Van Zyl Retief

Prescription: Lack of knowledge regarding legal conclusions

The Constitutional Court in the matter of Mtokonya v Minister of Police [2017] ZACC 33 dealt with the issue of extinctive prescription, in particular regarding whether section 12(3) of the Act requires a creditor to have knowledge of a debtor’s wrongful and actionable conduct, which gave rise to the debt, before prescription may start running against the creditor. Although the Supreme Court of Appeal has pronounced on this issue in a number of cases, the CC has never had the opportunity of pronouncing upon it until now. This case gave the CC an opportunity to pronounce, once and for all, on this issue to settle the law. In this case, the Applicant was arrested and detained by members of the Respondent on 27 September 2010. At the beginning of July 2013, the Applicant consulted an attorney, who after investigating the facts of his arrest and detention, informed him that he was unlawfully arrested and detained and as such had a civil claim for damages against the Respondent. The necessary notice was given to the Respondent in July 2013 and summons was served in April 2014. The Respondent contended that the Applicant’s claim had become prescribed, which the Applicant disputed on the basis that he did not know that he had any claim against the Respondent before consulting his attorney in July 2013 and as such the prescription of his claim could only start to run from July 2013, as this was the first time he obtained “knowledge” of the legal consequences of the actions of the Respondent. The question asked, upon which the Court had to make a ruling, was whether knowledge of a legal remedy is required for prescription to run? The starting point in considering this question, is to point out that the question calls for an analysis of section 12(3) of the Act. This section, in summary, provides that: As the general rule, prescription can only commence to run as soon as the debt is due, subject to three exceptions, namely: Prescription does not commence to run against a creditor if the debtor wilfully prevents him from coming to know of the existence of the debt; The debt is not deemed to be due until the creditor has knowledge of two things, namely knowledge of the identity of the debtor and knowledge of the facts from which the debt arose; and The creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care. The said section of the Act, clearly does not make provision for, nor does it require, the creditor to have knowledge of any right to sue the debtor. The Act also does not require him to have knowledge of legal conclusions that may be drawn from “the facts from which the debt arises”. The facts from which the debt arises are the facts which a creditor would need to prove in order to establish the liability of the debtor. The question arises, whether knowing that the conduct of the debtor is wrongful and actionable is knowledge of a fact? The section does not provide for, nor requires, knowledge of legal opinions or conclusions, or the availability in law of a remedy. A distinction between the question of fact and the question of law needs to be made, which in itself is not always easy to make. The Court considered this and relayed that a conclusion of law results when legal effects are assigned to events and that a question of fact usually calls for proof where a question of law usually calls for argument. The Court found that knowledge of a debtor’s wrongful and actionable conduct is knowledge of a legal conclusion and not knowledge of fact, and as such falls outside the scope of the Act. The facts from which a debt arises are the facts of the incident or transaction, which, if proved, would mean that in law the debtor is liable to the creditor. This case has now become settled law in that section 12(3) of the Act requires knowledge only of the material facts from which the debt arises for the prescriptive period to begin running – it does not require knowledge of the relevant legal conclusions (i.e. that the facts constitute negligence) or of the existence of an expert opinion which supports such conclusions. The interpretation and application of this Act remains technical in nature, and it is advised to obtain legal advice in the event of doubt. Reference List: Prescription Act 68 of 1969 Links v Department of Health, Northern [Cape} Province 2016 (4) SA 414 (CC) Mtokonya v Minister of Police [2017] ZACC 33 Loni v Member of the Executive Council, Department of Health Eastern Cape, Bhisho [2018] ZACC 2 This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Why vaccines should be encouraged in the workplace, but rarely enforced

