Mr. Speaker, when the Committee of the whole House discussed the Vote “Parliament” on Tuesday, I raised the matter of the admission of non-Whites to the parliamentary dining-room.

I stated that permission was refused to the then hon. Leader of the Opposition to entertain to lunch in Parliament on 5 March 1979 the members of the International Cricket Conference who visited South Africa in order to investigate and report on the progress being made in eliminating racial discrimination in cricket, and who included Mr. Champ Hunt, chairman of the Bermuda Cricket Union and their South African host, Mr. Varachia, president of the South African Cricket Union.

You, Mr. Speaker, have asked me to draw to the attention of the House that when approached for his permission, Mr. Speaker offered instead to host a luncheon in the parliamentary dining-room himself, at which all members of the International Cricket Union delegation and their hosts would have been present, as well as the hon. member for Sea Point and the official spokesmen on sport of the various political parties represented in the House. The offer of Mr. Speaker was, however, not acceptable to the official Opposition on the ground that we wished, in our own right, to entertain and talk to the international delegates.

Permission to hold the luncheon was thereafter refused in terms of the rules governing the use of the dining-room, a matter which I treated fully in my speech on the Vote.

The luncheon was then arranged at a local hotel.

Order! In order to round off this whole issue properly and present the full picture, I just wish to mention that a few weeks before this happened, I was approached by the vice-president of the S.A. Cricket Union with a provisional request to entertain the overseas visitors, together with their South African hosts, to lunch in the parliamentary dining-room. I assured him that I should gladly do so. However, the matter was not followed up by the Cricket Union.

Mr. Chairman, during the Second Reading debate we discussed the question of public amenities which should be provided alongside national roads. I think that the House was at that stage of the same opinion, namely that it was necessary that these amenities should be provided. A question arose—raised by me and the hon. member for Umhlanga—in connection with competition with private enterprise, in that we did not feel that it was correct for the National Transport Commission to enter into competition with private enterprise if private enterprise was prepared to provide the amenities on their own.

Obviously, it might well be necessary to encourage private enterprise to put up amenities of this nature. I do not think, however, that there was any divergence in principle on what we believe. We are now faced with a situation in which we have three different amendments before us. At this stage I should like to take the opportunity of moving the amendment printed in my name on the Order Paper, as follows—

: Provided that—

All three amendments, to a lesser or greater degree, are aimed at achieving the same thing. Apart from my own amendment, there is one amendment printed in the name of the hon. member for Umhlanga, and the hon. the Minister has been kind enough to let me have a copy of the amendment he intends moving himself. I have only had a brief look at the hon. the Minister’s amendment. I dare say it is adequate, but only just. The whole question of private enterprise is covered, but not to any great degree. There is always a possibility of abuse in this sort of situation, but I am not suggesting for one moment that this hon. Minister will have anything to do with that. I believe, however, that in legislation one always has to ensure that abuse of any system is made as difficult as possible. Therefore I should like to go ahead with my amendment and get the hon. the Minister’s comment when he replies later. The point of the exercise is that if the State is going to put up amenities it could well be in competition with private enterprise.

We are absolutely ad idem when it comes to the amenities themselves. It is necessary for, “comfort stations”, as they are termed in America, to be provided for motorists. I also think it is necessary that one should have things like first-aid stations, telephones, etc. There are long stretches on many of our national roads—stretches of as much as 150 kilometres long—along which one finds no garage, no café and no restaurant, so that motorists are left rather to their own resources. There is no question at all about our agreement with the expropriation of land for this purpose.

In order to motivate my amendment, I should like to point out that we believe that if such land is expropriated, the National Transport Commission should immediately offer it for sale by public tender to the private sector. It is, of course, quite possible that nobody in the private sector might be interested in buying that particular land to provide the amenities. That is why, further in my amendment, I state that if no tenders are received, it shall be at the hon. the Minister’s discretion to give permission for the amenities to be built on that land and then to offer it for sale to the private sector. If, even at that stage, no tenders are forthcoming then, again at the discretion of the Minister, the amenities that have been built by the National Transport Commission could be offered for rent—all by public tender.

I think we have tried to achieve the same thing. I must say that I found considerable difficulty in trying to phrase an amendment that would meet the intention of this amending Bill. I do hope, however, that the hon. the Minister will give due consideration to my amendment.

Mr. Chairman, this afternoon something very unusual and very welcome has happened here in this House in that we have the amendments as printed on the Order Paper—one in my name on yesterday’s Order Paper, and the one in the name of the hon. member for Orange Grove on today’s Order Paper. During his Second Reading speech, I think, the hon. the Minister intimated that he understood the difficulties which each of us was having with this particular clause of the Bill before us.

He undertook to consult with us and to look at and consider amendments which we may wish to bring forward in the spirit of trying to find some way out of the predicament in which we found ourselves. True to that spirit the hon. the Minister, before we took our places here this afternoon, paid me a compliment by saying that he intended moving an amendment that embodies two portions of my amendment. I believe this is a good way to go about legislation of this nature. I agree whole-heartedly with the hon. member for Orange Grove that this is a particularly difficult clause to amend in order to achieve what, I now know, we are all seeking to achieve. I am equally confident that the hon. the Minister is striving to attain the same end as we on this side of the House.

I must say that I am not entirely happy that our intentions as regards private enterprise are adequately catered for, but like the hon. member for Orange Grove, I am only too happy to listen to what the hon. the Minister has to say to us and to hear his assurances and any motivation he might have of the amendment he has so courteously handed to me to study. I wish to leave my amendment, as it stands, on the Order Paper in order that the hon. the Minister may deal with it and in doing so indicate why he has seen fit to change it and phrase it in the way he has done. I move as an amendment—

Mr. Chairman, clause 2 grants the national Transport Commission the right to buy land adjacent to roads for the purpose of letting it. This creates problems in so far as existing developers were compelled, in terms of the previous policy, to erect their filling stations or restaurant facilities at least 500 metres away from the national road at interchanges. Now, the point is that in parts of my constituency, and just outside it as well, there are developers who, in terms of the old policy of the National Transport Commission, have made considerable investments in establishing filling stations and restaurants for through traffic, in terms of the policy of the department. If development were to be permitted within a reasonably short distance from these developers by the department, and possibly by other bodies, e.g. the relevant provincial or local authorities, or the Planning Division, which is also involved, this would entail that the developers in question could suffer heavy financial loss, because naturally the travelling public will prefer to use the amenities just alongside the road. This will save them a lot of trouble. In principle I agree wholeheartedly with the policy that it is preferable to do it this way, as it is being done everywhere in Europe. All I am asking of the department, however, bearing in mind the conditions they themselves set previous developers, is to see to it that in terms of the new arrangements, the previous developers will not be severely prejudiced. I request the department at least to be reasonable in dealing with the previous developers, for they have observed the requirements of the department. I think this is a reasonable request. I myself have in the past made representations on behalf of persons who erected filling stations in Estcourt and Mooi River according to the old policy. Now, within approximately 15 km from an existing filling station, provision is being made for the acquisition of a site which could be let to one of the petrol companies for the erection of a filling station and restaurant facilities on both sides of the national road. I know that it is not only the National Transport Commission that is involved. I know that the Planning Division, the provincial authorities and the local authorities, where applicable, are also involved. Nevertheless I wish to make an earnest appeal for fairness as regards the action taken in respect of the existing developers who have already invested large amounts of money—in some cases more than R¼ million—in existing facilities to provide for the travelling public.

Mr. Chairman, in reply to the aspect raised by the hon. member for Klip River, I want to say immediately that he has already addressed representations to me and my department in regard to this specific case to which he referred. The idea is not to duplicate existing facilities, but to create facilities where there is a need for such facilities. I also just wish to refer to the whole question of the specific facilities existing in our smaller towns in all the provinces. The idea is not to create any facilities of this nature so close to existing facilities that these would be adversely affected. Naturally it is not possible at this stage to bind people to a specific localization, that is to say, to a specific distance from existing facilities. However, we shall have to give careful consideration to the position of developers who have indeed developed sites in accordance with the previous policy and whose rights could be affected by the implementation of a new policy. I gladly give the hon. member this assurance. The hon. member should, however, realize that certain other factors have in any case emerged since the formulation of the old policy for the National Transport Commission. I do not give this as a reply. I merely wish to state the fact. The energy crisis has brought into being certain new elements, new considerations, in the planning of national roads and the relationship between planning and standards. However, all parties in this Committee agree that there is a need for the creation of facilities at particular points, without identifying those points.

There is a second remark I wish to make in this regard. Because of the very lack of facilities of this nature for certain population groups in this country, the need to create them is stressed and emphasized even further. Hon. members surely know—and I certainly do not apologize for this—that in many towns no facilities exist for certain population groups in this country. Apart from Government policy, there are owners of certain facilities who, in their own right, restrict their services to certain people. Therefore, what we are trying to do here is, in all reasonableness, to look at this particular facet as well, for the benefit of the whole public, particularly the motorist.

†It is quite obvious that hon. members accept the commitment I gave on behalf of the Government on the question of private enterprise’s role in this instance. Hon. members will also understand, I am sure, that I have exactly the same difficulty that they have, i.e. how to incorporate an intention in any Bill or Act of Parliament. I think hon. members will appreciate that this is one of the most difficult things to do. It is one of the most difficult things imaginable to decide exactly what one proposes to do in terms of one’s own commitment. Let me, however, restate my own position in this particular regard. I believe that it is for private enterprise to undertake and develop the type of facility that we have in mind and about which we all agree. Secondly, there are certain limitations on the private sector providing these facilities, and the acquisition of land or sites for this particular purpose is one of the major limitations on the private sector, in the light of the facts as explained in my Second Reading speech. Once we agree that that is so, we have to decide how we can best achieve our objective, how to define it in exact terms in the Bill. I have indicated that we are committed to making the land which is to be acquired in terms of the Bill before us, available to the private sector. Therefore we do not argue about that particular issue. But the question is: What is the best way of making it available to the private sector? In many cases it will be possible to sell the land to the private sector, but that does not apply in all cases. Hon. members must bear in mind that in terms of the agreement the Department of Industries has with the motor companies we are giving out quotas for service stations, for instance. This puts an additional limitation on this, additional to how one would normally do this.

By accepting part of the amendment of the hon. member for Umhlanga, we wish to give an indication that the land, when it is sold, will be sold by tender. Secondly, we say that, when acquiring the land, reference will be had to and their will be consultation with the local authority and the provincial administration concerned. I think that explains my position to hon. members. In many cases it may well be that people will not buy the land but will want a long-term lease on it. That applies to oil companies and also to private developers. In many cases service stations with their ancillary facilities are in any event the property of oil companies. They in turn lease it to garage owners. The only argument I want to put before the hon. member’s is that I do not think they must tie me down to a certain procedure when it comes to how I should deal with a problem. Whatever is to be done, whether one deals with property in terms of a sale or a lease, it should be by tender. That, I think, adequately explains the amendment I propose in the place of the amendments of the hon. members.

There is a final point I should like to make. It is difficult to accept the second part of the amendment of the hon. member for Umhlanga for the simple reason that, if I have to advertise what is intended in the Government Gazette and the papers circulating in the area concerned, I would have to include exact details as to what is to be done on the site. In any event, there are other limitations on the private owner of land when he wants to undertake this kind of development. There are certain restrictions in terms of building distances and there are certain restrictions in terms of the right to subdivide land. Different tests are applied by the various departments when they have to approve subdivisions.

I submit, in conclusion, that hon. members must accept my undertaking in this regard. Let us test this in practice. We have had no experience with this sort of thing at all. I shall be the first one to come back to the House to amend any legislation we find does not serve, firstly, the commitment I have given and, secondly, the purpose we all want to serve with the Bill before us.

Mr. Chairman, I now move as an amendment—

This applies to a lease as well as a sale.

Mr. Chairman, we in these benches very happily accept what the hon. the Minister has said, but I should like to query the usage of the word “alienated” in this regard. I do not know whether the hon. the Minister has his dictionary available; if not, perhaps he can borrow the dictionary of the hon. member for Amanzimtoti. In the second portion of the hon. the Minister’s amendment he says—

I should really like to know the connotation of the word “alienated”. In my understanding it is only in the event of the land being sold. One can only alienate land if one sells it I want to cover the leasing situation as well and I want to be quite satisfied that this word does cover it, because if it does not, I think we should then insert “land intended to be alienated or leased”. Therefore I recommend this to the hon. the Minister and his department for further consideration with a view to further amending the clause in the Other Place.

Mr. Chairman, I rise immediately to assure the hon. member that the use of the word “alienated” is intentional, because “alienate” includes various ways of disposing of land, of which “sale” is one, of which “lease” is one and of which even “donation” is one. These all represent various forms or means of alienating land. Therefore the hon. member can be assured that the word “alienated”, as it is used in this particular amendment, includes all the forms of disposing of land.

