Financial Institutions Legal Snapshot

South African banking, finance and insurance law know-how

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Powers of CIPC to investigate a Companies Act related complaint

By Patrick Bracher (ZA) on June 25, 2019

The Supreme Court of Appeal made important findings regarding the powers of the Companies Commission to investigate a complaint. Where the complaint relates to the inaccuracy of the company records as to who was a director, the failure to ensure that the record was maintained accurately constitutes either an ongoing act or omission under section 219(1)(a) of the Companies Act and the right to investigate does not stop after three years. Secondly, the fact that there…

Financial Institutions Legal Snapshot

Cyber risk warnings for insurers

By Patrick Bracher (ZA) on June 18, 2019

The cautionary warnings continue for insurers regarding the cyber risks that they underwrite. Although cybersure is seen as one of the major opportunities for the insurance industry, there are a number of risks including the increasing frequency of cyberattacks, the difficulty in pricing for the risks, and the fact that existing policies, including liability and property policies, may be invoked to pay claims which have never been priced for. In May 2019, Beazley of London…

Financial Institutions Legal Snapshot

Restrictions on transfer of benefits on termination of pension fund membership is valid

By Michelle David on June 18, 2019

Provisions in pension fund rules that a member may not withdraw from membership of the fund while remaining in service of the employer to transfer benefits to another fund, were held to be valid and not unconstitutional or contrary to public policy, said the appeal court. Section 13A(5) of the Pension Funds Act read with the definition of ‘member’ means that a person cannot demand the transfer of any benefits from one fund to another fund…

Financial Institutions Legal Snapshot

The trustees’ authority to act on behalf of a trust

By Carina van Vuuren on June 13, 2019

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

South African banking, finance and insurance law know-how

Powers of CIPC to investigate a Companies Act related complaint

Cyber risk warnings for insurers

Restrictions on transfer of benefits on termination of pension fund membership is valid

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

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