A sale agreement had been signed on behalf of a trust, as purchaser, by a single trustee whose conduct was thereafter ratified by the remaining trustees. The court held that the agreement of sale was not valid and enforceable and it could not be ratified after the fact. In terms of section 2(1) of the Alienation of Land Act 68 of 1981, a contract of alienation of land must be in writing and signed by…

Financial Institutions Legal Snapshot

The elements of defamation

By Patrick Bracher (ZA) on June 11, 2019

The Johannesburg High Court discussed the balance between the constitutional right of freedom of expression and the required respect for inherent dignity ‘to all human beings’. The defendant argued the allegedly defamatory statements made about the plaintiff were true and in the public interest. It is for the defendant in a defamation claim to establish the truth of the allegations and the fact that they are in the public interest. The context in which the…

Financial Institutions Legal Snapshot

When the Master compiles a panel of liquidators it is administrative action

By Patrick Bracher (ZA) on June 9, 2019

One of the functions of the Master of the High Court is to compile a panel of suitable candidates to be appointed as liquidators or trustees of insolvent persons and to remove people who are unsuitable. The adding or exclusion of persons from the panel is administrative action for the purposes of the Promotion of Administrative Justice Act and can be reviewed by a court. Establishing a panel of approved functionaries facilitates the exercise of…

Financial Institutions Legal Snapshot

Exclusion of liability in carriage document for deck cargo

By Patrick Bracher (ZA) on June 9, 2019

Where a bill of lading provided that ‘the carrier shall in no case be responsible for loss of or damage to the cargo, howsoever arising … in respect of deck cargo’ the English High Court held that the provision effectively excluded liability for deck cargo which was lost overboard from the vessel in heavy seas. Where liability may realistically arise otherwise than through negligence, the exemption clause should usually be interpreted as not exempting liability…

Financial Institutions Legal Snapshot

Words on social media must be read in conversational context

By Patrick Bracher (ZA) on June 9, 2019

Extraordinarily, the English Supreme Court had to decide whether the words ‘he tried to strangle me’ used on a Facebook post by a woman regarding her ex-husband meant that ‘he tried to kill me’ and damaged his reputation, hence the defamation claim. The lower court, after an analysis of dictionary meanings of the word ‘strangle’, found that the ordinary reader would have understood the word to mean that the ex-husband had attempted to kill her…

Financial Institutions Legal Snapshot

Employees of municipality and government proportionately liable for breach of finance management laws

By Patrick Bracher (ZA) on June 6, 2019

Where a former managing director of a municipal entity was sued by that entity for alleged breach of the Municipal Finance Management Act 2003 (MFMA) it was held that she was entitled to join 19 other municipal officials on the ground that they were allegedly joint wrongdoers and equally liable to the municipality if she herself was liable for breach of various responsibilities whilst she was in office. The claim of R2 969 489 was founded on…

Financial Institutions Legal Snapshot

Importing a tacit term into a contract

By Patrick Bracher (ZA) on May 28, 2019

Where a non-variation clause and a whole agreement clause were included in a comprehensive contract dealing in detail with the subject matter between the parties, the court refused to import a tacit term into the contract. A tacit term is an unexpressed provision in the contract which derives from the common intention of the parties and which is inferred from the express terms of the contract and the surrounding circumstances. The courts are generally slow…

Financial Institutions Legal Snapshot

Take implementation, good faith and disclosure clauses seriously

By Patrick Bracher (ZA) on May 28, 2019

Where one of the parties to a contract had secretly entered into agreements with third parties to gain an unfair advantage for itself, the court held that it was in breach of the good faith and non-disclosure provisions and liable for damages. The implementation clause required the parties ‘to do all such things, perform all such acts and to take all steps to procure the doing of all such things and the performance of all…

Financial Institutions Legal Snapshot

Suspensive condition of tender not met – no valid contract

By Patrick Bracher (ZA) on May 15, 2019

A builder submitted a tender to the Development Bank of Southern Africa (DBSA) for construction of a school. The tender was ‘conditionally accepted’ and further documents had to be submitted by a deadline date after which the construction contract would be signed. The documents were not submitted in time nor was the construction contract signed. It was held that there was no acceptance of the tender and therefore no contract despite the fact that the…

Financial Institutions Legal Snapshot

Guidance on conducting insurance business in terms of section 5 of the Insurance Act

By Claudia Eisenberg Jackson on May 7, 2019

Section 5(1) of the Insurance Act 2017 prohibits any person from conducting insurance (including reinsurance) business in South Africa unless licensed under the Act. Under section 5(2), a foreign re/insurer will be regarded as conducting insurance business in South Africa if that foreign re/insurer, or another person on its behalf, directly acts in South in respect of the foreign insurance business. The wording of section 5(2) is wide and includes intermediary services performed on behalf…

Financial Institutions Legal Snapshot

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The trustees’ authority to act on behalf of a trust

The elements of defamation

When the Master compiles a panel of liquidators it is administrative action

Exclusion of liability in carriage document for deck cargo

Words on social media must be read in conversational context

Employees of municipality and government proportionately liable for breach of finance management laws

Importing a tacit term into a contract

Take implementation, good faith and disclosure clauses seriously

Suspensive condition of tender not met – no valid contract

Guidance on conducting insurance business in terms of section 5 of the Insurance Act

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