Amendment moved by the Minister of Transport Affairs agreed to and amendments moved by Mr. R. J. Lorimer and Mr. B. W. B. Page dropped.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

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

As the hon. the Minister will see, this is a simple, technical amendment. I believe that a word has been left out, although I did have a semantic argument with an official who believed that it was in order as it stood. Even if he still holds that belief, I argue otherwise. At any rate, my amendment serves to make it very much easier and simpler.

Mr. Chairman, I accept the amendment because I believe that if you can say what you intend, you should say it.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 8:

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

The first amendment has to do with the services of the Railway Police in times of emergency. We in these benches would accept that, in war-time conditions for example, it might be necessary to place the Railway Police under the command of the State President, who may then assign them to other commands, which would be military commands one would imagine. We obviously regard the Railway Police as being there for a specific purpose. They are there to serve the interests of the Railways in police matters. In conditions of war, however, things of course become very different, and we accept that it might be necessary for Railway policemen to be called upon to carry out duties which would not be normal for them at all. The same thing could happen in certain emergencies. As the clause reads at the moment: “The State President may in the event of war or other emergency,” we believe it is a little too broad, and the purpose of my first amendment, is to restrict this to a state of declared emergency. The clause will then read—

There are many emergencies that occur almost daily in this country and there are likely to be many more. We do not believe that the Railway Police should be called upon to depart from their normal tasks of protecting the Railways and carrying out police duties, unless the emergency is so serious as to be a state of declared emergency.

The second amendment has to do with where the Railway Police may be employed in that state of war or emergency. As the clause reads in the Bill that is before us, it is stated that they could be used to—

We believe that this is a little broad. It is obvious that they could be used within the borders of the Republic, but the object of our amendment is to restrict their use to either within the borders of the Republic or to any area adjacent to the borders of the Republic. One accepts that in modern Africa there occur hot pursuit situations where it might be necessary for policemen to go just beyond the borders of the country, and what we are attempting to do in this amendment, is to restrict that use only to that sort of task.

We do not believe that a man who has joined the Railway Police should find himself in a situation where he could be sent anywhere in the world. The likelihood of this happening may be very small indeed, but we are talking about the principle here. We believe that people join the Railway Police because they want to carry out a task as policemen. The task could be broadened somewhat at times of war or emergency but not to a situation where Railway policemen can go anywhere in the world. That is the motivation for our amendment. We realize fully that the S.A. Police Act provides the same, that members of the Police Force can be sent to any place in the world. However, there is a more restrictive situation with regard to the Railway Police. They are there for a particular function, and we do not believe that they should fall in the same category as the S.A. Police Force.

Mr. Chairman, the amendments moved by the hon. member for Orange Grove are actually of a twofold nature. If I understand him correctly, he is satisfied, as far as the first amendment is concerned, that the S.A. Railway Police could, in certain circumstances, be placed under another command by the State President Secondly, the hon. member argues that he would be satisfied if that should happen in the event of the country being in a state of war or a declared state of emergency. I should like to explain to the hon. member in which circumstances a declared state of emergency exists in terms of particular statutes. It is quite clear that the Public Safety Act of 1953 affords the State President certain powers to declare a state of emergency. I assume that the declared state of emergency to which the hon. member refers is a declared state of emergency in terms of the provisions of the Public Safety Act of 1953, as amended. The hon. member will understand that the declaration of a general state of emergency, or even a state of emergency in respect of a particular part of the Republic only, is an act which does not receive publicity within the borders of the country alone; the declaration of a general state of emergency has certain implications for the country beyond its borders as well, in the sense that it causes people in other countries whose task it is to determine the investment risk of our country, to question the circumstances. Therefore it may happen in practice that circumstances arise which may necessarily entail putting the S.A. Police and the S.A. Railway Police at the disposal of another body, even in a limited local area. In my opinion it would be a mistake in these particular circumstances, to say that a state of emergency should be declared in terms of the provisions of the National Safety Act for the sake of employing the S.A. Railway Police for a limited purpose. I should like the hon. member to agree with me in this regard, because I am not trying to argue against him. I am arguing about the situation which could arise in practice. The second argument I am asking the hon. member to accept, is that there are three security forces in South Africa. Firstly there is the Defence Force and its component parts. Secondly there is the S.A. Police Force, and thirdly, the S.A. Railway Police Force. In this particular respect I wish to indicate that the concept that the S.A. Railway Police is merely there to guard and protect is one we abandoned long ago. Although they include limited geographical or territorial powers the functions of the S.A. Railway Police are identical to those of the S.A. Police. Accordingly there is no longer any difference between the statute governing the S.A. Police and the statute governing the S.A. Railway Police. Consequently I ask that when we hold a debate on the S.A. Railway Police in this House, we regard it as a real Police Force. Hon. members can look at the legislation affecting the S.A. Railway Police. The amendment I am now proposing, brings it into line with the S.A. Police Act in all respects. As far as the declaration of a state of emergency is concerned, the hon. member will have to agree with me that it may be very beneficial to the country to employ the Railway Police Force for certain purposes where a state of emergency exists which does not justify a declaration as such.

[Inaudible.]

That is correct.

†I should like to submit that there is a difference in degree. That is the only point I should like to make to the hon. member. Once the hon. member accepts, as he does, that under certain circumstances the Railway Police must be put under the command of some other person or institution, he has accepted the principle that they should be made available under certain circumstances.

It could be a national disaster.

It could be a disaster. I submit that if we have to accept that it could only be done under circumstances of war and of declared emergency in terms of this Act, we would, firstly, be doing this country a disservice and, secondly, withhold the Railway Police from making a contribution by assisting their colleagues in the other Forces. I should like to tell the hon. member that I have no other motive except the one I have explained. I think I have convinced the hon. member … Well, he is smiling, Mr. Chairman.

I should like to come to the second point. In this regard the hon. member has again accepted the principle that like the S.A. Police the S.A. Railway Police may also be called upon to serve outside our boundaries. The only limitation he wants to put on that is that it must be adjacent to South Africa. I need not explain the map of Africa to him, but should like to argue that once one has accepted the principle that the South African Railway Police may, like the other Forces, in certain cases be called upon to serve beyond our boundaries, one has in fact accepted the principle that one has to operate outside one’s own boundaries. For the very same reasons the hon. member has indicated his support of the principle of going beyond our boundaries, I submit he will have to accept that the same circumstances can entail that one will have to go beyond the second boundary. I should therefore like to ask the hon. member to assist us in this regard. I will be prepared to give hon. members the information, even if it has to be on a confidential basis, as to any circumstances that might cause this to happen. After all, whether we like it or not, or whether we hold different opinions, we share one thing with one another and that is the protection of this country and the peoples living in it, and therefore I should like to ask the hon. member to accept my bona fides in this regard and accept the amendment as it stands.

Mr. Chairman, I am quite prepared to accept the hon. the Ministers bona fides in this matter, but unfortunately I am not prepared to accept his rejection of my amendments. I think we have different conceptions as to the functions of the Railway Police. We do not see them as ordinary policemen who just have a certain territory assigned to them. They have a specific function and that is to do with the security matters of the Railways. As the hon. the Minister has quite rightly said, this country has various tiers of security forces. We have the military and the ordinary Police Force. We believe that those should be adequate to deal with the normal daily emergencies or national disasters, of which the hon. member for Durban Point spoke. I may point out that in times of national disasters co-operation is always forthcoming from the Railway Police, as from everybody else. It is not necessary to place them under the overall command of somebody else. We believe they do have a restricted function and as far as possible we should like to see them restricted to that area. We do not believe that it should be possible to use the Railway Police on an everyday basis away from the Railways in a state of emergency which is not defined. It could be anything, such as a march of students, and we do not want them to be used in that sort of situation, because we believe that is the function of the military, who are trained for that job, and for the S.A. Police, who are also trained for a particular job. The Railway Police are trained for the job of security on the Railways. It is a matter of specific expertise in a particular area.

In so far as my second amendment is concerned, I can also not agree with the hon. the Minister. He carried the argument just a little too far. I believe there is a difference between having something to do with chasing a criminal across the border in a hot-pursuit operation or in the case of dagga smugglers and things of that nature, and mounting an invasion of the continent of Europe, to take it from the sublime to the ridiculous.

Why should the S.A. Police be entitled to act under those circumstances?

The S.A. Police should not be entitled to act. It has always been the contention of us in these benches that in times of war the military have to function. We accept that in times of a declared emergency which is heading towards a sort of war situation, extraordinary attitudes have to be taken into account and that extraordinary measures have to be taken. Under such circumstances the S.A. Police Force may be called upon to carry out this sort of task. When it comes to the Railway Police, however, we feel that they have a particular field of expertise and what applies to the S.A. Police does not apply to them.

Although I accept the bona fides of the hon. the Minister and have listened to the arguments which he has advanced—I think he has expressed our point of view very fairly indeed—I am afraid we shall have to stick to our amendments. We think they should be accepted. I would urge the hon. the Minister to give consideration to accepting them.

Mr. Chairman, I shall not take up much of the Committee’s time. I think we shall simply have to agree with one another to be able to differ on this matter.

I repeat that the functions that have been allocated to the S.A. Railway Police do not differ in principle from those entrusted to the S.A. Police. The restriction on the activities of the Railway Police do not lie in the content, but mainly in geographic areas. I want to furnish the hon. member with an example, even on the basis of his argument. As far as the S.A. Railways is concerned, some of its capital equipment is at present in various countries in Africa, in countries not necessarily bordering on South Africa. We do not operate solely within the borders of this country. Even on the basis of the duty of protection which he said rested on the Railway Police in respect of the protection of Railways property, it could be a duty which extended across the border of a country immediately adjacent to us. The hon. member must show some understanding for my limitation as regards arguing this matter. I am afraid that if I go on arguing, conclusions could be drawn that are not in accordance with my intentions. I believe that the hon. member will recognize my problem in this regard.

Just like the S.A. Police, the Railway Police have a security division. They have a murder and robbery division too. They are modelled on the same principles and geared to the same goals as the S.A. Police. Let us examine the example to which the hon. member for Durban Point referred by way of interjection. A natural disaster arises which need not be declared an emergency in terms of the relevant legal provisions. However, someone must be put in charge of rescue operations, and this may occur in areas in which passengers of the S.A. Railways are involved. Even goods to be conveyed may be involved. However, one single force must be in command. In a case of this nature we cannot work with the concept of a declared emergency. Surely the hon. member will understand this.

Now I come to the second point, viz. that the hon. member conceded that the borders could be crossed. Now I want to point out that once the hon. member has conceded the principle that the S.A. Railways Police may cross this country’s borders, and that they can then be placed under the command of another body or person, he has also, with all due respect, already conceded the whole principle.

To a degree.

There is no such thing as a principle “to a degree”. There is only such a thing as a principle. A principle does not have a degree. There is only one principle involved here and that is the acceptance that it can happen that the S.A. Railway Police, like other forces, are compelled to act beyond the borders of this country. What borders these will be, will be determined by the nature of the emergency situation prevailing there.

Now I ask once again that we simply agree to differ. I shall understand if the hon. member differs from me on this. Unfortunately I cannot accept his amendment in this regard.

Mr. Chairman, I merely wish to state that the NRP does not support the view of the official Opposition in this matter.

This is the attitude which was adopted when the Defence Act was amended in order to allow the Defence Force to operate beyond the borders of South Africa. At that time the official Opposition—I must say they are consistent—followed exactly the same line of reasoning. They used the same wording referring to areas immediately adjacent to our border. At that time, I think, there was a limit of 50 km. That attitude has been abandoned by the official Opposition, and I think the hon. member for Orange Grove should have consulted with the hon. member for Yeoville, because with regard to the Defence Force the official Opposition now accepts the need, under certain circumstances, to operate beyond the immediate area of our borders. By “area adjacent to” it does not mean only the country or the whole of the country; it means the area limited to the border of South Africa.

We can think of many circumstances in which it might be necessary. For example when it affects a very valuable consignment —diamonds or something of that nature— being conveyed by the S.A. Railways, and which needs to be guarded and protected. Does that mean that our Railway policemen have to get off the train as soon as it reaches the area beyond that immediately adjacent to our border, and hand over the guarding of that very valuable consignment to someone else?

What happens now?

What happens now is that our police either go right through or hand over, depending on the agreement. We have our trains operating in Mozambique. We have personnel operating in Mozambique. We have people living there, working in the Maputo harbour, and I can see no reason why a Railway policeman should not serve there. It is an agreement with the country with which we are dealing. Therefore we cannot support the objection of the official Opposition.

Mr. Chairman, it is not my intention to carry on with this argument very much longer, because it is obvious that we disagree on this. I merely want to react to what the hon. member for Durban Point has just said. We do not equate the S.A. Railway Police with the Army. This is the difference. We do not believe they are there to serve the same purpose or to carry out the same function. We believe they are different organizations with different areas of specialities.

The hon. the Minister did introduce new arguments. These had to do with the defence of Railway property. If this clause were restricted to the defence of Railway property, it would be a very different matter. But it is not, and I see no point in prolonging this argument. I think we have to agree to disagree.

