The actio pro socio revisited

by | Jul 22, 2020 | SAMLJ, SAMLJ V31 I1

The actio pro socio revisited

Author Elizabeth Snyman-Van Deventer

ISSN: 1996-2185
Affiliations: Professor, Mercantile Law, Faculty of Law, University of the Free State, BIuris LLB LLM LLM LLD (UFS).
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 76 – 89

Abstract

The common-law actio pro socio has become part of the South African law of partnership as the action by which partners’ mutual rights and duties can be enforced. Although it is generally accepted that the actio pro socio can be instituted on the dissolution of the partnership, whether it can also be brought while the partnership still exists is less clear. In an attempt to bring greater clarity on the issue, this contribution defines the position of actio pro socio in South African law, and then takes the reader on a brief chronological journey through the South African case law which has crafted the country’s approach to this remedy. It emerges that the courts’ distinguish between bringing the actio pro socio while the partnership still exists and after its dissolution, and that it is indeed possible to institute the action during the existence of the partnership without automatically signalling its dissolution. This is also confirmed by Roman and Roman-Dutch law. Those instrumental in shaping the country’s law of partnership are therefore urged not to lose sight of the Roman and Roman-Dutch origins of this arm of the law in developing a generally empowering partnership law for South Africa.

Opening pandora’s box: the ‘confidentiality’ clause in the international trade administration commission’s amended tariff investigations regulations

by | Jul 22, 2020 | SAMLJ, SAMLJ V31 I1

Opening pandora’s box: the ‘confidentiality’ clause in the international trade administration commission’s amended tariff investigations regulations

Author Clive Vinti

ISSN: 1996-2185
Affiliations: Lecturer, Department of Public Law, University of the Free State, LLB (cum laude) (UFH) LLM (UCT).
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 90 – 106

Abstract

The Amended Tariff Investigations Regulations (‘ATR’) allow an applicant to apply for a tariff increase on a product so as to protect the local industry from the pressure exerted by imported products. This amendment of a tariff or customs duty is preceded by an investigation by the International Trade Administration Commission (‘ITAC’), which assesses the merits of this application. During this investigation, ITAC requires the party applying for the tariff increase (or amendment) to provide certain information that could either justify or controvert the merits for the amendment of the tariff. However, this information may contain ‘confidential’ information that coincidently justifies the tariff increase but at the same time, also divulges the competitive advantage of the applicant. The ATR permits the non-disclosure of this information if it finds it to be ‘confidential’. This paper then explores the ATR’s attempt at finding the balance between divulging enough information for interested parties to defend their interests and at the same time, to protect the ‘confidentiality’ of the competitive advantage of the applicant for a tariff increase. It is my view that the ATR fails to achieve this balance and thus, compels interested parties to defend their interests in the dark.

Diminution’ in share value and third-party claims for pure economic loss: the question of director liability to shareholders

by | Jul 22, 2020 | SAMLJ, SAMLJ V31 I1

Diminution’ in share value and third-party claims for pure economic loss: the question of director liability to shareholders

Author Brightonmmupangavanhu

ISSN: 1996-2185
Affiliations: Senior Lecturer in Law, University of the Western Cape, PhD Commercial Law (UCT), LLM Environmental Law (UKZN), LLB (Fort Hare)
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 107 – 128

Abstract

When a shareholder suffers pure economic loss as a consequence of a reduction in shareholding value, the natural temptation for a shareholder is to seek a remedy that includes a personal claim against a director. This is because directors, as agents of a company, are decision-makers in a company. However, the common law in South Africa and elsewhere holds that a shareholder does not have a cause of action to recover personal damages against a director simply because a company in which he or she holds shares, suffered damages. This article argues that the Supreme Court of Appeal (SCA) in Itzikowitz v Absa Bank Limited confirmed that this principle still applies in South African common law. Yet, despite the SCA clarifying the contours between delicts committed against a company and those committed against a shareholder, there are still cases in which shareholders seek damages against directors for pure economic losses suffered by him or her. This article identifies the ambiguity in section 218(2) of the Companies Act 71 of 2008 as part of the problem. Suggestions are made to adopt a judicial approach to the interpretation of section 218(2) in order to distinguish between instances where the general remedy under section 218(2) is applicable and instances when it is not. The focus first falls on the correct position at common law regarding a remedy for pure economic losses. Thereafter, the focus moves to the proper interpretation of section 218(2) in order to ensure that courts do not arrive at an absurd outcome—that is, to avoid an absurdity so glaring that it could never have been contemplated by the legislature.

