OCJ on allegation of procurement irregularities; Land Court Bill & Cannabis for Private Purposes Bill deliberations

Meeting report

Report by OCJ on allegation of procurement irregularities.

Ms Memme Sejosengwe, Secretary General: Office of the Chief Justice (OCJ), presented the report from the OCJ on the allegation of procurement irregularities in the CaseLines Project Procurement. 

Providing background to the allegation, she said a court online system was introduced through close cooperation with the State Information and Technology Agency (SITA). It consisted of two separate yet interlinked systems -- case management solution (CRM Dynamics), and evidence management solution.

CaseLines was an integral part of the end-to-end solution. The court online system was piloted in the Gauteng Division of the High Court, representing 52% of all civil matters countrywide. In support of this pilot project, a procurement process was initiated during 2021 for the evidence management part of the court online system, namely CaseLines, since the existing 36- month contract for licences, including support and maintenance, was coming to an end.

On 10 December 2021, following a sole source procurement process, the OCJ awarded a contract to Thomson Reuters to provide software, licences, resources and support and maintenance for a period of 60 months, commencing on 1 April 2022. 

On 20 December 2021, the National Treasury (NT) was informed of the sole source procurement process which had been followed, as contemplated in NT Instruction number 8 of 2007/2008. In response to the above, on 25 January, the National Treasury informed the OCJ that it did not agree with the procurement process followed by the OCJ. After extensive engagements between the OCJ and National Treasury that ended in a mediation process, the latter communicated on 30 March 2022 its conclusion as follows: 

“NT notes the deviation on the basis of sole supplier status, as communicated in the reporting by the OCJ.”

Thomson Reuters commenced its licensing services on 1 April 2022, and support and maintenance commenced on 1 June. 

Ms Sejosengwe said that on 16 May 2, Thomson Reuters had formally provided the OCJ with the details of the qualifying small enterprise (QSE) South African-based company they had sub-contracted to provide support and maintenance. The OCJ noted at that stage that the company's three directors were employees of the OCJ, and had followed due supply chain management (SCM) processes by requesting clarity on a possible conflict of interest, such as remunerative work outside of the public service (RWOPS), etc. By then, the three directors of the company, still employed by the OCJ, had already served their resignation letters to the OCJ, and were serving their notice period during May.

Following the above, the Secretary General  (SG) of the OCJ convened a task team of senior officials to assemble and review the Thompson Reuters tender award documentary trail. This task team created, as first deliverable, an events timeline for contextual purposes, which the forensic unit of the OCJ used during their subsequent investigation. Investigations were ongoing, and the OCJ was therefore not in a position to provide any further information, as this may negatively impact these investigations.

To prevent any service interruption to the Judiciary, the OCJ had engaged with Thomson Reuters, who committed to the continued rendering of all services in terms of its contract with the OCJ. Thompson Reuters also subsequently informed the OCJ and released a media statement that they had instituted an internal investigation, and that the services provided by their subcontractor had been suspended. The OCJ had made no payments in terms of this contract.

Ms Sejosengwe said she had called a special executive committee (EXCO) meeting to reflect on the matter, the risks faced by the OCJ, and its potential impact on the judiciary that the OCJ serves. The SG had urged the executive and management to work collectively to strengthen controls and improve internal processes, including the scrutiny of policies and standard operating procedures, and by doing so to enhance the OCJ’s systems. A risk-based approach needed to be followed, with close attention to any potential risks and to mitigate any adverse impact on the judiciary and the OCJ.

The OCJ took its fiduciary duty to manage and protect state resources entrusted to it seriously, so it initiated a process to review all its SCM processes and the membership of its bid committees. This was done to ensure ways were found to enhance the OCJ’s technical capacity to further strengthen internal controls in the area of SCM.

The OCJ was also reviewing active contracts by the Department for any impropriety, particularly within the Information Communication Technology (ICT) space. To this end, it bore the responsibility to ensure that, where a perception of wrongdoing or actual wrongdoing was established in a procurement process, such wrongdoing was readily identified and the OCJ would seek legal counsel to determine the best way forward, guided by the applicable government prescripts.

Ms Sejosengwe said that the OCJ had acquired counsel through the state attorney. This was to get proper legal advice on issues regarding this matter from senior counsel. The OCJ treated this matter with great seriousness, as it had great implications. It valued the oversight by the Portfolio Committee, and gave an undertaking that any impropriety in the usage of public funds would be addressed, and was prepared to account fully and transparently on these matters in due course.

Discussion 

Adv G Breytenbach (DA) said she was perturbed at the presentation's lack of information on the issue, as this was a matter of great concern. She was aware of the sensitivity of certain information concerning the matter, as there was still an ongoing legal investigation. However, the OCJ was being particularly parsimonious with information on the matter, as what had been shared with the Committee had not provided any new information. It was just information that had already been available to the public through the media. She asked if the three senior positions involved in this matter had been filled, or if the vacancies were being advertised. If they were filled, who were the people occupying these positions. She also asked how three senior officials at the OCJ had resigned at the same time in a relatively small office without raising red flags, and if exit interviews were conducted. If so, what was said during these exit interviews? Had the three senior officials disclosed their interest in the company, ZA Square Consulting, and if so, when and what was the nature of the interest?

She asked for more information on the matter, and said that it was mystifying how three senior positions were able to do this without being detected in the regular course of business. The OCJ did not seem to be doing enough to address this matter, and more information needed to be provided to the Committee. 

Mr W Horn (DA) shared the same sentiments as Adv Breytenbach on the scantiness of the information provided by the OCJ. It was one thing to say that the OCJ respected the Committee’s oversight, and another thing to come two months after the matter had been made public and present to the Committee information that was already publically available -- and then proceed to tell the Committee to trust the process to unfold as the divulging of any further information would compromise the investigation. He asked how far along the investigation was, as it had been two months and the matter concerned one procurement, so it would seem reasonable for the OCJ to present sufficient information to the Committee so that proper oversight could be carried out.

