Business Law

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Tobacco control legislation : the challenges of enforcement mechanisms.
(2002) Buthelezi, Michael Celumusa.; Singh, Annette.; Reddi, Managay.
No abstract available.
The shortcomings of the common law and the Companies Act 61 of 1973 in regulating executive remuneration in South Africa : is the code of corporate practices and conduct the answer for listed companies?
(2003) Polaki, Angelina Tlotliso.; Mongalo, Tshepo Herbert.
King II articulated in an open manner, issues of disclosure, transparency, comparator ren1lmeration packages and a robust approach to the paYment of con1pensation in relation to poorly performing directors. While directors owe fiduciary duties to the company (shareholders present and future), by paying themselves huge packages, they do no longer act in the best interests of the con1pany because awarding themselves exorbitant packages may frustrate their duty to maximise shareholder value. The solution is that their interests be linked to those of shareholders by requiring that their pay be linked to their performance. With the advent of corporate governance reforms, other stakeholder interests have to be taken cognisance of by directors in corporate decision Inaking. As such, a huge gap between the salaries of rank and file employees and those of executive directors is seen as a conscious move to ignore the interests of legitimate stakeholders when there is no compelling reason to do so. To try and align the interest of shareholders and directors, it is felt that more emphasis has to be placed on actively engaging shareholders and employees in the determination of executive remuneration. It is subn1itted that pay that is not linked to performance is a breach of fiduciary duties, in particular, duty to avoid conflict of interest. However, our common law and Companies Act 61 of 1973 fail imn1ensely to address concerns relating to excessive remuneration pay. In particular, the business judgment nl1e precludes minority shareholders taking action on the basis of wrongs committed against the company by virtue of pay not being linked to performance. Neither has the introduction of corporate governance reforms impacted heavily on setting executive remuneration. They have not proved effective in curbing fat cat pay. It is acknowledged that these reforms have ~rought about a profound impact on attitudes in the corporate environment. However, numerous deficiencies, particularly in the context of South Africa can be identified. This thesis serves as a means of establishing whether fron1 a legal perspective, following recent reforms, the negative impact of exorbitant remuneration pay is of such a serious nature as to warrant more stringent regulation in one form or the other. South Africa should consider revan1ping and tightening current legislation, which as submitted is lacking in a number of respects. As a strategy to eradicate exorbitant pay, it is submitted that directors fiduciary duties have to be revised and legislated in order to successfully establish directors wrongdoing. It is felt that legislative enactment may be made stronger by the fact that it may have stronger and sharper teeth and hence able to reach where self-regulated codes are weak.
The role of the JSE in the globalization process with special emphasis on the implementation of the Jet and Strate systems.
(2000) Govender, Kribashni.; Mongalo, Tshepo Herbert.
No abstract available.
To lift or not to lift the veil - the unfinished story : a critical analysis of common law principles in lifting the corporate veil.
(2002) Mthembu, Louis Velaphi.; Schembri, Christopher Carmelo.
No abstract available.
A critical analysis of the role of disclosure in strengthening corporate governance and accountability.
(2010) Bagwandeen, Lynelle.; Schembri, Christopher Carmelo.
