A critical assessment of the regulation of cryptocurrency in Nigeria

by | Apr 19, 2025 | SAMLJ, SAMLJ V36 I3

A critical assessment of the regulation of cryptocurrency in Nigeria

Author: Isau Ahmed Olatunji

ISSN: 1996-2185
Affiliations: Senior Lecturer, Department of Business and Private Law, Faculty of Law, Kwara State University
Source: South African Mercantile Law Journal, Volume 36 Issue 3, 2024, p. 457 – 481
https://doi.org/10.47348/SAMLJ/v36/i3a6

 Abstract

Over the years, there has been a tremendous increase in the use of cryptocurrency as a virtual means and form of payment worldwide. However, in recent years, there has been a steady increase in the use of cryptocurrency for illicit and criminal activities such as money laundering, financing terrorism and other illegal activities. In addition, the virtual nature of cryptocurrency creates opportunities for tax evasion thereby constituting a serious tax challenge for countries. This makes it necessary for countries to put in place measures to regulate cryptocurrency to prevent its use for illicit and criminal activities. Various countries have established certain measures and legislations to regulate the use of cryptocurrency. The objective of this article is to examine nature of cryptocurrency as well as its regulation in some selected jurisdictions. The paper will also examine how cryptocurrency is currently regulated in Nigeria.

The role, relevance and effect of the strike in the 4IR Age of Auto and Robots: A South African Perspective

by | Apr 19, 2025 | SAMLJ, SAMLJ V36 I3

The role, relevance and effect of the strike in the 4IR Age of Auto and Robots: A South African Perspective

Authors: Nozipho Gwala & Lux Kwena Kubjana

ISSN: 1996-2185
Affiliations: LLB student, University of South Africa; Senior Lecturer, Department of Mercantile Law, University of South Africa
Source: South African Mercantile Law Journal, Volume 36 Issue 3, 2024, p. 482 – 494
https://doi.org/10.47348/SAMLJ/v36/i3a7

 Abstract

A strike has always been an integral part of effective collective bargaining, and the only weapon in the hands of employees against an employer. Not only is a strike believed to be to collective bargaining what an engine is to a vehicle, but it is also something without which, collective bargaining would become collective begging. These observations highlight a premium put on a strike and clarify its critical role and relevance in the realisation of effective collective bargaining. This article explores the role, relevance, and effect of the strike in the Fourth Industrial Revolution (‘4IR’) context. The article understands the link between labour intensity, as the employees’ potential source of strength, and effective collective bargaining. And then, it poses the question: Is this the beginning of the end of the strike, or an opportunity for the reinvention of collective bargaining? While the article appreciates innovation and the changing employment landscape brought about by the 4IR, it questions how these changes would affect the role, relevance, and effect of the strike when full automation is rolled out. The purpose of the article is to explore alternatives to fill the vacuum likely to be left by the erosion of the strike, owing to automation.

Putting the unconstitutionality of deemed discharge behind us? A review of recent developments on deemed dismissals

by | Apr 19, 2025 | SAMLJ, SAMLJ V36 I3

Putting the unconstitutionality of deemed discharge behind us? A review of recent developments on deemed dismissals

Author: Vuyo Ntsangane Peach

ISSN: 1996-2185
Affiliations: Associate Professor, University of South Africa
Source: South African Mercantile Law Journal, Volume 36 Issue 3, 2024, p. 495 – 515
https://doi.org/10.47348/SAMLJ/v36/i3a8