Amendments negatived (Official Opposition dissenting).

Clause agreed to (Official Opposition dissenting).

Clause 32:

Mr. Chairman, I move as an amendment—

I have already explained the reasons for this in the Second Reading.

Mr. Chairman, we are quite prepared to accept the amendment moved by the hon. the Minister.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Third Reading

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

I want to thank the hon. members for their co-operation in the passing of this legislation. We have, as all of us recognized during the Second Reading debate, in fact entered a whole new era. The legislation is of a technical nature, but has a significant effect on the more efficient functioning of the S.A. Railways and its associated services, services that affect everyone. I just want to conclude by expressing once again my sincere gratitude for the co-operation.

Mr. Speaker, the hon. the Minister has said that this is almost a new era as far as the Railways are concerned. The Bill is largely devoted towards taking out of the Constitution Act and putting into relevant Railway legislation various matters pertaining to Railways. I think the only comment that I would like to make in the Third Reading is that we have clauses in the Bill which have to do with the simplification of Railway accounting methods. I believe there is still room for improvement here. We have a new hon. Minister in this portfolio for his first session and I think we have made a good start. I would like to see him going further in simplifying Railway accounting methods, much further than even has been done in this Bill.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, as one whose constituency has been plagued by the problem of share-block sales, I wish to participate in this debate in order to place on record my appreciation that at long last action is being taken to remove some of those problems.

I want to start by saying that great play has been made of the “sharp” and dishonest dealings that have taken place. There are a great number of estate agents, however, who have handled this type of transaction absolutely scrupulously, honestly and fairly and have never tried to mislead or exploit the people they deal with. I think it would be unfortunate if the impression were created that all dealings in share-block transactions have been under suspicion. Unfortunately, however, there have been those who have exploited this system of “selling” flats. It started as a circumvention of the provisions of the Rents Act in many cases. Owners who had a fixed rental, determined by the Rent Board, sought to find a quick way to make money. They would buy up an old block of flats, paint it up, titivate it a bit to make it look a bit better, and then start selling the flats. They would then go to almost any lengths to get the existing tenants evicted, by victimization and by continual annoyance. Eventually the Rents Act had to be amended three or four times to give protection to rent controlled tenants against exploitation in terms of what I call the “victimization clause”. It is too late for the victims of those operations of the past to be given assistance. I wish, however, there was some way of compensating them by at least bringing to book some of the exploiters like the one in that shocking Barcelona case in my constituency, a case to which the hon. member for Yeoville referred in passing. I wish this Parliament could do something about bringing before the courts those people who took advantage of the gaps and loopholes of the past to exploit tenants. I know of many people—the figures run into many hundreds —who have lost their life-savings in this sort of transaction, and I only hope we have closed all the loopholes by this measure. I do not suppose, however, that one ever closes all the loopholes, but I do hope that the inquiry that took so long, literally years during which the commission sat, gathered enough evidence to deal with all the known loopholes.

One type of situation that has been dealt with involves the two “classes” of shares, but I should like to ask the hon. the Minister whether there is adequate protection against the type of abuse I am now going to describe. I am referring to the situation where only 49% or less of the shares are sold. The remaining shares are kept by the seller. This then gives him a majority on the board. He consequently has the power to control and determine the activities of the board. With that power he then pays himself, his wife or his son directors’ fees, appoints some other relative as caretaker and pays that caretaker. This is “legitimate” business because he controls the board and determines the remuneration.

The Bill also seeks to ensure that there shall not be preferential levies. This was another of the evils that previously took place. The owner’s shares would carry a lower levy per square footage than would those that had been sold to other people. I hope that that aspect has been dealt with by this Bill.

Then there is a problem peculiar to my own and one or two other constituencies in Durban, but mainly my own constituency, namely the leasehold properties. I am not satisfied that there was no way in which this matter could be dealt with. Leasehold property is now accepted by the Government itself and the building societies in regard to Black townships. A Black person in Soweto can buy a house under 99-year leasehold. He can get a bond on it and it becomes his property. That is quite all right and it is accepted by the Government. However, when it comes to a block of flats under leasehold in Durban, the sectional title ownership of the flats in that building is excluded.

That is anti-White.

Yes, it is discrimination against White property owners because a person is now obliged to buy in terms of the share block system. He cannot get title and therefore he cannot raise a bond to finance the purchase of his flat. I believe we should not abandon attempts to sort out this leasehold problem.

There could be a time limit. For example, provided the lease has another 35 years or more to run, I see no reason why that property cannot be registered as a sectional title property. In any event, in 35 to 40 years’ time the property will in most cases have outlived its purpose or at least the original cost will have been covered. In any case, that lease is never called up at the end of 99 years. It is either renewed or converted.

I believe we have to give some further attention to this question. Those people who have bought flats in these buildings under the share block system are unable to get title to them. It means they hold only shares and they are not property owners. Not having title they cannot pass on the property when they die—only the shares.

I do not want to deal with other matters which have already been dealt with in this debate. I merely wish to say that I support this measure in the hope that it will eliminate those evils which have created so much heartbreak and so much suffering for so many people. It has made some people rich very quickly and, although they have not been “dishonest” because they have not committed a crime, they have become rich in a very doubtful fashion as far as the practices they followed are concerned. I hope we now have a measure which will put an end to that sort of exploitation of people. I support the Bill.

Mr. Speaker, I should like to convey my sincere thanks to the hon. members who took part in the debate. In more than one respect, this is a piece of legislation in respect of which one would like to receive suggestions from the Opposition side in order to help one to make the legislation as effective as possible. We are really breaking new ground with this measure. Therefore I want to say, as I said in my introductory speech, that I shall certainly take into consideration, even at this stage, any suggestions which may help us to effect improvements.

†The hon. member for Hillbrow referred to clause 21 of the Bill, which is the clause dealing with offences and penalties. It is unfortunately not possible for me to delete that clause. There are perhaps other remedies available, and I am aware that the contemporary trend is to de-criminalize legislation where commercial matters are concerned. However, in the fourth interim report of the commission it was recommended that I should introduce this Bill in the House this session. The two hon. members who signed the minority report did not motivate why they were against any criminal proceedings against people …

No, that is not so.

The hon. member did not really motivate his stand.

It is because they favour of the rich landlords and not the poor tenants.

Yes. But in any case I feel that if we delete this and clause 19 of the Bill, we shall perhaps have to look at many other clauses of the Bill. At this moment, however, I think that I should be allowed to proceed and let us get the Second Reading through. Then by trial and error and by mutual co-operation we might eventually be able to have, if not fool-proof legislation, then at least better legislation. If this is not ideal, at least in time we might be able to reach the position which the hon. member for Durban Point has in mind.

As far as clause 2 of the Bill is concerned, if this clause is applied in the way it is suggested, we feel that it is possible that more hardships will be experienced, and not only hardships, so I think that we should proceed from the point of departure that we have suggested in this Bill. The hon. members who signed the minority report do agree with the principles of the Bill; so I do not think that I need elaborate on this matter any more. Perhaps during the Committee Stage we can come back to it. As far as certain other suggestions are concerned, I think they are being dealt with in the Sectional Titles Act, which deals with the opening of a sectional titles register, etc.

Buildings erected before the commencement of this legislation is also something to which the hon. member referred. Those buildings really fall under the surveillance of a local authority. It is really not my department’s function to monitor problems in regard to that. The hon. member also mentioned that a share-block company may entrust its moneys to a legal practitioner or to an estate agent. If I understand the hon. member correctly, he favours that this should be obligatory. Am I right in saying that?

No, the money must be paid direct, in view of the Barcelona case.

I think we should allow the company to decide in its own discretion how to do this. It should be allowed to act according to the law. I do not think that we should prescribe to them in that regard.

There is another clause to which the hon. member referred, namely to the provisions of clause 15(8) of the Bill, in terms of which the Registrar of Companies would be empowered to prohibit a share-block company from operating on its trust accounts. I have been advised that the Registrar would be obliged to exercise those powers with due regard to the legal rules in relation to natural justice. So as far as that is concerned, I do not think the hon. member need fear that there is anything to be worried about. I also wish to thank the hon. member for his general support as far as this legislation is concerned. I do not think it is easy legislation. It is legislation, as I have already said, with which we are breaking virgin soil.

*Then I also want to thank the hon. member for Klerksdorp for his support of the legislation. This hon. member referred to certain obstacles presented by the legislation to the conversion of rights of occupation into rights of ownership. This is not really a matter which falls under my jurisdiction, but I do think that the problem, which was also mentioned by the hon. member for Durban Point, i.e. the leasehold aspect, will receive the attention of the department concerned. In fact, I believe that we can even make small amendments at this stage to effect an improvement in that respect, perhaps in the Committee Stage. The question of whether building societies should be allowed to finance the purchase of rights of occupation is not a question which I can decide, of course. The hon. member for Klerksdorp also mentioned the question of the mortgagees who obstruct the so-called conversion by refusing to grant permission for conversion or to accept repayment of the guaranteed loans. We shall have to look at this problem. If it creates any further problems, we shall have to take measures. This is one of the cases where we shall have to learn through experience which measures we have to take, if any measures are required at all.

†I think it was the hon. member for Amanzimtoti who referred to the desirability of interested organizations preparing a document which should serve as a guideline for persons how to operate a share-block scheme, persons who are participating or who desire to participate in such a scheme. It has been brought to my attention that the South African Property Owners’ Organization has already prepared such a document as a guideline with regard to sectional titles. I think that they can be asked also to prepare a document to serve as a guideline in cases where this legislation is to be applied. Then I wish to thank the hon. member for Walmer for also supporting the legislation. He particularly supported clause 21 of the Bill, and I am glad of that. He was of the opinion that a participant in a share-block scheme was not in a strong position to enforce his right as against a share-block developer and a company. These are things with regard to which I believe we might, as time goes by, be able to decide whether we have the right balance between the interests of the credit receiver and the giver of credit.

*I want to thank the hon. member for Langlaagte for his contribution to the debate. It is true that we have had problems. That is why this legislation is being introduced. There have been major problems, as the hon. member for Durban Point also said. However, I do not want to come back to the dubious practices of certain operators in this respect. The hon. member also referred to the town-planning schemes of certain local authorities, but I believe this is also a matter where the enforcement of building regulations and the autonomy of local authorities with regard to the share-block company should be left in their hands.

†I was also particularly pleased to hear from the hon. member for Yeoville that he favoured Government interference in the free market mechanism for the sake of creating equality in the market place. The hon. member made a good contribution as far as I am concerned. He, correctly, pointed out that share-block schemes most definitely developed because before the enactment of the Sectional Titles Act there was no way in which a person could acquire exclusive rights of use to a flat. This point was also brought up in a recent case. If I understood the hon. member for Yeoville correctly, he holds the view that all members of a share-block company should have equal votes at any meeting of the companies. In respect of this matter I have been told that in most share-block schemes the voting rights, contributions to the levy fund and payments to be made in respect of the loan obligation of the company, are related to the number of shares held by the participants in such a scheme. Interested organizations have asked us that this practise should not be prohibited. The hon. member also raised some technical problems that I do not wish to discuss at this stage. I think that he could perhaps enlarge upon them in the Committee Stage.

I certainly agree with the hon. member for Durban Point that not all transactions under a share-block scheme are under suspicion. That is so. There are many reputable operators in this field. I want to thank the hon. member for his contribution and his suggestions. I am not quite certain about the control. Much has been written about that, and if he studies the legislation very carefully, he will definitely find that we have taken into account this specific problem of the share-block owner or developer not being able to prevent the opening of a sectional title register. We have also taken into account that he should be prevented from taking complete control of the company.

If he looks at some of the clauses I think he will see that provision has also been made specifically that certain directors should always be present at all meetings of the board of directors. We shall certainly look at the leasehold problem which has specifically been mentioned and perhaps we can say more about this aspect during the Committee Stage. I think that is all comment I have to make on the contributions by hon. members during this debate.

Question agreed to.

Bill read a Second Time.

Mr. Chairman, before I move the amendments printed in the name of the hon. member for Yeoville on the Order Paper I want to reiterate one or two of the major principles contained in this Bill, because I want the Committee to consider these amendments in the light of the general principles which I shall now state.

Firstly, these principles clearly relate to the fact that it is necessary to protect the consumer in hire-purchase and leasing agreements, that is credit agreements, from the depredations of the slick salesmen and the sharp operators who through slick salesmanship persuade people to buy something which they cannot really afford. Without a doubt these people need protection.

Secondly, one must also seek in this legislation to provide certain protection for the trader who is letting items costing considerable sums of money out of his control. There is, in fact, no limit in this Bill to the amount of money whereas in the past there was a maximum of R4 000. The Bill makes no provision for any limitation on the amount of money which may be utilized in terms of a credit agreement.

I think one must also bear in mind that in seeking to protect the consumer one must not unduly penalize the commercial operator who, predominantly, conducts a fair and reasonable business.