This dissertation critically analyses the role of disclosure in strengthening corporate governance and accountability to determine whether a prescriptive system of disclosure is of greater efficacy than a voluntary regime. The research undertaken has been done on a qualitative and theory building basis. The purpose of the study is to examine how current and future legal reform can curb corporate governance shortcomings and contribute to a new more dependable mode of corporate governance. This requires a comparative analysis of the South African and English models which are voluntary ('comply or explain') regimes compared to the prescriptive American model of corporate governance ('comply or else'). The foundational basis, definition and jurisdictional evolution of corporate governance is examined and analysed to ascertain the role of disclosure in relation to good governance. To facilitate this investigation a critical review of the legislative framework and reforms enacted locally (and offshore where applicable) is also undertaken. Disclosure as a concept is probed in terms of both a mandatory disclosure and voluntary disclosure regime to determine the more prudent mode of dissemination and how it impacts the efficacy of corporate governance and accountability. To ensure a holistic VIew of the role of disclosure is comprehensively critiqued its influence on corporate social responsibility is embarked upon. It is contextualized against the shareholder (contractarian) theory of governance versus that of the stakeholder (communitarian) theory of governance. This will involve a study of the competing requirements of disclosure in terms of these two theories and its impact on securing accountability. The tenuous relationship between shareholders and directors is considered to determine whether corporate governance regimes safeguard shareholder rights and how these measures contribute to strengthening governance. The codified role of directors in enhancing disclosure to shareholders is also undertaken. To exatrune the interplay between these concepts corporate governance failures are dissected to determine the shortcomings of disclosure practice. The recommendation of this dissertation is that a mandatory disclosure regime is of greater efficacy in strengthening corporate governance and accountability but to remedy recurring corporate governance shortcomings a disclosure regime that is holistic and principles based is required. It should also be supported by a dedicated and empowered regulatory system with sufficient penal measures to curb fraudulent behaviour but sufficient flexibility so as not to curtail industrial fortitude.
An evaluation of disaster and risk management in the Durban south basin, with particular reference to community awareness.
(2006) Purmanund, Hardeo.; Subban, Mogesperie.
No abstract available.
Investor protection in empowerment schemes of arrangements and joint ventures.
(2001) Joko, Michael Kiyong Kimbi.; Woker, Tanya Ann.
In this paper, I have attempted to highlight the problems that face investors, both black and white, in South Africa, especially in the light of the effects of the new legislation promulgated after apartheid was abolished. The legislation with which I am most concerned, is the legislation which was promulgated to promote the entry of blacks into the South African economy. In chapter one, I deal with the concept of empowerment from the constitutional view point and the problem of its definition. I also discuss out the relevant new legislation that in my argument I believe impacts on corporate activity and then deal with the distinction between an "arrangement" within its ordinary meaning in corporate law distinct from that as defined in the in the Companies Act 61 of 1973. In chapter two, I deal with the dangers facing an individual investor, the benefits of incorporation, the problem of the existence of money revolving schemes, and the effects of a lack of education amongst previously disadvantaged investors. In chapter three, I deal with joint ventures, their benefits, the effect of the Competition Act 81 of 1998 on joint and potential areas of conflict between black and white partners. Certain aspects of fraudulent and negligent conduct of directors are examined. In Chapter four, I deal with the methods of executing mergers and acquisition in relation to empowerment companies, their advantages and disadvantages, certain procedures necessary for the protection of investors like due diligence inquiries, the protection offered by the present company legislation and the common law and criticisms of the courts to protect shareholders. I look at a case study and special considerations in mergers and acquisitions. In chapter five, I look at the problem of capital in empowerment companies, the various methods that have been used to raise capital, and the loopholes in the law that affect some of these arrangements. I have focused specifically on special purpose vehicles and buyouts. In chapter six, I deal with the impact of government action and government policy on empowerment and I have compared this with what has happened in other countries. I conclude by recommending that the Black Empowerment Commission should be given teeth to take corrective measure towards empowerment.
Law of money, value and payment.
(2002) Eitelberg, Eduard.; O'Shea, A. G.; Somaroo, Harichand.
