Oh deer, Baby Reindeer
• Series raises the question: when can you say ‘this is a true story’?
Lauren Salt ENS
Apopular Netflix show released in April 2024, Baby Reindeer tells the allegedly true story of Scottish comedian Richard Gadd being stalked by an older Scottish woman, Martha Gadd portrayed himself in the show and the opening of the first episode states: “This is a true story ”
Although the real names of the protagonists were changed in the show, it did not take long for internet sleuths and the media to uncover the identity of Martha and her alleged first victim, her previous employer
What ensued were online interviews with the real-life Martha, Fiona Harvey, and her first victim, previous employer Laura Wray, with the latest development being a defamation suit that Harvey has instituted against Netflix Harvey is claiming damages in the amount of $170m for defamation, intentional infliction of emotional distress, negligence and unauthorised use of her identity and likeness Wray, a barrister, has threatened a defamation
claim against Harvey for her statements made about Wray in her recent interview
So what is this all about?
In the show, Martha is depicted as a twice-convicted stalker who:
● Was said to have stalked her previous employer’ s family (Wray) and a police officer;
● Physically and sexually assaulted Gadd’ s character;
● Camped outside Gadd’ s character’ s home for up to 16 hours a day; and
● Spent more than five years in jail for multiple sentences Harvey says these things are all untrue and therefore it cannot be a true story A debate on the facts is playing out in the court of public opinion and will ultimately play out in a US court of law
The questions the Baby Reindeer saga raises are:
(i) if the show depicts the truth, whether it would be defamation; and (ii) if there has been embellishment, whether this would detract from any truths that were portrayed in the show
Why this Baby Reindeer saga is important for employers is because, often, employers are faced with the moral, ethical or legal conun-
drum as to whether they can or should disclose harassment or other criminal conduct of employees to the media, other employees or prospective employers and, if so, how they should go about doing it
To understand where the line is drawn on what can be said and what is reasonably defensible from a defamation perspective, it is important to understand our defamation framework
In SA, defamation, which forms part of the law of delict,
is defined as the unlawful publication of a defamatory statement concerning another person The disclosure of any information to a third
IT IS ACCEPTED THAT DISCLOSING AN EMPLOYEE’S SERIOUS MISCONDUCT TO THIRD PARTIES WOULD BE DEFAMATORY
party that could damage a person ’ s good name and reputation would be considered defamatory
It is accepted that disclosing an employee’ s serious misconduct to third parties would be defamatory given the impact on their reputation In fact, it is accepted that, even where the disclosure does not directly contain the details of the conduct or its consequences, if it can be reasonably inferred from what is said, this too would be defamatory
The question then arises: but what if it is the truth?
There are certain defences to defamation Once the aggrieved individual has proved that the statement is defamatory and that it was published, the alleged defamer is required to rebut the presumption that their conduct is wrongful and intentional While there are a number of defences, we will focus on the defence of “truth and in the public interest”
DEFENCE
It is lawful to publish a defamatory statement which is true, provided that the publication of the defamatory statement is for the public benefit The defence of truth and public interest is also commonly referred to as the defence of “justification”
The courts have held that, in this context, the public interest would suffer rather than benefit from any unnecessary reviving of forgotten scandals However, the commission of recent offences against the law or against society, the courts have held, stands on a different footing It is generally for the public interest that others who might have any dealings with the guilty individual should be informed of his true character In the context of disclosing an employee’ s conduct to
TWISTED
Cast member Richard Gadd attends a photo call for the TV series Baby Reindeer in Los Angeles, California /Reuters
BUSINESS LAW & TAX
Litigation funding a big deal
•
Case against Old Mutual by Living Hands trustees is an example of offshore funders with deep pockets
Evan Pickworth Business Law & Tax Editor
The once prevalent distaste for “champerty” has significantly diminished since 2004, with third-party legal funding becoming more prominent and popular in SA
The rising costs and protracted nature of complex legal disputes often make this option a lifeline for indigent litigants, who may never reach the court’ s steps without substantial financial backing
However, the prospect of foreign private equity funds or investment houses operating out of a tax haven taking control of litigation in SA in pursuit of major payouts usually 50% of a favourable outcome must raise eyebrows These deals are also making the headlines for all the wrong reasons due to disputes between the parties to the funding agreement itself
Since 2004, one of the initial challenges with this new avenue for justice was the enforcement of cost orders against funders The courts, however, have shown commendable progress in developing the law and have become more receptive to this prospect, even granting cost orders where the funder was not joined as a party
In recent months, Nkosana Makate’ s R20bn “Please Call Me” case has gained momentum thanks to litigation funding through the Sterling Rand Litigation Fund
Yet it did not come without a 15-year wait and a contentious dispute with the
early initial funder, Raining Men Trade, with issues like signatures and arbitration leading to separate nasty legal fights
Meanwhile, Claims Funding Europe funded litigation in the Netherlands and SA on behalf of investors in Steinhoff International Holdings
As part of the global settlement in the class action, €442m was contributed to the settlement fund
The case brought against Old Mutual Unit Trust Managers (OMUT) by the trustees of the Living Hands Umbrella Trust is a recent example of litigation funding from offshore funders with deep pockets However, the extraordinary feature of the action was that the undisputed primary cause of the loss was the criminal conduct
YOU ALSO HAVE TO WONDER WHY A PROVISION FOR R30M IN LEGAL FUNDING WAS NEEDED TO TARGET OLD MUTUAL
of individuals comprising the controlling mind of the first plaintiff, Living Hands (Pty) Ltd, a trust administration company and not the company targeted in the litigation, which was just an investment adviser following an instruction in line with its mandate
It is scary to think what a precedent in favour of the plaintiffs would have been set for the financial services industry
You also have to wonder why a provision for R30m in legal funding was needed to target Old Mutual, which was not involved in any of the corruption and fraud, instead of chasing the actual looted money trail of Fidentia itself In the earlier action which was recently overturned on appeal the plaintiffs had claimed damages in delict, based on an alleged negligent omission by OMUT which caused the trust to suffer pure economic loss
You will remember beneficiaries of the looted Living Hands fund included widows and orphans of miners Mastermind of the fraud J Arthur Brown spent time behind bars for his misdeeds (Sadly, the curators were able to recover only a pittance of the R2bn Fidentia empire )
To the likely dismay of the plaintiffs and their offshore funders strangely, the original funders, Global Distressed Alpha Fund III out of Bermuda, were in 2014 replaced by Simba Investments, with its registered office in Singapore but legally existing under the laws of Luxembourg the SCA recently held that when it paid the funds into the first plaintiff s banking account,
nobody, least of all OMUT, could have known that the Fidentia wrongdoers were going to embark on a course of criminal conduct that would result in the depletion of the funds The loss suffered was not of a kind that was reasonably foreseeable
This meant that the various reasons given for allowing the plaintiffs’ claim are in principle not legally sound The plaintiffs, on whom the burden of proof lay, failed to establish wrongfulness, negligence and causation
As the dust settles on this protracted action, the funding agreement of 2011 assigned to Simba in 2014 makes for interesting reading, notably as it is unclear how much the 46,000 widows and orphans would actually have received if this litigation was successful It makes a maximum amount of R30m available on top of the R750,000 in legal
costs and expenses incurred in 2011 of R750,000
It also gives the two curators including the disgraced Dines Gihwala (who quit as curator in June 2014) a handsome payment of R100,000 a month with 10% annual escalation, excluding VAT and other necessary disbursements It includes payment for adverse cost orders (meaning the funders will have to pay for the recent appeal)
On the flipside, had they won, the funders would have benefited from a clause
ALARMINGLY, ANOTHER PROVISION ALLOWS FOR THE FUNDERS TO ‘CONTROL AND DIRECT’ THE LITIGATION
which read that any award shall be split in equal shares
Alarmingly, another provision allows for the funders to “control and direct” the litigation, giving them significant sway in how it is run and whether or not appeals will take place despite this being a dispute within the confines of SA law
Based on the above, the jury must be out on whether litigation funding is always the right choice SA The Old Mutual decision shows that sometimes funders with deep pockets can back the wrong horse SA law is advanced but fair and, generally, our top courts get it right in the end
The reality is that litigation funding is big business globally due to the handsome payouts that can be achieved It is still a small percentage of the cases in SA, but we need to watch this space closely
Baby Reindeer: getting to the bottom of a ‘true’ story
CONTINUED FROM PAGE 1
other employees or future employers, there may be moral, ethical or legal duties that the employer is required to consider prior to making the disclosure which will inform whether it is obliged or entitled to disclose the information
Insofar as the publication to the employer s own employees is concerned, the employer may be required to disclose certain information to, for example, ensure the safety of its employees
Insofar as publication to future employers is concerned, a former employer potentially has a duty to inform a prospective employer of the character or conduct of their potential employee
The duty may arise from a legal or contractual duty (under any employment or collective agreement as a result of an industry agreement or as a result of a request for details of the reasons for the employee s termination) or a moral or ethical duty In this regard,
there is no general legal obligation to disclose the misconduct to a prospective employer However, a failure to disclose this information or accurate information regarding their conduct may result in the former employer attracting liability for any future harm caused to the future employer
Consequently, whether the publication of a defamatory statement is for the public benefit will depend on a number of factors, including whether:
● There is a duty to disclose
the employee s conduct;
● What is disclosed is true (which is assessed on a balance of probabilities); and
● The timing of the publication impacts the public interest assessment ie is this a forgotten scandal or is it recent and relevant?
