as Chairman, presented the First Report of the Select Committee on Public Accounts (on Unauthorized Expenditure).

Report, proceedings and evidence to be printed and considered.

as Chairman, presented the Second Report of the Select Committee on Public Accounts.

Report, proceedings and evidence to be printed and considered.

Mr. Speaker, when I was last on my feet in the discussion of this particular Bill, I said that the Bill had some good and very good provisions as well as some bad and very bad provisions. To deal briefly with what we consider to be a very good clause, I want to refer to the fact that compulsory motor vehicle insurance will now, in terms of this amendment, in prescribed circumstances cover national servicemen doing their first period of service when they accept a lift. This is an exceptionally good provision. It is one which my hon. colleague, the member for Durban Point, has been fighting for for many years. For a long time he has been asking that national servicemen should be entitled to be given lifts in prescribed circumstances. I understand that a scheme will shortly come into operation in terms of which the prescribed circumstances are going to be such that, with the co-operation of oil companies and, presumably, motor dealers, there will be specific points in towns where servicemen will be able to be picked up. I only hope that those who are controlling this scheme will not only see to it that the national serviceman concerned is the right national serviceman to get such a lift, and that he is not absent without leave or anything of that nature, but that they will also check up to see whether the car in which he is getting a lift appears to be a reasonably roadworthy vehicle with a reasonable sort of driver, because there have been altogether too many instances of national servicemen being killed on our roads during their short weekend passes. I believe that this is something that should be borne in mind.

I now want to get onto the bad and very bad provisions of the Bill. I wonder if hon. members are, in fact, aware of what this Bill is attempting to do. I am going to tell hon. members, and I am going to tell them in no uncertain terms. It is transferring the insurance from the owner of a vehicle to the vehicle itself. This means that when one insures one’s car with the MVA, it is basically one’s car that is covered. The intention is that no matter what happens to that car during the period covered by the particular insurance token, or who the owner is, the third party will remain as part of the car and will remain with the car.

The first people I now want to consider are the owners of new vehicles. There are of the order of 300 000 new vehicles sold in the Republic in the course of a year, and in a high majority of cases the people who buy new vehicles trade in their old vehicles. A person who therefore buys a new vehicle in May, having just bought third party cover for his old vehicle, will lose that money. He will then have to buy new third party cover for his new car. In the past he could take his old disc off and for 35 cents swap it for a new token which he could then put onto his new motorcar. Today, however, he may no longer do that. He has to buy a new token for his new motor-car and he completely loses his old one.

I estimate that this is going to cost the public that buys new vehicles something in the order of R3 million to R4 million per annum, and we know that the new car buyer is already subsidizing the Government, in all sorts of instances, in the form of sales taxes, duties and the Lord knows what.

Do not be so negative.

One must also take into account, of course, that the used vehicle buyer will get a third party token which he does not have to pay for. Before I briefly touch on that, let me say that one must also consider the owners of hire fleets. I am talking about organizations such as Avis and Hertz. They have to pay R52,50 for third party insurance. What is their situation? It is going to cost them a lot more money too.

There is another factor that I think one should bear in mind. I am thinking of the fact that there is a difference between metropolitan and rural third party insurance. What will happen in terms of this new legislation? One could pay a cheap price for third party in a rural area and sell one’s car to someone in an urban area and he will get the benefit of that insurance. I believe that if this comes to fruition there should be serious consideration given to equalizing the third party rates for all vehicle owners, whether they live in metropolitan or rural areas. What happens, too, when a person sells his motor-car and it goes off to a different area and is given a different registration number altogether? The token on the vehicle will not reflect that fact and one can have a change of ownership without anyone, in fact, knowing what the new registration number of the vehicle is. I have said that the new car buyers are going to be charged more money. This is perfectly true. The used car buyer, however, is going to benefit but he is not going to benefit to the same extent that the new car buyer has lost because used cars could sit for several months on dealers’ floors without being sold. The benefit that the used car buyer therefore gets will not always be as much as the new car buyer has lost.

I also think that it is a very well-known fact that within the motor trade, and particularly within the used car motor trade, there are unfortunately certain people whom we in the trade know as “skebengers”. What is the “skebenger” going to do? He is going to remove the third-party disc and, when some unsuspecting customer comes along to buy a used car, the used-car dealer is going to say to him that he still has to pay for the third-party token of insurance even though he will not have paid anything extra on it himself. He is going to charge the customer for that. I am sure that this is going to happen in a certain very unfortunate section of the used car trade.

The next point I wish to deal with—I think I have motivated the fact that it is going to cost additional money—is that I believe this system is going to cause incredibly severe administrative problems. What is the situation that is being created by this amending Bill? In clause 6 on page 7, lines 38 onwards, it is specifically stated that—

On the next page it goes on to say that—

This means that every time a motor vehicle changes hands two prescribed forms have to be filled out and sent off to the insurer.

Let us now first consider the motor industry itself. What is this going to mean to them? It means that every time they accept a motor vehicle as a trade-in, they are going to have to inspect the third-party disc, ascertain which company issued the third-party insurance and take the token number. They are then going to have to write to the insurance company concerned informing them of the fact that they have accepted that motor vehicle as a trade-in. At the same time the customer who traded the vehicle in will also have to send a notification to the insurance company on the prescribed form. So, that is two forms that are already going to have to be filled in. Then the motor trade will keep that vehicle in stock for a short while and, when they sell it to a customer, once again another two forms will have to be filled in. To make the situation even worse, the motor company could sell the used vehicle to another motor company. This happens a lot. Frequently a new-vehicle dealer will accept a used vehicle as a trade-in and will then sell it to a used-car dealer. In such a case the two original forms, the two forms used by the respective car dealers and ultimately another two forms when the used-car dealer sells that vehicle to a private customer will be involved. Thus, in what is basically one transaction, one finds that six separate forms will have to be filled in and sent off to the insurer. I am sorry, but I believe that this is going to create a tremendous administrative problem.

My estimation is that approximately one million used vehicles change hands every year—and now I am not considering trailers, caravans, tractors and vehicles of that nature. If two forms are made out for every one of those transactions, it means that two million forms will flood in to the insurers. In addition to that, if it concerns a transaction involving the motor trade—and I would guess that, of the one million vehicles, the motor trade would sell a minimum of 700 000 to 800 000—four forms will probably have to be sent in. That puts the total figure up to four million. The only person who, I think, will be laughing all the way to the bank in this instance will be the Postmaster-General because the postage on those forms will bring in approximately another R500 000 into his coffers in the course of a year. Think of the administrative nightmare this will be for the motor trade and for the insurance companies who will be receiving millions of these forms! They are going to have to find a home for these forms. They are going to have to file them. Those notices will have to be recorded against the respective tokens of insurance and, as I have said, in respect of a certain motor vehicle they may have to deal with six forms in the course of a year recording changes of ownership. I believe that this is, in fact, creating more problems than it is attempting to sort out. When one refers to the report of the Wessels Commission on Compulsory Motor Vehicle Assurance, one sees that one of the reasons why they recommend that the disc should stay with the car is that the existing procedure results in a claimant having to incur considerable legal costs to establish who the owner of the vehicle concerned was at the time of the accident which gave rise to his loss or damage, whether the vehicle was validly insured at the time and which authorized insurer, if any, is liable for the loss or damage.

Mr. Speaker, I believe that the way we are now going to do it, is certainly not going to overcome this problem. I believe it is actually going to make it worse and I will tell hon. members why it is going to make it worse. It is because of the private buyer. What is the situation now of the man in the street who sells his car to another man in the street? Mr. Speaker, I will wager you 10 to 1 that most private sellers will not be aware of the provisions of this Act and are not going to fill out the form in the prescribed way, nor is the buyer going to fill out the form in the prescribed way.

Are they aware of the provisions of the Act as it is now?

Does the hon. member for Mossel Bay suggest that if Mr. Mbiso from Duncan Village sells his car to Mr. Ramanase, who is going to use it as a taxi, they will be aware of these provisions?

Are they aware of the provisions at the moment?

No, they are not. They do not do it in many cases.

The point is the same argument does not apply, because the second owner is going to have a third-party disc on his motor-car. In the present circumstances he has to buy one and put it on his car. In this way the insurance company is notified. Otherwise the traffic police jump on him because he does not have third-party insurance. No, Mr. Speaker, I believe that when it comes to the private owner, there is going to be an administrative nightmare. He is not going to be aware of the legal provisions. There will be a tremendous amount of problems involved. What happens if the disc is lost off the windscreen in the case of an accident? Who owns that motorcar? The registered owner and the registered owner according to the insurance company could be totally different people. To find out who the insurer is and who the owner is can be a tremendous problem.

I think I have covered these two particular aspects in regard to the administrative problem. However, I do not want to be totally negative. I see a certain amount of benefit resulting if the third party token stays with the vehicle. However, I do not agree with the way we are seeking to do it in this legislation. There are other methods of doing it, methods which are used in other countries. I want to refer to New Zealand and Rhodesia where the licence disc is also the third-party disc. I see no reason why we cannot adopt a procedure of that nature also in South Africa. After all, when someone buys a used motor vehicle he has to obtain a roadworthy certificate before he can license it. The licensing authorities look at that roadworthy certificate before they issue the licence. Is there any reason why they should not also require that the person who desires a licence, to bring a form along which states that he has paid his third-party insurance in respect of that particular vehicle? I suggest that this would be a very simple procedure. The insurance company would be assured of the fact that the vehicle is roadworthy. That would save them quite a lot of problems, because it is a provision of the Act that they are entitled to call for a roadworthy certificate if they are not satisfied with the roadworthiness of the vehicle. Secondly, I believe it would not involve the licensing authorities collecting any money. All they would have to do would be to see that the declaration is there when they issued the licence. Provision could be made on the licence form where they could write in the name of the company who is insuring the vehicle. I believe this would be a far more sensible method of bringing about the sort of situation that we desire to create by this legislation. I can see the desire behind it, but I maintain it is not being done in a way which is going to solve more difficulties than it creates.

The next point is: What, in fact, happens if the provisions are not complied with? If the person who sells his used motor vehicle— here I am asking a question and I am not accusing—does not inform the insurance company and the person who buys the used motor vehicle does not inform the insurance company—I think this is going to happen quite frequently—these people are, in terms of the legislation, committing an offence for which they can be punished. Will the fact that they have committed an offence, because they have not adopted the procedure they should have adopted, result in the fact that the third-party insurance then becomes invalid?

No. Where do you find that?

I am questioning the hon. the Minister on this because I do not believe it is sufficiently clearly stated in the Bill that, in fact, the insurance remains valid notwithstanding the fact that the procedure has not been adopted. In terms of clause 2 of the Bill a paragraph (d) is to be added to section 12(3). Paragraph (d) basically provides that the declaration must contain the name and address of the person indicated in the application in question as the owner of the vehicle concerned—

This is where I believe they are trying to overcome the problems that I have raised, but I am not at all sure—I would not be sure without perhaps getting senior counsel’s advice—of whether this does cover the situation since it can be argued that all we are validating here is the application of the person at the time when he makes that application. Let me put it this way: I think I am the owner of a vehicle, but in actual fact I am not. Nevertheless I take it along and I sign myself in as the owner and get a third-party token. In such a case I think the clause will validate me. I am not sure, however, whether it will validate me at all if, in fact, the other circumstances apply where a motor vehicle has changed hands and neither of the two persons concerned has done anything about the third-party token.

There is another portion of the Bill which we believe is very bad. I refer to the claims consultant issue. I am surprised that the hon. members of the Official Opposition did not bring this situation up. What is going to happen, in terms of the legislation, is that a number of persons will lose their livelihood, not necessarily because they are doing a bad job. I shall, however, leave the motivation of this submission to one of my hon. colleagues on these benches to handle. I simply mention it in view of the fact that I am going to move an amendment to the motion that the Bill be read a Second Time.

I have said before that I think what we in these benches have to do is basically to try to weigh up whether the bad within the Bill outweighs the good. That there is good, we do not deny, but we have nevertheless come to the conclusion that we cannot support the Second Reading of the Bill. We believe that a bad job of amending the legislation has been done in this instance. As I have said before, it could have been done in many different ways. I have mentioned the situation in Rhodesia and New Zealand. I therefore move as an amendment—

Mr. Speaker, we are dealing here with social or community legislation. Because times change it is necessary for adjustments to be made in the kind of cover we want to give people. However, the legislation should not be injudiciously adjusted and the Government—through the hon. the Minister—has seen fit to appoint a commission of inquiry in regard to certain aspects of compulsory motor vehicle insurance. Representatives of the fund and the Law Society served on the commission. They produced a comprehensive report but I do not seem to remember the hon. member once referring to this report. [Interjections.] When an hon. member discusses this legislation in the House one at least expects him to refer to the arguments contained in the report of the commission and to point out where they are incorrect. I listened to the hon. member but I must honestly say that I did not hear him refer to those arguments. [Interjections.] The hon. member may perhaps be very observant when it comes to small administrative points but on this occasion he said nothing about the over-all advantages that will accrue to the public in general.

I now want to deal with his assertion that we will experience great administrative problems.

Mr. Speaker, may I ask the hon. member whether he is of the opinion that it was the Wessels Commission that drew up this legislation?

Let me put it this way: A large part of the legislation was suggested by the Wessels Commission and is contained in its report To give effect to the findings of the commission the law advisers then drafted this Bill.

However, the hon. member has not as yet shown us where the Bill differs from the recommendations of the commission. That is the point. The hon. member concentrates on minor administrative points and completely ignores the over-all advantages that will accrue to the public in general. Let me give you one example, Sir. A member of the fund served on the commission and he was satisfied that the vehicle was insured. I am quite sure that his attention was drawn to any administrative problems that could possibly arise. He came to the conclusion, however, that it was not in any way an insurmountable problem. The hon. member, however, had a great deal to say about the legislation as though it would result in a plethora of paper work. I want to point out to the hon. member that, in the first place, the fund is prepared to do this paper work and that, in the second place, a tremendous amount of paper work is already being done today.

The hon. member wanted to know why we could not emulate overseas countries where a person is required to produce a roadworthy certificate before he is issued with his third party insurance. That is an absolutely ill-considered suggestion.

I did not say that.

In that case the hon. member must please express himself better in the future. The fact of the matter is that the hon. member spoke about the large number of forms that would now have to be completed. He pointed out further that in future nobody would give notice and would refuse to comply with the law. I think that is an insult to the public, comply with the law. I think that is an insult to the public. Surely we are law-abiding people? The hon. member said that dealers in second-hand vehicles were dishonest people and would exploit the public.

He did not say that.

It is an implied insult. That hon. member should pay more attention. It is in fact an accusation against the dealers and that is wrong. The most important argument he advanced, however, referred to the tremendous increase, as he put it, in the costs that would have to be incurred when motor vehicles were bought or sold. But we have a free-market mechanism. If the price of the motorcar is such that this aspect of the matter does actually become a factor to be considered, one simply adds the additional cost in the value of the third party insurance for the remaining period to the selling price of the vehicle and there will be no problem. I cannot follow the argument of the hon. member. It is small-minded and petty and irrelevant to the broad principle.

Secondly, he said it was very bad policy in this instance to insure the vehicle. I shall come back to that.

I want to refer briefly to certain very praiseworthy aspects of this legislation. Before doing so, however, I want to express my gratitude and appreciation to the hon. the Minister, the Secretary of the department, as well as Mr. Keyter, for the way they have assisted me. Whenever I had a small problem they solved it on the spot and the trouble was over. I want to suggest to the hon. member that when we discuss legislation of this kind, legislation which is not of a political nature, he would do well to approach the officials of the department if he has a problem. I am confident that they will be as accommodating towards him as they were towards me. I don’t want to be petty and do the hon. member and injustice; I merely want to say to him with respect that he must not try to make out a case by raising such frivolous arguments.

Among the important aspects of this Bill there is one which is very interesting. One cannot deal with one aspect alone; one must deal with the Bill in its entirety. When one does this one finds that certain special circumstances are defined in clause 1 and that the elements of neglect, omission or ignorance are excluded. That is very closely linked with the work of claim consultants. The hon. member did not refer to that. He merely talked vaguely about claim consultants, without having regard to the whole prospectus and the whole set-up of the Bill. Perhaps another hon. member will speak about that at a later stage. This isa very good amendment. For the very reason that this change is being made one should make absolutely sure that those people who deal with claims are well trained and know what they are doing and that, should he perhaps fail to lodge a claim, the claimant will still be covered. Obviously attorneys comply with these requirements. The hon. member for Mossel Bay will deal more fully with this aspect.

The other aspect to which the hon. member has referred, is that the motor vehicle will now be insured instead of the owner. But we must consider the problem that has been experienced and which we are now trying to overcome. The problem arises from the fact that a vehicle is sold and third party insurance is not taken out immediately. Someone buys a motor vehicle and uses it to go and get his roadworthy certificate. During that time there is an accident in which someone is injured but the owner of the vehicle or the driver is not insured. In such a circumstance the injured person has a claim against the driver personally. That is the problem. There are two aspects. Firstly, if the injured party lodges a claim against the driver personally, is the driver in the financial position to pay or not? If he can pay he can be financially ruined on a purely technical point because he did not have valid third party insurance at the time of the accident. That is all. If he cannot pay the fund will have to pay. The hon. member must not argue—I notice that they are hastily making notes—that there should be no vehicles that are not roadworthy.

I did not say that.

I accept that the hon. member did not say it.

They should not be on the road without third party cover.

The hon. member is right. But this does in fact happen. Those are the hard facts of the matter.

It is illegal.

Suppose it is illegal. I agree it is illegal but what is the effect of that fact? For the very reason that the owner has been insured instead of the vehicle, someone is now going to suffer tremendous losses. That is precisely what the fund does not want. The fund says it is unreasonable that in such circumstances a person has to pay out of his own pocket. The fund says that in such a case that person should be assisted. They think the Act should be amended because that will be to everybody’s advantage. I have no fault to find with this approach. Why should someone be ruined financially merely because of a technicality? If we have to amend the Act, we have to do so, and I wholeheartedly support the amendment to section 12.

The remaining provisions are actually of a consequential nature. Another aspect that we should consider and ask ourselves whether it is in the interests of the country, is the idea contained in clause 8. It provides, inter alia, that in future where an injury has been sustained the compensation may be paid in instalments. Is that good or bad? The hon. member did not refer to that. I honestly think this is an important aspect, if not one of the most important in the entire Bill. What happens at the moment is that the court awards the injured person a certain amount. An estimate is made of how long he will live and how much money he stands to lose. Suppose his life expectancy is estimated to be five years. He is then compensated on the basis of five years. Suppose he dies earlier, say after a year. In that case unnecessary enrichment has taken place because the amount was calculated on the basis of five years instead of one year. The reverse is also true, of course. Suppose he lives for 10 years. In that case the court awarded him too little. The court is not infallible and it can only depend on the evidence before it. This legislation now provides that, in the future, life expectancy will no longer be the deciding factor but the actual salary the person would have earned. That is important. The story that the fund is only looking after itself, that it wants to keep the money for itself and not use it in the interests of society, must be squashed. Here we have the proof that this idea is in the interests of society. But what does the hon. member say? He says they refuse to pass the Second Reading. They refuse to allow the inclusion of this sound provision. He says they will not allow this provision to be inserted in the legislation. Is that the approach of a party whose policy, broadly speaking, is to look after the interests of the people? I think the reply is obvious; it is right there before us.

The next aspect I want to deal with is the position of the soldier, the person who is undergoing training for the first time. The hon. member for East London North spoke about this. We are grateful for the support we have had in this connection.

When one looks at the Act itself one notices that it is being amended in a number of respects. In this respect I want to thank the hon. the Minister and his department for having been prepared, at this late stage, to effect certain amendments in the interests of the public. I refer, for example, to clause 11 which amends section 24 of the principal Act. It deals with prescription.

One must admit that in terms of the Prescription Act a delict becomes prescribed after three years whereas in terms of the Motor Vehicle Insurance Act the period is two years and 90 days. We are consequently dealing here with a diminution of the rights a person should have in terms of the Prescription Act. We should ask ourselves, however, whether it is important to shorten this period. That immediately illustrates the advantages which actually flow from this legislation. In terms of the Prescription Act a person has no assurance whatsoever that he will be paid. That is because his claim may be against someone who might just as well be a puppet. On the other hand in terms of this legislation, a person can be certain that he will be paid what is his due. That is the reason why the prescription period has been shortened. The public must understand that. They must realize that it is in their own interests that this is being written into the law. It also offers protection to the fund and the fund is, after all, also part of our South African society.

Another important aspect is the prescription of a claim against a minor. As hon. members will notice, this aspect is completely and adequately covered by the proposed amendment of the hon. the Minister.

