Talking Point October 2016


A succinct discussion of selected topical, legal matters

Dear Friends and Colleagues

I take great pleasure in submitting the October 2016 edition of Talking Point to you.

Milton Friedman (1912 – 2006) was an American economist, lecturer, and statistician.  He was a confidant of Richard Nixon, Ronald Reagan, and Margaret Thatcher; and the author of the famous and influential book (and television series) Free to Choose (1980).  As a prolific and outspoken “classical liberal” and Nobel Prize laureate, he was perhaps the best-known economist of his generation.  As an acerbic capitalist, he was also entertaining:

  • If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”

  • Inflation is taxation without legislation.

  • We have a system that increasingly taxes work and subsidizes non-work.”

  • The government solution to a problem is usually as bad as the problem.”

  • Most of the energy of political work is devoted to correcting the effects of mismanagement of government.”

  • The unions might be good for the people who are in the unions but it doesn’t do a thing for the people who are unemployed.  Because the union keeps down the number of jobs, it doesn’t do a thing for them.”

  • “… there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

  • “A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom.  The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.”

As an aside, the following quip, though often ascribed to Friedman (who used it as a title of a book), actually has an unknown origin:

  • There’s no such thing as a free lunch.”

As always, I would greatly appreciate your feedback on Talking Point. Please email me at charlt@walkers.co.za.

Regards

Charl Theron

In this issue:

  • Termination of Joint Ownership

    • The Latin expression “communio est mater rixarum” originates from antiquity, and means “co-ownership [of immovable property] is the mother of disputes“.  From the novel How to Make an American Quilt by Whitney Otto: “No one fights dirtier and more brutally than blood; only family knows its own weakness, the exact placement of the heart“.  We discuss a recent case featuring both facets.
  • Hospitals can be dangerous

    • The Minister of Health, Dr Aaron Motswaledi, is on a crusade to keep victims of medical negligence in State hospitals away from attorneys.  We discuss a recent case that illustrates why this will be a bad thing for the victims.  Imagine being given a formaldehyde solution to drink.
  • School fees can be a battleground

    • We discuss two such cases, coincidently both concerning schools in Fish Hoek.  The legal costs far exceed the school fees concerned.  In most cases, NGO’s are the real litigants, with the parent as a proxy.
  • You are what you eat

    • Genetically modified food is an emotional topic.  We discuss developments regarding compulsory labelling to provide consumers a choice.
  • Racial quota system revisited

    • We provide a follow-up on a 2014 article dealing with employers’ action plans for the promotion and achievement of equality in respect of race in the workplace.
  • Credit checks and POPI

    • The Protection of Personal Information Act (POPI) has been law since 2013, but is at present not fully operative.  This is another international example of what we could expect from life under POPI.
  • The Pinochet decisions in the UK

    • These legal cases are perhaps the most famous cases dealing with a former foreign Head of State’s immunity from criminal proceedings.  They also illustrate how swift yet inefficient legal proceedings can be, and the importance of avoiding any perceived conflict of interest.

LEGAL MATTERS

Termination of Joint Ownership

Charl Talking Pointby Charl Theron and Nosipho Madikiza

When the “mother of disputes” (an irretrievable breakdown in the relationship) occurs between the co-owners of immovable property, they have three options to resolve the dispute by agreement:

– partition the property by means of a subdivision that would permit each individual owner to obtain exclusive ownership of a specified portion of the total area of the property (under a Partition Agreement and a Deed of Partition Transfer);

– the one individual owner can sell his or her undivided share in the property to the other owner; or

– the individual owners can sell the whole property to an outsider, and distribute the proceeds amongst themselves.

However if the joint owners cannot reach an agreement, any one of them may approach the Court for relief.

Coetzee v Coetzee, a judgment of the High Court, Cape Town on 2 August 2016, dealt with a nephew and uncle who co-owned a family farm near Velddrif that had been in the family since 1852, and on which both of them had grown up.  They had an irretrievable breakdown in their relationship, and could not reach an agreement.

The nephew owned a 90% undivided share in the farm, and the uncle owned the remaining 10%.  The nephew applied to Court for an order that the uncle must sell his 10% undivided share to the nephew for R233 260, alternatively, that the farm be sold by auction and the proceeds shared 90%/10%.

