PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
9 February 2005
The Speaker of the National Assembly
Dear Madame Speaker
INTRODUCTION OF A BILL
I wish to submit an Amendment Bill in the National Assembly in my individual capacity and accordingly hereby submit to you -
- A memorandum in terms of National Assembly Rule 234(1)(a)
- A memorandum in terms of Rule 234(1)(2) the objects of the Magistrates' Court Amendment Bill, 2005 including a statement that the Bill has no financial implications for the state (Rule 234(1)(c)).
- A copy of the proposed Amendment Bill.
I should therefore be pleased if Madame Speaker would kindly in terms of Rule 234 (2) table my memorandum in the Assembly and thereafter in terms of Rule 234 (1) refer my memorandum to the Committee on Private Members' Legislative Proposals and Special Petitions.
LK Joubert MP
LEGISLATIVE PROPOSAL BY L K JOUBERT. MP
MEMORANDUM IN TERMS OF NATIONAL ASSEMBLY RULE 234
The purpose of this memorandum is to obtain permission of the National Assembly in terms of Rule 236 to initiate legislation. The memorandum sets out:
- Particulars of the proposed legislation
- The objects of the proposed legislation
- The financial implications for the State
Particulars of the legislative proposal are set out in the attached draft bill to amend the Magistrates' Courts Act, 1944 (Act No. 32 of 1944).
The object of the legislative proposal is to give effect to the decision of the Constitutional Court in Jaftha v Schoeman and Others, CCT74/03 by remedying the defect in section 66(1 )(a) of the Magistrates' Courts Act, 1944 (Act No. 32 of 1944), and afford individuals judicial protection against the unconstitutional sale in execution of their immovable property.
4 Financial Implications
The proposed legislation will have no financial implications for the State.
MAGISTRATES' COURTS AMENDMENT BILI
(As introduced in the National Assembly as a section 75 Bill
(The English text is the official text of the Bill)
Mr L K Joubert MP
[B .... — 2005 ]
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
To amend the Magistrates' Courts Act, 1944, so as to provide for judicial oversight over the process of the sale of immovable property in execution; and to provide for matters connected therewith.
Be it enacted by the Parliament of the Republic of South Africa, as follows:-
Amendment of section 66 of Act 32 of 1944, as amended by section 16 of Act 40 of 1952 and substituted by section 3 of Act 63 of 1976
1. Section 66 of the Magistrates' Courts Act, 1944, is hereby amended by the substitution for paragraph (a) of subsection (1) of the following paragraph:
" (a) Whenever a court gives judgement for the payment of money or makes an order for the payment of money in instalments, such judgement, in case of failure to pay such money forthwith, or such order in case of failure to pay any instalment at the time and in the manner ordered by the court, shall be enforceable by execution against the movable property and, if there is not found sufficient movable property to satisfy the judgment or order, [or the court, on good cause shown, so orders,] then a court on application by the judgement creditor, after consideration of all relevant circumstances, may order execution against the immovable property of the party against whom such judgment has been given or such order has been made."
Amendment of section 67 of Act 32 of 1944, as amended by section 25 of Act 93 of 1962,; substituted by section 5 of Act 19 of 1985 and section 1 of Act 204 of 1993
2. Section 67 of the Magistrates' Courts Act, 1944, is hereby amended by the insertion before paragraph (a) of the following paragraph:
" (aA) Subject to the provisions of section 66(1)(a) the immovable property of the execution debtor and of his family,".
3. This Act is called the Magistrates' Courts Amendment Act, 2005.
MEMORANDUM ON THE OBJECTS OF THE MAGISTRATES' COURTS AMENDMENT BILL, 2005
1. PURPOSE OF THE BILL
- The main purpose of the Bill is to address a major deficiency exposed by the Constitutional Court with regard to the provisions of section 66 of the Magistrates' Courts Act, 1944 (Act No. 32 of 1944) (hereinafter referred to as the Act).
