Limitation of Legal Proceedings Against Govt Institutions / Administration of Estates Bills

Meeting report

JUSTICE AND CONSTITUTIONAL AFFAIRS PORTFOLIO COMMITTEE
21 June 2000
LIMITATION OF LEGAL PROCEEDINGS AGAINST GOVERNMENT INSTITUTIONS BILL: DISCUSSION

Relevant documents:
Summary of Submissions - Limitation of Legal Proceedings Against Government Institutions Bill
Working Document: Draft 1 - Limitation of Legal Proceedings Against Government Institutions Bill
Limitation Of Legal Proceedings Against Government Institutions Bill [B65-99]

Documents handed out:
Statutes that dealt with limitation of legal proceedings against organs of state
Schedule 1 of Public Service Law Amendment Act, No. 86 of 1998
Submission on Cross-Border Insolvency Bill from Cape Bar Council
National Prosecuting Authority submission on Administration of Estates Bill (see Appendix 1)
Submissions on the Administration of Estates Bill from various Masters of the High Court (see Appendix 2)

Chairperson: Advocate JH De Lange

SUMMARY
The Committee continued informally considering the Limitation of Proceedings Against Government Institutions Bill. The Committee envisages meeting again to discuss this Bill and the Administration of Estates Bill after recess.

Public hearings will be held after recess on the Administration of Estates Bill and the Scorpions Bill which should be coming to the committee soon..

MINUTES
Limitation of Proceedings Against Government Institutions Bill
Clause 1 Definitions
"organ of state"
Still under the heading: "Substitute the definition of "government institution" with any of the following options:" the Chairperson proposed that sub-clause (b)(ii) be taken out and refer to bodies mentioned in Schedule 1 of the Public Finance Management Act.

Advocate Masutha (ANC) observed that when looking at statutory bodies performing a public function it might be necessary to "go back to basics" and look to see what the provision was intended for. He mentioned that the provision never included a Board.

The Chairperson agreed that this was a valid point in that in the past the limitation covered only specific departments such as Police and Defence. He said a policy decision needed to be taken on the issue because if the problem areas were only certain departments in the past, what would be the justification of extending the requirement to give a notice to all organs of state.

Clause 2(1)
The Chairperson said Option 1B and 2B seem the better formulations. He urged the Department to look at the reference to "his or her" since it is possible that the debtor might not always be a natural person. The Chairperson pointed out that the notice period applies but now it is not completely inflexible. One can still approach a Court for condonation unlike in the past where it was the end of the matter once the 6 month period allowed for giving a notice runs. The normal 3 year prescription period still runs, in theory this means an action can be brought with permission of the Court within the 3 year period even if one failed to give notice within the six month period.

Clause 2(2)
Under the clause options are given for further methods of giving a notice such as faxes and e-mail. The Chairperson's view was that option 1A is the better formulation.

Members were concerned that where electronic forms of giving a notice are used it might be difficult to prove that the debtor received the notice.

The Chairperson urged drafters to look at mechanisms to prove receipt. He suggested that where fax or e-mail is used they should find wording to say certified mail confirming such dispatch should also be sent accompanied by the notice.

The Chairperson said he was not in favour of the requirement in Option 1B that the notice set out facts the creditor relies on for the intended proceedings. He said this would result in unfairness for the party giving notice. He said the drafters may leave the wording in the Bill and it will be decided upon when all the parties discuss it.

The Chairperson said a decision on Option 2 would depend upon the policy decision to be taken on the words "debtor" or "organ of State". Option 2 gives guidelines on to whom the notice should be sent.

Clause 2(4)
The Chairperson said he is opposed to the provision that the court may condone failure to give notice on application by the Creditor if it is satisfied that the debtor/organ of state was not unreasonably prejudiced by the failure. He said this should not be an alternative requirement in order for the court to grant condonation but rather should be made additional to the requirement that good cause exists for the failure by the creditor/ it is in the interest of justice. He proposed that the conjunction "or" be replaced with "and" to effect the change in the wording of the sub-clause.

Clause 2(6)
The Chairperson said he does not agree that the Court should be required to ignore the law if the non-compliance is not raised by the debtor/state organ. He said he is against binding the court to disregard the law.