Mr Horn asked at what stage the OCJ had determined that the procurement in question required a sole procurement process, and whether the subcontractor at the centre of this matter had already been established. Had the three senior members interested in the subcontractor in question been involved in deciding that only a sole entity would qualify for the awarding of the particular contract? Were the three senior members the only shareholders of the subcontractor company and if so, what were their shareholding percentages? Referring to possible litigation, he asked what the status of the award was -- if it was still in place, with the understanding that the subcontractor would need to be replaced, and if payments had been in terms of the contract. If so, what was the percentage? Was the contract still in place with the sole service provider, and to what extent had services begun? There had been mention of the scrutiny of other contracts in the presentation, so he asked if information was available on whether there had been any other irregularities that had been identified in the awarding of other contracts and if so, what these contracts were. 

Mr S Swart (ACDP) shared the same concerns as the other Members of the Committee about the lack of information. There was a lot of information being shared in the media, and they were aware of the ongoing investigation. However, the Committee still needed answers, and he suggested that the Secretary-General perhaps submit these answers in writing. The Committee was not any closer to finding out what had happened, and far more information was available in the media. He thanked the media for exposing this matter, and asked if the OCJ would have picked up that there was a procurement irregularity if it were not for the media.

He said that under the Public Finance Management Act (PFMA), the Sectary-General’s duty was to ensure that the procurement and provision processes were fair, equitable, transparent and cost-effective. He noted the Secretary-General’s apology, and that the OCJ was a department separate from the judiciary. The impact of this matter required a high level of integrity which concerned supply chain management and procurement practices. It was important to note that the company in question had been formed five days after the contract was awarded to Thomson Reuters on 15 December 2021. This should have raised concerns. The former chief financial officer (CFO) reportedly saw no issue with his oversight over the bidding adjudication committee in the OCJ, despite later winning the contract with Thomson Reuters. The former chief director of court administration had commented that because their contract started on 1 June, the company in question had started to earn income only after they departed from the OCJ.

Mr Swart said he appreciated that these issues were being investigated, but this was the highest level of what would appear as impropriety. The Zondo Commission had highlighted the issue of procurement irregularities. When the OCJ appeared before the Committee on 3 May, were they aware that these three senior members had resigned? Had these vacancies now been filled, as the OCJ was already a small office? Was the three-month investigation period reported by the media a correct estimation of how long this investigation would take? Had the 1 April 2022 National Treasury Supply Chain Management Instruction Enhancing Compliance Note 3, issued to reduce abuse of the supply chain management system, been applied to this matter?

Ms W Newhoundt- Druchen (ANC) shared the sentiments on the scantiness of the information presented. She asked who had been on the team when the bid was adjudicated and evaluated. If the three senior members were involved in the entire process, was there any disclosure on their involvement in this process, and when had the OCJ picked up on the issue -- was it before or after it was made public? The Secretary-General had said that awarded contracts would be evaluated, so was anything discovered during these evaluations? She asked if the funds allocated for this project would be suspended or not, and if the services would be suspended too. Did the Secretary-General have sufficient external support? Had other staff members picked up the procurement irregularities?

Ms N Maseko-Jele (ANC) asked if there were any signs of issues with the procurement processes within the OCJ. This incident gave the impression that there were other procurement irregularities that perhaps involved the same three senior members that had not been flagged, as this particular procurement irregularity seemed to have been an intentional act. She asked the Secretary-General to provide comment on this. Because the resignations of the three senior members had been submitted, had the OCJ withheld payment of their pension funds or any funds due to them as a means of ensuring the OCJ circumvented any financial loss? 

The Chairperson asked if the investigation was internal, or one being conducted by law enforcement agencies. 

Secretary-General's response

Ms Sejosengwe said it was a difficult day, but they had to account. The three positions became available at the end of May, and were advertised at the end of June. The OCJ was in the process of filling the positions, and interviews were being conducted. The process of filling the positions should be concluded within two or three months. She said that because the OCJ was a small office, she had appointed acting persons to the three vacant senior positions until permanent replacements were hired. This resulted in a capacity gap, and the OCJ was working to ensure that all areas were covered.

She had put together a small team, which included the acting persons, to work on the matter which was already under investigation. All persons who were a part of the bid adjudication and evaluation processes were investigated. The investigation was being conducted both internally and by law enforcement agencies. She appealed to the Committee that the names of these persons not be disclosed yet in order not to comprise the investigation, but as soon as the investigation was concluded, these names would be made available to the Committee.

She said the three senior members during the procurement processes had declared that they had no interest in the company or anything related to the process, and therefore the OCJ had been unaware of this issue until the three senior members handed in their resignations and the company notified the office about what was happening with the subcontractor. The OCJ did not know in advance, and had no suspicions or reasons for suspicion that anything untoward had occurred.

According to records, the senior members were the sole directors of ZA Square, and Mr Nathi Ncube, Mr Casper Coetzer and Ms Yvonne van Niekerk's shareholdings were 51%, 25% and 24% respectively. All three of them, due to their positions, were integrally involved in the procurement process from specifications, bid evaluations, the bid adjudication committee (BAC) and the negotiations involved in the pricing of the contracts. The preliminary process of reviewing contracts had not uncovered any untoward activity, but the process was still unfolding.

The OCJ was also following a case in the media concerning a contract awarded to Pursuit Knowledge Consulting (PKC). The PKC matter also involved an official who had resigned. This matter was being investigated, and information would be available at an appropriate time.

No payments had been made concerning this matter as a risk management measure to protect state funds. The OCJ was subject to legal counsel concerning the status of the contract in question, and engagements about the contract were underway between Thomson Reuters and the OCJ’s legal counsel. Legally speaking, the contract was still in place, because services still needed to be rendered. An impact assessment on the courts had been concluded as part of the work being done about the contract in question. This was done to assess the outcome if the OCJ did not receive a system.