- On 8 October 2004 the Constitutional Court in the case Jaftha v Schoeman and Others. CCT 74/03, unanimously held that those provisions of the Act that provide for execution of immovable property of judgement debtors limits the right to housing entrenched in section 26(1) of the Constitution.
- At present section 66(1)(a) of the Act prescribes the process from the time a court gives judgement in favour of a creditor until the ultimate sale in execution of the debtor's immovable property. The sheriff calls at the home of the debtor and attaches movable property sufficient to settle the debt. If insufficient movables exist the sheriff issues a nulla bona return, which reflects that there is insufficient movable property to settle the debt. On the strength of the fact that no movables are found, the clerk of the court is obliged to issue a warrant of execution against the immovable property. It is for the clerk to decide whether, in light of the sheriff's return, insufficient movables exist to satisfy the judgement. Once the clerk is satisfied of this fact, it follows that the debtor's immovable property will be sold in execution. This entire process occurs without any oversight by the courts.
- The Constitutional Court held that this provision is unconstitutional since it negates a person's access to adequate housing and its link to the inherent dignity of a person. This is exacerbated by the fact that in many instances the collection of trifling debts causes existing access to adequate housing to be totally eradicated, possibly permanently.
- The interests of judgement creditors should however not be overlooked and a mechanism should be found to balance the relevant interests. The balance between the advantages to the creditor and the immense prejudice and hardship caused to the debtor.
- At present the section is sufficiently broad to allow sales in execution to proceed in circumstances where it would not be justifiable for them to be permitted.
- A blanket prohibition on the sale of immovable property will however not be appropriate.
- An appropriate remedy should be flexible to accommodate varying circumstances in a way that takes cognisance of the plight of a debtor who stands to lose his security of tenure, but is also sensitive to the interests of creditors whose circumstances are such that recovery of the debt owed is the countervailing consideration.
- The Constitutional Court held that an appropriate remedy would be to provide for judicial oversight over the execution process. Judicial oversight would permit a magistrate to consider all the relevant circumstances of a case to determine whether there is good cause to order execution. Circumstances that could be taken into consideration include; the circumstances in which the debt was incurred: any attempts made by the debtor to pay of the debt; the financial situation of the parties; the amount of the debt; whether the debtor is employed or has a source of income to pay off the debts; and any other factor relevant to the particular facts of the case.
- This bill contains certain amendments that will give effect to this proposal.
2. OBJECTS OF THE BILL
The objects of the Bill are briefly explained below.
- Clause 1 seeks to amend section 66(1)(a) of the Act. It is proposed that the section be amended to make provision for a judgement creditor to apply to the court for the execution against the immovable property of a debtor. It also provides for the court to make an order in this regard after considering all the relevant circumstances. This amendment aims to establish judicial oversight over the sale in execution of immovable property. The interests of the judgement creditor is also protected in that it still allows for the sale in execution of immovable property under circumstances where in the courts opinion it will be justifiable. This proposal also acknowledges the widely recognised legal and social value that must be acknowledged in debtors meeting the debts that they incur.
- Clause 2 confirms the aforementioned amendment in that it proposes the exemption of immovable property from execution unless so ordered by the court. The purpose is to insulate from execution the immovable property of a debtor where a court after considering all the relevant circumstances does not find it justifiable. This amendment does not constitute an unconditional blanket prohibition and sufficient attention will be paid to the interests of the judgement creditor.
3. DEPARTMENTS/BODIES/PERSONS CONSULTED
No other parties were consulted.
4. IMPLICATIONS FOR PROVINCES
There are no implications for provinces.
5. FINANCIAL IMPLICATIONS FOR STATE
There are no financial implications for the State.
6 PARLIAMENTARY PROCEDURE
The opinion is held that the Bill must be dealt with in accordance with the procedure established by section 75 of the Constitution since it contains o provision to which the procedure set out in section 74 or 76 of the Constitution applies.