NEWSLETTER – ISSUE 02

NEWSLETTER
July 2019
Issue 02


FEATURED ARTICLES THIS MONTH
DEVIATION DUE TO CHANGED CIRCUMSTANCES WHEN EXERCISING A REAL RIGHT OF EXTENSION 

BY ALLEN WEST 
The deviation from the section 25(2)(a) and (b) plans when exercising a real right of extension has been a matter that has been deliberated on at length by our Courts and Registrars of Deeds.  Recent case law, in my opinion, has now finally put this thorny issue to rest

Background
In the case of Dolphin Whisper Trading 10 (PTY) LTD v The Registrar of Deeds and another (20645/08) [2009][ZAWCHC] dated 3 March 2009, it was held that if there is not sufficient evidence of changed circumstances, the real right of extension has to be exercised strictly in accordance with the section 25(2)(a) and (b) plans.  This case literally put the cat among the pigeons and developers had to approach the Court when any deviation from the section 25(2) plans occurred.  In the judgement of Roseparkadmin CC and others v Registrar of Deeds (WCHC) Case No 5522 dated 17 May 2011, it was held that section 25(13) of the Act allows the Developer to deviate, in instances of changed circumstances, from the section 25(2) plans and an owner who feels prejudiced may alone apply to court.  It was further held that the Act does not require the developer to first obtain the courts sanction for such deviation.  Two conflicting decisions on which Registrars had to implement a uniform practice

Registrars Ruling
Registrars of Deed at their annual conference in 2011 took cognizance of the Roseparkadmin-case, but felt it prudent to expand on the decision and to usurp the duty to ensure that the exercising of the real right of extension is within the physical boundaries of the reserved right (RCR12 of 2011).
The Chief Registrar furthermore issued a directive providing that proof must be submitted that the real right is exercised within the “foot print” on which the reservation took place, which proof must be in the form of a certificate from a surveyor or architect (see CRC 2 of 2012).

Recent Case Law
In terms of the most recent case in this regard, namely the unreported case of Hartenbos Woonwapark CC v Registrar of Deeds and others, Case No 3273/2017 dated 29 May 2017, the court held as follows:
“I cannot agree that the developer’s failure to divide the sections strictly according the site development plan due to the changed circumstances amounts to non-compliance with the provisions of the Act.  Although the Act requires the sections to be divided according to the site development plan, the Act does envisage that there may be situations where it is not possible to divide the sections strictly according to the site development plan due to “changed circumstances”.  The Act, in those instances, provides remedies to the owners of the units who may be affected by the deviation to approach the court.  I agree with the applicant’s submission that section 25(13) of the Act relates to situations where an owner of a unit in a scheme takes issue with a deviation, and approaches the court for an order obliging the developer to properly comply with the terms of the reservation or any other relief which the court may deem fit, including an award for damages.  It is clear from the reading of section 25(13) of the Act that this section is not concerned with the power of the Registrar of Deeds to refuse to register the transfer nor the court’s approval of the transfer of a unit which is subject”

Conclusion
Where the real right is clearly defined on a diagram, the exercising of the real right may not exceed the boundaries or encroach on other common property in the scheme. However, where no diagram exists, but merely a sketch plan, it is not incumbent on the Registrar of Deeds to police the foot print.


CALCULATION OF INTEREST OF A DEBT  

Carma Prinsloo

BY CARMA PRINSLOO 

The calculation of interest on a debt is governed by the Prescribed Rate of Interest Act 55 of 1975 (hereinafter “the Act”). The Act has been divided into two parts relating to the calculation of interest, being:
(1)  the rate at which interest on debt  is calculated in certain circumstances, and
(2)  interest on a judgment or unliquidated debt.

Interest on debt in certain circumstances
Section 1 of the Act applies in circumstances where the calculation of interest is not governed by any other law, agreement or trade custom.  In these circumstances, the rate of interest shall be calculated by using the repo rate as determined by the South African Reserve Bank, plus 3,5 % per annum.

Interest on a judgment debt
Interest on a judgment debt will become due from the day on which such judgment debt is payable.  As of 1 January 2019, the prescribed rate of interest is 10.25% per annum.

Interest on unliquidated debt
An unliquidated debt shall bear interest as per section 1 of the Act, stating that interest will be calculated by using the repo rate plus 3.5% per annum.

Interest on an unliquidated debt shall run from the date on which payment of the debt is claimed.  Payment of interest may be claimed by the service of a demand or summons.

Should damages claimed include an estimation of a loss (in whole or in part) which will occur in the future, interest on that part of the debt will only commence to run when quantum is determined by judgment or agreement.  Thereafter, the amount will be deemed to be a judgment debt.

The interruption of interest can occur where a debtor offers to settle a debt (whether by tender or making a payment into court).  The interruption will occur from the date of the payment into court or date of the offer made until the date of acceptance of the offer by the creditor.


THE LIABILITY OF THE ARCHITECT IN THE SOUTH AFRICAN LAW

Sumari Benade

BY SUMARI BENADE

McKenzie’s “Law of Building and Engineering Contract and Arbitration 7th Edition, p 129” defines

an architect as “a duly qualified professional person whose function it is to design and supervise the erection of buildings, or in the words of The Shorter Oxford English Dictionary: One whose profession it is to prepare plans of edifices and exercise a general superintendence over their erection.”  A person may only practise as an architect in South Africa if he is registered as such in terms of the Architectural Profession Act 44 of 2000.  Section 27 of this Act stipulates that the South African Council for the Architectural Profession must draw up a code of conduct for registered persons.  All registered persons must comply with the terms as included in this code and failure to do so constitutes improper conduct.

The preamble of the Code of Professional Conduct, issued under BN 154 of 2007, Government Gazette 32731, 27 November 2009, states that “it is an overriding obligation under the rules that, in carrying out professional work, a registered person is expected to act with due skill, competency and integrity”. Once an architect is appointed by the employer, a binding contract will be in existence between the parties.  Usually included in the tacit terms of the agreement is that the architect does in fact possess the required skill and ability to be reasonably proficient in his calling.  It is, however, important to be cognisant of the fact that the architect may be also held liable in respect of a delictual claim in the absence of any contractual agreement between the parties.

It is a well-established fact in the South African Law that a person who does not practice with the due skill and diligence will be regarded as negligent.  In the Supreme Court of Appeal matter, Goliath v MEC for Health, Eastern Cape 2015 (2) SA 97 (SCA), the Court referred to the matter of Van Wyk v Lewis 1924 A.D 438 in which the test for negligence has been defined as “the failure of a professional person to adhere to the general level of skill and diligence possessed and exercised at the same time by the members of the branch of the profession to which he or she belongs would normally constitute negligence.”  In the English matter of Nye Sanders & Partners v Alan E Bristow (1987) 37 BLR 92 (CA) the Court stated the following with reference to the position of an architect: “Where there is a conflict as whether he has discharged that duty [to use reasonable skill and care], the courts approach the matter upon the basis of considering whether there was evidence that at the time a responsible body of architects would have taken the view that the way in which the subject of enquiry had carried out his duties was an appropriate way of carrying out the duty, and would not hold him guilty of professional negligence merely because there was a body of competent professional opinion which held that he was at fault.”