There is a third point that I should like to mention. I think that perhaps we have identified another possible area of conflict. I believe this area of conflict lies in whether we should legislate for certain things to be done in this Bill or whether the self-same things should be done through regulation by the hon. the Minister. We in these benches believe that one should do it by legislation as far as possible. I think we shall find during the course of the discussion of the amendments we intend moving that this is where the conflict does arise.

The conflict will arise in that we shall be seeking to put into the legislation before the House certain amendments to clarify certain issues. The hon. the Minister might intend to bring about exactly those same objectives, but intends to do so by means of regulation. As a general principle I want to state at the outset that we in these benches believe it is preferable to do it by legislation in this House. We believe that the hon. the Minister and his department—they will obviously be in control of this legislation when it becomes law—need to be prescribed to as to what they can do in terms of regulations, prescribed to by this House, which is after all the highest legislative body in the land.

Against that general background, therefore, I wish to move the first amendment printed in the name of the hon. member for Yeoville on the Order Paper, as follows—

If this amendment is accepted, the clause will read as follows—

I think this clarifies the situation. Now it will not only deal with the person who transfers rights and obligations, but also with the person who only transfers rights. I think it is entirely logical. I also move the second amendment printed in the name of the hon. member for Yeoville on the Order Paper, as follows—

This amendment is really consequential upon the first amendment. Regrettably I have only established this afternoon that this will necessitate a second consequential amendment and I accordingly move—

If the hon. the Minister accepts my first amendment, per se he will also have to accept the second and third amendments I have proposed.

There is a further amendment which I should like to move, but which I again regret does not appear on the Order Paper. It is an amendment which I believe is very important. It relates to a credit receiver as defined in clause 1 on page 5 of the Bill. I quote clause 1 (iv)

“credit receiver” means—

To this I wish to move the following amendment—

I wish to move two further amendments, both with the same effect. So I shall motivate only one of them by saying that we in these benches do not believe that one is seeking to protect anybody other than a consumer who is a natural person. I think it is totally unnecessary to protect commercial bodies, companies, by this legislation. Anybody who has the commercial intelligence to create a company, in all probability a limited liability company, is seeking to protect himself commercially by limiting the liability to which he can be bound in terms of his company. Therefore, to attempt to protect him by allowing the definition of “credit receiver” to include companies, we believe is not a desirable step. I appreciate that this can create exceptional problems and that there are small companies whose owners or managers are perhaps not commercially aware. Perhaps there are a few of them that may need a certain amount of protection in terms of the Bill, but we believe those to be so much the exception that an attempt to cover them by legislation is totally unnecessary. We believe that the amendment aimed at making it a natural person who receives the protection in terms of the Bill is very, very desirable indeed and not impossible to implement. We have a precedent for this amendment in Great Britain. In their credit agreements legislation they have the same definition of a credit receiver being a natural person. Their legislation was introduced some time ago and they have operated under the legislation for some time without seeking to amend it. I therefore do not believe it to be a definition which should give the hon. the Minister too many problems.

If we accept that basic principle, there are two further amendments that will have to be accepted. I therefore move as further amendments—

These are all the amendments which we wish to move at this stage.

Mr. Chairman, as far as I am concerned the two amendments printed on the Order Paper are in order because they will create more certainty in law as they make a distinction between “rights” and “rights and obligations”. As far as those two amendments are concerned, I agree with the hon. member and accept them.

I have already stated that in order to increase the effectiveness of the legislation, I shall always be willing to accept assistance from any side.

*Unfortunately I have not had time to scrutinize the amendment concerning a credit receiver. Since the hon. member has now moved that amendment at this stage, I think it would be better if I gave it some further consideration. If I am prepared to effect a change in the light of that amendment, I shall move a suitable amendment in the Other Place.

Mr. Chairman, I should like to thank the hon. the Minister. I hope that the rest of the amendments we on this side of the Committee shall be putting will be accepted as graciously as the hon. the Minister has accepted those which are printed on the Order Paper.

I am also accepting the third amendment.

I thank the hon. the Minister, I was on the point of referring to that amendment.

Does the hon. member insist that amendments Nos. 4 to 6 be put?

Yes, Mr. Chairman, I should like them to be put. I accept entirely what the hon. the Minister has said, but I think we need to show by means of a vote in the Committee that we are very strongly in favour of those amendments.

Amendments (1), (2) and (3) agreed to.

Amendment (4) negatived and amendments (5) and (6) dropped.

Clause, as amended, agreed to.

Clause 2:

Mr. Chairman, I move the amendments printed on the Order Paper in the name of the hon. member for Yeoville, as follows—

I should like to motivate all four the amendments moved. Obviously we on this side of the House are in favour of legislation which is designed to protect the small man in small transactions. For that very reason we are supporting this measure. We should also like, however, to see that both the small businessman and the private individual receive equal protection. As the clause stands at the moment, however—and I am referring now to the first amendment moved—only mining and the manufacturing process have been included. We believe that that does not go far enough and that it also opens transactions far too widely. Whereas I have emphasized that we should like to see the small businessman protected, we believe that if we should confine ourselves to mining and the manufacturing process, we may be going a little bit too much for the overkill as it were. That would then imply that we invade the free enterprise system to a greater degree than, I believe, even the hon. the Prime Minister promised when he stated that there would be no invasion of the private sector through any specific legislation.

More substantially I believe the first amendment deals specifically with things like engineering, construction, road building and commerce. Commercial transactions are important when we refer to cases in which this measure should not apply. The reason for that is that not only are we going too far in the present case, but at the same time we also find ourselves in a situation in which many of these transactions are being dealt with by financial institutions. Such financial institutions will in fact become the credit receivers in an agreement of purchase. I am sure the hon. the Minister is aware of representations made to the financial institutions in this connection. They have at all times pleaded that they should be protected because there would be no contract between them and the actual purchaser. That is because the purchaser enters into a specific transaction and then approaches a financial institution to obtain finance for the deal. He therefore basically becomes the credit receiver, but then it often happens that the seller, cedes his obligations and his rights, as well as his warranties and guarantees in terms of that agreement, to the actual financier. In a way this acts as a type of protection as well because not all transactions will be acceptable to the financial institutions. There will be cases in which they will definitely not approve of a particular transaction. Therefore it is necessary to ensure that the financial institution that will take the place of the credit receiver in this instance will be properly covered. I trust that the hon. the Minister is satisfied that the registration covers them completely, in so far as this specific aspect is concerned. Of course, the powers vested in the Minister to grant exemption in certain cases may also well be covered in a particular agreement. That is the exemption referred to in clause 2(2), which reads as follows—

I hope the hon. the Minister will accept that what we are concerned with here are the interests of the small businessman.

There is, of course, also a second difficulty. That is that subject to the provisions of the Limitation and Disclosure of Finance Charges Act, it seems to be common cause that this whole legislation is being revised. It has even been suggested that perhaps that law in a revised form should have been written into this Credit Agreements Bill, which of course replaces the Hire Purchase Act, but I understand that that piece of legislation, for which many representations have been made, is not quite ready, so we will have to limit ourselves in so far as it, in terms of clause 5, affects the transaction.

That being the case, let us now confine ourselves and not have the provisions apply to the “engineering, construction, road building or a manufacturing or commercial” process, as we envisage. The amendments to subsections (2), (3) and (4) relate to the provision contained in the proposed subsection (1) of clause 2, as set out at the bottom of page 5 of the Bill. That reads—

In other words this is a determination, and as such, when we come to the second amendment on page 7, in line 11, in the proposed subsection (2), we are dealing with the exemption of categories of persons, but not with determination, because that concerns only the proposed subsection (1), and not the proposed subsection (2). Therefore in the proposed subsection (3) where it says—

It should read—

In other words, we are covered under subsection (2) but not under subsection (1), and we should be covered under subsection (1). That is why we suggest the insertion of “proposed determination” on page 7 in line 13, where that should be included. Further, it should be covered on page 7 line 16, which is also a consequential amendment. The determination contemplated in clause 2(1) is then covered by the declaration and determinations in the other subsections.

Mr. Chairman, I think that in this case the proposed amendments are an improvement. They serve to broaden the powers of the Minister, and I have no objection to substituting the words “engineering, construction, road building” and so on; but a “commercial transaction” is something which is not really definable. It might be fairly difficult to try to define it and it may, to a certain extent, defeat the purpose of the Act. That is why I would suggest that we leave out “commercial”, and determine that aspect by regulation. Otherwise, I am prepared to accept the amendments.

Mr. Chairman, I accept the compromise and perhaps at a later stage, on further mature consideration or when it goes to the Other Place, the hon. the Minister might just like to give further consideration to the word “commercial”, though I accept the compromise. With the leave of the House, therefore, I withdraw amendment (1).

Amendment (1), with leave, withdrawn.

I now move as a new amendment (1)—

Mr. Chairman, I would also perhaps like to make the odd suggestion in this regard to the hon. the Minister. We must first of all realize that we have taken away any limitation in terms of money in the Bill. Having had a limitation of R4 000 before, we now have no limitations. A transaction could entail the sale of a big computer, costing lots and lots of money on a lease arrangement, or a PABX—there are many things which cost a large amount of money and which would fall under the scope of such an agreement, really being commercial processes. If the hon. the Minister has difficulty with the word “commercial”—and I accept what my hon. colleague from Hillbrow has said—I would like to make the suggestion that if “commercial process” is a term that is too wide and the implementation of which will cause difficulties—and I accept this argument entirely—the possible means of overcoming this by legislation, rather than by regulation, is to define “commercial process”, in the definitions of the Bill. This would enable the hon. the Minister’s department to sit down and exclude by means of the definition a whole number of “commercial processes”. It would give an exact definition which could be of great assistance. It would then for ever be in the legislation and commercial bodies would know precisely the situation they are in, which would be determined for a good length of time, and not suddenly find that by regulation various items have been altered. I would commend this to the hon. the Minister’s attention.

Mr. Chairman, my mind is not completely closed to any suggestions of that kind, but to me as a layman the existing legislation already appears cumbersome enough. We can, nevertheless, look into that, but I think it is going to be too onerous a task to expect that to be done before the legislation gets to the Other Place. So this is something I shall have to take into account for the future. I accept the amendment, except for the fact that we should omit the words “or commercial”.

Mr. Chairman, may I just refer briefly to the amendment of the hon. member for East London North, in connection with the “commercial” aspect. Apart from the fact that the concept is vague, as the hon. the Minister has rightly indicated, the amendment will also have the effect, in my opinion, of excluding a very large number of credit agreements from the implementation of the Act. Apart from the fact that the word “commercial” is very vague, it will cover a very wide field. There will be hardly any credit agreement which cannot in some way or other be termed “commercial”. The effect of this will be that virtually no credit agreement will be subject to this legislation, and in my opinion this would defeat the whole purpose of the legislation. Since the hon. the Minister has indicated that he will reconsider the matter, I wish to point out that it entails a very dangerous extension of the restrictions on the power of the hon. the Minister in terms of this legislation.

Mr. Chairman, in connection with the second amendment I just want to say that it often happens that steps have to be taken suddenly. Therefore I cannot accept the second amendment, because the passage of time in this case would prevent any steps being taken. Because I am therefore unable to accept the second amendment—and I think hon. members will understand my reasons—the third and fourth amendments also fall away. Therefore they are not accepted either.

Amendment (1) agreed to.

Amendment (2) negatived and amendments (3) and (4) dropped.

Clause, as amended, agreed to.

Clause 3:

Mr. Chairman, I move the amendments printed on the Order Paper in the name of the hon. member for Yeoville, as follows—

The effect of the first amendment is very, very clear. The position is that in terms of this clause the Minister may by regulation in the Gazette prescribe maximum periods, portions of the cash price, etc. He also has the right, in terms of the Bill as it stands at present, not to publish those regulations in the Gazette but to send them direct by mail or to have them delivered by hand to a person or persons if they are only to be applied to a person or persons. We do not believe that this should happen. We believe that this involves a commercial process and that it is possible that a number of people might wish to deal with a particular person who provides a particular type of service. The fact that there is only one person who provides that service does not mean that necessarily there are not a lot of people who might wish to avail themselves of that service. Therefore we believe that the relevant words should be deleted. That will have the effect that any time the hon. the Minister wishes to make regulations in regard to prescribing the maximum period, the portion of the cash price, the manner in which the price of any goods or service shall be displayed or advertised, or generally any such conditions as he may find fit, regardless of to whom those regulations apply, they should be published in the Gazette.

As regards the second amendment, we believe that the relevant words are unnecessary and that the situation is already covered by the other words presently in that clause.