 Abstract

Deemed dismissal or discharge, alternatively called termination of employment by operation of law (ex lege) is one of the most disputable issues in constitutional labour law. A termination of employment by operation of law arises when an employee absents himself or herself from his or her official duty for a period exceeding 30 days. Significantly, procedural safeguards against unfair dismissal are attenuated because the affected employee is given a semblance of a hearing. Moreover, the employee is asked to show cause why he or she should not be discharged. Since the authorities are clear that where dismissal is precipitated by the operation of law and there is no right to a hearing, deemed discharge unarguably represents far-reaching encroachment on the constitutional guarantee to fair labour practices and the statutory right not to be unfairly treated. An employee who is deemed dismissed has a restricted access to the purpose-built labour dispute resolution forums established by the Labour Relations Act 66 of 1995. Although the uncertainties concerning the unconstitutionality of the deeming dismissal provisions were cast aside in Phethini v Minister of Education (2006) 27 ILJ 477 (SCA), the jurisdictional complexities displayed in recent cases such as Western Cape v Weder and MEC for Dept of Health [2014] 4 BLLR 393 (LC), Ramonetha v Department of Roads and Transport, Limpopo [2018] 1 BLLR 16 (LAC), Minister of Defence and Military Veterans v Mamasedi 2018 (2) SA 305 (SCA), Maswanganyi v Minister of Defence and Military Veterans (2020) 41 ILJ 1287 (CC) and Masinga v Chief of the SANDF [2022] ZASCA 1 (5 January 2022) compel a rethink of the constitutionality of the deemed discharge provisions.

A comparative critical analysis of the effectiveness of Remuneration Committees in the determination of executive remuneration in South Africa

by | Apr 19, 2025 | SAMLJ, SAMLJ V36 I3

A comparative critical analysis of the effectiveness of Remuneration Committees in the determination of executive remuneration in South Africa

Authors: Ophellia Kimbini, Rehana Cassim & Michele Havenga

ISSN: 1996-2185
Affiliations: LLD candidate, Department of Mercantile Law, University of South Africa; Professor, Department of Mercantile Law, University of South Africa; Professor Emeritus, University of South Africa
Source: South African Mercantile Law Journal, Volume 36 Issue 3, 2024, p. 516 – 543
https://doi.org/10.47348/SAMLJ/v36/i3a9

 Abstract

Over the years, executive remuneration has been significantly increasing, and several jurisdictions have established specific corporate governance measures to manage this remuneration. Establishing effective remuneration committees is one of the measures that could be used to curtail the spiralling of executive remuneration. This article examines the role of remuneration committees, their effectiveness in setting executive remuneration, and how they are regulated in South Africa. The article aims to determine whether and how to enhance the use of these committees by South African companies. It examines how these committees are regulated by the Companies Act 71 of 2008, the JSE Limited Listings Requirements, and the King IVTM Report on Governance for South Africa, 2016. It also compares how the United Kingdom, Australia, and the United States of America regulate the use of remuneration committees in their corporate governance regimes.

Franchise termination with particular reference to the petroleum sector: Goodbye and good luck, but who owns the goodwill?

by | Apr 19, 2025 | SAMLJ, SAMLJ V36 I3

Franchise termination with particular reference to the petroleum sector: Goodbye and good luck, but who owns the goodwill?

Author: Tanya Woker

ISSN: 1996-2185
Affiliations: Professor of Law (Retired), and Senior Research Associate, University of KwaZulu-Natal (Durban)
Source: South African Mercantile Law Journal, Volume 36 Issue 3, 2024, p. 544 – 571
https://doi.org/10.47348/SAMLJ/v36/i3a10

 Abstract

This article focuses on the controversial issue of franchise agreement termination with particular reference to the petroleum sector. Although franchisees are said to ‘own’ their own businesses, it is never intended that they will have access to the franchisor’s trademarks and other intellectual property on a permanent basis. The franchise relationship will eventually terminate. The question then arises: who owns the goodwill of the particular franchise outlet operated by the franchisee – franchisee or franchisor? The issue of goodwill has arisen in a number of petroleum sector related cases recently, including the Constitutional Court, and although the courts have referred to goodwill, the question has not been definitively addressed. This article seeks to show why the issue of goodwill is a complicated issue in the context of franchise termination, how goodwill is traditionally dealt with in franchise agreements and to make some suggestions going forward. This topic is complex especially since it is not always easy to distinguish national or international goodwill from local goodwill. The two are deeply entwined. So, there is a need for further and more detailed research. This article is intended to start the debate.