Do business rescue proceedings affect the liability of sureties of the company?

by | Jul 22, 2020 | SAMLJ, SAMLJ V31 I1

Do business rescue proceedings affect the liability of sureties of the company?

Author Simphiwe P Phungula

ISSN: 1996-2185
Affiliations: Lecturer, School of Law, University of KwaZulu-Natal, LLB LLM (UKZN)
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 129 – 144

Abstract

This article deals with the legal position of sureties of a company that has commenced business rescue. It analyses how sections 133 and 154 of the Companies Act apply to debts incurred by the company and whether these sections extend to sureties by examining how the courts interpret sections 133 and 154 in relation to the liability of sureties for the debts of the company. It starts by explaining the general legal principles governing suretyship, and then addresses sections 133 and 154 and their impact on the sureties of a company undergoing business rescue.

To foreclose or not to foreclose: revealing the ‘cracks’ within the residential foreclosure process in South Africa

by | Jul 22, 2020 | SAMLJ, SAMLJ V31 I1

To foreclose or not to foreclose: revealing the ‘cracks’ within the residential foreclosure process in South Africa

Authors Ciresh Singh

ISSN: 1996-2185
Affiliations: LLB, LLM, PhD Candidate at the University of KwaZulu-Natal.
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 145 – 162

Abstract

The execution against hypothecated immovable property, also known as foreclosure, involves a delicate balancing of mortgagor and mortgagee rights. Section 26(1) of the Constitution of the Republic of South Africa, 1996 (‘Constitution’) provides that ‘everyone has the right to have access to adequate housing’. Foreclosure can be seen as an infringement of a mortgagor’s right to have access to adequate housing. Thus, during foreclosure a balance needs to be struck between the mortgagor’s right to have access to adequate housing and the mortgagee’s foreclosure rights. Unfortunately, South African law has not provided clarity on the balancing of mortgagor and mortgagee rights during the foreclosure process and this has resulted in considerable inconsistency. With the exception of rule 46A of the Uniform Rules of Court, there is no specific legislation that governs foreclosure process. This ‘crack’ in the law is concerning given the economic and social impact of mortgage and foreclosure. The argument in this article is that current rules governing foreclosure are inadequate and lack a structured framework. In particular, the current laws do not provide any clarity as to when foreclosure against a home is justifiable or when it is not, nor do they provide any guidelines for courts to consider during foreclosure proceedings. This lack of clarity has resulted in much confusion, and it is submitted that there is a need for establishing clarity for purposes of certainty in law regarding foreclosure. Accordingly, it will be suggested that the adoption of a ‘Foreclosure Act’ is required to establish clarity in foreclosure process and fairly balance the interests of all parties concerned during foreclosure against a home.

Tackling the Boko Haram Insurgency: Causes, Challenges and Responses

by | Oct 25, 2019 | SAMLJ, SAMLJ V26 I1

Tackling the Boko Haram Insurgency: Causes, Challenges and Responses

Authors Michael Addaney

ISSN: 2521-2583
Affiliations: None
Source: South African Yearbook of International Law, 2014, p. 157 – 171

Abstract

Over the past five years, a wide ambit of narratives has been proffered on the Boko Haram insurgence in northern Nigeria, particularly its causes and possible solutions. Most of these narratives conflict and thus compete with one another. This is effectively making it difficult for the government of Nigeria and the international community to devise a clearcut approach to deal with the crisis. It has also played an immense role in worsening the relationship between the predominantly Muslim North and the mainly Christian South. This paper critically tests a number of existing narratives that seek both to explain the origins of Boko Haram and propose solutions. It does this through a meta-analysis and critical content analysis of literature as well as information from both local and international media sources. It is organised under two commanding schools of thought: (i) the human development theory and (ii) the Islamic-state theory. Without doubt, the Boko Haram phenomenon is extremely complex. Yet these two theoretical explanations of the insurgence have a significant influence on public thinking about the crisis. While the Islamic-state theory seems to be mainly advanced by the locals who are mostly civilians (Nigerians), the West tends to think that human development issues of poverty are more important. It was found that there was no specific authoritative way of thinking about the crisis in terms of its causes. The study is designed to play an instrumental role in finding a sustainable solution for the crisis in a modest way. In terms of solutions, however, a military intervention through force is suitable should dialogue fail by March 2015.