Accordingly, employers may make statements to third parties about the conduct of their employees, provided that they have a valid defence on which they can rely When making any disclosures of this nature, employers must be careful not to disseminate
the information recklessly
The disclosures must be made only to those who are entitled to receive them and there must be a cognisance of any unintended consequences of the disclosure, such as a breach of confidentiality obligations to any victims
COMPETING DUTIES
Employers must be careful to balance the competing duties of the employer and the rights of the other employees, the offending employee and the victim(s) In doing so,
employers should be mindful that any changes to the facts to protect identities or overembellishment (intentional or not) may impact whether the statement amounts to the truth on a balance of probabilities It is important to remember that even if the statement is true, it may not always be in the public interest
Similarly, if the statement is not entirely true, the aspects of truth may not insulate an employer from a claim of defamation in respect of the untrue statements
/123RF SASUN1990
BUSINESS LAW & TAX
Data and cloud policy gets more flexible
• Practical approach to cloud computing recognises its pivotal role in socioeconomic development
Priyanka Raath & Shaaista Tayob ENS
The department of communications & digital technologies officially published the National Data and Cloud Policy (GG No 50741) on May 31 2024, in line with section 3(1) of the Electronic Communications Act, 2005
The policy recognises that data and cloud technologies have a pivotal role to play in socioeconomic development, government service delivery and digital economic growth in SA
Key objectives include:
● Enhanced data security The policy aims to protect private and sensitive information from cyberattacks through the establishment of data protection protocols as required by the Protection of Personal Information Act, 2013 (Popia)
● Digital transformation The policy aims to promote the use of technology in different sectors to increase productivity and efficiency
● Improved public service delivery The policy aims to promote the use of cloudbased solutions, to help government departments offer better services to citizens and businesses
● Economic growth The policy will enable more businesses to leverage technology, which will lead to increased job creation and economic growth
THE POLICY AIMS TO PROMOTE THE USE OF TECHNOLOGY … TO INCREASE PRODUCTIVITY AND EFFICIENCY
● Enhanced collaboration The policy aims to facilitate enhanced collaboration among government departments, private entities and research institutions, fostering the exchange of knowledge, data and expertise
To whom does the policy apply? The policy has broad
application in that its scope extends to:
● National and provincial government
● Organs of state/public enterprises
● Private sector
● General public/individual citizens
● Data controllers and data custodians
In addition, the policy outlines the responsibilities of data centres operating in SA specifically:
● Data centres must be built and operated in adherence to environmental legislation and building by-laws
● Data centres must not be built in restricted areas such as heritage sites, national key points or land designated for land reform
● Data centres must not be located in areas prone to natural disasters or social disturbances
● Data centres must display or be able to provide verifiable certification credentials to all potential customers
● Data centres used by the government should comply with a fault-tolerant design that provides a minimum
uptime of 99 995%
● Priority should be given to the self-provision of electricity and water for the operations of data centres to ensure continuous operation and reduce dependency on the national grids
The above must be considered by (1) organisations using data centres in SA to host their data and ensure that their contracts with such data centres are updated to align with the above, and (2) data centres that operate in SA should consider the impact of the policy on their operations and customer engagements
What does it say about decentralising cloud services?
The new policy framework aims to migrate all government IT services to the cloud, fostering interoperability between various government departments and enhancing digital services for citizens
By decentralising cloud service providers, the policy
acknowledges the expertise and resources available within the private sector, which can enhance efficiency and innovation in public services
This is a departure from the draft version which stated that all government sectors should rely on a single, government-owned data centre for their IT needs, which had been a concern raised by many sectors and key stakeholders
One of the notable provisions in the policy is the requirement that data centre infrastructure used by government entities must be located within the country
Is the policy binding?
Since there are already existing policies and legislation such as Popia, the Cybersecurity Policy Framework and the Cybercrimes Act that address data governance and security, the policy is aimed at reinforcing these laws
The policy still needs to undergo implementation which will be done through
government consultations with key stakeholders and implementing agents such as SITA, relevant government departments and, where necessary, industry and sector stakeholders
Structures comprising different professionals will be established to advise on the development of frameworks necessary to support the policy’ s implementation, including a data advisory council with representatives from the public and private sectors, academia and a data and cloud technical implementation task team comprising various government entities’ representatives
The policy represents a strategic shift towards a more flexible and practical approach to cloud computing in the public sector, which impacts organisations in multiple industries
● Reviewed by Ridwaan Boda, executive in ENS’ TMT practice
Job termination: what employers need to know
Jacques van Wyk
Werksmans
In today’ s highly competitive employment market, securing the most suitable candidates is of paramount importance to the success of a business
Employers must, however, be careful to vet prospective employees so as to protect the interests of the business Offers of employment are therefore increasingly subject to conditions and requirements which, if not met, may lead to the termination or cancellation of employment or an offer of employment
In Makakaba v APT Engineering JV [2024] 4 BALR 385 (CCMA), the Commission for Conciliation, Mediation and Arbitration (CCMA) decided on a dispute where a prospective employee claimed to
have been unfairly dismissed without a disciplinary hearing, following a background check conducted by APT Power Engineering JV (the company) which indicated a prior criminal conviction Mpho Makakaba (the employee) was provisionally employed as a mechanical fitter, pending the outcome of certain background checks
Upon receipt of the applicant s police clearance results, his provisional contract of employment was terminated He referred a dispute to the CCMA in terms of section 191(1) of the Labour Relations Act 66 of 1995 (LRA)
At arbitration, the employee stated he had given the company permission to conduct a background check on him and had incurred the costs for doing so He also stated he had notified the company that he had once
paid a fine but failed to produce evidence to this effect
Although the employee denied having been made aware of some parts of his employment contract, he conceded that his signature appeared on same One of the clauses in the employment contract provided that: The employee is expected to provide police clearance at his/ her cost If one is not provided, APT will acquire the necessary criminal clearance on behalf of the employee, and the cost will be deducted from the employee s salary
In cases where the employee fails to submit the required police criminal clearance, the company has a right to terminate the agreement
The employee submitted that he was aware of the provisions of this clause but that, according to his understanding, if an employee did not
meet the requirements, they would be issued with a notice of termination and removed from the work site pending the outcome of a disciplinary hearing
In response, the company s human resources manager testified that an induction meeting was held where all prospective employees were made aware of the provisional nature of the employment contracts, the criminal and other background check requirements and the possible conse-
ALL PROSPECTIVE EMPLOYEES WERE MADE AWARE OF THE PROVISIONAL NATURE OF THE EMPLOYMENT CONTRACTS
quences of not meeting the company s requirements
She further submitted that a disciplinary hearing was not necessary because the applicant was employed under a conditional contract and therefore could be released without neither prior notice nor a hearing
The CCMA had to decide, among other things, whether the employee had established the existence of a dismissal and, if so, if such dismissal was fair
The CCMA found the employee was aware of the company s requirements for employment and of his duty to disclose all criminal convictions but had failed to do so Further that, the employee was a prospective employee pending the outcome of all checks and was therefore not entitled to a disciplinary hearing
The CCMA commissioner considered Bayat v Durban Institute of Technology (2006) 27 ILJ 188 (CCMA) where it was held that where a conditional offer of employment is made, an employment relationship only comes into being when the condition is fulfilled
Accordingly, the employee was found to have failed to discharge the onus of establishing the existence of a dismissal
If employers wish to make employment offers subject to the fulfilment of conditions, then these must be clearly stipulated in the contract of employment
These conditions might be that employment is subject to: (1) positive background checks and (2) the verification of the candidate s personal, professional and criminal history
BUSINESS LAW & TAX
Alternative housing and eviction law
• Occupiers cannot wilfully defeat property owner ’ s rights by failing to seek other accommodation
Wandile Ndabambi & Tamara Chinganya ENS
In the case of Smith v Khumalo and All the Unlawful Occupiers of the Property and Another, the court per Duncan AJ deemed it just and equitable to order the eviction of the unlawful occupiers of a residential property despite the City of Johannesburg not yet identifying and providing suitable alternative accommodation for them
The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998, a cornerstone of the legal framework governing evictions, is underpinned by constitutional principles
Section 26(3) of the constitution stipulates that noone may be evicted from their home or have their home demolished without an order of court made after considering all relevant facts The act, in turn, enforces this constitutional obligation by stating that no person may evict an unlawful occupier except on the authority of an order of a competent court
The Constitutional Court confirmed in Occupiers of Erven 87 & 88 Berea v CF de
Wet NO and others that the act envisages a two-stage inquiry that must be undertaken by a court when considering an application for eviction from residential premises first, whether it would be just and equitable to grant an eviction order having regard to all relevant factors; and second, if it decides that an eviction order should be given, the court must apply
ALTHOUGH THE ILLEGAL OCCUPANTS INCLUDED YOUNG CHILDREN, THE PROPERTY WAS UNSUITABLE FOR THEM
principles of justice and equality in determining the date of implementation of that order and whether any conditions should be attached to that order
In this case, the retired pensioner, who owns the property in Johannesburg, vacated it in 2005 to let it to a tenant After the previous tenant was forced to leave, the pensioner discovered that unauthorised individuals had
taken up residence on the property
These individuals violently confronted the applicant, leading to the applicant seeking court assistance
The applicant recorded that the property was in a good, upmarket state when the illegal occupation commenced, with all amenities intact However, at the time of the court application, the property was dilapidated and vandalised, and the power had been disconnected, resulting in a drop in the property’ s value The applicant has since been without a house and forced to stay with friends and family
In July 2020, the applicant received an offer to purchase the property He saw this as his only chance to regain some benefit from the property that had been unlawfully occupied Given his age and lack of income, the ability to sell the property was a glimmer of hope It would provide him with funds to sustain his livelihood
In their opposition to the application, the unlawful occupiers relied solely on the argument that they had no alternative accommodation They contended that they should be allowed to remain