The uncle counter-claimed that the property should be partitioned by means of a subdivision that would permit him to obtain exclusive ownership of his house and an area of the surrounding land (about 10% of the total farm area) – a claim under the actio communi dividundo (an action to subdivide the common property).

In the Court of first instance (one Judge), the nephew won.  The judge regarded the Subdivision of Agricultural Land Act 70 of 1970 as making any subdivision legally and practically impossible.  The uncle was ordered to sell his 10% to the nephew at market value (as determined by a qualified valuer); alternatively, the farm was to be sold by auction and the proceeds shared 90%/10%.

The uncle appealed, and the Court of appeal (three judges) unanimously delivered the 2 August 2016 judgment.  The Court did not accept that the Subdivision of Agricultural Land Act was a total bar to subdivision.  The Court held that it was vested with a wide equitable discretion to determine the basis upon which the parties’ joint ownership shall terminate, and a physical division is the indicated course, unless it would be impossible, impracticable, or inequitable.  The appeal succeeded.

The Court ordered the parties to apply for all the many governmental consents to subdivide the farm, as counterclaimed by the uncle, and that the nephew must permit the registration of servitudes granting the uncle access over the nephew’s portion for a right of way, for access to the family graveyard, and to be buried in the family graveyard (all deeds the nephew had vehemently opposed).

The Court order also provided that in the (unlikely) event of the Subdivision of Agricultural Land Act being a total bar to subdivision consent, the farm was to be sold by auction and the proceeds shared 90%/10%.  However, one subtext in the judgment may be that all the many governmental consents to subdivide the farm should be granted.

Another subtext in the judgment may be that the nephew was bullying the uncle, and the Court would have none of that.

Hospitals can be dangerous

Jerome casualby Jerome Veldsman

Grey’s Hospital is the referral (specialist health care) provincial hospital in Pietermaritzburg.

Smith v MEC for Health, KZN, a judgment of the High Court, Pietermaritzburg on 2 August 2016, dealt with the distress of a (then) 79 year old patient immediately following a knee replacement operation at Grey’s Hospital in May 2010.

The patient was wheeled out of the operating theatre and into the recovery room.  She asked the attending anaesthetist for a drink of water.  The anaesthetist went into the nearby sluice room and decanted what she thought was a cup of water from a liquid canister.  She returned to the patient and gave the cup to her to drink.  The patient drank the liquid, immediately had a traumatic experience, and shouted “You are killing me“.  The anaesthetist rushed to the sluice room, examined the canister, and only then noted the label in black writing ‘FORMALIN‘ on it.

Formalin is a clear liquid (like water), but contains noxious chemicals including formaldehyde (30%) and methanol (10%), and its used as an antiseptic, disinfectant, and preservative of human (and other) samples.  A sluice room is used for disposal of human waste and associated products, and disinfection of reusable products.

Pre-formalin, the patient was spritely, enjoyed a normal meal, and participated in dancing, painting, and floral arranging.  Post-formalin, the patient suffers from chronic and untreatable post-traumatic stress disorder and many other formalin related illnesses, is a recluse, and can eat only blended food.

The Hospital denied that the anaesthetist had been negligent and claimed the patient was malingering.  The Hospital also used delaying tactics to block the patient having her day in Court.  A cynic could argue, waiting for the patient to die.  This went on for six years, but eventually the trial commenced.  In evidence, the anaesthetist conceded liability.  The evidence of the medical experts on behalf of the Hospital was rejected.

The patient won, and was awarded R550 000 for future medical and other expenses and R340 000 for pain, suffering, and loss of amenities of life.

 

School fees can be a battleground

Roxy 5Jerome casualby Roxanne Ker and Jerome Veldsman 

Section 40(1) of the South African Schools Act (SASA) is, at first glance, readily understandable: “A parent is liable to pay the [public] school fees … unless or to the extent that he or she has been exempted from payment in terms of this Act.”  [underlining added]

As the term “parent” can have different meanings to different people, section 40(1) of SASA has featured in many court cases.

