Business Law

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A critical analysis of the requirements needed for the commencement of business rescue in South Africa.
(2023) Chikuvanyanya, Tafadzwa Munashe.; Subramanien, Darren Cavell.
The ripple effects of COVID 19, the rise of inflation, interest rate hikes, and the negative effects of the Russia-Ukraine war are some of the reasons that have led to the poor performance of global economies. South Africa is no exception to the negative impacts of these global challenges. South Africa, which is still a young democracy, faces unique challenges such as load-shedding. Load-shedding has adversely impacted all businesses that are being forced to operate at a loss because of the additional costs they are incurring to procure alternative electricity sources to keep their businesses operational. Interest rate hikes have also impacted South African businesses to the extent that they have been described as a ‘punch to the gut for businesses already struggling. These challenges bear negative consequences on the South African economy at large because both small and big businesses may be forced to default on their payment obligations due to insolvency. Insolvency usually results in businesses being placed in liquidation, which may result in their ultimate closure and job losses. To avoid this, South Africa, like other countries, has adopted a corporate rescue process as an alternative to liquidation proceedings. This corporate rescue process is commonly referred to as ‘business rescue’, and it is necessary to analyse its requirements to ensure that the maximum potential of this process is realized and that companies benefit more from it
Affected persons in business rescue proceedings : has a balance been struck?
(2016) Silangwe, Thandeka.; Williams, Robert Charles.
Abstract not available.
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.
Analysing and comparing the impact of misrepresentation and non-disclosure on the validity of a contract: similarities, differences and remedies.
(2018) Ramphal, Kayra.; Subramanien, Darren Cavell.
This dissertation explores the concepts of non-disclosure and misrepresentation in South African law. The principal focus surrounds the effect non-disclosure as a form of misrepresentation has on the liability of contracting parties. In order to explore this effectively, the study explores the concept of duty of disclosure, and whether such a duty exists in South African law. Instances when a duty to disclose arises are explained, such as positive steps taken to conceal facts, the seller having sole knowledge of the material fact, an omission or misleading language, and a change in circumstances. Similarly to the English law duty of disclosure in relation to information in contracts uberrimae fidei, the similar South African law concept in insurance or agency contracts known as ‘utmost good faith’, is discussed and explored. The study determines whether such a concept should be a mandatory requirement in pre-contractual negotiations. Additionally, this study explores the various avenues of relief that are available to those who have fallen victim to misrepresentation. This results in an analysis of the effectiveness and success of the current traditional methods of claiming and quantifying damages that are adopted by South African legislature and the judiciary. The discussion then explores the proposed alternate method which aims to combine a claim into one of delict and that of contractual liability, or on the other hand institute a claim solely based on contractual liability. Lastly, this study explores the effect the Consumer Protection Act 68 of 2008 has had on contractual agreements, remedies and penalties, and how this ground-breaking legislation has altered the approach previously adopted by the common law and whether it has done enough to protect consumers.
An analysis of cryptocurrency regulation within South Africa and the impact that cryptocurrency has on existing financial regulations.
(2021) Gholizadeh Touchaei, Kyavand.; Swales, Lee Jay Edwin.