in the property until the municipality provided them with accommodation
A relevant factor in the first inquiry is whether alternative accommodation is available When considering this requirement, the court acknowledged, on the one hand, the applicant’ s right to property under section 25 of the constitution and found that he had been unlawfully deprived of this right
On the other hand, the court considered whether an eviction order would be just and equitable in circumstances where the respondents had occupied the property without paying rent and failed to look after the property to the extent that it posed a safety and health threat to those who occupied it
The court noted that although the illegal occupants included young children (who would be worse affected by an eviction), the property was unsafe and unsuitable for them
Additionally, the respondents’ only defence to the application was that they did not have accommodation and should be allowed to stay on the property until the municipality provided them with suitable accommodation
CONSUMER BILLS
The court held that from the launch of the application in September 2022, the respondents knew that the property belonged to the applicant and that they were in unlawful occupation of the property as the applicant wanted them to leave
In the circumstances, justice demanded that unlawful occupiers who were given notice of eviction were obliged to take steps to find alternative accommodation and could not remain in the property and wilfully defeat the property owner ’ s rights
There was no evidence that the respondents took any steps to find alternative accommodation
Thus, despite the municipality not yet being able to find alternative accommodation for the occupiers who qualified for such accommodation, the court found it just and equitable after considering the applicant’ s interests and the occupiers’ interests to grant an eviction order
However, the court allowed the occupants to vacate the property from May 13 2024 (the date of the order) until September 1 2024 (ie after the worst of the highveld winter)
As part of the second
inquiry, the court made the additional order directing the municipality to take steps to find accommodation for the qualifying occupiers Still, it noted that the obligations imposed on the municipality by the additional order did not in any way undermine (or render conditional) the finality of the eviction order
The court explicitly urged the adult occupiers to act responsibly and proactively to find alternative accommodation, including approaching the department of human settlements
This decision highlights the obligation placed on unlawful occupiers to actively try to find alternative accommodation in circumstances where they have been notified of their unlawful occupation and not to rely on the local authority and wilfully defeat the property owner s right to his property Eviction laws are a contentious topic, often viewed from different angles Property owners may perceive them as oppressive, while occupiers rely on these laws to protect their occupancy Understanding eviction laws empowers property owners to ensure fair treatment and safeguard fundamental rights
Kenya shows the way for AI-generated jump
In June 2024 a multidisciplinary workshop which included technology experts, philanthropists, educational institutions and business development bodies produced a paper titled AI and the Future of Work in Africa (available online) which provides exceptional insights into that subject
A great deal of positive and negative things are being said throughout the world about generative AI, but few comments focus specifically on Africa
The huge advantage of generative AI is that it is gender and age neutral
Anyone who takes the trouble to acquire the skills can leap ahead of those who
PAT R I C K B R AC H E R
don’t In developed economies the major threat is seen as the replacement of jobs In Africa, with an average of 75% of the population in informal business, the opportunities for improvement are selfevident So too with SA’ s high rates of unemployment and the discernible gender gap
You cannot lose a job you do not have, but you can acquire AI skills to get a better future
than those who don t
Dealing with generative AI is like dealing with another person The skills are best learnt by having conversations with the best platforms There are not enough young people in formal employment to leave it to employers to upskill their employees That will not grow the skills fast enough One thing the informal sector and joblessness has created is entrepreneurship and innovation
However, learning from constant interaction with generative AI requires constant access to data and devices The paper reveals that five of the 10 most expensive countries for data
are in Africa Give people open access to the internet and knowledge of what is available and they will acquire the skills to make positive use of generative AI
Kenya sets a good example by creating hotspots in Nairobi and a commitment to establish 1,450 village digital hubs and 25,000 WiFi hotspots nationwide With the rapid development and improvement of generative AI and its ability to create opportunities, there is an even more compelling need for government and business to create hotspots, especially in areas where there is greatest unemployment, and to provide access to affordable data
Many businesses are hotspots in themselves
It is interesting to watch overnight and weekend security personnel in offices relieved from the tedium of the job by having access to the internet and the wider world
Access to the internet needs to be selfless and available, and business can provide it to more of those who need it
If we don t go about it
ANYONE WHO TAKES THE TROUBLE TO ACQUIRE THE SKILLS CAN LEAP AHEAD OF THOSE WHO DON’T
positively, generative AI will exacerbate inequality between people and between economies
Political, business, religious and cultural leaders in SA need to take the lead in providing the opportunities to gain valuable AI skills And access needs to be combined with the ethical deployment of AI that can be monitored and enforced
It is essential to give universal opportunities for self-skilling so those empowered can advance the economy and create opportunities for newly opened career pathways
● Patrick Bracher (@PBracher1) is a director at Norton Rose Fulbright
BUSINESS LAW & TAX
Signal of shift towards more regulation
•
On his way out the door, trade & industry minister publishes draft regulations on vertical restraints
Heather Irvine & Judd Lurie Bowmans
On June 3
2024, the outgoing trade, industry & competition
minister published Draft
Vertical Restraints Regulations in relation to section 5 of the Competition Act for public comment
It seems these draft regulations are partly an attempt to regulate particular kinds of restrictions which have been identified by the Competition Commission as problematic in its market inquiries to date
Market inquiries don’t create a permanent legal mechanism for the commission to regulate conduct or agreements it regards as anticompetitive or adverse to the public interest objectives of the act
The draft regulations also set out factors which may be relevant in assessing whether
minimum resale price maintenance in contravention of section 5(2) of the act has occurred, such as whether a supplier has imposed a minimum resale price on goods to be resold; and whether there
EACH CASE NEEDS TO BE ASSESSED ON ITS MERITS AND IN LINE WITH THE ANALYTICAL FRAMEWORK POSTULATED IN THE ACT
is an “inducement to comply with the set price and sanctions for noncompliance”
However, the draft regulations propose that it is also relevant if there have been repeated requests by the supplier to adjust pricing to the minimum resale price; and whether the supplier restricts advertising below the mini-
mum resale price
The memo notes that this kind of restriction blunts the reward to a reseller of pricing lower and may maintain prices at the minimum level prescribed by the supplier
The minister is empowered by section 78 of the act to make regulations “that are required to give effect to the purposes of this act” However, as a form of subordinate law making, such regulations cannot amend the act; this can only be done by parliament Accordingly, the test set by section 5 for whether a particular restraint constitutes a restrictive vertical practice (as interpreted by the tribunal in the case precedent to date), remains unchanged
So does the burden of proof on the commission to demonstrate that, on a balance of probability, a firm has contravened the act The draft regulations cannot shift the burden of proof to a firm to prove that any restriction on a distributor, customer, fran-
chisee, dealer etc is necessary or indispensable There may be cases in which a restriction has the consequence of excluding historically disadvantaged persons (HDPs) and/or SMEs, and this results in a substantial lessening or prevention of competition in the market as a whole but this would certainly not always be the case
In competitive markets in which there are many brands, smaller rivals and HDPs should be able to partner with other suppliers and, consequently, the level of competition in the market as a whole is unlikely to be affected by any restrictions which are imposed by a particular brand owner Of course, each case needs to be assessed on its merits and in line with the analytical framework postulated in the act
The draft regulations do not remove the need for a
thorough economic assessment by the commission (when it investigates complaints) or the tribunal (when it adjudicates complaints) in line with established principles of any alleged prohibited practice This exercise would have to include a careful review of the facts of each case, as well as an appropriate assessment and weighing up of the efficiency, procompetitive or other advantages of such restrictions
It is important to recognise that even exclusive agreements which by definition may have an impact on market participants that are not parties to the agreement may be efficiency enhancing and can often be pro-competitive
This draft is a further signal that the commission increasingly favours rulemaking which bans particular kinds of restraints which it
regards as potentially problematic or unfair, rather than case-by-case, evidencebased assessments of whether a particular restriction actually harms competition, and if so, whether there are still pro-competitive or efficiency enhancing reasons to apply it
However, while as a matter of policy, the commission may favour the elimination of the particular kinds of vertical restrictions identified in the draft regulations, these restrictions are not identified by the act as unlawful per se and, consequently, brand owners and manufacturers that regard these restrictions as essential for the efficiency of their distribution model are entitled to apply them unless they substantially lessen or prevent competition in a relevant SA market and are not justifiable
* See also Page 11
Beware of standard form lease agreements
Charles Shapiro & Charne Martin
Fluxmans Attorneys
Lease agreements often contain clauses that lead to litigation after the lease has terminated as was highlighted in Mokone v Tassos Properties CC and Another 2017 (5) SA 456 (CC)
In Mokone, the tenant entered into a written 12month lease agreement with the landlord, which granted the tenant a right of preemption The tenant was a business owner operating out of the leased premises
The lease was orally renewed (the first extension) for another year and later extended for a further eightyear period (the second extension) The second extension was effected by making a written endorsement on the front of the original lease indicating the increased rental and new expiry date of the lease,
L E GA L S C O O P
accompanied by the sole signature of the landlord s representative
During the renewed lease period the landlord sold the property to a third party without first offering it to the tenant The tenant then notified the landlord that she wished to exercise her right of pre-emption and offered payment of the same purchase price She asserted that her right of pre-emption was automatically extended along with the lease during the first and second extensions and that the sale by the landlord to the thirdparty buyer was, therefore, invalid and set aside
The Constitutional Court held that the tenant’ s right was valid and enforceable in that the contract in its entirety had been extended, including the right of preemption, despite the fact that the renewal of the lease was oral, as pre-emptive rights need not comply with the formalities set out in the Alienation of Land Act
The decision in Mokone emphasised the importance of not agreeing to a blanket renewal when a lease terminates
Standard form lease agreements often do not consider the implications of lease renewals or extensions which provide for the same terms and conditions as the existing lease creating obligations for the landlord, the tenant and their successors in title which do not reflect the intentions of the parties