The provisions of clause 11 are, if not the most important, nevertheless some of the important provisions of this Bill. Clause 11 seeks to amend section 25 of the principal Act. I just want to quote the proposed new section 25(1)(b)—

This is the provision which has caused most problems in practice. We must admit that some officials in the employ of authorized insurers also sometimes do not interpret the law correctly. Some of them have regarded it as a game in which the one has to outwit the other and keep the game going until the date of prescription has been reached; then the claim becomes invalid. On the other hand the game amounted to an attempt to increase costs by refusing to accept a settlement. We have consequently had a cat-and-mouse game between the insurer and the claimant. The hon. the Minister is now inserting the relevant amendment in order to make the authorized insurer realize that he can no longer play this cat-and-mouse game until the claim has become prescribed and that he has definitely to decide whether or not he is going to accept and acknowledge the claim. I think in practice, and as far as the public in general is concerned, this amendment is one of the most important in the Bill. But what does the hon. member for East London North say, Sir? He says: “No, this is hopeless. We must not pass the Second Reading at all.” I have already pointed out that the amendment moved by the hon. member is ill-considered. Perhaps the hon. member will realize this and withdraw it.

I did not mention that at all.

That is the point; why did the hon. member not mention it? If this is so important and so basically to the advantage of our people, why did the hon. member not mention it? Why move an amendment to the effect that your party declines to approve the Second Reading?

The bad outweighs the good.

Sir, I want to make it clear that this legislation is well considered. One cannot simply create imaginary problems and then maintain that there are going to be administrative problems. What is important if there are administrative problems is that they will be solved, provided we adopt a policy which is in the interests of the public as a whole. I am quite convinced that this legislation is in the interests of the public as a whole and that it is a good legislation. I therefore wholeheartedly support the Second Reading of this Bill.

Mr. Speaker, it was not my intention to speak on this Bill. My hon. colleague from Green Point has already given the reaction of the Official Opposition to the Bill as a whole and we still, after having listened to the argument of the hon. member for East London North, believe that the Bill deserves our support.

More convinced than ever?

Yes, I would agree with the hon. the Minister; we are more convinced than ever. The hon. member for East London North told us in dramatic terms the other night that this measure was going to cost the country millions of rand. He said that it would cost motorists millions of rand and that there would be millions of additional pieces of paper floating around. He described it almost as a bureaucratic and administrative nightmare. I think he probably acted in haste, and is now repenting his haste, because today we had a very much muted performance from the hon. member for East London North.

I think I must react to the amendment the hon. member has moved. I shall do so very briefly. Firstly, he says that the Bill should be rejected because it will cause severe administrative and practical problems. The problems that he outlined had to do with paperwork. He said it would now be necessary for a form to be filled in by the owner of a car when he wanted to sell it. At the moment the owner of a car fills in a note to his insurance company to the effect that he no longer owns the car. In other words, he cancels the insurance. We therefore have one form against another form. The hon. member also said it would be necessary for the new owner of a car to inform the insurance company that he was the new owner, and that this meant another additional piece of paper. Let us examine that, Sir. The new owner of a car has to fill in an application form for third party insurance under the present Act.

Now it can be done on one form.

Yes, that is so. We are therefore saving money. The hon. member says that for 35 cents one could go along and change the token. It was not quite as simple as that. The hon. member also rather paternalistically, if I may say so, talked about unsophisticated members of the community who would be unable to fill in such forms, and claimed that such forms would not be filled in. I believe that the procedures as laid down in this Bill make it very much easier for an unsophisticated person to fulfil the requirements in terms of the Act. So, Sir, I am not convinced at all that there will be a monument of additional paperwork as a result of this Bill. He did make the point, incidentally, that if a car was sold or traded in to a second-hand motor dealer and that car stood on the floor in the ownership of that motor dealer, the process might be duplicated at a later stage when the car was passed from the ownership of the motor dealer to the new owner. I am afraid I think this is to advantage too. Anyone who buys a second-hand motorcar will find it necessary to test drive that car. And I believe that it is very important that if he is going to test drive it, it should be insured when he does so.

But that is covered by the trade plates.

I have heard of trade plates, but this makes the process very much easier than in the case of trade plates because the car is insured without any necessity for its having to operate on trade plates at all.

But it is insured by virtue of the trade plates.

Yes, it is insured by virtue of trade plates but this applies to a particular vehicle and that particular vehicle’s insurance is paid for right at the beginning of the year with no trouble. If one looks at the report of the Wessels Commission—and I have a feeling that the hon. member for East London North had not even read the report of the Wessels Commission when he made his speech—one sees, I think, that the arguments in favour of the new procedures are set out quite succinctly. I quote—

And that applies, in particular, to vehicles in respect of which no trade plates are in use. That problem is now being washed right out.

Oh, yes?

I quote further—

What could be clearer than that?

You think that is not going to happen now?

I do not think that is going to happen now. I think this is a considerable improvement.

Finally, evidence was given to the commission that the costs of obtaining particulars of ownership were, in many cases, out of all proportion to the advantages involved in the principle that it ought to be a mere formality. Anyone who knows anything about third party court cases will appreciate that this is a very valid point indeed, and we certainly agree with the report of the Wessels Commission. We think that the drafters of this Bill have done a reasonable job in turning the recommendations of the commission into legislation.

I now want to look at the second reason the hon. member advanced for our rejecting this Bill. This had to do with the fact that it would cause pecuniary loss to certain motorists. He said that because someone sold a car in the middle of the year, the insurance he paid for the balance of the year would be a complete loss to him. Let me just point out, however, that if one is buying a car one assesses the value of that car, and if it happens to be insured, the value of the car includes that insurance.

You are living in a dream-world.

Do you really think you will get that from a used car dealer?

I really must say that I think that the hon. members in those benches are protesting just a little too much. [Interjections.]

Thirdly, the hon. member referred to the case of claims consultants. He said that this would unjustly result in a loss of livelihood to certain persons. Well, he is obviously referring to claims consultants. We in these benches are not convinced that this legislation would, in fact, put claims consultants out of business. We believe that they are still perfectly entitled, even under this legislation, to act in an advisory capacity. I may say that we hold no particular brief at all for those claims consultants. I am advised that the majority of such claims consultants act for insurance companies.

Mr. Speaker, may I ask the hon. member exactly whom the claims consultants would be advising?

Anybody who wishes to get advice from claims consultants. I think the hon. member must admit that at the moment there are various malpractices that exist. I see on the Order Paper that the hon. member for Umhlanga is going to move an amendment in the Committee Stage, an amendment dealing with claims consultants. Obviously we shall listen to his argument. We do not believe, however, that they will be put out of business.

The fourth reason in the hon. member for East London North’s amendment is based on the assertion that this could result in the insurance of some vehicles being invalidated. He advanced a rather strange argument to the effect that the clause that was meant to deal with this did not do so. He said that it would, in fact, be necessary to obtain advice from senior counsel before a pronouncement could be made.

The time to get advice from senior counsel, however, is not when one is arguing about the Bill in Parliament. One should do so before one presents one’s argument, before one jumps with both feet into the mud.

We do not have Oppenheimer supporting us.

That might or might not be an argument in terms of this Bill. I do not actually consider that it is, but obviously that hon. member does.

In all, the four reasons why we should reject this Bill do not convince us at all. We therefore intend to persist in our agreement with this Bill and we shall vote for it at Second Reading.

Mr. Speaker, the hon. the Minister said during his Second Reading speech, and the hon. member for Pretoria West mentioned it earlier this morning, that the Bill now before us is a result of the recommendations of the Wessels Commission. The said Wessels Commission consisted, inter alia of members of the legal profession and representatives of the fund. The Association of Law Societies was also given the opportunity of commenting on the commission’s recommendations. The original draft Bill was finally submitted to the Association of Law Societies for its final comments. The provisions of the Bill now before us are therefore the outcome of careful consideration by representatives of all interested parties who might be affected.

The object of this Bill is mainly to be more fair to both insurer and insured; to remove points of doubt that have arisen in practice; to speed up the settling of claims; and to streamline the administrative procedures.

Regarding greater fairness to insurer and insured, I refer hon. members to clause 8 which provides, firstly—

That provision is clearly aimed at being fair to both insurer and insured. A further provision, namely the proposed new subsection (1B) of section 21 as contained in clause 8, reads as follows—

Once again this provision is aimed at being fair to the insurer. The same applies to the proposed subsection (1C) which refers to costs of future hospitalization which will only be paid should this become necessary. A further provision which will ensure fairness is the provision to which the hon. member for Pretoria West also referred. This deals with the question of compensation in a claim for future loss of earnings or for maintenance that may be paid by way of instalments. In conclusion I want to refer in this connection to clause 10(1)(e) which provides that on request of the insurer a claimant must undergo a medical examination or examinations by doctors appointed by the insurer at the latter’s expense. Once again this provision envisages fairness.

In the second place the Bill is designed to eliminate areas of doubt. I refer here, firstly, to the definition of “special circumstances” in clause 1 in terms of which it is now clearly stated that negligence on the part of attorneys and others will not be regarded as “special circumstances”. This makes the position clear after the uncertainty that has resulted from a series of court decisions in this connection.

A second provision aimed at the elimination of areas of doubt is that covering national servicemen in terms of clause 9. There was an area of doubt here which gave rise to many problems and this is now being removed by this provision.

A third area of doubt is eliminated by clause 10(1)(e) which provides that in future claims may only be dealt with by attorneys and other authorized persons. In the past unfortunately there were instances of abuse in regard to the handling of this sort of claim. So this is another area of doubt which will be removed.

The Bill is also aimed very specifically at speeding up the handling of claims. In this regard I refer to the new section 25(1)(b) which provides—

This is a provision which will inevitably lead to claims being submitted quickly and being dealt with more speedily. The same thing holds good for the next provision which adds the following proviso to section 25(2) of the Act—

In other words, the claimant need not wait until that period has expired. As soon as the insurer indicates that he is contesting the claim, the claimant can proceed immediately with the issue of summons.

The hon. member for East London North made much of the fact that the Bill would create administrative problems. I want to stress that this Bill is aimed particularly, inter alia, at streamlining administrative procedure. The provision to which the hon. member referred, viz. that it is now the motor vehicle that is being insured and not the owner is precisely the one that is aimed at streamlining procedure and eliminating administrative prolixity. It does away with the necessity for reinsurance whenever there is change of ownership of a vehicle. It also removes the danger to which reference has already been made—I think the hon. member for Orange Grove also referred to this—that the vehicle may be uninsured, albeit for a short period, i.e. while the change of ownership is in process.

I maintain therefore that the Bill complies completely with all four of these objectives.

I should also like to comment on some of the arguments advanced by hon. members of the Opposition. Incidentally, I listened with rapt attention to the argument of the hon. member for Orange Grove which I greatly appreciated. I hope I shall however be forgiven for saying that I was somewhat surprised that an hon. member who can argue so correctly on an issue like this can be so confused when it comes to his political thinking. I agree with what the hon. member said in this connection, and also as far as his reply to the hon. member for East London North is concerned.

The hon. member for East London North saw fit, inter alia, to suggest that special places should be indicated where national servicemen who hitch-hike could be picked up. It is a nice thought, but like so many nice thoughts it is obviously completely impractical and impossible. Regarding his further suggestion that, in addition, there should be control over the roadworthiness of vehicles in which national servicemen are to be transported, this is so far-fetched that it really calls for no further comment.

The hon. member spoke of the extra burden imposed as a result of the fact that the motor vehicle and not the owner is to be insured. He went on to say—

But a little later on the hon. member himself referred to clause 6 and the new section 19(4) which is aimed at the prevention of this very thing. So the hon. member cannot in one breath advance this argument and in the next breath say: The simple fact that notice has to be given of change of ownership is an unfair burden. When he made his first statement, he obviously forgot completely that there was such a requirement, because he said: Transfer can take place without anybody knowing about it.

The idea of the combining of motor vehicle insurance with licensing, to which the hon. member referred, was in my view adequately dealt with this morning in the reply which the hon. Minister gave to a question on the Order Paper. This sort of thing has already been investigated by a previous commission and found to be impractical. So the hon. member’s suggestion is one which is not acceptable; it cannot be implemented in practice.

Furthermore the hon. member for East London North asked—

After a long plea and argument he eventually came up with the answer himself. The hon. member is like a dog running round a bush chasing its own tail. These were just words for the sake of words. As one of my colleagues remarked in an aside to me, the hon. member gave one the impression involuntarily that he was being paid for every minute he was speaking.

Finally, as far as the hon. member for East London North is concerned, I come to the issue of loss of earnings or deprivation of livelihood as far as claims consultants are concerned. I think one of the best aspects of the Bill is that it makes for certainty in the handling of these claims. Let us admit to one another that there have been abuses in the past in regard to the handling of MVA claims. The designation “claims consultants” may sound very professional, and one is inclined to accept them as a profession which maintains high norms. But in reality anybody who works in this sphere is covered by the designation “claims consultant”. The fact is that we have found in practice that when an accident occurs, the claims consultant is sometimes on the scene before the ambulance or the police turn up. He then advises the people on the spot, and whether that advice is good or bad, claims may flow from it. In my practice I personally had a case of somebody who came to me and told me that a certain claims consultant had advised him at the scene of the accident. He put in a claim but never heard another word about it. When I made inquiries I found that quite a tidy sum had in fact been paid out but that the claimant had received no benefit from it. The compensation just disappeared somewhere along the way, like water soaks into sand.

I say that one of the best things about this Bill is that it now provides certainty regarding the handling of these claims. This certainty is achieved because it is concomitant with the provision in clause 1, which amends section 1(1) of the Act, that “special circumstances” shall not include any neglect, omission or ignorance. Members of the legal profession, by virtue of their training, their experience and their responsibility, are eminently qualified to deal with this sort of claim. But there is something else. They are bound by a strong ethical, professional code, and in addition they have the Fidelity Fund which covers them. Where then could one find a group of people who are better qualified and more competent to deal with these claims, and who can offer more security to the claimant, than the members of the legal profession? So if hon. members get up here with sentimental arguments in favour of people whose living is now being taken from them, I say that those people either have a mandate from the claims consultants to speak on their behalf or they have never thought of the interests of the people who are affected by the occurrences to which this Bill refers but are blinded by the financial interests of this small group of people.

In conclusion I should also like to make a few remarks about the questions which the hon. member for Green Point put on a previous occasion in this debate. He asked if inflation or other changing circumstances would be taken into consideration in deciding on monthly instalments. I want to tell him that this will certainly be done. Just as it is estimated in the present assessment of compensation, and compensation is actuarially assessed and determined in terms of the present Act, so will it continue to be actuarially determined and assessed, due regard being had to all those changing circumstances.

The hon. member for Green Point also referred to the Government’s responsibility to ensure the financial stability of the insurers. I agree with him. It is important that insurers should not be exploited and the fund depleted. For that reason it is particularly necessary to be fair to the insurer and the fund as well. My contention is that this Bill is in fact fair to the insurer and the fund.

The hon. member for Green Point also remarked that the immediate damage which the insured, the claimant, suffers, is of the greatest importance. Once again I want to agree with him on this point. This is so. In practice I have always found that when I talk to the insured about benefits in the long term, he talks to me about his immediate needs. That is also why it is very necessary that the claimant should have professional advice so that he does not sell his birthright for a mess of pottage. For that reason it is also very necessary that it should be attorneys who deal with these claims and that claims should be dealt with as quickly as possible to keep this temporary emergency period as brief as possible.

Bearing in mind all these considerations regarding the Bill and its provisions, and also after careful consideration of the arguments advanced by members of the Opposition, I have absolutely no hesitation in supporting the Second Reading of this Bill.

Mr. Speaker, we have listened to an argument raging back and forth across the floor of the House. We in this party appear to be the men in the middle as both the Official Opposition and the Government take us amiss because we are opposing this Bill. I think my colleague, the hon. member for East London North, has made it abundantly clear that we are opposing this Bill on some of the clauses. It is not completely bad, and he has said so, not once but three or four times. The bulk of the Bill is acceptable to us, but there are clauses which are not. However, I want to deal with some of the things which have been said so far. I want to respond immediately to the hon. member for Mossel Bay who has just resumed his seat. He talked about the fact that the report of the Wessels Commission and the recommendation contained therein, had been placed before us. I think his assumption is that we must accept per se a Bill which is framed around the recommendations of the Wessels Commission.

I never said so.

Well, then there is something wrong with my hearing and the hearing aid I have here.

If you want to oppose the Bill, you must give cogent reasons for it.

We have already produced cogent reasons. We have done so, and I shall produce another. But where are we going with this line of argument? We are going to end up with Parliament being unnecessary because we will govern by commissions. All we shall need is commissions to tell us what to do. We do not have to worry a hoot. Just let parliament go, and that is it! That is the hon. member for Mossel Bay’s argument, certainly not mine.

The hon. member for Mossel Bay then goes on and talks benignly about the clear thinking of the hon. member for Orange Grove. The one thing that I love and admire when I fly to Durban is the beautiful water of Mossel Bay. But it is now going to be muddied by the clarity of the thinking of the hon. member for Orange Grove, as I shall point out in a moment. He, the hon. member for Mossel Bay, talks about claims consultants and says that the best thing the Bill does is to bring a degree of security in respect of the handling of claims. The matter which I wish to raise pertinently with the hon. the Minister is with regard to the position of the claims consultant. I am not disputing the fact that claims consultants are certainly under the microscope. The hon. member, however, puts them all into one basket. They are all wrong; so drown them all! Put all the kitties in a basket and throw them in the water. Tie a big rock around their necks, and that is the end of them. That is the hon. member’s mentality, the way he argues. The hon. member for Mossel Bay goes on to say that before the ambulance and the police arrive, the claims consultants are there. I have never heard anything so ridiculous in all my life.

I can mention cases.

Mr. Speaker, I ask you with tears in my eyes! An accident occurs and before an ambulance or a policeman arrives, the claims consultants turn up. Who told the claims consultants? The hon. member then talks about the legal profession, its ethical code and its Fidelity Fund. I agree with his points, but while there are people in the legal profession who are disciplined under their code there are the “shysters” who fly overseas and cost the Fidelity Fund thousands upon thousands of rand. I shall come back to that point in a moment.

The hon. member for Orange Grove said that the hon. member for East London North, my colleague, gave a muted performance. He said that he was not quite as vociferous today as he was the other night. I thought my hon. colleague spoke exceptionally well today. I think he presented our case exceptionally well. I want to tell the hon. member for Orange Grove that when my colleague spoke the other evening, at that stage of the game we had not yet finally decided that we were going to oppose the Bill. We decided subsequently to do so. This is just for his information.

You mean he was speaking and you had not yet read the Bill?

You are talking nonsense! He just started his speech and then took the adjournment of the debate, and the hon. member knows that. The hon. member for Orange Grove’s problem and his party’s problem is that once again the Progs have missed the boat. Once again they have been caught out. They have supported the Second Reading and now they are trying to cover up their tracks. Now they are trying to smooth things over. The other evening the hon. Leader of the Opposition got cross and said that he was getting sick and tired of this friendliness, this “Vause” across the floor. They must be careful or we shall have a little “Colin” across the floor if we go on like this! This is the problem with the PFP. They have missed the boat entirely and now they present puerile arguments. Let me quote a classic example. The hon. member says the person who wants to buy a second-hand motorcar wishes to test-drive that vehicle. Therefore it must have a third-party disc on it. Now, what in heaven’s name …

I said the vehicle was already insured.

Oh, the vehicle is already insured! Insured? By a third party disc? It is not comprehensively insured. The only insurance it has is that of a third party disc. However, a set of trade plates …

Stop acting! [Interjections.]

I am only putting the hon. member for Orange Grove right.

Yes, but stop acting!

A set of trade plates …

I wish you would stop acting! You are like a circus performer!

A set of trade plates cover that vehicle when the vehicle is demonstrated to a customer. Now, I want to ask the hon. member for Orange Grove, who is so concerned about the customer who test drives a used vehicle, how does he think one test drives a new vehicle?

Is the hon. member for Umhlanga aware of cases when people have been test driving vehicles that have been uninsured?

I repeat; How does one test drive a new vehicle? It has no third party disc on it. So, one uses trade plates. That is what covers the vehicle. That is what will cover the second-hand vehicle as well. All I can say to the hon. member for Orange Grove is: Shoemaker stick to your last. He must stick to building and let those of us who know a little bit about the motor trade speak on issues such as this one. [Interjections.] Mr. Speaker, you know the hon. member went on to say that the drafters of this Bill had done a reasonable job in drawing up this legislation. In one breath he is telling this House …

Do you always stick only to second-hand car matters when you speak in this House?