This research critically analyses a novel yet unknown area of law within South Africa — the regulation of cryptocurrencies. ‘Cryptocurrency’ refers to what is known as a Decentralised Convertible Virtual Currency (DCVC). In addition, cryptocurrency can be understood to be a subset of the collective term known as ‘crypto asset’. Crypto assets encompass all cryptocurrencies, security tokens and utility tokens. It is often referred to as Financial Technology or Fintech. The technology that underpins cryptocurrency is referred to as blockchain. Simply put, blockchain allows for information to be transacted between two points in a simple yet secure manner. This is done digitally through the use of the internet. In essence, a blockchain refers to information being stored in an encoded form on a peer-to-peer network. A blockchain may also be referred to as a ledger. Through a blockchain, a transaction is also more transparent, as it allows each party to the transaction to view all information relating to the blockchain. Blockchain technology can be applied to different aspects of various industries, such as contracts. The basis of a cryptocurrency is to create a medium of exchange that is anonymous, secure, as well as relatively fast in terms of a transaction. However, one of the most important characteristics of a cryptocurrency is that it is unregulated. Through being unregulated, it allows cryptocurrencies to be used to circumvent financial regulations and engage in activities such as terrorism, money laundering and tax evasion. The reason for this is because cryptocurrencies are not linked to any central regulatory body, that can oversee cryptocurrency. According to the South African Reserve Bank 2014 Position Paper, there are no express regulations for cryptocurrency in South Africa. Furthermore, cryptocurrencies are not recognised as legal tender in South Africa as they are not issued or controlled by a central regulatory body. Therefore, cryptocurrencies cannot be used as substitute as a legal tender. Through the 2014 Position Paper, risks were highlighted with regards to cryptocurrency transactions. However, no regulations were identified that could remedy these risks. Following the 2014 Position Paper by SARB, SARB established the Intergovernmental Fintech Working Group (IFWG) and the Crypto Assets Regulatory Working Group (CARWG) in conjunction with the South African Revenue Service (SARS). Their goal is to review the position of cryptocurrency and consider any public policy in terms of cryptocurrency. In 2019, the IFWG and CARWG released a Consultation Paper, that further developed the understandings found in the 2014 Position Paper. Through the 2019 Consultation Paper, the term crypto asset was adopted. As of April 2020, the IFWG, together with the CARWG released a Position Paper, which highlights various recommendations that can be used within South Africa in the general regulation of cryptocurrency, serving as the latest stance regulatory bodies have in relation to cryptocurrencies. Furthermore, the term crypto asset was also further developed and understood to be a collective term that includes cryptocurrencies as a subset. It is also imperative to understand that many laws that apply to fiat currencies pre-dates the creation of cryptocurrencies. Therefore, many of these laws do not apply in regulating cryptocurrencies and will need further interpretation as well as amendment to be adapted in line with the concept of a cryptocurrency. Hence, by analysing the Twin Peaks model, and determining how cryptocurrencies interact with relevant laws found within the Prudential Authority and Financial Sector Conduct Authority, a greater understanding can be found as to how to regulate cryptocurrencies. As it stands, the applicability of regulations is dependent on whether fiat currency is involved in a cryptocurrency transaction. If a cryptocurrency is being dealt with solely, the laws tend to falter due to the fact that South African regulators do not classify cryptocurrency as a legal tender. Therefore, there is a possibility that users of cryptocurrency will be able to circumvent laws put into place to protect and preserve the financial sector of South Africa. The reason for this is that, many regulations within South Africa currently only apply to the definition of legal tender as mentioned by the SARB position paper of 2014. Hence, in order for cryptocurrencies to be accepted within South Africa, there is a need for greater analysis of regulations, and in addition foreign countries such as the United Kingdom and the United States of America can be analysed. These countries provide a greater understanding as to how regulatory bodies can provide regulation for this novel technology within South Africa. It can therefore be deduced, that through a greater understanding of this technology, there will be greater acceptance and better regulation of cryptocurrencies.
An analysis of lifting of the corporate veil in light of s20(9) of the Companies Act 71 of 2008.
Govender, Tamera Nelendree.; Subramanien, Darren Cavell.
No abstract provided.
An analysis of temporary employment services and the new laws regulating them in South Africa.
(2014) Schoeman, Adél.; Whitear-Nel, Nicola Jane.
This research focuses on temporary employment services in South Africa and considers the new legislation relating to them. The Labour Relations Amendment Act 6 of 2014 and the Basic Conditions of Employment Amendment Act 20 of 2013 were recently passed into law. The Congress of South African Trade Unions called for a total ban on temporary employment services in South Africa; however, rather than banning them, the government amended the labour laws regarding temporary employment services, in order to regulate them more closely. This thesis considers the rationale behind the introduction of the new laws, the abuses suffered by temporary employees, and will explore the nature and implications of the amendments on temporary employment services in South Africa.
An analysis of the Broad Based Black Economic Empowerment policy and its effects on beneficiaries.
(2019) Dawood, Tasmia.; Tenza, Mlungisi Ernest.