No Boardroom, No Debate: Resolving the Tension Between Round-Robin Resolutions and Company Law Democratic Principles

by | Apr 14, 2025 | BTCLQ, BTCLQ V16 I1

No Boardroom, No Debate: Resolving the Tension Between Round-Robin Resolutions and Company Law Democratic Principles

Authors: Matthew Blumberg SC and Matt Williams

ISSN: 2219-1585
Affiliations: N/A
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 1, 2025, p. 1 – 6

Abstract

The primary decision-making organ of a company is its board of directors. The board functions based on majority rule, but only once the minority has had an opportunity of ventilating their views. This is the basic democratic principle of our company law. Board decisions are normally made at board meetings, where the minority has a forum to ventilate their view. But board decisions can also be made through round-robin resolutions, where there is no meeting. Without a meeting, the minority has no forum to ventilate their views. There is therefore a measure of tension between (non-unanimous) round-robin resolutions and the basic democratic principle. In this article, we consider — following a recent High Court judgment on the topic — how this tension is to be resolved. We describe the basic democratic principle and demonstrate that it is also reflected in the provisions of the Companies Act 71 of 2008. We then explore the tension between (non-unanimous) round-robin decision-making and the basic democratic principle. We conclude — as did the court in the aforementioned judgment — that any potential tension is reconciled through the requirement of proper notice. In this way, round-robin resolutions strike a balance — between pragmatism and efficiency, on the one hand, and adherence to the democratic principle, on the other.

The Deferral of Unrealised Foreign Exchange Gains and Losses Rules, and the Applicability to Parties Other Than the Lender or Borrower

by | Apr 14, 2025 | BTCLQ, BTCLQ V16 I1

The Deferral of Unrealised Foreign Exchange Gains and Losses Rules, and the Applicability to Parties Other Than the Lender or Borrower

Author: Michael Rudnicki

ISSN: 2219-1585
Affiliations: N/A
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 1, 2025, p. 7 – 13

Abstract

This article considers the tax rules in relation to the deferral of unrealised foreign exchange gains and losses (referred to in tax terms as ‘exchange differences’) in respect of foreign loans between related parties and whether the deferral rules can be extended to include parties to the loan agreement other than the debtor and creditor. The rules applicable to foreign exchange gains and losses are dealt with in section 24I of the Income Tax Act, 1962 (‘the Act’). This provision subjects realised gains or losses to income tax, but defers the tax treatment of exchange differences on certain loans and debts to subsequent years in which the underlying asset is brought into use.
Unrealised foreign exchange gains and losses (referred to as ‘exchange differences’) in respect of foreign currency loans (loans in foreign currency constitute ‘exchange items’) between related parties are deferred until the settlement or realised date of the loan, meaning that these gains and losses are not reflected in taxable income while the loan is not settled.
The deferral rules applicable to a ‘group of companies’ and ‘connected persons’ are found in section 24I(10A)(a) of the Act. The rules are comprehensive, but the particular issue for consideration in this article is the meaning of the words in the following extract:
‘… [N]o exchange difference arising during any year of assessment in respect of an exchange item … shall be included in or deducted from the income of a person in terms of this section—
(i) if, at the end of that year of assessment—
(aa) that person and the other party to the contractual provisions of that exchange item—
(A) form part of the same group of companies; or
(B) are connected persons in relation to each other …’ (my emphasis).
The key question considered in this article is whether a guarantor to a loan agreement or any other party for that matter, being a party to a loan agreement, brings the agreement within the ambit of section 24I(10A)(a)(i)(aa), where such party or parties are either a ‘connected person’ in relation to the borrower or part of the same ‘group of companies. The hypothesis here is that these entities are party to the contractual provisions of the exchange item, namely the loan. The crisp issue is whether ‘the other party’ referred to in section 24I(10A)(a)(i)(aa) is intended to apply narrowly to a typical lender-borrower relationship or whether it should apply broadly to any party to the contractual provisions of an exchange item.
The article considers principles of statutory interpretation applicable to the definitive article ‘the’ in respect of ‘the other party’. It is submitted that the legislature could have used phrases such as ‘a party’, ‘any party’ or ‘another party’ but instead deliberately chose the phrase ‘the other party’. The article concludes that the provisions must have been intended to apply to an arrangement between the borrower and lender in the context of a loan arrangement and not any other party to the contractual provisions of the loan arrangement.
Accordingly, it is submitted that the deferral of unrealised gains and losses in respect of a foreign loan or debt between parties within a ‘group of companies’, or who are ‘connected persons’, is restricted to the debtor and creditor in relation to the loan agreement and does not extend to other persons (such as a guarantor) that may be party to such an agreement.