No! But I must say that although I am out of the business, I have a wealth of experience to back me when speaking on this issue. The hon. the Minister of Defence need not worry. [Interjections.] During the course of his speech the hon. member for Orange Grove said the drafters of this Bill had done a reasonable job in drawing up this legislation. Well, that was the only sensible thing he said. He is quite right. They have done a reasonable job, but they have not done as good a job as they should have done. That is our submission.

The hon. member for Orange Grove then said that claims consultants, in his opinion, would not be put out of business because they could still be used in an advisory capacity. I asked him who they would advise, and his answer was: “Anyone who wants their advice.”

I was not quite as hesitant when I said it.

You were just as hesitant as that, my friend. Mr. Speaker, the hon. member for Orange Grove is suggesting that those claims consultants could advise the legal profession. Why then, in heaven’s name, do away with those claims consultants who are good enough to advise the legal profession? That is what the hon. member is suggesting.

[Inaudible.]

The hon. member said anyone could be advised by those claims consultants. Now, included in that must be the legal profession.

The hon. member for Pretoria West attacked the hon. member for East London North for saying that this was a bad Bill. Now, the hon. member for East London North did not say all the principles contained in the Bill were bad. He merely said he believed the Bill could do with a certain measure of cosmetic and structural surgery. In any case, the hon. member for East London North is not alone in this thought. We are not alone in this thought. The AA has also expressed this opinion. The AA of South Africa has said it is not happy with the way in which this Bill has been drawn up. The hon. member for Orange Grove, by implication, is not 100% happy. He said the Bill was reasonably well drafted.

The hon. member for Pretoria West then went on to say that we must be sure that these people are well versed in these matters and able to deal with them effectively. This was when the hon. member was talking about claims consultants. As in the case of the attorneys, I agree with him. When I talk to the hon. the Minister about claims consultants, I am not going to talk to him about any Dick, Tom or Harry who it was suggested could come along and claim to be a claims consultant. I want to talk to him about those who are in fact well versed and knowledgeable in that field.

I want to deal specifically now with a section of clause 10, which I believe is grossly unfair because it will cause a number of innocent people untold and unwarranted hardship. Here we have a classic example of throwing the baby away with the bath-water. In fact, the bath-stand, the dummy and everything is being thrown away. It all goes out of the window. Clause 10(e), which inserts a new paragraph (d)(i) into section 23 of the principal Act, seeks to empower only practising attorneys to act on behalf of claimants in respect of MVA claims. As a person who has been associated with the motor trade for many years—and I hasten to add, for the benefit of the hon. the Leader of the House, that I am no longer associated with the trade—I am not oblivious to the reasons why we have these problems. I would like to quote from the recommendations made by the Wessels Commission. I refer to page 18 of the report of the commission. Paragraph 6.8.2.1 reads as follows—

True to the tradition, we saw how the hon. member for Mossel Bay reacted to this recommendation. In his view, since this is a recommendation of a commission, it must be accepted and must become law. This recommendation ties in directly with the proposed new provision in clause 10. In passing, Sir, I want to say that it is significant that in many Bills before the House, it is clause 10 which gives us problems. How many clause tens have we not had that we seem to have a war over? We never seem to be able to get away from clause 10.

In the preamble to this recommendation relating to claims consultants, specific mention is made of the fact that claims consultants are not subject to control measures and that some—I wish to emphasize the word “some”—have indulged in the exploitation of clients. Let me say here to the hon. member for Mossel Bay that I agree with him; the exploitation is tremendous. We know it exists. We must accept this. Nevertheless, this is only the case with some of these consultants, as the Wessels report states. The report states further that at the time of going to press, the MVA Fund and the authorized insurers were dealing with only 16 of the original 31 claims consultants. Furthermore, the report states that several firms had since come into being, but that neither the fund nor the authorized insurers had any dealings with them whatsoever. So, Sir, that puts paid to the statement that any Dick, Tom or Harry can put up a sign and go into business as a claims consultant. I repeat that at the time of the printing of this report, the MVA Fund permitted the authorized insurers in terms of the Act to deal with only 16 claims consultants.

There is no law to prevent any more consultants from opening up businesses.

I am coming to that. The report goes on to deal with tariffs, and the fact that there is no rate laid down in respect of claims consultants, whereas—and I quote—“an attorney receives a minimal amount in respect of attorney and client costs from the claimant”. I have yet to find an attorney who recovers a minimal amount. If one asks an attorney to make a telephone call, one can be sure one will get a bill for a “minimal” amount. Let us make no mistake about that.

R1,86.

One will certainly get a bill for a “minimal” amount in very quick order. Every one of those 16 claims consultants subscribes, at the moment, to tariffs and fees laid down by the small organization that they have.

Do they have a fidelity fund?

And, incidentally, they have a fidelity fund. It is a small one, but they do have a fidelity fund. They subscribe, however, to laid down tariffs, so for heaven’s sake why do we want to put them out of business? Why? It is further stated that the claimant, when dealing through a claims consultant, does not therefore receive his full compensation. I am sorry, but I cannot accept that. I accept that there are instances. Oh yes, I accept that there have been instances in the past. I accept that there have been tremendous problems in this area. That I do accept.

Are the fees of claims consultants taxable?

They have a tariff, but this is by arrangement amongst themselves, but naturally any fee that is paid, when all is said and done, must be taxable in some measure. [Interjections.]

But there is no control.

That hon. member must simply listen. [Interjections.] Do not feather your own nest, my friend.

Order!

Sorry, Mr. Speaker. [Interjections.] Many other submissions are made in this report. Reference is made to the fact that claims consultants concentrate their activities mainly on the non-White population. This is true, but it is also said that “it was testified that in this respect they were rendering a valuable service”. That is also embodied in this report but we seem to have overlooked that fact. I should like to quote the relevant passage in the report—

That is what the claims consultants were achieving and are achieving. Having now dealt with the issues contained in the report, I would like to suggest that not all the apples in the basket are affected merely because of the presence of a few rotten ones or even because of the presence of a large number of rotten ones. There are, I know, still the few good apples in the basket. I hope the hon. member for Mossel Bay is listening to me carefully.

I am.

I think we must accept that it is common cause that claims consultants or, as they sometimes prefer to be known, public loss assessors, have not enjoyed the best of reputations and that, in fact, there are many, many instances of what could be described as unprofessional and unethical conduct on their part when dealing with MVA claims.

Let them put their own house in order.

There are for example the people who go to casualty sections and ambulance rooms of hospitals to tout for business. That is a terrible thing to do, it is a shocking thing to do. The hon. member for Pretoria West has just said by way of interjection: “Let them put their house in order.” This is what happened in the case of the chiropractors. We told them to put their house in order, but in the meantime those who were in practice were permitted to continue practising. That is the difference. Those who were in the country were allowed to continue to make a living. In terms of this Bill the authorities want to take away the living of all claims consultants. I am not saying that a certain number of them should not have their living taken away from them. By way of an amendment I am going to indicate which of them I feel should be permitted to continue to operate. A sword of Damocles will be suspended over them. There is much these claims consultants have to answer for and I believe sincerely that those who are guilty of malpractices should be hounded out.

How?

How! What a ridiculously stupid question! If the hon. member will wait a minute, I will tell him. I do not believe that every single one of these claims consultants must be tarred with the same brush. A number of these gentlemen render a very valuable and honest service and are themselves upstanding, solid citizens.

Hear, hear!

Thank you! There are those who certainly do not deserve to have their livelihood taken away from them with the stroke of a pen.

The relevant clause presumes that all will be put right now because only attorneys will be permitted to act on behalf of claimants. May I ask: Has no attorney ever been struck off the roll for improper or unethical conduct? As I said earlier, there are a lot of rotten apples in every basket.

Mr. Speaker, may I ask the hon. member a question?

Oh, for heaven’s sake! Go on.

Can you name me a single case of an attorney who was struck off the roll in connection with a third-party claim? Secondly, can you name me any instance where a client has suffered as a result of the attorney’s malpractices in respect of a third-party claim?

I can even quote you the case of a medical practitioner who has been struck off the roll in connection with this matter.

Mr. Speaker, I cannot even see the sense of the hon. member’s line of questioning. I am sorry, but I must ignore that sort of question.

You cannot answer it!

It is not a matter of not being able to answer it. It is a ridiculous question. Sir, as I have said, there are rotten apples in every basket. There are rotten apples in the basket of the legal profession.

There are rotten apples in the basket of the medical profession, of the accounting profession, of the engineering profession and, do you know, there are rotten apples in the basket of the claims consultants. What is more—you will never believe this, Mr. Speaker—there are rotten apples in the basket of the motor traders … [Interjections.] … and even in politics we have had a few, not so?

Although it has already been criticized, I think we must take note of the fact that there has been an association of public loss assessors in existence for approximately six years and that this association, albeit small, formed itself for a specific purpose—and I quote—

This is a start to better things. They are trying. It will be argued that the association does not have the disciplinary powers of the law societies but, as I have said, a start has been made. Most important of all, the only people who may belong to this association— this is the crux of the matter—are those who are approved of by the MVA Fund as outlined earlier. I said earlier in my speech that the MVA Fund approved of 16 claims consultants. The only members of this organization are those who were approved of by that fund. Who controls the MVA Fund? The hon. the Minister controls it. I think it must go on record that members of this association were spoken of very highly in evidence that was given before the commission. In fact, it was said that one—whom I shall not name; it is in the evidence—actually prepared his claims better than 90% of those submitted by attorneys. Are you listening, my friend?

No, I have stopped listening.

Don’t confuse him with facts!

Have you stopped? Try this one for size. A certain Mr. Van Niekerk gave evidence before the commission. Mr. H. J. Claassens put the following question to him—

Mr. Van Niekerk answered—

That is the swallow.

Why must we shoot that swallow? Why must we take that swallow and wring its neck? [Interjections.] I do not, for one minute, want anybody to get the impression that I am against attorneys. I am not against attorneys—in heaven’s name. [Interjections.] On the other hand, I do not want anybody to get the impression that I am supporting all claims consultants. I am certainly not doing that. But I want to say that there are men who are rendering an honest service in this field at this moment. There are firms that are rendering an honest service, and at least—I make this appeal to the hon. the Minister—they should be permitted to continue to conduct their businesses until such time as they die out when they can disappear from the scene for ever.

And companies?

We do not have to license any new ones. They can come under the direct control of the hon. the Minister, because they can only be there for as long as they are recommended by the MVA Fund. It is my intention to move an amendment in this regard in the Committee Stage and shall take my argument further then.

I sincerely hope the hon. the Minister will give serious consideration to what I have said because, like my colleague, I feel we must accept that we are depriving innocent individuals of an honest livelihood.

Mr. Speaker, it was quite pleasant and amusing to listen to the non-arguments of the hon. member for Umhlanga. I have some advice for him, Mr. Speaker When next the Malcomess Circus comes to town, he should join it.

I think he must have thought that it is better to have risen and spoken than never to have risen at all. He argues that there is quite a lot of good in this Bill and, as a matter of fact, that the crux of this Bill is acceptable to the NRP.

No, he did not say that.

He said that. The hon. member can read his Hansard. He made this point very specifically. If that is the case, then they should vote for the Second Reading of the Bill and then, in the Committee Stage, vote against those particular clauses which they find unacceptable.

Or amend them.

Or try to amend them. That was the obvious course to follow.

Have you looked at the Order Paper?

You will agree with me, Mr. Speaker, and the hon. member will also agree with me that, on a balance of probabilities, according to their view the Bill is acceptable to them. That is the impression I gained from the hon. member’s speech. [Interjections.] We are living in a very strange world. The hon. member for Umhlanga now seems to say that we argue that because the report of the commission has stated certain facts, we must now accept it per se without any further ado. When we come to the Erika Theron Commission, however, and we say that certain recommendations are not acceptable to us, then we are committing treachery, but here they argue in the same way …

In that instance, yes. [Interjections.]

It just goes to show how logical hon. members of the NRP are. Surely the hon. member must have also considered the fact that the commission had the evidence in front of it of both the arguments in favour of retaining claims consultants or whether only to employ attorneys, members of the legal profession, in cases of this nature. They must have weighed up the evidence on both sides and, in fact, they did weigh up the evidence on both sides. They found that 16 out of the 31 claims consultants who are practising, are refused assistance or acceptance by the fund. More than 50% are not acceptable to the fund.

And you want to write them all off now.

That is quite right. We want to write them all off, because the harm that is being done to people who get injured and to the descendants and dependants of people who get killed, exceeds this probable injustice to those claims consultants to a great extent.

*The position is therefore that the hon. member concedes that there are some of the claims consultants who are guilty of serious malpractices. He also says there are a few who do good work, and that also appeared to be the case in evidence before the commission.

I made my plea just for those few; for those few only.

The hon. member now says by way of an interjection that his plea is for those few only. It is also known that even insurance companies make use of claims consultants to do certain investigation work for them. Those few who are bona fide and who do good work, will always be accommodated in the future.

Where?

In matters relating to third party insurance claims. This hon. member is not an attorney and therefore does not know what this is all about. These people are used by attorneys and by insurance companies and they do good work in that connection.

Mr. Speaker, may I ask the hon. member a question?

Yes, certainly.

If this is the case, then do I assume that the attorneys take the cream off the top, having used the brains of the claims consultants?

That is in fact the crux of the matter, for what is involved here is not the attorneys, but the interests of the injured and the dependants of the deceased persons. That is what is involved. We are, in the main, considering how their interests may best be served. That is what is relevant here and that is what the hon. member cannot understand. He says that the attorneys charge minimal fees.

My learned friend, the hon. member for Pretoria West, then asked the hon. member whether he was aware that the accounts of attorneys were assessed (getakseer). He then very clearly gave us to understand that he did not know what that meant.

He only knows about taxation!

The hon. member does not know in what respect injured persons and dependants of deceased persons are being protected by this very principle of assessment. The hon. member ought to read paragraph 6.8.1.15 at page 18 of the Wessels Report, because it has been found that exploitation takes place, inter alia, as a result of the unrealistic fees which the claims consultants charge for services rendered, and by retaining part of the compensation paid to the representative, and not paying it over to the claimant. That is the sort of thing that happens. The hon. member has even referred to claims consultants who make inquiries at hospitals and at the casualty departments of hospitals. I personally have knowledge of superintendents of hospitals who have come and complained to me about the fact that these people make the life of patients in hospitals absolutely unbearable. This type of conduct is not in the interests of this type of social legislation.

The hon. member for Pretoria West made the point earlier in his speech that this is social legislation, but apart from that the hon. the Minister has the very unenviable task of having to steer very carefully and delicately between the interests of injured persons and the interests of the MVA fund. He must maintain a balance which is in the interests of both these parties.

I think the commission’s investigation and the hon. the Minister’s Bill are both exceptionally successful. I want to congratulate the commission on the good work which it has done in this connection. In particular, I want to refer to the question of special circumstances mentioned in clause 1. Clause 1 amends section 1(1) of the Act so that the definition of “special circumstances” provides that it will not also include any omission, neglect or ignorance. If an attorney therefore errs or is negligent, or is guilty of an omission, it will not have the effect that the injured party or the dependants of the deceased will be in a helpless position, because they now have the right to act against the Provident Fund of the Law Society.

Another aspect which I appreciate, is the amendment proposed by the hon. the Minister that in cases of a dispute, the dispute should not be referred to the hon. the Minister but should be referred to the court. I do not think it is good legislation that interpleader matters in a case should be referred to the Minister for a decision, because it brings about that the Minister becomes a party to the issue.

Next, I want to refer to clause 11(1) which amends section 24(1) of the principal Act. Here there is a return to the provisions of the old Act, namely that the date of prescription is calculated from the date on which the cause of the claim occurred. That covers the case where the injured party dies after a period of two years and as a result of the injuries which he sustained in the accident. In terms of the original legislation, the claim of the dependants arises on the date of the accident, but as it is now being amended, prescription will run from the date of death. I welcome this amendment which the hon. the Minister has introduced.

I also want to refer to the question of the prescription of the claim of a minor child. As the Bill originally read, it would really have been an injustice to the minor child, especially to the orphan or a totally ignorant minor person who is prejudiced as a result of the action of his parents or of his foster-parents in that they did notify the insurance company within two years after the accident that an injury had taken place.

I appreciate that problems are being experienced in this connection by insurance companies who, 10 or 15 years after an accident has occurred, receive claims out of the blue from people who were injured or who were allegedly injured. I realize that the hon. member has a very special problem in that connection, but I am pleased that the common law right which a minor person has, has prevailed in this regard and that the hon. the Minister has agreed that the provision which confers that right on him, will be retained. For the reasons already advanced, it is my privilege to support the Second Reading of this Bill.

Mr. Speaker, we on this side of the House substantially agree with what the hon. member for Brakpan has just stated. It is clear that the hon. member for East London North overreacted the other day when he rose to speak for a few minutes before the adjournment of the debate. The hon. member for Umhlanga has done his very best to come to his rescue today and to get him out of the difficulty into which he put his foot the other day. The hon. member for Umhlanga tried to enhance his arguments, but with very little effect. He was unable to substantiate his purely theoretical arguments. He has obviously disclosed a lack of practical knowledge of the whole aspect. We are dealing with third-party insurance, a vital aspect of life in South Africa. Claims have to be handled of families who have lost the breadwinner and who depend upon the third-party claim from the insurance company to maintain them. Other people, particularly Africans, have no means of assistance and no funds and often have to apply to the Legal Aid Bureau to get assistance. For these people one has to obtain a form of livelihood. It is then no wonder that paragraph 6.8.1.17 of the Wessels Report reads—

That is basically what this Bill is all about. We can find no reason to support the amendment suggested by the NRP with regard to paragraph 124. One of the biggest fears that an attorney has when acting on behalf of a third-party claimant is the question of prescription. It is a nightmare. When the claims, as the hon. member for Pretoria West also knows from experience, are properly filed and the MVA 13 forms have been handed in, one waits for the insurance company. Attorneys do not rush into litigation, but try to settle the matter amicably to see whether a reasonable settlement can be arrived at. I regret to say that some of the insurance companies have the habit of stringing out these negotiations with the deliberate intention of drawing them out over the prescribed period so that they can plead prescription, with the result that the claimant loses out. That is the difficulty.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, before business was suspended I was dealing with the hon. member for Brakpan who had referred to the question of prescription as contained in clause 10 of the Bill. The hon. member argued that this was an advantage in so far as the prescription period is concerned. He cited as an example that if a person were to die as a result of the injuries sustained in an accident, the prescriptive period would then run from the date of death, and that would then give the claimant an extra period to claim the two years in terms of this clause. We have a little difficulty in giving the same interpretation to the amendment contained in this clause as the hon. member for Brakpan has. As the Act stands, it is from the date upon which the claim arose and as it is to be amended it will be the occurrence which caused the bodily injury or death.

There is an amendment on the Order Paper to delete those words.

I am leaving it like that.

In that case I thank you for drawing my attention to it, because I saw a difficulty here which the amendment will now eliminate.

I should now like to refer to the matter that was raised by the hon. member for Umhlanga. I am convinced that the hon. member for Umhlanga either has not read the Bill, or if he has read the Bill…

He has read the Bill.

If he has read the Bill he does not understand it and does not interpreted it correctly. If he was advised by the legal advisers of the NRP I do not think he was advised correctly. The hon. member for Umhlanga made the statement—and I took great care to write down very carefully what he said—that only attorneys are permitted to act. He is wrong, because the Bill does not say that at all. The Bill says—

By whom?

It says by an attorney. The operative word for me is “instituted”. It is not putting the assessors out of business. Let us examine for a moment what the words “by instituting a claim” mean. If one looks at section 25 of the Act, it deals with instituting a claim in terms of which a form prescribed by regulation, commonly known as MVA 13 form, is filled in and filed. In practice only the attorney can file that claim. But there is no definition of the word “institute” in the Act itself. As far as “institute” is concerned, the legal interpretation of “institute” is to institute an action, which is to bring a claim before the Supreme Court or the magistrate’s court, which is done by an attorney. The rules of practice of the Supreme Court prescribe that only an attorney can institute an action in the Supreme Court. The only thing that the claims assessor is restricted from doing at the moment is filing the MVA 13 form with an insurance company. The Act provides, and the rules of the Supreme Court provide, that an individual himself can actually file a claim on his own. He does not need an attorney. He can prosecute his own action. There is nothing to stop an insurance assessor from advising a claimant on how to go about filing a claim. He can still keep his offices open. There is nothing in the Bill that says he must close his offices. There is nothing in the Bill that says he cannot continue to practise as an insurance assessor. The claimant can simply go to this person for advice and the claimant himself can file the MVA 13, the details of the claim, which he then hands in together with the medical report, which is part and parcel of the claim. This is a very serious business, because there is a lot involved. As I have mentioned earlier, the breadwinner has been lost and the family needs support. Compensation is at stake. I am sure that if any hon. member of the NRP has to undergo an operation of any kind, he will go to a doctor or a specialist in order to make sure that he will get the best medical treatment. I believe members of the public themselves should go to a specialist who will give them the best possible treatment. It is clear, even from the report of those who went into this matter. The hon. member quoted at length from the report. However, he forgot to quote from page 18. Well, I am going to quote from page 18, par. 6.8.1.17—

In actual fact, all the assessors are being stopped from doing is simply from taking the MVA 13 and handling it themselves. Once the individual hands in a claim form, the assessor can advise such individual, who can in turn go to the insurance company. The assessor can also go to the insurance company. Only when it comes to the question of actually filing a summons, the assessor or the claimant must, as everybody knows, go to an attorney because only an attorney can file a claim in court, and he needs a power of attorney to do so. Where then are the assessors being put out of business?