Abstract available in PDF.
An analysis of the consequences of a business rescue moratorium on legal proceedings on property owners.
(2021) Ngubane, Samukelo Siyanda.; Govindsamy, Salina.
It has been over a decade since the Companies Act 71 of 2008 introduced business rescue proceedings which provided for the rescue of financially distressed companies. This procedure replaced the then statutory procedure of judicial management under Companies Act 61 of 1973. The business rescue proceedings begin with the general moratorium or stay on legal proceedings against the company or its property. This has a consequence that any claims against the company may only be enforced with the consent of the business rescue practitioner or the leave of the court. However, the courts continue to grapple with the interpretation, effect, and application of the key elements of business rescue provisions while always striving to accord respect to the legislative intention of business rescue as set out in section 7(k) of the Companies Act 71 of 2008. After a decade since its introduction, it is an opportune time to ascertain whether the business rescue proceedings is an effective corporate rescue procedure suitable to the modern-day demands of the South African economy. The research analyses the effect and the consequences of the moratorium on the rights of property owners. The moratorium has the effect that companies are given temporary immunity to actions brought by creditors which would have been due and enforceable. In this regard, the property leased by the property owner remains occupied by the company during business rescue proceedings as the property owner is barred by the moratorium to institute legal proceedings against the company. Further, when the repossession of the property is not possible and the rental due or installment is not payable by the company, the business rescue proceedings encroaches on the right of the property owners. The purpose of the research is to highlight the effect of the moratorium on the lease agreement between the company and property owners and the possible protection of the property owners’ rights. The study includes a critical analysis of judicial decisions on the moratorium, together with a discussion of the legal position in comparable foreign jurisdictions. In my conclusion, based on the findings, the business rescue is not free from imperfection. Therefore, I recommended that the legislature amend some parts of Chapter 6 of the Companies Act 71 of 2008.
Analysis of the evolution of the appraisal and oppression remedy and its adoption under the Companies Act in South Africa.
(2018) Essop, Suhaifa.; Subramanien, Darren Cavell.
The Companies Act 71 of 2008 encapsulates the economic sphere, its procedures, problems and possible resolutions to such issues on a wide scale. It allows a litigant a basis and a guideline when dealing with corporate law in relation to the corporate sector. The main idea is to allow free, fair and prosperous trade not only for the majority shareholders but also for the minorities and the financial environment as a whole. Every shareholder who has invested in a company needs to be given the opportunity to be a part of a concern in which (s)he has full confidence and reliance on the controlling members. The issue arises when the aforementioned is not complied with whether it is a large corporation or a small start-up business. There are several remedies which can be used as a means of restitution, however, for purposes of this dissertation we shall analyse two controversial and expanded remedies, namely the Appraisal and Oppression remedies. This dissertation focuses on the two by analyzing the introduction of the Appraisal remedy and its source of adoption and the development of the Oppression remedy with the main aim of answering the questions of whether, firstly, these remedies are warranted in South Africa and, secondly, whether or not further expansion is required for their proper functioning.
An analysis of the impact of the sanitary and phytosanitary agreement on market access : case study on the SA/EU citrus dispute and AGOA dispute.
(2016) Singh, Shikira.; Stevens, Clydenia Edwina.
Abstract not available.
An analysis of the Protection of Personal Information Act (POPIA) and the European Data Protection Framework: suggestions for South Africa.
(2021) Lee, Andi William.; Swales, Lee Jay Edwin.
No abstract supplied.
Analysis of the test for review as set down in the Sidumo judgement.
Mamvura, Guest.; Subramanien, Darren Cavell.