Asset-for-share Transactions: The Number-of-Shares Conundrum

by | Apr 14, 2025 | BTCLQ, BTCLQ V16 I1

Asset-for-share Transactions: The Number-of-Shares Conundrum

Author: Duncan Mcallister

ISSN: 2219-1585
Affiliations: MCom (Tax), CA(SA)
Source: Business Tax & Company Law Quarterly, Volume 16 Issue 1, 2025, p. 14 – 19

Abstract

This article relates to asset-for-share transactions under section 42 of the Income Tax Act and addresses the question as to how many shares must be issued to the transferee company in exchange for the asset or assets transferred, so as to comply with the section.
The author gives examples to illustrate the operation of section 42 and the problems that can arise in asset-for-share transactions, particularly where assets have different values and more than one share is issued in exchange. It is suggested that if there are insufficient shares available to match the relative value of the assets being exchanged, the solution is to allocate the aggregate base cost of the assets to the shares issued. This solution will not, however work in the case of pre-valuation date assets, for which there are different methods prescribed for determining value. In such a case, the solution suggested is to allocate shares with distinctive certificate numbers to particular pre-valuation date assets based on their relative market value. The author suggests that, alternatively, it may be time for legislative intervention to simplify matters, by the introduction of a rule similar to that in paragraph 76B of the Eighth Schedule to the Act.
The article suggests that SARS should give comfort to taxpayers by adopting the suggested solution for post-valuation date assets in an Interpretation Note, or perhaps resorting to legislation to resolve the complexity. Finally, the article also considers the application and effect of the value-for-value rule in section 24BA of the Income Tax Act, which applies to section 42 asset-for-share transactions.

Tacit terms versus non-agreed obligation

by | Apr 13, 2025 | TSAR, TSAR 2025 I2

Tacit terms versus non-agreed obligations

Author: HCJ Flemming

ISSN: 1996-2207
Affiliations: Retired Deputy Judge President, Gauteng
Source: Tydskrif vir die Suid-Afrikaanse Reg, Issue 2, 2025, p. 231-246
https://doi.org/10.47348/TSAR/2025/i2a1

Abstract

Daar is alle rede om die toedig van ’n nie-ooreengekome kontraktuele reg te erken as ’n selfstandige proses om die ooreengekome doel van ’n kontrak te beskerm, vry van die omstandertoets. Die regspraak het in Suid Afrika in die verloop van sowat vyftig jaar sedert 1974 ’n rigting ingeslaan wat nie geregverdig kan word nie. Dit het onnodige inperking op die toedig van regte geskep en gepaardgaande onreg veroorsaak. ’n Ompad van spekulasie oor hoe ’n niebestaande mens ’n vraag sou geformuleer het, is onnodig en minder akkuraat as ’n direkte vraag na watter plan die partye sou gemaak het as hulle voorsien het watter onvolledigheid van die kontrak in die toekoms sou blyk.
In die proses is selfs die onuitgedrukte werklike ooreenkoms, die gebied waar die bystandertoets bekend geword het, met onaanvaarbare byvoegsels belas. Die beoordeling van ’n stilswyende beding (“tacit term”) moet gesuiwer word.

Expansion of a sectional title section onto the common property on which the owner has a registered garden exclusive use area

by | Apr 13, 2025 | TSAR, TSAR 2025 I2

Expansion of a sectional title section onto the common property on which the owner has a registered garden exclusive use area

Author: CG Van der Merwe

ISSN: 1996-2207
Affiliations: Senior Research Fellow and Emeritus Professor, Department of Private Law, University of Stellenbosch and Emeritus Professor of Civil Law, School of Law, University of Aberdeen
Source: Tydskrif vir die Suid-Afrikaanse Reg, Issue 2, 2025, p. 247-262
https://doi.org/10.47348/TSAR/2025/i2a2

