This
is a question that each director of either a small, medium or large firm must
take into account when considering competition in the market. Negligence has
left a lot of firms in a position that leads to them breaking down, but for a
firm to successfully compete in a market one must take the following into
account.
ESTABLISHING DOMINANCE
A definition of a dominant firm appears in
section 7 of the Competition Act. The inquiry into whether an entity is a
dominant firm includes an identification of the relevant market in which the
firm is involved, it’s market share within that market and whether it possesses
the relevant market under section 7 depends upon the market share enjoyed by
the firm alleged to be dominant.
WHEN
IS A FIRM DOMINANT?
Section 7 of the Competition Act states
that a firm is dominant in a market if:
- It has at least 45% of that
market
- It has at least 35%but less
than 45% of that market
- If it has lee than 35% of that
market but it has market power
The statutory test for dominance requires
an assessment of market share and market power. A firm with a market share of
45% or more cannot escape being conspired dominant per se, however, for those
firms with a market share of less than 45%, market share is only one aspect
that needs to be considered.
If the firm has a market share of less than
45% but equal to or more than 35%, the onus is on the firm to show that it does
not have market power.
If a firm cannot produce evidence to show
that it does not enjoy market power, then the firm is dominant.
Likewise, a firm with less than 35% of a
market share may be dominant if it has market power. However, in this case, the
onus is the complainant in the case or where relevant, the Competition
Commission, to show that the firm has market power.
TEST
FOR DOMINANCE
A firm can only be determined once the
market in which the firm competes is correctly defined. Accordingly, the
definition of the relevant market is an important initial step in establishing
whether a firm qualifies as dominant. It is quite possible for a big
conglomerate firm that participates in various diverse industries not to be
dominant in any relevant market.
So, the main question to ask is when does a
firm have market power? The Competition Act defines market power as the ability
to:
- Control prices
- Exclude competition
- Behave to an appreciable extent
independently of competitors, customers, and suppliers.
Market power provides the firm with the
ability to set prices above the competitive price level, and in so doing earn a
greater profit than it would have under competitive conditions in the market.
WHAT
DOES THE DOMINANCE PROVISION PROHIBIT?
In terms of section 8 of the Act, it is
prohibited for a firm to:
1. Charge an excessive price to the
detriment of consumers;
2. Refuse to give access to competitors
access to an essential facility when it is economically feasible to do so;
3.Engage in an exclusionary act, other than
that listed below if the anti-competitive effect outweighs its technological
efficiency or whether pro-competitive gain;
4. Engage in any of the following
exclusionary acts, unless the firm concerned can show technological efficiency
or other pro-competitive gains which outweigh the anticompetitive effect of its
act;
- Requiring or inducing a
supplier or customer not to deal with a competitor. This transpired in the case
of Comair Ltd v SAA 2008 where SAA
induced airline agents to not deal with Nationwide Airlines and Comair who were
complainants in selling the tickets but only sell SAA tickets to customers in
return for an incentive promised by SAA.
- Refusing to supply scarce goods
to a competitor when supplying those would be economically feasible.
- Selling goods or services on
conditions that the buyer purchases separate goods or services unrelated to the
object of a contract or forcing a buyer to accept a condition unrelated to the
object of a contract or forcing a buyer to accept a condition unrelated to the
object of the contact.
- Selling good and services below
their marginal or average variable cost.
- Buying up a scarce supply of
intermediate goods or resources required by a competitor.
Before one engages in the market it is
advisable to look out for such conduct, apply the Act where applicable.
We can help with this! We have extensive experience with the
Competition Commission, having appeared before the commission on behalf of
clients and dealt with Competition matters, up to and including, challenging
fines, opposing applications brought by the Competition Commission,
representing clients before the Competition Tribunal, among others.
Contact: Charmaine Schwenn
Charmaine@schwenninc.co.za
031
-0030360
WRITTEN BY: PORTIA SAMKELISIWE DLAMINI
13/05/2019
The law of insolvency – What does it mean to be insolvent?
It might happen that you have heard people talking about being insolvent and that their assets are sequestrated. This article will take you through the meaning of Insolvency for a person (NOT a company – that is Liquidation and will be covered in a later blog). We will also discuss who a debtor is for the purposes of insolvency, the purpose of a sequestration order and who may be sequestrated.