This is particularly apposite where the original
lease contains a benefit for the agent such as the agent s entitlement to commission if the tenant purchases the property after the termination of the original lease
CONSEQUENCE FOR ALL PARTIES
Landlords, unaware there is an enduring clause, might unknowingly sell the property through another agent to the tenant and then become liable for double commission, having to pay the agent who procured the tenant in addition to the agent who sold the property to the tenant
The landlord may face a claim from the tenant who had the right of first refusal or the purchaser who in good faith purchased the property only to find that the purchase agreement is set aside due to the tenant having had the right of first refusal (as in Mokone s case )
The tenant who purchases the property through a different agent from the agent who facilitated the hire of the property and is unaware of the enduring clause which entitled the letting agent to a sale commission if the property is purchased by the tenant and who warrants that the selling agent was the effective cause of the sale, will be in breach of that warranty
Executors of estates may be saddled with all the consequences of enduring clauses as the executor is
LANDLORDS, UNAWARE THERE IS AN ENDURING CLAUSE, MIGHT UNKNOWINGLY SELL THE PROPERTY THROUGH ANOTHER AGENT
unlikely to be aware of either the tenant’ s rights of first refusal or the agent’ s right to a commission where a lease is terminated
THE SOLUTION: CLEAR AND TAILORED AGREEMENTS
To avoid these issues and potential future litigation, both landlords and tenants:
● Are cautioned against relying solely on standard form agreements
● Are advised to consult with legal professionals to ensure the lease agreement reflects their intentions and is premises specific
● Should clearly define the duration of collateral clauses such as the right of first refusal, and the agent s introducing role and the right to commission
● Must expressly terminate collateral clauses upon lease extension if they are not intended to continue
BUSINESS LAW & TAX
Resemblance is more than skin deep
• Advertising board finds that L’Oréal product deserves protection from Nutriwomen packaging
Liézal Mostert ENS
In SA, it is not uncommon for companies to take disputes related to intellectual property to the Advertising Regulatory Board (ARB), a process that is far cheaper and quicker than high court proceedings
In this article, we discuss recent ARB proceedings regarding skincare products in the case of L’Oréal SA (Pty) Ltd v Nutriwomen (Pty) Ltd
L’Oréal lodged an ARB complaint about Nutriwomen ’ s Dermacare product range It claimed the Dermacare packaging “substantially copies the packaging and get-ups” of L’Oréal’ s CeraVe products
L’Oréal argued as follows:
● CeraVe has distinctive packaging and it has been advertised significantly worldwide and in SA;
● Nutriwomen, a direct competitor, is copying CeraVe with its Dermacare range and is doing this through similar packaging, get-ups, colour schemes and product descriptions;
● Nutriwomen is exploiting CeraVe’ s advertising goodwill
and is seeking to create “ an association of affiliation in the mind of consumers [this] is likely to cause damage to the goodwill associated with the complainant’ s product packaging and get-up” ;
● The two products “directly compete” as they are sold “in the same stores and on the same shelves, and are used by the same consumers for the same purposes ” ;
THE CERAVE PACKAGING HAS NOT BEEN USED FOR LONG ENOUGH FOR THERE TO BE ANY PROTECTABLE ADVERTISING GOODWILL IN SA
● Nutriwomen, through its imitation of the CeraVe packaging, is “deliberately seeking to ride on the coattails of the substantial and favourable reputation the complainant has developed in its CeraVe packaging and get-up” ;
● Nutriwomen is contraven-
ing clauses 8 1 and 9 1 of section II of the ARB Code
Nutriwomen’ s response Nutriwomen saw things differently It denied there were rights in the CeraVe packaging It made the point that it had not replicated the Vshaped block used by L’Oréal It also argued the following:
● The CeraVe packaging has not been used for long enough for there to be any protectable advertising goodwill in SA;
● The CeraVe packaging architecture is not unique and the colours used are common in the industry;
● L’Oréal is trying to stifle legitimate competition;
● Dermacare has built up its own reputation;
● There are lots of other similar products, colours, descriptors and fonts out there;
● The two brand names are clearly visible;
● The goods involved are not impulse purchases; and
● It is not unlawful to sell products which are considered to be “dupes” of another product
The ARB ruling In a ruling dated May 16 2024,
PACKAGING PICKLE
the ARB made the following findings:
Jurisdiction: Although Nutriwomen had not submitted to ARB’ s jurisdiction, the regulatory board can issue a ruling for the guidance of its members This can have a significant impact on the ability of a non-member to advertise and possibly sell its products through retailers that are members of the ARB
Passing off: Although the test to be applied under clauses 8 and 9 of section II of the ARB Code is not quite the same as the test for passing off, court decisions dealing with passing off may be persuasive in ARB matters
The exploitation of advertising goodwill: Clause 8 of the ARB Code deals with the exploitation of advertising goodwill and says the likelihood of confusion, deception and the diminution of advertising goodwill are factors that can be considered
The existence of goodwill: On the issue of whether there is advertising goodwill, the following issues are very relevant:
● L’Oréal’ s significant revenue;
● A market share of 10% in the skincare category of dermocosmetics (which both brands are part of);
● The availability of its products in the Dis-Chem and Clicks chains; and
● Significant advertising Dealing further with advertising goodwill, the ARB said the following:
● It was satisfied that the “unique combination of elements in the CeraVe product architecture has resulted in distinctive packaging goodwill”
● L’Oréal has clearly “gone [to] great effort in the short time since the launch of CeraVe locally to advertise the brand, including the product architecture of the different products in the range”
● Social media posts submitted by L’Oréal in support of the complaint show that “CeraVe and the related product architecture is widely recognised by and prominent in the mind of consumers [L’Oréal] has established the necessary advertising goodwill in its product architecture within the meaning of clause 8 of section II, despite having launched its products locally only in 2022 ” No coincidence: The ARB was clear: “There are too many similarities for this to have been coincidence the CeraVe and Dermacare range share overwhelmingly the same imagery imagery that is not shared by third-party products ”
A likelihood of confusion: The ARB held that there was
/Picture: Supplied
clearly a likelihood of confusion “by a hurried consumer and based on imperfect recollection” despite differences in the brand names of the products This meant that there was a breach of clause 8 of section II of the code Dupes: The ARB held that “dupes may be commonplace in the market, but this does not mean that competitors offering ‘dupes’ have free rein to copy the product architecture of another brand Copying brand architecture to deliberately create the impression in a consumer ’ s mind that your product is a ‘dupe’ of the original would amount to classic exploitation of that brand’ s advertising goodwill ” Imitation: The ARB said that clause 9 prohibits the copying of an existing advert in a way that “is recognisable or clearly evokes the existing concept and which may result in the likely loss of potential value” The ARB held that “the unique combination of elements affords the CeraVe packaging protection within the meaning of clause 9” Conclusion
The ARB can, in certain cases, play a significant role in disputes related to intellectual property
● Note: The ruling of the ARB is being appealed
Dispute resolution is one answer for clogged Joburg court
Nick
Alp & Sarah McKenzie
Webber Wentzel
A recent notice issued in the Johannesburg high court by deputy judge president Roland Sutherland on June 4 2024 indicated wait times for civil trials
The notice advised that the lead time to have a matter heard in the civil trial court could, in some instances, take up to three-and-half years (ie in November 2027) This is alarming This significant delay could unfairly favour recalcitrant defendants, with the result that in a lot of cases, justice delayed will be justice denied (as the maxim attributed to the British politician William E Gladstone suggests)
The notice indicates that reducing the civil trial lead time to less than 12 months
(which is the standard set in the 2014 Norms and Standards for the Performance of Judicial Functions) would require about 20 judges assigned to civil trials each week Currently, the court can only allocate between two and six judges a week In measuring a court s performance, one of the primary indicators used is the case clearance rate This rate calculates the number of resolved cases compared with the number of incoming cases It indicates whether a court is clearing (resolving or disposing of) fewer cases than are being filed and signals whether the court or court system is keeping up with the demands for judicial service
While indicators assessing case duration and overall quality of justice are impor-
tant, the case clearance rate is arguably the most widely used benchmark as it provides clarity and ease of measurement
The notice is indicative of significant capacity constraints at the Johannesburg high court This capacity constraint is fuelled by limited resources and rising caseloads
The court is hamstrung by insufficient human and other resources to keep up with the civil trial caseload Appointing pro bono acting judges helps, but it has not alleviated the backlog
The number of civil cases filed is also increasing, putting further strain on the system To significantly reduce the backlog, the court would need to dedicate at least three times the current number of judges allocated to
civil trials
Other measures and interventions that can be taken to tackle the case backlog issue include:
● Amending the regulatory framework to improve the efficiency of court proceedings (for example, simplifying procedures or introducing time limits or shorter deadlines);
● Relieving judges of nonjudicial tasks;
REDUCING THE CIVIL TRIAL LEAD TIME TO LESS THAN 12 MONTHS WOULD REQUIRE ABOUT 20 JUDGES ASSIGNED TO CIVIL TRIALS EACH WEEK
● Transferring judges from other less burdened divisions to sit in Johannesburg; or
● Transferring cases from Johannesburg to courts in less burdened divisions
These interventions may, however, have cost implications and may take time to implement, thus not addressing the backlog in the short term
The Johannesburg high court s backlog strengthens the case for alternative dispute resolution (ADR), which includes mediation and arbitration It offers a faster and potentially less expensive way to resolve disputes outside of court This could significantly reduce wait times for litigants and lessen the court s burden
Sutherland echoes this sentiment, advocating for a broader dispute resolution
system that includes ADR alongside traditional court proceedings
Importantly, ADR would never replace the court system in its entirety, but it has huge potential to support the system For example, an ADR process could be tailored to deal with the pre-entry of a case into the court system so that once the case gets to court, all parties are on the same page and preliminary issues have been resolved In SA, ADR and arbitration in particular given its strict regulation offers a flexible, quick and effective route for resolving disputes In light of the overwhelming backlog in our courts, it would be manifestly advantageous, not only for parties but also for the functioning of our court system as a whole, to consider ADR at this time
BUSINESS LAW & TAX
Guilty until proven innocent
• The cornerstone of justice, ‘innocent until proven guilty’ , vanishes when a whistle-blower speaks up
Chelle Waters Independent consultant
SA’ s fight against corruption often feels like a desperate plea echoing in vast, empty space
Despite mounting evidence and public outcry, those implicated in fraud and corruption often seem untouchable
Calls for accountability go unanswered, whistle-blowers are left exposed and the fight for justice can feel like a losing battle This pervasive sense of impunity breeds cynicism and despair
The risks of whistleblowing are no secret Yet, even more baffling is the instant presumption of guilt when those who are corrupt attempt to turn the table on those who bravely speak up
The cornerstone of justice, “innocent until proven guilty” , seems to vanish when someone speaks up Why is it ingrained in us to believe the worst first?