Ms Sejosengwe said the OCJ was piloting the total solution in Gauteng, which meant a shift away from the standalone CaseLine, to CaseLine as an integral part of the system. The outcome of the assessment was that 100% of the total population of the over 17 000 cases civil cases in the Gauteng Divison of the High Court were on the court online e-filing system. The Gauteng Division of the High Court was the biggest division in the country by case load; therefore, the impact would be devastating. The contract in question would have to be dealt with very carefully to ensure the courts would not be disadvantaged. Over 600 law firms and 4 750 lawyers were registered on the system. The system also had 150 000 case outcomes which would be affected. She added that going back to a manual system was not an option, as there was no storage capacity. The Judge President of the Gauteng Division had issued a practice directive to ensure all civil matters would be on the system. The system was at an advanced stage and it would be sad to lose all these cases.

The Secretary-General assured the Committee that the OCJ and its legal counsel, alongside the main contractor Thomson Reuters, were working on a resolution to ensure a minimised impact. Services would continue whilst these parties worked on a resolution. It was a priority of the OCJ to ensure that the courts could function whilst the procurement issue was being addressed. 

She said the OCJ did not have sufficient support, especially given the gaps in capacity created by this matter. However, it was still dedicated to ensuring all areas were covered under the circumstances. She noted that capacity had also been affected by budget cuts in the OCJ, which meant there was a general issue with the ability to fill vacant positions. This was understandable, as it resulted from the reduction of the public sector wage bill.

The procurement irregularity had been detected only after the fact. Concerning the pension fund questions, she would refrain from addressing them so as not to compromise the investigation. The OCJ did not agree with comments made by the former CFO and the Chief Director of Court Administration, but further comments could not be made on this, as the investigation was still in progress. 

The OCJ had implemented the National Treasury Note 3 instruction, and its engagements with National Treasury had provided much clarity and direction on what was set out in the Note. The process of determining whether a sole service provider would be awarded a contract was also under investigation, and information on the engagements between the OCJ and the company awarded the contract was collected.

Information on the exit interviews will be provided later. From previous evaluations done by the OCJ, people generally did not provide much information during the exit interviews, aside from citing personal reasons or pursuing other endeavours. The Secretary-General agreed with the suggestion that the OCJ submit a written report to the Committee, however, and this would be done at an appropriate time.

She acknowledged the provisions set out in the PFMA, and as the accounting officer, assured the Committee that efforts were made to guard against procurement irregularities. However, these things sometimes happen. The OCJ was not proud of this lesson and as soon as it had been made aware of the matter, she reconvened with Exco to look at tightening up procurement policies and procedures. It was also impressed upon the BAC, the SCM and technical people the importance of their role in detecting issues earlier. 

Ms Sejosengwe said the OCJ was small, and it was difficult to get officials at the same level to oversee these processes to ensure more prudence. The reliance on external assistance made the procurement process longer. This was not an excuse, but just a contributing factor to the risk of procurement irregularity. The maintenance and support services provided by the subcontractor had been suspended, and were now provided by the main contractor, Thomson Reuters. Engagements were underway concerning the status of the contract to resolve the issue and ensure business continued, and that there was no negative impact on the Gauteng Division of the High Court’s systems. The investigation was expected to be concluded within three months -- the end of September -- and the OCJ would present all the necessary information concerning the case to the Committee at that date. However, if the investigation was not concluded by then, they would still present information on the status of the investigation. 

Second round of questions 

Mr Swart thanked the Secretary-General, and acknowledged the difficulty she was experiencing in responding to the questions due to the impending investigation. He asked if the OCJ was aware of the three resignations at the time of their presentation to the Committee on 3 May and if so, the reasons behind not notifying the Committee. He also asked when the resignation letters were received. He appreciated her explanation regarding the impact on CaseLine and civil matters, and agreed that reverting to a manual system was not an option because Gauteng was an economic hub. He had experienced the effectiveness of CaseLine. He asked if no payments had been made relating to the contract, and what the risks of the contractor stopping providing services were. Perhaps regular written reports on the progress of the investigation and the impact on civil litigation in Gauteng and across the country needed to be provided to the Committee. He added that there should perhaps be engagements with the judiciary and the Chief Justice, to understand the impact on the courts better. 

Ms Newhoundt-Druchen asked at what point it had been decided that the company that would be awarded the contract had to be a local company. She also asked if, during the recruitment process, the bid adjudication committee investigated the background and capacity of companies bidding for contracts. 

Mr Horn asked if the shareholding of the subcontractor had been set up as a focal point of the investigation. Was the shareholding set up to meet black economic empowerment (BEE) requirements and was there a possibility of a silent partner, or were shareholders proxy holders for an unknown party? He understood that exit interviews were normally uneventful, but the context was that three senior managers had resigned, and interrogation was required. 

He asked for further clarity surrounding the declaration of interest provided by the three senior members and whether they had disclosed their interest in April as reported by the media. If so, did this indicate that these senior managers were shareholders of the subcontractor? 

Adv Breytenbach was not pleased with the lack of new information provided by the Secretary-General, as all information provided was already available to the public. She said the SG’s response that information would be provided at an appropriate time was patronising and an affront. The Committee had the duty of oversight, and this was a big matter of which the SG was aware. The Committee was no closer to unravelling the problem, and if answers to the question were unavailable, it would mean that the OCJ was no closer to unravelling the problem. The SG saying the OCJ would report on the status of the investigation at the end of September was not acceptable, as what was needed for the Committee to perform oversight was the content of the investigation. The Committee needed to know why and how this happened, and what preventive measures were being put in place. It was easy to hide behind an ongoing investigation, but that was not a valid excuse, as information could be provided that would not comprise the investigation.

Adv Breytenbach said the OCJ did not have a handle on the situation and had been caught napping. Three senior members had resigned simultaneously without raising any alarms, no one had been investigated, and the exit interviews were not reviewed. She said she had no questions to ask, as the response would be that information could be shared only at an appropriate time due to the ongoing investigation. 