Abstract

Greeff, die eienaar van ’n deeltiteleenheid in die Merriman Court deeltitelskema het verskeie kere probeer om sy deel uit te brei op ’n gedeelte van die gemeenskaplike eiendom waarop hy ’n geregistreerde eksklusiewe tuingebruiksreg gevestig het. Toe die regspersoon weier, nader hy die Wes-Kaapse hooggeregshof vir ’n magtigende verklarende bevel om voort te gaan met die uitbreiding op grond van die goedkeuring van die uitbreiding op ’n algemene vergadering in 2017. Die hof a quo beveel die regspersoon om ’n algemene vergadering te hou om die beoogde uitbreiding te magtig.
In ’n appèl na ’n volbank van die Wes-Kaapse hof in Merriman Court Body Corporate v Greeff, appelleer die regspersoon teen die regshulp aan Greeff op verskeie gronde en meer spesifiek op die grond daarvan dat Greeff nie die vereiste spesiale besluit vir sy uitbreiding op ’n algemene vergadering verkry het nie. Die volbank beslis dat Greeff nie kon bewys dat die uitbreidingsplan om ’n motorhuis op die gemeenskaplike eiendom op te rig op die 2007-algemene jaarvergadering goedgekeur is nie omdat die planne slegs in beginsel goedgekeur is; dat die notule van die April 2017-vergadering nie melding maak van ’n spesiale besluit wat Greeff magtig om die eenheid uit te brei nie; en dat die notule van die Augustus 2019-vergadering vermeld dat verskeie probleme met die konsepdeelplanne uitgewys is toe die planne onder die lede versprei is.
Die volbank bevind dat die beoogde boustruktuur slegs gewettig kon word indien eiendomsreg op die beboude gedeelte van die gemeenskaplike eiendom aan Greeff oorgedra word. Maar sowel artikel 2 van die Wet op Vervreemding van Grond as artikel 17(2) van die Wet op Deeltitels vereis ’n skriftelike beliggaming van ’n besluit deur ál die lede van die regspersoon dat hulle bewus is van die vervreemding van ’n gedeelte van die gemeenskaplike eiendom. Die volbank bevind dat die toepaslike wetgewing geen informele beskikking van gedeeltes van die gemeenskaplike eiendom toelaat nie, omdat elke geregistreerde deeltiteleienaar mede-eiendomsreg in onverdeelde aandele ooreenkomstig hulle deelnemingskwota het. ’n Boustruktuur kan nie gebou word op grond wat aan twee eienaars behoort sonder ’n skriftelike rekord van waar en hoe eiendomsreg in die boustruktuur ingevolge toepaslike wetgewing sal vestig nie.
Die volbank verduidelik dat die regspersoon gemagtig is om by wyse van ’n eenparige besluit gemeenskaplike eiendom te vervreem en die tersake akte ingevolge artikel 5(1)(a) van die Wet op die Bestuur van Deeltitelskemas te verly. Daarna moet die algemene vergadering die uitbreiding van die deel by wyse van ’n spesiale besluit ingevolge artikel 5(1)(h)) goedkeur. Die besluit ingevolge artikel 5(1)(a) moet bewustelik en nie bloot by verstek nie geneem word. Aangesien nie een van die twee bogenoemde besluite aan daardie statutêre voorskrifte voldoen nie, handhaaf die volbank die appèl en stel die bevel van die hof a quo tersyde.
Kritiese evaluering
Om sy doel te bereik, moet Greeff die volgende stappe neem.
(1) Greeff moet die gedeelte van die gemeenskaplike eiendom waarop hy sy deel wil uitbrei, kanselleer omdat die uitbreiding nie aan die oogmerk met ’n eksklusiewe tuingebruiksgebied voldoen nie. Hy moet dus ingevolge artikel 5(1)(f) aansoek doen vir die kansellasie van die eksklusiewe tuingebied op die gedeelte van die gemeenskaplike eiendom waarop hy sy uitbreiding wil vestig.
(2) Greeff moet dan die uitsluitlike gebruiksreg ten opsigte van daardie gedeelte van die gemeenskaplike eiendom kanselleer deur middel van ’n bilaterale notariële akte tussen homself en die regspersoon met ’n presiese aanduiding van die gedeelte van die tuinarea wat met die uitbreiding belas word.
