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GAUTENG HIGH COURT DECLARED COVID-19 LOCKDOWN REGULATIONS FOR ALERT LEVEL 3 AND 4 INVALID AND UNCONSTITUTIONAL

Synopsis

An urgent application was launched in the Gauteng High Court to challenge the constitutionality of the national lockdown and the regulations promulgated in respect thereof.

In his judgment, Judge Norman Davis, considered the regulations in the light of whether it is rationally connected to the stated objective of limiting and preventing the spread of COVID-19, and whether the constitutional rights of South Africans are justifiably limited in terms of Section 36 of the Constitution.

The regulations considered and scrutinised by the court includes the following:  regulation 35 (Attendance of funerals); regulation 35(1) (Attendance of funerals – movement between provinces, metropolitans, and districts); regulation 35(3) and 48(2) (Prohibition of night vigils and the criminalisation thereof); Table 2, exclusion number 7 (Personal care services, such as hairdressing); regulation 34 (Movement of children); regulation 33(a)(e) (Movement in respect of performance of permitted services under Level 3 and the limitation of time 06h00 – 18h00); and regulation 39(m) (Prohibition in respect of beaches and public parks).

The court found the abovementioned regulations to be irrationally connected to preventing and limiting the spread of COVID-19 and that their encroachment on and limitation of rights guaranteed in the Bill of Rights contained in the Constitution are not justifiable in an open and democratic society based on human dignity, equality and freedom as contemplated in Section 36 of the Constitution. One example of irrationality made by the court reads as follows …“If one has regard to some of the public platforms to which I have been referred to, the examples are too  numerous to mention.  One need only to think of the irrationality in being allowed to buy a jersey but not undergarments or open- toed shoes and the criminalization of many of the regulatory measures”

The court therefore made the following ruling:

  • The Minister’s declaration of a State of Disaster (lockdown) is found to be constitutional and valid;
  • The regulations promulgated by the Minister in respect of Level 4 is unconstitutional and invalid;
  • The regulations in respect of Level 3 is unconstitutional and invalid except for regulation 36 (Prohibition on evictions); regulation 38 (Prohibition on initiation practices); regulation 39(2)(d) and (e) (Places and premises normally closed to the public, namely night clubs and casinos); and regulation 41 (Closure of borders);
  • The regulations pertaining to the prohibition on the sale of tobacco and related products is excluded from this order and is to be decided on a later date.

The court suspended the declaration of invalidity for 14 days in order for the Minister, in consultation with Cabinet, to review, amend and re-publish the regulations, meaning that Level 3 regulations remain in operation for now and should still be adhered to.

Appeal by State

The Cabinet has decided to appeal Judge Davis’ decision and is of the view that another court might come to a different conclusion. The State will request the appeal to be heard on an urgent basis in order to obtain clarity on the regulations.

In the appeal application the Minister of Cooperative Governance and Traditional Affairs, Dr Nkosazana Dlamini Zuma, will be joined by President Cyril Ramaphosa and the Minister of Health, Zweli Mkhize.

Conclusion

The consequences of the judgment as stands, and if not successful on appeal by the State, could mean that certain business and individuals might have a claim of damages against the State.

Author: Monique Botha

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BLC ATTORNEYS COVID-19 UPDATE

We at BLC Attorneys trust that all of our clients and the public at large are continuing with their efforts to remain safe and healthy as we enter the 10th week of the national lockdown.

We confirm that our offices have been open since 4 May 2020 and that our office hours are currently 8am – 2pm from Monday to Friday. Our office has a strict COVID-19 work control policy in place to ensure the safety of all our staff members and clients attending at our offices.

Some of the main practices that have been implemented at our offices are as follows: all staff members and clients of the firm will be required to enter the building through the front door wearing a mask, sanitise their hands and undergo a health screening check upon entering the building. Each staff member and client will also be required to register their attendance at the workplace in a register book that will be in one of the front reception consultation rooms.

Clients will only be permitted access to the BLC premises if they have a pre-arranged confirmed appointment. In this regard you can contract any director or our receptionist on 041 5063700 to arrange an appointment.

Staff members and clients with COVID-19 like-symptoms, including a mild cough or a low-grade fever (37.5°C or more) will be identified, tested, and are required to stay at home. Hand sanitiser dispensers will be placed at strategic points throughout our offices. Regular use of the sanitiser before and after handling any paper, files, envelopes, and any communal equipment is compulsory. Further, all staff members are aware to sanitise keyboards, telephones, desk areas, handrails, doorknobs throughout the day.  Staff members are also encouraged to regularly wash their hands with hot water and soap for a minimum of 20 seconds.