Even when innocence is painstakingly proven, the vindication is often a whisper compared to the initial roar of accusations This deafening silence from the public echoes the lack of support for whistle-blowers, leaving them exposed and isolated
It’ s a chilling reminder that the fight for truth can be a lonely one
We humans have a morbid fascination with the downfall of others A juicy exposé on corruption grabs
our attention, fuelling outrage and much sharing on social media But here’ s the rub: when the dust settles and innocence is proven, our outrage rarely translates into the same level of vindication
This silence is corruption’ s silent ally It allows the powerful or those who do wrong to skate by unscathed, while whistle-blowers wage a lonely and often perilous fight for truth
This lopsided dynamic is a huge hurdle in the fight against corruption We must break free from this cycle of scandal-mongering and
SILENCE IS CORRUPTION’S SILENT ALLY. IT ALLOWS THE POWERFUL OR THOSE WHO DO WRONG TO SKATE BY UNSCATHED
demand accountability for wrongdoing, not just revel in the initial takedown
A clear example is the plight of two courageous lawyers who, despite enduring arrest and mistreatment following their work for the University of Fort Hare (UFH), continue to stand up and speak their truth
Bradley Conradie and Sarah Burger began investigations into the UFH in 2018 and despite sharing substantial evidence of rampant
fraud and corruption with not only the UFH but also other authorities such as the Hawks and Special Investigating Unit (SIU), saw few steps taken to punish those committing these crimes Instead they, in fact, received ongoing abuse
While much has been written about this extensive fraud, what is alarming is why the fraudsters are still walking free despite all of the evidence at hand and at a loss of R60m-R70m to the university and Conradie and Burger continue to be grossly mistreated
The climate of silence surrounding whistle-blowing and those who investigate fraud and corruption extends beyond the inaction of powerful figures For those with the courage to speak out, protection is a rare commodity The emotional toll is immense, the fear of retaliation a constant shadow
TURN THEIR BACKS
But the betrayal goes deeper Often, the very organisations designed to support colleagues and whistle-blowers turn their backs, distancing themselves or even abandoning these brave souls This can happen before any investigation, before innocence or guilt is established, leaving the whistle-blower isolated and ostracised
This lack of understanding, especially from supposed allies, is a devastating blow It silences others who might come forward, perpetuating a
culture of corruption where wrongdoing thrives
One example of many is a recent post on LinkedIn about the UFH matter by an Institute of Commercial Forensics Practitioners (ICFP) committee member, who quoted a Daily Maverick article and then publicly praised the VC How can someone in the forensics profession who is a committee member of the institute publicly speak out without first contacting and questioning his own colleagues and, instead, support someone who I assume he does not know personally and, worse, laud them for having the same attributes as Nelson Mandela, details incidentally which have since been deleted
If Van Wyk had done any research he would have known that Conradie and Burger identified extensive fraud during their time consulting to the UFH
However, my point is here is someone in the same profession and a committee member of a body for foren-
sic practitioners and yet who himself has been quick to judge and assume guilt before innocence
Perhaps the waste of taxpayers ’ money in some of these investigations will produce more of an outcry For example, in Conradie and Burger’ s case, more than 20 police officials were deployed from the most elite unit to arrest both of them (Conradie who is in no way a danger or aggressive and Burger, a petite woman) after which a private jet was used to transport them from Cape Town to East London
In another related arrest, a single person was flown from Johannesburg to East London in a private plane In fact, most of the accused were jetted to East London, all at substantial cost to taxpayers
FOR THOSE WITH THE COURAGE TO SPEAK OUT, PROTECTION IS A RARE COMMODITY. THE EMOTIONAL TOLL IS IMMENSE
Then police minister Bheki Cele’ s comment in the media (News24) about the UFH matter where he said “ we will use whatever resources are available to us ” was very true and sadly, an unnecessary and outrageous squandering of taxpayers’ money
The reality of being a whistle--blower is keenly felt in a hard-to-watch BizNews’ interview with Mzukisi Makatse, the attorney who first blew the whistle on corruption at the National Lotteries Commission and who lost everything because of it, even though he was vindicated by the SIU who eventually uncovered R1 4bn in corrupt dealings
Was it worth it? I believe for someone like Makatse it was Truth and integrity even while floundering in a cesspool of deceit
And the same will apply, in time, for Conradie and Burger
Court ruling shows need for clear cannabis policies
Jonathan Goldberg & Grant Wilkinson Global Business Solutions
The landmark judgment in the Enever v Barloworld case has prompted a critical reevaluation of workplace cannabis policies in SA
Though personal cannabis use has been decriminalised, it does not grant carte blanche for employees to arrive at work under the influence, nor does it require employers to tolerate such conduct However, the Enever case highlights a nuanced issue: dismissal based solely on cannabis positivity without clear evidence of impairment may in some work environments be problematic
Bernadette Enever s dismissal was initially upheld for repeated positive tests for
cannabis, in violation of her employer’ s stringent zerotolerance policy
Enever s reference to the National Road Traffic Act, which permits a blood alcohol content of up to 0 05g/100ml, was not upheld by the court
The labour court emphasised that the company was bound by this statute and, similarly, the allowance for alcohol consumption at the workplace was strictly limited to rare events like yearend functions This policy did not bolster Enever s argument as it was deemed rational by the court to differentiate between these cases
The labour court further noted that cannabis should be consumed privately, reinforcing the distinction in the application of workplace policies
Nevertheless, on appeal to the labour appeal court, the labour court ruled the dismissal unfair, emphasising that Enever consumed cannabis during her private time without evidence of impairment at work This distinction is pivotal in environments that do not involve safetysensitive activities, where the absence of impairment evidence should influence disciplinary decisions In evaluating the claims of
COMPANIES MUST BALANCE POLICIES WITHIN A LEGAL FRAMEWORK THAT PROTECTS AGAINST DISCRIMINATION AND INVASION OF PRIVACY
discrimination, the labour appeal court applied the wellregarded Harksen model to assess whether differential treatment occurred; if such treatment was based on prohibited or arbitrary grounds that affect human dignity; and whether the treatment was justifiable, grounded on the inherent requirements of the job or legitimate policies of affirmative action
The labour appeal court opined: A mere positive test for cannabis that can remain in a person s system for many days does not address the sobriety of the user or indicate whether they are impaired from carrying out their duties
This remark highlights the need for evidence of actual impairment at work rather than reliance solely on the presence of cannabis in the system
The ruling underscores the necessity for businesses to develop fair, clearly defined policies that respect employees privacy while ensuring workplace safety and productivity Companies must balance these policies within a legal framework that protects against discrimination and unwarranted invasion of privacy
Employers are urged to consider both the specific job requirements and the broader implications of enforcing stringent substance policies
The labour appeal court stated: The principle of overbroad, unwarranted and unjustifiable invasions of the right to privacy being unconstitutional applies in this case
This judgment not only addresses the immediate concerns surrounding
employee rights and corporate policy but also sets a precedent for how similar cases might be handled in the future, stressing the importance of fairness, clarity and the need for a demonstrable link between substance use, job performance and work environment Businesses are encouraged to adopt more measured approaches, possibly integrating behaviourbased assessments rather than relying solely on biological testing, to manage cannabis use more effectively among employees
The Enever v Barloworld judgment offers guidance for refining workplace cannabis policies, ensuring they are justly enforced and adequately protect both the interests of employees and the operational imperatives of employers
BUSINESS LAW & TAX
Still no clarity on puzzle of NHI funding
• Does National Health Insurance mean that badly needed medical tax credits are on the way out?