Clause 3
The Chairperson said he has a problem with the clause especially when read with clause 5. He said the Department needs to draft clause 3 to capture the subtlety of restoring prescription law while at the same time allowing for condonation by the court. He pointed out that there is also a possibility of not getting condonation within the 3 year prescription period upon which the claim expires.

Clause 4
The clause is to be read with the schedule of Acts amended or repealed . Members are to look at the Bill over the recess and see if they are happy with the laws repealed as listed in the schedule.

Clause 5
The clause provides that if section clashes with other laws section 2 prevails.

Advocate H Schmidt (DP) said there might be a problem if a number of Acts state each one prevails in the event of conflict with all referring to the same issue.

The Chairperson agreed saying that is why an Act would have to provide that it repeals laws that were in effect immediately before its commencement. However, an Act cannot bind future laws to be passed by Parliament as that would be pointless because Parliament can always amend its laws.

Administration of Estates Bill
The Chairperson said the Committee agrees with the Administration of Estates Bill and would hold public hearings around the Bill after recess.

Scorpions Bill
This Bill is in the pipeline and when it comes he would like it to be given priority to allow the unit to work smoothly. If the Bill comes to the Committee soon, public hearings on it might be held earlier in August. The Chairperson made an undertaking to inform members on developments over the recess.

The meeting was adjourned.

Appendix 1:
INVESTIGATING DIRECTORATE: SERIOUS ECONOMIC OFFENCES
NATIONAL PROSECUTING AUTHORITY OF SOUTH AFRICA

ADMINISTRATION OF ESTATES AMENDMENT BILL, 2000 YOUR REFERENCE

18 May 2000

1. In general, the Amendment Bill ("The Act") has successfully addressed the expressed aims as set out in the memorandum of objectives, and the amendments are mostly technical in nature.

2. The Act retains the wide discretionary powers of the Master over the estates of deceased persons. It is these wide discretionary powers which are the subject of some criticism, inasmuch as they may be subject to abuse by unscrupulous and corrupt officials in the Master's Office. The wide discretionary powers of the Master in performing his duties in terms of various statutory provisions, including the Administration of Estates Act, form part of this Directorate's present investigation into allegations of corruption in the Master's Office, Pretoria.

3. The ambit of the Master's discretionary powers are, however, also presently subject to debate, especially in the light of constitutional developments in recent times. Subsequent to the enactment of the Interim - and Final Constitutions, the unfettered discretion of state officials in exercising "administrative functions" appears to be slowly being dissipated by the courts. (cf. Ynuico Ltd v Minister of Trade and industry and Others 1995(11) BCLR 1453 (T); Kotze v Minister of Health and Another 1996(3) BCLR 417(T))

4. In the light hereof, yet without being able at this time to submit a detailed discussion of the present structure of the Master's Office in relation to the Administration of Estates Act, it can merely be reiterated that care should be had to ensure that the actions of the Master in relation to estates, should at all times be subject to the scrutiny and review of the court. Any provision of the Act which might serve to hamper or negate the court's powers in this regard should be revisited.

5. Three minor matters referred to in the Act need possible attention:

5.1 In section 81, no mention is made of the purchase of property by a body corporate in which the curator or tutor, or the other persons referred to, might have an interest. Such a body corporate may not always act as "agent" of the curator/tutor when purchasing the property, but should be subject to the same control as the other persons mentioned.

5.2 It is not clear why, in terms of section 18(b) of the Amendment Act (section 102(1) of the principal Act), the option of imposing both a fine as well as imprisonment have been done away with. It is submitted that the option of imposing both in suitable circumstances be retained.

5.3 In section 18(a) of the Amendment Act (section 102 (1 )(e) of the principal Act), it is suggested that the word "whatever" be replaced with the word "whatsoever" to make the phrase more meaningful.

DIRECTOR: INVESTIGATING DIRECTORATE: SERIOUS ECONOMIC OFFENCES

Appendix 2:
Administration of Estates Bill, 2000

Further to my earlier letter I shall be pleased to enquire whether it is the express intention of the legislature to compel the Minister to appoint a Master to "each High Court", as opposed to a Master to each Provincial Division of the High Court, as under the present Act.

See Section 1 (c), Section 2 and Section 3 of Bill

S S Moodley
Master of the High Court
Grahamstown