I do not blame hon. members for championing any profession, including this one. I have nothing against the profession. Nobody says they are dishonourable people. Not at all. On the contrary. There is no need to compare them with the attorneys, because attorneys are not in question here. It is merely a question of the expert advice that is needed in a case like this.

When it comes to the question of touting, for example, the public is perhaps better protected. As every attorney and the public know, the attorney who touts is subjected to very severe disciplinary steps. He can even be struck off the roll, thereby losing his entire profession. However, these people are, firstly, allowed to tout, because there is no law which prevents them from touting. An ambulance driver, a medical superintendent or anyone else who is near to a victim of a third-party claim, are allowed to do so. So touting takes place. When it comes to the fees, the attorneys! fees are subject to taxation by the Master of the Supreme Court. There is no similar provision regarding the claims of an assessor. All in all, it is obviously a lot of hot air and I think hon. members of the NRP have got hold of the wrong end of the stick.

As regards the Bill itself, it has many provisions which deserve the support of this House. There is no one principle that can be pointed out by hon. members of the NRP as being unacceptable to this House, so unacceptable that the entire Bill should be rejected. They cannot lay a finger on one such principle. The only point they raise is the one in connection with the assessor. I have dealt with the question of the assessors. In my opinion it would be in the interests of the public to go to an attorney who knows how to handle these claims and who knows how to file a form, which is the basis of the entire claim. The attorney will give them the best possible advice. The attorney also very often consults counsel or senior counsel, according to the quantum of the claim, and the public will therefore be properly advised.

The Bill assists in several respects. It also assists as far as this clause is concerned. As hon. members know, the cost of litigation is very high. Therefore, if we look at the provisions of the clause, we see that we are now obliged to follow a certain procedure. Firstly, we are obliged to hand in a medical examination report. Secondly, we are obliged to hand in copies of the reports and, thirdly, we are obliged to allow authorized insurers, at their request, to inspect all the records. The only difference here is that this can now be done before the institution of a summons and before expensive litigation takes place.

It means that after the MVA 13 is filed and the insurance company has decided whether to accept or reject the claim, they are entitled to these particulars which will assist them to assess whether or not they will accept or reject the claim. It is no different to the state of affairs obtaining after a summons has been issued. Then, in terms of the pleadings before the Supreme Court, and in terms of the rules of the Supreme Court, the other side, the insurance company, will always request these very particulars, which then become part of the pleading and part of the case itself.

All in all, nothing said by hon. members of the NRP persuades us to change our mind with regard to the standpoint which was so well motivated by the hon. member for Green Point and by the hon. member for Orange Grove. In the circumstances, the amendment the hon. member for Umhlanga suggested he was going to move at Committee Stage does, I believe, not take the matter any further.

Mr. Speaker, I should like to express my appreciation to the hon. members who took part in this debate. We know that there is no politics in this legislation and that our only intention is to make legislation of this kind as effective as possible. It is also my wish to have only those provisions in the legislation which are good and which are in the interests of the various parties and then to make changes where it is necessary. The hon. members of the NRP, especially the hon. member for East London North, objected to certain aspects of the Bill. I must honestly say that the objections he raised are not valid. The hon. member mainly objected to the additional invoices and documents which have to be handed in. I said by way of interjection that the position was now being simplified to such an extent that the seller and the buyer will be able to notify the insurer of their transaction jointly, on one little form. This is undeniably going to eliminate much of the work which had to be done in the past. Formerly, the seller had to inform the insurer of the sale of the vehicle. Then the buyer, too, had to go and take out fresh insurance. From the nature of the case, this involved much more work and trouble than this procedure which is now to be introduced.

It was also said that there would have to be liaison with the garages in the future. The fact of the matter is that the insurers, the insurance companies, have something like 10 000 agents all over the country. The forms which have to be handed in can be handed in to the 10 000 agents of the various insurers to inform them of the sale of a vehicle. Those forms can be handed in either by the seller or by the buyer.

The forms have to be returned to the insurance companies.

Yes, of course they have to be sent to the insurance companies, but that is what the agents are there for, after all. They are there to liaise with the insurance companies.

The hon. member also made a point of the fact that the seller would not be able to recover the value of his third party insurance. That point has in fact been answered. Surely the seller of a car is not so ignorant or weak that he will not see to it that the value of the third party insurance is included in the selling price. If I am selling a car for R1 000, and the value of the insurance I want to recover is R10, I tell the buyer that he has to pay me R1 000 for the car and R10 for the insurance. [Interjections.]

What happens if the seller is offered R1 000, and the buyer says to him: “Look, your car is worth R990.” How does the seller know … [Interjections.]

Then I do not sell the car to him. Then I have to look for a buyer elsewhere. It is really simplistic to argue that the seller will not be able to make a deal under which he recovers the value of the third party insurance, for in terms of the new procedure it is an asset in the hands of the buyer. [Interjections.] To argue that the seller will not be able to insist on a deal in terms of which he can recover the value of the third party insurance in this way is erroneous, because it is an asset. Under the new procedure it is an asset in the hands of the buyer.

You cannot sell your politics and you cannot sell your cars either. [Interjections.]

I do not know whether I heard the hon. member correctly, but if my memory serves me, he then made an attack on garages. He said that garages would now exploit this position because the garages would indicate that a second-hand car costs as much as it did because it was in fact insured, while one would find that one would still have to pay an additional amount for the insurance.

I said “certain ‘skebengers’ ”.

No, the hon. member cannot have his cake and eat it. If the first argument is valid, the second argument cannot be valid, because it is completely contradictory. If the garage is alert enough to collect the third party insurance, then the man who is selling his car must also be alert enough to get the value of that third party insurance.

No, it does not work that way.

You had better keep to education. [Interjections.]

No, do not let him go back. [Interjections.]

Order!

What I find disappointing is that it would seem as if the hon. member is only looking for all the objections and has not looked at the advantages which this new arrangement holds. If he reads the report of the Wessels Commission, he will find, among other things, that one of the major reasons which are quoted to indicate why we should tie the third party insurance to the vehicle rather than to the person is that under the old dispensation, we had so many cars which were not insured. A car could be sold without any third party insurance being taken out by the person who was buying the car. That was one of the major reasons. However, he is quite blind to that. He does not see the advantages of this scheme. I suppose he only wants to be an effective Opposition and to find fault with the legislation which is introduced here.

Thank your new allies too, Lourens.

I have already expressed my thanks for the support I have received. The members of the PFP who took part in the debate adopted a very sensible attitude today.

Who were they?

The hon. member for Orange Grove and the hon. member for Hillbrow. The hon. member for Orange Grove replied so effectively to the four points in this amendment—and one has to give him credit where it is due—that there is no need for me to say anything about it.

Your moment of glory!

The hon. member for Umhlanga spoke mainly about the consultants. According to my information, there are only 11 active consultants, so it is quite erroneous to speak of hundreds of people who are now going to lose their livelihood because of these events. We are going so far as to say that they may continue the work they are doing and that they may complete that work. This we are doing. However, this is a recommendation by the Wessels Commission, and I naturally attach great importance to it myself. I believe that evidence was given by all the various interested parties and that the committee made this recommendation accordingly. However, I can also say that we have experience of many problems we have had with these consultants in the past I do not want to sling mud today and to say that they are all equally bad, because there are good ones among them. However, the fact of the matter is that they need not have any qualifications whatsoever. Anyone can profess to be a consultant of this nature and act on behalf of the claimant. For this reason, we encountered many examples of irregularities. We should like the procedure pertaining to compulsory motor vehicle insurance to be streamlined and disciplined. For that reason I think it is a good thing that we are discouraging these people by means of this legislation. The hon. member for Hillbrow gave us an interpretation of the wording of the clause concerned. His interpretation was that they were not being completely excluded. Although they will still be able to play a role, their role will naturally be smaller. The claim, however, has to be instituted by the claimant himself. One of the major reasons why I think we are acting wisely in leaving this procedure to the legal profession is the fact that the consultant who is not a lawyer will only be able to act as a negotiator. He will only see whether it will be possible to come to an agreement, whether the insurer and the claimant will be able to reach a settlement If they cannot reach a settlement, he will not be able to take any further action himself. In many cases he will then leave the matter at that and lose interest in it. From the nature of the case, it is not in the interests of the claimant or of the insurer that those circumstances should arise.

Mr. Speaker, may I ask the hon. the Minister whether he is of the viewpoint, therefore, that these claims consultants can in fact operate precisely as they are operating today with the exception that, instead of their handling the claims in themselves, they will now hand it to claimants to hand in to the insurance companies, and that they will in fact be able to remain in business?

That is in effect so. According to the wording of the clause it is so. However, we know it will not work that way in practice.

No, because they will no longer be handling the money.

In practice it will not work that way, because they will no longer be in a position of advantage, as they used to be, with regard to the free handling of the matter. Therefore I believe that although it is correct to say so on paper, it will not work that way in practice.

I think we should leave the matter at that. Let me just add that I am aware of the fact that several hon. members, on this side of the House as well, have shown themselves to be favourably disposed towards these consultants and the position they have occupied up to now. It is true that some of them, and especially the good ones, will be prejudiced by the line of action laid down in this legislation. It is inevitable that the good man in any profession sometimes has to pay for the deeds of weaker brothers. If we are interested in the legislation itself and in its practical implementation, I think we are going in the right direction here.

They also do a lot of other assessing.

Yes, that goes without saying. This provision only relates to third party insurance.

If hon. members look at page 162 of the Order Paper, they will see that I am going to move certain amendments. However, allow me to refer first to page 158, on which notice is given of an amendment to be moved by the hon. member for Pretoria West. That amendment relates to clause 8 on page 9 of the Bill. It is intended to clarify the wording at the end of paragraph (b) by omitting the words “and over a period as specified in the undertaking” and replacing it with “as agreed upon or directed by the court”. In this way, provision will also be made for cases where an agreement is entered into between the claimant and the insurer. I think this is an improvement, therefore I am prepared to accept that amendment.

I have also given notice of my intention to move an amendment to clause 10, and I should like to deal with it at this stage, as I think the reason for it will then be clearer. The hon. member for Brakpan referred to it. Clause 10(1)(e) provides for a paragraph (c) to be added to section 23 of the principal Act. It is the intention to omit the words “refuses or fails” from the proposed new paragraph and to insert the words “unreasonably refuses or fails”. The reason why we are doing this is that I have come to the conclusion, after consultations, that it is not a sound procedure for the Minister to adjudicate so often in matters of this kind. I have had the wearisome task in the past of considering applications for condonations where prescription had taken place. Mr. Speaker, I can assure you that I have been snowed under by such applications at times. It imposes a tremendous additional burden of work on the Minister himself, while I believe that this is a matter which should rather be ironed out in court. For this reason, we changed the Act a year or two ago to provide that such condonation should be handled by the court and not by the Minister. We felt that the last part of the proposed subsection should rather be removed. This is the part which provides that the Minister may adjudicate and that the proposed subsection should begin by referring to a person who “unreasonably refuses or fails”. In other words, if a person unreasonably refuses or fails, recourse may be had to the courts, and the courts may decide whether or not he has unreasonably refused or failed. As a result of this amendment it has been necessary for us to amend the whole proposed subsection a little lower down. I just want to point out that on page 162 of the Afrikaans Order Paper, a printing error occurs in paragraph (6). That paragraph should read—

At the moment the figure “(i)” appears there—

This means that I shall not be able to accept the amendment which will be moved by the hon. member for Umhlanga.

Another amendment is printed in my name on the Order Paper with regard to clause 11. This is the clause to which the hon. member for Hillbrow referred to a short while ago. We had intended removing the words “the date upon which the claim arose” from the legislation and inserting the words “the date of the occurence”, i.e. the date of the accident, for the purposes of prescription. I received representations from the Association of Law Societies—the hon. member for Pretoria West was involved in this—and subsequently we had another look at this matter. This is also the clause to which the hon. member for Brakpan was referring when he said that it was theoretically possible—we should not like to prejudice anyone—that an agreement could be reached with regard to a claim resulting from an “occurence”, the word we wanted to insert into the Act. He said it was possible that an agreement or a court action arising for such an occurence could be concluded. At a later stage, something may happen, such as the death of the breadwinner of the family, as a result of which a further claim may arise. If we retain these words which we intended to insert here, i.e. “the date of the occurence”, it would mean that the further claim which would arise would have become prescribed.

That was the point we were making.

Such a claim would have become prescribed, and consequently I have decided—I think this is a valid point and one could always examine the matter again if it should be necessary—rather to retain the present wording of the legislation for the time being.

The second part of the amendment in clause 11 relates to minors and provides that all the words after “curatorship” in line 31 be omitted. I originally regarded the words after “curatorship” as a very reasonable and equitable new insertion into the legislation. I say this because it may happen that a minor who is three, four or five years of age is injured in an accident. The claim of that minor does not become prescribed before he is 21 years old, i.e. not before he attains his majority. If no one, neither the insurer nor anyone else, is aware of such an accident or occurrence, this means that the minor will have the right to go to court 16 or 18 years later and to institute a claim. Such a claim will not have become prescribed, and where is one going to find the details of such an occurrence when 16 or 18 years have elapsed? This is why we thought it was very reasonable and equitable to lay down that notice of such an occurrence has to be given to the insurer—there is no obligation to institute a claim—so that the insurers are able to examine the merits of the accident at that stage, while the events are still fairly fresh …

Within what period?

If notice is given of such an occurrence or accident within a period of 24 months, it means that the period of prescription still lasts until the minor becomes 21 years old. In other words, prescription does not take place, but notice has to be given of an accident. I originally believed that this was a fair and reasonable proposal, but there is one aspect of it which has always troubled me, and I have now yielded on this point after the discussion of the matter by the Law Society. The important consideration to my mind is that this notice, within the specified time after the occurrence, has to be given by someone else. If this someone else, whether the parent or the guardian—if the minor does not have a parent or guardian, another person has to do it on behalf of the minor—fails to give notice, the minor loses his claim. I realized that the other disadvantages in regard to the period of time which elapses are still valid, but however, that may be, for the purposes of the legislation which is before the House at the moment, I felt that it was better to leave the position as it was.

I should not like to prejudice the minor by placing him in the position where he will not be able to pursue his claim when he attains his majority, simply because of someone else’s negligence. I shall therefore move those amendments in the Committee Stage. For the present, I think I have said enough.

Question put: That all the words after “That” stand part of the Question.

Question affirmed and amendment dropped (New Republic Party dissenting).

Bill read a Second Time.

Mr. Chairman, I move the amendments printed in my name on the Order Paper, as follows—

What this is about is basically the definition of “air navigation facilities”, with special reference to aids. The proposed definition in clause 1 provides for the accommodation of aids in a building or attached to a structure. My proposed amendment will amend the provision in a way so as to make provision also for the fact that an aid need not necessarily be accommodated in a building or attached to a structure only, but may also occupy premises in its own right.

Mr. Chairman, I think it is a clear definition and therefore an improvement, and I am prepared to accept the hon. member’s amendments.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 2:

Mr. Chairman, I move the amendments printed in my name on the Order Paper, as follows—

In the international conventions, especially those of Montreal and The Hague, a definition is given of the concepts of “in use” and “in service” relating to an aircraft. I think that this clause deals specifically with a certain action applicable to the safety of an aircraft as well as to the good order and discipline of the circumstances in the aircraft. I think the concept of “in flight” is very restrictive. The concept of “in service” will also provide for the period during which an aircraft is being prepared and for the period which extends from the time the aircraft has come to a standstill up to the time it is prepared for a subsequent flight.

Mr. Chairman, the concept of “in service” proposed by the hon. member is a somewhat wider concept than the concept of “in flight” which we had previously. I think it is an improvement and I am prepared to accept the amendments.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 3:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

Clause 3 provides, inter alia, for the insertion of a new section 2L(4) in the Act. At the moment the relevant paragraph reads—

We want to substitute the word “in” for “after”. It is in line with the Treasury and Audit Act, for the Minister of Finance not only to be consulted, but to have to give his consent.

Mr. Chairman, there is one item in this clause on which I should like to have a bit of clarity from the hon. the Minister. The proposed new section 2F(4) on page 15 of the Bill reads—

Furthermore, I should also like to refer to the proposed new section 2F(1) which refers to the searching of a person at an airport, aerodrome or heliport. The place where the search may take place is restricted to an airport, aerodrome or heliport. However, when one looks at subsection (4), it seems it could take place at any place in the whole wide world, certainly in the Republic of South Africa. Is it the intention of the hon. the Minister that this should be so, because the clause seems to us to be very wide indeed. Perhaps the hon. the Minister intends it to apply not only to an aerodrome, airport or heliport, but also for example to an air navigation facility in terms of the new definition, which reads “where baggage may be stored”. I should like a little clarity on this because the definition seems to be very wide indeed.

Mr. Chairman, the intention is as it is expressed there, i.e. that it may take place anywhere. I am fully aware of the fact that this is a very wide concept, but hon. members will understand that it may be necessary to conduct an investigation at a place other than those defined in the Bill. That is why it was felt after consultation that we should rather retain the wide concept, otherwise one is going to restrict this to the aerodrome or to restricted areas, while it may possibly be necessary to conduct an investigation at a place outside that defined area for which the Bill makes provision. For that reason it is the intention to render it possible to have the investigation take place anywhere. I shall be pleased if the provision can remain as it is.

Mr. Chairman, I realize what the difficulties are the hon. the Minister has in this connection in that the operations of a saboteur or a hijacker would be very difficult to control. His operations might well commence outside an air navigation facility, airport or heliport. However, would it not be true, according to our criminal code, to say that if any illegal action is going to take place, there is adequate protection in that the police could take action if they believed that any crime is about to be committed? This clause gives a wide variety of people authority to search a building anywhere without a warrant. We find this very difficult to support. We know the hon. the Minister’s difficulties. The definition of an authorized person is very wide because it includes, for example, members of the Defence Force, who can search a building without a warrant. Already there is provision in our legislation for people to do this under certain circumstances. We do not necessarily believe that this provision should be included in this clause. I particularly want to draw attention to how very broad and far-reaching this clause is. At the very least I want to urge the hon. the Minister to give us some sort of assurance that it will be used with a great deal of circumspection.

Mr. Chairman, I think the fact that this is un authorized person already affords a measure of protection. I agree that one must ensure that people are not given too free a rein to do things. For that reason I respect the hon. member’s feelings on this matter. However, I give him the undertaking that I shall look into this matter carefully again, before I go to discuss it in the Other Place, to determine whether it is absolutely essential for us to keep the scope of the clause as wide as it is and whether it would not be possible to insert a provision which would narrow its meaning. If I am unable to do so, I shall contact the hon. member and I shall give him an opportunity to discuss the matter with me again. In any event, I want to assure him that this authority will be used with great circumspection.

Mr. Chairman, I want to thank the hon. the Minister for the sympathetic manner in which he has handled this question. Of course I accept his assurance and I am very grateful indeed that he is going to submit the matter to his law advisers to see whether he can narrow it down a little bit.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, it was with great pleasure that we took cognizance of the unanimity in this House today, and we are very pleased that this legislation can be placed on the Statute Book. With the effect which it will have, it is a continuation of the Aviation Act of 1962. It is important legislation which gives effect to the various conventions which already exist. Reference was also made here to the Tokyo Convention of 1963. The legislation has been brought into line with the accepted practice in regard to the acts committed on aircraft. It is of particular importance to take cognizance of the provisions of this convention. I should like to draw attention to article 16 of this convention, and I am quoting from the English text—

In this way I also know that our aircraft enjoy the necessary protection at foreign airports. It is also an exposition and an encompassing of The Hague Convention of 16 December 1970. This convention took place with a view to the suppression of the hijacking of aircraft. South Africa was a participant in the convention, which was signed by 51 countries. What is important here is article 3—

This is very important to know, for at that stage the aircraft is still on the ground. The article continues—

When the aircraft has landed again—

This is in turn an amplification of the Montral Convention which was also signed by South Africa on 23 September 1971. The aim of this convention was the suppression of unlawful acts threatening the safety of civil aviation. This is in fact where we find the origin of this afternoon’s amendment, viz. the 24-hour provision.