The latest Regulations to the Disaster Management Act, 57 of 2002, have been published to provide guidance to the public in terms of Alert Level 3 and will apply nationally from 1 June 2020. Some of the most important developments brought about by the implementation of Alert Level 3 are as follows:

  • Nelson Mandela Bay, together with other metros around the country, has been identified as a hotspot for COVID-19. This means that extra care must be taken by every person living in and around Nelson Mandela Bay to continue with strict compliance with social distancing and other health and safety measures to contain the spread of COVID-19;
  • Movement of persons – exercise between the hours of 06h00 to 18h00 is allowed, provided that the exercise is not done in organised groups and adheres to health practices and social distancing measures;
  • A person may also leave their place of residence to attend a place of worship in the same or another metropolitan area or district within the same province, which gathering is limited to 50 persons or less, and attend a school or learning institution once these are opened;
  • Prohibition on evictions – a competent court may grant an order for the eviction of a person from their land or home in terms of relevant legislation, provided that an order of eviction may be stayed and suspended until the last day of Alert Level 3, unless a court decides that it is not just and equitable to stay and suspend the order until the last day of the Alert Level 3 period;
  • Places and premises which remain closed to the public include beaches, public parks, theatres and cinemas, gyms and fitness centres, night clubs, bazaars, casinos, and conference facilities;
  • Sports grounds and field and swimming pools are to remain closed, except for the training of professional athletes and professional non-contact sports matches;
  • Hotels, lodges, bed and breakfasts, timeshare facilities and resorts and guest houses are to remain closed, except to the extent that these facilities are required for accommodation by remaining tourists confined to such facilities, persons for work purposes and persons in quarantine or isolation;
  • The sale of liquor from any licenced premises (whether an on-consumption or off-consumption licenced premises) or through e-commerce delivery is permitted only from Monday to Thursday between the hours of 09h00 t0 17h00. Please note that the consumption of liquor at a licenced premises itself is prohibited;
  • The sale of liquor is prohibited on Fridays, Saturdays, Sundays and public holidays and the sale of tobacco, tobacco products, e-cigarettes and related products remain prohibited, except for export purposes;
  • On site consumption of food and beverages at a place of sale, including restaurants and retail outlets, remain prohibited;
  • Personal care services, including hairdressing, beauty treatments, make-up and nail salons remain prohibited; and
  • Individuals who do not comply with the regulations commit an offence and are liable on conviction to a fine or to imprisonment for a period not exceeding six months or to both such a fine and imprisonment.

Please stay tuned to our Facebook page for regular articles and updates related to COVID-19 and contact our offices on 041 506 3700 should you have any queries or concerns regarding the impact that COVID-19 has had on your workplace or business.

Author: Blaine Saunders

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AARTO: New Demerit System & Alcohol Limit for South African Motorists

“It is going to be zero! no alcohol in the blood. Zero! No more a glass for the road”. This was the statement made by Minister of Transport Fikile Mbalula on 23 January 2020 on the release of the statistics for the 2019-2020 festive season Arrive Alive Road-Safety Campaign.

Mbalula was referring to how the new law, the Administrative Adjudication of Road Traffic Offences Act (“AARTO”), that he hopes to come into effect by July 2020, will have a zero tolerance stand on the consumption of any amount of alcohol by drivers. The Minister made it clear that drivers will not be allowed to have even one drink before driving.  

The purpose of AARTO is:

• to encourage compliance with the national and provincial laws relating to road traffic and to promote road traffic safety;

• to encourage the payment of penalties imposed for infringements and to allow alleged minor infringers to make representations;

• to establish a procedure for the effective and expeditious adjudication of infringements;

• to alleviate the burden on the courts of trying offenders for infringements;

• to penalise drivers and operators who are guilty of infringements or offences through the imposition of demerit points leading to the suspension and cancellation of driving licences, professional driving permits or operator cards;

• to reward law-abiding behaviour by reducing demerit points imposed if infringements or offences are not committed over specified periods;

• to establish an agency to support the law enforcement and judicial authorities and to undertake the administrative adjudication process; and

• to strengthen co-operation between the prosecuting and law enforcement authorities by establishing a board to govern the agency.

Thus, AARTO introduces a new traffic demerit system which penalises motorists who violate traffic laws.

How will this new demerit system affect South African Drivers?

• All motorists will start with zero points.

• Points (between 1 to 6) are allocated according to the severity of road infringements or offences committed.

• Demerits are assigned to both drivers and cars when a penalty fine for a traffic infringement is paid or when the person is convicted of an offence in court.

• When 12 points are exceeded, the driver’s licence will be suspended for a period calculated in months, equal to the number of points exceeding 12, multiplied by 3 (the Minister of Transport may also prescribe a specific number).

• A driver may apply for the return of their licence once the suspension period lapses.

• A driver who is disqualified for the third time will lose their licence and will have to reapply for a learner’s licence and redo their drivers testing after the suspension period lapses.

• Should a driver fail to pay fines, they could be blocked from obtaining driving and vehicle licences.