Societies have, since time immemorial, traded real goods and services for expectations of goods and services in some future. These expectations have been associated with tangible and, lately, intangible property - which is generally called money. From the crude quantity theory of money, the purchasing power of a monetary unit is given as 1/ P = T/(Mv). P is the price of the traded goods and services T, M is the total money supply and its turnover rate is v. The total money supply M is dominated by bank credit. In the South African law (and elsewhere) the judicial recognition given to bank credit (1) as money seems to have happened as an unintended side-effect to accepting cheques as delivery vehicles in a cash transfer without any tangible money moving from the transferor to the transferee. In payment of money, the law of property and the law of contract overlap and become inseparable. Both the English and South African laws define payment as performance of a preceding duty. The Supreme Court of Appeal, in the Vereins- und Westbank case seems to have declared an abstract transfer of ownership of money to be payment even though no preceding duty to pay was found. The profit of a financial investment is called interest and is calculated from a simple or compound interest formula. Despite medieval legal, theological and ethical objections, neither is illegal in the South African positive law. The last remnant of the medieval protection of a guilty debtor (often the ruler) at the expense of an innocent creditor is the in duplum rule. This is particularly obnoxious during modern rampant inflation that was unknown and could not be predicted when only metallistic money was in use. The influence of the in duplum rule is being limited by recent restrictive judgments in South Africa and in Zimbabwe. In South Africa, the Government has a constitutional duty to ensure that its subjects are not deprived of property. Specifically, the Constitution prescribes in Section 224(1) that the South African Reserve Bank must 'protect the value of the currency'. It is shown that the recent Reserve Bank policies, unless urgently modified, are in conflict with the publicly promised inflation rate of no greater than 6%. The exchange rates depend fundamentally on the price levels of the traded or tradable goods and services in the respective economies. This leads to the concept of purchasing power parity, which is most accurately reflected in the relationship between interest rates in different states and their relative foreign exchange depreciation rates. It is submitted that the South African Exchange Control Regulations have outlived their usefulness (if ever they had any) and are unconstitutional - at least in so far as they interfere with the South African Reserve Bank's obligation to pursue its primary object 'independently and without fear'. In the main, the South African Courts have applied restrictive interpretation to the Exchange Control Regulations and they have justifiably ignored the public international law obligation of the Republic to recognise the Exchange Control Regulations of fellow IMF members extraterritorially. (1) To money related claims on banks - see the body of the thesis for the two-creditor-two-debtor legal aspects in the 'bank credit'.
The interface between the Insolvency Act 24 of 1936 and the National Credit Act 34 of 2005.
(2013) Rampersad, Kereen.; Steyn, Lienne.
The Insolvency Act 24 of 1936 regulates the debtor’s estate when sequestrated for the benefit of creditors. The debtor must prove that sequestration will be to the advantage creditors and as such creates a stumbling block in the way of the debtor when applying for the voluntary surrender of his estate. Sequestration is viewed as a drastic measure due to the consequences attached to it. The sequestration procedure is often used by debtors as a form of debt relief as, subsequent to the sequestration procedure, the debtor may become rehabilitated. The effect of rehabilitation is that it discharges the debtor of all pre-existing debts and disabilities resulting from sequestration. Compulsory sequestration is often used as a debt relief measure by the debtor in the form of the so-called ‘friendly sequestration’. One of the reasons for this is that the onus of proof is much less burdensome as compared to the onus required in voluntary surrender by the debtor of his estate. South African law provides for alternative debt relief measures falling outside the scope of the Insolvency Act, including debt rearrangement in terms of section 86(7)(b) or debt restructuring in terms of section 86(7)(c) as a result of debt review in terms of the National Credit Act 34 of 2005 (NCA). However this procedure does not offer the debtor the opportunity of any discharge from his debts as the order expires only after the administration costs and all of the listed creditors have been paid in full. Further the NCA does not mention the Insolvency Act and this has led to problems in the application of both Acts and inconsistencies between them. An application for debt review by the debtor has been held to constitute an act of insolvency. Thus the creditor can use this very act of the debtor to have the debtor’s estate sequestrated. This is possible as an application for the sequestration of the debtor’s estate is not considered to be an enforcement of a debt by legal proceedings for the purposes of section 88(3) of the NCA and such actions by the creditor are not prohibited by the NCA. This was stated in Investec Bank Ltd v Mutemeri 2010 (1) SA 265 (GSJ) and was subsequently confirmed by Naidoo v ABSA Bank 2010 (4) SA 597. The consequence of this is that a debtor’s estate may be sequestrated even where he has applied for debt review. Currently, as stated by Van Heerden and Boraine, there is no explicit regulation by the legislature of the interaction between the provisions of theInsolvency Act and the NCA. In terms of FirstRand Bank v Evans 2011 (4) SA 597 (KZD) a debtor’s estate may be sequestrated even after a debt rearrangement order has been confirmed by a court in terms of the NCA. This clearly operates to the disadvantage of a debtor. Comparing the position with that in foreign jurisdictions such as the United States of America and England and Wales shows a lack of balance between the interests of the creditor and the debtor. South African insolvency law is not aligned with internationally acceptable standards because it is too creditor orientated and debtors are not provided with effective remedies to deal with their financial difficulties. This research paper will focus on reform in South African law to assist debtors in need of debt relief. There is a need for a system to be put into place to regulate application for debt review by a debtor and the application for the sequestration of the debtor’s estate by the creditor. In addition there is a need for the introduction of new legislation or amendment to the NCA which could be effective in redressing the current situation.