Should it therefore be found that an architect’s conduct falls short of the conduct that would have been reasonably exercised by another person of the same profession, the architect will be held liable in damages to his employer.

In the matter of Bentel Associate International (Pty) Ltd v Loch Logan Waterfront (Pty) Ltd 2015 JDR 0323 (FB) the Court had to decide inter alia whether the defendant’s claim in reconvention, alleging that it has suffered damages as a result of the plaintiff’s failure to perform its obligations in a professional and workmanlike manner and without negligence, should be upheld.  The Court stated that “the architect’s liability is not absolute in the sense of being liable for whatever occurs. The architect is liable for substantial negligence (Dodd v Estate Cloete and Another 1971 (1) SA 376 (ECD)).”  It further referred to the matter of De Wet v Steynsrust Municipality 1925 OPD 151 in which it was held that “an architect must exercise the general level of skill and diligence exercised by other persons exercising the same profession, being skilled and experienced persons.”  The Court referred with approval to the position in international law pertaining to the liability of the architect and quoted John R. Heisse from his article “The Measure of Malpractice” Journal of the American College of Construction Lawyers Vol 5, Nr 2, 2011: “Noting that architects and engineers deal in somewhat inexact sciences and are continually called upon to exercise their skilled judgment in order to anticipate and provide for random factors which are incapable of precise measurement the courts have reasoned that the indeterminate nature of these factors makes it impossible for professional service people to gauge them with complete accuracy in every instance.”

The benchmark regarding the standard of care that should be applied by an architect in the law of the United States has been defined in the Maine Supreme Court matter of Coombs v Beede 89 Me. 187 A 104 (1896).  The Court held that the responsibility of the architect is the same as a doctor to patient or lawyer to his client, which is that the architect possess “some skill and ability in some special employment and offers his services to the public on account of his fitness to act in the line of business for which he may be employed.”  The Court further held that the undertaking of the architect implies that he consequently possesses the “skill and ability, including taste, sufficient to enable him to perform the required services at least ordinarily and reasonably well; and that he will exercise and apply, in the given case, his skill, ability, judgment and taste, reasonably and without neglect.”  The Court then attempted to define the exclusions from the architect’s duty of care, submitting that “the undertaking does not imply or warrant a satisfactory result.  It will be enough that any failure shall not be the fault of the architect.  There is no implied promise that miscalculations may not occur.  An error in judgment is not necessarily evidence of want of skill or care, for mistakes and miscalculations are incidents to all business of life.”  Negligence should therefore be evident from the conduct of the architect and it will not suffice to simply state that a mistake was made by the architect.

When the architect enters into an agreement, it is implied that he is able to perform the work with reasonable skill and diligence.  It does however not warrant that the result will be without fault and the architect therefore will not be held liable for the fault arising from defects in the plans because he does not imply or warrant a satisfactory result.


LATEST DEVELOPMENTS IN CASE LAW
NATIONAL HOME BUILDERS’ REGISTRATION COUNCIL & ANOTHER V XANTHA PROPERTIES 18 (PTY) LTD (780/2018 and 784/2018) [2019] ZASCA 96 (21 June 2019)

The respondent, Xantha Properties 18 (Pty) Ltd embarked upon the construction of a property development in Cape Town

consisting of a number of shops and 223 residential apartments.  It averred that it had no intention of selling these apartments or developing them under a sectional title scheme but with the sole intention to rent them to tenants. Although registered as a ‘home builder’ as defined in the Housing Consumers Protection Measures Act 95 of

1998, it disputed being  obliged to enroll this development project with the NHBRC or to
pay the prescribed enrolment fee under section 14(1) of that Act, arguing that the section did not require a home builder to
enroll houses being constructed solely for the purposes of being let.

The NHBRC and the Minister of Human Settlements, contended otherwise and insisted upon the respondent’s development being enrolled and that it pay the necessary enrolment fee, a sum in excess of R1.5 million. The respondent paid that sum under protest but proceeded to seek a declaratory order in the High Court, Cape Town to the effect that it was obliged neither to enroll its development nor to pay such fee. The respondent’s application succeeded but with the leave of the court a quo, the two appellants appealed against the decision.

The Supreme Court of Appeal allowed the appeal. In doing so it held that the fundamental underlying premise of the Act is to guard against builders constructing sub-standard homes.
Moreover the definition of a home builder’s business was amended specifically to include building homes for purposes of being let or rented out, and there was no reason why the legislature would have decided that homes build for leasing purposes should be treated differently from those constructed for resale. It held that the court a quo had incorrectly reached the conclusion that section 14 did not apply to homes being built for lease and rental purposes. The Supreme Court of Appeal therefore allowed the appeal and granted an order dismissing the respondent’s application with costs.


PUZZLES AND PUNS

If you can’t convince them, confuse them

-Harry Truman


NEWSLETTER MAY 2019 – EXCITING NEW DEVELOPMENTS AT AM Theron INC

NEWSLETTER
May 2019
Issue 01
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EXCITING NEW DEVELOPMENTS AT AM Theron INC

We are excited to announce that as of March 2019, Johan Loots joined our team at AM Theron Inc. as director. Johan, a Pretoria born attorney, specializes in Commercial, Civil and General Litigation, especially in Insolvency Law and Rehabilitations. Johan was appointed in 2000 as moderator and specialist examiner of the Attorney’s Admissions Exam for the Legal Practice Council.

We herewith extend our heartfelt congratulations to our two Professional Assistants, Anjo Rheeders and Sumari Benade, on their admissions as both Conveyancer and Notary Public of the High Court of South Africa respectively during March 2019. We are proud to share this remarkable achievement with them.

Sumari Benade   Anjo Rheeders

FEATURE ARTICLES THIS MONTH
THE LEGAL APPROACH TOWARD TIME BARRING CLAUSES IN INSURANCE CONTRACTS

BY CLAIRE ROUX       Claire Wolmarans

The Constitutional Court, in the case of Barkhuizen v Napier 2007 (5) SA 323 (CC), dealt with the issue of “time-barring clauses” in contracts entered into between private persons.

The salient facts of the case are as follows:

The applicant claimed the insured sum from the respondent upon being in an accident with his insured vehicle. The respondent subsequently rejected the claim.