Minister of Transport’s 0% alcohol tolerance

At this stage, a driver will incur 6 demerit points when he or she is caught operating a vehicle whilst the concentration of alcohol in any specimen of blood taken from any part of their body exceeds 0,05 grams per 100 ml’s.

A driver will incur 6 demerit points when they are caught operating a vehicle while the concentration of alcohol in any specimen of breath exhaled by him or her exceeds 0,24 mg’s of alcohol per 1000 ml’s.

According to Women on Wheels (https://www.womenonwheels.co.za/safety/drinking-driving-exactly-limit/), the rule of thumb is a maximum of one unit of alcohol per hour, which constitutes 10 ml’s of pure alcohol, based on an adult weighing 68 kg’s. Our bodies can process only one unit of alcohol each hour. However, it is important to be aware that if you weigh less than 68 kg’s your body will need more time to process the same amount of alcohol.

What is one unit of alcohol?

One unit of alcohol equals:

• two thirds of a beer or spirit cooler with 5% alcohol content;

• 75 ml’s of red or white wine per hour with an alcohol content of 12% to 14%; or

• one 25 ml tot of alcohol per hour for whisky and brandy.

The Minister’s statements will not be taken lightly. Something definitely needs to be done to minimise the carnage on South Africa’s roads despite some seeing these changes as extreme. However, we can all agree that if the Minister gets his way, Catholics returning from church will find themselves in a peculiar position if they are stopped at a roadblock!

Full speech available here: (https://www.pscp.tv/w/1zqKVEdoaBdxB?t=3)

Author: Mikhael Cain

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CO–HOLDERS OF PARENTAL RESPONSIBILITIES AND RIGHTS AND COVID-19

Amidst the announcement and implementation of the national lockdown, a great deal of concern and fear amongst many people arose.

However, fears and concerns for co–parents / co–holders of parental responsibilities and rights were amplified when initial Regulations to the Disaster Management Act, 57 of 2002 (“the Regulations”), regulated that children were prohibited from moving between co-parents and would therefore have to remain with the parent with whom the child was with when the lockdown period started commenced. The other parent would therefore have to rely solely on communicating, e.g., via telephone call, WhatsApp, Skype, etc.

On 30 March 2020, much relief was brought when the Regulations were amended in terms of Government Notice No. 430 of 30 March 2020, which allowed for children to move between co–holders and/or an appointed caregiver.

The amended Regulations provided that children will now be allowed to move between co – holders, provided that arrangements are in place for a child to move from one parent to another in terms of; a court order, parental responsibilities and rights agreement or parenting plan registered with a Family Advocate.

Furthermore, a child will only be allowed to move to a household provided there is no person who is known to have come into contact with, or is reasonably suspected to have come into contact with, a person known to have contracted, or reasonably suspected to have contracted COVID-19.

When transporting the child, the parent or caregiver transporting the child concerned must have in his or her possession the court order or the agreement referred to above, alternatively, a certified copy thereof.

Although one would find difficulty in determining whether anyone has come in contact with a person who has contracted COVID-19, parents are always recommended to act in the best interests of the child and to exercise extra care during this time.

Although the Regulations brought a lot of relief, the following question remained outstanding: what would happen to those parents who are not in possession of a court order or parenting plan? Does this mean that the child would not be transported to the other parent during the lock down period due to a lack of documentation?

On 16 April 2020, further amendments were made to the Regulations and the following paragraph was added:

  1. The co-holder of parental responsibilities and rights in possession of a birth certificate or certified copy of the birth certificate of the child or children to prove a legitimate relationship between the co–holders of parental responsibilities and rights.

This means that the parent or caregiver transporting the child concerned must have in his or her possession the court order or the parental responsibilities and rights agreement or parenting plan or birth certificate of the child or children, as required.

Despite the numerous amendments that were made, on 8 April 2020, an urgent application in the Western Cape High Court was brought against the Department of Social Development by a divorced couple whose children were with their grandparents in Bloemfontein since the lockdown period started.

In this particular application, the parents requested the court to grant one of the parents an opportunity to travel to Bloemfontein to fetch the children. The Department of Social Development defended the matter on the basis that this does not create an exception relating to movement of children from a parent to a caregiver or vice versa.

Judge Meer granted the father permission to fetch the children on the basis that the requirements in terms of the Regulations, mentioned above, were complied with as there was an existing parenting plan registered with a Family Advocate.

The amended Regulations and the Judgment handed down by Judge Meer have brought great relief and satisfaction to many co-parents, especially as we embark on the next phase of the lock down period with many fears and uncertainty relating to the future of the virus and the future of our children.

Author: Shiraiz Potgieter

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THE FUNCTIONING OF SOUTH AFRICAN COURTS DURING LOCKDOWN

As the COVID-19 pandemic continues to surge around the world, South Africa has been putting several measures into effect in response to the nationwide lockdown which began on 26 March 2020.