Ms Maseko-Jele said it was important for the SG to pay attention to these issues to avoid a recurrence, because when the Committee received answers such as these, it created the impression that people within the Department were doing whatever they wanted. Therefore, to avoid shocking future outcomes, the processes of the Department needed to be closely monitored. She asked for updates on the supply management processes, and if any gaps and remedies had been identified. She also asked if the OCJ had asked the Auditor General (AG) for assistance.

Regarding the progress review of active contracts, she asked if any impropriety had been detected, particularly in the ICT sector, and if plans were being made for closely monitoring the procurement issue.

Secretary-General's response

Ms Sejosengwe said the OCJ had been unaware of the resignations at the time of their meeting with the Committee on 3 May. The resignation letters were received on 3, 4 and 6 May respectively.

The risk of services being halted by the contractor due to non-payment was being attended to by the OCJ’s legal counsel, as the OCJ understood there was a risk of breach of contract. The OCJ and Thomson Reuters sat with the same issue concerning ZA Square as the subcontractor, and all invoices would be considered within this context. The OCJ was receiving services, and therefore was legally obligated to make payments, but this could be done only once the issues regarding this procurement issue were resolved. The OCJ would be under the guidance of the Committee regarding regular updates on the impact on civil litigation in Gauteng, CaseLines and issues faced by the courts. She assured the Committee that the CaseLine online court system was operational in Johannesburg and Gauteng. Maintenance support services were provided by the main contractor, not the subcontractor. As of today, there were no impact updates. Thomson Reuters was also being investigated by law enforcement regarding its dealings with the subcontractor.

She commented that the OCJ understood the Committee’s frustration with the amount of information shared, as they had an oversight duty to fulfil as mandated by the Constitution. However, she could not share more information according to advice given by legal counsel, to prevent the investigation from being comprised. It was also to prevent the ventilation of issues that would later possibly be ventilated in court, as this matter could potentially lead to litigation. She appealed to the Committee to understand the position of the OCJ.

The Secretary-General said records showed that the subcontractor had no trading experience. The subcontractor had begun trading only on the day the three senior officials left the OCJ. She accepted the criticism regarding the exit interviews, and the OCJ would look at these interviews. The context of why the exit interviews were not reviewed was that the OCJ was limited in capacity, and had to prioritise other aspects of the procurement issue and risks faced by the supply chain management.    The Deputy Director-General of Court Administration had shared that the Chief Director of Court Administration had cited pursuing a career in private practice as a reason for his departure.

She confirmed that on 30 April, before the system closed, the three senior officials had declared their interest in the subcontracting company. She accepted the criticism on the lack of information provided to the Committee but the track record of the OCJ spoke for itself, and it was not hiding anything. She appealed to the Committee to understand the difficult position she was in. She accepted the responsibility that this had happened under her watch and at the appropriate time, she would avail herself to the Committee to be grilled.

She said the supply chain management gaps had been identified and were due to insufficient capacity. This had made it difficult to have more senior officials involved in the processes of segregating duties.  Capacity was why those sitting on the committees often had different levels of seniority. Using external assistance to resolve capacity issues resulted in delayed procurement processes. This was not an excuse, but a reality. The OCJ had tightened its SCM by increasing the number of senior managers overseeing processes so that more than one eye looked at things. Mechanisms in the risk management unit (RMU) had been put in place so that companies would be assessed through applicable systems at the evaluation stage before proceeding to the adjudication process, so as not to rely on the declaration of interest forms only. She noted that tender documents were huge and due to their limited capacity, the OCJ could not go through everything. The RMU had been instructed to vet all companies going through the procurement process to ensure no improper engagements and associations between OCJ officials and these companies. The RMU also checked if these companies had the required capacity to deliver.

Ms Sejosengwe said the AG had contacted the OCJ when the matter became public, and together they had looked at the environment regarding ICT. The OCJ and the AG had agreed that the AG would make sure where the bulk of the money and the risk in these procurement contracts were in the future. The AG had also identified issues in certain areas of ICT, which would be a part of the audit report. The OCJ would deal with this when the audit report was made available.

Mr Swart asked the Chairperson and the Committee for guidance on how regularly the Committee would be updated on the impact of civil litigation.

The Chairperson thanked the SG, and said there was a mutual understanding over the frustration concerning the extent that information could be shared. The Committee took the judiciary’s work and reputation very seriously. What happened was unfortunate, and the Committee understood the ongoing investigation. The SG had indicated that the investigation could be concluded by 30 September. He suggested that an engagement on the progress of the investigation and the issues concerning CaseLines and civil litigation be set with OCJ in the first week of October. After the engagement in October, the Committee would discuss the frequency and format of the updating reports going forward. The Committee would try to balance the importance of this matter and its capacity, based on their current workload. The Committee would perhaps not be able to meet with the OCJ every time and in those instances, a written report could be submitted.

Mr Swart agreed with the Chairperson’s proposal. He said the SG should immediately notify the Committee if any issues arose regarding CaseLines.

The Chairperson agreed, and thanked the Secretary-General and her team.

Ms Sejosengwe apologised for the lack of information shared. She said the OCJ was doing its best with limited resources to ensure this did not occur again. She apologised to the Judiciary administration, and said she would continue to ensure that the integrity of the OCJ would not be affected.

Deliberations on the Land Court Bill 

Mr Henk du Preez, Department of Justice and Constitutional Development, said he would not go through the briefing note, "Jurisdiction of Supreme Court of Appeal, Expropriation and Alternative Dispute Resolution (ADR) – Land Court Bill" document line by line, but would rather address it as a whole. The document had been submitted to the Committee before this meeting. 

 Paragraph One – Introduction

Several interested parties had expressed their concern regarding the jurisdiction of the Land Court of Appeal as a court of final instance, to the exclusion of the Supreme Court of Appeal; the compulsory arbitration which was currently contained in the Land Court Bill; and the possibility of bringing the Expropriation Bill under the exclusive jurisdiction of the Land Court.