Mr. Chairman, I think the power to be conferred upon the Minister in terms of this clause is one he should have. I do not think there could be any objection to a notice that is applicable only to a single person or a single group of persons, not being published in the Gazette. Where there is only one person or one particular group of persons having an interest in the matter, it could serve no purpose to publish the notice in the Gazette where he or they would probably not even read it. In a court case where there was an application for condonation of late publication of a legal notice in the Gazette, while there had been timely publication of the notice in a daily newspaper, the learned judge expressed the view that more people read the daily newspaper than read the Gazette. I believe it constitutes far more adequate and effective notice to give direct written notice to a person or group of persons involved than to publish the notice in the Gazette.

I just wish to suggest to the hon. the Minister that whereas the clause requires notice by hand or through the post, it be added that notice should be given by registered mail. I think if we were to insert here that notice should be given by registered mail, it would be quite sufficient and it would also be a more effective notice than publication in the Gazette would be.

Mr. Chairman, the hon. member for Mossel Bay has suggested a good alternative amendment, but I hope he realizes it does not cover the point that I have been trying to make. We will accept it if the amendment which I have proposed is not accepted. I also want to point out to the hon. member that we must remember here that what we are dealing with are commercial transactions, and it is not possible to have a commercial transaction with only one person involved.

That is what the Bill says.

The Bill talks about a person and states that—

I assume that to mean that that is the person who is offering the goods for sale or for lease.

That is correct.

Right. But it also affects the people to whom the goods are to be leased or sold. It might be only one commercial operation that is offering this type of service, but the regulations could apply to a whole number of customers of that commercial operation, and if they are not in a position to know, through publishing it in a Gazette, what regulations apply to the sale of those goods, they are actually put in a less fortunate position than the grantor of the credit or the seller of the article, who has the regulation from the Minister by registered mail or otherwise. He knows the conditions, but the people who are buying the article do not know them. That is the question I want to ask. I have no objection to the hon. the Minister giving notice by mail or by hand, provided it is also published in the Gazette. One can never state categorically that a particular regulation is only going to apply to one person. I do not believe this is possible, and therefore we believe it is very important that these regulations should be published in the Gazette. By all means send them by mail, by registered mail or by hand as well, but they must also, in our view, be published.

Mr. Chairman, I listened carefully to the hon. member and I have some sympathy with what he has proposed, but I do not think it would be in the interest of commerce and industry. This clause empowers the Minister to deal with specific individuals, specific instances, specific transactions, etc. Therefore I do not think we should have a sort of blanket application, in case I deal with a specific person, by publishing his name in the Gazette. This may easily happen and it may prejudice him. That is why I do not think I shall be able to accept this amendment.

*On the other hand, I think the amendment to the effect that one sends it by registered mail, is acceptable, because that will result in more certainty and fairness. But for the very reason that in the interests of commerce and industry, the Minister should obtain the right to take action against specific firms as well as against specific categories of credit grantors and credit receivers, I think that for the reasons I have stated here, I cannot accept this amendment. I do not think it would be in the interests of these people. Consequently I cannot accept the second amendment, either. Unfortunately, therefore, I cannot accept the amendment moved by the hon. member for East London North. I am prepared, however, to accept the suggestion, the amendment, even though it is not on the Order Paper, as a consolation prize to the hon. member.

Mr. Chairman, I should like to raise another matter with the hon. the Minister arising out of the withdrawal of the Hire-Purchase Act. That Act provided, as I was informed, that when a notice was issued in terms of which the rules of hire-purchase were changed—requiring a bigger deposit or extended terms, etc.—a period of time was given, 30 days or one month, before the terms of such notice became applicable. I wonder whether the hon. the Minister also has that in mind in terms of (d) where he generally may prescribe any such condition that he may find fit in regard to any credit agreement. I am wondering whether the hon. the Minister has abandoned that idea altogether or whether there will be no such period.

It is at least in the power of the Minister to consider whether that is to be applied or not. I think there is quite some leeway in that regard.

[Inaudible.]

It is a question of the hon. the Minister taking action to alter the conditions under which a person who sells by credit is operating. It may for instance be a larger deposit which may adversely affect the business of that person. The hon. member for Amanzimtoti raised the point during the Second Reading, particularly in relation to the fashion industry, where there are long leadins before an article of merchandise is put on the shelves. If the hon. the Minister is then going to make a determination and say that this is going to happen within that time, or immediately, it may seriously prejudice the person’s chances of marketing the entire stock that he has ordered, or something of that nature. It may well prejudice the business that he is conducting. In the old Act provision was made for a period of 30 days, but there is no such provision in this legislation now. I wonder whether the hon. the Minister might consider looking into this matter to see whether that is necessary. Or does he feel that he is covered in terms of subparagraph (d)? He could then perhaps tell us, perhaps in the Other Place, whether the matter has been reconsidered.

I am making a note of that, but I think provision is made for that in the Bill. I do not know whether the hon. member has carefully looked at the Bill. I shall nevertheless have a look at that.

Order! For the sake of clarity I just wish to ask the hon. member for Mossel Bay whether he has moved an amendment.

Mr. Chairman, if you decide that it should serve as an amendment, I shall gladly move accordingly. Mr. Chairman, I therefore move as an amendment—

Amendment (1) moved by Mr. D. J. N. Malcomess negatived.

Amendment moved by Dr. H. M. J. van Rensburg agreed to.

Amendment (2) moved by Mr. D. J. N. Malcomess negatived.

Clause, as amended, agreed to.

Clause 4:

Mr. Chairman, this clause refers specifically to clause 13. In view of the amendments to clause 13 on the Order Paper, I think it would be more beneficial if we discussed implications of this under clause 13. However, I want to raise one other point at this stage, a point which I mentioned earlier. Let us assume that a purchaser goes to a shop and enters into an agreement to buy a hi-fi set. He then goes to a financial institution, tells them he wants to buy that hi-fi set, asks whether they will finance it and they agree to do so. The financial institution then, in fact, purchases the hi-fi and becomes the credit receiver in terms of this Bill. They then cede the rights or obligations together with the warranty and guarantees to the original purchaser. We would like the hon. the Minister to give us complete clarity that he is satisfied that there is now a privity of contract between the purchaser and the credit grantor should there be litigation.

Mr. Chairman, I think there are two contracts in this case. As I see it, the original purchaser is the party who is actually involved as far as this clause is concerned.

But will there be privity of contract?

The contract is concluded by the person purchasing the article at an ordinary place of business. Any further transaction he makes is a second contract.

Mr. Chairman, the financial institution becomes the credit receiver. They will then be the people to whom the credit grantor will look to if there should be default in payment. The privity of contract is therefore between the financial institution and the credit grantor rather than with the other person. That is where he escapes liability, and that is what is worrying me.

Mr. Chairman, the obligation may rest on them, but they are not really the primary purchaser. If there is a technical legal point here, I will have to consult my legal advisers on it, but as far as I am concerned, it is common sense that the purchaser is liable.

Clause agreed to.

Clause 5:

Mr. Chairman, I move the amendments printed in the name of the hon. member for Yeoville on the Order Paper, as follows—

The first amendment seeks to amend clause 5(1)(b). This provides that, subject to the provisions of the Limitation and Disclosure of Finance Charges Act, 1968, any credit agreement shall contain certain particulars. One of these is the names of the credit grantor and of the credit receiver and their business or residential addresses in the Republic. This must be read in conjunction with Subsection (4), which says that the addresses referred to in the subsection I am dealing with shall for all the purposes of that credit agreement serve as domicilium citandi et executandi of the parties thereto. As the hon. the Minister knows that is the address which in law is considered to be the place where valid service of a notice, summons or any process of law given in terms of the agreement can be served. This in turn must be read in conjunction with clause 6(1)(f), which reads—

In other words, everything comes back to this address, which is very important as far as the question of domicilium citandi is concerned. The question is whether we wish to confine the concluding of transactions in the Republic of South Africa only to people who have an address in South Africa. Surely thousands of transactions are concluded daily with people who live in Transkei, Bophuthatswana, Venda, Zimbabwe, Lesotho and Swaziland. We have a difficulty in this respect. So in order not to exclude those people from the protection that is being afforded by this provision, the amendment provides that after the word “Republic” the following words must be inserted—

This would cover the situation as far as the question of their address is concerned. I want to venture the guess that if the law stays as it is there will be people who will, just to comply with the law, supply fictitious addresses in the Republic of South Africa, and then we are going to defeat the entire object we are trying to achieve. I therefore think that the amendment is reasonable.

Now I have motivated the first amendment. The second amendment proposes the insertion of paragraph (h) after paragraph (g) on page 9 of the Bill. It requests that the buyer, the credit receiver, shall be entitled to obtain a copy of the agreement in the language which he has requested in writing. Quite frankly I think that this covers an omission. I think that in terms of the Sale of Land on Instalments Act, 1971, the purchaser can stipulate in which language he wants the agreement to be drawn up. So the precedent does exist in law. Unfortunately not everybody is fully conversant with both official languages. The purchaser is entitled to have an agreement, which is often a long one full of small print, etc., drawn up in the official language of his choice so that he will be able to understand what he is purchasing. My second amendment therefore proposes that the agreement should be drawn up in the language he uses most.

Mr. Chairman, this question of the address of any party involved in a commercial or credit transaction, is something for which there are indeed precedents, according to the experts who advise me. This precedent exists in the Magistrates’ Courts Act.

The hon. member has referred to this very question of people living in the Transkei, Lesotho and elsewhere. I am very sure that this amendment would create more problems in this case than it would solve. I think if a person concludes a credit transaction in South Africa, it is only fair to expect of him to furnish an address in this country, because it imposes an obligation on him.

†The hon. member has spoken about fictitious addresses. The supplying of a fictitious address is, however, an infringement of the law. I cannot comment on that. It might happen. It is one of the loopholes we must consider.

In regard to the second amendment the hon. member has proposed, I want to say that I think it is a good amendment. As I have said, I always welcome this kind of amendment. It brings about greater clarity of language, but I think I can even improve on that, because I think the amendment should not read “be in the official language which the credit receiver may have requested in writing”, but “be in the official language which the credit receiver may request in writing”.

I shall not argue about the semantics, and consequently I withdraw my second amendment.

Amendment (2), with leave, withdrawn.

Mr. Chairman, I now move—

If the hon. member agrees to that, I cannot accept the first amendment, which will create a lot of problems for me. I have discussed it fully with my advisers. However, I gladly accept the second amendment.

Mr. Chairman, I should just like to thank the hon. the Minister for accepting our second amendment. I agree with him in respect of the wording he suggested because it obviously contains exactly what we were trying to achieve.

I should, however, like to return now to our first amendment. In this respect we in these benches have a real difficulty. What does the hon. the Minister say must happen now if someone living in the Transkei, for instance, comes to Cape Town and tries to buy a car here? He does not have an address in the Republic, which means that he cannot comply with the law. That means we have a stalemate. What happens now? There must be some solution to this problem. What is that solution?

[Inaudible.]

Mr. Chairman, may I suggest to the hon. the Minister that he should perhaps consider this point and even discuss it with the members of the department. I believe there is a very, very real difficulty here. This relates particularly to those companies which operate businesses in the hire-purchase or leasing fields fairly close to an independent homeland. There are a number of these. East London does a tremendous amount of business with people from the Transkei.

We certainly believe that we should be allowed to have a valid hire-purchase agreement with these people when they come to East London. To say that they have to give an address in the Republic is for many of them an impossibility. They simply do not have one. They have their home in the Transkei. They have their business in the Transkei. They therefore do not have a residence or a business in the Republic of South Africa. I submit that this is a very, very real difficulty. The same thing will happen, for instance, in Natal. Obviously, Natal also borders on the Transkei. There must also be a large number of businessmen and individuals who come from the Transkei to purchase goods somewhere in Natal. How is one now going to overcome this situation? Will it mean that the trader will have to say: “I am sorry but I cannot have a valid hire-purchase agreement with you. Therefore I will have no protection in terms of the goods that I am going to supply to you, and I am not going to be able to supply those goods. You must pay me in cash?”

It is also true that that person from the Transkei can then go back to the Transkei Bank and get that bank to pay the trader. There are possible ways around this problem, but I do not think that should be necessary. I do believe this is a very, very real difficulty. I think the hon. member for Mossel Bay will agree with me in this respect. What does one do when a prospective buyer is not able to give an address in the Republic of South Africa? Does one say: “I am terribly sorry but I am not prepared to supply these goods to you except for cash?”

If the hon. member for Mossel Bay believes that businesses can operate in any other way, I think he is gravely mistaken. I do suggest very seriously that the hon. the Minister should discuss this matter again with the officials in the department. I believe this is a very real difficulty. I also believe it is a very reasonable case. It is obviously not an ideological matter in any shape or form. We are simply trying to solve what we believe is a very, very real difficulty in this particular Bill.

Mr. Chairman, I should just like to emphasize that we are here dealing with credit agreements. That does not cover all agreements. The Bill relates specifically to credit agreements.

Now, it is true that there are serious obstacles in the way of every credit grantor who wishes to enforce his claim against anybody from outside the borders of the Republic of South Africa. There is no simple procedure whereby goods may be recovered or debts collected from persons outside the borders of the Republic. Consequently, it is necessary at all times to exercise circumspection in granting credit to people who do not have an address within the Republic of South Africa. That is my reply to the hon. member for East London North.