The distribution of a COVID-19 vaccine is seen as a fundamental component to ending the pandemic. However, mandatory vaccinations in the workplace should be treated with caution by all employers. As it stands, there is currently no legislation in South African law that specifically requires an employee to be vaccinated against COVID-19. As a point of departure, the Occupational Health and Safety Act mandates all employers to provide and maintain a working environment that is safe and without risk to the health of their employees. In the same breath however, the National Health Act states that a health service, which includes the administration of any medication or vaccination, may not be provided to a person without their consent, unless the failure to treat the person will result in a serious risk to public health. Invariably, the question that now arises is whether an employer may, after considering these two pieces of legislation, enforce a compulsory vaccination policy in the workplace. The South African Constitution states unequivocally that everyone has the right to bodily and psychological integrity, which includes the right to security in and control over one’s body. The Constitution, however, also limits the right to bodily and psychological integrity to the extent that it is reasonable and justifiable in an open democratic society based on human dignity, equality, and freedom. In essence, an employer’s obligation to ensure a safe and healthy working environment must be balanced with the employees’ constitutional right to bodily integrity when determining whether there are justifiable grounds to limit the right. Furthermore, section 5(2) (c) of the Labour Relations Act bars an employer from prejudicing an employee for the employees’ failure or refusal to do something that the employer may not lawfully permit or require the employee to do. Similarly, section 187(1) (f) of the Labour Relations Act prohibits dismissals that discriminate against employees based on their religion, conscience, belief or culture. A similar prohibition is also contained in section 6(1) of the Employment Equity Act, which is also stands as a safeguard for employees. In light of the aforementioned legislative framework, a court of law may be hesitant to uphold an employer’s decision to dismiss an employee for refusing to subject themself to a COVID-19 vaccination. Therefore, it stands to reason that, an employer has an extremely limited scope to enforce a vaccination policy in the workplace. A challenge that an employer will have to face is the ability to provide the court with compelling reasons that, under the circumstances, the rights of the employee to refuse the vaccine are outweighed by other constitutional rights such as the right to a safe environment or the right to life by way of an example. In conclusion, there is no current legislation in South Africa that permits an employer to enforce a vaccination policy in the workplace or to dismiss employees for their refusal to be vaccinated. Therefore, as a general rule, an employee may not be dismissed for his or her refusal to be vaccinated. Employers do, however, have a limited scope to deviate from this general rule and may implement a vaccination policy in the workplace, provided that compelling reasons for its implementation exist. Employers are however, advised to do so with caution and to obtain expert advice before the implementation of such policies. Employers are encouraged to motivate employees to agree to be vaccinated through means of education as opposed to coercion. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The threat of fake news to your business