Two years later, the applicant instituted legal proceedings against the respondent claiming payment of the insured sum together with interest thereon. The respondent responded claiming that they were released from liability due to the applicant’s failure to adhere to the time-limitation clause which formed part of the contract. The relevant clause read as follows: “if we reject liability for any claim made under this policy we will be released from liability unless summons is served… within 90 days of repudiation”. In essence the applicant was time barred from instituting proceedings to pursue his claim.

The applicant argued that the time-limitation clause was unconstitutional as it was contrary to public policy and thus invalid. The basis of the Applicant’s contentions in this regard was that the clause sought to prescribe an unreasonably short period of time within which to institute legal proceedings and as a result it infringed on the right to seek redress from the Court and the right to access the Court.

The Court considered whether public policy tolerates time-limitation clauses. The Court held that it did, subject to the considerations of reasonableness and fairness. Furthermore, the Court reiterated that the Constitution recognises that the right to seek legal redress may be limited in certain instances. The Court also formulated a test for fairness viz, firstly, whether the clause itself is unreasonable and secondly, if the clause is reasonable whether it should be enforced in the circumstances. The Court found that clauses of this type are reasonable and thus operational within our law.

The Court ultimately found that the clause should be enforced in this matter because the applicant failed to show why he had did not act in accordance with the provisions of the time-bar clause. The Court explained that had the applicant been unaware of the time limitation clause or the consequences thereof, or failed to act in accordance with same due to factors outside of his control then the clause would operate unfairly and the Court would not enforce same. However, the applicant seemed to be fully aware of the clause and the effect of same.

This decision opened the door for the Courts to refuse enforcement of certain unfair clauses in contracts between private persons and laid the foundation of the grounds on which to do so.

The Policyholder Protection Rules
On 01 January 2018, the amended policyholder protection rules came into force. Various Rules have been in place regarding time barring since 2011, which the new Rules amplify. The rules build on the position laid down by the Court in Barkhuizen v Napier.

The Rules, firstly, provide that insurers must accept, reject or dispute a claim or the quantum thereof within a reasonable period of time. Thereafter, insurers must give written notice of their decision to the claimant within 10 days of making same.

In the event that an insurance claim is rejected or disputed by the insurer, the Rules provide for a rather stringent set of disclosure obligations which the insurer must fulfil. This ensures that claimants are equipped with the necessary information to properly pursue claims which they feel have been wrongly rejected.

It is also clear that mere notification of the clauses and processes is insufficient. Insurers must also ensure that claimants are made aware of the relevant details and implications thereof in order for them to be well equipped to deal with such clauses and/or to pursue such processes successfully.

The Rules confirm the Court’s power to condone non-compliance with time-limitations should they operate unfairly, as well as in circumstances where the policyholder can show their failure to institute legal proceedings timeously was due to a good cause. It is submitted that the test for fair operation of such a clause remains as decided by the Court in Barkhuizen. It must also be noted that the above requirements must be fulfilled in conjunction with one another.

Insurers are also precluded from imposing unreasonably short time-limitations, as the Rules state that any time-limitation imposed in a policy entered into after 2011, may not be shorter than six months.

The Rules now require insurers to ensure that the policyholder is well aware of the existence of the time-limitation clause, as well as the implications thereof. This protects policyholders from being prejudiced by clauses which they previously would not have been made aware of, or fully understood. It also provides the policyholder with ample opportunity to dispute repudiated claims and follow the correct processes in order to have their claims reconsidered.

Should an insurer fail to act in accordance with the Rules, a policyholder may lay a formal complaint against the insurer. As a result, the Rules have created a more onerous position for the insurer and this should ensure that they act in accordance therewith.

The Rules provide some welcome redress to the unequal power that insurance companies hold over policyholders. Furthermore, the new amendments to the Rules obligate insurers to inform policyholders of the protection in place which makes it more accessible to the policyholder and easier to follow.

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DEFECTIVE WORKS AND SUCCEEDING CONTRACTOR’S LIABILITY

BY ANJO RHEEDERS     Anjo Rheeders

When a contractor is replaced by a new contractor it is of the utmost importance that the succeeding (new) contractor must understand the provisions of his/her appointment agreement, as well as the liabilities imposed in terms of the agreement. Depending on the intention of the parties to the contract, the contractor’s liability regarding defective works could be exempted.

In the recent unreported case of Trencon Construction (Pty) Ltd v South African Airways (Pty) Ltd 2015 JDR 0090 (GJ) the court had to determine whether the replacement contractor was liable for the defective works caused by the former contractor on the project.

In this case, Trencon Construction (“Trencon”) was appointed as the contractor for the construction of a departure lounge at OR Tambo International Airport, subsequent to the liquidation of the initial contractor. The parties concluded a written agreement and the general conditions applicable were the Joint Building Contract Committee: Principal Building Agreement (“JBCC”). When Trencon issued an invoice to South African Airways (“SAA”) for work done in terms of the appointment, the principal agent contended that there was defective works which had to be remedied before a certificate of final completion could be issued. It should be noted that when the Applicant was appointed as contractor the design, manufacture and installation of the shop fronts, which were alleged to be defective by the principal agent and SAA, was done by the previous contractor.

SAA and the project manager relied on clause 8.2 of the JBCC which provides that: “The contractor shall make good any physical loss and repair damage to the works, including clearing away and removing from site, all debris resulting therefrom, which occurs after the date on which the possession of the site is given and up to date of issue of the deemed certificate of final completion…” [own emphasis]

The court held that clause 8.2 implies that the contractor shall make good the physical loss and repair and damage to works which occurs after the date on which possession of the site is given. It is common cause that the loss or damage occurred after the date on which possession was given to Trencon, and accordingly they were therefore not obliged to make good the loss or repair the damage.

Furthermore, the principal agent never issued a defects list, despite Trencon’s notification that same was outstanding. Accordingly in terms of clause 26.4 of the JBCC, the certificate of final completion is deemed to be issued, and as a result final completion is deemed to have been achieved.

The court also referred to clause 8.5 of the JBCC which provides that: “The contractor shall not be liable for the cost of making good any physical loss or repairing any damage of works where this resulted from the following circumstances: …8.5.9. design of the works where the contractor is not responsible in terms of clause 4.0…”

It was common cause that Trencon was not responsible for the design of the works which the principal agent and SAA contends to be defective. This is therefore another reason why Trencon cannot be held liable for the loss or damages.

To conclude, due to the provisions of the JBCC and due to the fact that the loss or damage did not occur after the date of possession of the site, Trencon was not responsible for the loss or damaged works that occurred. Should an employer therefore require the succeeding contractor to take responsibility for remedying defects or damages caused by the preceding contractor, the employer must expressly state its intention and ensure that it is included in the agreement.