†The trader can sell to the citizen of the Transkei by all means, but if he grants him credit, he will be at great risk. Whether he has a hire-purchase agreement or any other agreement, he will still be at a great risk.

*In view of the fact that the amendment is worded in such a way that the credit receiver need merely furnish a domicilium citandi et executandi—because that is what is implied here—without also furnishing an address within the Republic, it affords the credit grantor no security worth mentioning, because the furnishing of a domicilium merely entails that there would be a place where process could lawfully be served on the credit receiver, but whether he would ever receive it, or whether the goods purchased would indeed be there, or whether there would ever be any possibility of the credit grantor enforcing his claim, is quite another matter. That is why the furnishing of an address within the Republic is important. In other words, the furnishing of a domicilium citandi et executandi is only important from the point of view of a legal formality, but it has no material legal significance. Consequently, I do not believe we could accept the amendment as suggested by the hon. member.

Mr. Chairman, we are very disappointed to hear that the hon. member for Mossel Bay should think that traders, such as motor dealers or anybody affected by this Bill when it comes into operation should simply not enter into the transaction unless cash is paid, for the simple reason that the buyer cannot furnish a residential or business address in the Republic. Surely that is an uncompromising attitude which would affect thousands of business people. It would affect the turn-over of thousands and thousands of rand in South Africa. Surely the hon. the Minister will not accept such an untenable argument with regard to free trade in South Africa.

I think I might have a solution, which I have quite frankly just thought of. The clause says that the name of the “grantor” must be supplied. That would be the business in South Africa, so that is no problem. It further says—

So if the person does not carry on a business or have a residential address in South Africa, he cannot comply with this provision and enter into an agreement. Now remember, too, that it is not only the merchants that have dealings with clients. This is going to affect —if one leaves it as it is—all the financial institutions which finance the deals. They will no longer be able to pay cash to the original credit grantor and take up the agreement themselves, because they in turn, in terms of the agreement and the privity of contact that the hon. the Minister has said will relate to a cession, will not be able to furnish an address in the Republic. So this will affect all the financial institutions and their deals as well. I think there could be a very simple solution. Since we are only speaking about a business or residential address, let us say “or chosen address”. In other words, the Transkeian or Bophuthatswana citizen can then choose an address of an attorney or an accountant who has an address in the Republic of South Africa, and he in turn can keep in touch with these persons. If the domicilium citandi is covered on the basis of a chosen address in South Africa, this could simplify matters.

If the hon. the Minister will accept the amendment, I shall write it out quickly.

Mr. Chairman, my difficulty with the suggestion of the hon. member for Hillbrow is that the “chosen address” will afford no guarantee whatsoever.

*It is all very well to say that the purchaser or credit receiver can maintain contact with the attorney or representative concerned, but there is no guarantee that he would indeed do so. In other words, he could choose an address, for example that of his attorney in East London, Pretoria or wherever, and return to Transkei or Bophuthatswana and the credit grantor would have no means of recovering the goods or enforcing his claim against the credit receiver in terms of the contract. Attorneys practising in Pretoria or in other places close to foreign States, have frequently encountered the problem of how to enforce judgments of our South African courts in the foreign States. I assume that this provision has specifically been incorporated in the legislation to afford greater security of justice in respect of credit agreements. So, it is not a matter of “adopting an uncompromising attitude” on my part. One would like to stimulate commerce by all means, but one cannot do so at the expense of security of justice. One could not allow a state of affairs where the very commerce which one stimulates, could create problems later on which one could not handle. In order to obviate those obvious problems, there has to be a provision such as this one in the Bill.

Mr. Chairman, the hon. member for Mossel Bay has only exacerbated the problem that we are discussing here. That just goes to show what a difficult thing this is. The suggested address may not be an address at which one can levy execution, but what I intended with my suggestion was that the attorney or accountant at the specific address would be able to get in touch with the person because he has chosen to accept the domicilium citandi. He can tell the purchaser that he is in arrears with his payments and should rectify the matter. I think that is what is wanted. If it must be an address at which one can execute, let me say that the present situation is no different. A person may perhaps give a fictitious address in South Africa and take the goods, in his car, out of the Republic of South Africa. The chances of recovery, in such a case, would be equally slim. I think that this is a difficult problem. I accept the fact, but with all due respect I do not think that we or the hon. the Minister can be happy to leave matters as they are. Let us just highlight the problem as it stands. Perhaps when the legislation goes to the Other Place we can all try to put our thinking caps on and find a solution to the difficulties.

Mr. Chairman, I am trying to be accommodating as far as possible, but I do not think that in a case such as this it is necessary for me to give the assurance that I shall rectify the matter in the Other Place. Let us first look at the matter in perspective. We are dealing here with credit agreements which initially, in the Hire Purchase Act, were subject to a maximum amount of R4 000. The objective here is to give a little more scope. In my Second Reading speech I made it very clear that we were dealing with semi-durable goods such as motor-cars, furniture, etc. This is the type of business we are dealing with here, even though it has not yet been specified. Notice has not yet been given as to what type of business is going to be included under the new legislation. However, these are the types of business where there has been the highest incidence of abuse and which we are seeking to place on a sound basis. We are dealing with certain people from neighbouring countries, and all that is being sought here, is that a person should furnish his residential address, his place of residence, in this country. He must not cross the border by car, buy furniture on credit and then make off. We have to make it more difficult so that this type of thing cannot happen. The contrary is, of course, also true. One also has to guard against abuse from the other side. One does not want high-pressure salesmanship to be applied to people from another State who are perhaps less capable of understanding these things. There has to be an obligation on the seller. What is expected here? Let us discuss what is expected. The purchaser has to furnish an address. Whether it is a chosen address, as the hon. member suggested, or whether it is any other address, whether it is a permanent address or a temporary address, is not being specified. In respect of certain of these aspects, we have to stipulate these things for the benefit of the credit grantor in the country so that he may expect these things of the credit receiver. In this case, one is looking after the credit grantor rather more than the credit receiver.

There is a final point I wish to raise, and once again this protects the credit receiver. I refer the hon. member to subsection (2) of the clause in question, in terms of which one may not infringe the provisions referred to in subsection (1). However, the fact that the provisions have not been complied with, does not make such an agreement unlawful. The person concerned would therefore still be able to take legal action or try to protect his interests as best he could. It would only make matters easier for him in this case if we were to go about things in this way. For that reason I am unfortunately unable to accept the amendment. I have already said that this is legislation in which we are breaking new ground. I hope the hon. member will appreciate that we cannot accept that amendment.

Amendment (1) negatived.

Amendment (2) agreed to.

Clause, as amended, agreed to.

Clause 6:

Mr. Chairman, we have on the Order Paper in the name of the hon. member for Yeoville five amendments. In view of the fact that the one amendment on the last clause was not accepted, I believe that the second amendment on clause 6 consequentially falls away and we shall therefore not move it. I move the remaining amendments, renumbered (1) to (4) as follows—

As regards the first amendment, I must state specifically that clause 6 deals with credit agreements or any other agreements and states that they “shall not contain a provision having the effect that …”. Then a whole number of paragraphs follow giving the provisions that may not be put into such a hire-purchase agreement. The first amendment relates to paragraph (d) which reads that—

That is once again a protection for the consumer. We believe that this should be qualified by a proviso, the proviso to read as set out in the amendment. What we are trying to do here is to protect the person who is simply providing finance for a transaction. He is prepared to cede his rights in that, having bought the goods from the supplier and then supplied them to the credit receiver, he cedes his rights to that credit receiver. He cedes his right of comeback against the supplier of the goods, under warranty shall we say. He cedes that right to the persons actually using the goods under lease or hire-purchase agreement. If he cedes such rights, the purchaser or hirer of those goods should not be able to come back at him and say: “Something has gone wrong with my goods.”

He should be able to go direct to the original supplier and to take action against him to restore the goods to the condition in which they should be, and repair them. We believe that this clause will do that and allow such a provision to be made. It is for the protection of finance companies which provide financing for deals, but which should not really have to be bothered about being sued because of warranty defects in the goods that are supplied.

The second amendment falls away. The third amendment is again a long the same sort of lines and is on page nine, in line 62. Line 62 states that one may not have a credit agreement in which “the period of the credit agreement is left undetermined”. Once again we must bear in mind when looking at this clause that we are seeking to protect the consumer. We want to amend the clause by again inserting a proviso, which reads—

So the consumer, the person who is buying it, can terminate it himself—

In other words, it enables one to have an indeterminate type of credit agreement, provided it is for a minimum period of 12 months and, secondly, provided that it is at the request of the credit receiver that thereafter it can be terminated. I think this is fair. If we bear in mind that it is the consumer whom we are trying to protect, how are we protecting him by not agreeing to this amendment that we have proposed? The amendment makes it quite clear that the credit receiver himself can terminate that agreement. Therefore, if he feels that his rights or possessions are being prejudiced, the rights are in his own hands. He himself can terminate it. Therefore, we recommend that the hon. the Minister accedes to the request for this amendment.

The next amendment—to repeat it—is on page 11, in line 12, and reads—

Again this is very clear and I believe very logical. Subsection (2) of the clause states—

That is well and good as far as it goes, but we do not believe that it goes far enough. Now we are putting the case that the credit receiver, the person, the consumer whom we are trying to protect, has in writing requested the grantor of that credit to place an order with a manufacturer for the goods which the credit receiver wishes to purchase. I think it would be inequitable if, having done that, and the credit grantor, say a bank, having placed the order for the goods with a manufacturing company, the credit receiver should then be entitled to say: “I am sorry. You bought the goods but I do not want it anymore. Therefore I am not going to sign a credit agreement.” I think that this is a perfectly obvious and quite straight forward amendment which, again, should receive the hon. the Minister’s attention.

The last amendment that we have on clause 6 is right at the bottom of page 11, in line 64. The amendment is to insert “any initial payment or rental or” after the word “pay” in line 64. The intention of this particular provision is to state that no credit grantor shall make any money available or cause any money to be made available by any other person to a credit receiver. One can well see the sense of this. The situation can often arise where, for instance, a motor trader might lend his customer some money on an open account in order to put down a deposit on a vehicle. This has happened.

The oldest lark in the world.

Yes, obviously this is well known to the hon. member for Umhlanga. Subsection (7) of the clause states further that this will not apply on a number of occasions. For instance, para. (c)(i) and (ii) state—

So if one owes money on a vehicle on a hire-purchase agreement, one can borrow money on an overdraft from a bank and then pay off the hire-purchase instalments, and the hire-purchase is then at an end. Again we feel that it has not gone far enough. We believe that, after the word “pay” in line 64, there should be inserted “an initial payment or rental or”. The reason for this is that it often happens that a person who wishes to buy an article does not have any money. The first thing that he perhaps does is to go to his bank. He may have good security of some kind or other and his bank may be prepared to lend him R1 000 on overdraft. He then takes that R1 000, purchases an article and that amount of R1 000 becomes his initial deposit. As we read this clause, if he does that, he would be in conflict with the regulations and therefore we wish to insert the words, “any initial payment or rental or”.

Mr. Chairman, to my mind, the first amendment shows a faulty, uncertain thought. If one asks oneself what we are dealing with here, there are two possibilities, viz. that the credit grantor also sells the goods or provide the services, or the credit grantor merely finances transactions. The hon. member for East London North argues that the exclusive aim of this amendment is to protect the financing bodies from claims resulting from defects in the sold goods. However, surely the financing company does not need such protection. What is stated in the amendment, is merely that the credit agreement may not contain a provision which, if it did not exist, would subject the financing body to claims. After all, no one can claim from the financing company for defects in the goods which were sold to him by another company. Let us take an example. If Lewis Stores sells me a bedroom suite and that transaction is financed by the Trust Bank, and I discover that there is beetle in the bedroom suite, surely I cannot hold the Trust Bank responsible because they financed the transaction. Therefore, the financing body does not need this protection. One will only be able to hold the financing body responsible for a defect in the service which it renders itself. After all, one cannot hold the financing body responsible for defects which are the fault of another company.

The ostensible aim of this amendment, is not being achieved by this amendment, the body which ostensibly has to be protected by this amendment, does not need such protection and this amendment is not acceptable.

Mr. Chairman, I cannot accept the amendment. This is somewhat similar to what the hon. member for Hillbrow and myself have already debated with regard to first and second contracts and the person who must carry the responsibility for the first contract which he negotiated. I think this wordy amendment actually negates the aims of clause 6. I am not completely convinced that we will be able to solve the matter by accepting the amendment. However, I want to concede at once that we may have problems here.

†I have admitted that we shall have to look at this, and I think that if we cannot solve these problems where and when they occur by regulation, we should look into the matter again. I am not, however, prepared to accept the amendment at this stage.

As far as the hon. member’s third amendment is concerned, I think it is wrong to leave the period for a credit agreement undetermined. That is one of the principles contained in this Bill.

