointed by a High Court as a curator bonis, provisional trustee, trustee, co-trustee, provisional liquidator, liquidator or co-liquidator to deal with insolvent estates and the winding up of companies. Transformation of the industry is a key objective of the policy. The policy will only apply to appointments made in terms of the Insolvency Act, the Companies Act and the Close Corporations Act. The policy will not apply to the appointment of an insolvency practitioner tasked with the voluntary winding up of a solvent company. All masters offices are expected to divide their practitioners into four categories: Category A: African, Coloured, Indian and Chinese females; Category B: African, Coloured, Indian and Chinese males; Category C: White females; and Category D: White males. Individuals within each group must also be listed in alphabetical order according to their surnames. A ratio of 4:3:2:1 will apply where four must be appointed from group A and 1 from group D. A provisional list of insolvency practitioners has been published on the department s website. The department wants all information forms completed and sent by 7 March. The form is available at A final list of practitioners will be drawn up before the policy kicks in on 31 March. Source: RECOMMENDED READING Modern usufruct empowering the usufructuary, Apers and Verbeke, TSAR,.1 An analysis of the legally protectable interests pertaining to language, Malan, TSAR,.1 Shareholder interests and good corporate governance in South Africa, Esser, THRHR, Band 77 No. 1 February The overlap between the Consumer Protection Act 68 of 2008 and the National Credit Act 34 of 2005: A comparison with Australian Law, Stoop, THRHR, Band 77 No. 1 February A consumer s right to plain language and to be informed in an official language that he understands as required by the National Credit Act Standard Bank of South African Ltd v Dlamini, Otto, THRHR, Band 77 No. 1 February The constitutionality of third party appointments before and after the Tax Administration Act, Keulder and Legwaila, THRHR, Band 77 No. 1 February

2 2 Children and Grandparents: An overrated attachment?, Louw, Stellenbosch Law Review Regstydskrif, Vol 24 No Disclosure of Owernship and Human Flourishing: An Exploratory Overview, Rachilitz, Stellenbosch Law Review Regstydskrif, Vol 24 No SEMINARS GAWIE LE ROUX ON AGREEMENTS OF SALE UNDERLYING LEGAL PRINCIPLES Port Elizabeth - 11 March East London - 13 March Johannesburg - 18 March Bloemfontein - 19 March Pretoria - 24 March Cape Town - 26 March Durban - 27 March Registration Details: REVISITING THE TAX ADMINISTRATION ACT AND INCORPORATIONS Cape Town - 10 March Port Elizabeth - 11 March Durban - 12 March Johannesburg - 13 March Pretoria - 14 March Registration Details: GENERAL CAN THE VOETSTOOTS CLAUSE PROTECT A SELLER AGAINST NO BUILDING PLANS? HAVISIDE v HEYDRICKS AND ANOTHER (1) SA 235 (KZP) This case confirmed the position in our law that the absence of approved building plans constitutes a latent defect, in respect of which a voetstoots clause can protect an innocent seller. The parties in this case concluded a written sale agreement in terms of which the respondents bought property at Port Shepstone from the appellant. Subsequent to having taken transfer, the first respondent approached the local municipality because he and the second respondent wanted to build a flat on top of the existing double garage and outbuildings. However upon inspection of the municipality s files the first respondent discovered that, a letter dated 26 June 1991 had been drafted by the municipality for the appellant s attention, stating that it had come to the attention of the municipality that an illegal structure (which was presumably a carport) was in the process of being built on the property in the absence of plans having been submitted to the local engineer s department for approval. The file also did not contain any plans for the existing double garage which formed part of the property which the respondents had bought. Subsequent to consultations with an architect and a civil engineer, it was confirmed that not only were there no building plans for the double garage, but also that the structure which had been erected did not meet the usual standards in terms of building regulations. The first respondent admitted the following namely, that he did not obtain a copy of the title deeds before buying the property; that he did not approach the municipality to inspect the building plans before buying the property; and that he and the second respondent had assumed that everything was in order. The double garage however was an illegal structure which did not conform to municipal bylaws. The first respondent thereupon approached the Court for an order obliging the appellant to pay for his damages, being the cost to erect a new double garage in accordance with approved building plans which complied with building regulations. The appellant defended the matter relying on the voetstoots clause that was contained in the agreement. The appellant alleged that when she bought the property, there was already a carport in existence and she visited the