On 3 May 2020, the Minister of Justice and Correctional Services, after consultation with the Minister of Cooperative Governance and Traditional Affairs, issued a Direction to address, prevent and combat the spread of COVID-19 in all courts, court precincts and justice service points in the Republic of South Africa. The Directions published by Government Notice No.440 of 31 March 2020 are replaced by these Directions.

The following Directions provide for the management of Alert Level 4 permitted legal services as listed in Annexure 1. These services include the following:

Permitted Services Directions
Criminal Proceedings
1. First Court Appearances
2. Postponements in absentia
3. Bail applications;
4. Consideration of continued detention of children awaiting trial;
5. Guilty Pleas;Trials in respect of corruption, sexual offences, Gender based violence and Femicide, serious violence crimes, robbery, murder, and violation of COVID -19 Regulatios;
6. Finalising partly-heard matters; and
7. Applications for leave to appeal, Appeals and reviews
– In stances where the accused is in custody and unopposed bail applications,  if the charges in question are listed in schedules 1, 5 or 6 of the Criminal Procedure Act, audio-visual link, teleconferences, videoconference and any other electronic mode may be used to postpone such matters.

– All criminal trials enrolled during Alert Level 4 lockdown must be postponed to dates after the lockdown, save for awaiting trials where detainees are held in Correctional Centers or where children are being detained in Child and Youth Care and Correctional Centers.

– Accused persons detained for petty offences must be released and warned to come back at a later date.
Civil Proceedings
1. Issue of all court process and filing of papers;
2. Urgent motion applications;
3. Urgent civil trials, incl. COVID 19 related cases;
4. Debt review applications;
5. Alternative Dispute Resolution Mechanisms;
6. Divorce proceedings (High Court & Regional Court);
7. Taxation
– Civil matters to be dealt with online, in writing, or telephonically
– Small claims Court may not operate during Level 4 lockdown and services related to these are limited to email and telephone enquirers.

– Civil cases that are not identified as urgent may not be placed on the court roll for the duration of the period of lockdown. However, Heads of courts retain the discretion to authorize the hearing of matters.
Family Law matters
1. Child and spousal maintenance proceedings2. Foster care applications
3. International child abduction cases
4. Adoption application hearings
5. Care & contact, care and protection proceedings in respect of children, including removal to temporary safe care placement in child and youth care centre.
6. Protection orders in terms of Domestic Violence Act No.116 of 1998
– Child and spousal maintenance proceedings; protection orders in terms of the Domestic Violence Act, or the protection from harassment applications, will be able to go ahead.

– The minister also prioritized foster care applications and hearings; matters in respect of the care and contact of children, international child abduction cases, as well as adoption applications.
Master of the High Court
1. Lodgement of requisitions by way of email. 
2. Reporting and issuing of letters in all deceased estates matters
3. Reporting and issuing of appointment in all Insolvency matters.
4. Examination of L & D Accounts in all deceased estates matters lodged by email
5. Examination of L & D accounts in all accounts Insolvency matters by email
6. Reporting and issuing appointments in only urgent curatorship matters lodged by email
7. Reporting and issuing in only urgent Trust matters for the benefit of COVID-19 relief measures lodged by email
8. Receiving of applications and payments of funds from Guardian’s Fund
9. Issuing letters of executorship and endorsement of power of attorneys
– The offices of the Master of the High Court will also render its service during this time, which will include payments to natural guardians, tutors and curators on behalf of minors and persons under curatorship. The office will also process documentation required for the burial of a deceased person and the urgent appointment of curators.

These Directions are to be read in conjunction with the directives issued by the Chief Justice Mogoeng Mogoeng in terms of section 8(3) of the Superior Courts Act, 2013, and the directives issued by the relevant Heads of Courts in the Superior Courts and Magistrates/Lower Courts, from time to time.

In an instance where these Directions do not deal with circumstances that relate to a particular Court, the Heads of Court shall issue Directions which address and manage those particular circumstances provided that the Directions are not inconsistent with those placed by the Chief Justice.

Please note that the directives issued by the Heads of Courts will differ depending on the court and jurisdictional area.

Please note that further directions may be issued in due course, or may have been issued to date, in light of ongoing developments around the COVID-19 pandemic in South Africa.

Author: Thina Makaula

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UNDER WHICH CIRCUMSTANCES CAN AN EMPLOYER BE HELD VICARIOUSLY LIABLE FOR THE ACTIONS OF HIS EMPLOYEE?

What is Vicarious Liability?

Vicarious liability refers to a situation where an employer is held responsible for the actions or omissions of his employee. In the workplace, an employer maybe vicariously liable for the wrongful conduct of an employee if such wrongful conduct was committed by the employee in the course and scope of his or her employment. The rationale for this is that the employee is an extension of the employer. In other words, the employee is the instrument through which the employer acts for the employer’s gain.

