across the bar

google victory in the you tube copyright lawsuit

by Steve - Posted 26 June 2010

Google have successfully defended the lawsuit brought against them by Viacom and its co-plaintiffs for direct and secondary copyright infringement involving copyright protected material being uploaded to You Tube. The New York district court ruled that Google were entitled to safe harbour protection under the Digital Millenium Copyright Act, and that general knowledge of copyright infringement on its site did not disqualify it from such protection. Viacom have said that they will appeal the decision.

Check out the ruling.  

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when crime does pay (at least 6 months salary)

by Ashley - Posted 21 May 2010

So what happens if one of your employees is arrested on suspicion of committing a crime and remains in custody for a long period of time? Does this constitute incapacity and can you then fire them?

The Labour Appeal Court was faced with this very question in the recent case of Samancor Tubatse Ferrochrome v Metal and Engineering Industries Bargaining Council (MEIBC) and Others. Mr. Maloma (not Malema) was employed by Samancor as a furnace operator. He was arrested on suspicion of having committed an armed robbery. He remained in custody and was absent from work for approximately 150 days!

10 days after his arrest, Mr. Maloma received a dear john letter from his employer advising him that he had been dismissed on the ground of incapacity, i.e. that he was physically unable to tender his services.

Previously, our law recognized two aspects of incapacity: a) poor performance - where the employee was incompetent at doing the work because of a lack of skill, knowledge, ability or efficiency; and b) ill health or injury. However, the new case law has extended these 2 categories and incapacity can now be permanent or temporary and may take other forms, for instance, imprisonment and military call-up.

The court took into account that Samancor had no idea how long Mr. Maloma's incarceration would last, and that they needed a quick replacement because of the skilled nature of his job. The court decided that the dismissal was substantively fair. Unfortunately Samancor dropped the ball by not giving Mr. Maloma a fair opportunity to present his case and so the dismissal was held to be procedurally unfair. They were ordered to pay him 6 months salary as compensation.

In other words, Mr. Maloma received paid leave from his employer for his stay in jail. Who says crime doesn't pay.   

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new consumer protection act gets going on 28 april 2010

by Steve - Posted 29 April 2010

The Consumer Protection Act 68 of 2008 became an Act by publication in the Government Gazette on 28 April 2009. The actual implementation of the new law was staggered over 18 months with the 2 important milestones being 28 April 2010 and 28 October 2010.

On the first milestone - 28 April 2010, the Minister of Trade and Industry must start the process of establishing the bodies and structures required to administer the new law, including the National Consumer Commission and Tribunal. The Minister will also need to be in a position to deal with the accreditation process for consumer groups who want to be recognised under the Act.

Once this has been done, the Minister must then set about the task of making regulations to flesh out various sections of the Act. This process will require further consultation with the Commission and accredited consumer groups. The most important regulations will be those pertaining to: 

a)    the functioning of the Commission and the Tribunal;

b)    what contractual terms will be regarded as unfair, unjust and unreasonable to consumers;

c)    the publication of the various forms required by the Act to be used by suppliers and service providers in their dealings with consumers.

The Minister has been given 6 months to get all this up and running which seems unlikely to be enough time. This time period can be extended by a further 6 months on application by the Minister.

More importantly, manufacturers, importers and retailers who release defective or unsafe products onto the market after 28 April 2010 may now be held liable under the strict product liability provisions of the Act. Consumers who buy defective products after 28 April 2010 will be able to sue the suppliers of the defective product without having to prove that the supplier was negligent. Consumers will be able to recover damages for any loss they have suffered because of the defect.
 

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can we sue iceland?

by Steve - Posted 23 April 2010

There you are, a little Eskimo sitting chilling at your fishing hole - the next thing you know you are being showered in molten lava and ash. Who would have thought that Iceland was such a dangerous place beyond Bjork and the odd hungry polar bear!

The recent eruption of Eyjafjallajokull (hat tip for proper pronunciation) left millions of airline passengers grumpier than a hungry polar bear. Now that the dust has settled, passengers want to be paid compensation for losses suffered through cancelled direct and connecting flights, other transport costs, hotel reservations and unpaid salaries.   

With the sheer magnitude of the losses already suffered by the airlines (which is said to be more than the loss suffered in the aftermath of September 11), it comes as no surprise that the airlines are arguing that they are not liable because a volcanic eruption is an Act of God which made it impossible for them to perform under their contracts with passengers.

In SA law, an Act of God (or force majeure in fancy legal latin), is regarded as an event that directly and exclusively results from the occurrence of natural causes that could not have been prevented by the exercise of foresight or caution. If a contract becomes impossible to perform as a result of an Act of God, neither party may be held liable for any loss suffered by the other.