Sub-paragraphs 1.2 and 1.3 referred to previous meetings with the Committee. Mr Du Preez wanted to specifically highlight paragraph 1.3, which referred to a meeting held on 25 May, where the Committee had directed the Department to conduct research and do a briefing on the concept of “equity.”

 He said the Chief Director of his Department and a team member, Mr M Mokulubete, were on the platform. He asked the Chairperson to allow them to address a few matters at the end of the presentation.

Paragraph Two – Jurisdiction of the Supreme Court of Appeal

Concerning paragraph 2 and the proceeding sub-paragraphs, in responding to the concerns that the bill could not at this stage exclude the Supreme Court of Appeal's jurisdiction in hearing appeals emanating from the bill, Mr Du Preez highlighted paragraph 2.2. This focused on section 166 of the Constitution, which sets out the hierarchy of the courts of the Republic: the Constitutional Court; the Supreme Court of Appeal; the High Court of South Africa, and any high court of appeal that may be established by an Act of Parliament to hear appeals from any court of a status similar to the High Court of South Africa; the Magistrates' Courts; and any other court established or recognised in terms of an Act of Parliament, including any court of a status similar to either the High Court or the Magistrates' Courts.

Paragraph 2.3 states that Section 166(c) permits the establishment of a court with appellate jurisdiction (i.e. Land Court of Appeal), and section 166(e) permits the establishment of a court of a status similar to a High Court (i.e. Land Court). The Land Court of Appeal and the Land Court were established under different sections of the Constitution -- 166(c) and (e) respectively. The intention was to create an appellate structure on land matters. 

 More importantly and at the crux of the matter, they would like to propose to the Committee and request their guidance on section 168(3) of the Constitution, paragraph 2.4, set out in subsection 3(a) of section 168, which states that the Supreme Court of Appeal may decide appeals in any matter arising from the High Court of South Africa or a court of a status similar to the High Court of South Africa, except in respect of labour or competition matters, to such extent as may be determined by an Act of Parliament.

Mr Du Preez said clause 34(2) was addressed in paragraph 2.5 of the document, and further information on this was provided in the briefing note document. 

He said reference was made to a case that had been decided by the Supreme Court of Appeal (SCA), and further information on this case was included in the document. In paragraph 2.9, it was indicated that concern had been raised as to the purpose of a Land Court of Appeal, if the SCA was given appellate jurisdiction over land matters from the Land Court of Appeal. The Chairperson himself had raised this concern during a Committee meeting. Paragraph 2.9 indicated that this concern necessitated consideration of various options in this regard.

Paragraphs 2.10.1 to 2.10.3 set out the options proposed for the Committee’s consideration.

Mr Du Preez said the Department would like to propose that at this stage, the Committee would consider not proceeding with the establishment of a Land Court of Appeal, given the austerity measures that must be taken at this stage. It would take significant capital to establish such a court, and would also require a constitutional amendment. 

He asked for the Committee’s guidance on what the Committee’s feelings were on a proposed amendment to the Constitution in the near future that would pave the way for the creation of a proper Land Court of Appeal. 

Paragraph 3 - Jurisdiction of the Land Court over the Expropriation Bill

Mr Du Preez said Paragraph 3.1 provided background information to the discussions had in the development of the Expropriation Bill and the Land Court Bill. 

He asked Members to focus on paragraph 3.4, and noted that the Department had explained that they were not in a position technically insert proposed amendments in the schedule to the Land Court Bill referring or proposing an amendment to the bill which was currently being considered in Parliament. However, in early or mid-September the National Assembly was scheduled to vote on the Expropriation Bill, and the Department had seen the A list of the bill that would be presented to Parliament for approval.

Paragraph 3.4 defined the court. Mr Du Preez said it was possible that the definition of the court could give the Land Court exclusive jurisdiction on expropriation matters, but it would have to be amended in the future. 

Paragraph 4 - Arbitration

Paragraph 4 focused on arbitration, and the Department noted the concerns shared by the Committee and interested parties. 

Mr Du Preez said paragraph 4.4 raised the question as to whether it would be possible for a judge of the Land Court to also act as an arbitrator. The reference to compulsory arbitration in Paragraph 4 would be removed if the Committee agreed with the Department’s recommendation.

Paragraph 5 - Concept of law and equity 

Mr Du Preez said paragraph 5 said clauses 3(1) and 34(1) were similar in all respects to sections 151(1) and 167(1) of the Labour Relations Act, 1995 (Act No. 66 of 1995), which provides as follows: “151(1)The Labour Court is hereby established as a court of law and equity. 167(1) The Labour Appeal Court is hereby established as a court of law and equity.”

He also referred to subparagraph 5(b), which states that Section 22(1) of the Restitution Act does not establish the Land Claims Court as a court of law and equity. It provides only that "there shall be a court of law to be known as the Land Claims Court which shall have the power, to the exclusion of any court contemplated in section 166 (c), (d) or (e) of the Constitution…”

Mr Du Preez also pointed to subparagraph 5(d), which states that Section 33(c) of the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994), which established the existing Land Claims Court provides that “in considering its decision in any particular matter, the Court shall have regard to the following factors:

• The desirability of providing for restitution of rights in land to any person or community dispossessed as a result of past racially discriminatory laws or practices;
• the desirability of remedying past violations of human rights;
• the requirements of equity and justice.”

Case Law

Research was carried out regarding case law which could be found in the document.

The Department was of the view that the Land Court and the Land Court of Appeal would be established as courts of law and equity, as provided for in clauses 3(1) and 34(1) of the Bill. Furthermore, establishing the Land Court as a court of law and equity would also enable the court to apply equitable considerations when dealing with the admissibility of hearsay evidence, in addition to the obligation imposed on the court to look at the relevance and cogency of the evidence presented before it.