If we look at this legislation as it is going to be applied, we are very grateful for all the research which has been done in this regard, particularly by Mr. Clarkson of the department. We are dealing here with the protection of an industry. We have now taken precautionary measures. On the one hand there are preventive measures dealing with the access to aircraft and airports, and on the other hand there are contingency measures with a view to emergency situations, and so on. However, there are also follow up measures which, inter alia, make provision for a board of inquiry.

If we consider what happened six years ago when we experienced our first aircraft hijacking, we realize how necessary legislation of this nature is. When that dramatic hijacking occurred, a cold wind blew through this House. That was when we heard of the first hijacking in the history of aviation in our country. The aircraft in question was a Boeing 727, an aircraft which at that time cost R3,7 million.

But it is not only the purchase price of an aircraft which is important, but also the fate of the passengers and the crew members. Fortunately our aircraft landed in a friendly country, Malawi, thus enabling Capt. Fleming, through restrained action, to prevent any unfortunate incidents occurring.

It is the hon. the Minister and the people involved in the taking of safety measures, who will realize what this legislation really means. We must also take into consideration that the purchase cost of our entire fleet of aircraft at present amounts to R414,25 million. R414,25 million is therefore the value which is going to be protected by this legislation. If we note, as I have already said, that the Boeing 727 in question was purchased for an amount of R3,7 million, we realize that the same aircraft would cost considerably more today. Unfortunately I do not know what such an aircraft costs today.

I can mention, however, that a Boeing 737, which is considerably smaller, cost R2,75 million at the time, while the same Boeing 737 today costs R8 million. The price of a Boeing 737, therefore, rose from R2,75 million to R8 million. The Airbus recently purchased by the Airways, cost R21 million. Today the price of an Airbus is R25 million. The Boeing SP cost R26,5 million at the time. I do not know what the same aircraft costs today. The Boeing 747, which cost R18 million at the time, today costs R45 million.

Apart from the importance of these safety measures, the importance of regulating and safeguarding our capital expenditure in matters of this nature, is also apparent now. That is why it is a great pleasure for me, on behalf of hon. members on this side of the House, to pledge the necessary support to this Bill. We hope that it will indicate to everyone that we in South Africa are co-operating in an organized manner and will allow no unfair and unlawful deeds here.

Mr. Speaker, I think it is very fitting that the hon. member for Rosettenville should have conducted this Second Reading debate on this legislation. After all, we know him to be a person who takes an intensive interest in transportation, and all its ramifications. The hon. member pledged his unequivocal support to this Bill, and I merely wish to express the hope that his great expectations in regard to the workings of this legislation will be realized.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, when you reported progress last night and requested leave to sit again, I was busy replying to a matter raised by the hon. member for Berea. I pointed out, inter alia, that there were 107 000 contributing members of the Sick Fund, that there were 214 000 dependants, and that there were also 40 000 pensioners. That gives a total of approximately 360 000 persons entitled to the benefits of the Railways’ Sick Fund. Hon. members will therefore appreciate the vast scale of the Sick Fund and the need to do everything possible to keep the costs of the Sick Fund as low as possible. It is in our own interests, too, to keep it as low as possible: at present the contribution to the Sick Fund by the Railways is 120% of the members’ contributions. In other words, if a member pays R1, the Railways pay R1,20. During the year 1976–’77 the Administration’s contribution to the Sick Fund was R16,5 million.

Mr. Chairman, I wonder whether I could ask the hon. the Minister a question in connection with that figure. I should like to ask whether the hon. the Minister could indicate to us what percentage of that figure of R16,5 million was actually spent in connection with medicines.

Mr. Chairman, I do not have the figures available at this stage, but I shall try to find out and let the hon. member know.

*What I can tell the hon. member, is that apart from the 55 chemists of the Railways’ Sick Fund, we have agreements with 286 private pharmacists. These private pharmacists have concluded contracts with the department for the supply of medicines to the Sick Fund’s beneficiaries at various centres. During the year 1976–’77, we paid R4,44 million to these private pharmacists for prescriptions executed. That can serve as an indication to the hon. member. As I have said, we strive as far as possible to keep the costs as low as possible not only of the Sick Fund, but also of the Railway Administration. We find that on average, the prescriptions executed by the Railways’ Pharmacy Department cost R6,33—and in fact this figure is confirmed by the figures; however, the cost of prescriptions executed by the private pharmacists to which I have just referred, amount on the average, to R10,28 per prescription. That means that the average cost per prescription is 62,4% higher from the private pharmacists than from the pharmacists of the S.A. Railways. The hon. member for Berea said that he would continue his speech later on. I want to tell him that it now appears that the Railways do have authority to institute a Sick Fund. A certain measure of doubt arose about the question whether, by implication, this also included authority to have pharmacists of this nature. The pharmacists employed here are all licensed and qualified persons. Nevertheless, we felt that to put everything beyond question, we should incorporate this provision in the Bill. I am not incorporating this in the Bill because I want to go and open a chain of dispensaries. That is by no means my intention. All I want to do is put the Railways’ authority to have such dispensaries beyond question. In future we shall continue exactly as we have done in the past. The procedure we have followed in the past has been to have departmental dispensaries whenever there are large concentrations of Railways employees. As a result we have, as I have indicated, a total of 55 throughout the country. They are at places where there are large concentrations of Railway employees which justify such dispensaries. However, where there are no such departmental dispensaries, it is our practice to conclude agreements with private dispensaries in order that the necessary prescriptions may be executed. I have already referred to that. We can continue with that procedure. But I cannot guarantee today—I am certainly not prepared to do it—that we are going to limit the number to those 55.

That is the point.

But that has been the point since 1913. What new aspect has been introduced today? Richards Bay, for example, is becoming a city where, in all probability, there will be a large concentration of Railway employees in time to come. Does the hon. member not want me to have authority to open a departmental dispensary there, too, such as I have in other parts of the country and with which I have effected vast savings for the Sick Fund and for the Railways? I am not talking about rands now. I am talking about millions of rands which are being saved in this way. That is all I am interested in. I also want to give hon. members the following assurance. I do not know what they are so concerned about. Evidently a message has been sent to all pharmacists in the country to the effect that they should send telegrams to the MPs. The telegrams are streaming in here at Parliament today. All the telegrams have the same wording. They object to this clause in the legislation. But if telegrams are sent to MP’s in this way, I regard that as the poorest manner of protest. I regard it as contempt of this Parliament if, without reference to the merits of the case, objections are advanced solely in this manner and MPs are expected to react. I want to tell hon. members here and now that they need not bring these telegrams to me. They make no impression on me.

However, I want to give them an undertaking at this stage. My colleague, the hon. the Minister of Health, has also spoken to me because he is also under pressure from the Pharmaceutical Society which, in the nature of things, would like to look after their interests. I do not blame them for that. It is only human. Therefore I have given my colleague, the hon. the Minister of Health, the undertaking that I shall discuss this matter with him and, if necessary, also with other bodies and persons. He and I will settle the matter between us, or see to what extent we are able to settle it. I shall perhaps be prepared to do something in the Other Place if they can convince me, or if it is decided that something should be done. But at the moment I can see no reason why we should deviate from the provision which we are now inserting in this legislation. It is only there to enable us to continue with the procedure which we started in 1913. I want to give hon. members the assurance that we handle only prescriptions in these dispensaries. We do not sell cameras or cosmetics or anything of that sort there. In those dispensaries, we handle only prescriptions. That is all. What is more, I want to give hon. members the assurance that a railwayman cannot buy a packet of this or a little bottle of that there. What he gets in the Railway dispensary, he can only obtain on prescription from a doctor. No members of the public are served there at all and the railwayman is only served on the strength of a prescription. I do not know why the hon. members are objecting. They will probably continue to raise their objections. But that assurance I can give them.

The hon. member for Orange Grove has indicated that he thinks I want to compete with the private sector. If they regard this as competition with the private sector, I want to point out that the Railways have been doing this since 1913. Nor do I want to do anything more than I have done up to now. All I want is the right to do these things in the interests of Railway people, the Sick Fund and the Railway finances as such. But if the hon. member regards that as competition with the private sector, and does not want me to do it, then he must also argue that I may not have a cafeteria at Salt River.

Can you do it more cheaply?

Indeed I can. I have just said so.

Are you able to do it more cheaply?

Of course! The Railways are saving millions of rand by having their own chemists.

*To return to the hon. member for Orange Grove: If he thinks that in this way I am competing with the private sector, he must also say that I should not have cafeterias at the workshops.

No, it is not the same.

But of course it is the same.

The issue here is a professional service.

If the hon. member wants to be consistent in his argument, he must tell me that I may not have workshops where the wheels of trucks are made and where diesel locomotives are repaired.

That is an integral part of the workshops.

Have you attorneys in your employ to help the staff?

All I want to do is act in the interests of my own people in this connection. As I have said, I am not supplying anything to private people. This is a service I am rendering exclusively to my own people, and I think I must carry on with it.

That is all I have to say at this stage. I want to conclude with the undertaking that in my negotiations with my colleague, the hon. the Minister of Health, I shall look into this matter carefully before I go to the Other Place with this legislation.

Mr. Chairman, I am grateful that the hon. the Minister is at least going to talk to his colleague, the Minister of Health, about this, because I think we are dealing with a very serious principle here. I think that the hon. the Minister, with respect, is taking a very dangerous line in his reasoning. When I opened discussion on this clause, I stated that I thought that this intrusion into private enterprise was quite unwarranted. The hon. the Minister said—and I quote his words—“I am providing a service for my own people.” He also claims that he can do it cheaply. I am unable to argue on the merits of whether he can or not, but I wonder whether full overheads and all that sort of thing are taken into consideration when the costs are calculated. The hon. the Minister might well say he is going to look after his people on the Railways. I can say I am going to open a supermarket and sell groceries because I can do so more cheaply than anybody else. I can say that in doing so I am just looking after my own people, the Railway employees; I can say I am providing them with a service. With the best motives in the world, I think the hon. the Minister must realize that this is, in fact, a very dangerous and slippery path he is following. One can always justify it on the basis that it is cheaper, but by doing this one is undermining the whole principle of the private enterprise system.

You are undermining the Railwaymen.

Not at all. It is in the interests of the Railwaymen too that the private enterprise system persists. If one wants to follow the socialist path, one must decide to do so, but one must appreciate exactly what one will be doing in that case. It is a very slippery path indeed. The hon. the Minister is talking about 350 000 South Africans. If he was merely saying that he was going to open dispensaries in areas where no other pharmacists are available, I would have been quite happy to go along with that. However, he says he is going to operate these dispensaries wherever there are great concentrations of Railwaymen. If various other industries decided to do the same thing, they could just about put the pharmacists out of business. I frankly believe the pharmacists are members of a highly responsible profession which operates successfully. I would not like to see them put in a situation where they are getting this sort of unfair competition from the State, and I believe it is unfair competition.

What has the position been up to now?

Not very good.

The position up to now, as the hon. the Minister has explained himself, is that at one time he was dealing with, I think, 286 different pharmacists. Now he manages to do the work with 55.

There are 286 pharmacists. In addition, I have 55 of my own.

You have 55 of your own in addition to the 286. There is no doubt at all that those 55 pharmacists are doing work that could well be handled, in most instances, by private pharmacists.

I wanted to pursue the argument the hon. the Minister used about just looking after his people. He quoted the example of a works canteen in the Railways. He said that is possibly competing with private enterprise. Not at all. It is ordinary practise for any commercial undertaking to see that the ordinary needs of its employees are looked after during working hours. However, he is going far further than that. He is, in fact, competing with private enterprise. He is saying he could follow it through to any lengths, for instance by providing haircuts, and he could provide special Railway-employed hairdressers to do these haircuts. This is not, however, the function of the Railways. The hon. the Minister knows the Republic of South Africa Constitution Act as well as I do. The function of the Railways is to run railways, harbours, airways and pipelines, and not services of this kind. When private enterprise is in a position to provide a very efficient and competent service, they should, in fact, be allowed to do so. If, on the other hand, the hon. the Minister is saying that the pharmacists do not provide an efficient and competent service, and if he is saying that they are, in fact, taking the public for a ride, then we are in a completely different ball game.

I frankly do not believe that the Railways Administration is able to provide pharmaceutical services that much more cheaply than private enterprise. It still has to be proven to me. I would like to see facts and figures, taking into consideration things like overheads. He quoted figures of, I think, R6,33 per prescription against approximately R10 per prescription, but I wonder how those figures were calculated. However, I want to make very clear that even if private enterprise is more expensive, the hon. the Minister could perhaps talk to the hon. the Minister of Health about regulating the pharmacists. I do not know whether the hon. the Minister is telling us that they are taking a lot of profit. I do not think this is true because many pharmacists that I know of are struggling to keep going. This sort of thing, if continued right through the Public Service, could just about knock them right out of business. I think it is a very dangerous thing indeed that the hon. the Minister is doing. I asked merely for an assurance that he would not be extending this at all—I know he is doing quite a lot of this already—and for his acceptance of the principle that if it could be done by private enterprise, they should be allowed to do it. However, he has simply not given us this assurance. He says he will not give any guarantees. In fact, he said the opposite when he stated that, if necessary, he would extend it further. In this respect we are very unhappy about this clause indeed.

Mr. Chairman, I think the hon. the Minister made it perfectly clear here—and I think he was very reasonable—that he would take another look at this clause. But I think that we should also look after the interests of the railway workers in this country. For years those people have had a condition of service which has been of great benefit to them. Now the Opposition wants to deprive the railway workers in South Africa of that condition of service is in an indirect way and without consulting them. Who is the mouthpiece of the railway workers in South Africa? Is it the hon. members sitting on the opposite side, or is it the Railwaymen’s representatives in their trade unions and staff associations? Now I want to ask those hon. members this: Have there ever been representations from any of those mouthpieces, the staff associations of the Railways, to deprive railwaymen of this right? On the contrary. If we were to do the rash thing today and take those privileges away from them, the railwayman would be bitterly dissatisfied, because it is a right, a condition of service which they have had over the past 50 or 60 years. The hon. members on the opposite side now want to deprive them of that willy-nilly.

That is not the point of the argument.

Those hon. members who now support the idea of depriving the railwaymen of this service, are the same people who shouted to high heaven during the budget debate when tariffs had to be increased because the Railways had to find ways and means of covering its expenses. Today, however, when the hon. the Minister makes it perfectly clear here that it would cost the Railways hundreds of thousands of rands more, the hon. members advocate something like this in this House. The hon. members cannot always have their cake and eat it. After all, the hon. the Minister has given the assurance that as far as the existing pharmacists or the dispensers of medicine are concerned, he intends accommodating them by legalizing the measure. Where there is a large concentration of people necessitating that right, this may be utilized to the benefit of the railwaymen to keep their medical expenses as low as possible. Surely we all know today that medicine is one of the major sources of expenditure.

Today medicine is an expensive item which forms part of the cost of living. If we can succeed in keeping the cost of living down for approximately 300 000 people, I shall most definitely never advocate here in this Parliament that the cost of living be increased for those people. In my view the hon. the Minister was very reasonable when he said that he would investigate the matter. If this is an existing privilege these people have been enjoying, I want to advocate its retention for those people. The hon. member says it is a social service that is being rendered and that it is being rendered in competition with the private sector. Then what about the dry canteen which the police have, and what about the facilities which the Prisons Service has for its members in its messes? Surely that, too, is in competition with private enterprise. Those practices, according to the hon. members, may be allowed, but in the case of the Railways it may not happen. The pharmacists rendering those services are trained people. They are not quacks. They are as well trained as any other pharmacist. It is, in other words, a really outstanding service which is being rendered. My plea is that the hon. the Minister give serious consideration to the retention of the existing position, and in this regard I am pleased to support the hon. the Minister.

Mr. Chairman, last time I spoke in the House I made reference to the “sting in the tail of the scorpion” clause, and today I want to refer to this clause under discussion as the “mamba” clause, because the mamba strikes very quickly and leaves one very dead indeed. This clause was going to pass through the House very quickly and could have left a lot of pharmacists in South Africa—in terms of their businesses—almost dead.

I want to motivate a case today which I believe should come to the attention of the House, and I want to do so fully because I think it is important, especially in the light of some of the comments made firstly by the hon. the Minister and secondly by the hon. member for Vanderbijlpark who has just resumed his seat.

He should have stayed in his seat.

I just want to recap on the issue I raised yesterday. The point of the matter is that the 55 Railway pharmacists, to whom the hon. the Minister referred, are qualified to the same degree as any other pharmacist. The hon. member for Vanderbijlpark is quite right on that score. They are practising in the interests of Railwaymen throughout the country. Nobody disputes that and nobody wants to take away that right. I do not know where the hon. member got that idea from because nobody on this side of the House made such an allegation. Yesterday, when we started this discussion, we asked the hon. the Minister—and Hansard will show this—to motivate his case so that we could get some idea of what he had in mind.

I now want to deal with the question of communication in this matter, because I believe this lies at the heart of the matter. May I ask the hon. the Minister of Transport for a reply to a question across the floor of the House now?

The hon. member may put his question. The hon. the Minister will answer it when he replies.

Fair enough, thank you. I should then like the hon. the Minister to answer certain questions. I should like him to tell us when the Department of Health and the Minister of Health were made aware of the legislation; when he had discussion with the Pharmacy Board which is, after all, the statutory body which looks after matters of this nature and administers the Pharmacy Act; and whether he consulted with any of the pharmaceutical associations or, in fact, with anybody in the enterprise of pharmacy before he introduced the present amending clause?

The hon. the Minister made reference to telegrams, and I am going to presume to answer his question about why he received those telegrams. I have reason to believe in the light of information that the Pharmacy Board has been trying to seek an audience with the hon. the Minister since November of last year, that it has, in fact, written on at least three occasions to his department and has not, as yet, had the courtesy of a reply.

Under circumstances such as these, and with the pace at which this Bill was going through, the question that arose was whether, in fact, it was the intention to write this into the legislation and then to have had an audience with the Pharmacy Board and to have said to them: “Gentlemen, I am sorry, but the law is now changed. We can discuss the problem, but we have to discuss it from a completely different viewpoint”. I should like the hon. the Minister to answer to this. The reason why the telegrams landed on the hon. the Minister’s desk—I am very glad they did arrive because it indicates how seriously senior members of the Pharmacy Board and the pharmaceutical profession regard this matter—is that none of these people were consulted about this legislation.

Why should they be? I am not changing the position.

I do not think that is being very fair. The hon. the Minister knows, as I outlined yesterday, that his 55 pharmacists are operating through the good offices of the Pharmacy Board, and their good offices only. In fact, if one wants to look at the matter in the cold light of legislation, there is nothing on the Statute Book which makes it right and proper for those pharmacists to be practising in the dispensaries operated by the Railways. I gave the reasons for that yesterday, and unless the House wants me to I do not intend recapping on that. Hon. members may prove me wrong if they can, but I maintain that there is nothing in law making it proper for those pharmacists to function on behalf of the Railway dispensaries. It is purely the good offices of the Pharmacy Board which enable them to do so. A few moments ago the hon. the Minister asked me why he should have consulted these people. I believe that under the circumstances it was his duty to have gone to that statutory body and to have told them that he intended to regularize the situation, because that is, in effect, what the hon. the Minister is attempting to do. He told us across the floor of the House that he is only attempting to regularize the situation, and we accept that. However, I believe it was his duty to have gone, not only to the statutory body, the Pharmacy Board, but also to his colleague, the hon. the Minister of Health, to inform them of the position so that the channels of communication would have been right and the people would have known exactly what was happening.

The reason for the telegrams, which the hon. the Minister received, is that the pharmacists and the bodies governing the pharmacists throughout the country were worried that the hon. the Minister may have had in mind to expand his services out of all proportion. I think I have dealt with that part adequately.

I should now like to come to a new aspect, i.e. the whole question of whether the hon. the Minister should have this amending legislation take preference over the Pharmacy Act which controls the running of pharmacy in South Africa from A right through to Z. That Act was amended recently, and it was a principle very firmly established by legislation in this House only last year that the only people who should have a say in the operation of a pharmacy should be qualified pharmacists. This is the point at issue. The hon. the Minister of Transport, through his department, will now be in a position to employ pharmacists, and I believe this is cutting right into the heart of the Pharmacy Act and it spells the beginning of the end of retail pharmacy as we know it in this country. I say this because if the hon. the Minister can change his legislation so as to have it take preference over the Pharmacy Act, then so can the hon. the Minister of Labour, the hon. the Minister of Mines, the hon. the Minister of Posts and Telecommunications and so on. What is going to happen? One is going to find that the profession of pharmacy will become irrelevant in South Africa. Does the hon. the Minister want this? I ask him in all seriousness whether he wants the position of 2 000 pharmacists to become irrelevant.