Requirements for Vicarious Liability

The requirements for the vicarious liability of an employer are threefold:

  1. An Employment relationship – the person who committed the wrongful act must be an employee;
  2. A wrongful act must be committed; and
  3. The wrongful act must be committed in the course and scope of the employee’s employment with the employer.

As a general rule, if the wrongful act complained of occurred while the employee was on a frolic of his or her own, the employer will not be held viciously liable for the aforementioned act because it did not occur in the course and scope of the employee’s employment with their employer. There are exceptions to this general rule which will be explored in applicable case law below.

Applicable Case Law

The test to be applied in cases deviating from the above general rule was formulated in Minister of Police v Rabie 1986 (1) SA 117 (A) (“the Rabie case”). The test formulated in the Rabie case has both subjective and objective elements. In terms of the test formulated in the Rabie case, an employer may still be held liable even if the employee had abandoned the employer’s business and engaged in a frolic of his or her own, provided that there is a sufficiently close connection between the actions of the employee and the business of the employer.

The test to be applied in cases deviating from the above general rule was formulated in Minister of Police v Rabie 1986 (1) SA 117 (A) (“the Rabie case”). The test formulated in the Rabie case has both subjective and objective elements. In terms of the test formulated in the Rabie case, an employer may still be held liable even if the employee had abandoned the employer’s business and engaged in a frolic of his or her own, provided that there is a sufficiently close connection between the actions of the employee and the business of the employer.

In the Rabie case, the Plaintiff sued for damages caused in consequence of his wrongful arrest and assault. The police officer who made the arrest was an engineer in the employ of the police. At the time that he made the arrest complained of, he was off duty and in plain clothes. He introduced himself to the plaintiff as a police officer, took the plaintiff to the police station and wrongfully charged the plaintiff with housebreaking. The Judge, in combining the subjective and objective tests, found the Minister to be liable, notwithstanding that the policeman was off duty and acting outside the scope of his employment with the Minister at the time of the incident.

In Minister of Safety and Security v Morudu, Navsa ADP (as he then was) reasoned as follows in applying the test formulated in the Rabie case:

“Utilizing the test in Rabie as a basis, the Constitutional Court formulated the test for determining vicarious liability in deviation cases as follows (Para 32):

“The approach makes it clear that there are two questions to be asked. The first is whether the wrongful acts were done solely for the purposes of the employee. This question requires a subjective consideration of the employee’s state of mind and purely factual question. Even if it is answered in the affirmative, however, the employer may nevertheless be liable vicariously if the second question, an objective one, is answered affirmatively. That question is whether, even though the acts have been done solely for the purpose of the employee, there is nevertheless a sufficiently close link between the employee’s acts for his own interest and purposes and the business of the employer. This question does not raise factual questions but mixed questions of fact and law. The question of law it raises relates to what is sufficiently close to give rise to vicarious liability. It is in answering this question that the court should consider the need to give effect to the spirit, purport and objects of the Bill of Rights.”

In the above case an employee, Mr Duba, was employed by the Minister of Safety and Security as a fingerprint expert, whose duties included, inter alia, uplifting fingerprints from various crime scenes. Mr. Duba suspected that his wife was having an extra marital affair with Mr Morudu, the deceased. Mr Duba drove to the deceased’s home. Mr Duba asked about the whereabouts of Mrs Duba, his wife. Shortly thereafter, he pursued Mr Morudu through the house and ultimately shot and killed him. At the time of the incident, Mr Duba was traveling in an unmarked police vehicle and was dressed in civilian clothing. Further, he used his private firearm to commit the crime.

The court of first instance held that the Minister was liable for the wrongful conduct of Mr Duba. It is against this background that the matter went on appeal. On appeal, the Minister maintained that Mr Duba had not been acting in the course and scope of his employment as a fingerprint investigator and consequently, the Minister was not liable. The Supreme Court of Appeal held that the division to which Mr Duba was assigned was not a division of the police services to which the public would intuitively turn for protection. Further, the Respondents had not known that Mr Duba was a police officer. As mentioned above, at the time of the incident Mr Duba was driving an unmarked vehicle and was dressed in civilian clothing. Hence, no trust was placed in him as a police officer by the Respondents.

The court in this case applied the Rabie test for vicarious liability. It held that Mr Duba went on a frolic of his own and that there was no close connection between the aforesaid frolic and the business of the Appellant. The Supreme Court of Appeal absolved the Minister of Safety and Security from liability because the connection between Mr Duba’s actions at the time of the incident and the business of the Appellant was too remote.

The principles shown in these cases are that an employer can be held vicariously liable for the actions of an employee, acting in his course and scope of his employment. However, in cases where the employee acts contrary to the instruction of the employer and the employee’s actions bear no similarity to the instruction, then liability will not be imputed to the employer due to the remoteness of the connection.