Consumer protection in Swaziland : a comparative analysis of the law in South Africa and the United Kingdom.
(2012) Dlamini, Eugene Majahemphini.; Subramanien, Darren Cavell.
Consumer protection has become an important issue in many spheres of trade. This fact is borne out by the many consumer protection laws introduced in many countries globally. However, despite these developments Swaziland is lagging behind. Obviously, this state of affairs has left consumers in Swaziland in a totally vulnerable position. Consumers are often exploited in two material respects. They are either subjected to unfair contract terms in the provision of services, or supplied with defective products having the potential of causing serious bodily harm. In protecting consumers the common law has been judicially developed over many centuries to curb these unfair trading practices. The doctrine of freedom of contract has been the driving force in regulating the relations between consumers and suppliers. The import of this doctrine is the unyielding recognition of an individual’s autonomy in the conclusion of consumer transactions. The underlying percepts of this doctrine are privity of contract, which only recognises obligations between contracting parties, and pacta sunt servanda which requires contractual undertakings to be recognised. The operation of contractual freedom in concluding agreements often leads to unfair results against consumers because suppliers usually impose unfair terms as a result of their stronger bargaining power over consumers. In short, problems faced by consumers were twofold; first, they have to battle the issue of potentially harmful goods, and secondly, their economically weak bargaining position is exploited by suppliers through the use of unfair contract terms. Many countries, including the United Kingdom and South Africa, addressed these two consumer issues decisively through statutory reform aimed at protecting consumers against potentially harmful products and unfair contract terms. Swaziland requires statutory reformative measures that will ensure a shift from the current consumer framework regulated by outmoded common law principles towards a modern framework that will comply with international standards.
Contractual exemption clauses under the South African Constitution : an examination of the potential impact of public policy and Ubuntu on such provisions.
(2012) Sewsunker, Sheethal.; Louw, Andre Mouton.
This dissertation will examine the current state of our common law in relation to its treatment of exemption clauses in contracts, and will focus on recent developments which may augur greater scope and a new approach to be taken in future for South African courts to ensure fairness and the promotion of substantive justice for contracting parties faced with such provisions. Whilst it is acknowledged that exemption clauses are considered to be an integral part of most contracts and are used to facilitate the efficient running of businesses, their continued use in standard form contracts have been viewed with judicial suspicion and scrutiny as the inherent nature of these clauses have the potential to operate unfairly against a contracting party by excluding their rights of recourse which they would have otherwise had at common law. Public policy has always been a benchmark against which potentially unfair contracts terms have been measured however, the advent of the Constitution has brought about a new meaning to be prescribed to public policy as the Constitutional Court has declared that it is now deeply rooted and informed by constitutional values of dignity, equality, freedom and more recently ubuntu which is to infuse the common law principles of contract. Despite these developments, the new meaning of public policy and the apparent elevation of the spirit of ubuntu as an overarching and founding constitutional value has not been fully utilised by courts in a manner which can effectively address these potentially unfair, one-sided and abusive exemption clauses by declaring them to be contrary to public policy. Notwithstanding legislative acknowledgement and the subsequent enactment of the Consumer Protection Act 2008 which has brought about greater regulation of unfair and unconscionable contract terms, it is argued that the testing of potentially unfair and abusive exemption clauses against the dictates of public policy and ubuntu in a constitutional context may provide the South African courts with a new approach to pursue greater substantive justice in respect of these notoriously problematic clauses.
