Amounts paid to illegal and fraudulent pyramid scheme operators constitutes ‘gross income’

The sole issue before the SCA was whether the money deposited by investors with Prinsloo’s various enterprises, incorporated and unincorporated, had been received by those enterprises within the meaning of ‘gross income’ as defined in the Income Tax Act 58 of 1962 (the Act). (Read more...)

Access to information held by a private body

In Claase v Information Officer, South African Airways (Pty) Ltd 2007 (5) SA 469 (SCA) the appellant (Claase), a retired airline pilot was, as part of his retirement package, entitled to two free business-class tickets on any South African Airways (SAA) international flight per year.

When he wanted to change the date of two business-class tickets that he had booked, he was told that although there were seats available in the business class, none could be allocated to him until booking had closed. When booking closed, he was told to fall to the back of the queue. While he did, he witnessed passengers upgrading economy-class tickets to business ones. (Read more...)

Restraint of trade

Protection of trade secrets and confidential information: In Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) the appellant was employed by the respondent as a systems engineer in the highly competitive telecommunication networks market. His contract of employment provided that after termination of his employment with the respondent he would, for a period of 12 months and in the province of Gauteng, not be employed by a competitor.

He also undertook not to disclose trade secrets and confidential information belonging to the respondent. After his resignation the appellant immediately joined the respondent’s rival. As a result of this the respondent applied for an interdict restraining the appellant from working for the its rival and disclosing confidential information about its business. (Read more...)

Promotion of Access to Information Act 2 of 2000 cannot be used as a pre-action discovery tool

Section 50(1) of the Promotion of Access to Information Act 2 of 2000 (PAIA) makes provision for access to information held by a private body which is required for the exercise or protection of any right. In Unitas Hospital v Van Wyk and Another 2006 (4) SA 436 (SCA)* the first respondent sought to institute a damages claim against the appellant as a result of the alleged negligent medical treatment of her deceased husband which resulted in his death. (Read more...)

Financial Services Board - Inspection of Financial Institutions

The constitutionality and legality of certain inspections performed by the Financial Services Board (FSB) in terms of the new Inspection of Financial Institutions Act 80 of 1998 (the new Inspection Act) and Financial Services Board Act 97 of 1990 (the FSB Act) came under scrutiny in Platinum Asset Management (Pty) Ltd v Financial Services Board and Others; Anglo Rand Capital House (Pty) Ltd and Others v Financial Services Board and Others 2006 (4) SA 73 (W). The applicants (Platinum) sought the review and setting aside, under s 1(c) of the Constitution, of the decision of the Registrar to appoint an inspection into the affairs of Platinum in terms of s 3 of the new Inspection Act, read with s 45 of the Stock Exchanges Control Act 1 of 1985 (the SEC Act) and s 26 of the Financial Markets Control Act 55 of 1989 (the FMC Act). Platinum based its application on the following grounds:

• The inspection was ultra vires the provisions of the new Inspection Act since Platinum was not a ‘financial institution’ as defined, nor was the appointment of the inspectors authorised by the provisions of s 45 of the SEC Act or s 26 of the FMC Act.

• The authorisation was overbroad, undefined and unspecified, and accordingly inconsistent with the rule-of-law principle enshrined in s 1(c) of the Constitution in that it failed to provide clear parameters for the inspection.

• Ulterior purpose, in that the investigation was initiated by a foreign regulator and the dominant purpose of the investigation was to monitor compliance with UK law.

• The lack of independence of the inspectors.

• The inspection was ultra vires the functions and powers of the FSB in that it was acting under the new Inspection Act and the FSB Act and was thus empowered only to conduct inspections pertaining to contraventions of the laws supervised by the FSB, namely the laws regulating financial institutions.

(Read more...)