It should be noted that the JBCC applicable in the Trencon case was the JBCC published in 2007, and in the latest edition of the JBCC published in 2014, clause 8.2 is amended. In terms of the 2014 JBCC version, clause 8.2 states that: “The contractor shall make good physical loss and repair damage to the works caused by or arising from:
8.2.1. any cause before the date of practical completion;
8.2.2. any act or omission of the contractor, in the course of any work carried out in pursuance of the contractor’s obligations after the date of practical completion.”

It is clear that the words “which occurs after the date on which the possession of the site is given” has been omitted and accordingly this could have an influence on the liability of the contractor. Clause 8.5 of the 2014 JBCC, however, still excludes the contractor’s liability for the loss or repair of damages caused by the design works for which the contractor is not responsible, and this could ultimately still be a defence for the contractor, should the preceding contractor’s works include design.

In light of the aforementioned it is therefore evident that depending on the type of JBCC edition applicable, the contractor will have a valid defence in these circumstances. However, every situation will have to be determined on its own merits and facts.

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WHO IS REGARDED A NON-RESIDENT FOR PURPOSE OF SECTION 35A OF THE INCOME TAX ACT 58 OF 1962?
BY ALLEN WEST    

Under South African Law there are different types of residents, for example a resident defined by the Income Tax Act, 1962 in terms of the so-called physical presence test and an ordinary resident defined in terms of South African common law.

Any individual, who is ordinary resident (common law concept) in South Africa during the year of assessment or, failing which, meets all three requirements of the physical presence test, will be regarded as a resident for tax purposes.

An individual will be considered to be ordinary resident in South Africa, if South Africa is the country to which that individual will naturally and as matter of course return after his or her wanderings. It could be described as that individual’s usual or principal residence, or his or her real home. If an individual is not ordinarily resident in South Africa, he or she may still meet the requirements of the physical presence test and will be deemed to be a resident for tax purposes.

To meet the requirements of the physical presence test that individual must be physically present in South Africa for periods exceeding-
• 91 days in total during the year of assessment under consideration;
• 91 days in total during each of the five years of assessment preceding the year of assessment under consideration; and
• 915 days in total during those five preceding years of assessment.

An individual who fails to meet any one of these three requirements will not satisfy the physical presence test.

If the individual is neither ordinary resident, nor meets the requirements of the physical presence test, that individual will be regarded as a non-resident for tax purposes. This means that individual will be subject to tax only on income that has its source in South Africa. A non-resident will, however, be subject to the withholding of tax on the sale of immovable property, as provided for in Section 35A of the Income Tax Act 1962.

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LATEST DEVELOPMENTS IN CASE LAW

National Home Builders Registration Council v Michiel Wessel Adendorff & others (406/2018) [2019] ZASCA 20

In this matter, the Supreme Court of Appeal had to determine whether a trust is a “home builder” in terms of sections 1 and 10(1) of the Housing Consumer Protection Measures Act 95 of 1998 (“the Act”).
The salient facts of the matter are as follow: During 2013 an NHBRC inspector, whilst

conducting a routine inspection, discovered that the trustees of the Mike’s Trust were constructing a sectional title housing development on the property for the benefit of the Trust. It is common cause that initially the Trust registered as a ‘home builder’ in terms of section 10 of the Act, for a period of one year, but failed to renew its registration. The Trust continued with the construction of new homes on the property, whilst not registered as a home builder. It was served with notices of non-compliance by the NHBRC, but refused to comply. Consequently, the NHBRC launched the application against the trustees.

The Trust submitted that it is not regarded as a person and therefore it is not required to register as a home builder in terms of the Act. The Court considered the relevant provisions of the Act and confirmed that “the Act is consumer-protection legislation, having as its object the protection of consumers against home builders who construct homes with structural defects, to provide consumers with information about competent builders, and to give effect to the rights of consumers.” The Act therefore requires registration of home builders and the enrolment of houses being built to ensure that the aims and objects of the Act are optimally achieved.

It was evidently confirmed by the Court that there can be no cogent reason for the legislature to exclude a trust that owns property, and is building a home, from the provisions of the Act, where the manifest purpose of the Act is the protection of the housing consumer, and maintaining the minimum standards required of home builders. Trusts are therefore deemed to be home builders as envisaged in the Housing Consumers Protection Measures Act 95 of 1998 and should register as such.

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PUZZLES AND PUNS

What’s wrong with lawyer jokes?
Lawyers don’t think they’re funny and
other people don’t think they’re jokes.

AUTHENTICATION OF DOCUMENTS FOR USE IN AND OUTSIDE SOUTH AFRICA

Introduction

Have you ever had to legalise documents within South Africa for use abroad or vice versa?

If you have, then you have no doubt experienced the frustration of having same signed/executed only to find out later that the documents are not legally valid or acceptable

Herewith a brief summary of the requirements for authentication

  1. Documents must be properly authenticated to ensure that they are legally valid for use either within South Africa or abroad.
  2. The country in which the documents will be used will determine the authentication process required.
  3. The process of authentication is simplified where the country is a party to The Hague Convention of 5 October 1961 (which abolishes the requirement of diplomatic and consular legalization for public documents originating in one Convention country for use in another). Documents issued in a Convention country which have been certified by a Convention Apostille are entitled to recognition in any other Convention country without any further authentication. Such recognition is an obligation on the part of the United States to the other countries party to the Convention and the federal courts and state authorities have been alerted to this obligation. Consular officers in Convention countries are prohibited from placing a certification over the Convention Apostille.
    Public documents include:
    • Documents emanating from an authority or an official connected with the courts or tribunals of the state, including those emanating from a public prosecutor, a clerk or a process server;

    • Administrative and notarial documents; and

    • Official certificates which are placed on documents signed by persons in their private capacity, such as official certificates recording the registration of a document or the fact that it was in existence on a certain date and official; and notarial authentications of signatures.

    If you have a document which you want legalized for use in another Convention country, the Convention certification called an Apostille must be affixed to the document by a competent authority. The Apostille is a pre-printed form prescribed by the Convention.

  4. Documents are authenticated with a Certificate of Authentication and/or an Apostille Certificate.
  5. Rule 63 of The Rules of the High Court of South Africa regulates the requirements for authentication where documents are signed / executed outside South Africa for use within South Africa.

To ensure that your documents are legally valid the following is required

SIGNING / EXECUTING OF DOCUMENTS WITHIN SOUTH AFRICA FOR USE OUTSIDE OF SOUTH AFRICA.

