pn280703

EXPLANATORY MEMORANDUM ON THE JUDICIAL MATTERS SECOND AMENDMENT BILL, 2003

1. The main purpose of the Bill is to encompass in a single Bill a variety of amendments to laws which are administered by the Department of Justice and Constitutional Development and which amendments do not require individual Amendment Acts. These mainly comprise the rectification of certain provisions and are also aimed at addressing certain problems areas which have arisen in practice. The Bill also contains certain amendments which are of a more substantial nature.

2. The objects of the respective clauses of the Bill are briefly explained below.

2.1 Clause 1 substitutes section 35B of the Insolvency Act, 1936, which deals with agreements on informal markets. Section 35B allows for post-insolvency netting or set-off in respect of the obligations of parties arising out of agreements which fall within the definition of "agreement" for purposes of section 35B(1). Netting involves the setting off of obligations under transactions one against another so that payments between the relevant parties are made on a net rather than a gross basis. A concern was raised that provisions of section 35B fall short of expectations and many of the international banks and securities firms operating in South Africa are still constrained in taking on larger exposures because of legal concerns over the ambit and effectiveness of the current section 35B. The proposed amendment will allow for agreements that provide for termination and netting. In terms of the new provision ‘agreement’ means an agreement which provides that if the estate of a party to the agreement is sequestrated before that party has performed fully in terms of the agreement all unperformed obligations of the parties terminate or become due, the values of the unperformed obligations are determined and the values are netted so that only a net amount is payable. It also provides that when the estate of a party is sequestrated all unperformed obligations arising out of such agreement will be automatically terminated, the values will be calculated at market value and the net amount will be payable.

2.2 Clause 2 of the Bill amends section 4 of the Prevention of Counterfeiting of Currency Act, 1965, by addressing the reverse onus that is placed on accused persons, in line with constitutional jurisprudence.

2.3 The Department was requested to consider an amendment obliging presiding officers in bail proceedings to consider any pre-trial service report that might be available to assist the court in arriving at a decision regarding release on bail. Clause 3 amends section 60(2) of the Criminal Procedure Act, 1977, which currently sets out a number of powers a court has in bail proceedings, by obliging the court to take a pre-trial services report into account at bail proceedings if such report is available.

2.4 Subsection (3) was inserted in section 276 by the General Law Amendment Act, 1992 (Act 139 of 1992), to confirm that correctional supervision may be imposed for statutory offences. Although the Supreme Court of Appeal has stated authoritatively that correctional supervision is a competent sentencing option in the case of statutory offences, there are examples where section 276 has been interpreted in the High Courts in a manner which excludes correctional supervision as a sentencing option in the case of statutory offences where the relevant statutory provisions do not expressly provide for correctional supervision as a sentencing option. Clause 4 of the Bill aims to establish legal certainty regarding correctional supervision as a sentencing option in respect of statutory offences.

2.5 The proposed amendments to the Attorneys Act, 1979, contained in clauses 5 to 7 will make it compulsory for all newly admitted attorneys and sole practitioners to complete a legal practice management course. The objective of this insertion is to reduce the number of claims against attorneys which arise as a result of a lack of management and administrative skills.

2.6 Section 7(8) of the Divorce Act, 1979, allows a court granting a decree of divorce to order that any part of a pension interest which is due to the other party, be paid to such person when the pension benefits accrue in respect of that member. This subsection presently empowers a court, when making such an order, to "make an order that an endorsement be made in the records of that fund that that part of the pension interest concerned is so payable to that other party". Clause 8 of the Bill places a duty on the registrar of the divorce court to ensure that the endorsement takes place as soon as possible since the Act is at present silent on this aspect and it has happened in practice at times that no endorsement has ever taken place, to the detriment of the other party.

2.7 Clauses 9 to 11 of the Bill envisage amendments to the Sheriff’s Act, 1986, to change the name of the Board for Sheriffs in order to accord the Board its national status.

2.8 Clause 12 provides that a maintenance court, where circumstances permit, eg the availability of a Family Advocate, can request a Family Advocate to investigate and report on the welfare of any minor or dependent child affected by a maintenance inquiry. This clause, in effect, extends the current role of the Family Advocate as provided in the Mediation in Certain Divorce Matters Act, 1997. The main role of the Family Advocate at present is to inquire into, report and make recommendations to the court on any matter concerning the welfare of children in divorce-related proceedings and, where requested by the court, to adduce evidence in court and to cross-examine witnesses. The amendment contained in this clause extends the current functions of Family Advocates to maintenance inquiries. In similar vein, clause 15 extends the present role of Family Advocates to domestic violence proceedings.

2.9 Section 16(2) of the Maintenance Act, 1998, envisages a maintenance court making an order, in appropriate cases, against any person who is under a contractual obligation to pay money on a periodical basis to any person who has a maintenance obligation, to pay such money to the maintenance beneficiary on behalf of the person who has such maintenance obligation. Clause 13 has been included to eliminate any uncertainty about whether pension funds can be ordered to make payments in terms of section 16(2) of the Maintenance Act, 1998.

2.10 Section 26 of the Maintenance Act, 1998, provides, among others, that whenever any person against whom any maintenance order has been made "under this Act" has failed to make any particular payment in accordance with that maintenance order, such order is enforceable in respect of the arrears amount by execution, as contemplated in the Act. The amendments contained in clause 14 are necessary to ensure these provisions are also applicable in respect of maintenance orders made by the High Courts and Divorce Courts. The amendments contained in clause 14 are intended to address this problem.

2.11 Section 10 of the Promotion of Access to Information Act , 2000, provides that the South African Human Rights Commission must, within 18 months after the commencement of that section, compile in each official language, a guide containing such information as may be required by a person who wishes to exercise any right contemplated in that Act. The time frames for public and private bodies to publish their manuals have been extended on two occasions, making it impossible for the SA Human Rights Commission to compile its guide within 18 months after the commencement of section 10. Clause 16 consequently amends this section by extending the period in which the SA Human Rights Commission must compile a guide.

2.12 Clause 17 amends the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000, by providing that the publication of a notice by the Minister, altering the boundaries of an equality court does not affect any legal proceedings which have been instituted but not yet completed at the time of such publication.

2.13 The Department was requested to investigate the possibility of creating a mechanism in the Cross Border Insolvency Act, 2000, which will regulate legal proceedings which are pending at the time the Minister withdraws a notice in terms of which a State has been designated as a country for purposes of this Act. The proposed amendment contained in clause 18 gives effect to this request.

2.14 Clause 19 amends the Judges' Remuneration and Conditions of Employment Act, 2001 (Act 47 of 2001), in order to address a problem in the application of section 16(4). Section 16(4) of this Act deals with the position of judges and their widows who retired under the dispensation before the enactment of the Judges' Remuneration and Conditions of Employment Act, 1989, namely the Judges' Pensions Act, 1978. The pensions payable to these retired judges or their widows deteriorated over time to such an extent that these pensioners are in a very unfavourable position when compared to judges and their widows who fall under the scope of the 1989 legislation and the new Act. When attempting to apply these provisions in practice, the National Treasury experienced difficulties since some widows would have received less than what they are currently receiving. Clause 19 intends to address this difficulty.