It must be pointed out that even if the word “equity” was not included in the Bill, the court would still be able to take into account just and equitable considerations in reaching its decision by applying its inherent powers as accorded to it in the Constitution. This would mean that even if the Bill did not provide for the “just and equity” principle, the court would still be required to apply equitable considerations in respect of the said Acts, and not all others. This position would also apply to other Acts over which the Land Court was later given jurisdiction. As a result, the following options were proposed for consideration by the Committee:

• retaining the “court of law and equity” in the Bill as it was currently provided, so that equity considerations were applied in all matters before the court; or
• delete the expression “and equity” in the Bill, so that equitable considerations were applied only in respect of those Acts which already provide for such.   

Conclusion and way forward 

Concerning the paragraph dealing with the jurisdiction of the SCA, the Department presented options 1 and 2 for consideration by the Committee. It conceded that arbitration should be removed from the Bill, and submitted that the Expropriation Bill could not be included under the exclusive jurisdiction of the Land Court Bill at this stage, since the Expropriation Bill was also still being considered by Parliament. It recommended that the Land Court and the Land Court of Appeal be established as courts of law and equity.

Discussion

The Chairperson asked to go back to paragraph (c) concerning the conclusion and way forward. He asked about the exclusion of the Expropriation Bill, because the Committee was also intending to pass this bill around September. 

Mr Du Preez responded that he had quoted the proposed definition in the Expropriation Bill, which would pave the way to a certain extent for the Land Court to have jurisdiction regarding expropriation matters. The issue faced was a technical implementation concern: at this stage, they could not foresee which one of the two bills would commence first after being signed into law by the President. There was a possibility the Land Court Bill would commence first, making things difficult in terms of cross-referencing with the Expropriation Bill. The solution they saw at this stage was that the definition of the court would assist in ensuring that matters be referred to the Land Court. 

Ms Maseko-Jele asked if the matter of expropriation could be left in the bill, but also about expropriation in terms of what the Constitution states.

Ms Newhoundt-Druchen asked why the phrase ‘court of law and equity” had to be mentioned specifically in the bill. 

Mr Swart asked for guidance from the Chairperson on whether they were simply asking questions for clarity, and the deliberations would be at a later stage. Regarding the issues of clarity that he had picked up earlier, he said it was a straightforward issue. When they looked at the bill and what the Department had consulted on, the bill was presented by the inter-ministerial committee on 20 November 2020, and it was now almost two years later when it had become very obvious that the Supreme Court of Appeal could not be excluded without a constitutional amendment. They were now sitting with a situation that should it be desirable that the Land Appeal Court ask the SCA, it would require a constitutional amendment.

The Committee was under a lot of pressure to pass this bill. It was regrettable that the matter was still an issue. It was very clear now that the way forward would be to pass the bill with the SCA’s jurisdiction removed, and to then consider in due course to put in the clause that would require a constitutional amendment. This would result in several issues that would need amendments to deliver it. He wanted to ask if the Department was recommending that there still should be a Land Court of Appeal and the SCA, or if the Committee would consider deleting the Land Court of Appeal and having only the SCA until a full Land of Court of Appeal was set up. Mr Du Preez had pointed to financial restraints and the amendment of the Constitution, which would delay the passing of the bill.

Ms Maseko-Jele said that because amendments were going to be made to the Constitution, would it not be possible for them to liaise with the Constitutional Review Committee for this constitutional amendment to be included as well, as it required a two-thirds majority?

The Chairperson said that the Committee Members needed to get mandates from their respective parties so the feasibility of this amendment could be determined, as a two-thirds majority was required. In terms of the purpose of the bill now, the Committee should proceed with deliberations as scheduled and during the deliberations, the Committee could indicate the position of their respective parties, as a two-thirds majority was needed for a constitutional amendment. He proposed that even if the two-thirds majority was not achieved, the Committee should still proceed with the bill with the exclusion of the Land Court of Appeal, and use the SCA as proposed. 

Mr Swart expressed concern at possible delays in passing the bill, because even if parties were to support the constitutional amendments, the process of the bill would have to be restarted with a new separate bill. He was not opposed to the proposal -- just concerned about possible delays. It was important to note that if the decision was to amend the Constitution, it would lead to many possible delays, but he left it for the parties to consider.

Mr Horn said he agreed with Mr Swart, as amendments to the Constitution required a specific and lengthy process which would work against the Committee’s goal of finalising this bill as soon as possible. He was not closing the door on the possibility of an amendment to the Constitution to establish a dedicated Land Court of Appeal. However, the best option at this stage would be to remove the reference to the Land Court of Appeal. 

Ms Maseko-Jele asked for an explanation of the advantages and disadvantages of removing the reference to the Land Court of Appeal. 

The Chairperson said the view was that after the bill had been passed, there would still be an appetite to amend the Constitution. The Constitution currently states that the SCA was the only court of appeal allowed. The issue was that the Department conceded that they had been wrong about the issue of the SCA, and were suggesting a possibility that was currently not provided for in terms of the Constitution, and would require an amendment which would be another long process. It would also depend on whether political parties were willing to support it. The issue now was that the bill needed to be passed in terms of the Constitution as it stands now if the Committee were to meet their set deadlines. 

Ms Maseko-Jele said she now understood what was going on, but the Committee would need to assist regarding the SCA’s capacity. 

Mr Swart said that Mr Du Preez had also mentioned that there could be a Land Court and an appeal to a full bench of the Land Court, which would be three judges even if the Land Appeal Court was removed.

The Chairperson asked if Members understood that the Committee agreed to stick with the status quo of a Land Court, a full bench of appeal, the SCA and the Constitutional Court. 

The Committee agreed.

Department's response

Mr Du Preez said it had been explained during a previous Committee meeting and the current briefing, that this bill did not aim to really amend substantive law. As soon as reference was made to expropriation and section 25 of the Constitution, those were issues being dealt with in the Expropriation Bill, and one would not want to include substantive revisions of that nature in a bill which dealt exclusively with the structure of the court itself. 

Mr M Mokulubete, Department of Justice and Constitutional Development, said that with the issue of equity, it had been indicated by Mr Du Preez that the structures of the Labour Court and the Labour Court of Appeal were established as courts of law and equity. 