  1. Where countries are party to The Hague Convention:
    Currently 77 states including most European countries, the United Kingdom, The United States of America and South Africa1.1 Documents are signed and/or executed in the presence of a Notary Public. The Notary Public will attach his Certificate of Authentication to the documents which must bear his signature, stamp and seal.
    1.2 Documents are then forwarded by the Notary Public to The High Court in the area in which the Notary Public practices. The Court will then attach an Apostille Certificate authenticating the Notary Public’s signature; or-
  2. Where countries are not party to The Hague Convention:2.1 Documents are signed and/or executed in the presence of a Notary Public. The Notary Public will attach his Certificate of Authentication to the documents which must bear his signature, stamp and seal.
    2.2 Documents are then forwarded by the Notary Public to The High Court in the area in which the Notary Public practices. The Court will then attach an Apostille Certificate authenticating the Notary Public’s signature.
    2.3 Documents are then submitted to the Legalisation Section at DIRCO (The Department of International Relations and Co-operation) based in Pretoria to be legalised.
    2.4 Once legalised by DIRCO the documents are then forwarded to the Embassy/Consulate of the country in which they are intended to be used for further authentication.

SIGNING / EXECUTING OF DOCUMENTS OUTSIDE SOUTH AFRICA FOR USE WITHIN SOUTH AFRICA.

Rule 63 of the Uniform Rules of the High Court regulates the requirements for authentication.

In terms of Rule 63 a document is sufficiently authenticated by means of a Certificate of Authentication which bears the signature and seal of office of:

  1. a head of a South African diplomatic or consular mission or a person in the administrative or professional division of the public service serving at a South African diplomatic, consular or trade office abroad; or
  2. a consul-general, consul, vice-consul or consular agent of the United Kingdom or any person acting in any of the aforementioned capacities or a pro-consul of the United Kingdom; or
  3. any Government authority of such foreign place charged with the authentication of documents under the law of that foreign country; or
  4. any person in such foreign place who shall be shown by a certificate of any person referred to in paragraph (i), (ii) or (iii) or of any diplomatic or consular officer of such foreign country in the Republic to be duly authorised to authenticate such document under the law of that foreign country; or
  5. a Notary Public in the:- United Kingdom of Great Britain and Northern Ireland (England or Ireland);
    – Zimbabwe;
    – Lesotho;
    – Botswana;
    – Swaziland; or
  6. a Commissioner Officer of the South African Defence Force as defined in section 1 of the Defence Act, 1957 (Act 4 of 1957) in the case of a document executed by any person on active service.

DOCUMENTS EXECUTED IN NAMIBIA

Documents executed in Namibia cannot be authenticated before a Notary Public.

However, Namibia is a party to The Hague Convention and the documents can thus be authenticated via these formalities.

POWER OF ATTORNEY EXECUTED IN LESOTHO, BOTSWANA OR SWAZILAND

A Power of Attorney which is executed in these countries and which gives authority to a person to take, defend or intervene in any legal proceedings in a Magistrate’s Court within The Republic of South Africa shall not require authentication. However the Power of Attorney must be duly signed and the signature must have been attested by two competent witnesses.

THE LIABILITY OF THE ARCHITECT IN THE SOUTH AFRICAN LAW

THE LIABILITY OF THE ARCHITECT IN THE SOUTH AFRICAN LAW

 

McKenzie’s “Law of Building and Engineering Contract and Arbitration 7th Edition, p 129” defines an architect as “a duly qualified professional person whose function it is to design and supervise the erection of buildings.” In the Shorter Oxford English Dictionary an architect is described as “One whose profession it is to prepare plans of edifices and exercise a general superintendence over their erection.” One may only practise as an architect in South Africa if you are registered as such in terms of the Architectural Profession Act No 44 of 2000. Section 27 of this Act provides that the South African Council for the Architectural Profession must compile a code of conduct for all registered persons. Such registered persons must adhere to the terms as included in this code and failure to do so will constitute improper conduct.

 

The preamble of the Code of Professional Conduct, issued under BN 154 of 2007, Government Gazette 32731, 27 November 2009, provides that “it is an overriding obligation under the rules that, in carrying out professional work, a registered person is expected to act with due skill, competency and integrity”. Once an architect is appointed by the employer, a binding contract comes into existence between the parties. This means that a claim for negligence could be instituted against the architect in terms of the contract, or based on delict. Tacitly included in the terms of the agreement is that the architect does in fact have the required skills and ability to be reasonably proficient in his/her calling.

 

It is trite law in South Africa that a person who does not practice with the due skill and diligence will be regarded as negligent. In the Supreme Court of Appeal matter, Goliath v MEC for Health, Eastern Cape 2015 (2) SA 97 (SCA), the Court referred to the matter of Van Wyk v Lewis 1924 A.D 438 in which the test for negligence has been defined as “the failure of a professional person to adhere to the general level of skill and diligence possessed and exercised at the same time by the members of the branch of the profession to which he or she belongs would normally constitute negligence.” In the English matter of Nye Sanders & Partners v Alan E Bristow (1987) 37 BLR 92 (CA) the Court held the following with reference to the position of an architect: “Where there is a conflict as to whether he has discharged that duty [to use reasonable skill and care], the courts approach the matter upon the basis of considering whether there was evidence that at the time a responsible body of architects would have taken the view that the way in which the subject of enquiry had carried out his duties was an appropriate way of carrying out the duty, and would not hold him guilty of professional negligence merely because there was a body of competent professional opinion which held that he was at fault.”

 

Should it therefore be found that an architect’s conduct falls short of the conduct that would have been reasonable exercised by another person of the same profession, the architect will be held liable for damages to his/her employer.

 

In the recent matter of Bentel Associate International (Pty) Ltd v Loch Logan Waterfront (Pty) Ltd 2015 JDR 0323 (FB) the Court had to decide inter alia as to whether the defendant’s claim in reconvention, alleging that it has suffered damages as a result of the plaintiff’s failure to perform its obligations in a professional and workmanlike manner and without negligence, should be upheld. The Court held that “the architect’s liability is not absolute in the sense of being liable for whatever occurs. The architect is liable for substantial negligence (Dodd v Estate Cloete and Another 1971 (1) SA 376 (ECD)).” It further alluded to the matter of De Wet v Steynsrust Municipality 1925 OPD 151 where it was held that “an architect must exercise the general level of skill and diligence exercised by other persons exercising the same profession, being skilled and experienced persons.” The learned Judge referred with approval to the position in international law pertaining to the liability of the architect and quoted John R. Heisse from his article “The Measure of Malpractice” Journal of the American College of Construction Lawyers Vol 5, Nr 2, 2011: “Noting that architects and engineers deal in somewhat inexact sciences and are continually called upon to exercise their skilled judgment in order to anticipate and provide for random factors which are incapable of precise measurement the courts have reasoned that the indeterminate nature of these factors makes it impossible for professional service people to gauge them with complete accuracy in every instance.”