Meaning of: “Insolvency”
A person is insolvent when his liabilities exceed his/her assets. Inability to pay debt is, at most, merely evidence of insolvency.
A person who has insufficient assets to discharge his/her liabilities, although satisfying the test of insolvency, is not treated as insolvent for legal purposes unless his/her estate has been sequestrated by an order of the court.
A sequestration order is a formal declaration by the High Court that a he/she is insolvent. The order is granted either when he/she voluntarily surrenders their estate or where one or more of his/her creditors apply for compulsory sequestration. The person in this circumstances is referred to as a debtor (someone who owes money to creditor(s)).
Who can be regarded as a “debtor”?
The term “debtor” is technically wider than just a single person. It embraces the following:
The purpose of a sequestration order
The order of sequestration is made by the High Court to secure the orderly and equitable distribution of a debtor’s assets where they are insufficient to meet the claims of all his creditors. A sequestration order is issued by court to execute property belonging to a debtor in order to for the creditors to be paid which in some cases one or a few creditors are being paid, and the rest receiving little or nothing at all. However, the law takes its cause to ascertain that whatever assets the debtor has are liquidated and distributed among all his creditors in accordance with a predetermined fair order of preference.
Once an order of sequestration is granted, a coming together of creditors is established, and the interests of the creditors as a group enjoy preference over the interests of individual creditors.
A creditor’s right recover his claim in full by judicial proceedings is replaced with the right, on proving a claim against the insolvent estate, to share with all other proved creditors in the proceeds of the estate assets.
Apart from what is permitted by the Act, nothing may be done which would diminish the assets of the estate or prejudice the rights of creditors.
The law of insolvency exist primarily for the benefit of the creditors, thus a court will not sequestrate a debtor’s estate unless it’s known that the sequestration will be to the benefit of the creditors. Thus a sequestration order would not be granted if there is only one small creditor or if the debtor’s assets are not sufficient to cover the costs of sequestration, and so the creditors of the debtor would then have to seek individual relief against the debtor by taking judgment against him for nonpayment of debts. The concept of sequestration being to the benefit of creditors means that each creditor must benefit – receive some dividend from the sequestration order being made.
What may be sequestrated?
Estates that fall with the meaning of the word “estate” with regard to insolvency:
Written by Portia Dlamini
AS THE PARENT WITH PRIMARY RESIDENCE CAN I RELOCATE WITH MY CHILD?
Where both parents have guardianship over their children and one parent wants to move overseas the consent of the other parent is needed.
If however, consent is unreasonably withheld, the parent wanting to relocate can approach either the Children’s Court or the High Court for an order granting the parent to move with the child.
It is very important to note that a decision by a court is not made without a proper investigation. The court must be satisfied that the parent’s reasons for relocating are bona fide (meaning in good faith) and it must be within the best interests of that child.
The court will prefer a well laid out plan for things before making any decisions such as the child’s well-being, education, care and among other things the child’s housing.
The court will also take the following into account before granting the relocation:
Some of the factors that could go against the child relocating would be:
It is also of great importance to note and fully understand that the High Court and Children’s Court are the upper guardians of children and can make the necessary decision for the child regarding what is in his/her best interest. For any legal advice regarding the relocation of a child or children’s rights in generally contact our offices today on 031 003 0630 or email us on Charmaine@schwenninc.co.za.
#SCHWENNINC #YOUGOTSCHWENNED #FAMILYLAW
The Importance of having a living will
In light of wills week this month (16 to 20 September 2019) we thought we would highlight the importance of drafting a living will when drafting your last will and testament.
What is a living will?
It is a document in which you give instructions to your medical doctor and your family that in the event of a serious injury or disease, that renders you in a coma or in a vegetative state that you do not wish to be kept alive through artificial means.
Reasons Why You Need a Living Will:
What a living will cannot state.
You cannot include instructions for euthanasia or doctor-assisted suicide in South Africa. You are entitled to request for specific treatments to be withheld or withdrawn, but you cannot ask a doctor to end your life.
How to draw up a living will?
Drawing up a living will isn’t time-consuming, and while you can do it yourself, it’s always best to have an attorney assist you with the process. Your living will should be accessible, so it’s advisable to inform your family and your medical practitioners of your living will’s location and give them copies.