Against the strict application of the caveat subscriptor rule in the context of contracts of necessity.
(2012) Govinden, Kaelin.; Louw, Andre Mouton.
This dissertation critically examines the common law caveat subscriptor rule and argues against the strict application of the rule in the context of ‘contracts of necessity’ (which is defined in the research paper). I will begin by explaining what exactly the caveat subscriptor rule entails and how it functions within the realm of mistake in contract as a species of the reliance theory which the South African law of contract endorses. I will then proceed to outline the narrow grounds recognized by the courts to date upon which one may escape the working of the caveat subscriptor rule. In section II of the paper I will briefly discuss the rise of the consumer protection movement and consider the extent to which the Consumer Protection Act now provides added protection to the unwitting signatory against the strict application of the rule. In section III I will critically examine the underlying presumptions of the caveat subscriptor rule which purport to justify the existence and application of the rule itself. I will then proceed to illustrate that while the assumptions underlying the caveat subscriptor rule may have been accurate and relevant in the past, these assumptions are no longer in keeping with the modern era of mass marketing characterized by the widespread use of standard-form contracts and consumer non-readership, which is reflected in recent judgments dealing with unread contract terms. In section IV I will examine the modern reality of consumer non-readership caused by various innate psychological factors and behavioural biases, particularly in the context of contracts of necessity. In section V I show that a change in judicial attitude towards unread contract terms and increased fairness towards the signatory is warranted not only in light of modern consumer behavior, but also in light of the courts constitutional mandate to develop the common law in accordance with section 39 (2) of the Bill of Rights as well as its underlying values. In section VI will propose a new basis for escaping the strict application of the rule grounded in public policy and will conclude by suggesting some practical methods for reform under the common law.
A critical examination of the defence of parody to a claim of copyright infringement, with particular reference to South African copyright law.
(2013) Buthelezi, Zama Nombuso.; Woker, Tanya Ann.
No abstract available.
Class actions : a proposed procedure in terms of the Consumer Protection Act 68 of 2008.
(2013) Haneef, Raeesa.; Woker, Tanya Ann.
Due to length and time constraints, this dissertation will briefly examine and provide an overview of the current method that courts have adopted in bringing a class action in Southern Africa and internationally. Specific focus will be on the Unites States of America, Australia and the Canadian province of Ontario. Challenges of bringing a class action will also be discussed, with a view of ascertaining the most appropriate or well-suited method of bringing a class action under the Consumer Protection Act 68 of 2008. The main issue that will be analysed will be the certification process. The key question to be answered is which approach or procedure, in dealing with the certification requirements under various jurisdictions, should South Africa adopt or incorporate into, class action procedure legislation? In chapter one I will introduce the concept of a class action as it is a relatively new concept found in South African consumer legislation. Different definitions of a class action will be discussed in context of particular statutes. I will define and highlight the purposes of a class action in South Africa and show why there is firstly, a need for such a procedure and secondly why there is a need for such procedure to be codified into legislation. In chapter two I will discuss certain important aspects of class actions. The purpose of this is to identify the main features of a class action. Ultimately, the purpose will be to discuss whether or not these features should be included in South African class actions. Chapter three will commence with the comparative perspective portion of this paper. The legislation adopted by the United States, will be discussed in chapter three followed by a discussion of the Ontario legislation in chapter four and the Australian legislation in chapter 5. The approaches that these jurisdictions have taken in respect of a class action procedure serve as a basis upon which a class action procedure for South Africa will be recommended. Chapter six will provide conclusions that have been drawn through analysis of the foreign jurisdictions’ class action procedures which will reflect the best and worst elements of a class action procedure. This is significant in determining what type of class action procedure would be best suited to South Africa. Chapter seven will highlight the current South African approach to class actions through an examination of case law and a Report by the South African Law Commission. This chapter will also analyse the short-comings in the South African approach through a critique of case law. In chapter eight of this paper I will propose an approach that South Africa should adopt with regard to a class action procedure that is best suited to South Africa’s social climate. Finally, I will conclude with a summation of the arguments presented in this paper in chapter nine.
