Judicial Matters Second Amendment Bill: briefing

Meeting report

SAFETY AND CONSTITUTIONAL AFFAIRS SELECT COMMITTEE
24 NOVEMBER 2003
JUDICIAL MATTERS SECOND AMENDMENT BILL: BRIEFING

Chairperson: Mr M Mokoena (ANC)

Documents:
Judicial Matters Second Amendment Bill [B41B-2003] (awaited)
Judicial Matters Second Amendment Bill [B41-2003]

SUMMARY
The Bill provides a variety of amendments to fifteen Acts administered by the Department of Justice and Constitutional Affairs. Most of these amendments address certain problems areas that have arisen in practice. A concern was raised that the amendment to the Insolvency Act, 1936, so as to regulate agreements providing for termination and netting was not clear and asked if there is any real problem with the current provision. The Department also proposed amendments to amongst others, the Prevention of Counterfeiting of Currency Act, 1965, so as to further regulate the onus on an accused person; Criminal Procedure Act, 1977, so as to regulate pre-trial services in respect of bail proceedings and to further provide for correctional supervision as a sentencing option; and to the Attorneys Act, 1979, so as to provide for the mandatory attendance of a legal practice management course by attorneys and sole practitioners.

MINUTES
Clause 1
Mr L Basset (Department legal drafter) said that this clause seeks to amend the Administration Amendment Act of 1929 so as to provide for the appointment of presiding officers of Divorce Courts. He said that this amendment is necessitated by the uncertainty around the issue whether the section provides for the appointment of presiding officers in temporary, permanent or acting capacity.

Clause 2
This deals with the Insolvency Act on Agreements providing for termination and netting. Mr T Cronje (South African Law Commission) said that as the law stands the trustee of an insolvent estate has an election whether to terminate or continue with contracts entered into by the sequestrated person. The amendment seeks to remove such an election and consequently all contracts are terminated upon sequestration. The clause goes on to provide for the netting of all unperformed obligations of the insolvent. A concern was raised that the provisions of section 35B fall short of expectations and that many of the international banks and securities firms operating in South Africa are still constrained in the taking on of larger exposures because of legal concerns regarding the ambit and effectiveness of the current section. This amendment would allow for netting of specified obligations.

Mr L Lever (DA) said that this amendment has enormous and far reaching implications. It is not clear if the clause gives preference as a secured creditor or a quasi-secured creditor. The clause encourages speculations on what would happen upon insolvency.

Mr Cronje replied that the clause specifies what happens with regard to unperformed obligations upon sequestration. He also said that the clause does not seek to create secured creditors.

Mr B Mkhaliphi (ANC) asked if the presenter was talking about secured creditors as they are known in terms of insolvency law. He also asked if consideration had been made of the implication this clause might have on the rights of workers.

Mr Cronje said that secured creditors differ. One might be a secured creditor in terms of a mortgage bond or a pledge. This clause is concerned with book debts which are ceded as security for a debt. In this case one is dealing with an already secured creditor. This clause would allow an out and out cession which would also provide that the ceded property would be ceded back once it is established that the debt has been discharged or does not exist.

With regard to the implications for workers, Mr Cronje said that their plight has been considered and that it is not the Department's intention to make it worse.

Mr P Mathee (NNP) asked if the clause provides for preference or not. Would this clause not remove any preference a creditor might have in terms of other laws? What are the problems with the current provision.

The presenter said that this clause deals with an already secured creditor. The current provision has been found to be too wide. The purpose of the amendment is to limit it scope to financial transactions.

Mr Mathee asked if the words "notwithstanding any rule of the common law to the contrary" at the beginning of Clause 2 are new and not found in the existing provision. He advised for caution if the common law is to be tampered with by this amendment.

The presenter said that the clause seeks to change the common law as relating to the trustee right to elect whether to cancel the contract and issues relating to the setting off of obligation upon sequestration.

Mr P Maloyi (ANC) asked what the implications would be if this clause was removed from the Bill. He also asked about the urgency of the clause.

Mr Cronje said that if the clause was deleted then the current provision would apply. He said that banks need this provision so as to eliminate uncertainties around this clause.

Mr Mathee asked if the Portfolio Committee on Justice conducted any public hearings on the Bill and if any institutions made submissions to them on the Bill.

Mr L Basset said that this Bill was debate extensively in the Portfolio Committee and they were also briefed by the Department and the Banking Council.

Clause 3 Amendment of section 4 of Act 16 of 1965, as amended by section 4 of Act 18 of 1996
Mr Basset said that this clause deals with prosecution for the contravention of section 2(d), (j) or (l) of act 16 of 1965. Section 4 of the Act is amended so as to bring it in line with constitutional jurisprudence. The phrase "the onus of proving that such was the case shall be on the accused" is deleted from the section.

Clause 4 Amendment of section 60 of Act 51 of 1977, as substituted by section 3 of Act 75 of 1995 and amended by section 4 of Act 85 of 1997, section 5 of Act 34 of 1998 & section 9 of Act 62 of 2000
Ms P Naidoo (Department legal drafter) said that the Department was requested by the Portfolio Committee on Justice to investigate the possibility of taking into account the pre-trial services report in a bail application. The amendment requires a court to consider such report in bail applications, if such report is available.

Mr Lever said that there is a system that is currently in use in bail applications. He respected the Portfolio Committee's views on the issue and stressed that the Select Committee also has its views on the matter. He felt that there is no need to amend the law. The Department had to justify to the Committee if this amendment is necessary given the cost-benefit implications it might have.

Clause 5 Amendment of section 276 of Act 51 of 1977, as amended by section 3 of Act 107 of 1990, section 41 of Act 122 of 1991, section 18 of Act 139 of 1992, section 20 of Act 116 of 1993, section 2 of Act 33 of 1997 and section 34 of Act 105 of 1997
Ms Naidoo said that the SCA has authoritatively decided that correctional supervision is a competent sentencing option in the case of statutory offences but some courts still interpret section 276 as excluding correctional supervision as a competent sentencing option. This amendment seeks to establish legal certainty regarding correctional supervision as a sentencing option.

Mr Basset added that if the court considers a minimum sentence then correctional supervision is not an option.

Clause 6 Insertion of section 299A in Act 51 of 1977
Ms Naidoo said that it is important to include this amendment in the Criminal Procedure Act as it deals with the duties of the courts. This clause places a duty on the court, at sentencing stage, to inform a complainant or a relative of a complainant in a murder case of his or her right to make representations to a Parole Board when the parole of a prisoner is considered.

Mr Mathee observed that the duty seems to be limited to instances where the complainant is physically present in court. He asked why there is this limitation.

Mr Basset said that the Portfolio Committee had also debated this issue. He understood the member's concern and added that people would get to know of this right.

Mr Lever felt that perhaps this duty should rest with the investigating officer or the National Prosecuting Authority and not the court. He also had a problem with sub-clause (2)(ii) in that a person who knows that his or her address would be made public would not be prepared to make representations to the Board.

Mr Basset understood the need to provide for some safety measures and said that such could be included under sub-clause (4).

Clause 7 Amendment of section 342A of Act 51 of 1977, as inserted by section 13 of Act 86 of 1996
Ms Naidoo said that this clause is amended to provide that the National Director of Public Prosecutions must, within a specific time, submit a report to the Minister of Justice containing the particulars of each accused whose trial has not yet commenced and who has been in custody for a particular period. This report must be tabled in Parliament.

Clause 8, 9 and 10 Amendments to the Attorney Act