This gets us back to another aspect of the Bill and the relevant argument of the hon. the Minister. He put a very eloquent case. He referred to the hundreds of thousands of members, dependents and pensioners whom he has to take into consideration. Nobody is speaking against those people or their rights to enjoy medicine at a reasonable price. This is exactly why we are taking the trouble to raise these points in this debate. We have never, as the hon. member for Vanderbijlpark made out, suggested that they should not have those rights to enjoy service and medicine at reasonable cost, not only to themselves, but also to the State.

However, what is the position? The figures the hon. the Minister quoted, i.e. R6,33 for prescriptions from the Railways dispensaries as opposed to R10,28 from pharmacies which are on contract, in themselves sound very good. However, that was the motivation behind my question to the hon. the Minister about what percentage of this subsidy of R16,5 million is going to medicine, because if 50% of that subsidy is going into medicine, and one averaged that out over the 2,5 million prescriptions which I estimate went through the hon. the Minister’s department last year, one would find that the cost of prescription is exactly the same, whether it comes through the dispensaries operated by the department of the hon. the Minister or through a retail pharmacy.

I tell you it is not.

I shall then take my argument a stage further.

Otherwise the adding machine is wrong.

I am prepared to take the hon. the Minister’s argument a stage further. Why was the hon. the Minister not prepared to negotiate with representatives of the industry? He knows and we know that the contracting pharmacists—and he has told us there are 286 of them—quote a tender price which represents a very significant saving on the normal retail cost of a prescription. I know I am correct in that. If the only motivation of the hon. the Minister was cost, and he had openly gone to the representatives of the industry to present his problem to them, I believe he could have arrived at a very fair arrangement with them, because it would not have created a precedent. The department of the hon. the Minister of Health—and I am sorry he is not here—has negotiated with pharmacies to supply drugs to the needy at cost price. The pharmacists of South Africa were prepared to do this and they do it to this day. If the hon. the Minister had made a reasonable compromise, I am quite sure that pharmacy would have accommodated him. [Time expired.]

Mr. Chairman, I wish to assure the hon. the Minister here and now that I have received no telegrams and that I have not the slightest intention of causing feelings to run higher than is already the case. I only wish to put one question. I think it may be important and even decisive with regard to the decision which has to be taken here. It concerns the rather striking figures he furnished. He said, inter alia, that the price of medicine obtained on prescription from private pharmacists amounts to about R10 while the medicine obtained from his dispensaries costs about R6.

That is the average.

Yes, that is the average. I wish to ask whether those figures are, strictly speaking, comparable. When I had something to do with these matters many years ago, the position was—it may have changed in the meantime—that there was a limited list of drugs which could be prescribed by a Railway doctor, for very good reasons. This excluded most of the most expensive drugs. In other words, specifically with a view to keeping the costs of the drugs reasonable, one was limited at that time to drugs which were reasonably cheap. If we now compare an amount of R6 based on such a list, with an amount of R10 relating to a whole series of available drugs, the comparison is of course not quite justified. If, on the other hand, such a list no longer exists, or the comparison has been eliminated in some way, my objection falls away. I should like the hon. the Minister to reply to this.

Mr. Chairman, I doubt whether it is necessary that I should argue the matter with hon. members much further because there is a danger that I will be repeating what I have said already. I cannot quite understand what it is all about. No one, including the hon. member for Berea, has said that we should not continue with the procedure we have been adopting through the years. I now have 55 pharmacies and it could be that in the years ahead, I could perhaps open another pharmacy at Richards Bay, for instance, or at another place where there is a concentration of Railway employees.

Therefore the number of pharmacies will not always be limited to 55. The fact of the matter, however, is that the procedures which are followed, will remain as they are today. The hon. gentlemen are now saying that they have no objection to this and they do not want to see the Railway employees deprived of their rights. What do they want me to do? Therefore I do not think it necessary that I should have had discussions in advance with the Pharmacy Board. I had no intention of depriving the pharmacists of anything under this provision which I had not deprived them of before. Let us assume that I kept something from them. If the Railways did not have these pharmacies, it would have meant that we would have had to obtain all these prescriptions from private pharmacists. Therefore one can conclude that since there are 55 departmental pharmacists, we are depriving the private pharmacists of something. On that assumption I accept this. With this amendment of the Act, however, I do not intend taking anything further from them. I do not intend following any procedure different from than I have followed in the past I wish only to keep to and confine myself to the procedure which I have followed up to now. I give hon. members that assurance. I had thought they would be satisfied with that assurance.

The hon. member for Berea asked me what procedure was followed here. I have already told him that I did not negotiate with the Pharmacy Board. What I can tell the hon. member, is that if someone says that he wrote three letters to my office and received no reply to them, he is telling a lie. It does not happen in my office that a letter remains unanswered. That does not happen in my office. I give hon. members that assurance and they must accept it. When a letter arrives in my office, the reply may not be “yes”, but the letter is replied to. When someone says that he wrote three letters to me and received no reply, it cannot possibly be true. The letters must have gone elsewhere.

He probably still has to post them.

Perhaps he still wishes to post them, but they have not yet arrived at my office.

I want to tell the hon. member what procedure is followed. When we introduce legislation of this nature, it is circulated amongst all the various departments; i.e. also amongst all the other Ministers. Such legislation is then approved by the Cabinet or by a Cabinet Committee before the legislation is introduced in this House. The hon. member will not know the procedure followed by a Government and he will probably not have the privilege of finding out.

We shall see.

This is, however, the procedure followed. Legislation introduced here, is circulated beforehand and therefore the contents thereof are at the disposal of other hon. Ministers. I really feel that the objections raised here by the hon. member for Berea, are totally exaggerated. He said: “It spells the end of retail pharmacy.”

The beginning of the end.

Make it “the beginning of the end” then. Surely this is totally ridiculous. Big employers provide certain services to their employees. In this case we have done this through the years. It is to our advantage. In this way we save and therefore we should like to carry on with it.

The hon. member for Parktown asked—I presume he had experience of this when he was still practicing as a doctor—whether the doctors still have to keep to a list when they issue prescriptions, the list of less expensive drugs. The hon. member compared the price of approximately R10 for prescriptions from private contracting pharmacies to the price of approximately R6 for the prescriptions from the departmental dispensaries and I should like to give him the assurance that that list is equally applicable to the departmental dispensaries and to the private pharmacies. The explanation for the difference in price of prescriptions cannot therefore be found there. I should like to conclude. I give hon. members the undertaking—I have also given the hon. the Minister of Health this undertaking—that I shall discuss this matter with him because he has also received representations. I shall do this before I take the Bill to the Other Place.

I shall see whether there are any objections, although I do not believe that there are objections. I believe that, if any reasonable pharmacist or whoever listens to the explanation and to the motives and intentions of this clause here today, he should have no objections to it. However, if objections are raised, we will nevertheless listen to them and give attention to them before I introduce the legislation in the Other Place.

Mr. Chairman, I want to thank the hon. the Minister for his assurances that he will look into this matter. We do appreciate his sentiments in this regard. However, I do not altogether follow his argument in connection with the procedures to be followed in the changes he intended making. I will tell him why I have this problem.

The Pharmacy Act, as I have indicated, controls everything to do with pharmacy. The Pharmacy Board has powers which are very strictly prescribed by law, and that was the point I was trying to make when I said that the hon. the Minister had not negotiated with the Pharmacy Board. In the Pharmacy Act— Act No. 53 of 1974—in Chapter I, which deals with the functions and powers of the board, which is a statutory body, the following is stated very clearly in section 4(i)—

Now, my problem is that it does not say “Subject to the provisions of this or any other Act”. The point I made, right in the beginning of my discussion on this clause, was that it was due to the good offices the Pharmacy Board that these pharmacists were allowed to practise, because there was nothing in law specifically giving them that right. They are not an individual pharmacist and they are not a corporate body.

Under those circumstances it had struck the NRP that it would be necessary for the hon. the Minister to change the Pharmacy Act I am surprised that there was no apparent pre-discussion with the hon. the Minister of Health in this regard. Had the hon. the Minister gone to the hon. the Minister of Health, the hon. the Minister of Health would have referred this matter to the Pharmacy Board. I think the hon. the Minister has to grant me this point. The standpoint of the Pharmacy Board at the moment is that it is not prepared to register any more pharmacists to work in Railway pharmacies. I refer back to section 4 of the Act which refers to the provisions of this Act, and of no other Act …

[Inaudible.]

No! Just listen to the argument and give me a chance to put my case. I have already told that hon. member that we are not trying to take away anything. We are trying to establish why the communication channels have apparently become fouled up, and we are trying to solve the problem on a reasonable basis so that the hon. the Minister can be happy, so that his Railway Sick Fund members can be happy and so that the profession of pharmacy can be happy. I mean to come back to that profession in a moment.

Have you consulted your father on this?

Mr. Chairman, I have news for that hon. member. I have my own views on politics, on business and on everything else. I do not owe my position here to anybody else. I owe it solely to my own hard work and to the party which I represent [Interjections.] I do hope that it need never be said of me that I have to climb on anybody’s back. I can stand on my own feet in this debating Chamber and put forward my own arguments when I believe they are correct I want to make that very clear.

However, allow me to continue with my argument I think that the trouble arose because, according to the Pharmacy Act, as we read it, the hon. the Minister could not have passed this amendment without changing the Pharmacy Act Under those circumstances he would have had to have consultations with the hon. the Minister of Health.

I now want to come back to another point. The hon. the Minister is obviously interested in saving. In these times most Government departments have this problem.

I would like to suggest to the hon. the Minister that he could achieve greater savings if he were to institute a scheme to phase out Railway pharmacists slowly and gradually. I am not suggesting that this should be done now; let us not get excited about this. If the hon. the Minister were to phase these pharmacists out slowly and come to an arrangement with the body of pharmacists in this country along these lines, he would be able to achieve greater savings. The Railways, as we know, enjoy the advantage of tender prices on drugs. The Railways have the right to substitute generic medicines for well-known brand names. For the benefit of hon. members here—and I shall not include the hon. member for Pretoria East—who might want to know the difference between brand names and generic names, let me take a simple example like Terramycin. Terramycin is a brand name, and it is an expensive form of tetracycline. One can buy tetracycline, made by the same company, with the same efficacy, at say a third of the price of the known brand name. The Railways have the facility to substitute in this manner, but the Pharmacy Act does not allow pharmacists to substitute in this manner. They can therefore not compete on that basis. If, however, the hon. the Minister were prepared to make representations to the hon. the Minister of Health so that an accommodation could be reached whereby private pharmacists would have the same privileges and could put out to tender for drugs used in quantity, I can assure the Minister, from discussions I have had with representatives of the industry who came here especially today to discuss this, that private pharmacists would be able to compete very efficiently with the pricing structure which the Railways can offer. I want to ask the hon. the Minister, in his future negotiations in this regard, not to disregard totally the possibility that the pharmacy body can do this. The reason is obvious. Fifty-five Railway pharmacies and 286 private pharmacies on contract to the Railways gives us a total of 341 pharmacies. To retain the goodwill of 2 000 pharmacies, who are represented in every town and village of the country, and to ensure that the members of the Sick Fund get the best possible service, surely it is in the interests of the hon. the Minister to keep in with this body of pharmacists? If he does, the situation will not arise—and I say it could arise—where, if he antagonizes the body of pharmacists, i.e. the Pharmaceutical Society, the Pharmacy Board and members of the profession, they could turn around and say: “Well, if that is the way you want to play it, that is fine.” If that happens, it could be that in a small village like the one the hon. member for Mooi River lives in, namely Howick, members of the Railways Sick Fund who live there will be told by the local pharmacist, when they go there with a prescription from their Railway doctor “I am sorry, Mr. Van der Merwe. We are having problems with the Railway Sick Fund. We are not prepared to dispense your prescription. I am sorry if it is urgent, but you will have to go down to Pietermaritzburg or up to Estcourt to get it dispensed.” I do not think this would be a desirable situation, and I am sure the hon. the Minister will agree with me. This is why I raised the whole question of communication. The Minister has enjoyed the very best of relations with the S.A. Pharmacy Board and with the profession, and I raise this matter because I believe it will be in his interests, in the interests of pharmacy and in the interests of all the hundreds of thousands of members of the Sick Fund to continue those good relations.

Sir, I think I have said enough to indicate our motivation in raising this issue as thoroughly as we have. I accept the hon. the Minister’s assurance that he will look into this matter carefully and, if necessary, amend the legislation in the Other Place. On that note, Sir, I would like to thank you for your forbearance.

Mr. Chairman, I have received an interesting little list which I will read out, particularly for the information of the hon. member for Berea. This is an analysis of the cost of medical treatment, for the hon. member for Berea wanted to know what proportion of the costs can be ascribed to drugs. It seems that drugs are responsible for 30% of the total cost, whereas 17% is for specialists, 16% is for doctors, 5% is for administrative costs, 11% is for pharmacies which supply the doctors themselves, and 21% is for hospitals. The hon. member suggested that clause 16 of the Bill, as it reads at present, cannot be accepted because it conflicts with a provision in the Pharmacy Act.

At first I wanted to say that since we spoke so much about mens rea yesterday and today, I would be able to plead that no mens rea was present if I were to make myself guilty of something like this. However, it is unnecessary that I should put forward that argument, for as the lawyers will tell the hon. member, if there are conflicting provisions in two different Acts, the latest Act applies.

That is the problem.

In other words, if there should be a conflict between this provision and the provision in the Pharmacy Act, this provision, the latest one, will be the provision which applies. Therefore I do not think that there will be any problems in this regard. It may be desirable to amend the Pharmacy Act as a result. That is possible. However, I cannot take the matter any further. I think I have given enough undertakings in this regard.

Clause agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, I move—

The amendments to the Sale of Land on Instalments Act, 1971, proposed in the Bill under discussion, will give effect to recommendations made in an interim report of the Commission of Inquiry into the Development Schemes Bill, Bill 78 of 1977. I wish to avail myself of this occasion to convey my thanks to the chairman and members of the commission for the work they have done thus far.

On 9 March last year the subject of the Development Schemes Bill, Bill 78 of 1977, was referred to a Select Committee for inquiry and report, the committee to have power to take evidence and call for papers and to have leave to bring up an amended Bill. The Select Committee reported on 13 June 1977 and indicated, inter alia, that with a view to the advanced stage of the session it would not be in a position to complete its investigation before the prorogation of Parliament, that the Government should consider appointing a commission consisting of the members of the Select Committee and that the scope of the terms of reference of the commission be extended.

Consequently a commission as proposed by the then Select Committee was appointed by the State President on 31 August 1977, with extended terms of reference. However, due to the general election held in November last year, the commission’s first meeting only took place on 10 January 1978 in Pretoria. I just want to mention in passing that some of the members of the commission did not return to this hon. House. Therefore, approximately two months after its activities had begun, the commission published an interim report which now forms the subject of the legislation under discussion. I believe that the interim report attests to the zeal with which the commission has devoted itself to its task. I do also want to express the hope that the commission will be able to publish a report on the balance of the task awaiting it, with the same zeal and promptitude.

The subject of the interim report of the commission affects an important aspect of South African law. The questions which arise out of the sequestration, liquidation or death of a seller of land on instalments were the main factor giving rise to the representations made to the Government which resulted in the passing of the Sale of Land on Instalments Act, 1971.

Since a purchaser of land can only obtain the ownership of the land in his name by way of registration of transfer, the biggest single problem which occurs in practice with regard to the sale of land is that creditors of the registered owner of the sold land have the right to attach that land and then have it sold in order to recover their claims against that owner, in whole or at least in part, from the proceeds of the sale. On the liquidation of a company or the sequestration of the estate of a person who is unable to pay his debts, the person who purchased land on instalments from the company in liquidation or from the person whose estate was being sequestrated had only a concurrent claim against the company or the insolvent estate.

Every purchaser of land on instalments necessarily runs the risk that the person from whom he purchased the land will be unable to pay his debts at some stage before the land is transferred to him and that a liquidation or sequestration order may be granted against that person or his estate. I want to stress that that risk incurred by purchasers of land on instalments cannot be eliminated without drastically altering, weakening or undermining our system of registration of land.

†Mr. Speaker, I stress this particular point because it would appear that certain persons labour under the mistaken impression that the Sale of Land on Instalments Act, 1971, has removed all the dangers inherent in the purchase of land on instalments. That is definitely not the position. Many people have experienced losses because of this mistaken impression. The Commission of Inquiry into the Development Schemes Bill states in its interim report that it has come to its notice that several purchasers of land have paid the purchase price of the land in full without making appropriate arrangements beforehand for the transfer of the land to them against such payment.

I may at this stage just explain that, in view of the existing legal rules relating to the transfer of ownership of immovable property, a purchaser of land would generally arrange for payment of the purchase price to be effected simultaneously with the registration of transfer of the land. It follows that, in the absence of such an arrangement, the possibility always exists that the purchaser may suffer loss.

It is a well-known fact that several township developers are being wound-up because they are unable to pay their debts. The liquidators of the companies concerned are faced with the difficulty that conflicting views have been expressed by eminent legal counsel as to the manner in which the provisions of section 14(3) of the Sale of Land on Instalments Act, 1971, should be construed.

The section in question provides among other things that, when land has been purchased under a contract from a company being wound up and that land is not encumbered by a mortgage bond, such land shall be transferred into the name of the person who has the right to claim transfer of the land and who makes arrangements to the satisfaction of the Master of the Supreme Court, within six months after he has been called upon to take transfer, for the payment of the outstanding balance under the agreement plus interest to the date of the registration of transfer.

*Some of the purchasers of land on instalments from companies in liquidation are apparently able to comply with the requirements of the section in question. However, according to available information the company has not paid any endowment in respect of the land in question in respect of which transfer had to be effected. Due to the provisions of the provincial ordinances concerned, the Registrars of Deeds concerned are unable to permit the transfers unless proof of payment of the endowment is submitted.

It is therefore deemed desirable that the legal position relating to the obligation to give transfer and pay an endowment be clearly stated. Since the envisaged amendments to the section could be more effectively discussed in the Committee Stage, I do not intend to go into the matter in detail at this point.

Mr. Speaker, on behalf of the Official Opposition I say at once that we are glad to support the Bill which is before us. We welcome it and we do so firstly for the reason that this Bill does assist in solving a difficulty which has arisen in regard to the interpretation of the Act. The measure also has the effect of coming to the rescue of the innocent purchasers who, in good faith, paid their money in terms of a deed of sale. On some occasions these payments were kept up to date and payment was even made in full. However, they then found that they were unable to obtain transfer, for reasons entirely beyond their control. They accordingly found themselves in a situation where they had lost all the money that they had paid. We indeed welcome the measure. The hon. member for Yeoville will, I am sure, be very pleased today because he asked for this and he has, in fact, put a question on the Order Paper in this regard this year. I think the hon. the Minister said then that he was not sure, but that he was considering bringing this measure before the House.

If one looks at the Bill before us, it is clear that we are dealing with a measure which deals specifically with persons who buy land under a contract of more than one year and pay more than two instalments. Transactions of this nature are included within the scope of this legislation. In doing so they are given a measure of protection, which this legislation affords them, and it is well that this happens. A situation arose where, in the case of a big company—and I think we can mention the name, Glen Anil—with tremendous assets which amounted to, I think, R70 or R80 million, purchasers found themselves in a situation where they were unable to obtain transfer after having, in good faith, purchased land from a company as substantial as this. This was not simply because they were not able to comply with the requirements regarding the balance owing by them, because although they had paid the balance, they were still unable to get transfer. I agree with the hon. the Minister when he says that we cannot cover every gap in so far as the purchaser is concerned. There will always be a measure of risk as far as an innocent purchaser who purchases land from a seller, is concerned. In this case protection is given in law because it is land which is acquired by natural persons and it is land which is required for residential purposes. In other words, the land is not really bought for speculation and it is not business, commercial or industrial property. It is land where people are going to live. We are all very concerned with land where people are going to live, and where they are going to provide homes for themselves, because they require protection.

A commission of inquiry was appointed— as the hon. the Minister has intimated—in regard to the Development Schemes Bill which was before this House on an earlier occasion. The chairman of this commission was Mr. J. A. van Tonder, the hon. member for Germiston District, and the commission’s report, which makes very interesting reading, deals with the problems that arise from the interpretation of section 14(3) and (4) of the principal Act with regard to the giving of transfer. Whereas it is accepted that this is an interim report and that interim relief is being given by the House at this stage, it is trusted that some of the difficulties raised in the report will be dealt with at a later stage. One of the difficulties is for example that the liquidators have, in terms of legal opinion obtained by them, been advised that they are not entitled to give transfer even although purchasers have paid, and that they would have laid themselves open to a claim for damages had they done so. It was also found that although, in the interpretation given to section 14(3), a right was given to a purchaser to obtain transfer, there was, in fact, no legal obligation upon him to obtain transfer. Then, of course, it was found that there was an endowment payable on certain stands so that, in any event, if these requirements had been complied with, they could still not have obtained transfer. Then one had the conflict of interest which invariably arises in a township company where the secured creditors are in conflict with the concurrent creditors, who in this instance are basically those who are purchasers of land by instalments.