In conclusion, the lesson to be drawn is that each case must be judged on its own merits, carefully analyzing the facts and applying the principles of law.

Author: Thina Makaula

Reference:   

  • Minister of Police v Rabie 1986 1 SA 117 (A)
  • In Minister of Safety and Security v Morudu and Others 2016 (1) SACR 68 (SCA).

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COVID-19 AND FREEDOM OF SPEECH


As a citizen in a democratic country like South Africa, one is entitled to freedom of speech. It is a right provided for in Chapter 2 of the Bill of Rights, as contained in the Constitution of the Republic of South Africa (“the Constitution”).

Section 16(1) of the Constitution provides that:

Everyone has the right to freedom of expression, which includes freedom of the press and other media; freedom to receive or impart information or ideas; freedom of artistic creativity; and academic freedom and freedom of scientific research.”[1]

However, there is a limitation on such freedom of expression contained in section 16(2) which provides that:

The right in subsection (1) does not extend to propaganda for war; incitement of imminent violence; or advocacy of hatred that is based on race, ethnicity, gender or religion, and that constitutes incitement to cause harm…”[2]

The Constitution also contains a general limitation clause contained in section 36 which provides that the rights conferred by the Bill of Rights may be limited if such limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom.

As the COVID-19 pandemic has spread across the globe and is now within our borders, there is understandable panic and fear going around which often amounts to any or all information received regarding COVID-19 being shared across all social media platforms, i.e., WhatsApp, Facebook, Twitter etc., and more often than not the information comes from unreliable or unsubstantiated sources. Sharing this information or passing it on can be problematic if it transpires that it is not factually correct.

In South Africa’s attempt to deal with the global pandemic, the Minister of Cooperative Governance and Traditional Affairs, Dr Nkosazana Dlamini Zuma, has in terms of section 27(2) of the Disaster Management Act, 2002, set out Regulations setting out steps deemed necessary to curb any preventative escalation of the disaster or to alleviate, contain and minimise the effects of the disaster.

When it comes to sharing of information, one must specifically take note of Section 14(2) of the Regulations which provides that:

14(2) Any person who publishes any statement, through any medium, including

social media, with the intention to deceive any other person about –

(a) COVID-19;

(b) COVID-19 infection status of any person; or

(c) any measure taken by the Government to address COVID-19,

commits an offence and is liable on conviction to a fine or imprisonment for a period not exceeding six months, or both such fine and imprisonment.

To be convicted for contravening the abovementioned legislation one would need to have the intention to deceive the receiving party, with whatever information is being shared.

Recently this section of the Act was invoked when a Cape Town man was arrested and charged under Section 11(5)(c) (now 14(2)(c)) after sharing a video of himself, claiming that the cotton swabs used to test patients for COVID-19 was already contaminated with the virus. This was not true. He urged South Africans not to let the Government test them.

There was a clear intent to deceive the parties who would receive the message. This is known as dolus directus in South African criminal law. If, before posting, he had foreseen that the receiving party may be deceived by the information he would be posting, and then he reconciled himself to such possibility and then went through with posting the video, he would be considered to have acted with the necessary intention. This is known as dolus eventualis in South African criminal law.

With the new Regulations that have been set in place, think twice before clicking that “forward” or “share” button.

To obtain true and correct information, one can tune in to your local news channel or visit the following websites:

http://www.health.gov.za/index.php/outbreaks/145-corona-virus-outbreak/465-corona-virus-outbreak

https://www.who.int/emergencies/diseases/novel-coronavirus-2019

https://www.sacoronavirus.co.za/


[1] Section 16(1) of the Constitution of the Republic of South Africa, 1996.

[2] Section 16(2) of the Constitution

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PAYMENT HOLIDAY VS CREDIT LIFE INSURANCE DURING THE COVID-19 PANDEMIC

What is a payment holiday?

A payment holiday is an agreement you might be able to make with your credit provider allowing you to temporarily stop or reduce your monthly repayments.

Standard Bank has taken the initiative to make a payment holiday option available to their clients. Thereafter, ABSA, FNB and Nedbank followed suit. A payment holiday is only available to qualifying consumers in an endeavour to ease the economic impact of the COVID-19 pandemic. 

Who should qualify for a payment holiday?

This is the big question as some consumers are already overindebted and can ill afford their current monthly repayments.  

All the major banks have their own policies in place. However, at the very least, you as the consumer should be in good standing with your credit provider to qualify for a payment holiday.

What are the consequences of a payment holiday?

The one, two or three months that you do not make any payments are added to your outstanding balance, inevitably increasing your outstanding balance. Your monthly instalment is then recalculated over the remaining period of your loan, thus increasing your monthly instalments as well as extending your loan period and at the same time, interest continues to run against your loan account.

Consumers must be very careful not to commit an act of insolvency when:

  • Admitting that you owe a credit provider and put an offer of settlement forward requesting the credit provider to write off a certain amount;
  • Admitting in writing of your inability to pay the debt; and
  • Not satisfying a judgment order brought against you.