 

The benchmark regarding the standard of care that should be applied by an architect in the law of the United States has been defined in the Maine Supreme Court matter of Coombs v Beede 89 Me. 187 A 104 (1896). The Court held that the responsibility of the architect is the same as a doctor to patient or lawyer to client, in that the architect has “some skill and ability in some special employment and offers his services to the public on account of his fitness to act in the line of business for which he may be employed.” The Court further held that the undertaking of the architect implies that he/she consequently possesses the “skill and ability, including taste, sufficient to enable him to perform the required services at least ordinarily and reasonably well; and that he will exercise and apply, in the given case, his skill, ability, judgment and taste, reasonably and without neglect.” The Court then attempted to define the exclusions from the architect’s duty of care, submitting that “the undertaking does not imply or warrant a satisfactory result. It will be enough that any failure shall not be the fault of the architect. There is no implied promise that miscalculations may not occur. An error in judgment is not necessarily evidence of want of skill or care, for mistakes and miscalculations are incidents to all business of life.” Negligence should therefore be evident from the conduct of the architect and it will not suffice to simply state that a mistake was made by the architect.

 

In the matter of Bloomsbug Mills, Inc, v Sordoni Construction Co 401 Pa. 358 (1960), the Pennsylvanian Court confirmed that “an architect is bound to perform with reasonable care the duties for which he contracts. His client has the right to regard him as skilled in the science of the construction of buildings and to expect that he will use reasonable and ordinary care and diligence in the application of his professional knowledge to accomplish the purpose for which he is retained. While he does not guarantee a perfect plan or a satisfactorily result, he does by his contract imply that he enjoys ordinary skill and ability in his profession and that he will exercise these attributes without neglect and with a certain exactness of performance to effectuate work properly done. While an architect is not an absolute insurer of perfect plans, he is called upon to prepare plans and specifications which will give the structure so designed a reasonable fitness for its intended use, and he impliedly warrants their sufficiency for that purpose.”

 

CONCLUSION

 

When the architect thus enters into an agreement, it is implied that he/she is able to perform the work with reasonable skill and diligence. It does, however, not warrant that the result will be without fault and the architect therefore will not be held liable for the fault arising from defects in the plans because he/she does not imply or warrant a satisfactory result.    

Construction Law – Labour unrest in construction – who bears the risk?

The Medupi power station project will no doubt see claims for an extension of time for completion and claims for additional payment following recent reports of labour unrest on the construction site in Lephalale.

Construction at the multi-billion power plant was temporarily suspended on 16 January 2013 for more than a week as a result of what is being referred to as an “illegal strike” by Hitachi Kaefer and Alstom Kentz workers affiliated with the National Union of Metalworkers of SA. The workers are claiming that they have not received sufficient December bonuses and are also “not being paid double” on weekends.  This follows a similar strike in September 2012 when evacuation was ordered at the Medupi site because of violent strikes by workers.

Eskom is scheduled to start supplying power to the national grid from the first unit of the Medupi power plant by the end of this year.  Eskom’s Hilary Joffe has, however, confirmed that labour unrest threatens the completion milestones set out in the current project programme. 

Eskom will ultimately face the risks associated with the delays as contractors are likely to claim extensions of time for completion of certain portions of the project. Eskom may also face claims for additional payment as a result of the delay to contract works and disruption of project schedules. 

Numsa’s Irvin Jim has been reported as stating that the consistent frustration of construction is a deliberate act from contractors in an effort to delay the project in order to claim benefits from Eskom.

Eskom may have to review its current project labour agreement in order to avoid further delays and associated claims caused by the labour unrest.

Claims on these types of major projects involving numerous contractors’ and sub-contractors’ agreements (which are often linked to one another) require analysis of the various parties’ contractual rights and obligations.   AM Theron Incorporated specialises in construction law.

Company Law – Winding-up of a Close Corporation – The New Companies Act

LAWS REGULATING WINDING-UP PROCEEDINGS

The winding-up of a Close Corporation (“CC”) is regulated by sections 66 to 81 of the Close Corporation Act 69 of 1984 (“The CC Act”).   This Act, however, does not specifically regulate winding-up proceedings of a CC, but instead incorporates the applicable sections of the Companies Act dealing with winding-up proceedings by reference.  The applicable sections of the Companies Act should therefore be read as if it prescribes the proceedings for both Companies and Close Corporations.

The Companies Act 61 of 1973 (“the old Act”) used to regulate winding-up proceedings of a company (and therefore the winding-up of a CC) under sections 337 to 348 thereof.  In terms of section 344 of the old Act, read with section 68 of the CC Act, a CC could be wound-up, inter alia:
•    if the CC is unable to pay its debts as described in section 345 of the old Act; and
•    if the Court is satisfied that it is just and equitable that the CC should be wound up.

In terms of section 345 of the old Act, read with section 69 of the CC Act, a CC is deemed unable to pay its debts when:
•    a creditor to whom the CC is indebted in a sum of not less than R 100 has served on the CC, at its registered office, a demand requiring the CC to pay the sum due and the CC has for 21 days thereafter neglected to pay the sum or secure or compound for it to the reasonable satisfaction of the creditor; or
•    the sheriff has issued a return of service against the CC stating that it does not own sufficient disposable property to satisfy a judgment in favour of a creditor; or
•    it is proved to the satisfaction of the Court that the CC is unable to pay its debts, taking into account the contingent and prospective liabilities of the CC.

In terms of the provisions of the old Act a Court could therefore order that a CC be wound-up if a creditor could prove that the CC was indebted to it and was unable to pay such debt.

The old Act has recently, however, been wholly replaced with the Companies Act 71 of 2008 (“the new Act”), save for sections 337 to 348.  These sections of the old Act have been incorporated into item 9 of Schedule 5 of the new Act, subject to a limitation on the applicability thereof.  The applicability of sections 343, 344, 346 and 348 to 353 of the old Act has been limited to apply only in circumstances where a winding-up order is sought against an insolvent CC and shall therefore not apply to solvent CC’s.  As a result hereof, section 68 of the CC Act (the counterpart of section 344 of the old Act, dealing with circumstances under which a CC may be wound up) has also been repealed.  The effect of the aforementioned is that a solvent CC may now only be wound-up by Court order under the circumstances set out in section 81 of the new Act and no longer under the circumstances set out in section 344 of the old Act, read with section 68 of the CC Act.  

Section 81 of the new Act provides that a solvent CC may be wound-up by Court order if, inter alia:
•    one or more of the CC’s creditors have applied to the Court for an order to wind up the CC on the grounds that the CC’s business rescue proceedings have ended in accordance with section 132(b) or (c)(i) and it appears to the Court that it is just and equitable in the circumstances for the CC to be wound up; or
•    it is otherwise just and equitable for the CC to be wound up.

In light of the recent change in legislation a solvent CC may therefore no longer be wound-up purely because of the fact that it is indebted to a creditor and it is unable to pay its debts.  