In the digital age, information is everywhere. At the click of a button a message can travel across oceans in the time it takes to blink. For the large part, it’s an incredible testament to human invention. But for some part, as with the spread of destructive fake news, it reveals our ugly side. In the time of COVID 19, fake news is especially destructive when it encourages methods of virus prevention that are untrue. And while most fake news regarding the coronavirus does not directly impact businesses, there have been plenty of instances where fake news regarding the virus have resulted in damages and losses: Fake News Causing Supply Shortages When South Africa was about to enter its lockdown at the end of March, we had already received reports of stockpiling taking place in other countries. Soon South African supermarkets also saw shortages of items like toilet paper and disinfectants. This caused supply shortages, resulting in empty racks in the stores. So, when a WhatsApp message attributed to Checkers was busy spreading in May, the Shoprite group had to act quickly to let consumers know that the claim was not true that “sugar, fish oil, rice, flour and soap powder” were facing a scarcity issue. Fake News Impersonating Real News While social media is a great tool to stay connected, it is also a conduit for fake news centred on trending topics. During the early development of the pandemic, sources impersonating well-known media outlets revelled in the panic that ensued by publishing false information regarding the spread of COVID-19. The news agencies that were being impersonated had to act quickly to quash the spread of misinformation and limit the disreputation caused. Fake News Leading to Arson As COVID-19 has been spreading this year, so too has 5G technology. This has led to countless rumours that 5G signals cause COVID-19. There is, however, no evidence that supports the claim. Not only is it scientifically impossible for radio waves to transmit a biological virus, but it is also clear that the coronavirus is spreading rapidly in places where 5G technology is absent. For telecommunication companies implementing 5G technologies across the country, the spread of misinformation can cause great damage. Not only can the spread of misinformation lead to decreased sales of devices that use 5G technology, but there have also been instances where misinformed people have set 5G towers alight. These are but some of the many instances where fake news had adverse effects. Since panic is heightened during a pandemic, misinformation can spread even faster than it usually does. Something as simple as a false report of a COVID-19 case at your place of business can be extremely damaging. Apart from the global COVID-19 pandemic, there are many other instances where fake news can damage a business. While most of the fake news in the digital universe is used to procure clicks and ad-revenue, fake news can also be fabricated to cause defamation, damage to brands, competitive sabotage, loss of customers, etc. Because of the reputational and financial damage that fake news can cause, it is paramount to respond to fake news swiftly and decisively. Unfortunately, though, many businesses are not geared to tackle the news that might affect them. For this reason, an action plan in the form of a rapid-response protocol is needed. Rapid-response protocol Identify the threat Before you respond to fake news, make sure that you know what false claims are being made. Although this step might seem obvious, it is crucial that your response is formulated in relation to the misinformation being spread and not as a result of hearsay or rumours. Evaluate the level of the threat Not all fake news will require a response. Consider what the impact the false news has (or can have) on your business. Does it relate to your business, a product/service being sold, or is it a fake news article with a more general scope? Only prepare to comment on fake news that might harm your business. Identify the truth Once you know what false claims are being made, compare what you know to be false with what you know to be true. Gather info that will help you formulate your response. If possible, it will be good to support your claims with concrete information that verifies the truth. Update all your online presences Although there may be people spreading fake news that impacts your business, it doesn’t mean that everyone will be as naïve to believe the news without verifying it. Your online presence (specifically your social media pages and website) is the most reliable source of public information. Make sure to debunk the fake news where people will be searching for your response. Formulate a press statement/release Write a release that both debunks the fake news and that expresses the reality of the issue put in question by the fake news. Send out the press statement to all relevant sources Prepare a list of media contacts ready to send your statement to. This list should also specifically include any media outlets in your niche. By maximising the availability of a true statement, it minimises damage caused by fake news and discourages people from spreading false news. If possible, find the source of the fake news If you can find the originator of the fake news, it is pertinent to have them retract the fake news and publish the truth. If the fake news was published on social media, you could report both the fake news post and the account from which the fake news came. Often, cutting fake news off at the source dramatically limits its spread. In the digital age, with the exponential growth of digital information, preparing a response protocol for threats from fake news articles is critical. Make sure that your business is educated in identifying fake news and knowing what to do when it may cause harm. Reference list: https://www.bizcommunity.com/Article/196/15/204108.html https://www.businessinsider.co.za/here-is-what-you-need-to-know-about-5g-in-sa-2020-5 https://www.enca.com/south-africa/sa-news-organisations-targeted-in-fake-twitter-accounts Government Gazette Vol 657, No. 43107, 18 March 2020

Is it time to say goodbye to your business?