Although a measure of preference is given to them—and rightly so—it is not sufficiently preferent to exceed the preference in the case of mortgage bonds and other creditors. I therefore believe that this interim gage bonds and other creditors. I therefore believe that this interim measure has been introduced to come to the assistance of those particular purchasers, and also other purchasers from township companies, who have, unfortunately, found themselves in a similar predicament. This does not go so far as to come to the rescue by appointing a liquidator to represent, for example, the interests of concurrent creditors. That cannot be done in this particular instance.

That is a matter for the Minister of Justice to deal with.

Yes, I was about to say—as the hon. the Minister points out—that it is a matter that must be dealt with elsewhere. In this regard there is also the human error, i.e. that even purchasers who have complied with everything themselves, are on many occasions negligent as they are a little tardy about getting transfer into their names and making sure that they obtain their legal rights. Because of their tardiness they are very often placed in this particular position.

It is interesting to note that the commission also dealt with the matter of sectional titles. The definition of “land” in the Sectional Titles Act is “land shown on a sectional plan as part of a Sectional Titles scheme”. In section 3(2) of the same Act we read: “A unit shall for all purposes be deemed to be land and urban immovable property.” Accordingly it would seem that, in terms of the definition of “land” as mentioned in the principal Act being amended by the Bill that we are discussing, sectional title would be protected. When we come to those people who buy block shares—in the USA it is known as the condominium type of development—the buying of, for example, block D, which entitles the buyer to, let us say, residential flat No. 14, means that the buyer has taken transfer within the company. Other legal consequences will then follow.

That involves the registration of the transfer of the shares.

That is so. It will then be regarded as a transfer of shares and not of land. As regards the Bill itself, section 14 of the Act is amended by the substitution of proposed new subsections (3), (4) and (5). The proposed new subsection (3) deals with the situation when there is no encumbrance of a bond and the new proposed subsection (4) deals with the situation when there is a bond. Where there is no encumbrance of a bond itself, having been given notice in terms of the previous subsection, the person has six months within which either to pay the balance of the purchase price or to pay such costs of sequestration and administration, including any endowment to be made in terms of the law to any person, whichever is the larger amount. The same principle then applies in so far as the next proposed subsection is concerned, where in fact there is a bond. In this case, a period of 30 days is granted in which the outstanding balance of the mortgage bond plus interest to date of registration or all such costs of sequestration and administration, including any endowment and such other amounts as rank in preference prior to the claim, should be paid. At this stage I want to mention why we have placed nine amendments on the Order Paper to deal with these two clauses. We have done this, because the Glen Anil type of situation is not the only situation in which purchasers can find themselves. They may also find themselves in a situation where they have, for example, bought from a person or a company who has gone insolvent. There might then be only one or two stands in the entire estate while the rest of the estate consists of other assets. That person or company could then have been sequestrated or placed into liquidation for other reasons than that of township development. I think it is manifestly unfair and not really a proposition to then have to pay the entire balance of the bond as against the purchase price that might be owing or, on the other hand, to pay the endowment in both cases as against what is owed in terms of the balance of the purchase price. The choice given is therefore really not attractive to the purchaser. It might well be because of the fact that the Bill, in both instances, states, “whichever is the larger”. If the costs of sequestration, endowment, encumbrances, etc., amount to approximately R50 000, while the balance of the purchase price is R5 000, obviously it is not an attractive proposition.

The purpose of the amendments, which I would like the hon. the Minister to think about, is to try, if possible, to relate, pro rata, the assets of the stand to the assets of the entire estate. For example, if one interprets this new provision strictly, one particular purchaser could be called upon to pay the whole outstanding balance whereas another purchaser may not be called upon to pay those outstanding balances. I should like to give a second example. Where there are 10 purchasers of land, one can then divide the balance of the amount owed on the mortgage bond plus the endowment that is owed in that instance into 10 pro rata shares, in accordance with the value of the land in relation to the overall assets. I think this would be a fairer state of affairs.

Your amendment does not provide for that.

Well, this is what I am trying to achieve. If my amendment does not achieve that aim, I will bow to any amendment which will. The purpose of my amendment is to draw the attention of the House, and in particular the attention of the hon. the Minister, to this unfair sort of imbalance which is being created. One is not making it attractive to the purchasers to pay such a large amount. If the amount is out of proportion to what he owes, the purchaser is back to square one and he might as well cut his losses and call it a day. For that reason I have drawn up this amendment.

In passing, I would finally like to say that the hon. the Minister, in coming to the rescue of purchasers under deeds of sale, should consider, maybe at a later stage, some other amendment to this legislation. For instance, the Act itself is restricted to natural persons and I wonder whether it is not time to give consideration to the fact that unnatural persons should be considered as well, because it is quite the mode today for an individual to form a company and to purchase his sectional title for a residential flat, or to purchase the stand which he wishes to acquire, in the name of the company. If he himself, or he and his wife, are the sole shareholders of the particular private company, then it is really only for the sake of convenience and perhaps for tax purposes that he bought it in the name of the company. If property is in such circumstances bought in the name of a company, I think we should perhaps give consideration to the possibility that that company should be given protection as well.

Secondly, in so far as all the terms set out in the Act relating to what should be contained in a deed of sale are concerned, we can perhaps add certain provisions to make it imperative that in drawing up the deed of sale the attention of the purchaser should be drawn to the rights and duties that he has in terms of the Sale of Land on Instalments Act. I think he should be aware of his duties and rights. The hon. the Minister knows too well that it often happens that in drawing up a deed of sale one might warn somebody that transfer duty is payable within six months. It then happens that they pay for about 10 years, and then all of a sudden wake up and find that the penalties are enormous. Therefore, I think it is necessary that one should also in this case draw their attention to it.

Lastly, I would like to refer to the question of endowment. It is not the fault of the purchaser if the seller has neglected to pay endowment. If the seller company does not have sufficient money to liquidate the endowment owing to the local authority, there is an encumbrance, and the purchaser cannot get transfer until the endowment is paid. I wonder whether the time has not come—and I say this after considerable forethought—to give consideration to the fact that in acceding to a residential township application, the township developer, to begin with, should not be required to ensure that the endowment is covered by way of a guarantee before he is entitled to actually sell his stands. I think that is a matter which should be given consideration.

In conclusion, I should like to say that by and large we welcome the provisions which are contained in the Bill. It is an interim measure which had to be taken hastily in order to come very urgently to the rescue of people who are in dire straits. In that respect the Bill has our full support.

Mr. Speaker, to begin with I should like to thank the hon. member for Hillbrow for supporting this Bill on behalf of his party. The hon. member said, quite correctly, that this Bill emanates from the interim findings of the commission which was appointed last year, to which the hon. the Minister also referred. This commission investigated the Glen Anil company which is now in liquidation. Evidence was presented to the commission to the effect that Glen Anil had about 16 000 erf buyers on their books and that these 16 000 erf buyers—according to the situation at the time—stood to lose approximately R34 million in the process. Of the 16 000 erf buyers, 1 800 had fulfilled their obligations completely, except for the endowment which may have been outstanding. However, their erven were fully paid off. Owing to the difference between the legal opinions of various lawyers, the liquidators feel that they cannot simply give transfer. Although the purchaser had the right to demand transfer, there was no provision in the Act to the effect that they had to give transfer. This Bill now seeks to rectify this matter.

As far as the liquidators of Glen Anil are concerned, the commission recommended— this is really a matter for the Department of Justice to deal with—that an additional person should be appointed to represent the 16 000 erf buyers in the liquidation of the company. When a big company like Glen Anil goes into liquidation, the banks and the financial institutions are the big creditors for enormous sums of money. But these 16 000 erf buyers, a large number of people, who collectively represent a large amount of money, are disorganized, unaware of one another and do not take the trouble to attend the creditors’ meetings at which provisional and later final liquidators have to be appointed. The Master of the Supreme Court has the right to appoint an additional liquidator, if he is requested to do so by the interested parties, to represent these minority groups. With that I am not trying to suggest here that the four liquidators who are dealing with the Glen Anil matter, are not quite capable of carrying out their task. The question is just that these 16 000 buyers are not represented in this case. That is why we felt that we should make this recommendation.

As far as the transfer of property is concerned, the hon. the Minister pointed out that when one buys immovable property, one makes an arrangement with the seller according to which one pays the purchase price to an attorney, usually into a trust. Payment for the property then takes place at transfer. If one buys on instalments, this is not the case. One pays them into an account, and in time the amount is paid off, but since the money is not in a trust, it may already be lost and one cannot take transfer of one’s property. The hon. the Minister quite correctly said that the legislature cannot protect a person from his own stupidity. Of course he did not use exactly the same words; these are my words. Nevertheless, an attempt is being made here to protect innocent buyers, as the hon. member for Hillbrow said.

As far as the Bill is concerned, I just want to ask the hon. the Minister to give his attention to clause 1 during the Committee Stage. I quote from the proposed section 14(4)—

I think 30 days is too short a period because building societies, the bodies which usually grant bonds, usually hold meetings once a month. As far as bonds are concerned, there is the quota system too. I feel that we should increase this period to at least 60 days or even longer. However, I leave it to the hon. the Minister to give it his attention during the Committee Stage.

I very much want to say a little more about the functions of the commission. It will interest hon. members. As the hon. the Minister said, it was only on 10 January that the commission met for the first time, although it was appointed in August last year. I should like to mention the names of the members, because I should like to thank them.

The following members were appointed to the commission: Mr. T. Aronson, Mr. S. P. Barnard, Mr. F. D. Conradie, Mr. M. W. de Wet, Mr. J. P. du Toit, Mr. J. I. de Villiers, Mr. E. Louw, Mr. H. Miller, Mr. L. G. Murray, Mr. A. A. Venter, Mr. V. A. Volker, Mr. G. H. Waddell and myself as chairman. I am very much indebted to these members of the commission. Four of the members are no longer in Parliament, viz. Mr. H. Miller, Mr. L. G. Murray, Mr. J. I. de Villiers and Mr. G. H. Waddell. Either they did not make the grade in the last election, or they have retired from Parliament. I am sorry that, owing to their new circumstances, neither Mr. H. Miller nor Mr. Waddell were able to attend any meetings of the commission. They did in fact make valuable contributions on the Select Committee last year. I am sorry that they could not see their way clear to attend the meetings of the commission.

Apart from my thanks to the members of the commission, I am very much indebted to Advocate Bräsler who was our technical adviser on the commission. He was also our technical adviser on the Select Committee. I am also indebted to the secretary of the commission, Mr. Jan Groenewald, who did very valuable work and always presented the documents very thoroughly.

It will interest hon. members to hear from whom the commission has received evidence so far. Firstly, we received evidence from the members of the National Association of Chartered Accountants. This was very valuable evidence. We questioned the Director of Local Government for the Transvaal, Mr. Kruger. We also had evidence from the Association of Law Societies of Southern Africa and from the South African Property Owners’ Association. Hon. members will realize that these bodies all deal with the transfer or the purchase of land or the establishment of a township. The same holds good for the accountants too, because they have to balance the figures in the end. We also received valuable evidence from the Department of Commerce, the Registrar of Patents, Trade Marks and Copyright, the Chief Law Adviser of the Johannesburg city council, Dr. Cowen, who had a particular interest in the work of the commission and who in fact gave very valuable evidence without remuneration.

†We also questioned the Manager, of Property Investments, of the S. A. Mutual Life Assurance Society as well as the risk consultant to the S.A. Mutual Life Assurance Society, the branch manager of the Mutual and Federal Insurance Company Ltd., and the Santam Insurance Company.

*We questioned the following building societies: The United Building Society, Saambou National Building Society and the Allied Building Society. Furthermore, we also questioned the Trust Finance Corporation of Africa Limited, the well-known Syfrets firm in Cape Town and the Chief Master of the Supreme Court. I want to express my sincere thanks to those people and bodies. Hon. members will notice that we called for evidence on a very broad front, because we want to try to give a final reply to the problems which arose in cases like those of Glen Anil, although, as I have already said before, one cannot protect anyone from their own stupidity.

I could carry on for a very long while to read to hon. members from evidence in order to support what I said, but I do not think I should take up any more of the House’s time with this. I conclude by saying that I am very grateful that we have come so far that the people who stood to suffer heavy losses could be assisted at this stage by introducing this legislation. If this question of transfer had had to be tested in court in terms of clause 14(3) of the Bill, it would most probably have ended up in the Appeal Court, with a delay of three years, with an obvious financial loss for the 1 800 people to whom I have referred.

Mr. Speaker, the legislation before the House, as the hon. member who has just resumed his seat has said, arises from investigations which were made by a Select Committee of the House which has since become a commission and which, in turn, arose from one of the most spectacular financial crashes which this country has ever known. Mention has been made, by the hon. member for Hillbrow, of the fact that people have tended to be a bit casual about how they go about safeguarding their interests when they are purchasing land, and of the fact that they are careless or do not make sure that they can obtain transfer in certain circumstances. Anybody can be forgiven, however, for having presumed that an institution like Glen Anil was a 100% blue chip institution with which nothing possible could ever go wrong. This legislation is obviously merely interim legislation to deal with this problem. Having read the report of the Select Committee, and the interim report of the commission, I wonder whether if they are ever going to sort this matter out to the satisfaction of the people concerned. There are thousands of small people who are going to suffer very considerably indeed.

The commission will do it.

The hon. member nods his head wisely and says that the commission will do it, but I think that the commission is going to be busy for a long, long time before it can come to a really equitable solution to this problem, because it is incredibly complicated. This legislation presents merely a tip of the problem and is designed to protect the most readily accessible group of people, those to whom transfer can be given on a reasonable payment and within a reasonable time.

It is only the tip of the iceberg, I grant you that.

That is correct. I think that the problem is very much more far-reaching than this legislation indicates, and when the commission submits its report later we expect further legislation to be introduced in this House. It is obviously impossible to protect everybody in every circumstance. Although it was thought that the Sales of Land on Instalments Act would provide a measure of protection for the buyer, the first spectacular crash that came along proved that the legislation was inadequate. What this legislation is intending to do, I believe, is to establish a release figure. The problem is that people who have paid off, or nearly paid off, the land which they have purchased from this group of companies with which Glen Anil is associated, find that they cannot take transfer. The hon. member for Hillbrow quite rightly said that the big bond holders have obtained legal opinion which says that the liquidator is not required to give transfer of a particular plot to a particular person because that would be lessening the security of the big bond holder. In an endeavour to sort out this problem, the hon. the Minister has brought this Bill before the House. We have considered the matter and I have placed two amendments on the Order Paper which deal with the problem of the release figure. The hon. member for Hillbrow again had a certain advantage in speaking before me since this enables him always to appear to be wiser than I am.

Well, I have put up with that for many years.

Yes I know, but then you are wiser than I am. [Interjections.] The problem is to establish a release figure which is going to allow transfer to be given, and the Bill requires that transfer shall be given. However, the problem is that transfer cannot be given until such time as certain obligations which are incumbent on the purchaser of the plot have been fulfilled. Those are matters such as endowment and a pro rata share—as we shall suggest in an amendment which we shall move—of the administration costs. Without the amendment which we intend to move we do not think that the position of those individual purchasers has been advanced particularly. I hope that the hon. the Minister will indicate that he will accept the amendments we shall propose in the Committee Stage.

They are acceptable to me; I can indicate that now.

I am very grateful indeed to the hon. the Minister. I think that under these circumstances the condition of those people will be very much ameliorated. As the liquidator, who gave evidence before the Select Committee on the Development Schemes Bill, said, if it is going to be advantageous to some people, somebody else is going to lose out.

What is being done by means of this legislation is that the security of the big bond holders, who are called a secure creditor, is going to be affected. There is no doubt about that because plots will now be transferred out of the areas over which they hold a bond. That is something which I believe the Sale of Land on Instalments Act was designed to do. In other words, it was designed to protect the small man who was buying on instalments, and this has led to legislation consequential upon the intention of the legislature in the first place.

We welcome this legislation and we support the Second Reading.

Mr. Speaker, I should also like to express my thanks to the hon. member for Mooi River. I want to fix the hon. member’s attention on the fact that comprehensive evidence was obtained by the commission in connection with the question of exemption, etc. It will probably receive further consideration in due course, but in itself it is not the immediate solution to the problem with which the buyers are faced, especially in big companies. The hon. member said he wondered whether the commission would complete its work. I want to assure the hon. member that I think all the members of the commission will do their best to analyse and solve this matter properly.

It is a privilege for me to serve on the commission. It is a special privilege to serve under the chairmanship of the hon. member for Germiston District. The hon. member for Germiston District chairs the commission in a very competent way and has also earned the respect of all the members who serve on the commission. I should like to say that we are proud of our chairman.

The interim report is a unanimous report, and I should also like to associate myself with the hon. member for Germiston District in his request to the hon. the Minister in connection with extending the period of 30 days. I believe it will definitely bring about an improvement. The terms of reference of the commission are, inter alia, to investigate problems in general and to examine and try and solve any particular problem which buyers of land experience, despite the provisions of the Act. This also includes problems with the transfer of land, especially in the case of the insolvency or liquidation of the seller. Actually there are two basic problems to which the commission reduced the evidence, especially as far as this urgent matter is concerned. In the first place, according to the legal advice from a senior advocate which was obtained by the liquidators of Glen Anil, the conclusion was reached that section 14(3) and (4) of the principal Act do not require the liquidator to give transfer to the buyer or buyers. A second conclusion which emanated from the legal advice which was obtained was that the endowment fees payable to the local authorities were not administrative or realization costs and therefore not the obligation of the liquidator.

Consequently, a checkmate position arose in the Glen Anil matter, in the sense that, in cases of sold erven on which there were no bonds or in the case of sold erven on which the bonds could be redeemed from the balance of the purchase price still owing, transfer could be provided by the liquidators. The fact that endowment fees were not paid to the local authorities by the township owners out of the proceeds of the purchase prices, does, however, prevent transfer. Consequently the question arises as to who should pay. Should the buyer pay the endowment fee? He has probably paid a great deal of money already. Should the holder of the bond pay it or should the local authority lose that money? Apart from that, the standpoint of the Registrar, a standpoint based on the provisions of the ordinances, is that the Registrar does not register transfers unless the endowment fees have been paid.

I do not want to discuss the matter in too much detail. The Master of the Supreme Court has stated his standpoint to the commission as far as the endowment aspect is concerned, and I quote him—

He went on to say—

In the second place, as far as this matter is concerned, a ruling was given on 6 December 1977—and I think this was to a certain extent to the relief of the liquidators, and probably the buyers too—by Mr. Justice André Botha in a case in the Supreme Court, Irene Developments (Pty.) Ltd. v. The Municipality of Verwoerdburg. In his ruling in this case, the judge found that endowments form part of the costs of the administration of such liquidated companies.

I believe that this Bill offers a solution to these two urgent problems. Now I notice— with respect to the hon. member for Hill-brow—that he has placed certain amendments to clause 1 on the Order Paper. These are amendments which I feel do not even have anything to do with the change, in certain cases, of the existing section 14, as envisaged by the Bill. It will be interesting to hear from the hon. member for Hillbrow during the Committee Stage, to which claim he is referring when he speaks about “pro rata to the claim”, which, according to the hon. member, should be inserted at various places in clause 1. With all due respect, I do not think that the amendments which the hon. member has in mind, actually make sense in so far as the bond and the purport of the clause is concerned. However, I think that we can argue about this once again during the Committee Stage. In the light of the request by the hon. member for Hillbrow—and also in pursuance of what the hon. member for Mooi River said—I feel that, in connection with the Bill, it is important for one to bear in mind that the endowment is in fact part of the administration costs, that the full endowment must be paid and that the administration costs are an absolute priority beyond any bond.

In conclusion I should like to point out that the problems in the existing Act are identified in particular by the extensive collapse of large property companies. I believe it is very important that, in the first place, buyers should acquaint themselves with their rights and that they should obtain legal advice. As the hon. the Minister said in his Second Reading speech—and the report of the commission also refers to this—many of the buyers who have even paid their full purchase price, did not even take the elementary steps of ensuring and making arrangements to see that the land was transferred to their name. There are protective measures in the Act I do not say that they are absolutely protective measures in all cases. The buyers must acquaint themselves with them and they must also exercise their rights in good time.