He referred to the case of the National Education, Health and Allied Workers Union (NEHAWU) v University of Cape Town & Others, set out in the briefing, not the document. The court acknowledged that the current Labour Court replaced the Industrial Court in the case. The Industrial Court had been established as a court of equity, and other matters had to be dealt with in the High Court. However, with the advent of the Labour Relations Act (LRA), there had been a change of heart by the legislature in terms of which when the industrial court was replaced, but in the LRA, the Labour Court was established as a court of law and equity. He added that the LRA established the Labour Appeal Court as a court of law and equity. The Department understood that when the court was established as a court of law and equity, it would be able to apply the law. However, in an instance where there would be injustices in the application of the law, then the court would still be able to apply equitable considerations. 

He said if the Committee was agreeable, the Land Court should also be established as a court of law and equity to apply both the law and equitable considerations. The high courts also had this jurisdiction, in which they could apply equitable considerations. However, if the following expression of the court was established as a court of law and equity, it would leave the expression beyond a doubt that the court would be able to apply equitable considerations. 

The Chairperson asked if the Committee had anything further to add so the Department could polish and work on their draft. 

As there were no further additions, the Chairperson asked the Committee Secretary when the Committee would meet with the Department next. The Committee Secretary said it would be on 30 August.

The Chairperson asked Mr Du Preez if this would be enough time. 

Mr Du Preez replied that t would be enough time and a document would be ready to be presented on the 30th, but it was also dependent on the guidance of their seniors within the Department.

The Chairperson said that Mr Du Preez must tell his seniors that this presentation was part of the Committee’s parliamentary process that needed to be done by the 30th, and their decisions could not affect that.

Deliberations on Cannabis for Private Purposes Bill. 

The Chairperson said he thought the Committee Members would have received a legal opinion, and suggested that before proceeding to the bill, Dr Barbara Loots, Parliamentary Legal Adviser, should brief the Committee on this legal opinion, which had implications on how the Committee would move forward. 

The Committee agreed with his suggestion.

Dr Loots had a technical snag and did not have access to the legal opinion at that moment. She asked the Committee if it would be acceptable to simply relay the gist of the legal opinion, using her rough notes of the legal opinion. She added that if there were any questions or additional information which she could not access, she would just supplement that the next day. 

The Chairperson said the legal option had been circulated to Members the previous day, and therefore it would be sufficient just to provide the gist of the legal opinion. He added that any additional information or answers to questions could be supplemented the next day. 

Dr Loots said after the public hearings, it became apparent, with the cultural and religious concerns raised by members of the public, that they had to look at what the impact would be on certain tagging considerations. The bill was initially tagged under the Traditional Leadership and Governance Framework Act of 2003, and since then, the Traditional and Khoisan Leadership Act of 2019 has become operational. They had to look at the public comment on the extended bill, and then how that would fit into the new structure of the Act. Section 39(1)(a) of this Act states that if something directly affected traditional or Khoisan communities or pertains to customary law and customs, the bill would have to be referred to.

Dr Loots said cannabis had a strong presence in traditional and Khoisan communities, and their office moved with the opinion that, given the extended scope of the bill and the public comments, the character of the bill had changed to such an extent since its regional introduction and tagging that the Committee would now need to refer the bill for input from traditional leaders on that community's cultural and religious perspective. This would then trigger joint rule 163, read with the National Assembly rule 286, which would give the Committee the power and responsibility to refer it for consideration for referral to the House. 

Dr Loots said that this would stagger the Committee's consideration of the bill, because the Traditional House would have the opportunity to consider the extended version and come back with comments that could impact how to finalise the cultural and religious section of the bill. 

The opinion also referred to the fact that depending on how the commercialisation component was formulated at the end when the Committee adopted the A list, a check would need to be done to see if the Joint Tagging Mechanism (JTM) would have to be alerted to the potential shift in tagging from 75 to 76. This would not impact the Committee's process now, but an assessment would be needed on the adopted A list. She said Adv Sarel Robbertse, State Law Adviser, would elaborate on the changes with commercialisation and provide guidelines for future legislation. The impact on trade could be determined only once they had the A-List and the wording approved by the Committee. Once this happened, they could alert the JTM, who would notify the National Assembly and the National Council of Provinces that a 76 process was needed instead of a 75 one. 

She said what was important for the Committee at this stage were the implications of the Traditional and Khoisan Leadership Act, and that the Traditional House should be alerted through the JTM to the impact of the cultural and religious extension of the bill on these communities and their interests, more so now that the bill had been expanded beyond the Constitutional Court judgment.

The Chairperson asked if, in their legal opinion, this process would take about 60 working days, and if the House of Traditional Leaders had 60 working days to make comments.

Dr Loots said it would, but there was a possibility of the process being quicker. However, 60 days was the number of days allowed per legislation. 

Adv Robbertse agreed with Dr Loots that the bill must be referred to the House of Traditional Leaders, since the proposed clause 1(b) did affect culture and religion. This had also been considered during drafting proposals and amendments to the bill. In terms of the previous clause 1(a), which was now clause 10 of the bill, there was a provision that the national legislation that implements commercialisation had to provide for the cultural and religious use of cannabis. This effect deferred clause 1(b), which was now clause 11 of the bill, which did provide for cannabis for such use. There were certain concerns raised about clause 1(b) that he would address later. In general, he agreed with Dr Loots.

The Chairperson said the Committee had to confine themselves to the idea that the bill had to be referred to the House of Traditional Leaders. He asked if the Committee had any comments. 

Mr Swart agreed with the legal opinion, and said the bill had a massive impact on several communities, including the AmaMpondo and religious communities, and therefore it was important that it be referred to the House of Traditional Leaders. He asked for clarity on the issue of the reclassification of the bill, as this was also another process. He asked if the assumption was that the bill would be reclassified and referred. He also asked if the Committee would have to wait before continuing with deliberations. 

Mr Maseko-Jele asked what the timeframe for this process was.