South Africa has been experiencing very slow economic growth and international rating agencies have subsequently downgraded South Africa’s investment outlook to “junk status”. This, and a myriad of other factors, have negatively impacted South African businesses, especially small and medium business enterprises. Many of these struggling enterprises are now at a crossroads: do they continue trading and hope that things will improve, whilst risking incurring further debts, or do they cut their losses and give up? This article will briefly explain what the difference is between business rescue and liquidation, two legal avenues which are available to financially distressed companies. Business rescue: Failing companies traditionally only had the option to liquidate. The Companies Act 71 of 2008 (hereinafter referred to as “the Act”) has created another option in the form of business rescue proceedings.[1] Companies which are in financial distress can be placed under business rescue where after a business rescue practitioner will be appointed. The main objective of business rescue proceedings is to reorganise and restructure the business in order to make it a more profitable and stable entity. This is achieved by placing the company and the management of its affairs, business and property under temporary supervision. Furthermore, it provides for the development and implementation of a business rescue plan.[2] Business rescue proceedings can, similarly to liquidation proceedings, be launched on a voluntary basis or by way of a court application brought by creditors or other affected persons. A company must be in financial distress before it can file for business rescue. A company will be deemed to be financially distressed for purposes of this Act if: “(i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months; or (ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months”.[3] Companies meeting either of the requirements as set out above will thus be eligible to commence with business rescue proceedings in order to rehabilitate the financially distressed company. Some of the most prominent effects of a company being placed under business rescue are the following: A general moratorium on legal proceedings against the company is imposed. Creditors will accordingly not be able to institute civil claims against the company or execute on any court orders already granted.[4] A guarantee or surety previously given by the company in favour of any other person may not be enforced by any person against the company.[5] The company may only dispose of its property in the ordinary course of its business in a bona fide transaction which is at arm’s length.[6] The business rescue practitioner can “cancel or suspend entirely, partially or conditionally any provision of an agreement to which the company is a party at the commencement of the business rescue period, other than an agreement of employment.”[7] This places the business rescue practitioner in a powerful position to alleviate some of the financial commitments of the struggling company by renegotiating payment schemes with the company’s creditors. The ultimate objective of business rescue proceedings is to save companies. This should, if possible, be the preferred course of action for a financially distressed company since it has the potential to preserve jobs and to reinstitute a stable and solvent company which can contribute to the South African economy. Liquidation: The objective of liquidation proceedings is fundamentally different from that of business rescue proceedings. Liquidation proceedings are not aimed at rescuing a financially struggling company, but rather to permanently end the company. It is important to note that liquidations of insolvent companies are still done in terms of the Companies Act 61 of 1973 (hereinafter referred to as “the Old Act”). A company is regarded as being insolvent if its liabilities exceed its assets, or if it is unable to pay its debts as and when it becomes due.[8] Liquidation of a company results in the establishment of a concourses creditorium and the company will cease to trade and its assets will be frozen. All civil proceedings against the company will stop as well as any execution processes against the company. The Master of the High Court will appoint a liquidator who will be responsible for collecting all of the company’s assets and to distribute same between the creditors after the costs of the liquidation have been paid. Liquidation and business rescue proceedings, although applicable in similar circumstances have very different objectives and one should thus consider these objectives when choosing one or the other. Business rescue proceedings should be strongly considered where there is a reasonable prospect that the company may be able to trade on a solvent basis again. However, it does sometimes happen that a company is completely “down and out” and that there are absolutely no prospects of the company ever being able to service its debts and/or to trade on a financially viable manner again. In such cases, one should liquidate the company in order to protect the remaining assets in favour of the creditors. You should consult a knowledgable attorney if your company is financially distressed in order to determine the best way forward. Reference List: Companies Act 71 of 2008. Companies Act 61 of 1973. [1] Chapter 6 of the Companies Act 71 of 2008. [2] The purpose of the business rescue plan is to “rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company.” See section 128(1)(b)(iii) and section 150 in this regard. [3] Section 128(1)(f) of the Companies Act 71 of 2008. [4] Section 133. [5] Section 133(2). [6] Section 134(1)(a). [7] Section 136(2). It is important to note that employees remain employed by a company under

Make More Than A Name for Yourself

Branding is certainly a very important aspect of your business. But what exactly is “branding” and how will it affect your business? Simply put, your brand is your commitment to your customers. It shows them what they can expect from your products and services, and it sets you apart from other businesses. Do research A solid foundation is required to build an impressive, long-standing brand. Without a strong knowledge of your business, your brand will not work in the long run. You should reflect on your business before you jump into the process of advertising it. By doing this, you’ll create a brand that best represents your company and speaks to your target audience. In order for your brand to be successful, you need a group of loyal followers that love your business and want to tell other people about you. These are the people you want to spend the bulk of your marketing efforts on. By spending time focusing on a certain group (rather than EVERYONE) you’ll save money and catch the attention of more clients. In addition, when you know exactly who it is that you’re trying to reach, the advertising process will be much easier. Be professional A professional designer and writer are key players when it comes to the branding of your company. They do much more than just making your brand look and sound nice; they also help you to develop and implement a brand strategy by considering your target audience and your marketing goals. Essential to brand development is consistency and repetition. You want all of your marketing collateral pieces to be streamlined so that they continually build on one another and reinforce your image. Imagine the chaos of having a website, business card and brochure – all of them having a different logo or slogan! It will definitely send out a messy message to your target audience and they will view you as unprofessional. You can try to influence the way you want people to see your company, but to a large extent, your brand becomes what other people say it is. This can be a strange concept for most, but at the end of the day, you won’t be in business unless other people enjoy what you put into the world. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies
X