This has been confirmed in the Free State division in the recent unreported judgments of Daffue J in Herman v Set-Mak Civils (5495/2011) [2012] ZAFSHC 58 (5 April 2012) and Zietsman AJ in HBT Construction and Plant Hire CC v Uniplant Hire CC 2012 JDR 0334 (FB).  In these judgments it is confirmed that a solvent CC can only be wound up by the Court on application of a creditor thereof if business rescue proceedings have ended and it is just and equitable that the CC be wound-up, alternatively if it is otherwise just and equitable for the CC to be wound up.  The mere fact that a CC is not paying the creditor’s debt is, however, not ground which makes it just and equitable for a CC to be wound-up and a creditor will have to prove factual insolvency of the CC before section 344 of the old Act, read with section 68 of the CC Act, will become applicable.  

PRACTICAL CONSIDERATION

In accordance with section 69 of the CC Act, a creditor shall send to the CC, at its registered office, a demand requiring the CC to pay the sum due within 21 days of receipt thereof prior to initiating winding up proceedings.  “Days” are defined as work days excluding the day on which the first event occurs (service of the letter of demand) and including the day on which the second event is to occur (the last day of the 21 day period).

An application for winding up of a CC shall be accompanied by a certificate by the Master, issued not more than ten days before the date of the application, to the effect that sufficient security has been given for the payment of all fees and charges necessary for the prosecution of all winding up proceedings and of all costs of administering the CC in liquidation until a provisional liquidator had been appointed.

A copy of the application for winding up a CC together with the supporting affidavits must be served on the Master prior to filing same with the Court in order for the Master to consider whether it should apply to Court for postponement of the hearing of the matter.  The application and affidavits should thereafter also be served on:
•    any registered trade union of the employees of the CC;
•    the employees of the CC (by affixing a copy to any notice board to which the applicant and the employees have access inside the premises of the CC or by affixing a copy to the front gate or door of the premises where the applicant has no access to the premises);
•    SARS; and
•    the CC at its registered address.

The applicant must then, prior to or during the hearing of the matter, file an affidavit which sets out the manner in which the above service requirements have been complied with and which is deposed of by the person who furnished a copy of the application to the said entities / persons (in practice service is done by the sheriff and the return of service constitutes an affidavit as aforementioned).

The general Rules of Application, as set out in Rule 6 of the Uniform Rules of Court, apply to winding up proceedings.

Engineering News – The Future of the Engineering Sector Seems Bleak

Engineering News recently reported that only 105 000 out of 496 000 of last year’s matriculants are able to pursue studies in engineering due to poor results in their final examinations.

Marna Thompson from the Department of Basic Education confirmed that the number of matriculants who have written and passed mathematics have declined steadily since 2008.  This leaves South Africa, each year, with an even greater shortfall on skills development opportunities for companies looking to fill learnership programmes and apprenticeships.

The Engineering Council of South Africa recently launched a national initiative to improve the current skills shortage in engineering, in line with the government’s plan to develop 30 000 engineers by 2014.  South Africa has a considerable deficiency of trained engineers, each engineer serving around 3 000 people, as opposed to 227 in Brazil and 543 in Malaysia.

According to the North West University, however, South Africa needs at least 25 000 engineering graduates per year in order for the country to be economically competitive.   These alarming figures of skills shortages in our country have moved the North West University to open a new engineering faculty of 18 000m² which can host 1 200 students in an attempt to produce a larger number of engineering graduates each year.  In light of the poor matric results, this initiative may be in vain as there are fewer students demonstrating a capacity to qualify for engineering studies each year.

Skills shortages do not only hamper South Africa’s infrastructure capacities and other developments, but also poses an increased risk to insurance companies providing professional indemnity insurance to the engineering industry.  Insurance companies may see an increase in liability claims against professional engineers in the years to come if more is not done to promote the engineering profession under young South Africans.

AM Theron Incorporated specialises in the fields of Insurance- and Engineering Law and keeps up to date with the latest developments.

Medical News – The effect of the Consumer Protection Act on Medical Professionals

According to a Business LIVE report dated 01 May 2012, a 2011 study by the Professional Provident Society (PPS) shows that professionals such as doctors, pharmacists and dentists are experiencing higher levels of confidence that the Consumer Protection Act (“CPA”) would add value to their clients, suggesting that medical professionals are beginning to accept the value of the legislation.

Dr Dominique Stott, an executive at PPS, is quoted as saying that the CPA is applicable to almost all services provided within South Africa, and since medical practitioners and hospital clinics provide medical services to the public, their services will also be impacted by the CPA.

Dr Stott states that if any member of the public is unhappy with the provision of medical services, they can approach the consumer commission and lodge a complaint against either a doctor or a hospital.

According to Dr Stott medical professionals will now have to ensure that communication documents are in plain English, and in language that consumers can understand. In addition, practitioners have to ensure that their contracts with the public do not contain terms that are unreasonable or unjust, and further have to ensure that their services are not directly marketed to consumers who have previously registered pre-emptive blocks for such marketing.

Dr Stott added that no negative option marketing will be allowed, so consumers cannot be sent messages suggesting that if a consumer does not opt out, they will automatically be opted in.

Dr Stott states that “all these factors mean service providers will now need to tread carefully when dealing with consumers, to avoid being brought in front of the commission. Consumers also now have a well-defined process that they can follow when their rights have been tampered with.”

However, Dr Stott believes that there are also benefits for the medical profession in that “often doctors are faced with a situation where patients book appointments and either cancel them at the last minute or simply don’t turn up. In these cases, doctors will still be entitled to levy a cancellation charge, though this must be reasonable and in line with general practice in the industry”.

To ensure compliance, Dr Stott advises that medical professionals should familiarise themselves with the Act and the workings of the National Consumer Commission.
  

Construction – New Dam Construction in the Eastern Cape

EngineeringNews reports that the construction of the R200-million Ludeke dam, which formed part of the first phase of Umgeni Water’s R830-million Greater Mbizana regional bulk water supply scheme in the Eastern Cape, started last week with the closure of the Ludeke river. 

In its totality, Greater Mbizana regional bulk water supply scheme would provide 20-million litres of safe drinking water to 266 000 people daily.

Ludeke dam was expected to hold 14.5-billion litres of water and cater for existing water demand, as well as any estimated increases over the next 30 years.

The construction of the dam, which was located about 60 km north-west from Port Alfred, was expected to start as soon as the bed of the Ludeke river was completely dry.  The dam comprised two embankments, one of which was 40 m, as well as a 17-m-high saddle embankment, which closes off a neck in the basin. An established and effective method of building embankments – with a clay core supported by a rockfill shell – was being employed.

The Greater Mbizana regional bulk water supply scheme comprised the new Ludeke dam, a pumped raw water supply system to the existing Nomlacu water treatment works, which was to be upgraded in two phases to 20 000 m3/d, and a bulk treated water supply system within the Mbizana local municipality.

AM Theron Inc Attorneys are specialists in Construction and Engineering Law and are in touch with the latest developments in the industry.