3 3 property only once a year and that after she had purchased the property, her mother and her brother filled in the walls of the existing carport without her knowledge or without obtaining her consent. She also did not deem it necessary to ask them whether they had obtained permission or submitted plans, as she was not interested in the maintenance of the house; she only bought it for her mother to occupy and she left the maintenance issues to her brother. When she saw that the walls had been erected, it did not occur to her that she should ascertain whether this had been done in accordance with accepted building standards. She also never spoke to first respondent before he took transfer of the particular property. The Magistrate found that there was a duty on the appellant to enquire whether plans had been obtained for the double garage and to inform the respondents that it was an illegal structure. It could also be inferred that the appellant did not make such disclosure because she wanted a higher price for the property. The appellant s silence in this regard fell within the ambit of non-disclosure which was similar in many respects to misrepresentation inducing the respondents to buy the property. It was an implied term in the contract that the structure had been erected in compliance with the Act and/or with the municipality s approval. The respondents were accordingly entitled to judgment on the merits which the Magistrate granted and the appellant appealed against this judgment on the grounds namely, that the magistrate erred in concluding that it was not necessary to make a finding on whether the appellant s non-disclosure was fraudulent, and that a mere finding of non-disclosure was sufficient for the appellant to attract liability; not concluding that a finding of fraudulent misrepresentation required knowledge of unlawfulness (which the appellant did not have); not following the judgment in Odendaal v Ferraris 2009 (4) SA 313 SCA, which judgment was given on 1 September 2008, a month before the magistrate delivered his judgment in the court a quo; finding in the respondents favour in the face of their failure to have proved that the appellant had deliberately concealed the existence of latent defects with the intention to defraud. It was contended on behalf of the respondents that the issue which the Court had to determine rested on a crisp legal point namely, did the trial court correctly determine that it was an implied term of the agreement that structures had been erected in compliance with building regulations and with the approval of the municipality and not on the factual question of whether or not the appellant had knowledge of the illegality of the structure at the time that the sale was concluded. Our courts have in the past taken a broad view of what constituted a latent defect. Generally a latent defect was held to be broadly speaking a defect that might be described as an abnormal quality or attribute which destroys or substantially impairs the utility of effectiveness of the res vendita, for the purpose for which it had been sold or for which it was commonly used. Such a defect was latent when it was one which was not visible or discoverable upon an inspection of the res vendita. In Odendaal v Ferraris the Supreme Court of Appeal held that where an illegally erected structure was such that it may require either its demolition or alteration as a condition for municipal approval of the plans, such facts constitute defects which interfere with the ordinary use of the property, thus constituting a latent defect as understood in the context of voetstoots. The fact that the irregular structure also contravened building regulations did not change the character. Accordingly a voetstoots clause ordinarily also covered the absence of statutory authorisations and the particular structure in this case was not authorised. The absence of statutory permission, necessary to render the building authorized, was thus a latent defect to which the voetstoots clause applied. If a purchaser wanted to avoid the consequences of a voetstoots sale, the onus was on him to also show that the seller knew of the latent defect and did not disclose it; and that the seller deliberately concealed it with the intention to defraud. There was no evidence that the appellant was aware that the garage had