As with many things in life, people change their minds and we always recommend that you review both your Last Will and Testament and your living will on an annual basis or if your circumstances have changed.or any queries contact, Charmaine Schwenn on 031 – 003 0630 or email – charmaine@schwenninc.co.za so that we can assist you in drafting both your will and living will.
#Willsweek2019 #Justschwennit #Yougotschwenned
SPOUSAL MAINTENANCE: WHAT DO I NEED TO KNOW
Should a spouse be entitled to payment of a monthly amount of maintenance for themselves when they get divorced?
The simple answer is “no”. Our courts try to ensure what is known as a “clean break principle” on divorce, ensuring that as much as possible that each party goes their separate ways after a divorce.
This started with courts refusing spousal maintenance orders in some of the following circumstances:
In the past it was common that women would stay at home raising children and looking after the family home, however, this has become more rare. In these kind of situations, the court favours the application of “rehabilitative maintenance.” This upholds the clean break principle, giving the spouse maintenance for a fixed period of time until they are financially self-sufficient and upskilled to enable them to be gainfully employed.
In the cases where the courts grant maintenance orders, the court will have to take the following into account:
At Schwenn Incorporated we look at trying to get settlements during a divorce that are the most fair and favourable for our clients, as cost effectively as possible. If you have any questions on spousal maintenance or divorces in general do not hesitate to contact us today on 031 003 0630/ info@schwenninc.co.za.
Written by Jessica Schwenn and Charmaine Schwenn.
#schwenninc #newblog #spousalmaintenance #yougotschwenned #subscribe
WHAT IS STATUS AND LEGAL CAPACITY?
These terms are often mentioned in laws, contracts and news articles. What do they actual mean?
Status refers to your rights and responsibilities in civil and criminal law and whether you can sue or be sued.
This is further limited by your domicile (where you live and consider to be your home country), your age and your mental capacity.
Age and capacity go hand in hand, as described below :
Here are some random and interesting other facts about the law and age:
The law therefore indicates that to enter into any legal contract or litigation in general one must know of their legal status in order to peruse same legally.
For any questions on your legal status contact our offices today on 031 003 0630 or email us at Charmaine@schwenninc.co.za.
#newblog #schwenninc #legalcapacityandstatus #attorneysatlaw #litigation #contracts
The law of adoption in South Africa
Adoption can be described as the actual process where one or more people make an application to the Children’s Court to become a parent of a child that can be either biologically related to the parent or not.
Who is adoptable according to the laws of South Africa?:
Who can apply to adopt a child?:
Who needs to give consent to allow a child to be adopted?:
Can consent be withdrawn?:
Yes, a parent who gave the consent to an adoption has 60 days after consent was initially given to withdraw the consent.
Therefore the Children’s Court cannot grant an adoption until the 60 day period has expired.
When is it possible for consent not to be required?:
What is the actual procedure to adopt a child?:
For any family law matters don’t hesitate to contact our offices today on 031 003 0630 or email us at Charmaine@schwenninc.co.za.
Written by Jessica Schwenn.
WHEN A WILL FIRM BE CONSIDERED TO BE DOMINANT FOR PURPOSES OF THE APPLICATION OF THE COMPETITION ACT?
This is a question that each director of either a small, medium or large firm must take into account when considering competition in the market. Negligence has left a lot of firms in a position that leads to them breaking down, but for a firm to successfully compete in a market one must take the following into account.
ESTABLISHING DOMINANCE
A definition of a dominant firm appears in section 7 of the Competition Act. The inquiry into whether an entity is a dominant firm includes an identification of the relevant market in which the firm is involved, it’s market share within that market and whether it possesses the relevant market under section 7 depends upon the market share enjoyed by the firm alleged to be dominant.
WHEN IS A FIRM DOMINANT?
Section 7 of the Competition Act states that a firm is dominant in a market if:
The statutory test for dominance requires an assessment of market share and market power. A firm with a market share of 45% or more cannot escape being conspired dominant per se, however, for those firms with a market share of less than 45%, market share is only one aspect that needs to be considered.
If the firm has a market share of less than 45% but equal to or more than 35%, the onus is on the firm to show that it does not have market power.
If a firm cannot produce evidence to show that it does not enjoy market power, then the firm is dominant.
Likewise, a firm with less than 35% of a market share may be dominant if it has market power. However, in this case, the onus is the complainant in the case or where relevant, the Competition Commission, to show that the firm has market power.