As far as the hon. member’s fourth amendment is concerned, I do not think the credit receiver should bind himself by an agreement even before he places an order or it is executed. Therefore I cannot accept this amendment either.

*I think that if I were to accept the amendment, it would jeopardize many of the basic objectives of the legislation to a large extent, or negate them entirely.

As far as the hon. member’s fifth amendment is concerned, I think it is totally unnecessary. Anyone who has the money or who can manage to make the initial payments, etc., can make arrangements at any time with a financial institution, for example a bank, for an overdraft, but if it is specifically included in the legislation that this relates to an initial payment, I am of the opinion that it is going to lead to abuse. Therefore I cannot accept this amendment either. I am sure that hon. members are simply trying to bring about better legislation, but nevertheless I cannot accept any of the hon. member’s five amendments.

Mr. Chairman, I regret that our batting average is deteriorating so sharply at the moment. With regard to the various amendments, I do not think that the hon. member for Mossel Bay was entirely right in his argument, but perhaps the significance lay in what he omitted to say. I begin to get the feeling that, although he spoke so strongly against the first amendment and did not react to the third, fourth and fifth amendment, we can perhaps assume from that that he actually agrees with them and was therefore not prepared to argue against them.

No.

I accept what the hon. the Minister has said, but I particularly want to argue the merits of the fourth amendment again. I believe that many difficulties are going to be created if this amendment is not accepted, because there are obviously many occasions where persons or companies—and we must bear in mind that we are quite often going to be dealing with commercial enterprises—approach a financial institution with the object of asking them to finance the purchase of a certain item, whether it be a motor-car or a television set or whatever, and if they agree, whether they would place an order for the supply of the particular goods. By not accepting this amendment, the hon. the Minister is saying that if the financial institution, the financier, places the order with the supplier, receives the goods and then hears from the person who originally asked the institution in writing to order those goods on his behalf, that he is sorry, but that he does not want those goods anymore as he has changed his mind, that financial institution has no come-back in terms of this proposed legislation before the House.

I think this is very clear, and I hope the hon. the Minister will at the very least undertake a rethink of this particular clause, because I think that if he looks at it again and discusses it with the officials in his department, he might find that he could perhaps move the same or a similar amendment in the Other Place. I should like to leave it on that basis.

Mr. Chairman, I am sorry, but in a case like that, taking into account the principle contained in this legislation, we would allow the consumer, whom we want to protect, to sign an order for goods before he makes a formal agreement and before he is sure that he can in fact receive the goods. I can imagine that many abuses may arise from this. After he has given that directive, in exceptional circumstances, he might be in urgent need of the goods, but now the financial institution can tell him that he must wait until the goods which have been ordered for him, have been received. There is no certainty. We want to try to protect the small businessman and the consumer in general. In this case we are protecting neither him nor the other man. If we force people to sign their names on preliminary agreements which bind them to such an extent that they have no room for manoeuvre, we are leaving the situation wide open for abuse. Therefore I am sorry, but I cannot accept it.

Mr. Chairman, because of what the hon. the Minister has said, I think I have to react to it. I think that what one has to bear in mind, is that in attempting to protect the consumer one must not place the supplier in such a situation that he is not prepared to do business with the consumer on that basis. This is a situation which could actually arise. This type of transaction has been done in the past. The financial institutions are simply going to say to the consumer that they are sorry, but that they are not prepared to act in this way on the consumer’s behalf, because the law is such that the consumer is placing the financial institution in such a position in which it is going to be left with the article if he orders that article and the consumer cancels the order. This is going to be the attitude the financial institution is going to have to adopt. In seeking to protect the consumer and by being over-protective, one is actually going to prejudice the very position of the consumer, one is trying to protect. By being over-protective, one is going to ensure that the financial institution, the people from whom he gets his credit whereby he creates a certain amount of wealth for himself, because he is able to get things into his home or into his small business which he would otherwise not be able to get, will not be able to purchase those goods because it cannot deal with him on this basis.

Mr. Chairman, I do not want to reason or argue about this any longer. I simply want to point out that one of the main aims of this legislation is to control and regulate sales methods—methods by which people buy things that they should not buy, instead of exercising their self-control. These measures relate to people who buy as well as people who sell. Now I want to urge those who make the money available, to show greater responsibility, because it is one of the important factors that we in the business world must take into account, particularly in these times when people are simply buying and buying, while prices are continually rising. I do not want to argue about the matter any longer. However, I cannot accept this amendment of the hon. member.

Amendments (1) and (2) negatived.

Amendments (3) and (4) negatived (Official Opposition dissenting).

Clause agreed to.

Clause 8:

Mr. Chairman, although I have not placed an amendment on the Order Paper, I indicated during the Second Reading debate that I believe that it would be an improvement if we were to add the words “per registered post” on page 13, in line 40, after “notify”.

I should like to hear whether the hon. the Minister is prepared to consider such an amendment.

Mr. Chairman, what the hon. member for Mossel Bay is suggesting now, follows on what I have already accepted. Consequently I am prepared to consider it as an amendment.

Mr. Chairman, if you are prepared to allow such an amendment to be moved at this stage, I shall move it.

The hon. member for Mossel Bay may move his amendment.

Mr. Chairman, then I move the following amendment—

Amendment agreed to.

Clause, as amended, agreed to.

Clause 11:

Mr. Chairman, with regard to clause 11 objections have been lodged to the way in which certain things have been worded. For instance, it has been said that as far as the notice by mail is concerned, the word “served” implies that proof is given of the delivery of such a notice. That is why I decided to move an amendment. I therefore move the two amendments printed in my name on the Order Paper, as follows—

Mr. Chairman, we have no difficulty with the amendment moved by the hon. the Minister. We, of course, have an amendment for clause 11. Let me motivate it.

The clause deals with a default in the agreement. The credit receiver, having failed to comply with his obligations under the agreement, must now be placed in mora, and dies induciae is suggested, a period of something like 30 days after notice has either been given by way of an A/R card or registered post served at the domicilium citandi. We are suggesting that 30 days is far too long for the dies induciae on a letter of demand to a man has been in default. Since a man has already failed to pay within 30 days of the due date, we think it is unreasonable for a credit grantor to give him another 30 days notice asking him to remedy the default. We think it is far too long. As the clause stands, a person who has entered into a hire-purchase agreement or a credit agreement, as mentioned in the clause, may wait 29 days after he is given notice—and remember he is now already in default before he gets the notice. He then pays. He fails to pay the next month, however, and waits another 29 days until he gets the notice, and on having got the notice he pays on the 29th day. He could keep on doing this. I think anyone who has had any experience of collecting debts outstanding on hire-purchase agreements will tell one that once the purchaser, or in this case the credit receiver, gets into default he is inclined to allow that default to accumulate until it becomes a very large amount, and then he is really in difficulty. If it is a motor vehicle he has bought, for example, he finds that the vehicle needs repairs, but he does not have the money to pay for them, nor to pay the hire-purchase instalments. I think those people with experience of the motor game will particularly appreciate that. I have had to collect many outstanding amounts on agreements of this nature. Therefore, we are suggesting that the 30 days be reduced to 14 days, because we think 14 days is a reasonable period. The purpose of the second amendment is to prevent a person waiting until the demand has expired before he pays, and thereafter defaulting every month, and again waiting for the demand before he pays, and continuing on this basis.

I refer the hon. the Minister to a provision in the Sale of Land on Instalments Act which is precisely the same as the amendment we have moved. When a man has remained in default, having failed on two or more occasions to comply with the terms of the credit agreement, in terms of that legislation he is no longer entitled to the period of 30 days, as laid down. I am suggesting therefore, to prevent a debtor from stretching his credit unreasonably—and this could obviously affect the credit given by the credit grantor— that we then give him two chances. Thereafter he waives his right. Now in my amendment I have referred to 30 days being reduced to seven days, but obviously if the first amendment is accepted, the reduction must be from 14 days to seven days. I move the amendments standing in the name of the hon. member for Yeoville on the Order Paper, as follows—

Mr. Chairman, there is some cogency in the arguments of the hon. member for Hillbrow. I quite realize the long periods that elapse in matters of litigation. I think that because of the fact that we have the credit receivers’ interests in mind— this is foremost in our minds in cases like this—I do not think I can shorten the period of 30 days. I think a reasonable period should be allowed. I feel that in his second amendment he is much more convincing. We could perhaps reduce that period of time to a fortnight if the credit receiver defaults for the second time in one year. I think that if it were changed in that way it would be acceptable to me. The period can therefore be changed from seven days to 14 days. That I will accept, provided the person is defaulting for the second time in the space of one year. The hon. member has suggested seven days, but I suggest 14 days.

Mr. Chairman, I thank the hon. the Minister for his response in connection with my second amendment. I know that in the Sale of Land on Instalments Act there is a provision stipulating a period of one year, so I take it that that is why the hon. the Minister wants to specify a period of one year. I am therefore prepared to have the words “on two or more occasions in any one year” inserted after the word “occasions” in my amendment.

This brings me to the reduction in the length of the period. I still think the period is too long, but obviously a compromise is better than having it as it was before. That will certainly help. I therefore accept the hon. the Minister’s suggestion in connection with the second amendment, and consequently I withdraw this amendment.

Amendment (2), with leave, withdrawn.

Mr. Chairman, I now move—

I should, however, like to refer again to the first amendment. I want to ask the hon. the Minister to give more serious consideration to the 30-day period. One could be dealing with an article that could deteriorate very rapidly, e.g. a motor-car, a motor cycle or any article that can be used to such an extent that it rapidly wears out. One can, for example, treat the article roughly or not take very good care of it. This would entail a great loss when the article is repossessed, valued and the difference has to be paid out. It is going to be worse for the credit receiver. He is the one who is going to bear the heavier burden, apart from the added risk imposed on the credit grantor. There are articles for which a waiting period of 30 days before repossession would prejudice the parties concerned. I should therefore still like the hon. the Minister to reconsider the period of 14 days.

Mr. Chairman, I should like to add to that by saying that what I have written in the margin next to the relevant clause is that what this really means is 30 days’ notice to disappear. Very often one actually succeeds in tracing a consumer and getting a notice to him. One has to wait 30 days, however, before one can repossess the article. By that time the man has received his pay cheque from his employer, but instead of using it to help pay off the amount of money he owes, which by that stage might be considerably more than his monthly income, he ups and moves. The credit grantor then finds that the customer has disappeared and that the goods have disappeared with him. This could more or less carry on ad infinitum. I therefore think that this is a “30-days’ notice to disappear” clause. I concede to the hon. the Minister that perhaps the object is to give the consumer 30 days in which to get his pay cheque so that he can pay off the amount that is owing, but one must not forget that at this stage, he has probably already had a number of previous notices. He is possibly quite considerably in arrears with his payments. I think that this clause is going to make it very difficult to trace credit receivers who disappear a short while after getting the notice described in this clause.

Mr. Chairman, I have listened to the arguments and, as the hon. member said, it is in a certain sense six of one and half a dozen of the other. However, it seems that we are going to decide that the penalty is 14 days if a person does not do his duty for the second time in one year. I think we should rather stick to the 30 days and bear in mind that we may have to effect changes in both cases, if it appears during this year, in which we are going to gain a great deal of experience with this Bill, that this is not so good. Let me add that I have a measure of sympathy with what the hon. member said.

Amendments moved by the Minister of Commerce and Consumer Affairs agreed to.

Amendment (1) moved by Mr. A. B. Widman negatived (Official Opposition dissenting).

Amendment (2) moved by Mr. A. B. Widman agreed to.

Clause, as amended, agreed to.

Clause 12:

Mr. Chairman, I move as an amendment—

I think that as far as this clause is concerned, it is clear that the protection it affords is not wide enough in respect of the possible costs which may be accrued by the credit grantor in this case. Without going into this matter in great depth, I want to say that it is really a question of cases in which the credit grantor has not obtained a court order for the recovery of goods, and the credit receiver has not ended the agreement either. Thus they have a type of agreement with each other. The one keeps the goods in his possession for a while and then the other has to come and fetch them. There could be various forms of costs, for example transportation and storage. There could be outstanding instalments as well. Outstanding instalments may, of course, be recovered. He is capable of doing so in terms of the Limitation and Disclosure of Finance Charges Act. If the credit receiver meets the requirements of the credit grantor, there is no further problem. If there is a loss of interest, he is entitled to recover the interest in this case as well. However, it is felt that even reasonable transport costs ought to be taken into account. Certain people have approached me in this regard. If we amend the clause and substitute “reasonable costs” for “actual costs”, this will solve the problems in this regard that have occurred to people.