Paul Gering Tax Partner PKF Durban
The president finally found his elusive pen and signed the controversial National Health Insurance (NHI) Bill into law
Timing aside it was conveniently signed a few weeks before an election in which the ANC suffered a bloody nose many gaps exist in how NHI will look and what it will mean for you, the longsuffering taxpayer
These gaps include how NHI will affect group schemes, private healthcare funders and healthcare providers The elephant in the room is how money will be
found to fund it, a question that leaves us all with a sense of uncertainty
Another important aspect is whether it will also mean the end of medical tax credits as we know them
Medical tax credits are nonrefundable rebates to reduce a person ’ s normal tax bill At R364 a month, they are significant for many, providing a crucial savings lifeline Any announcement that
ONE MUST QUESTION THE ABILITY OF THE STATE TO FUND AND MANAGE SUCH AN INITIATIVE
credits will be “capped” or “scrapped” is unlikely to go down well with taxpayers
This system has worked well in providing some relief for taxpayers Any move to NHI will surely affect medical tax credits and could ultimately mean their complete phasing out
This is because one of the proposals for funding NHI is to end the medical aid credit or failure to adjust it for inflation as was seen in 2023
However, even the complete phase-out of the credit will not cover the funding required for NHI and would significantly impact the middle class
In my view, the proposed options are just not workable
COUNTING THE COST
or affordable Simply put, how is the state going to force doctors and private hospitals to open their doors to all and hope for payment in six months’ time? That will not happen
The health department explains that NHI aims to provide equity and social solidarity by pooling risks and funds
It will create one fund with adequate resources to plan for and effectively meet the health needs of the entire population, “not just for a selected few” , as the department puts it
The World Health Organisation and the UN call it universal health coverage because nobody is left behind and NHI aims to achieve
TAXING MATTERS
universal health coverage for all South Africans No-one will argue that these are laudable aims
On the future of the private sector, the department says healthcare funds and providers will continue to exist but their role will change When the NHI is fully implemented, they will provide cover for services not reimbursable by the NHI fund Medical schemes are voluntary organisations, and they will remain as such, says the department
However, I have serious concerns about the practical implementation when private hospitals already have bed shortages, and doctors in the private sector are stretched and unable to meet
the demand of medical aidfunded patients without significant delays in obtaining appointments If one looks at the number of doctors who still cannot obtain posts for community service or postservice placement, one must question the ability of the state to fund and manage such an initiative
We are in for a long transition until all of this takes effect We will need to watch this space closely Not only is the entire NHI set for extensive litigation (it is considered unconstitutional), but taxpayers will need greater clarity on whether they will be paying significantly more for potentially worse service
The jury is well and truly out on NHI
Aggrieved? How the the tax dispute process works
Estian Haupt, Leonard
Willemse & Jacky
Labuschaigne
AJM Tax
Taxpayers are increasingly being scrutinised by the SA Revenue Service (Sars) regarding their tax affairs
The Tax Administration Act No 28 of 2011 (TAA) provides various mechanisms for Sars to obtain information (such as verifications, inspections, audits and so on) to validate a taxpayer s tax position
Where Sars has made certain decisions or raised assessments indicating either an increased tax liability or decreased tax refund, combined with the imposition of penalties and levying of interest, taxpayers must understand the relevant processes to follow to dispute these decisions/assessments
THE TAA DISPUTE PROCESS
The TAA applies to taxes levied in terms of various tax acts, including but not limited to those levied in terms of the Income Tax Act No 58 of 1962 and the Value-Added Tax Act No 89 of 1991
Where a taxpayer is aggrieved by a decision or
assessment, the rules promulgated in terms of section 103(1) of the TAA must be adhered to, as failure to do so will render a dispute invalid and may leave the taxpayer with no recourse
It is, therefore, important to fully comply with the dispute resolution rules, particularly insofar as they prescribe the manner and period within which a dispute is to be submitted
The dispute process can be broadly summarised as follows:
● Request for reasons a taxpayer may request Sars to provide its reasons for the assessment within 30 days from the date of the assessment to enable the taxpayer to understand the basis for the assessment
● Objection if the taxpayer disagrees with the basis, it may object against the assessment within 80 days from the date of the assessment or the reasons requested
● Appeal if Sars disallows the objection, the taxpayer may appeal against the assessment within 30 days from that disallowance The taxpayer may elect to either attempt to resolve the appeal by way of the alternative
dispute resolution procedure, alternatively by way of a hearing, either before the tax board where the quantum in dispute is less than R1m or the tax court where it is more than R1m
A taxpayer may only dispute an assessment or decision in terms of the above internal remedies unless a high court otherwise directs The ability of a taxpayer to approach the high court as the forum of first instance is the subject of much debate and various recent cases
Currently, a taxpayer would be well advised to avoid doing so unless it is able to demonstrate that exceptional circumstances exist to warrant a high court directing that the dispute be heard by it without the internal remedies having been exhausted
THE CUSTOMS AND EXCISE DISPUTE PROCESS
Per the tax act definition in section 1(1) of the TAA, customs and excise legislation is excluded from the ambit of the TAA As such, any dispute regarding customs and excise legislation is subject to the
provisions of the Customs and Excise Act No 91 of 1964 (C&E Act) and its respective schedules, regulations and rules
The C&E Act regulates, for example, customs duties on the importation of goods, excise levies, export levies, diesel rebates, health promotion levies (generally referred to as “sugar tax”), as well as environmental levies (such as carbon tax)
Where a taxpayer is aggrieved by a decision made by Sars regarding the abovementioned taxes, judicial proceedings may be instituted against Sars by submitting an appeal to the high court (this is governed by section 96 of the C&E Act) Before these proceedings can be instituted, the taxpayer must provide Sars with one month s notice of its intention to appeal to the high court A taxpayer should consider this option extremely carefully as it is costly
As an alternative to instituting judicial proceedings, the taxpayer may lodge an appeal to Sars under Chapter XA of the C&E Act The chapter essentially provides for an internal administrative appeal
process, alternative dispute resolution and, under certain circumstances, dispute settlement This differs slightly from the TAA process, where a taxpayer first needs to submit an objection, and only after that can an appeal be lodged
The dispute process under the C&E Act also differs fundamentally from that of the TAA in that under the TAA provisions, a taxpayer can only bypass the TAA dispute process and institute legal proceedings directly in the high court in extremely limited circumstances
Sections 77A-77P of the C&E Act cover the internal administrative appeal process, which, similar to the TAA, provides for rules that prescribe the time frames, requirements, and forms to be adhered to and used The
IF SARS DISALLOWS THE OBJECTION, THE TAXPAYER MAY APPEAL AGAINST THE ASSESSMENT WITHIN 30 DAYS FROM THAT DISALLOWANCE
rules allow a taxpayer to request reasons for a decision, suspension of payment of disputed tax debt, and an option to select alternative dispute resolution
To conclude, whenever taxpayers are aggrieved by a decision made or assessment raised by Sars, they must adhere to the provisions and rules pertaining to the relevant tax acts They must also know which dispute process to follow, for example the TAA or the C&E Act and how to follow it
The dispute process under both acts can become extremely complex and technical It is therefore strongly recommended that advice and assistance be sought from reputable tax advisers specialising in the relevant dispute processes to ensure a taxpayer has a reasonable and fair chance of a successful outcome
● Estian Haupt is associate director: SA direct tax, Leonard Willemse is associate director: SA indirect tax; and Jacky Labuschaigne is senior manager: disputes at SA tax specialists AJM Tax
BUSINESS LAW & TAX
Whistle-blower protection
• Several reforms on the table to better protect people who come forward to disclose illicit activity
Jonathan Goldberg & Grant Wilkinson
Global Business Solutions
Whistleblowing is a critical mechanism for exposing corruption, fraud and other illicit activities
In SA, there has been an effort to focus on enhancing whistle-blower protection to encourage individuals to come forward with valuable information
In this article, we explore the landscape, proposed reforms and challenges related to whistle-blower protection in the country
THE CURRENT LANDSCAPE
As of 2024, SA is actively reviewing its legislation concerning whistle-blowing
Two key acts are under scrutiny:
● The Protected Disclosures Act This act aims to safe-
guard individuals who disclose information about corruption, fraud, or undue influence in public procurement activities; and
● The Witness Protection Act This act provides measures to protect witnesses, including whistle-blowers, who may face risks owing to their disclosures
PROPOSED REFORMS
In June 2023, a discussion document on proposed reforms for the whistleblower protection regime in SA was published This document released for public comment proposes several reforms to strengthen
ORGANISATIONS MUST STRIKE A BALANCE BETWEEN PROTECTING WHISTLE-BLOWERS AND MAINTAINING STABILITY
whistle-blower protection:
● Expanded scope The Protected Disclosures Act is set to cover more than just the traditional employer-employee relationship This expansion ensures protection extends to a broader range of situations, including contractors, suppliers and volunteers;
● Whistle-blower fund The proposal includes the establishment of a fund specifically designed to support whistleblowers This would provide financial assistance, legal representation and psychological support to those who risk their safety to expose wrongdoing;
● The SA Human Rights Commission The commission would play a more active role in overseeing whistleblower protection Their responsibilities would include monitoring compliance, investigating complaints and advocating for the rights of whistle-blowers;
FAIRER SOCIETY
● Immunity from legal action The reforms aim to grant whistle-blowers immunity from criminal or civil action arising from honest disclosures This provision encourages individuals to come forward without fear of retaliation; and
reforms are commendable, several challenges remain:
● Implementation Ensuring effective implementation and enforcement of the reforms is crucial Clear guidelines and mechanisms for reporting are essential;
● Cultural shift Changing the prevailing culture of silence and fear requires concerted efforts Encouraging a shift towards transparency and accountability is vital; and
● Balancing interests
Organisations must strike a balance between protecting whistle-blowers and maintaining stability
Fostering a culture that values integrity and openness is essential
Whistle-blowers are unsung heroes who play a vital role in safeguarding public interest
As SA continues its journey towards reform, it must prioritise robust legislation, effective implementation and a supportive environment for those who choose to blow the whistle