contravened building regulations and no fraudulent non-disclosure was proved. The Court thus concluded that the appellant was accordingly protected by the voetstoots clause and could not be held liable for the defect. WAS A CREDITOR S RIGHTS INTACT DESPITE A BUSINESS RESCUE ATTEMPT? FIRST RAND BANK LTD V E MARAIS INCORPORATED (67542/13) [2013] ZAGPPHC 315 In this case the Court noted that an invalid attempt to place a company under business rescue because of noncompliance with the Company Act s prescripts, could not put a hold on the efforts of the creditor to exercise its rights. In this case the applicant brought an application for leave to perfect the security of a debt concerning a Notarial Covering Bond. The applicant sought to attach and to take into possession movable property belonging to the respondent, as security during the period of indebtedness. The respondent was to show cause why the interim order sought should not be made a final order. The particular application was launched on 24 October 2013 and set down for hearing on Tuesday 29 October 2013 and was heard on 30 October On 28 October 2013 the respondent's sole director initiated Business Rescue proceedings in terms of section 129 of the Companies Act 71 of The director s resolution and other documents

4 4 were allegedly sent to the Commission. On 30 October 2013 the respondent appeared in Court and argued a point of law, that it had instituted Business Rescue proceedings and in terms of section 133 of the Companies Act, once rescue proceedings were initiated, there existed a general moratorium on any legal proceedings contemplated or in progress. Section 133 provides that during business rescue proceedings, no legal proceedings, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum, except with the written consent of the practitioner, with the leave of the court and in accordance with any terms the court considers suitable. As a set-off against any claim made by the company in any legal proceeding, irrespective of whether those proceedings commenced before or after the business rescue proceeding began; criminal proceedings against the company or any of its Directors or officers; proceedings concerning any property or right over which the company exercises the powers of a trustee; or proceedings by a regulatory authority in the execution of its duties after written notification to the business to the business rescue practitioner. During business rescue proceedings, a guarantee or surety by a company in favour of any other person may not be enforced by any person against the company expect with leave of the court and in accordance with any terms the court considers just and equitable in the circumstances. If any right to commence proceedings or otherwise assert a claim against a company is subject to a time limit, the measurement of that time must be suspended during the company's business rescue proceedings. The general moratorium is in effect a stay of proceedings. There are however exceptions and a proviso which allowed the enforcement of a guarantee, with the leave of the Court and in accordance with any terms the Court considers just and equitable in the circumstances. The applicant contended that the business rescue proceedings were not properly initiated as envisaged by section 129. Subsection 1 of section 129 prescribes that a board of a company may resolve to initiate business rescue proceedings if it has reasonable grounds to believe that the company is in financial distress and there appears to be a reasonable prospect of rescuing the company. Subsection 2 thereof provides further that the resolution may not be adopted if liquidation proceedings have been initiated by or against the company. Most importantly such a resolution has no force and effect until it has been filed. A perusal of copies of proof of registration for business rescue indicated the following, that they were dated Monday 28 October 2013, a day before the hearing of the application; and there was no stamp or signature of the commission, which provided proof of acknowledgement of receipt or filing of the business rescue application. In the Court s view the business rescue application was initiated to thwart the proceedings and not necessarily to rescue the business. The timing and the manner in which it was initiated, raised serious doubts as to whether the respondent genuinely intended to institute business rescue proceedings. The initiative appeared to in effect frustrate the applicants attempt to perfect the security granted to it by the very respondent. There was no proof that the business rescue proceedings had been filed with the Commission, as at the time of these proceedings. Section 133 did not apply and accordingly the applicant was