Fish Hoek Primary School v G W started in 2006.  The school sued the biological father of a learner for school fees (R1 610) in a Magistrate’s Court.  The learner had been born out of wedlock, and the father’s defence was that he was not the custodian parent or guardian of the learner, and he had not entered into any agreement with the school to pay the school fees.  The defence was upheld in Magistrate’s Court, and in two appeals in the High Court.  Ultimately (in 2009), the Supreme Court of Appeal found in favour of the school, and held that a parent is a parent, regardless of whether or not the custodian parent or guardian of the learner concerned.

MS v Head of Department, WCED and Others started in 2012.  The school sued the mother and father of a learner, jointly and severally, for school fees (R7 250) in a Magistrate’s Court.  The parents were divorced, and did not get along well post-divorce.  The mother was the custodian parent.

The Magistrate’s Court case was held in abeyance whilst the mother and the school battled on various fronts.  In 2013 the mother brought an application in the High Court, Cape Town, involving multiple disputes with the school, the provincial education department, the national education department, and others.  One dispute was the alleged joint and several liability of parents.  From the judgment:

Joint liability in this context means that each parent would only be liable for their proportionate share of the fees; joint and several liability means that each parent is liable to the school for the full amount of the fees and if one parent pays the full amount, she or he will have a right of recovery against the other parent.”  [underlining added]

The mother disputed joint and several liability on the basis that it continues to treat the divorced parents as a “household unit”, thereby violating the parents’ rights to dignity and equal protection of the law.  The High Court did not find in necessary to investigate this constitutional argument, and held (on 15 September 2016) on ‘standard’ rules of statutory interpretation that:

“… on a proper construction of the provisions of s 40(1) [of SASA] the liability of a parent … to pay school fees must be regarded as jointly and not jointly and severally.  ….  Such an interpretation is in accordance with the general principle in our law that co-obligators are liable only jointly unless an intention to impose joint and several liability is plainly expressed or can be clearly inferred.”

The implication of the judgment seems to be that a school has to sue both parents, whether never married, married, divorced, or separated, each for (presumably) half of the due and unpaid school fees.

It may well be that such litigation and concomitant animosity has an adverse effect on learners’ experience at school.  But some learners rise above it; from the introduction to the 2016 High Court judgment: “By all accounts, despite the issues raised in this matter by [the mother], the learner successfully matriculated and is presently pursuing her tertiary education at the University of Cape Town.”.

You are what you eat

Jerome casual by Jerome Veldsman

A “genetically modified organism” (GM/O) is an organism of which the genes or genetic material has been modified in a way that does not occur naturally through mating or natural recombination or both.  An “organism” is a biological entity, meaning an animal, plant, or single-celled life form.

Soya beans are a flagship GM crop; at least 80% of soybeans produced worldwide are GM – and Monsanto (a USA multinational agrochemical and agricultural biotechnology company) is the primary producer of the seeds.  Monsanto modified the genetic material of ‘standard’ soya beans by injecting cells with genetic information from a bacteria resistance to glyphosate into the genetic material of ‘standard’ soybeans.  Glyphosate is a herbicide that kills any plant on contact.  The result is a GMO (modified soya beans) resistant to glyphosate.  Accordingly, a field of GM soya beans can be sprayed with glyphosate, killing all plants in the field other than the GM soya beans.

South Africa is a major producer of GM crops and importer of GM foodstuffs.  A vast number of foodstuffs in local supermarkets contain substantial percentages of GMOs.

All GM soya grown in South Africa is liberally sprayed with herbicides that contain glyphosate  ….  ‘Roundup’, Monsanto’s flagship glyphosate-based herbicide, is the most popular brand  … Glyphosate has been linked to increased risk of chronic kidney disease, birth defects in humans and animals and spontaneous abortions.”  (African Centre for Biosafety)

Independent experts and scientific organizations worldwide stand behind the safety and are supportive of the use of GM crops.”  (Monsanto website)

As there are divergent opinions regarding the safety, or otherwise, of humans consuming GMOs, some countries make the labelling of goods containing GMOs compulsory.

In Europe, EU-wide regulations on compulsory labelling of goods containing GMOs have existed since 1997.