In terms of Section 8 of the Insolvency Act, 24 of 1936 these actions may allow a credit provider to proceed with liquidation/sequestration/business rescue action against you.

Is a payment holiday a good thing?

If you can still manage to pay your monthly instalments, it is best for you to continue to do so instead of opting for a payment holiday. Remember, nothing is for free!

What is credit life insurance?

Credit life insurance acts as security which consumers take out with a loan in the event of death, disability, mental illness, unemployment or other insurable risk that is likely to impair their ability to earn an income or pay monthly instalment under a credit agreement.

Due to ignorance, these benefits were hardly ever claimed by consumers but over the past couple of days things have changed and credit providers are inundated with queries by consumers regarding their benefits under the credit life cover.

Who qualifies for credit life insurance?

Self-employed people and pensioners do not qualify and, in some cases, contract workers do not either. Please see the related article of our Madeleen Charsley by clicking on the following the link: https://www.blcattorneys.co.za/articles/covid-19-economic-aftermath/ Author: Zelda Damons

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TERS FUNDING – RECOVERY OF MONIES ADVANCED TO EMPLOYEES

The TERS-funding process does not allow employers with 10 or less employees to collect and pay over these UIF benefits to their employees. The UIF will pay the benefits directly to the employees and not to the employer.

Where employers make advance payments to employees to assist them during the period where the employees are waiting to receive payment from the UIF recovering the payments made to tide employees over during the waiting period may prove difficult.

Prior to advancing payment to assist an employee an employer should conclude an Acknowledgement of Debt to enable the employer to deduct monies from future salary, subject to the limitations on deductions as contained in the Basic Conditions of Employment Act or any applicable Bargaining Council agreement.

Additionally, those employers with 10 or more employees who have advanced payments to employees should obtain consent to deduct such payment from monies received from the UIF.

Please contact gdakin@blclaw.co.za if you require an Acknowledgement of Debt.

Author: Guy Dakin

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INTERPRETATION OF “COLLECTION COSTS” AND APPLICATION OF THE “IN DUPLUM RULE” IN TERMS OF THE NATIONAL CREDIT ACT

The Western Cape High Court recently handed down an interesting judgement in the case of University of Stellenbosch Law Clinic and Others v National Credit Regulator and Others, where the applicants sought a declaratory order to determine the interpretation of the term “collection costs” in section 1 and the application of the provisions in section 101(1)(g) and section 103(5) of the National Credit Act, 34 of 2005 (“the NCA”), respectively.

The NCA

Section 1 of the NCA defines “collection costs” as an amount that may be charged by a credit provider in respect of enforcement of a consumer’s monetary obligations under a credit agreement, but this amount does not include a default administrative charge.

Section 101(1) of the NCA provides that a credit agreement must not require payment by the consumer of any money or other consideration, except:

  • The principal debt, being the amount deferred in terms of the agreement, plus the value of any item contemplated in section 102;
  • An initiation fee, which may not exceed the prescribed amount relative to the principal debt; and must not be applied unless the application results in the establishment of a credit agreement with that consumer;
  • A service fee which may be payable monthly, annually or as per transaction basis and must not exceed the prescribed amount relative to the principle debt;
  • Interest expressed in percentage terms as an annual rate as an annual rate calculated in the prescribed manner and must not exceed the maximum prescribed rate determined in accordance with section 105;
  • Costs of any credit insurance;
  • Default administration charges, may not exceed the prescribed maximum for the category of credit agreement concerned; and may be imposed only if the consumer has defaulted on a payment obligation under the credit agreement, and only to the extent permitted by Part C of Chapter 6; and
  • Collection costs as permitted by Part C of Chapter 6.

Further, section 103(5) provides that, despite any provision of the common law or a credit agreement to the contrary, the amounts contemplated in section 101 (1)(b) to (g) that accrue during the time that a consumer is in default under the credit agreement may not, in aggregate, exceed the unpaid balance of the principal debt under that credit agreement as at the time that the default occurs.

Submissions by the Applicants

The applicants sought three declaratory orders. In summary form, firstly an order declaring that the collections costs, as defined in the NCA, must be read to include legal fees incurred to enforce the monetary obligation under the credit agreement, regardless of whether such fees are charged before, during or after litigation. Secondly, that the limitation in terms of section 103(5) that all amounts (bar the capital) cannot exceed the balance of the debt, must apply at all times regardless of whether a judgment has been granted. Thirdly, that legal fees may not be claimed until they are agreed upon or taxed.

The applicants contented that this interpretation of the NCA will give true effect to the provisions of the NCA whereas at present the exclusion of legal fees is undermining the protection which the NCA was intended to afford consumers. The contention being that credit providers, while having their recovery of costs curtailed in terms of the NCA, are nevertheless enjoying the protection of recovering legal fees resulting in a failure to prevent the exploitation of the consumer.

