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Avoid Being Blacklisted

Some clarification: credit records, blacklisting and rescission of judgement applications (high and magistrate’s courts).

Nicolene Schoeman-Louw

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According to the IOL website, “46,5 percent of credit-active consumers – 8,61 million people – have apparently not been making their payments as they should.” This often results in judgements granted by a court and in many cases debtors neglect to defend the actions instituted against them (i.e. a summons).

This results in the court granting a default judgement in their absence and ultimately, that he or she is then blacklisted. Blacklisting adversely affects the debtor’s ability to have business dealings, but specifically, his or her ability to obtain credit (creditworthiness).

In order to remove his or her name from the so-called blacklist, the judgement in question, must be rescinded by an order of court. The court however, will only grant an order rescinding judgement, if the debtor has complied with prevailing laws and relevant court rules.

On the flip side of the coin, any creditor may list adverse information on a debtor’s credit record for a period of two years. This too, although not a judgment, may preclude a debtor from obtaining credit.

High Court

The general rule that applies in the High Court and Magistrate’s Courts is that an order of court will stand, until being set aside by a competent court. Thus, the court order must be obeyed, as there is a presumption that the judgment is correct.

In De Wet and Others v Western Bank Ltd, the court held:

‘A Court obviously has inherent power to control the procedure and proceedings in its Court. This is done to facilitate the work of the Courts and enable litigants to resolve their differences in as speedy and inexpensive a manner as possible. This, in my view, does not include the right to interfere with the principle of the finality of judgments other than in circumstances specifically provided for in the Rules or at common law.’

For a judgement to be rescinded in the High Court, the following needs to be established:

1. Good cause:

In order for an application for rescission of judgement to succeed, good cause must be proven. This is substantiated by the fact that in recent cases such as Swart v ABSA Bank Ltd the court dismissed this (unopposed) application for the rescission of judgment, as the debtor had failed to show good cause.

Good cause has never been defined and each case is measured individually against the facts contained in that specific case. The individual measurement of good cause further implies that the court can exercise its discretion in determining whether or not it is just and equitable to rescind any judgment previously made by it.

2. The rules of court:

In De Wet and others v Western Bank Ltd it was declared that the court has complete power to control the procedures and proceedings of the court. This is done to facilitate the work of the court and to enable litigants to resolve their differences as quickly as possible. Therefore, a rescission of judgement application must also comply with the rules of court.

Rule 42 sets out the grounds for the variation and rescission of an order. The grounds on which the court may rescind a matter due to of an error are:

  1. Where an order or judgment was wrongly sought or granted in the absence of any affected party;
  2. Where there is an ambiguity, a patent error or omission to the extent of such ambiguity,
  3. An order or judgment granted as a result of a mistake common to the parties.

Moreover, in the case where the rescission of judgement application is unopposed and brought by consent the court will regard the following:

  1. Reasonableness in the behaviour of the applicant,
  2. That the application is made in good faith,
  3. That the applicant has a bona fide substantial legal defence (based on the merits of the case).

3. Common law:

In Swadif (Pty) Ltd v Dyke No  the common law requirements set for rescissions of judgement applications were examined by court. Thus, in terms of common law, the following grounds can be used to set aside a judgement:

  1. Fraud,
  2. On rare occasions an error in law (justus error),
  3. New documents have been discovered,
  4. Judgement was granted be default in the absence of parties,
  5. On grounds of just cause (justus causa).

In addition to the above grounds, there must be a causal connection between the circumstances that gave rise to the rescission of judgement and the original judgement.

For the High Court even to consider a rescission of judgement, common law provisions, compliance with court rules and good cause must be established. This however, does not guarantee that a rescission will be granted, as the outcome is still at the discretion of the court.

Magistrate’s Court

The High Court is superior to the Magistrates Court and therefore has a bearing on the Magistrates Court and its decisions. High Court decisions also bind the Magistrates Courts in that province.

The Magistrates Court is a creature of statute and therefore can only perform what law allows it to in terms of the court rules. In terms of Rule 49 the following statutory requirements are set for rescissions of judgement in the magistrates courts:

  • The application must be done within 20 days of obtaining knowledge of such a judgement.
  • On application for rescission of judgement, an applicant must prove that there is good cause for the court to rescind the judgement. Nevertheless, the court may also rescind any judgement where it has good reason to do so. Thus, the court can use its discretion as to whether or not to rescind judgement.

As with the High Court, the magistrates court has never defined good cause.

For example, in the case of Silber v Ozen Wholesalers (Pty) Ltd good cause included the applicant’s defence, the circumstances surrounding and leading to judgement being taken and his conduct thereafter. In summary, the defendant (applicant) must have a bona fide legal defence, but is not limited thereto.

In addition, it is preferable that the applicant proves that there was no wilful non-compliance/default in terms of the court rules.

Therefore, the court rules must be complied with in the Magistrate’s Court in order to rescind judgement and as with the High Court, the judgement remains at the discretion of the court.

Conclusion

In the case of defaults, make sure you can afford the credit you have been given from the outset or make arrangements with creditors before falling into arrears so that a listing is avoided.

It is very important to note that under no circumstances will an attorney be able to predict or guarantee the outcome of an application for rescission of judgement, as it is solely the court’s discretion to grant or deny these.

Therefore, in order to avoid being blacklisted, it is advisable to approach an attorney for assistance when action is instituted against you. An attorney can also save you money by informing you whether the judgement cannot be rescinded due to non-compliance with the relevant legal provisions.

Nicolene Schoeman – Louw is an admitted attorney of the High Court of South Africa, as well as being a Conveyancer, Notary Public and Mediator. She is the Managing Director of Schoemanlaw Inc Attorneys, Conveyancers and Notaries Public (Schoemanlaw Inc Attorneys) in Cape Town. Visit www.schoemanlaw.co.za for more information or email enquiries@schoemanlaw.co.za

Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.

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Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.

1532099434_2-cents-worth-infographic

Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on Entrepreneur.com.

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.

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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel

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Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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