Under the Consumer Protection Regulations, the labelling of goods containing GMOs is compulsory in South Africa (since October 2011), and failure to label GM goods correctly is an offence.  However, there has been no prosecution to date, and there seems to be no concerted monitoring.  It is unlikely that consumers in South Africa will any time soon be in a position to choose whether, or not, to consume GM foodstuffs.

The USA is the primary promoter of GMO’s.  However, for the first time, State legislation in Vermont made the labelling of “food offered for sale by a retailer” compulsory (as of 1 July 2016).  But, on 29 July 2016, President Obama assented to a federal law (termed by opponents the “Monsanto Protection Act”) that overturned Vermont’s State law.

Bayer AG, a German company, is in the process of taking over Monsanto (if anti-competition regulators give consent).  The merged entity would control more than 25% of the world’s supply of pesticides and seeds.

 

Racial quota systems revisited

Amien casualJerome casualby Amien Hoosain and Jerome Veldsman 

As an introduction to the then upcoming Constitutional Court (CC) judgments, the article Racial Quota Systems in Talking Point July 2014 discussed systems under which a specific number or percentage of positions are set aside for a designated race.  The article concluded with the prediction:

One can expect a divided South African Constitutional Court on the question of racial quotas, but not the strict scrutiny applied in the USA.  Racial quotas may well pass constitutional muster in South Africa.

The first such case was South African Police Service v Solidarity obo Barnard, in which the CC delivered judgment on 2 September 2014.  One of the statutory provisions considered in Barnard was section 15 of the Employment Equity Act 1998.

Under section 15(2)(d), the affirmative action measures an employer must apply include measures to ensure the equitable representation of suitably qualified people from designated groups [black people, women, and people with disabilities] in all occupational levels in the workforce.  Under section 15(3), such measures include preferential treatment and numerical goals, but exclude quotas.

There is no definition in the Employment Equity Act of what would constitute a “quota“.  In Barnard, in the main judgment, it was held that “it would be unwise to give meaning to the term“, but it was “observe[d] that the primary distinction between numerical targets and quotas lies in the flexibility of the standard.  Quotas amount to job reservation and are properly prohibited by section 15(3) … The same section endorses numerical goals in pursuit of work place representivity and equity.  They [numerical goals] serve as a flexible employment guideline to a designated employer.”  It was also stated that: “It is so that the implementation of a valid plan may amount to job reservation if applied too rigidly.”

The most recent case was Solidarity and Others v Department of Correctional Services and Others, in which the CC delivered judgment on 15 July 2016.  One of the statutory provisions considered in Solidarity was also section 15 of the Employment Equity Act.

The employment equity plan of the Department of Correctional Services set numerical targets for its workforce based on the population estimates by Statistics South Africa: “White 9.3%; African 79.3%; Coloured 8.8%; Indian 2.5%  …  men to women … 60% and 40%“.  The plan included instructions for appointing personnel at the 15 different levels; as an example: “Levels 9-12: At levels 9 & 10 only 51 African Males, 198 African Females and 2 Indian Females can be appointed.  At level 11 & 12 only 109 African Females, 5 White Females and 9 Coloured Females can be appointed.  The employment equity plan also provided for the sanctioning (disciplinary action) of managers who failed to ensure compliance with the plan.

The plan made provision for only the National Commissioner to deviate from the targets “with valid documented reasons that will stand the test in the court of law“.

The majority (six Judges) and the minority (two Judges) agreed overall on the outcome of this particular case, but had divergent views regarding “quotas”.

The majority concluded that the targets in the plan did not constitute quotas:

Once it is accepted that the 2010 EE Plan contained a provision for deviations from the targets of the Plan, then, in my view the targets cannot be said to be rigid, particularly where it cannot be said that the situations in which deviations are permitted are situations that do not occur in reality.”

The minority (two Judges) concluded that the targets in the plan did constitute quotas:

We are concerned with the general application of the Plan – not with special cases to which the Plan does not apply.  When the National Commissioner deviates from the Plan to appoint doctors he is not implementing the Plan – he is excepting doctors from it.  The critical enquiry is not whether there are special cases that are excepted from the Plan, but instead whether there is scope for flexibility when the Plan is applied to non-excepted posts.  And there the Plan could not be more rigid.”