A great deal of publicity is often given to the collapse of a big land or property company. At the same time, the fear is always expressed that buyers of land and property will lose millions of rand. I believe that prominent publicity should also be given at the same time to the legal position and legal remedies of the buyers who do not have transfer or right of ownership on their erven. It will always be a sound practice if a buyer takes transfer simultaneously with the payment of the balance of the purchase price or, to put it the other way round, that the buyer will guarantee the payment of the purchase price or the balance thereof on registration of transfer. I believe that the risks of incurring a loss may be eliminated in this way. I am pleased to support the legislation.

Mr. Speaker, in the first place I want to say that it was a privilege and a pleasure to serve on the commission which has produced this interim report. Many experts appeared before us. They were exceptionally well prepared and gave all the members of the commission a very deep insight into the property industry and the problems surrounding the property industry. None of these experts were to my mind pessimistic in their outlook. In fact, they were mostly optimistic and had many constructive proposals on how to solve the problem facing the property industry. These experts did not only give evidence on the sale of land on instalments. In fact, they gave evidence covering a broad field connected with the property industry. It is important that the House be made aware of the fact that this interim report does not represent the conclusion of the work of the commission. A lot of work still lies ahead of us as there are many matters that still require consideration.

I think it is essential at this stage that one should refer briefly to the terms of reference of this commission. We were asked to look at the Development Schemes Bill, at the evidence obtained by the Parliamentary Select Committee which sat during 1977, at the Sale of Land on Instalments Act of 1971, at the findings and the recommendations of the Commission of Inquiry into Housing Matters, and at the desirability or otherwise of consolidating the legislation relating to the sale of fixed property. Furthermore, we were asked to submit draft legislation implementing any of our recommendations. I would have thought that it was absolutely vital that all parties in this House should be represented and should have the opportunity of assisting in this monumental task, because tens of thousands of people and their rights were affected. I would have thought that the Official Opposition would have welcomed the opportunity to serve on this commission and that they would have made a contribution. I believe that there are members sitting over there who are eminently capable of making such a contribution. Two former members of Parliament, who are members of the PFP, were nominated to serve on the commission, but neither of them served.

But the chairman knows why.

It is no use complaining now; I am not blaming those members. I am blaming that party. I was amazed that the Official Opposition, knowing that those members could not serve, did not make representations to be represented on the commission when the subject matter under discussion was of such vital importance to the country as a whole. Not only the question of housing and land, but also a question of security was at stake, and it was vital to ensure the well-being of all South Africans in this way. The commission, in view of the urgency of the matter, commenced its deliberations early in January, before the Parliamentary session. It was difficult for all of us to attend the sittings of the commission. It would have been a very good thing if the hon. members of the Official Opposition had made an effort to get members appointed to the commission so that they too could have attended those meetings early in January. But, Sir, the Official Opposition stood on the sidelines while we were considering these serious matters.

But it was a commission then, was it not?

Yes, it was a commission, but the hon. the Chief Whip knows that they could have made representations for two other members to serve in the place of those former members who could not serve. I am quite certain that two other members would have been accommodated. This was not a political commission. The hon. the Chief Whip would therefore have had no problems in this regard. This commission continued to sit during the session, and to my dismay the Official Opposition failed to assist even then in the functioning of the commission. I see that the Official Opposition have today given notice of amendments, as they are entitled to do, but I, for my part, would have liked to see those amendments debated in the commission. They should have been debated with the experts we had there. We would then have had the opportunity of gauging the opinions of those experts towards these amendments.

Did the chairman not tell you the reason for that?

Sir, I shall answer the hon. the Chief Whip. Let me say that there is no publicity or glory involved in serving on a commission of this kind. The members of such a commission serve behind closed doors. The Official Opposition knew there was no glory to be obtained. That is why they remained on the sidelines.

Either the chairman told you or he did not.

I have told the hon. member that if the two former members could not serve, he could have made representations for two other members to take their place. This must surely be an historical occasion, in the sense that I do not think there has ever been a time when an Official Opposition has failed to serve on a major commission when it was not opposed to the principle. As we have heard today, the Official Opposition is certainly not opposed to the principle of this Bill.

The chairman knows all about it.

It is no use the hon. the Chief Whip saying that the chairman knows all about it. The Official Opposition had a duty and they did not fulfil that duty, as they have failed in their duties throughout this session. [Interjections.]

Mr. Speaker, this Bill flows from the recommendations of the commission of inquiry. I should like to commend the chairman of the commission of inquiry for the efficient manner in which he acted on the commission. I should also like to pay tribute to the two officials who assisted the commission, and thank them for the tremendous amount of work they put in.

[Inaudible.]

Mr. Speaker, if the hon. the Chief Whip would interject a little more loudly, I could perhaps reply to him.

I was talking to the hon. member for Simonstown. [Interjections.]

Have you finished?

Yes, I have finished. You may carry on.

As I have said, I would like to thank these two officials for the help they gave to the commission. I should like to make mention of the fact that there were two members of the commission who had served on the Select Committee and who were former members of Parliament. Despite the fact that they were no longer members of Parliament, they continued to serve on the commission both in Pretoria and during its meetings in Cape Town. I am certain that those two members served at considerable inconvenience and expense to themselves and I should like publicity to pay tribute to them. The two members who under those circumstances continued to serve on the commission were Mr. Lionel Murray and Mr. Jack de Villiers.

There are some problems relating to the sale of land on instalments that are virtually insoluble. The hon. member for Mooi River said he hoped we would solve all the problems, but I can tell him that many of the problems are totally insoluble. There are thousands of buyers who, when a company goes into liquidation, cannot get transfer because the township is over-encumbered. For example, a township owner may take a first bond of R100 000; he may then take a second bond for services of say an additional R500 000; then he may have overdrafts of, say, R400 000. If he gives a covering bond to the institution of another R400 000, it will mean that he will have a total liability of R1 million. If he has 200 plots which he sells for R5 000 each, it means his assets on the other side will also amount to R1 million. Unfortunately, many of these township buyers, instead of using the proceeds of the sales to pay off the first and second bonds or bank overdrafts, purchase additional vacant land or land of any other description. Then, when all the companies go insolvent, the unfortunate position exists that there are liabilities totalling R1 million against this property and that the buyer of an erf, even though he has paid his instalments in full, cannot get transfer of the property because the liabilities on that land total R1 million. The buyer I am describing has, at best, a concurrent claim. Unfortunately, this buyer cannot be assisted. There is another class of buyer, however, who can be assisted by this Bill and whom I will deal with presently. Certain buyers who have paid the purchase price and should be able to obtain transfer are apparently unable to do so because the liquidators of a particular company have been advised by certain creditors that action will be taken against the liquidators if transfer is given. It is essential that the liquidators, the buyers and the creditors obtain clarity. I believe this particular Bill will give clarity to all those classes of persons. In the circumstances, we shall not oppose the Bill.

Mr. Speaker, I am rising to thank hon. members for their acceptance of the principles contained in this legislation. Let me say at once that I did not give out in my introduction to the Second Reading that the Bill was supposed to solve all the problems which exist in the property market. Indeed, I think it is a fact that, even though this commission of inquiry is doing its work well, many years will probably go by before it can solve the problems. The important aspect in this specific regard is that the members are prepared to give their time to the search for a solution to the problem which we are dealing with here.

All the hon. members emphasized that this legislation was actually an interim measure to cover certain aspects which the commission found were involved with the occurrences affecting a specific company. It is quite correct that, as regards the provisions contained in section 14 of the Sale of Land on Instalments Act of 1971, people who are entitled to registration of transfer after certain conditions have been complied with, now find that as a result of legal opinion, even conflicting legal opinion, they cannot obtain transfer. The essential reason for this is that on the one hand the legislation gives people the right to demand registration of transfer while it does not place a corresponding obligation on the liquidator to pass transfer. In this specific case, it affects the rights of almost 1 800 owners who would in fact have been entitled to transfer in terms of the provisions of the Act if there had been a corresponding obligation on the liquidators to pass that transfer.

The second aspect which it is concerned with, is the question of the administration costs as well as the endowment. I think that hon. members who have some knowledge of the property market are aware of the fact that although the payment of the endowment is of course not the responsibility of the buyer in the first instance, but of the developer of the property, that obligation is in many if not in most cases transferred to the buyers of individual erven by the developer in terms of the purchase contract. I think that hon. members will agree that it is in fact existing practice. Perhaps I should point out in this regard that what we envisage with this legislation, is nothing more than to ensure that the existing rights can be transferred effectively to a specific group of people. In order to do so in this particular case we must place the obligation on the liquidator to cause transfer to be registered. As far as the liability on a property is concerned, there are facets which mean that these have to be paid. We can imagine in general that it may happen that there are no funds in the free or unhypothecated assets of companies to pay the endowment or the registration. In that case the right and the obligation to pass transfer would actually mean nothing, because there would then be a specific deficit in the free assets of the estate of the company or the individual. In this regard it is important to note that what the Act of 1971 actually did, was to amend some provisions of the Insolvency Act. When we assess this legislation, it is important that we should bring it into line with the Insolvency Act and interpret it accordingly. If we do not do this, we will make mistakes as the hon. member for Hillbrow in fact unwittingly did.

I do not intend to reply in detail to the arguments of all hon. members at this stage, except to say that I should like to discuss in detail during the Committee Stage the facets which they pointed out and in regard to which some of them moved amendments. I shall be pleased if hon. members will accept this. I have one specific, interesting point which I should like to mention, a point which emanated from the speech of the hon. member for Klerksdorp, and this is that we are dealing with one specific problem. The problem is that although legislation—also the legislation which we are now proposing should be amended—gives people certain rights, it does not actually take the necessary consideration of what their rights are. This is a problem which I feel is as old as we are and as legislation itself. The hon. member mentioned one specific important facet, i.e. that the news media could make an important contribution towards making the public aware of some of their rights at least. He pointed out that when we have such a dramatic collapse of companies as we have had in respect of property developers in recent times, it is big news. It is big news in the sense that people may lose a great deal of money as a result. One should therefore be able to ask the media to make people equally aware of the rights which may nevertheless exist and which may possibly reduce their losses. I want to thank the hon. member for that suggestion in this particular regard.

The hon. member for Walmer had a bit of a squabble with his colleagues on the opposite side. I do not know whether it is Benjamin and Judah that are warring against one another. I just want to say that in reality this commission has to do very important work. Hon. members will understand that there are various departments which have various functions to carry out in respect of property.

One is the Department of Community Development which is responsible, together with the provincial administrations, for the development of residential areas and, therefore, the availability of plots. The department is also responsible for providing housing. In his turn, the hon. the Minister of Justice deals with the registration of title in respect of immovable property. Then there is an important facet of this subject which falls under the Department of Commerce, and here I am referring to the various forms of sales of immovable property and the various conditions which apply to it.

That is why the terms of reference to this commission were extended at its own request, although the terms of reference were stated very widely when it was still a Select Committee, since they encompassed the whole broad spectrum of the sale of land by means of conditions of sale.

It is essential for this commission to complete its task quickly and present us with its recommendation. I want to extend an invitation to the commission. If, during the course of its investigations, it feels that it has to present more interim reports in order to cover certain facets, and to protect people, I shall be very pleased to accept these interim reports. I also want to go further. When I have to deal with legislation of this nature, legislation which must protect people’s rights, it may be discovered that we may even have to amend the legislation further as a result of these interim reports. I shall have no hesitation whatsoever in doing so. I think it is the only realistic method of dealing with the matter, and I therefore want to extend this invitation to the commission.

Question agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

Hon. members will remember that the Estate Agents Act, 1976, came into operation on 1 August 1977. I want to avail myself of this opportunity of sincerely thanking the Estate Agents Board for the work they have done to date. In particular I should like to avail myself of this opportunity to thank the first chairman who is now retiring, Mr. Randall, very sincerely for the work he has done. I can understand the reasons which induced him to decide that he would cease to serve as chairman of this board. Since the commencement of this Act it has become clear—as I expected—that as a result of certain practical problems which could not have been foreseen during the drafting and passing of the original Act, but have since emerged, certain amendments have become essential.

In the first place, certain problems of interpretation were experienced with the definition of “estate agent” as it is now contained in the principal Act, and there have also been representations from various quarters that this definition could be interpreted so widely that more organizations and persons could be brought within its scope than was originally intended during the drafting and passing of the principal Act.

The definition of “estate agent” is therefore being adjusted to narrow the concept of “estate agent” in such a way that it will exclude persons who merely collect money by virtue of an agreement in terms of the Sale of Land on Instalments Act, 1971 (Act 72 of 1971), as well as persons who collect insurance premiums on behalf of companies. However, in order to protect the public against any loss which may be suffered as a result of the theft, by an estate agent, of the moneys which he has received in respect of the said two situations, the Act is also being amended so that the public will indeed have a claim against the Estate Agents Fidelity Fund in such cases.

I hold the view that we should give serious consideration to a subsequent further amendment of the Act so that all funds received by estate agents, shall be covered by their fidelity fund.

†The Estate Agents Act is also being amended to remove the doubt which at present exists as to whether the Minister has the authority to grant exemptions from the provisions of the Act to persons such as unrehabilitated insolvents mentioned in section 27 of the Act.

At present the provisions of the Act relating to the issue of fidelity fund certificates by the board are generally interpreted to have the effect that the board may only issue unqualified certificates. In practice it has been found that this provision is unnecessarily rigid and may cause unnecessary hardship in certain cases. In order to rectify this position it is felt that the board should be empowered to issue fidelity fund certificates subject to certain conditions laid down by the board with the approval of the Minister. A provision to give effect to this principle is included in the Bill.

In its present form the Act does not provide for a right of appeal to the persons mentioned in section 27 of the Act in the event of their applications for fidelity fund certificates being turned down by the Estate Agents Board. In order to overcome this problem, it is necessary to amend the Act so as to provide for a right of appeal against decisions of the board in this connection.

A further shortcoming in the Act is that an estate agent is obliged to open a separate trust account, but he is not required to identify such an account as being a trust account in terms of the Act. This defect is being rectified by a suitable amendment to the Act.

*The Estate Agents Board has also requested that provision be made in the Act for several categories of estate agents, which will then enable the board to fix different amounts which each of these categories of estate agents should pay to the board as levies or as contributions to the Fidelity Fund.

As the Act reads at present the position is that employers and their junior employees have to pay the same amounts to the Fund as well as to the board, and this is considered to be unreasonable. This view of the board has merit—and I believe hon. members will agree—and accordingly it is being proposed that the Act should be amended in such a way that regulations may be made to classify estate agents into various categories and to make provision for the payment of differentiated amounts to the board and to the Fund.

Another real problem which exists at present, is that the Minister may only grant exemptions from the Act by way of regulations, which of course occasions unnecessary costs and an additional administrative burden to the State. I therefore propose that the Act be amended in such a way that it is also possible for the Minister to grant exemptions from the provisions of the Act by way of written notices sent through the post or which need merely be handed over.

Although the Estate Agents Act only came into operation on 1 August 1977, it was absolutely essential to establish the Estate Agents Board before that date in order to perform specific functions. The board has its first meeting on 7 January 1977 and since that date, but prior to the date of commencement of the Act, it has therefore performed certain legal acts.

To prevent any such act performed by the board prior to 1 August 1977 being declared ultra vires, a new provision is being inserted in the Act as a result of which the Estate Agents Board shall be deemed to have been established on 7 January 1977, and any acts performed by the board between the date of the passing of the Act by Parliament and 1 August 1977, or any regulations promulgated during that period, shall be declared to have legal validity.

Mr. Speaker, apart from the fact that one does not want to strain the amicable temper which has prevailed in the House this afternoon, it would in any case be very difficult to find anything to quarrel over in this Bill. We are therefore going to support the Second Reading of the legislation. I do however want to express a few remarks in connection with the legislation.

The narrowing of the definition of “estate agent” will be welcomed by a considerable number of persons and bodies, since it appeared as though organizations of whose activities the purchase and sale of land comprised but a minor portion, might have fallen under the provisions of this Act, and since that would have imposed unforeseen burdens on them, we agree with what the hon. the Minister has proposed in this regard.

The provisions in clause 2 of the legislation, broaden the category of circumstances in which remission may be granted to people who have suffered as a result of malfeasance on the part of the estate agents. This step should also be welcomed and, subject of course to a proper opportunity to see what further amendments may be necessary, I want to express the general idea that we should welcome it if the hon. the Minister were to move even further in this direction in future.

†The proposed new section 27, as substituted by clause 3 of the Bill, deals with the issue of fidelity fund certificates to people who may on one ground or another have been disqualified from holding such certificates in the past. This is obviously a sort of prerogative of mercy clause, and it would not behove people with liberal views like ourselves to object to it. We expect with confidence that the hon. the Minister would be very careful about issuing any exemptions under this new provision, because if one reads …

I shall not extend my compassion too far.

That is exactly the request I was putting. If one looks at the categories from (a) to (e) not one of them can be regarded other than in a very serious light. We shall, however, not take exception to this. As the hon. the Minister has pointed out, clause 4 of the Bill is really consequential on clause 3 and thus calls for no further comment. The provisions in clause 5 is a necessary tightening up, and there is nothing that can be said about that.

If there is a provision of the Bill about which we have concern, it would be the provisions of clause 6—not in the sense that we cannot understand the hon. the Minister’s desire to have the provisions in the law, but because both provisions in clause 6 go very wide. We would hope that the different regulations that may be made in respect of different estate agents or categories, would never be used in a capricious way and we would warn the hon. the Minister against the danger—no matter how good his intentions may be—of making his categories too small. If the categories in this regard get too small, there is going to be a suspicion of motives that are not entirely admirable. Also in regard to the proposed new subsection (2), one wants to know the reasons as to why exemptions are to be visible and obvious. With these words of reservation or warning we accept the proposed new subsection (2) and we understand why the hon. the Minister wants actions taken before 1 August 1977 to be regularized. Therefore we are happy to support the Second Reading of this Bill.

Mr. Speaker, we on this side of the House are very grateful for the fact that the Official Opposition supports the legislation. It is very clear that the changes to the principal Act, which this legislation is going to effect, have been very well devised in co-operation with the Estate Agents Board. The mere fact that the hon. the Minister has also referred to it in those terms in his Second Reading speech, ought to be sufficient assurance to the hon. member for Parktown that the powers sought in this connection, especially those in clause 6 to which the hon. member has referred, are necessary with a view to the streamlining of the profession and that they will be put into effect in close co-operation with the board. In my view, the amendments to the principal Act now before us, satisfy at least two requirements. In the first place they will contribute to the streamlining of the profession. It is inevitably the case that a new Act in practice may exhibit certain deficiencies in practice and give rise to certain new aspects.

I am thinking particularly of the question of qualified certificates. That is something which I have encountered in my constituency. As a result of the fact that agents could not obtain an absolutely unqualified certificate, they found themselves in difficulties. I think that the Bill makes a particularly favourable concession in this respect. At the same time it makes provision for the necessary control. Furthermore, I think that these amendments still contain the necessary protection for the public in that a requirement is laid down that the desired trust account should also refer to this particular legislation. I think it is an important matter.

Then there is still the narrowing of the definition of “estate agent” and the consequential transfer of the conditions of protection for the public to section 18.

I think that the Bill now before the House, satisfies both these requirements, in respect of the profession and in respect of the public, and I therefore have pleasure in supporting it.

Mr. Speaker, since there is such unanimity among the hon. members, I do not intend to take up the time of the House for long. I just want to thank hon. members for their support of this legislation.

In this connection I just want to point out—it may interest hon. members—that the Estate Agents Board is at present going through a painful process to put this particular profession in order. Hon. members would appreciate that by its very nature this is, never an easy process in any case. For that reason I have great appreciation for the work which the board is doing in this connection. We shall have to accept that as we gain experience in this particular connection, we shall, from time to time, have to devote attention to specific facets of this legislation with a view to its improvement. I just want to point out that the amendments which we are effecting here, especially those in clauses 2 and 6, are really concerned with the fact that we want to administer the Act better and more effectively. We found that there were certain shortcomings in this particular connection.

†In this connection I can refer to clause 3. The existing provisions are so rigid that they do not allow for any discretion at all. We shall apply the proposed section with the greatest circumspection, but nevertheless I think we all agree that there is a need for a less rigid approach to this sort of thing.

With regard to clause 6, we can differentiate between various categories. I want to give the assurance that we do not intend having individual categories for individual undertakings. However, there are major differences, and I think we must make provision to deal effectively with those differences as they occur.

Finally, it is true that in terms of the new definition we are now narrowing the net, as it were. The hon. member for Florida is perfectly correct in stating that we are really transferring the protection contained in section 18 by extending section 18. I still hold the view that we shall have to consider—I undertake to do so—that all moneys received by estate agents, no matter what the source of that money is, should be carried by their Fidelity Fund.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

Agreed to.

The House adjourned at 5.24 p.m.