CAPE BAR COUNCIL

5 June 2007

From : ASHLEY BINNS-WARD SC: Chairperson: Cape Bar Council

To: The Chairperson Finance Portfolio Committee National Assembly Parliament

Dear Sir

Re: PENSION FUNDS AMENDMENT BILL [B 11-2007]

The Parliamentary Sub-Committee of the General Council of the Bar of South Africa has considered especially those provisions of the Bill which it considers may impact on the administration of justice or impress as possibly being questionable in terms of the Constitution.

The Bar supports the greater consistency and attendant fairness that will be introduced by the amendments to 301 of the Act as proposed in terms of clause 21 of the Bill.

The Bar does not support he proposed amendment of s 30P of the Bill. The provisions of s 30P, as currently worded, have consistently been interpreted by the Courts as conferring a right of appeal, in the wide sense of a rehearing, against the decision of the Pension Funds Adjudicator. These appeal proceedings are virtually without exception brought on motion and the Courts in any event determine in such matters whether to hear oral evidence and if so on what issues.

The amendment proposed in terms of clause 22 of the Bill does not appear intended to make any substantive change to the manner in which appeals from decisions of the Adjudicator are already dealt with by the Courts.

In the circumstances, particularly the introduction of the proposed sub-section 30P(3) will serve only to confuse matters.

Accordingly save in respect of the replacement of 'Supreme Court' wherever it appears with 'High Court', it is submitted that it would be counter-productive to otherwise adopt the proposed amendment to s 30P.

It is submitted that the proposed wording of s 30Y in terms of clause 23 of the Bill be supplemented by a sentence to read as follows: 'Provided that the text of any regulation which it may be proposed to make in terms hereof shall first be advertised for public comment.'

Clause 26 of the Bill proposes a substitution to s 37 of the Act. The existing section provides that the contravention of various provisions of the Act constitutes an offence for which prescribed penalties may be imposed.

Persons upon whom such penalties are imposed must be convicted by a court before being subject to such penalties and will therefore be entitled to the protection afforded by the Constitution to persons accused of a crime.

Subsections 2 to 5 enable the imposition of penalties for the failure to file documents prescribed by the Act or for the late filing thereof. These penalties may be imposed without recourse to a court of law. These penalties, in the nature of the statutory provisions concerned, will be visited only on pension funds, their agents or office bearers. Although not deal, the existing provisions many pass constitutional muster.

The proposed new section, however, envisages a radical departure from these principles. It enables the Registrar to impose so-called administrative penalties of up to R5million per day on pension funds, administrators, or any other party (third party) for any non-compliance with the Act. Although subsections 3 and 4 seek in some measure to bring the proceedings into line with court proceedings, it must be noted that the Registrar will be both the prosecutor and the judicial officer in such proceedings - a constitutionally unacceptable situation. In addition, a right of review only is provided, rather than a right of appeal from a decision of the Registrar.

It is considered that the proposed new provisions, which are essentially penal in character, offend against the constitutionally entrenched rights to a fair trial and that it therefore should be removed from the bill, leaving the existing section unamended.

Yours faithfully

ASHLEY BINNS-WARD SC Chairperson

Cape Bar Council