VIEWPOINT AFRICA
Derushka Chetty & Jessica de Kock
ENS
Established in December 1994, the Common Market for Eastern and Southern Africa (Comesa) is a regional economic community in Africa, which today is made up of 21 independent sovereign states
The primary purpose of Comesa is, among other things, to foster “economic prosperity through regional integration” The 21 African states that make up the Comesa region include Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Eswatini, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia and Zimbabwe
The Comesa Competition Regulations, 2004 were adopted by the Comesa Council of Ministers in December 2004 As prescribed by Article 6 thereof, the Comesa Competition Commission was established to regulate competition in the region and, thus, is the core institution responsible for administering and enforcing
the regulations
Since starting operations in January 2013, the commission has emerged as a formidable force in the competition law space It should, therefore, come as no surprise that this powerhouse regional regulator is ready to up the ante
What lies ahead is a radical set of possible amendments to the regulations, a draft of which was released for public comment and stakeholder engagement earlier this year (draft regulations”)
While the initial period for comment has closed and the public is yet to see what the final amendments will look like, those businesses active in the relevant territories would be well advised to monitor developments in this regard
This is not least of all because of any future mergers and acquisitions that businesses have on the horizon, but also to ensure
the compliance of business practices with competition principles, especially in light of potential future enhanced powers to be granted to the commission
The draft regulations propose to introduce a variety of changes to the region’ s competition law landscape
Many of these have no doubt arisen from challenges experienced by the commission in enforcing its mandate under the current regulations
From an M&A perspective, the proposed amendments include:
● Moving to a suspensory merger regime this is a significant alteration to the position under the current regulations, whereby a party to a proposed merger is, legally, free to implement a transaction prior to approval, so long as the proposed merger (if notifiable) is notified to the commission within 30 days of the parties decision to merge Multijurisdictional transactions will now need to take into account the particular timelines for approval by the commission
● There may be changes to the financial merger thresholds for a notifiable
● Monetary awards The discussion document suggests that a fixed percentage of recovered funds should be awarded to whistle-blowers Recognising their contribution in recovering ill-gotten gains incentivises reporting CHALLENGES
While these proposed
Remember, a society that protects whistle-blowers is one step closer to a fair and just future for SA
Proposed changes to Comesa competition law
merger and these may possibly differ according to specific industries
● The 120-day merger investigation period may be extended for periods that do not cumulatively exceed 90 days
● Where the commission sends a request for information necessary for the examination of a merger, the commission will have the ability to stop the clock on an investigation time period until the information is provided
● The commission may implement a simplified procedure to fast-track the review of notifiable mergers that do not raise significant competition or public interest concerns
● The commission shall develop public interest guidelines
● Public interest will become a focal point during merger investigations In its merger investigations, the commission will consider whether or not mergers are likely to substantially prevent or lessen competition and also whether they significantly affect public interest However, the commission shall place a greater weight on the substantial lessening or prevention of
competition tests relative to the public interest
● The CCC may, within 21 days of a notified merger, initiate a referral of the whole or part of the merger to the competent authorities of a Comesa member state/s
● In determining if a merger has been implemented without approval, the commission may consider various factors including, but not limited to, whether there has been an exchange of strategic information between the merging parties for purposes other than valuation or on a need-toknow basis during the due diligence, or in ways compromising the strategic independence of each of the parties to the merger
The draft regulations also attempt to clarify and/or expand on certain concepts to minimise room for vagueness or misinterpretation Some of these changes include formally defining the concept of control and requiring that
THE DRAFT REGULATIONS ALSO ATTEMPT TO CLARIFY AND/OR EXPAND ON CERTAIN CONCEPTS
it be on a lasting basis; expanding on the definition of a merger to cover fullfunction joint ventures; and prescribing a market share threshold (30%) at which a firm will be presumed dominant
Adding extra ammunition to the commission s arsenal, the draft regulations seemingly afford the commission an unrestricted power to enter, search and inspect any premises occupied by an undertaking, or which is reasonably suspected of having information or documents relevant to an investigation
The commission is also given powers to conduct market inquiries where it considers it necessary or desirable for the purpose of carrying out its functions and has powers to implement necessary remedies and policy recommendations and take any other actions per the regulations
For now, we wait for the final amendments to the regulations to be published and encourage businesses to keep these developments firmly on the radar
● Derushka Chetty is an executive: competition; Jessica de Kock an associate: competition at ENS
BUSINESS LAW & TAX
Draft rules on vertical restraints
• Unpacking the proposals published for public comment
Heather Irvine & Judd Lurie Bowmans
On June 3
2024, the outgoing trade, industry & competition minister published Draft Vertical Restraints Regulations in relation to section 5 of the Competition Act for public comment Manufacturers and suppliers active in SA should give careful consideration to this draft, since it proposes that certain kinds of restrictions which are currently commonly applied on dealers or distributors in many jurisdictions should be regarded as unlawful in SA
The draft regulations set out a nonexhaustive list of the various factors that “ may be” considered by the Competition Commission and the Competition Tribunal in “determining whether a restrictive vertical practice is in contravention of Section 5 of the Act” Section 5(1) of the act prohibits any agreement between parties in a vertical relationship (ie between a firm and its customers, suppliers or both) if it has the effect of substantially preventing or lessening competition in a market, unless a party to the agreement can prove that any resultant technological, efficiency, or other pro-competitive gain outweighs the identified anticompetitive effects Section 5(2) of the act prohibits the practice of minimum resale price maintenance outright, meaning that this practice conduct cannot be justified, even if it results in efficiency or other gains
To assess whether there is a substantial prevention or lessening of competition under section 5(1) of the act, the draft regulations propose that the competition authorities should have regard to factors such as the nature and duration of any restraints in a vertical agreement, and whether the arrangement is exclusive It should be noted that exclusivity is not per se unlawful in terms of the act
In relation to the assessment of whether there are any technological, efficiency or other pro-competitive gains arising from a vertical agreement, the draft regulations suggest that one should consider whether consumers or customers stand to benefit
This largely echoes the approach adopted by the tribunal in the relevant case law to date, which focuses on
defining the relevant product and geographic market, assessing whether a vertical restriction substantially lessens or prevents competition in that market and, if so, whether there are efficiency, pro-competitive or technological gains which outweigh those effects
However, the memorandum accompanying the draft regulations explains that the draft regulations are also intended to “clarify” that “the assessment criteria” include an analysis if whether the vertical agreement excludes small and medium enterprises (SMEs) and/or historically disadvantaged persons (HDPs) in a relevant market
This, the memo says, is because the exclusion of SMEs and and/or HDPs firms undermines the purpose of the act, which inter alia, is to ensure an “equitable opportunity to participate in the economy ” The draft regulations note that restraints are “potentially harmful if such restraints protect market incumbency through exclusivity to the exclusion of new participants”
The draft regulations accordingly propose that the commission and tribunal should consider “whether the agreement supports or improves the ability of SMEs and/or HDPs to enter into, participate or expand in the
RECOGNISE THAT EVEN EXCLUSIVE AGREEMENTS MAY BE EFFICIENCY ENHANCING, AND CAN OFTEN BE PRO-COMPETITIVE
relevant market or excludes SMEs and/or HDPs in the relevant market
This would, of course, not in itself render a restraint lawful or unlawful: the commission or tribunal would still need to assess the overall level of competition in the relevant market and, even if there is an exclusion of SMEs or HDPs, consider whether the restraint in question has the effect of substantially preventing or lessening competition And even if it is, the act still permits the parties to the agreement to defend it on the basis that it gives rise to efficiency or other gains
The draft regulations furthermore propose that specific kinds of restraints are considered likely to result in a substantial prevention or lessening of competition :
MARKET MOVES
● Restrictions on passive sales to customers outside of assigned territories or customer group the memo notes that while exclusivity in relation to territories or customer groups granted by a franchisor, for example, is typical, restrictions on passive sales should be regarded as overly restrictive and unnecessary to achieve investment incentives
This is not dissimilar to positions adopted in other jurisdictions
● Restrictions on active or passive sales by members of a selective distribution network the memo indicates that these types of restrictions should not be regarded as justifiable to achieve the objectives of selective distribution, which are typically to ensure that brand quality is protected
● Direct or indirect restrictions on members of a selective distribution network from selling the brands of competing suppliers the memo suggests that these restraints should be considered to be overly restrictive because the purpose of selective distribution is typically to maintain quality or service levels, and not to exclude competitors
● Direct or indirect restrictions on a buyer to manufacture, purchase, sell or resell goods or services after termination of the agreement
● Restrictive agreements which exclude SMEs and HDPs entirely, or to a material extent (from a sales channel)
the memo indicates that this may include selective distribution or selective service provider networks
The draft regulations also suggest that particular kinds of vertical restrictions employed by suppliers in particular sectors of the economy should be considered to be restrictive vertical practices which are not capa-
providers which restrict access to that infrastructure or service by third-party competitors (either entirely or to a material extent) the memo gives the example of exclusivity clauses in retail lease agreements which “have been shown to prevent competition in localised markets and protect incumbent national chains” ; and “protect incumbents at the expense of new entrants and independent traders, and which are not justified by the investment incentive claims” (This was a focus of the commission in its market inquiry into the grocery retail sector )