therefore granted authority to perfect the security it held under the General Notarial Covering Bond, by attaching all movable assets which formed the subject matter of the bond while the indebtedness existed. SUPREME COURT OF APPEAL - RECENT JUDGMENTS DEAN OF THE LAW FACULTY OF THE UNIVERSITY OF NORTH WEST & OTHERS V MASISI (297/2013) [] ZASCA 2 (20 FEBRUARY ): Appeal from Equality Court complaint in Equality Court concerning university s refusal to give credit for more than 50 per cent of courses completed at another university university rules and policy with statutory underpinning set aside by Equality Court failure to provide Minister of Education and other universities or their collective voice with opportunity to participate in proceedings orders set aside and matter remitted. THE PRESIDENT OF RSA V REINECKE (210/13)[] ZASCA 3 (28 FEBRUARY ): Magistrate appointed as relief magistrate removed from work as relief magistrate and generally from performing judicial functions claim for damages based on repudiation of contract of employment whether magistrate an employee whether magistrate can claim constructive dismissal BILLS LABOUR RELATIONS AMENDMENT BILL, 2012 B16D-2012 EMPLOYMENT SERVICES BILL, 2012 B38D-2012

5 5 NATIONAL ENVIRONMENTAL MANAGEMENT LAWS B26B-2013 NATIONAL ENVIRONMENTAL MANAGEMENT: WASTE B32B-2013 RESTITUTION OF LAND RIGHTS AMENDMENT BILL, 2013 B35A-2013 B35B-2013 SCIENCE AND TECHNOLOGY LAWS B36B-2013 NATIONAL CREDIT B47A-2013 B47B-2013 INFRASTRUCTURE DEVELOPMENT BILL, 2013 B49B-2013 STATE ATTORNEY B52A-2013 B52B-2013 NATIONAL WATER AMENDMENT BILL, B3- APPROPRIATION BILL, B4- DIVISION OF REVENUE BILL, B5- MEDICINES AND RELATED SUBSTANCES AMENDMENT BILL, B6- MEDICAL INNOVATION BILL, PMB1- PROCLAMATIONS AND NOTICES DEPARTMENT OF ARTS AND CULTURE Request for expressions of interest in the supply of a career information and exploration software solution published GG ( ) DEPARTMENT OF HIGHER EDUCATION AND TRAINING Notice of publication of Report of the Ministerial Committee for the Review of the Funding of Universities and Minister's Foreword published GG ( ) INCOME TAX ACT 58 OF 1962 Determination of the rate per kilometre in respect of motor vehicles for the purposes of s. 8 (1) (b) (ii) and (iii) GG ( )

6 6 published in respect of years of assessment commencing on or after 1 March Determination of the daily amount in respect of meals and incidental costs for purposes of s. 8 (1) (a) (i) (bb) in respect of the year of assessment commencing 1 March published S. 12I Tax Allowance Programmes published GG ( ) GG ( ) FOODSTUFFS, COSMETICS AND DISINFECTANTS ACT 54 OF 1972 Regulations relating to milk and dairy products amended GG ( ) PHARMACY ACT 53 OF 1974 Proposed criteria for the issuing of licences for pharmacy premises published for comment GG ( ) AGRICULTURAL PRODUCT STANDARDS ACT 119 OF 1990 Regulations regarding Inspections and Appeals: Local amended with effect from 1 April Export amended with effect from 1 April GG ( ) GG ( ) MAGISTRATES ACT 90 OF 1993 Remuneration of magistrates published and Proc 6 in GG of 22 March 2013 repealed with effect from 1 April 2013 GG ( ) COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT 130 OF 1993 Increase of maximum amount of earnings on which the assessment of an employer shall be calculated published with effect from 1 April Increase in monthly pensions published with effect from 1 April Schedule 4 amended with effect from 1 April GG ( ) GG ( ) GG ( ) PUBLIC HOLIDAYS ACT 36 OF 1994 Declaration of the 7th May as a public holiday throughout the Republic published GG ( ) SPECIAL INVESTIGATING UNITS AND SPECIAL TRIBUNALS ACT 74 OF 1996 Referral of matters to existing special investigating unit and special tribunal in respect of the affairs of the Department of Communications published GG ( ) EMPLOYMENT EQUITY ACT 55 OF 1998 ELECTORAL ACT 73 OF 1998 Draft Employment Equity Regulations, published for comment Calling and setting of a date for the election of the National Assembly published Election timetable for the election of the National Assembly and the election of Provincial Legislatures published Determination of the fixed number of seats reserved for each region in the election of the National Assembly published GG ( ) GG ( ) GG ( ) GG ( ) NATIONAL Schedules 1 and 2 amended GG ( )