A critical appraisal of the role of aid for trade in the achievement of a global partnership for development in respect of Kenya and Tanzania.
(2013) Chetty, Rushantha.; Stevens, Clydenia Edwina.
No abstract available.
Regulation of insolvency law in South Africa : the need for reform.
(2014) Cassim, Raeesa.; Steyn, Lienne.
Regulatory bodies must function properly in order for their duties to be performed. The performance of the regulatory body impacts the entire insolvency system. Academics have noted that the Master does not meet the standards of what is expected of an insolvency regulator. The Constitution requires that the power of the state be defined and regulated by the law to ensure the protection of the interests of society. State regulation must comply with the underlying values of the Constitution which also includes the protection of the interests of society. The state has a constitutional duty to protect societal interests, ensure that justice is promoted and ensure that just administrative action is achieved. The Master also has the requisite duty to protect societal interests. Academics have found that the objectives and outcomes of the regulation of insolvency law are still not in line with the Constitution and the values and principles it enshrines. Criticisms of the Master’s office include the lack of resources and institutional capacity, the lack of sufficient investigative powers and insufficient guidelines for the Master when applying their administrative discretion when appointing provisional insolvency practitioners. The lack of regulation of insolvency practitioners in South Africa has also been criticised which has a negative impact on the performance of the insolvency industry. Academics have proposed suggestions to reform the regulation of insolvency law in South Africa. However, none of these suggested proposals have been implemented as yet. The most recent development is the draft policy on the regulation of insolvency practitioners that has been submitted to NEDLAC in 2012. The policy aims to provide guidelines relating to the appointment of provisional insolvency practitioners. The policy also includes a code of conduct which insolvency practitioners must adhere to in order to be appointed as a provisional insolvency practitioner. The policy has the potential to provide sufficient guidelines to the Master when appointing insolvency practitioners. The precise guidelines in the policy reflect the need for transformation of the industry and the need for administratively fair decision making. Thus, the provisions of the proposed policy will be effective in countering the criticisms and transforming the insolvency industry and profession. Foreign jurisdictions have also encountered the problem of lack of regulation of insolvency practitioners. To circumvent this problem some foreign jurisdictions have made the recent development of adopting (or considered adopting) self-regulation or co-regulation of insolvency practitioners. In comparison to South Africa, they have made more progress towards improving the regulation of insolvency practitioners. The result of this is that South Africa is out of step with foreign jurisdictions. It is imperative that South Africa adopts reform initiatives to strengthen the regulation of insolvency law.
The impact of the precautionary principle and the SPS agreement on international trade.
(2012) Chinyama, Grace.; Mneney, Edith.
