WORKING DOCUMENT

(As on 30/05/2011) 
 
 
 

REPUBLIC OF SOUTH AFRICA 

_______________ 
 
 

STATE LIABILITY AMENDMENT BILL 
 
 
 
 

_______________ 
 

(As introduced in the National Assembly (proposed section 75); explanatory summary of Bill published in Government Gazette No. 33950 of 21 January 2011)

(The English text is the offıcial text of the Bill) 
 

_______________ 
 
 

(MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT) 
 
 
 

[B 2B—2011]


 

GENERAL EXPLANATORY NOTE:

[ ] Words in bold type in square brackets indicate omissions from existing enactments.

_______ Words underlined with a solid line indicate insertions in existing enactments. 

BILL

To amend the State Liability Act, 1957, so as to regulate the manner in which a final court order sounding in money against the State must be satisfied; and to provide for matters connected therewith. 

PARLIAMENT of the Republic of South Africa enacts, as follows:— 

Substitution of section 2 of Act 20 of 1957, as amended by section 1 of Act 201 of 1993 

1. The following section is hereby substituted for section 2 of the State Liability Act, 1957 (hereinafter referred to as the principal Act): 

Substitution of section 3 of Act 20 of 1957, as amended by section 36 of Act 9 of 1989 and substituted by section 2 of Act 201 of 1993 

2. The following section is hereby substituted for section 3 of the principal Act: 

"Satisfaction of [judgment] final court orders sounding in money 


 

Insertion of section 4A in Act 20 of 1957 

3. The following section is hereby inserted in the principal Act after section 4: 

"Definitions 

4A. In this Act, unless the context indicates otherwise—

'accounting officer' means a person referred to in section 36 of the Public Finance Management Act;

'appropriated budget' means the budget of a department which is appropriated in terms of appropriation legislation in the annual budget or an adjustments budget;

'department' means a national or provincial department;

'executive authority' in relation to—

'final court order' means an order—

(a) given or confirmed by a court of final instance; or

Public Finance Management Act' means the Public Finance Management Act, 1999 (Act No. 1 of 1999);

'relevant treasury' means—

as the case may be;  and

'Rules of Court' include—

4. The provisions of section 3(b)(ii) to (16) of the State Liability Act, 1957 (Act No.  20 of 1957), apply in respect of a final court order sounding in money against a department which was given before the commencement of this Act and which is not satisfied within 30 days after the commencement of this Act. 

Short title and commencement 

5. This Act is called the State Liability Amendment Act, 2011, and comes into operation on 30 August 2011 or an earlier date set by the President by proclamation in the Gazette. 


 

MEMORANDUM ON THE OBJECTS OF THE STATE LIABILITY AMENDMENT BILL, 2011 

1. BACKGROUND

1.1 On 2 June 2008 the Constitutional Court, in Nyathi v MEC for Department of Health, Gauteng and Another 2008 (5) SA 94 (CC) (the "Nyathi One case"), declared section 3 of the State Liability Act, 1957 (Act No. 20 of 1957) (the "Act"), which deals with the satisfaction of judgments against the State, to be inconsistent with the Constitution of the Republic of South Africa, 1996, "to the extent that it does not allow for execution or attachment against the State and that it does not provide for an express procedure for the satisfaction of judgment debts". The declaration of invalidity was suspended for a period of 12 months in order to allow Parliament to pass legislation that provides for the effective enforcement of court orders. 

1.2 The Minister of Justice and Constitutional Development applied for an extension of the period of suspension of the order of constitutional invalidity made by the Constitutional Court on 2 June 2008 in the Nyathi One case in order to introduce a State Liability Bill in Parliament, and for Parliament to pass the Bill. On 1 June 2009 the Constitutional Court, in Minister for Justice and Constitutional Development v Nyathi and Others, In re: Nyathi v Member of the Executive Council for Health, Gauteng and Another (Case CCT 53/09) (the "Nyathi Two case"), extended the period of suspension of invalidity to 31 August 2009, and on 31 August 2009 it was again extended to 31 August 2011. 

1.3 On 9 October 2009 the Constitutional Court handed down judgment in the Nyathi Two case which provides for an order that will regulate the satisfaction of judgment debts against the State until 31 August 2011 or until remedial legislation is enacted, whichever occurs first. The order provides for a tailored attachment and execution procedure against movable assets of the State. 

2. OBJECTS OF THE BILL

2.1 The Bill seeks to give effect to the Constitutional Court’s judgment in the Nyathi One case and its order in the Nyathi Two case, to wit, to amend section 3 of the Act accordingly. 

2.2 The objects of the Bill are to create an effective execution process to be used by successful litigants in civil actions against the State in cases where the State has failed to comply with final court orders sounding in money. The provisions of the Bill can be summarised as follows: 

2.2.1 Ad clause 1:

Clause 1 substitutes section 2 of the Act. The substitution of section 2 of the Act is mainly required as a result of the insertion of a definition of "executive authority" in the Act (see clause 3).  Provision is also made that in any action or other proceedings instituted by virtue of the provisions of section 1 of the Act, the executive authority of the department concerned must be cited as nominal defendant or respondent (see proposed new subsection (1)).  In order to ensure that the State Attorney is, at the initial stages of proceedings against the State, informed thereof, provision is made that the plaintiff or applicant or his or her legal representative must, within seven days after a summons or notice instituting proceedings and in which the executive authority of a department is cited as nominal defendant or respondent has been issued or given, serve a copy of that summons or notice on the State Attorney (see proposed new subsection (2)). 

2.2.2 Ad clause 2:

Clause 2 substitutes section 3 of the Act in order to give effect, as far as possible, to the Constitutional Court’s judgment in the Nyathi One case and its order in the Nyathi Two case. Provision is, among others, made for the following:

2.2.3 Ad clause 3:

Clause 3 inserts a new section 4A in the Act containing definitions of various expressions in the Act. Those definitions are required as a result of the proposed amendments to the Act that the Bill seeks to effect (see paragraphs 2.2.1 and 2.2.2 above). 

2.2.4 Ad clause 4:

Clause 4 provides for transitional measures in respect of final court orders sounding in money against departments which were given before the commencement of the State Liability Amendment Act, 2011, and which are not satisfied within 30 days after the commencement of that Act. 

2.2.5 Ad clause 5:

Clause 5 contains the short title of the Bill and provides for the commencement of the Act. 

2.3 As the Constitutional Court extended the period of suspension of constitutional invalidity of section 3 of the Act to 31 August 2011, the Bill has to be passed by Parliament and implemented before that date. 

3. DEPARTMENTS/BODIES/PERSONS CONSULTED

3.1 The Bill was prepared in close conjunction with National Treasury, being the main role-player. 

3.2 On 1 June 2009 a State Liability Bill, 2009, was published in the Gazette for public comments. The comments received were accommodated, where appropriate. 

4. IMPLICATIONS FOR PROVINCES

The Bill seeks to regulate the manner in which a final court order sounding in money against a department, including a provincial department, must be satisfied. 

5. FINANCIAL IMPLICATIONS FOR STATE

None. 

6. PARLIAMENTARY PROCEDURE

6.1 The State Law Advisers and the Department of Justice and Constitutional Development are of the opinion that the Bill must be dealt with in accordance with the procedure established by section 75 of the Constitution since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies. 

6.2 The State Law Advisers are of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, 2003 (Act No. 41 of 2003), since it does not contain provisions pertaining to customary law or customs of traditional communities.