However, if the impossibility is temporary, the parties may not be entitled to cancel and may have to accept delayed or alternative performance (in this case, a new flight). What is regarded as temporary will be a question of fact in each case.

In World Leisure Travel v Georges (2002 WLD), Mr Georges cancelled a family package tour to Mauritius he bought from WLT when his flight to the island was cancelled due to a cyclone that hit the night before he was due to depart. A clause in the fine print of his contract stated that cancellation of the tour within 2 weeks of the date of departure would lead to the entire tour price being forfeited.

After the flight was cancelled, Mr Georges sent a fax to WLT also cancelling his tour and claiming a full refund of the tour price. The legal basis for the cancellation was that the contract had become impossible to perform. Unfortunately the court disagreed and held that, because SAA had laid on a special flight 2 days later, the impossibility was only temporary. Mr Georges was therefore not entitled to cancel the contract and forfeited the full tour price.             

If you are one of the unfortunates that have just spent the last 6 days on a cold airport floor, this may not come as good news. But hey, spare a thought for the Eskimos or quit your job and open a travel insurance agency.
 

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New Companies Act

by Nicci - Posted 25 March 2010

The new Companies Act, which comes into effect mid-2010, will have a significant impact on company law in South Africa.    Over the next few weeks, we will be highlighting areas of the Act which we believe could affect you and ways in which you can anticipate and prepare for these changes.

Topics we will be covering include:

a)      The importance of the Memorandum of Incorporation and the flexibility it gives shareholders and directors in structuring the way in which the company operates.

b)      Directors’ rights and duties.

c)       Shareholding:   different classes of shares, what rights do shareholders have?, what protection does a minority shareholder have against decisions made by the majority?, what happens to your shares on death/insolvency?,  to whom may you sell your shares?   What happens to the value of your shares if the company issues new shares?

d)      How does the Act affect Close Corporations?   Is it necessary to convert your CC into a Company?

e)      Administrative obligations and accountability.

f)       Business rescue.

Follow this link to the Act as well as the draft regulations published in January 2010.

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google victory in EU adwords case

by Steve - Posted 24 March 2010

The European Court of Justice ruled in favour of Google  yesterday in the Louis Vitton Adwords case, finding that Google's practice of allowing online advertisers to buy keywords which were the same or similar to their competitors' trademarks, did not in itself amount to trademark infringement.  

There must have been the proverbial deep gasp of relief from Google's headquarters as the search giant derives a large portion of its income from its Adwords online advertising service.

The court did rule that online advertisers who use another party's trademarks in keyword-based advertising in order to confuse consumers or to piggyback on their competitors' business success could be held liable for trademark infringement. This clarifies the law as it relates to online advertising and the decision is to be welcomed.

Now Google can concentrate on its fight with Viacom and others in the Youtube case.

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google adwords decision expected next week

by Steve - Posted 19 March 2010

Online advertisers will be waiting anxiously for the decision of the EU's Court of Justice next week in the Google Adwords case. The court will rule on whether or not a company that buys Google adwords for a rival's trade marks are committing trade mark infringement. Google's adWords system currently lets the highest bidder choose any search term to display its ads.

The case involves luxury brand, Moët Hennessy Louis Vuitton (LVMH), who noticed that adverts for counterfeit product suppliers were being displayed on Google when searching under various LVMH trade marks.

The case will have major repercussions for online advertising that is based on a context-sensitive ad model. It will also provide some much needed clarity on the application of traditional trade mark protection into the online world.

Watch the space.

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The impact of divorce on a Trust

by Nicci - Posted 16 March 2010

The primary reason why a person forms a Trust is to separate assets from his personal estate.   This could be for estate planning purposes or to keep assets out of the reach of creditors.

There are three different role players in a Trust:  the Founder, the Trustees and the Beneficiaries.  The Founder of the trust divests himself of ownership of assets when they are transferred to a Trust and the assets do not form part of his personal estate.  The status of a Trust in law was confirmed in Land and Agricultural Bank of SA v Parker 2005 (2) SA 77 (SCA), where it was held that a trust  can only act through its Trustees, who have to act independently and in the best interests of the beneficiaries of the Trust.

What happens if the Founder is married and gets divorced?  Can his wife lay a claim to Trust assets which were acquired during the marriage and put into the Trust?

This is exactly what the Court had to consider in Badenhorst v Badenhorst (07/2005) ZASCA 116.  Could the assets belonging to the husband which had been transferred to a Trust during their marriage be taken into account in making a redistribution of assets ito Section 7 of the Divorce Act?  Briefly, Section 7 empowers a Court to award a redistribution of assets accumulated during the marriage as it deems just and equitable (for marriages out of community of property, solemnized before 1984), given the contribution of the parties to the marriage during its subsistence.