Medical Law – Risks associated with practising Obstetrics

Doctors are reluctant to specialise in Obstetrics due to the constant threat of being sued and the exorbitant cost of insurance premiums for medical malpractice cover.

Professional Indemnity Insurers indemnifying obstetricians in private practice should take note that the Sunday Times reports that these risks are regarded as falling in the “super high risk” category and pay the highest insurance premiums of the medical fraternity.

According to Health Minister Aaron Motsoaledi the problem has become so serious that he has commissioned a study to investigate reasons for this spike in litigation, which he hopes will report by the end of the year. Motsoaledi told the Sunday Times that while doctors should not be exempt from litigation “the manner in which it is happening is unacceptable”.

He is further quoted as saying “it’s overburdening gynaecologists more than any other profession … Why will you go and specialise in a profession where everybody is targeting you?”

Obstetricians who are members of the Medical Protection Society (MPS) – a non-profit organisation offering indemnity to nearly 30 000 health professionals in the country – pay an annual subscription fee of R220 700 while gynaecologists pay R111 130. In contrast, their counterparts in public hospitals who are members of MPS pay only R7020 because the State is liable to pay out negligence claims.

Professor Bhaskar Goolab, the president of the South African Society of Obstetrics and Gynaecology is quoted as saying that the average gynaecologist is “significantly fearful of litigation and it is something that affects his quality of practice”.  According to Professor Goolab the profession is being tainted by the legal profession as a “profession that is out there to harm mothers”.

Dr Chris Archer, an obstetrician in private practice, says that some of his colleagues are considering giving up their practice because of the steep cost of malpractice insurance. Dr Archer himself is reportedly paying just under R250 000 a year for cover through a commercial insurer. Dr Archer states that this amount is “enormous, especially when you consider that, 15 years ago, we were paying about R3000. Each time one reads of being sued, it makes us think that we are actually in a very dangerous profession and we wonder whether it’s worth it to carry on doing this”.

According to Dr Archer a possible reason for the increase in legal action against medical specialists could be the demise of the Road Accident Fund. He states that “it has forced a lot of lawyers who did this sort of work to look at the medical profession as a source of income because we are the only insured party”.

Dr Graham Howarth, MPS’s head of medical services for Africa, said in a statement that the organisation is aware of the issue. He is quoted as saying that “anecdotally, we are aware that some obstetrician members who have considered making the move into private obstetric practice have been apprehensive given the adverse claims environment”.

Although he refused to divulge the amount paid out by the MPS in claims in the past year, he said it had seen an increasing number of multi-million rand clinical negligence claims.

AM Theron Inc have developed a specialist Medical Law defence practice focussed on assisting Insurers of Medical Malpractice claims.

Medical Law – Rapid Increase of Medical Lawsuits in Gauteng

According to a News24 report, dated 4 June 2012, the Gauteng Health Department (‘the Department’) has paid R11.6 million to the family of an 8-year-old boy who suffered cerebral palsy after treatment at the Far East Rand Hospital.  The payment was made after the Department was ordered to do so by the South Gauteng High Court in Johannesburg.

The latest medical negligence payment by the Department follows on a report by News24, dated 15 April 2012, in which the DA voiced its concerns that higher payouts for medical negligence cases will severely impact the Gauteng Health Department’s budget as courts are granting higher payouts for medical negligence cases. Every effort should be made to ensure that quality health care is provided.

These concerns were raised after the news broke that the Department had been ordered by a court to pay R12 million to a mother whose baby was born brain-damaged and permanently paralysed due to negligence of staff of a Edenvale hospital.

The Department had already paid R15. 5 million in two medical negligence cases during this year alone.  R9. 25 million was paid to the family of a baby who was brain damaged during birth at the Pholosong Hospital.  Another R 6. 25 million was paid to a patient whose leg was amputated after he was scheduled for heart surgery at Steve Biko Academic Hospital in Pretoria.

Gauteng Health spokesperson Simon Zwane was quoted as saying that the department was ‘making efforts’ to prevent further lawsuits and to ‘generally improve the quality of healthcare in the province’.

However, despite the Department’s efforts it would appear as if claims of this nature are still on the increase, to the detriment of the Gauteng Health budget.

Construction – The Current State of the Industry

The Building Research Strategy Consulting Unit of business consultancy BMI estimates that investment in construction and building in South Africa in 2011 was R320-billion. However, construction demand from both the public and private sectors has slumped, on the back of global and local economic uncertainty.

The construction boom that preceded the slump saw many new construction companies entering the market. This has resulted in a situation of overcapacity in the current environment of reduced demand for construction services. Further, with fewer major contracts on offer, competition in the construction sector has become increasingly intense. Aggressive pricing, in an effort to secure contracts, has resulted in pressure on company margins, with several of the major participants in the market reporting margin erosion.

However, the South African government’s strong policy focus on infrastructure is positive and should eventually begin translating into orders, as well as help rebalance many South African construction companies’ order books, which are currently heavily weighted towards private sector contracts, with many construction companies in fact seeking out business in markets beyond South Africa’s borders.

Construction – Medupi Unit 6 Pressure Test to Start

EngineeringNews reports that Hitachi Power Africa has confirmed that the hydrostatic pressure test of the Medupi power station’s Unit 6 boiler pressure parts should begin within the coming two months.

CEO Johannes Musel told EngineeringNews that the test will signal the start of the “cold commissioning” phase of the power station’s initial production unit, which Eskom indicated should be producing electricity by the second half of the 2013.

The schedule has been pushed back by more than a year, owing to construction delays experienced in the boiler area. These delays have been attributed to structural steelwork design, manufacturing, logistics and construction problems.

The Integrated Resource Plan 2010-2030 was assuming the introduction of the first Medupi capacity during the first half of 2013, but Eskom has indicated that the unit is only likely to be introduced during the second half of 2013.

In a response to a Parliamentary question relating to Medupi and released on Wednesday, Public Enterprises Minister Malusi Gigaba said significant efforts have been made by Eskom, Hitachi Power Africa, as well as Hitachi operations in Europe and Japan to resolve problems and that the project schedule remains under constant review.

It is currently anticipated that the R120-billion, six-unit power station, which is being developed near Lephalale, in the Limpopo province, will be fully ramped up to its nameplate capacity of 4,764 MW during Eskom’s 2017/18 financial year.

Musel says the construction of the unit’s boiler pressure components, which are critical to the production of the steam needed to drive the turbine and electric generator, is nearly complete and that the focus is shifting towards the commissioning of the plant.

The first phase of commissioning is the cold commissioning phase in which no combustion takes place in the furnaces and no electrical drives are energised,” Musel explains, adding that any problems encountered during this phase will be fixed in line with schedules agreed with Eskom.

Following the hydrostatic pressure test the next milestone will involve chemical cleaning, which takes place ahead of “hot commissioning” and the eventual ramp up of the unit.

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