TEST FOR DOMINANCE
A firm can only be determined once the market in which the firm competes is correctly defined. Accordingly, the definition of the relevant market is an important initial step in establishing whether a firm qualifies as dominant. It is quite possible for a big conglomerate firm that participates in various diverse industries not to be dominant in any relevant market.
So, the main question to ask is when does a firm have market power? The Competition Act defines market power as the ability to:
Market power provides the firm with the ability to set prices above the competitive price level, and in so doing earn a greater profit than it would have under competitive conditions in the market.
WHAT DOES THE DOMINANCE PROVISION PROHIBIT?
In terms of section 8 of the Act, it is prohibited for a firm to:
1. Charge an excessive price to the detriment of consumers;
2. Refuse to give access to competitors access to an essential facility when it is economically feasible to do so;
3.Engage in an exclusionary act, other than that listed below if the anti-competitive effect outweighs its technological efficiency or whether pro-competitive gain;
4. Engage in any of the following exclusionary acts, unless the firm concerned can show technological efficiency or other pro-competitive gains which outweigh the anticompetitive effect of its act;
Before one engages in the market it is advisable to look out for such conduct, apply the Act where applicable.
We can help with this! We have extensive experience with the Competition Commission, having appeared before the commission on behalf of clients and dealt with Competition matters, up to and including, challenging fines, opposing applications brought by the Competition Commission, representing clients before the Competition Tribunal, among others.
Contact: Charmaine Schwenn
Charmaine@schwenninc.co.za
031 -0030360
WRITTEN BY: PORTIA SAMKELISIWE DLAMINI
13/05/2019
THE CONVEYANCING PROCESS
STEP 1 – Sign an offer to purchase a house from the Seller using an Estate Agent (if applicable);
STEP 2 – Bond Application done for the Loan :
Bond application forms part of the “suspensive condition” (conditions that need to happen before the sale). Another common suspensive condition is the sale of an existing document;
STEP 3 – Estate Agent will send Agreement to us for registration of transfer.
The Sale Agreement is a binding contract that forms the basis of the transaction;
STEP 4 – We will contact the parties for FICA documents, deposit from Purchaser (if applicable), request Deed and Discharge from cancellation bank, search at Deeds Office for restrictive conditions, etc. If the Seller has a bond over the property, his/her bank will hold the title deed in safekeeping;
STEP 5 – Bond attorneys will be instructed once the bond is approved, they will send through their letter with all requirements, a mortgage bond is a special loan which uses the fixed property as a security registered in the Deeds Office;
STEP 6 – Cancellation attorneys will be instructed by the seller’s bond bank, the cancellation attorney will send through the Title Deed and guarantee requirements to us;
STEP 7 – We will apply for rates clearance certificate (takes up to 3 / 4 weeks). A property cannot be transferred if there are outstanding rates;
STEP 8 – Start preparing documents for signature – this takes about a day;
STEP 9 – Contact parties to sign transfer documents such as Power of Attorney, Affidavits, etc. Original FICA to be brought in for verification purposes;
STEP 10 – Proforma account to be paid by purchaser, SARS Transfer Duty application to be done (takes up to 10 days), pro-rata rates/levies homeowner’s fees, etc called for payment. Proforma account is an estimate as to the rates and/or levies will only be known once the figures are received, there could be many additional costs incurred depending on the transaction;
STEP 11 – Once all is in order with Homeowner’s, Rates, Levies, SARS, the matter can be prepped for lodgement;
STEP 12 – Send documents to Stowell & Company for lodgement, always ensure that simultaneous transaction is all done on the same day (bond/cancellation). The lodging attorney is located opposite the Deeds Office and acts on our behalf;
STEP 13 – Matters are lodged together (transfer, bond & cancellation), this takes up to 5-6 days in lodgement stage;
STEP 14 – Examiners at Deeds Office examine each document sent;
STEP 15 – Matter comes “up for prep” or “fees”, we will prep final account in file. This is good news, meaning all the documents were correct and will be registered the next day;
STEP 16 – Matter registered, Seller paid, Estate agent paid, etc. The purchaser becomes the new owner;
STEP 17 – Title Deed sent back to us, send a copy to the client, to send original to bond bank attorneys. The title deed can take up to 2 months to return from Deeds Office.