cannot amend the act this can only be done by Parliament Accordingly, the test set by section 5 the act for whether a particular restraint constitutes a restrictive vertical practice (as interpreted by the tribunal in the case precedent to date), remains unchanged So does the burden of proof on the commission to demonstrate that, on a balance of probability, a firm has contravened the act The draft regulations cannot shift the burden of proof to a firm to prove that any restriction on a distributor, customer, franchisee, dealer etc is necessary or indispensable
ble of justification, including:
● Restrictions on the supply of spare parts, repair tools/ equipment and technical information to independent repairers and service providers directly from the manufacturer the memo indicates that such restrictions completely exclude repairers and service providers from performing such services and prevent competition in repair and service markets (being a focus area of the commission’ s Guidelines for Competition in the Automotive Aftermarkets While these restrictions have been mostly noticeable in the automotive aftermarket, they have been identified in many other product/service markets, including cellphones, heavy duty machinery and white goods The claimed benefit of supporting complementary investments in skills and service standards is rarely justified by the exclusion of competition
● Direct or indirect obligations causing a buyer of online intermediation services not to offer, sell or resell goods to end users under more favourable conditions via competing online intermediation services the memo indicates that restrictions on pricing lower in alternative online distribution channels, otherwise known as wide price parity or mostfavoured-nation clauses, are common in digital markets, and it has been identified that they reduce price-based competition across different distribution channels, but the claimed benefit of preventing free-riding on promotional investments is unlikely to offset the harm (these clauses were was a focus in the commission s recent market inquiry into online intermediation platforms)
● Agreements with business infrastructure or service
Other examples include exclusive use of storage facilities, including port facilities, or a substantial proportion of capacity at such facilities which would serve to restrict competitor distribution volumes
It seems these draft regulations are partly an attempt to regulate particular kinds of restrictions which have been identified by the commission as problematic in its market inquiries to date Market inquiries don’t create a permanent legal mechanism for the commission to regulate conduct or agreements it regards as anticompetitive or adverse to the public interest objectives of the act
The draft regulations also set out factors which may be relevant in assessing whether minimum resale price maintenance in contravention of section 5(2) of the act has occurred, such as whether a supplier has imposed a minimum resale price on goods to be resold; and whether there is an “inducement to comply with the set price and sanctions for noncompliance
However, the draft regulations propose that it is also relevant if there have been repeated requests by the supplier to adjust pricing to the minimum resale price; and whether the supplier restricts advertising below the minimum resale price The memo notes that this kind of restriction blunts the reward to a reseller of pricing lower, and thus, may maintain prices at the minimum level prescribed by the supplier
The minister is empowered by section 78 of the act to make regulations that are required to give effect to the purposes of this act However, as a form of subordinate law making, such regulations
THERE MAY WELL BE CASES IN WHICH A RESTRICTION HAS THE CONSEQUENCE OF EXCLUDING HDPS AND/OR SMES
There may well be cases in which a restriction has the consequence of excluding HDPs and/or SMEs, and this results in a substantial lessening or prevention of competition in the market as a whole but this would certainly not always be the case
In competitive markets in which there are many brands, smaller rivals and HDPs should be able to partner with other suppliers and, consequently, the level of competition in the market as a whole is unlikely to be affected by any restrictions imposed by a particular brand owner Of course, each case needs to be assessed on its merits and in line with the analytical framework postulated in the act
The draft regulations furthermore do not remove the need for a thorough economic assessment by the commission (when it investigates complaints) or the tribunal (when it adjudicates complaints, in line with established principles, of any alleged prohibited practice) This exercise would have to include a careful review of the facts of each particular case, as well as an appropriate assessment and weighing up of the efficiency, procompetitive or other advantages of such restrictions
It is important to recognise that even exclusive agreements which by definition may have an impact on market participants who are not parties to the agreement may be efficiency enhancing, and can often be procompetitive
This draft is a further signal the SA commission increasingly favours rulemaking which bans particular kinds of restraints which it regards as potentially problematic or unfair, rather than case-by-case, evidencebased assessments of whether a particular restriction actually harms competition and, if so, whether there are still pro-competitive or efficiency enhancing reasons to apply it
● See also Page 6
BUSINESS LAW & TAX
Extradition of Saffas from US
• Case of fugitive Johnathan Schultz shows only justice minister has power to make such a request
Aslam Moosajee & Laurence Mort ENS
In the case of Schultz v Minister of Justice and Correctional Services and Others, the Supreme Court of Appeal (SCA) heard an appeal against the decision of the Gauteng Division of the High Court, Pretoria
The central issue in this appeal was whether the power to request the extradition of a person from the US to stand trial in SA vests in the executive authority of the justice & constitutional development minister or with the National Prosecuting Authority (NPA)
In November 2019, the SA Police Service (SAPS) arrested several people accused of offences related to the alleged theft and sale of unwrought precious metals
The SAPS also executed search warrants, supported by an affidavit stating that Johnathan Richard Schultz (an SA citizen residing in the US) was an active member of one of the companies allegedly involved in committing the offences
Accordingly, when the arrested persons appeared in court in March 2022, the prosecution sought a postponement to allow time for the NPA to request Schultz’ s extradition from the US
In response, Schultz approached the high court for urgent relief seeking an order declaring that only the minister, in his capacity as a member of the national executive, had the authority to submit a request for the
extradition of an SA citizen from the US
It was noted in the high court that on December 16
1999 SA and the US entered into an extradition treaty In terms of Article 1 of the treaty, the countries agreed to extradite to each other persons whom the authorities in the requesting state have charged with, or convicted of an extraditable offence
Schultz argued that exercising power in terms of this treaty vests in the minister, not the NPA
THE PROCEDURE GOVERNING THE EXTRADITION PROCESS OPERATES AT BOTH AN INTERNATIONAL AND DOMESTIC LEVEL
The high court found that section 179 of the constitution, read with sections 20 and 33 of the National Prosecuting Authority Act 32 of 1998, vests the NPA with the power to institute and conduct criminal proceedings on behalf of the state
Further, the NPA is empowered under section 179(2) of the constitution to “ carry out any necessary functions incidental to instituting criminal proceedings”
The high court held that, under this statutory scheme, prosecutions fell within the exclusive domain of the NPA, which includes the power to request the extradition of an
individual from the US
The SCA stated that the starting point for deciding this issue involves considering the principle of legality which dictates that no power may be exercised beyond that which is conferred by law Therefore, it is essential to identify both the source of power and to whom it is vested
In this case, the source of power requires an examination of the extradition process, which may be defined as “the delivery by one state at the request of another of an individual within its jurisdiction who is accused or has been convicted of a crime committed within the jurisdiction of the other state for the purposes of standing trial or sentence in the requesting state”
The SCA said the procedure governing the extradition process operates at both an international and domestic level Internationally, an extradition request is governed by the rules of public and customary international law Domestically, states are regulated by their own domestic laws which, in the case of SA, involves the Extradition Act
Having identified the source of the power, the SCA considered whether the power to request extradition vests in the minister or the NPA It found that although the Extradition Act is silent in respect of outgoing extradition requests made to foreign states, an essential element of extradition proceedings is that it involves an act of sovereignty between two
TIME TO RETURN
states This, in turn, necessarily implicates foreign relations in which powers are bestowed upon the executive branch of government
The SCA held that this is consistent with international law and article 7(2) of the Vienna Convention on the Law of Treaties, in which it is presumed that where foreign functions are performed by a state, it does so through its executive officials
This is further supported by section 231(1) of the constitution, which provides that “the negotiating and signing of all international agreements is the responsibility of the national executive” Although section 2 of the Extradition Act confers this power on the president of SA, it was held in President of the Republic of South Africa and Others v Quagliani, and Two Similar Cases, that the president was empowered to delegate the power to enter into extradition agreements to the minister
Additionally, section 232 of the constitution recognises that customary international
law is law in SA unless it is inconsistent with the constitution or an act of parliament
Finally, in terms of section 233 of the constitution, the courts are enjoined to prefer any reasonable interpretation of legislation consistent with international law over any alternative interpretation inconsistent with it
The SCA reasoned that it would be contrary to established international law principles if it were to hold that the NPA, rather than the minister, possessed the decisionmaking power in respect of outgoing extradition requests
And it would infringe on the separation of powers doctrine by according an executive function to a
THE NPA, AS THE PROSECUTING AUTHORITY, IS EMPOWERED TO DETERMINE WHO IS TO BE PROSECUTED AND FOR WHAT CHARGE
nonexecutive organ of state
The SCA provided further guidance on the distinction of functions performed by the NPA and the minister
In this regard, the NPA, as the prosecuting authority, is empowered to determine who is to be prosecuted and for what charge The minister plays no role in the exercise of these duties
However, if the accused is residing in a foreign state, the NPA will be required to seek assistance from the minister, as executive authority, to decide whether and when to make an extradition request to the foreign state in a manner which does not undermine the NPA s prosecutorial independence
The SCA concluded that the high court s finding that an extradition request is incidental to the functions of the NPA cannot be sustained and, accordingly, set aside and replaced the high court s order with one which declared that only the minister had the power to make such a request for the extradition of Schultz from the US