The applicants submitted that the language used to define collection costs is clear and unambiguous and accordingly, the interpretation which the applicant sought is consistent with the words used in the NCA. The applicants submit that collection costs include legal costs as part of enforcing the consumer’s monetary obligation. The applicants and respondents had differing stances in regard to the words “enforce”. The applicant stated that it applies to all possible procedures up until payment. The respondents who opposed the relief provided that the word “enforce” is limited up to the commencement of litigation. They averred that once litigation commences, the credit agreement is cancelled and there is no longer the enforcement of the agreement but rather proceedings (an action or application) for a judgment against the consumer in favour of the credit provider and then thereafter the recovery of a judgement debt.

The applicants raised the following reasons why they say the NCA must be read to include all legal costs up to final recovery after judgment:

  1. The first reason why the applicants submitted that collection costs include legal costs is because the definition clause is particularly broad and refers to any charge levied in terms of the agreement where the creditor provider is attempting to enforce the consumer’s monetary obligation except for default administration charges.
  2. Secondly, the applicants provided that the provision of Part C of Chapter 6 governs enforcement by means of legal proceedings. The section refers to the definition of collection costs to the process of debt enforcement in a court and therefore the NCA includes legal fees in its definition of collection costs. The applicants averred therefore that collection costs are synonymous with legal costs or that legal costs fall within the definition of costs incurred in the enforcing of the monetary obligations under the credit agreement.
  3. Thirdly, the applicants contended that the term enforcement of monetary obligations refers to all measures taken by the credit provider to enforce payment in part or whole of a consumer’s obligations under the credit agreement. The contention being that when a credit provider invokes an acceleration clause in the agreement and proceeds to court to recover the entire debt as a result of a default, the agreement is not cancelled but what is sought is specific performance of the accelerated indebtedness.

Submissions by the respondents

Therespondents contended that the view of the applicants meant that orders can be made that are ineffective and this undermines the administration of justice. In this regard, the court was of view that the legislature has always imposed significant limitations on courts when it comes to an order as to costs.

The respondents submitted that the interpretation sought by the applicants would result in consumers ceasing to make any payments once the cap is reached in fear of triggering further liability. The applicants responded that this is applying principles applicable to the common law in duplum rule which are not applicable in terms of the NCA.

The respondents provided that the common-law definition of collection costs supports their contentions. They further contended that one of the rules of interpretation is that the legislature does not intend to amend the common law. The applicants’ response was that the legislature clearly did intend, in this instance, to amend the common law and include legal fees in collection costs for the reasons they have submitted set out above.

The respondents raised the further point that the legislature would have been aware of the issue of legal costs and expressly excluded them from the definition. As stated, the applicants say that the definition is intentionally broad as all possible costs could not necessarily be anticipated. The opposing respondents made the point that costs could include various costs and amongst others, give the example of the costs of tracing a debtor.

The respondents averred further that disallowing a party the opportunity to recover even taxed costs would affect a litigant’s constitutional right of access to court. They further submitted that there will be unanticipated consequences as the same interpretation would have to apply to all credit agreements including those of significant sums not falling within the realm of micro-lending.

Finally, and the most significant ground proffered by the respondents, was that when a judgement is granted after a summons or application is issued and served it constitutes a new cause of action against the defendant or respondent and therefore all further costs incurred are not collection charges. A distinction is drawn between collection costs recoverable in terms of the NCA and costs arising from the judicial process. It is then argued that legal fees are not part of collections costs for this reason. The suggestion is made that the judgment is a novation. The applicants pointed out that what the opposing respondents are relaying on would be a voluntary novation. The applicants further submitted that a voluntary novation can never be used as a way to escape the consequences of section 103(5) of the NCA.

The Court’s Ruling

After much consideration of the above-mentioned provisions of the NCA and submissions of both the applicants and respondents, the applicants were wholly successful in their application. By ruling in favour of the applicants, the court provided much needed clarity in relation to the aspects of costs in the following terms:

  • Firstly, it was declared that collection costs, as defined in the NCA, must be read to include legal fees incurred to enforce the monetary obligation under the credit agreement, regardless of whether such fees are charged before, during or after litigation.
  • Secondly, the limitation in terms of the NCA that all amounts – for example, interest, fees and collection costs, except the capital amount – cannot exceed the balance of the debt must apply at all times regardless of whether a judgment had been granted.
  • Thirdly, legal fees may not be claimed until these had been agreed upon or taxed.

Conclusion

If equality requires all persons an equal right to access to credit but consumers are not equal in their ability to pay, then it must equally mean that the cost of credit must be adapted accordingly. In reality the converse has happened and the cost of credit for small loans is disproportionately higher than for large loans.” – Judge Hack.

Author: Mihlali Mzileni

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