Are you looking to buy or sell your property?? Contact us today and we will help you!
#schwenninc #newblog #conveyancing #law #attorneys #theconveyancingprocess #callustoday #letushelpyou
The duties of an Executor in a deceased Estate.
Nobody likes to think about the fact that they will one day die. It is a horrible visual but what about those who are left behind? This article will discuss the duties of the executor and how they help those through that process.
During your life you acquire assets for example houses, cars, shares, etc. and you also acquire liabilities such as loans, debts, etc. These assets and liabilities form part of your estate, and when you die this estate needs to be administered, divided and distributed. These processes are all done by one person in control of the estate known as the executor.
The executor’s first step would be to meet the family and gather as much information and missing documents that they don’t have and reconcile the deceased’s will in which the executor in Testate Succession will be nominated.
The second step is that the estate must be reported to the Master of the High Court’s office in which the deceased lived. http://www.justice.gov.za/master/contacts.htm.
The executor must then place a notice to the creditors informing them of the deceased’s death. This notice will be placed in the Government Gazette and the local newspaper in the area the deceased had lived. This gives creditors the opportunity to institute claims within 30 days after the notice was published.
The executor will then close all of the current bank accounts open at the time of the deceased’s death. He/she will then open up a separate account strictly used for the administration of the estate.
The drafting of accounts must be done and advertised in the same manner as the notice to creditors which is then lodged for approval at the Master of the High Court where the death was reported.
After the accounts have been approved by the master, the executor will pay all the creditors and distribute what’s left of the estate to the beneficiaries accordingly.
The Master of the High Court can help the family of the deceased on the process, however, it is usually advisable that a qualified attorney and/or deceased estate paralegal helps the family. One can approach Pro Bono.org where they will be helped for free.
It is not advisable that a family member is left as the executor of an estate of their loved one. This is burdensome especially if it is not your area of expertise. Contact us and we will help you today. Call us on 031 003 0630 or email us at Charmaine@schwenninc.co.za.
#schwenninc #attorneys #law #deceasedestates #dutiesoftheexecutor #newblog
Are you thinking of buying an investment property to rent out? If so, here are some of the things to keep in mind:
1. It is important to think about the initial costs, do you have enough earnings to qualify for a bond on a property in the first place? Are you able to pay all the necessary transfer costs such as transfer duty, attorney/conveyancer fess?
2. Then consider ownership – firstly be how you intend to register the property, are you doing so in your name or in the name of a trust or company? Consult an attorney and accountant on this point.
3. What will the monthly costs be to you from date of registration? Think of costs such as levies, rates and taxes, and your bond instalment. Also factor in insurance and maintenance costs. You should have a contingency account for amounts not covered by your insurance for maintenance and upkeep of the property.
4. A big risk is periods when you have no tenants and are not earning an income, or if you have a tenant that is not paying rental, are you prepared to pay costs while looking for a suitable tenant or ejecting a non-paying tenant?
5. How much rent can you charge? Rental needs to be based on a) The type of property b) The location e.g. is it close to shopping centres? How many people will be living on the property? You will also need to plan ahead for the annual increase of rental which usually ranges between a 5-10% increase per year. This amount needs to be carefully considered and calculated so that it strikes an important balance between profit for you as a land owner as well as fairness and affordability for tenants.
6. You will need a strong rental agreement that protects your rights as a land owner, this should include breach clauses which will give you remedies in the event that the tenant breaches his responsibilities, this should also include the fact that they agree to pay legal costs in the event that a matter ends up in the legal process.
7. Tenant vetting- what you look for in a tenant : • Reliability – this would be especially useful when it comes to payments being made every month, • Conduct and demeanour – this would be one of the top priorities, not only does the tenant’s conduct depict how they will act toward you but it is important to see how they handle stressful and or difficult conversations especially when things go wrong and there is a breakdown in communication. • Responsibility – as a property owner, you want a tenant who will look after your property the best that they can as if it was their own, who will maintain it and keep it neat and tidy • Reference checks are essential, especially from previous landlords.
When seeking a tenant the most important thing is for you as an owner to feel comfortable!
If you have any queries and or advice on buying a rental property and renting out your property don’t hesitate to contact us today on 031 003 0630 or email us on Charmaine@schwenninc.co.za.