State Liability Amendment Bill: Adoption

Meeting report

State Liability Amendment Bill: B2B-2011: Adoption
The Chairperson asked the State Law Advisors to take the Committee Members through the documents and alert them of any changes or further amendments to the working drafts of the State Liability Amendment Bill (the Bill).

Mr Johan Labuschagne, Principal State Law Advisor, Department of Justice and Constitutional Development (DOJ&CD) referred the Committee to page 3 of the Working Draft and said that some technical amendments had been made by the Departmental advisors, without referring back to the Committee. He indicated the technical change to clause 3(1) to make it read better. In clause 11(d)(i) the word 'instructions' was substituted with the word 'Act'. In clause 11(f) the word 'or' was substituted with the word 'and'. National Treasury had indicated that it wished to have all the powers simultaneously listed from clause 11(a) to 11(g). On page 10 and 11 the provisions dealing with other institutions had been deleted.

Mr Labuschagne also pointed out some purely technical changes to the clause dealing with Transitional Measures. The last issue was the Memorandum on the Objects, which the Committee could consider. The same wording as appeared in the Bill had been used to explain the objects in the memorandum.  The contents of the A list were exactly the same as the contents of the clean document. The only proposal for the A list was on page 11 under the Transitional Measures. This had only been picked up on that morning and it was too late to effect a formal change in writing. However, the proposal was that sub-clause 3 of clause 3 should be stated in brackets - so that it read as follows: “the provisions in sub-section 3(3)(b)”.

Discussion
Mr J Jeffery (ANC) said that his understanding was that a Portfolio Committee did not ordinarily approve an amended memorandum, because it would be up to the Department concerned whether it wished to keep the wording of the memorandum as originally introduced, for the guidance of the relevant Select Committee when the Bill was referred to the National Council of Provinces (NCOP). He thought that this Committee should not be studying the Memorandum of Objects, let alone vote on it.

The Chairperson asked if there were any Members who held a contrary view, but there was no response.

Mr Labuschagne explained that in previous portfolio committees, the Memorandum was considered and approved. That was the reason why he had now attached it for consideration by this Committee.

The Chairperson asked if there were any reservations on the amendments tabled by Mr Labuschagne.

The Chairperson noted that the Memorandum of Objects should be approved by the Committee.

Ms D Schäfer (DA) pointed out that in clause 2, on page 3 of the Working Draft, the word 'given' was used, and she wondered if it should not have remained as ‘issued’. She also thought that clause 4, at the foot of page 4, should be worded to reflect that the court order must be served in accordance with the Rules of Court. In clause 6, on page 5, there was a reference to ‘court order’, although up to then the words ‘judgment debt’ had been used and she wondered if the wording of ‘judgment debt’ should remain, for consistency. She also asked for clarity on the changes in clause 9, on page 6.

Mr Labuschagne answered the first point about clause 2. He thought that notices were ‘given’ rather than ‘issued’, and the word ‘issue’ related to the summons.

Mr S Swart (ACDP) said that application proceedings were done by way of a notice of motion, which was ‘issued’ by the court. He thought that ‘given’ related to the later step of service. He agreed with Ms Schäfer that the word ‘given’ was unnecessary in clause 2.

Mr Jeffery noted that this related to service and was a formal proceeding, and asked what word was used in the Rules of Court.

The Chairperson, noting that Adv B Holomisa (ANC) had confirmed that the word ‘issued’ was used, asked that the word ‘given’ in clause 2 be substituted with ‘issued’.

Mr Jeffery the referred to the second issue raised by Ms Schäfer clearly could give rise to misunderstandings. The verb was ‘serve’ and there was a question as to whether the words ‘in terms of’ or ‘in accordance with’ or ‘in a manner provided for in the rules’ was appropriate. He thought that ‘in terms of’ was neater and preferable to other options. This, however, was his personal preference, and he did not think that it was a major issue.

Mr Labuschagne said that he did not think there could be any confusion as far as the clause was concerned, but the decision on the final wording lay with the Committee.

The Chairperson asked the Members if they had any major reservations. Members did not indicate that they had. The Chairperson therefore told Mr Labuschagne that no change should be made to the wording of clause 4.

Mr Jeffery indicated that he shared Ms Schäfer’s concerns about clause 9.

Mr Swart asked if it would not be more appropriate to say 'the Rules of Court, where applicable'.

The Chairperson said that there was no need to say 'the Rules of Court, as amended from time to time' as this was a given.

Mr Enver Daniels, Chief State Law Advisor, said that the rules of court were always applicable and there was no need to say either ‘where applicable’ or ‘with the necessary changes’.

Mr Jeffery said that it would seem that 'where applicable' should remain, as there may be a conflict between the provisions of this Bill and the Rules of Court. 

The Chairperson noted the consensus of the Members that the words ‘where applicable’ should remain, but the words ‘with the necessary changes’ should be removed.

Mr Daniels noted a suggestion from his colleague that more appropriate wording would be: 'Subject to this Act, the Rules of Court, where applicable, shall apply'.

The Chairperson noted general agreement from Members on this wording for clause 9.

Mr Jeffery asked if the Committee should not make a transitional provision that if there was a judgment order given before the Act came into effect, the Executive authority should be informed as soon as the Act became applicable.

Mr Labuschagne said that the reason why he had not mentioned the point raised by Mr Jeffery in a specific clause was that it would not serve much use if the plaintiff gave notice only now to the State Attorney, in respect of judgments handed down a year or two ago. Such a clause would need to be very carefully drafted. If the Committee felt strongly about the provisions in the Transitional Measures being changed, then it would be possible to amend them.

Mr Jeffery noted that the Committee was working within very tight time frames. In view of the complexity of such a provision, he thought that it was not necessary to pursue the point.