(3) Vervolgens moet Greeff die uitbreiding laat goedkeur op ’n algemene vergadering deur ’n spesiale besluit. Aangesien die uitbreiding die redelike gebruik van die gemeenskaplike eiendom deur die ander deeleienaars benadeel, sal Greeff moet onderneem om die markwaarde van die betrokke grond in onbeboude toestand te betaal ten einde die vereiste spesiale besluit met ’n 75 persent meerderheid te verkry.
(4) Daarna moet Greeff verskeie bepalings van die Wet op Bouregulasies en Boustandaarde 103 van 1977 nakom.
(5) Uiteindelik moet Greeff ’n konsepdeelplan van uitbreiding deur ’n argitek of landmeter laat opstel en laat goedkeur deur die landmeter-generaal en daarna laat registreer in die aktekantoor.
Myns insiens was dit nie vir Greeff nodig om ’n eenparige besluit te verkry vir die vervreemding of verhuring van ’n gedeelte van die betrokke gemeenskaplike eiendom ten einde sy doel te bereik nie.
Ek meen dat artikel 24(3) van die Wet op Deeltitels ’n selfstandige bepaling is wat bepaal dat ’n deeltiteleienaar eiendomsreg van die gemeenskaplike eiendom verkry indien dit deur ’n spesiale besluit ingevolge artikel 5(1)(a) en nie ook ingevolge artikel 5(1)(h) nie gemagtig word. Ek het getoon dat die aanvaarding van sodanige besluit die betaling van ’n versoeter deur die eienaar aan die regspersoon se fondse sal vereis om die ander lede te oorreed om ten gunste van die besluit te stem as vergoeding vir die verlies van die redelike gebruik van daardie gedeelte van die gemeenskaplike eiendom. Die redes vir die aanvaarding van ’n eenparige besluit ingevolge artikel 17(1) het niks te make met die voorneme van Greeff om sy deel na ’n gedeelte van die gemeenskaplike eiendom uit te brei nie.
Verder hoef Greeff nie aan die bepalings van die Wet op Vervreemding van Grond te voldoen ten einde ongeveer sestien vierkante meter van die nuwe daktuinoppervlakte ter vergroting van sy uitsluitlike tuingebruiksarea aan die eienaar van deel 3 af te staan nie. Die volbank beslis dat die verkryging van eiendom van die grond belas met die uitbreiding in stryd is met die bepalings van die bogenoemde wet. Maar dit was nooit Greeff se bedoeling om eiendomsreg of ’n langtermynhuurkontrak van die grond wat hy verkry het, weg te gee nie. Sy doel was om die uitsluitlike tuingebruiksarea van die eienaar ingevolge artikel 3 uit te brei, miskien om die negatiewe visuele impak van die uitbreiding op sy naaste buurman te versoet.
Nieteenstaande hierdie twee klein punte van kritiek, moet die volbank geloof word vir die wyse uitspraak dat die voorskrifte van die toepaslike wetgewing en regulasies tot op die letter nagekom moet word. In hierdie geval het die hof bevind dat Greeff nie voldoen het aan die bepalings van artikel 6 van die Wet op die Bestuur van Deeleiendomskemas nie wat vereis dat ’n skriftelike kennisgewing wat die voorgestelde spesiale of eenparige besluit duidelik uiteen moet sit ten minste 30 dae voor die algemene vergadering aan alle lede gestuur moet word. Daarbenewens bepaal voorgeskrewe bestuursreël 17(7) dat die agenda van ’n jaarlikse of spesiale algemene vergadering die voorgestelde bewoording van spesiale of eenparige besluite moet bevat. Objektiewe bewys moet gelewer word dat die vergadering waarop die besluit geneem is, behoorlik byeengeroep is. Die ipse dixit van Greeff dat die vergadering informeel byeengeroep is om ’n spesiale of eenparige besluit te neem, getuig van swak bestuur van die skema en is onvoldoende.