Neither the majority nor the minority judgments contribute much (if anything) to a coherent definition of what a “quota” actually is.  Strangely, neither judgment mentions SA Restructuring & Insolvency Practitioners Association v Minister of Justice & Constitutional Development, a judgment of the Western Cape High Court, Cape Town on 13 January 2015.  In SA Restructuring, the Judge referred to American jurisprudence, and mentioned the following definition:

A quota would impose a fixed number or percentage which must be attained, or which cannot be exceeded, and would do so regardless of the number of potential applicants who meet necessary qualifications.  …  By contrast, a goal is a numerical objective, fixed realistically in terms of the number of vacancies expected, and the number of qualified applicants available in the relevant job.”

Logically, the minority approach appears to be correct.  However, the majority judgment appears to be ‘pragmatic’.  Measured against a coherent definition of what a “quota” actually is, the bulk of governmental and other large institutional employment equity plans may well be struck down, and such a result would be unacceptable to a large part of the population.

Back to our July 2014 article.  The prediction was correct:

– a divided South African Constitutional Court on the question of racial quotas;

– no strict scrutiny of averred quotas (quite the opposite); and

– for practical purposes, racial quotas pass constitutional muster.

 

Credit checks and POPI

Jerome casualby Jerome Veldsman 

Some terminology in brief:

processing is any activity concerning personal information; and

personal information is any information relating to an identifiable living natural person or juristic person, including information relating to the financial history of the person.

Chitrakar v Bell TV, a judgement of the Federal Court of Canada, on 29 October 2013, dealt with a credit check by Bell TV on Mr Rabi Chitraker, without the latter’s prior consent.

Chitrakar ordered satellite television service from Bell TV.  He was a first-time Bell TV customer, and had no credit history with Bell TV.  A month later, Bell TV installed the service.  Chitrakar paid for the service, and all seemed well.

A few months later, unrelated to the satellite television service, Chitrakar accessed his own credit report, and was surprised to see that Bell TV had accessed (processed) his credit history (personal information), without his consent, on the date that he had ordered the service.

To make matters worse, the credit check had been a “hard pull”.  Such a check is officially added as a new inquiry to a credit report.  A concentration of “hard pulls” (new enquiries) within a certain time frame negatively affects the individual’s credit score.  A “soft pull” is a mere “look see”, and is not added to a credit report.

Upset about such breach of his right to privacy, Chitrakar took the matter up with Bell TV’s privacy officer, who gave him the “royal run-around“.  More upset, he filed a complaint with the Privacy Commissioner (Information Regulator in South Africa).  The Privacy Commissioner found that Chitrakar’s complaint was well-founded, and made remedial recommendations to Bell TV, which Bell TV seemingly ignored.

Chitrakar sued Bell TV, claiming damages for breach of his privacy rights, as well as punitive damages.  Bell TV seemingly ignored the summons.  The Court held:

Bell TV’s conduct in this matter is reprehensible in respect to Chitrakar’s privacy rights.  Not only did Bell TV violate those rights, it has shown no interest in compensation or apparently any interest … in following the Privacy Commissioner’s remedial recommendations.  …  I conclude that Bell TV has violated Chitrakar’s privacy rights … by conducting a credit check without his prior consent.”

The Court awarded Chitrakar damages of (Canadian) $10 000, and an additional equal amount as punitive damages.

 

The Pinochet decisions in the UK

At the relevant time (1998 – 2000), the House of Lords was still the apex Court in the UK, and the highly regarded Baron (Leonard Hubert) Hoffmann was a Law Lord.  As an aside, Hoffmann was born in Cape Town, and is a UCT graduate.

The basic facts are summarised as follows in the third (see below) House of Lords decision:

“On 11 September 1973 a right-wing coup evicted the left-wing regime of President Allende [in Chile].  The coup was led by a military junta, of whom Senator (then General) Pinochet was the leader.  At some stage he became head of state.  The Pinochet regime remained in power until 11 March 1990 when Senator Pinochet resigned.