Mr Lawrence Bassett, Chief Director: Legislative Drafting, Department of Justice and Constitutional Development, then addressed the Committee on the tagging of the Bill. He said that the Department had erred on the side of caution, as Section 76(4)(b) of the Constitution provided that a Bill had to be dealt with in accordance with Section 76(1) if it had provisions affecting the provinces. The State Law Advisors have prepared an opinion on this.

Mr Daniels said he would like to raise a point before the opinion was shared with the Committee. The concern he had was that South Africa borrowed extensively in the international markets, and he would be called upon, in his capacity as Chief State Law Advisor, to give his opinion on the legal ramifications prior to money being borrowed. None of the international instruments in terms of which South Africa borrowed money made reference to the State Liability Act. In terms of the agreements, if South Africa defaulted, then its embassies could be attached. A clause was inserted that stated that money to settle a judgment debt would be provided from the Revenue Fund. It was not clear if the changes proposed in the Bill actually covered such a scenario. It was therefore suggested that the Committee must address this issue, and make provision in the Bill for foreign debts as well.

Mr Jeffery pointed out that the Committee was working to a very tight deadline and the Executive already had given the Committee little time within which to process this Bill. The fact that this point was being raised only now created great difficulties for the committee, and he believed that it should have been contained in the Bill as introduced, and not raised at this late stage, particularly since the State Law Advisors had been working continuously on the matter. He believed it was out of order to raise the point only when the Committee was about to vote on the Bill.

The Chairperson agreed.

Mr Daniels said that he accepted the point, and would raise it with the Executive.

Ms Carin Booyse, Deputy Chief State Law Advisor, Office of the State Law Advisor, gave the opinion on the tagging. The State Law Advisors had considered the whole Bill and the Nyathi judgment and came to the conclusion that this Bill remained a Section 75 Bill. The Bill dealt with the satisfaction of a judgment and was ultimately about good governance and the rule of law.

Ms Schäfer pointed out that the Bill did affect provinces and it made reference to provincial treasuries.

Mr Jeffery said that the test was provincial legislative competence, and not whether provinces were affected. It was therefore necessary to consider Schedule 4 and how it would be affected by the provisions of the Bill. There was already a procedure in the Bill as introduced that affected provinces, even before the Committee had made any amendments. The Committee's amendments had not made any difference as to whether this Bill fell within a section 76 procedure. His main concern was that if this Bill had to be re-tagged, there would not be sufficient time. He suggested that the Bill should be passed as a section 75 Bill, and if somebody wanted to challenge this then they may do so.

Mr Swart said that he agreed with Mr Jeffery. It was unlikely that it would be contested as it was providing an additional benefit.

Ms Schäfer did not agree. She thought it was possible that the Bill was not correctly tagged right from the start and thought that it was not ideal if the correct procedure was not followed by reason of time constraints.

Mr Daniels said that the opinion of the State Law Advisors was fairly comprehensive, and this should allay the fears of the Committee. The State Law Advisors had also looked at the Hlongwane case as a reference.

Adv Holomisa said that if the Bill was a Section 76 Bill and the NCOP Committee had to obtain the provincial mandates, then surely it would be possible to apply to the Constitutional Court for an extension of time within which to pass the Bill.

Mr Jeffery said that it did not make a difference to this Committee whether the Bill was a Section 75 or Section 76 Bill as the tagging would affect the NCOP. The question was whether the Bill affected the financial interests of provincial government. However, he did not believe that the Bill was about financial interest, but was concerned with the procedures to settle debt.  In addition, he pointed out that the decision on tagging did not rest with this Committee.

The Chairperson read out Rule 249, which dealt with the process in the Committee. The Rule stated that the Committee could not propose an amendment that affected the classification of the Bill, except as provided for in sub-rule 4 and Joint Rule 163. Joint Rule 163 held that “the Joint Tagging Mechanism may change the classification of a Section 75 or a Section 76 Bill to a mixed Section 75/76 Bill, or a Section 75 Bill to a Section 76, or a Section 76 to a Section 75 Bill, only if the Bill was introduced in the National Assembly and the Bill was amended, before a second reading in the Assembly, to become a mixed Section 75/76 or a Section 75 or a Section 76 Bill.” The tagging of Bills was not the Committee’s job and the State Law Advisors had assured the Committee that it was correctly tagged. He thought the matter rested there.

The Chairperson asked Members if the Committee was ready to approve the Bill and Memorandum of Objects.

Ms Schäfer said that she must take the Bill back to her caucus for consideration, and her vote would not be recorded.

The majority of the Committee then approved the Bill, as amended, and Memorandum of Objects.
[PMG Note: Some further revisions were made to the Bill on 2 June 2011]

Committee Report on adoption of the Bill
The Chairperson then tabled the Committee Report on the Bill.

Mr Jeffery said that under point 5 of that Report, an additional point should be added that the Committee wished to recommend to the Minister of Justice that there be an inquiry into the municipal dispensation, with possible amendments.

The Chairperson asked if there were any objections.

Members confirmed that there were no objections to this.

The Chairperson informed Members that Dr M Oriani-Ambrosini (IFP) had tabled his minority views, in terms of Rule 251(3)(e)(ii).

Mr Jeffery asked if it was possible to table a view in absentia.

Mr Vhonani Raamano, Secretary of the Committee, said that Dr Oriani-Ambrosini had indicated that these issues had been raised during previous meetings, and he wanted them to be reflected in the Committee report.

Mr Jeffery said that the correct procedure had to be followed.

The majority of the Committee then indicated that they had no further problems with the Committee’s Report on the State Liability Amendment Bill, and resolved to adopt it.

The meeting was adjourned.