The Development of The South African Emolument Attachment Order Mechanism: A Historical Overview

by | Nov 20, 2022 | FUND, FUND V28I1

The Development of The South African Emolument Attachment Order Mechanism: A Historical Overview

Author Stephan van der Merwe

ISSN: 2411-7870
Affiliations: BComm LLB LLM PGDip (Higher Education: Teaching and Learning) (University of Stellenbosch). Senior attorney, notary public and lecturer, Law Clinic, University of Stellenbosch
Source: Fundamina, Volume 28 Issue 1, p. 140-170
https://doi.org/10.47348/FUND/v28/i1a4

Abstract

In South Africa, wage garnishment is achieved through the emolument attachment order (hereafter “EAO”) mechanism. This civil debtcollection instrument plays a significant role in South African society, affecting the lives of potentially millions of people. It is therefore concerning that the mechanism is often criticised for lacking effective measures to prevent, monitor, identify and then correct irregularities in the collection of debt through EAOs. This contribution considers the historical context that directed the development of the South African EAO mechanism and the composition of the current South African framework regulating EAOs. It considers South Africa’s unique legal approach resulting from the development of common-law procedural affordances supporting a predominantly civil-law substantive system. It analyses the role of Roman law, Roman-Dutch law, English common law, and the constitutional dispensation in shaping the contemporary EAO mechanism. In the process, the study identifies challenges that have been present since the mechanism’s earliest origins, which can be traced through its historic development and remain contentious in its contemporary version. The study is significant since the EAO mechanism has not yet been subjected to a comprehensive and critical analysis of this kind. Limited research has been conducted on the South African EAO mechanism and there has not been any detailed analysis of its history and development. It is submitted that such an analysis is a necessary first step to facilitate further in-depth comparative research with the aim of developing an effective and fair EAO mechanism.

The myth of a central role by institutional shareholders in corporate governance

by | Nov 19, 2022 | JCCL, JCCL V8 I1

The myth of a central role by institutional shareholders in corporate governance

Author: Ntombizodwa Lucia Zikhali

ISSN: 2521-2575
Affiliations: Candidate Legal Practitioner, Gildenhuys Malatji Inc
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2021, p. 1 – 20
https://doi.org/10.47348/JCCL/V8/i1a1

Abstract

The need for transparent and high standards of corporate governance is expressly highlighted in s 7 of the Companies Act 71 of 2008. There has been a wide call by those concerned with corporate governance for institutional investors to take a central role in ensuring corporate governance reform is successfully achieved. A number of concerns are highlighted that stand in contrast with this expectation of institutional investors taking on such a lead role. These concerns relate to competition in the investment market, performance incentives, short-termism, unwarranted interference with director authority, lack of expertise, the burden of investment and existing statutory mechanisms making this expectation unrealistic and a potential for more problems rather than a solution.

Personal liability of non-executive directors in South Africa: A global comparative analysis

by | Nov 19, 2022 | JCCL, JCCL V8 I1

Personal liability of non-executive directors in South Africa: A global comparative analysis

Author: Mutsa D Danha

ISSN: 2521-2575
Affiliations: Tutor and LLM candidate, Learning Space Tuition and Wits Law School
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2021, p. 21 – 34
https://doi.org/10.47348/JCCL/V8/i1a2

Abstract

The South African Companies Act 71 of 2008 (SA Companies Act) contains extensive provisions detailing the circumstances under which directors may be held personally liable for their actions completed while carrying out their duties. These statutory provisions are a partial codification and modernisation of the existing commonlaw provisions that had previously regulated this area of company law. These provisions still apply to the extent that they comply with the Act’s statutory provisions. The common-law tradition in South African company law has its roots in the English common law, which has spawned many other legal traditions, from that applicable in Australia to the tradition that has emerged (and diverged) in the United States of America. This article examines whether, in applying the statutory provisions of the SA Companies Act, the manner in which personal liability may be ascribed to directors would amount to a standard more onerous than jurisdictions with similar legal traditions to South Africa and, as such, render the position of director in South Africa as (comparatively) undesirable. A further examination of whether a director is an executive or a non-executive director is relevant to establish whether liability will ensue and to confirm the position in South African law on this matter. Some of the distinctions between such directors are laid out in the seminal case of Kaimowitz v Delahunt. Overall, this article seeks to ascertain whether the trajectory of South African company law is aligned with the modern forms of the same law that have evolved in its ‘sibling jurisdictions’ (legally speaking). It further seeks to establish whether any variance thereof would result in unintended detriment to the aims of the concerned laws – that is, promoting good corporate governance, and thus attracting good corporate leaders to the Republic.

Co-existence of statutory provisions and common-law rules make the smooth application of the Companies Act of 2008 to be untenable in certain respects

by | Nov 19, 2022 | JCCL, JCCL V8 I1

Co-existence of statutory provisions and common-law rules make the smooth application of the Companies Act of 2008 to be untenable in certain respects

Author: Batool Hayath

ISSN: 2521-2575
Affiliations: Attorney of the High Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2021, p. 35 – 49
https://doi.org/10.47348/JCCL/V8/i1a3

Abstract

The Companies Act 71 of 2008 does not provide a complete codification of company law in South Africa, with the common law still having application. While the Act has done away with certain common-law rules, for instance, the common-law derivative action, it has, in other instances, maintained a co-existence of commonlaw rules and statutory provisions. This article discusses how the coexistence of common-law rules and statutory provisions impacts the smooth application of the Act in the context of the Turquand Rule, pre-incorporation contracts and the common-law stipulatio alteri, and the partial codification of directors’ duties in the Act.

Is directors’ liability under the Companies Act of 2008 a potentially dangerous trap in comparison to other jurisdictions?

by | Nov 19, 2022 | JCCL, JCCL V8 I1

Is directors’ liability under the Companies Act of 2008 a potentially dangerous trap in comparison to other jurisdictions?

Author: Joshua Horney

ISSN: 2521-2575
Affiliations: Candidate Attorney, Macgregor Erasmus Attorneys
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2021, p. 50 – 66
https://doi.org/10.47348/JCCL/V8/i1a4

Abstract

Company law jurisprudence is still emerging in South Africa, especially with the birth of the comprehensive Companies Act 71 of 2008. Academics have focused on directorial duties, with harsh criticism on the shoulders of the legislature. This piece examines the role of non-executive directors specifically but directors holistically under South African law to potentially illustrate how red tape and compliance are strangling this role. Arriving at this conclusion, directorial duties under the common law and the Act are compared and scrutinised. In addition, directorial protective instruments are tested to analyse whether the Act has sufficiently protected directors enough to allow for entrepreneurship and risk-taking but also to hold overstepping directors accountable for extensive breaches of director duties.