WTO Agreements have failed to adequately cater for the needs of developing countries. The WTO Agreements, particularly the SPS Agreements has failed to take into account the special needs of developing and least developing countries and clearly their interests have received no representation in the Agreement. Instead of reducing the negative impact of the SPS measures, the Agreement itself has become a barrier to trade. The problems of its implementation inclusive of the expertise, the high costs of conformity, lack of infrastructure and adequate resources have created further restrictions for exporters in international commerce. The failure to adequately deal with the implementation problems of developing countries is evident in the stalemate that culminated at the Doha Ministerial Conference which has extended for over a decade. Perhaps the future of African developments lies in regional agreements, since it is clear that the multilateral trading system has failed. Whereas some scholars are of the view that Article 5.7 of the Agreement should be used as model for the precautionary principle. The principle is highly controversial and does not even have a universal definition; its application might prove to be highly problematic. However the trade-environment debate has already taken center stage in the WTO jurisprudence, suggesting possibly the emergence of an Agreement to that effect. One however can only wonder whether in including the trade-environment debate under the ambit of the WTO when clearly it has failed to deal with issues and concerns’ relating to trade only, might be biting much more than it can chew.
Strikes and essential services : a South African perspective considered in light of the proposed amendments to the LRA.
(2014) Elstob, Justin Dryden.; Whitear-Nel, Nicola Jane.
Abstract not available.
A critical exploration of the fiduciary duties of a director to act in good faith and for a proper purpose in respect of a company and an evaluation of the developments from common law to statute.
(2015) Naicker, Mershalene.; Williams, Robert Charles.
The subject of fiduciary duties of directors is viewed as a cornerstone of modern company law. The subject of fiduciary duties of directors is of paramount importance as directors have an abundance of discretionary powers that has far reaching consequences for the company itself and society in general. This study aims at understanding and exploring fully the fiduciary duties of a director of a company to act in good faith and for a proper or permissible purpose. The study seeks to explore these two fiduciary duties in terms of the common law as well as statute being the Companies Act¹ (2008 Act). The study goes on to explore the relationship between the extensive common law on the subject of fiduciary duties and the now partial codification of these duties in section 76(3)(a) of the 2008 Act and articulates the current extent to which the common law is still relevant. This subject has been explored extensively in the past, however, this study seeks to revisit the subject from a new angle and explore the connection between the common law and the now partially codified version of the fiduciary duties of directors. This study also seeks to supplement the chasm in the existing literature regarding the fiduciary duty of a director to act for a proper purpose. Finally, this study aims at fully interpreting the primary duty of a director to act in good faith and for a proper purpose so as to assist directors in understanding what is expected of them and thus resulting in mitigating the negligent breaching by directors of companies their fiduciary duties. Further, this study will set down the current position of the relationship between the common law and statute in terms of modern company law.
A thorough examination regarding the standard of skill and care to be exercised by a director in terms of the common and statutory laws and an overview of the business judgement rule : a company law perspective.
(2014) Maharaj, Manashya.; Williams, Robert Charles.
As a nationally and internationally recognised legal phenomenon the duty of a director to act within and adhere to a required standard of skill and care is of significant importance. Through a number of “tug of war” developments over the past few decades both the common law and statutory law standard of skill and care attached to a director in the midst of such director executing his office embraces somewhat of a settled nature. Subsequently, incorporating in its test both an objective and subjective element a standard of stringency is adopted when determining whether a director’s performance of such skill and care meets these objective and subjective requirements. The business judgement rule adopted (of late) in South Africa’s regulatory framework, in essence, attempts tirelessly to alleviate the stringent objective and subject tests that have been followed in our law wide eyed. In an attempt to break down and shun decades of developments initiated to improve the standard of skill and care according to which a director is tested the statutory business judgement rule finds its home within the four corners of South Africa’s Companies Act 71 of 2008¹ (the act) and thus encourages a means of defending directors from liability, safe harbouring them from their purported breach of the required skill and care that they should be exercising. Amidst to its significant importance at home there are a substantial and extensive number of second-guessing in respect of its application thus paving the way for sharp tongue criticisms to manifest and accumulate. The rationale attached to this dissertation therefore seeks to advance the knowledge of readers the important stance both the common law and statutory law tests play in South African company law, further and in relation to its importance to articulate that the business judgement rule attempts to counter against the stringent standard adopted despite its many years of development. 1 The Companies Act 71 of 2008.

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