7 7 ENVIRONMENTAL MANAGEMENT ACT 107 OF 1998 Fees for consideration and processing of applications for environmental authorisations and amendments thereto published with effect from 1 April Fee structure for consideration and processing of applications for waste management licenses, transfer and renewal thereof published with effect from 1 April Draft National Exemption Regulations, published for comment GG ( ) GG ( ) GG ( ) CORRECTIONAL SERVICES ACT 111 OF 1998 Delegation of competencies published GG ( ) MEDICAL SCHEMES ACT 131 OF 1998 Registered medical schemes published and GenN 141 in GG of 20 February 2013 replaced GG ( ) JUDGES' REMUNERATION AND CONDITIONS OF EMPLOYMENT ACT 47 OF 2001 Remuneration of Constitutional Court Judges and Judges published and Proc 60 in GG of 3 October 2012 repealed with effect from 1 April 2013 GG ( ) DISASTER MANAGEMENT ACT 57 OF 2002, NATIONAL DISASTER MANAGEMENT FRAMEWORK, 2005, FIRE BRIGADE SERVICES ACT 99 OF 1987, NATIONAL HEALTH ACT 61 OF 2003 & NATIONAL URBAN SEARCH AND RESCUE FRAMEWORK National Urban Search and Rescue Framework published GG ( ) LIQUOR ACT 59 OF 2003 Determination that the national Liquor Act 27 of 1989 shall cease to operate in the KwaZulu- Natal Province with effect from 28 February, and that the KwaZulu-Natal Liquor Licensing Act 6 of 2010 shall then come into operation on or before 28 February to regulate any matter related to liquor in the KwaZulu-Natal Province published with effect from 28 February GG ( ) NATIONAL CREDIT ACT 34 OF 2005 Removal of Adverse Consumer Information and Information Relating to Paid Up Judgments Regulations, published with effect from 1 April GG ( ) ELECTRONIC COMMUNICATIONS ACT 36 OF 2005 Proposed ICASA General Licence Fees Amendment Regulations, published for comment Withdrawal of application for transfer of licence from on Digital Media Proprietary Limited (ODM) to Startimes Media (South Africa) Proprietary Limited published GG ( ) GG ( ) ASTRONOMY GEOGRAPHIC ADVANTAGE ACT 21 OF Declaration of the Sutherland Central Astronomy Advantage Areas published GG ( )

8 BIRTHS AND DEATHS REGISTRATION AMENDMENT ACT 18 OF 2010 Date of commencement: 1 March Amends ss. 1, 7, 9, 11, 19, 24, 25, 26, 27A, 28, 29 & 31, substitutes ss. 8, 12, 23 & 32 and the words 'he', 'him' and 'his', wherever they occur, with the words 'he or she', 'him or her' and 'his or her', respectively, inserts ss. 22A & 27B and repeals s. 30 of the Births and Deaths Registration Act 51 of 1992 Regulations on the Registration of Births and Deaths, published and Regulations on the Registration of Births and Deaths published in GN R2139 in GG of 9 September 1992 repealed with effect from 1 March GG ( ) GG ( ) LABOUR RELATIONS AMENDMENT BILL, 2012 Notice in terms of s. 198A seeking representations from the public on which categories of work should be deemed to be temporary service published GG ( ) USE OF OFFICIAL LANGUAGES ACT 12 OF 2012 Use of Official Languages Regulations, 2013 published GG ( ) FINANCIAL MARKETS ACT 19 OF 2012 Notice of proposed amendments to the JSE Equities and Derivatives Rules published for comment GG ( ) DIVISION OF REVENUE ACT 2 OF 2013 Explanatory memorandum to the provincial allocations published GG ( ) SUPERIOR COURTS ACT 10 OF 2013 Norms and standards for the performance of judicial functions published Renaming of Courts in terms of s. 6 published Determination of sittings of the specific courts published GG ( ) GG ( ) GG ( ) PROVINCIAL LEGISLATION Eastern Cape House of Traditional Leaders Act 1 of 1995 Election of Xolile Sydney Ndevu as representative of King Mpendulo Sigcawu published PG 3133 ( ) KwaZulu-Natal KwaZulu-Natal Heritage Act 4 of 2008 KwaZulu-Natal Gaming and Betting Act 8 of 2010 KwaZulu-Natal Health Act 4 of 2000 Limpopo Draft applications for alterations and additions to or demolition of protected buildings published for comment KwaZulu-Natal Gaming and Betting Regulations, 2012: Determination of 'other events and contingencies' upon which bets may be struck published Regulations relating to the administration, management and control of provincial hospitals, services and institutions: Amendment of tariffs published with effect from 1 April PG 1100 ( ) PG 1100 ( ) PG 1102 ( ) National Environmental Intention to declare nature reserves: Welgevonden Private PG 2319 ( )

9 9 Management: Protected Areas Act 57 of 2003 Nature Reserve; Luvhondo Private Nature Reserve; Mokolo Private Nature Reserve; Happy Rest Nature Reserve; and Bothasvley Nature Reserve published for comment Mpumalanga Mpumalanga Road Traffic Act 4 of 1998 North West Local Government: Municipal Systems Act 32 of 2000 North West Road Traffic Act 11 of 1997 Mpumalanga Road Traffic Regulations, published with effect from 1 May and GenN 7 in PG 2126 of 22 January 2013 repealed Maquassi Hills Local Municipality: Credit Control and Debt Collection By-Law published and previous by-laws revoked Notice for approval for traffic officers to functions outside their area of jusridiction published for comment Approval for traffic officers to functions outside their area of jusridiction published and GenN 164 in PG 6785 of 28 May 2010 withdrawn PG 2268 ( ) PG 7230 ( ) PG 7236 ( ) PG 7236 ( )