Covering bonds, the accessorial principle and remedies founded in equity – Not self-evident bedfellows

by | Oct 22, 2019 | SALJ, SALJ V132 I2 2015

Covering bonds, the accessorial principle and remedies founded in equity – Not self-evident bedfellows

Authors J C Sonnekus, E C Schlemmer

ISSN: 1996-2177
Affiliations: Professor, Department of Private Law, University of Johannesburg; Professor, School of Law, University of the Witwatersrand
Source: South African Law Journal, Volume 132 Issue 2, 2015, p. 340 – 371

Abstract

Covering bonds provide security for the fulfilment of future obligations, provided explicit reference is made to the intention to secure a future debt up to a maximum amount. The accessorial principle, in terms of which the vesting of the right of real security is dependent on the existence of a principal debt, also entails the automatic demise of the security right if no debt any longer exists. Acovering mortgage bond ostensibly registered on the mistaken belief that the underlying loan agreement is valid, is ab initio void because it lacks the necessary accessory nexus. The perceived registered bond in reality never existed and the Deeds Registries must be corrected by cancelling the meaningless registration. Even if the creditor afterwards acquires another claim, it does not ex post ratify the void bond. A potential enrichment claim that may follow as a result of the advance of funds founded on an invalid loan agreement (presuming enrichment sine causa can be proven and no blame attaches to the conduct of the claimant condemned under the clean-hands principle) cannot be secured by a non-existing bond ostensibly registered as a ‘covering bond’ for the void loan. There was no consensus to secure this conditional debt founded on the condictio indebiti, and no real agreement as required for the abstract system existed. No judgment convinces merely because it ostensibly provides an equitable remedy to retrieve taxpayers’ money that was incompetently squandered.

Twelve years after Canada’s Access to Medicines Regime: Should South Africa follow the path?

by | Oct 22, 2019 | SALJ, SALJ V132 I2 2015

Twelve years after Canada’s Access to Medicines Regime: Should South Africa follow the path?

Authors Mélanie Bourassa Forcier, Béatrice Stirner

ISSN: 1996-2177
Affiliations: Professor, University of Sherbrooke, Canada; Researcher, University of Neuchâtel, Switzerland
Source: South African Law Journal, Volume 132 Issue 2, 2015, p. 313 – 339

Abstract

On 30 August 2003, the World Trade Organization decided that eligible countries without manufacturing capacities would be allowed to import generic drugs once they had been issued with a compulsory licence from an exporter country. Canada was the first country to implement this decision in its patent law and subsequently to apply it. Considering the fact that improving drug accessibility is a priority in sub-Saharan Africa, it is relevant for countries with manufacturing capacities, like South Africa, to consider implementing the August 30th decision into their legislation. This mechanism represents an opportunity for South Africa (1) to develop its pharmaceutical industry and (2) to increase drug accessibility in Africa. In exploring this option, the Canadian drug exportation mechanism could serve as a model for legislation in South Africa. In this article we review the Canadian experience, including the weaknesses of the Canadian platform. Based on lessons from this review, we suggest that South Africa should consider implementing a new drug exportation mechanism in its national patent law in order to rebuild its pharmaceutical manufacturing capacities and to improve access to drugs in Africa. In essence, by supplying sub-Saharan African countries, and thus using the compulsory licensing mechanism created following the Pretoria lawsuits, South Africa would close the loop.

Separation of powers, active liberty and the allocation of public resources: The E-Tolling case

by | Oct 22, 2019 | SALJ, SALJ V132 I2 2015

Separation of powers, active liberty and the allocation of public resources: The E-Tolling case

Authors Firoz Cachalia

ISSN: 1996-2177
Affiliations: Adjunct Professor, School of Law, University of the Witwatersrand
Source: South African Law Journal, Volume 132 Issue 2, 2015, p. 285 – 312

Abstract

The 1996 South African Constitution envisages a significantly expanded role for the judiciary. A change in legal culture, following South Africa’s constitutional transition, which is receptive to post-formalist styles of legal reasoning, also tends to expand the reach of the law. This change has implications for the relationship between the judiciary and the elected branches of government, and therefore for separation of powers. This article considers the principle of separation of powers in this context, as a source of both judicial authority and judicial self-restraint. Taking its cue from National Treasury & others v Opposition to Urban Tolling Alliance & others, it argues that the normativity of the principle of separation of powers and the democratic principles that inform the Constitution should frame the court’s consideration of the limits of judicial intervention in cases concerning the allocation of public resources, at least in macro-political cases that do not involve specific spending decisions affecting identifiable individuals. In the E-Tolling case — which came before the Constitutional Court by way of an appeal against the grant of injunctive relief against an organ of state (the South African Roads Agency) — the majority of the court relied on the polycentricity of resource allocation in upholding the appeal. In a separate judgment, Froneman J offered a different separation of powers justification for this outcome, saying simply: ‘[T]he courts of this country do not determine what kind of funding should be used for infrastructural spending on roads and who should bear the brunt of the cost. The remedy in that regard lies in the political process.’ Froneman J’s political process argument seems to suggest a broader normative consideration, which is that such issues should as a matter of political morality and legal principle be resolved by the elected branches of government, because they are elected. This article seeks to develop this line of argument by drawing on Breyer J’s suggestion that when interpreting the United States Constitution, its democratic objectives should be taken into account. The principle of active liberty, or self-government, is also one of the fundamental principles of the South African Constitution which should, along with other related principles (independence of the judiciary, the rule of law, and individual rights), be taken into account in developing and applying the separation of powers as a flexible constitutional principle relied upon by the judiciary to regulate its relationship with the representative branches and in appropriate cases to justify judicial restraint.

Notes: The overcomplicated interpretation of the word ‘may’ in sections 129 and 123 of the National Credit Act

by | Oct 22, 2019 | SALJ, SALJ V132 I2 2015

Notes: The overcomplicated interpretation of the word ‘may’ in sections 129 and 123 of the National Credit Act

Authors Michelle Kelly-Louw

ISSN: 1996-2177
Affiliations: Professor in the Department of Mercantile Law, University of South Africa
Source: South African Law Journal, Volume 132 Issue 2, 2015, p. 245 – 257

Abstract

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