There is no real dispute that during the period of the Senator Pinochet regime appalling acts of barbarism were committed in Chile and elsewhere in the world: torture, murder and the unexplained disappearance of individuals, all on a large scale.  …

In 1998 Senator Pinochet came to the United Kingdom for medical treatment.  The judicial authorities in Spain sought to extradite him [under an international arrest warrant] in order to stand trial in Spain on a large number of charges [mainly regarding alleged atrocities in Chile].  …  The background to the case is that to those of left-wing political convictions Senator Pinochet is seen as an arch-devil: to those of right-wing persuasions he is seen as the saviour of Chile.”

In the UK, the question was not whether, or not, Pinochet was guilty of any offence.  Rather the two primary questions of law were:

– Are the crimes of which Pinochet stood accused extradition crimes?

– If so, is Pinochet, as a former Head of State, immune from arrest and extradition (to Spain)?

The affirmative answer to the first question was not in doubt (at least regarding the serious accusations).  The answer to the second question was less unanimous.

The matter proceeded to the first House of Lords decision, on 25 November 1998 (coincidently Pinochet’s 83rd birthday).  The Bench consisted of five Law Lords, including Hoffmann.  Several amici curiae, including Amnesty International, were given leave to participate.  In theory, an amicus curiae (friend of the court), who is not a party to a case, is supposed to assist the court in the case in a non-partisan manner.  In practice, it is not uncommon for an amicus curiae to have an agenda.  From Amnesty International’s point of view, “Pinochet [was] seen as an arch-devil”.  By a 3:2 decision, the House of Lords, with Hoffmann part of the majority, found that Pinochet was not entitled to immunity from criminal proceedings and therefore the extradition procedure could proceed.

As a result of that decision, Pinochet was required to remain in the UK (under house arrest) to await the decision of the Home Secretary whether to authorise the continuation of the proceedings for his extradition.  The Home Secretary had until the 11 December 1998 to make that decision.

However, during the evening of the day (25 November 1998) on which the first House of Lords decision occurred, on the BBC Newsnight television programme, a speaker in Chile averred that Hoffmann’s wife was connected with Amnesty International in some way.  Pinochet’s solicitors started digging.  In correspondence, Amnesty International conceded that Lady Hoffmann had been in the employ of Amnesty International since 1977, in an administrative capacity.

Further, on 7 December 1998, in an anonymous phone call to Pinochet’s solicitors, someone averred that Lord Hoffmann was a director of the Amnesty International Charitable Trust.  In correspondence, Amnesty International conceded that Hoffmann had been such a director since 1990.

On 10 December 1998, Pinochet petitioned the House of Lords to set aside the first House of Lords decision.  The sole ground relied upon was that Hoffmann’s connections with Amnesty International were such as to give the appearance of possible bias, specifically without averring actual bias.  This resulted in the second House of Lords decision, by five different Law Lords, on 17 December 1998.  The Law Lords delivered separate opinions, all concluding that Hoffmann’s connections with Amnesty International, which he had not disclosed, were such that, in effect, he was acting as a judge in his own cause; and accordingly, the first House of Lords decision was set aside.

Then came the third House of Lords decision, on 24 March 1999, an afresh assessment of the original appeal.  The Bench consisted of seven Law Lords, excluding Hoffmann, but including four Law Lords from the second House of Lords decision.  By a 6:1 decision, the House of Lords found that Pinochet was not entitled to immunity from criminal proceedings and therefore the extradition procedure could proceed.

As a result of that decision, Pinochet was (still) required to remain in the UK to await the decision of the Home Secretary whether to authorise the continuation of the proceedings for his extradition.  Medical experts reported that Pinochet had “extensive brain damage”, was suffering from memory loss, had difficulties expressing himself, and lacked understanding of complicated phrases.  On 2 March 2000, the Home Secretary declined the extradition and allowed Pinochet to return to Chile.

In Chile, Pinochet faced more litigation.  In 2000, he was stripped of his immunity and charged, but the proceedings were halted for medical reasons.  Much the same happened again in 2001.  In 2006, Pinochet was again stripped of his immunity and charged.  He was placed under house arrest on 28 November 2006, and died on 10 December 2006.