The Court held that in order to succeed, the wife would need to prove 1) that the husband controlled the Trust and that  2) but for the creation of the Trust, he would have acquired and owned the assets in his own name.

An investigation would include:

a)The Trust Deed must be examined with regard to who the Trustees are and what their powers are.

b)Each asset transferred to the Trust must be examined as to when and how such asset was acquired and the circumstances surrounding the transfer of that asset to the Trust.

c)How the Trust is administered between the time of its creation and the date of divorce.

A Trust should be managed and controlled as an independent entity.  If it is shown that the founding spouse controlled the Trust and administered it as if it were his own assets, the Court can and will redistribute Trust assets in a divorce.

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Family Trusts vs Testamentary Trusts

by Nicci - Posted 16 March 2010

A Trust can be formed in one of two ways:  either while you are alive (inter vivos) where an individual wants to place assets in a trust for specific beneficiaries or in terms of a Will (mortis causa).

Trusts are used primarily in Wills to protect the inheritance of minors and only come into effect after the death of the testator.  The bequeathed assets are then protected until the beneficiaries are old enough to inherit, i.e. 18 years old.  This is also a useful tool if the testator wants to prolong the time period before the actual asset transfers to the beneficiary, as the testamentary trust can be structured in such a way that the inheritance only passes to the beneficiary at an age older than 18, i.e. when the beneficiary turns 30.

Any asset can be placed in an inter vivos trust - immovable property, cash or shares and the asset, once transferred, belongs to the Trust and will not be taken into account for the purposes of valuing your personal estate.  This type of trust works well when the asset held by the trust is a family beach house or farm.

All trusts have to appoint trustees, who manage the assets of the trust on behalf of the beneficiaries.  In a testamentary trust, the Will itself is the trust deed and contains instructions on how the trust is to be managed and the powers and duties of the trustees.  In an inter vivos trust, a trust deed is drafted and registered with the Master of the High Court and sets out the powers and duties of the trustees.  The trustees can only act on behalf of the trust once the Master has issued Letters of Authority to do so.

It is recommended that at least three trustees are appointed in a family trust and at least one of these trustees should be an independent party, eg. an attorney, accountant or a trust company.  A separate bank account in the name of the trust must be opened and all financial transactions relating to the trust must be recorded through this bank account.   SARS also requires all trusts to be registered for income tax purposes, so careful record keeping is a prerequisite for trustees.

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Affirmative action in the spotlight

by Ashley - Posted 15 March 2010

Affirmative Action is still a hotly contested topic in South Africa. In the recent case of Solidarity obo Barnard and Another v South African Police Services the Labour Court had to consider the issue of Affirmative Action and employment equity in the South African Police Service (SAPS).

Mrs. Barnard commenced service with the SAPS in 1989 as a constable. In 1997 she was promoted to the rank of Captain. After many years she was transferred to the National Inspectorate, formerly known as the National Evaluation Service (NES), at the rank of Captain.

During 2005 the SAPS created a new post of Superintendent of the NES. Mrs. Barnard applied for the position twice but was denied the promotion. Mrs. Barnard brought this application based on unfair discrimination and the allegation that she was denied the promotion solely for being white.

During the interview process for the position  Mrs. Barnard obtained the highest scores out of all the candidates and the panel agreed that the appointment of Mrs. Barnard would definitely enhance service delivery. Despite these factors, the Divisional Commissioner decided to leave the post vacant based on the sole reason that Mrs. Barnard was white and her appointment would frustrate the representivity status.

In 2006 the same post was again advertised. Mrs. Barnard applied and was short-listed. She was once again the top candidate for the position and recommended by the panel.

The National Commissioner refused to approve Mrs. Barnard's appointment on the basis that she was white and her appointment would not address representivity. The post was left vacant.

After due deliberation the Court reiterated that where a post cannot be filled by an applicant from an under- represented category because a suitable candidate from that category cannot be found, promotion to that post should not ordinarily and in the absence of a clear and satisfactory explanation be denied to a suitable candidate from another group.

The Court held that the failure to promote Mrs. Barnard was a decision based on her race and was indeed discrimination. The fact that other suitable black candidates were not appointed did not make the non- appointment fair.

In light of SAPS decision not to promote a black candidate, the Court concluded that it was unfair not to appoint Mrs. Barnard, who was a member of a designated group in the Employment Equity Act and the best candidate for the job.

The Court directed the SAPS to promote Captain Barnard to the post of Superintendent with effect from 2006.

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