On 31 March 2020, the High Court of South Africa, Mpumalanga Division, Middelburg (“Mpumalanga High Court“) meted out a severe reprimand to several legal practitioners who travelled from Gauteng Province to the Mpumalanga High Court in Mpumalanga Province during the lockdown period without the necessary lockdown permits. Acting Judge Brauckmann considered the lockdown regulations and the lockdown directives and decided that by travelling between these Provinces without the lockdown permits, the legal practitioners acted recklessly, possibly committed a criminal offence, were contemptuous of the Court, were possibly guilty of unprofessional conduct, set a bad example for the South African citizens and should not charge their clients for preparation, travelling and appearing at the Mpumalanga High Court on 31 March 2020.
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The coronavirus (COVID-19) is wreaking havoc around the world. It is now recognised as a global pandemic. Businesses in South Africa and across the world are forced to learn about this novel virus and adapt quickly. The health and wellbeing of employees is paramount and so is business continuity.
Uncertainties faced by businesses of all sizes include obligations of employees to their employers following restrictions on movements; the responsibilities of employers for the health and wellbeing of their employees and the inability of companies to meet contractual obligations due to circumstances beyond their control.
Our business is not immune from these challenges. We are learning and adapting quickly so that we remain available to assist you to navigate this period of business uncertainty.
We have been hard at work providing advice and guidance on novel questions arising from the spread of the coronavirus pandemic in South Africa. We also continue to provide normal business law solutions to you because the wheels of business in South Africa are as resilient as its people and will never be grinded to a halt.
Our robust information technology systems and document management solutions enable us to work remotely with the same efficiency and responsiveness that you have become accustomed to without compromising information security and confidentiality. Whilst our offices remain open, albeit with some restrictions, we conduct and hold necessary meetings virtually to promote your safety and ours.
We trust that you will stay safe and well during this difficult time and practice social distancing to the extent necessary. Our health depends on yours and yours on ours.
“Bad things happen and good things too…So taste your grief to the fullest.
It is life too…But it will pass and time will put a strange honey in the bitterness.
That’s the way life goes.”
– Ben Okri.
In terms of section 7 of the Companies Act, No. 71 of 2008, as amended (“Companies Act“), one of the purposes of the Companies Act is to promote the South African economy by encouraging entrepreneurship. There are many thriving companies in South Africa started by ingenious entrepreneurs. These entrepreneurs are, by default or design, mostly sole shareholders and sole directors of these companies. Decision making in respect of these companies is centralised in one person who is a sole shareholder and a sole director. If not managed properly, the death of that person may cause serious business continuity risk to companies and negatively affect the estate of the deceased and the funders and suppliers of the company.
On 22 August 2019, the High Court of South Africa, North West Division, Mahikeng (“High Court“) declared to be unlawful an acknowledgement of debt (“AOD“) between friends of some 18 years relating to a capital amount of R 831 000 lent and advanced between them. When the lender friend enforced the AOD in the High Court, the borrower friend dispensed with the friendship niceties and successfully argued that the AOD was unlawful for failure by the lender friend to register as a credit provider as required in terms of the National Credit Act, No. 34 of 2005, as amended (“NCA“).
The High Court of England and Wales recently decided that a director of a company who disagrees with his or her fellow directors (dissenting director) in the governance of a company must always observe his fiduciary duties and not publicly engage in “freelance activity” or engage in “renegade actions” outside the board of directors which may hinder the management of the business of the company.
On 15 February 2019 judgment was handed down in the case of Stobart Group Limited v William Andrew Tinkler  EWHC 258 (Comm), (“Stobart Group Judgment“). Stobart Group Limited (“Stobart Group“) is an infrastructure services company registered in Guernsey whose securities are listed on the London Securities Exchange. Mr William Andrew Tinkler (“Tinkler“) was the founder and CEO of Stobart Group for some ten years. He was also one of the major shareholders. He later resigned as the CEO and became an executive director.
Trustees for the Time Being of the Oregon Trust v BEADICA 231 CC and Others
On 28 March 2019, the Supreme Court of Appeal of South Africa (“SCA”) handed down a seminal decision in Trustees for the Time Being of the Oregon Trust v BEADICA 231 CC and Others (“Oregon Trust Decision”) relating to the impact of The Constitution of the Republic of South Africa (“Constitution”) on the law of contract.
Why is this decision important?
In 2016, Judge Malcolm Wallis (currently a Judge of the Supreme Court of Appeal of South Africa) said, in a private speech, “There is a view abroad, among both academics and legal practitioners, that certain decisions by the Constitutional Court of South Africa impacting commercial life of the country have introduced uncertainty in our commercial law.” He sounded a warning that the effect of such uncertainty will be to drive commercial litigation away from the Courts into arbitral forums that are seen as more predictable in their outcomes and therefore deprive the country the much-needed constitutional-contractual law jurisprudence.
Since then, academics, sitting and retired Judges have written extensively on the impact of the Constitution on the law of contract. Whilst the SCA have been trenchantly criticised for its conservatism and reticence to infuse contract law with the principles in the Constitution, The Constitutional Court of South Africa (“Constitutional Court“) have been criticised for introducing uncertainty in the law of contract.