This research study focuses on the test for review as set down in the Sidumo & another v Rustenburg Platinum Mines Ltd &others (2007) BLLR 1097 (CC) (herein after referred to as Sidumo), judgement. An analysis of case law is undertaken in order to determine whether the test is now in decline. This is achieved by exploring the relevant case law and cases that were decided before the Sidumo case, particularly the Carephone (Pty) Ltd v Marcus and others (1998) 11 BLLR 1093 (LAC) (herein after referred to as Carephone)case. The Sidumo (CC) case is discussed in detail, as well as the recent judgements in Herholdt v Nedbank Ltd (701/2012)2013ZASCA (herein after referred to as Herholdt) and Goldfields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA (JA 2/2012) 2013 ZALAC 28, 2014 1 BLLR (herein after referred to as Gold Fields Mining) The aim of this work is to explore whether employment justice for all might be better served were the relief against awards to take the form of an appeal rather than review.
Balancing the protection for intellectual property rights of copyright holders against the constitutional right to freedom of expression: a comparison of the South African approach and the United States of America’s approach.
(2018) Mhlongo, Banele Phumelele.; Soni, Sheetal Jacqueline.
No abstract available.
Balancing the rights of creditors and consumers when a home is sold in execution: what procedures should be followed?
(2020) Mazubane, Zamanguni Sithabile.; Woker, Tanya Ann.
The sale in execution of theprimary residence of a consumer has numerous implications. This is especially in light of section 26 of the Constitution of the Republic of South Africa, 1996(‘Constitution’) which gives people the right to adequate housing and to not be arbitrarily evicted from their homes. The enactment of the National Credit Act 34 of 2005(‘NCA’) which aimsto balance the rights of creditors and consumers also impacted the procedure to sell homes in execution. In particular, section 129 of the NCA has pre-enforcement procedures whilst section 130 allows credit agreements to be reinstated if consumers can pay the overdue amounts and other costs in full. In addition, amendments were made tothe Magistrates’Court Rules and the Uniform Rules of Court regarding the sale of consumers’homes.The new requirements introduced by the NCA and procedures introduced by thecourt rules resulted in a great deal of confusion with different courts and judges adopting different approaches. Eventually, several matters which sought to sell consumers’homes in execution were heard in Absa Bank v Mokebe and Related Matters 2018 (6) SA 492 (GJ)(‘Mokebe case’). Van der Linde Jofthe Gauteng Local Division of the High Court, used the power granted in section 14(1)(b) of the Superior Courts Act 10 of 2013 to, in consultation with the Judge President, discontinue the hearing of the matters before him and refer the mattersto the full bench of the Division.In essence, the court held that a uniform approach must be taken by the judges of this Division regarding how they handle foreclosure matters. This thesis investigates the procedure that creditors should follow before they are entitled to sell consumers’ homesin execution. In order to do this, this thesis will examinethe Constitution, NCA, court rules, practice notesand case law. More specifically, the persons that are the focusof the investigation are creditors that have a security right in the form of a mortgage bond over the home,versus consumers who have become overindebted and are no longer able to meet their obligations under the loan agreement that was entered into with the creditors. There cent landmark Mokebe case is examined in depth to determine what the current law is and how it can be improved.Furthermore, the effect of the Mokebe case inother High Court Divisions in the country will be briefly discussed.Lastly, this thesis sets out what consumers can do to prevent their homes being sold on publicauction especially after they default in their payments. This thesis will show that the procedure to sell homes in execution has drastically changed from the pre-constitutional to the current constitutional dispensation. However, it is submitted that the procedures can still be improved upon. This is because the right to adequate housing is an important socio-economic right which has been undervalued and overlooked. The courts have previously allowed execution of homes without considering the circumstances of consumers. The court rules allowed for this as the contractual rights of creditors were held at a higher standard than the socio-economic rights of consumers. It is argued that in the light of the NCA and its aims, there must be an appropriate balancing of the rights of creditors and consumers to create just outcomes. If we are to truly create a society based on ‘human dignity, the achievement of equality and the advancement of human rights and freedoms’ as expressed in the founding values of South Africa’s Constitution and reiterated to a large extent in the NCA; foreclosure laws must also reflect that vision.
Bitcoin and eSwatini Income Tax Order 1975 (King's Order in Council No. 21 of 1975)
(2019) Maphalala, Phesheya Sipho.; Schembri, Christopher Carmelo.