The Chairperson responded that it would be 60 working days -- just over two months. 

Dr Loots said they were sitting in a two-pronged referral situation. The traditional aspects could be sent by the Committee through the JTM to the traditional house immediately, but that would not change the 75 tagging of the bill. When tagging an opinion was done, they comment on two aspects. The first aspect was whether the bill was 75, 76 or 77, and the second aspect would be whether the bill impacted traditional communities regarding the legislation. At that moment, only the traditional house aspect of the bill had changed, because the scope of the bill had changed. Once the Committee had finalised their deliberations on the bill as a whole and the A-list had been adopted, their office could assess the impact of the commercialisation and whether it regulated trade to the extent that it affected the schedule for concurrent consideration or scope of trade. Once this was done, if necessary, the Committee would alert the JTM that there was potential for the tagging to change from 75 to 76.

These were two separate aspects that could impact the original tagging of the bill, but they were not linked to each other.

The Committee could alert the JTM that it believed the bill needed to be referred to the House of Traditional Leaders due to its extended scope for comment. The crafting of the bill and addressing issues the Committee had could also continue, and when the comments from the traditional house were made available, those could be taken on board to the extent necessary. The bill could then be finalised and a call could be made on whether the JTM needed to be alerted if the impact on the National Council of Provinces (NCOP) changed. This aspect would not change anything now for the Committee because of the decisions taken, but on the scope of commercialisation the Committee would now ultimately determine whether the JTM needed to be alerted, but this could happen only later.

The Chairperson asked if Mr Swart was clear on this issue.

Mr Swart responded that he was.

The Chairperson asked Dr Loots to clarify the process of referring the bill to the House of Traditional Leaders.

Dr Loots said that as far as she understood the rules, the referral could be made through the JTM. Confirmation and guidance should be sought from the Committee secretaries, as this was a procedural matter.

The Committee Secretary shared that according to the rules, they could go through the JTM.

The Chairperson asked if he was correct in assuming that they could not continue with the bill, as the process of referral to the House of Traditional Leaders as set out by the Committee Secretary needed to be followed first. This process could take up to 60 working days, and thereafter the bill would be considered with the comments shared by the House of Traditional Leaders. It was important that the House of Traditional Leaders be respected as a creature of statute, allowing them time to comment. It would have been lovely to finalise the bill now, but it was important to ensure all technical and procedural aspects were correctly followed to ensure that the product was as good as the process.

Ms Maseko-Jele asked if the Committee secretaries would start the processes immediately, as it could not even take all 60 working days.

The Chairperson noted no contrary views. He said that the Committee secretariat would work together to ensure all procedural aspects were adhered to. They would ensure that the JTM was informed and that bill was transmitted to the House of Traditional Leaders. Once it was received from the traditional leaders, the Committee would reconvene and work through the bill again. This would impact the programme, and one of the reasons the issue of adoption was not a part of the programme in this meeting was the issue of the referral to the House of Traditional Leaders and also the receiving of a report from Legal Services on bills that had Constitutional Court deadlines between now and the end of next year.

He commented that waiting for the Department to bring bills was not working in the favour of Parliament. The Committee would have received a legal option on the Sonke judgment, which placed the responsibility of passing bills squarely on Parliament and not the Executive.  He did not think Parliament would be meeting to pass bills or laws in 2024, so this time and next year had to be used to ensure court deadlines were met. The programme had been impacted, as the day for the Cannabis bill had to be set aside. This was also partly why the programme had not been adopted. He hoped the Members of the Committee understood, and asked for their comments on this.

Mr Swart appreciated that deliberations on the bill could not continue. He asked if public submissions already made by traditional communities such as the amaMpondo would be included in the referral to the House of Traditional Leaders. He presumed that the Committee could not dictate this, but Adv Robbertse could provide some guidance. He agreed that the programme had not been finalised, and shared the Chairperson’s concerns over meeting the Constitutional Court's deadlines, as this issue had continually been raised. He also noted the Constitutional Court, with the passing of the Electoral Bill, had stated that it was not good enough for Parliament to say it was waiting on the Executive. It was Parliament’s duty to pass bills, even if was a Committee bill.

The Chairperson thanked Mr Swart for pushing the agenda that Parliament should be focusing on, as it would soon be facing a crisis because some of the Constitutional Court judgments could create serious gaps in the law, so it was important for Parliament to step up its game and take its responsibility seriously. The issue of receiving bills late from the Executive, including the Cannabis Bill received a week before the deadline, had been raised at the start of the term.

Dr Loots responded to Mr Swart’s question, and said she was unsure of the extent of the information to be referred. However, from a legal perspective, she could not see sharing the information would be harmful, but she would defer and concede to her colleagues from a procedural perspective.

Adv Robbertse said in terms of what was referred to as the House of Traditional Leadership, it was merely the text of the bill itself that should be referred to. The bill was usually considered "as is" by the House of Traditional Leaders, but there was probably no harm in submitting the public submissions received by the Committee.

The Chairperson asked whether, because of the public submissions the Committee received from the subjects of the House of Traditional Leaders, the House would not have its own internal process of receiving comments and submissions from their subjects.

Dr Loots said that she would assume they had their own process, but was not privy to them. They would have to ask Adv Robbertse for guidance.

The Chairperson said that he would suggest that the bill alone be referred to the House of Traditional Leaders, and the House would then use its internal processes to receive public comments to avoid any unintended consequences on the part of the Committee. However, he would be guided by whatever decision the Committee thought was best.

Mr Swart agreed with the Chairperson, and withdrew the request to submit public submissions made by traditional communities with the referral of the bill, as these communities would, on their own accord, respond to the invitation from the House of Traditional Leaders.

The Chairperson said that the next meeting would deal solely with the Legal Services brief on Constitutional Court bill deadlines. The meeting on Friday would be postponed due to the sitting of the Women’s Parliament. The meeting would be accommodated some other time, and due to other changes, the programme would need to be redrafted. 

The meeting was adjourned.