Bitcoin usage and growth has gradually had an impact on the virtual world and financial markets of mostly South Africa, which has resulted in the Cryptocurrency being gradually adopted by emaSwati. The central bank of eSwatini has therefore noted that there have been reported cases of Bitcoin usage in the kingdom of eSwatini. However, with this growth the eSwatini Revenue Services has not made any statement or pronounciation on the possible tax treatment of the Cryptocurrency whilst on the other hand the central bank of eSwatini has begun the process of conducting research on how to regulate Cryptocurrencies in eSwatini. This situation in eSwatini has therefore presented us with a gap in literature and therefore an opportunity to conduct this study ensued on how Bitcoin can be treated for Income Tax purposes by the eSwatini Income Tax Order. This study has been conducted by focusing mainly on the direct tax consequences of the Cryptocurrency in eSwatini and South Africa, which may arise, and an examination of possible gaps in the eSwatini jurisdiction since there has been no pronounciation by the eSwatini Revenue Authority. Furthermore, brief lessons from the United Kingdom and the United States of America’s position on the tax treatment and regulation of the Cryptocurrency have been explored. The UK and USA have been selected for this study because they have more advanced regulations in relation to Cryptocurrency and a higher prevalence of Cryptocurrency transactions than both eSwatini and South Africa. Furthermore, in conducting the study South Africa has been selected because the common law of both South Africa and eSwatini is relatively similar and has been adopted from both the Roman-Dutch and English common law. A further preferred feature about the South African jurisdiction is that it shares a border and a similar socio economic environment to that of eSwatini. Having identified the gaps in the eSwatini jurisdiction the study has therefore concluded that the findings on the gaps necessitate the application of tax on worldwide income, and the implementation of Capital Gains Tax to the Swati tax legislation. Furthermore, the study has uncovered that in order to achieve this the eSwatini Revenue Authority must seek to find a proper classification for Cryptocurrency which will aid in the application of tax on the new digital currencies.
The board of directors as a governance mechanism in South Africa: an agency theory perspective.
(2018) Steyn, Blanche.; Stainbank, Lesley June.; Kwenda, Farai.
The changed legislative landscape of the 2008 Companies Act required a rebalancing of the agency relationship between the board of directors and shareholders given the more onerous statutory oversight and accountability requirements. This study investigates the relationship between the board and firm value of 84 companies on the SRI index between 2012 and 2014, separating the governance role of the board into their corporate control and managerial labour roles using uniquely constructed indexes. Fixed effects with generalised least squares estimations were used to assess the relationship between the corporate control and managerial labour of the board and various proxies for firm value. As board level controls need time to filter through to firm value the study also considered a negatively lagged relationship to firm value. The study expands on the practice of constructing indexes in governance studies by constructing two control indexes to measure quality assurance and company control indicators as well as the control index (CI) representing the corporate control role of the board and the managerial labour index (MLI) representing the managerial labour role of the board. The results show that both the CI and MLI indexes are positively associated to return on assets a performance measure controlled by the board but negatively related to next year’s return on assets, suggesting a short-term focus of the board’s governance role of a time-horizon problem. However, the CI and MLI indexes are positively associated to enterprise value and next year’s enterprise value indicating that the more dispersed shareholders in the market value the governance role the board as an alternative to shareholder monitoring. The association between MLI and Tobin’s Q and next year’s Tobin’s Q is small but negative. The latter can be attributed to the increased statutory responsibility of shareholders regarding board remuneration, and an upward pressure on director’s remuneration to compensate board members for their increased liability risk. A more in-depth study on the root cause of the changed association between return on assets and next year’s return on assets is an area of future research.
Business rescue a success or a failure? An analysis on the effectiveness of business rescue in South Africa.
(2018) Kahamba, Leona Ruvimbo.; Subramanien, Darren Cavell.
No abstract available.
Business rescue in South Africa : an exploration of business rescue and the role of the business rescue practitioner.
(2018) Patel, Tasmiya Essop.; Phungula, Simphiwe Peaceful.
Abstract available in PDF file.
Business rescue: a delay tactic for liquidation?
(2019) Nxumalo, Misiwe Mpilenhle.; Phungula, Simphiwe Peaceful.
No abstract provided.

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