Mr. Chairman, as I understand the sense of the hon. the Minister’s amendment, which does not appear on the Order Paper, I think we in these benches will certainly support it. In fact, I think it obviates the need for me to move the amendment standing on the Order Paper in the name of the hon. member for Yeoville and therefore I shall not move it. I now move the two amendments standing in my name on the Order Paper, as follows—

The first of these amendments relates to a better use of English and to a better understanding. The first two lines of this particular clause state—

This could be taken to mean that he has recovered the goods and still has them in his possession. I do not think this is entirely clear. In the Afrikaans text it is perfectly clear, but in the English text I do not believe it is perfectly clear what is intended. Therefore if my amendment is accepted the clause will then read—

I think this reads better, I think it makes better sense and I think it makes for greater clarity as well as better English.

To motivate my second amendment I want first of all to refer briefly to the previous clause, clause 11, where there is a proviso that that there shall be a 30-day delay between the “handing over of such service, as may be stated in the letter, and the credit receiver has failed to comply with such requirement”. First of all, not having been paid, one goes back to the credit receiver and has to wait 30 days before one can take further action against him to recover the goods. Let us assume that one has recovered those goods and that one has taken them into one’s possession. In terms of clause 12 one will then, for a period of 30 days, not be able to recondition the goods, nor can one therefore resell them, because the credit receiver has the right, for 30 days after one has taken the goods back, to come back to one and say that he wants the goods back because he has the money. This therefore means that for 30 days one has to put the goods aside or store them. One is not entitled to recondition them, and after all many of these goods that come back are in extremely poor condition. One could spend R300, R400 or R500 on reconditioning them. The trader certainly does not want to lose that R300, R400 or R500 by reconditioning the goods before the 30 days are up. We in these benches do not believe that this is a reasonable or just situation in any shape or form. Once again I stress that I believe that the Bill, in this particular instance, is being over-protective, and the person that the Bill is protecting is the bad egg, the person who is defaulting wilfully, did not have any intention of paying and has looked after the goods extremely badly. Therefore we have proposed, not entirely to cut that period out, but at least to reduce it to 14 days. I would also make the point that if one cannot set about reselling an article for two months from the time that the customer has failed to comply with the conditions, one could find the period of two months falling in December and January. In the case of a motor vehicle, the value of the article can deteriorate by a considerable sum of money. From the time that one originally could have repossessed it if one could have gone straight ahead until the time that one actually sells it, a period of two months having elapsed, the article could have dropped in value by R300, R400 or R500 very, very easily.

Now you tell us!

If the hon. member for Durban North had bought a car from me he would have known how these things work. [Interjections.] I believe that the 14-day amendment is a very reasonable amendment. I do not really believe that it is reasonable to expect the trader to wait 60 days before he can take any action to sell the article he has repossessed. I would have liked to have brought about a very much greater saving in time, and I also certainly would have liked to have seen the hon. the Minister accepting the 14 days instead of the 30 days in the previous clause, so that in total there would be a month, and I think a month is reasonable. If there were two periods of 14 days in total, between the time that the original notice was served and the time when the trader could sell the article concerned, it would give the credit receiver a period of a month to raise the necessary money. Now, in terms of this legislation, what one actually has is a period of two months. I am sure that is excessive, and I plead with the hon. the Minister to alter the 30 days to 14 days.

Mr. Chairman, since I requested as long ago as the Second Reading that greater protection should be afforded the credit grantor in terms of this clause, I naturally welcome the amendment moved by the hon. the Minister. However, I am in some doubt as to the scope of the proposed amendment— that is to say, I am not quite sure, or convinced, that the term “reasonable costs” includes interim interests as well. Consequently I should like to suggest that before we finalize this legislation, we obtain absolute certainty at some stage as to whether “reasonable costs” includes interim interest as well, because I think that it is essential that we make provision for the recovery of interim interest in this instance.

Mr. Chairman, I think that, as far as these proposals are concerned, the first amendment is acceptable. I think the words “in his possession” can be omitted. “Possession of” is much better wording to my mind. I thank the hon. member for that amendment. Once again, however, I do not think it is necessary for us to continue with an argument that might become futile, because I really cannot agree now to alter the “30” to “14” days after I have already expressed my opinion in our previous discussion on this specific matter. I should like to point out to the hon. member that the credit receiver is not the only bad egg in instances like these. He might be the irresponsible bad egg, but I think the credit grantor should also be regarded as at least an indifferent bad egg, because he sometimes does not think what the results of his high-pressure salesmanship could be. In view of what we want to achieve with this Bill, I do not think the credit receiver is the only one to be regarded as being a bad egg in these transactions. However, as I have said, I am not prepared to accept the second amendment of the hon. member, but I accept the first.

Mr. Chairman, the hon. the Minister has, to my mind, made out a relatively good case in this regard in that the credit receiver is not the only bad egg. One should, however, remember that there are many clauses in this Bill in which the activities of the sharp-practice trader, the slick salesmen, are being prescribed by this legislation. I should particularly like to draw the hon. the Minister’s attention to clause 13, the clause which deals with a cooling-off period, a very important new principle in the South African legislation on hire-purchase or leasing transactions. It is also a clause which I as a trader certainly do not like at all, but I can see the need to try to protect the consumer, the credit receiver. I wonder, however, if the hon. the Minister realizes the effect of these two clauses. If one takes them in isolation, they are not so bad, but I wonder whether, in drafting the Bill, these two clauses were not perhaps taken in isolation, because I do not think that a two-month period really is reasonable in this regard. As I have said, many things can happen in two months’ time. The hon. member for Hillbrow has mentioned the deterioration of the article over a period of time, particularly in instances where they are left out in the street in coastal areas where rust is a factor, etc. There can be an extreme amount of deterioration over a period of time. One can also have a trader making use of a company that is involved in many HP transactions, such as discounting transactions for the motor trade. A large company can have a large number of repossessions on hand. If the company then has to store all these repossessed articles for 30 days, it is going to create extra expense for the company. If such extra expense is created, the person who ultimately pays for this will be the consumer. The extra expense is taken up in the costs of the organizations concerned. They simply alter their profit margins to compensate for those extra costs. I am sorry that the hon. the Minister does not see fit to accept this amendment, because I believe that we are being over-protective in this legislation.

Amendment (1) moved by Mr. D. J. N. Malcomess agreed to.

Amendment (2) moved by Mr. D. J. N. Malcomess negatived (Official Opposition dissenting).

Amendment moved by the Minister of Commerce and Consumer Affairs agreed to.

Clause, as amended, agreed to.

Clause 13:

Mr. Chairman, this is a very interesting clause, and one which is basically an innovation in our law. The clause provides that, having entered into an agreement, the credit receiver has five days to decide whether he wants to go ahead with the agreement or, after having given due notice within that period, return the article to the credit grantor. I suppose one could refer to this as a “cooling-off” clause. One can understand the desire to protect the innocent purchaser from high-pressure salesmen who will go from door to door and by their persuasive powers induce women to enter into an agreement to purchase. However, when her husband arrives home and she tells him that she has purchased these items he may say that she could get them more cheaply elsewhere, that they are things they do not really need and that she has merely fallen victim to the persuasive powers of a high-pressure salesman. One can understand the protection that is needed against this type of high-pressure salesman. Having accepted that philosophy I must, however, point out that I can foresee considerable difficulty in implementing the provisions of this clause and in the courts interpreting this clause. Clause 13(1) provides, inter alia, that—

The credit receiver has five days to decide whether he wants to terminate the agreement. In this regard the mischievous words in law are “in respect of which the initiative emanated from any credit grantor or his manager, agent or employee”, because it can be very difficult to interpret what the word “initiative” means in law and how this initiative was brought about. Let us say, for example, that I advertise a product in a newspaper and a person telephones to say he likes what I am advertising and wants to buy the item and asks if I could send someone to see him so that they can enter into an agreement. On whose initiative is that agreement entered into? Does the initiative emanate from me because I advertised in the newspaper, or does the initiative emanate from the purchaser who telephones to say that he has read the advertisement in the newspaper? There is obviously going to be a lot of difficulty in interpreting whose initiative it is. If a person telephones, is that “initiative”? The difficulties which can arise in this regard are insuperable. If, for example, the transaction is concluded and signed at a place other than the business premises, the credit receiver may within five days terminate it by notice in writing. However, what is to stop a credit grantor, in those circumstances, from refusing to deliver an article until the credit receiver comes to his business premises to sign the agreement? In that way he overcomes the difficulty in respect of the five-day provision. One can therefore get out of it in that way.

I want to point out another thing that could happen. I want to say quite frankly that I am not a trader and have never traded in my life, but if I were a trader and I were aware of this provision, I would not deliver the article until five days after the agreement had been entered into to make sure that the purchaser would not be able to mess up the article I had delivered to him before giving it back at the end of five days if he did not want it, because then the provisions with regard to valuation, contained in clause 16, come into operation.

With my first amendment I therefore seek to remove the mischief caused by the words I have just read out, and in doing so to widen the scope of the provision allowing the credit receiver to have a five-day period in which to send an article back. This provision is qualified by my second amendment which proposes to add, after line 54, the following words—

I have referred to these provisions—

Of course, these premises include bank premises, the premises of financial institutions or agents’ premises. These are all places where this could be done. I think the clause providing for a period of five days, in which the consumer has the right to really think about the transaction, is an improvement in the law and of more benefit for administration purposes. We must not get bogged down in the question of who takes the initiative in such an agreement. Sometimes an unscrupulous dealer may persuade a person to sign even though the initiative has not emanated from the dealer. In other words, a credit agreement which is drawn up in the credit receiver’s house, contains a clause which certifies that the initiative has not emanated from the credit grantor. If the credit receiver signs that agreement, it negates clause 13(1). So this is wide open to abuse and misinterpretation. I therefore move the amendments standing in the name of the hon. member for Yeoville on the Order Paper, as follows—

Mr. Chairman, this provision is one of the most important in this Bill. It is of the utmost importance that the credit receiver should be afforded protection of this nature. It is not clear to me whether the hon. member for Hillbrow, who proposed the amendments, will be satisfied if the first amendment were retained, but the second amendment were perhaps not accepted. If this were to be his attitude, I should be able to support the first amendment, because to some extent I agree with him that problems may be experienced in the interpretation of the word “initiative”. However, I do not believe that that problem has been altogether settled. I do not know whether there will be fewer problems with the interpretation of the words “personal contact”.

In the second amendment moved by the hon. member, he omitted the important provision in the clause which includes not only the credit grantor, but also his manager, agent or employee. I think it is indeed a major step in the wrong direction to restrict the provision to the credit grantor himself and to exclude his staff, whom he could otherwise have used. I think the proposed amendment leaves the situation open for many more abuses.

I do not think it is unreasonable to expect the credit receiver to have to go to the business premises of the seller in order to negotiate an important transaction. There is therefore really no restriction, as far as the seller is concerned, affecting his business, because in a particular transaction it will be easy for him to demand that the purchaser should in fact come to his business premises. That is why I feel that one should retain this provision, particularly since the amendment creates as many, if not more, problems than the original clause, in fact more because there are certain important omissions in the second amendment. Consequently I do not believe that it can be supported.

Mr. Chairman, I think the two amendments which have been put by my hon. colleague are not actually dependent the one on the other. I think if the hon. member wanted to accept one, both or neither, he is entirely free to do so. The one is not at all consequential on the other.

I think generally, on this clause, one has to say that the hon. member for Albany is perhaps a little incorrect. The effects of this clause, as the hon. member has said, will not be such that it will be difficult to get the credit receiver to come into the business and sign the credit agreement. However, this is not necessarily the case. There are many instances where one signs an order with a person for the supply of an article and he might live 80, 100 or 130 km away from one’s place of business. Therefore you undertake to deliver the article to him on his doorstep, as a service given to the customer by the trader. Now, under the new circumstances, the traders are not going to be able to do that. I certainly, if I was a trader, would certainly not give anybody the opportunity to have a motor vehicle for five days, drive it, allow it to deteriorate, have it licensed in his name, and then return it to me. I would have to roadworthy it again to get it out of his name and back into my name. There is absolutely no chance that I would deliver a vehicle to a customer under the circumstances of the five-day cooling off period. If there is the chance that it can be thrown back at me. I am going to have to sign every agreement on my premises. This, again, is going to result in a certain amount of difficulty for the customer, because he is not going to be able to get a car under the circumstances where the vehicle is to be delivered to him on his farm, 50, 60 or 100 km away, and the agreement is to be signed there. It is just not possible.

We think this clause must be applied to protect the consumer against the sharp operator. The sharp operator keeps coming into the discussion because he is very important. The customer does need protection. The traders are therefore going to have to put up with a certain amount of inconvenience, and so are the customers, in order to protect the, shall we say, stupid from the depredations of the sharp operator.

I believe the second amendment put by my hon. colleague is one which follows absolutely from the first three subsections of the clause. We have already stated what we are trying to do, viz. to protect the customer against the sharp operator. Now, what we are saying in this clause, is that the provisions of the three subsections shall not apply where there has been no personal contact between credit grantor and receiver. So what we are saying is that the sharp operator cannot have operated under those circumstances. He cannot, through salesmanship, have persuaded the customer to buy something which that customer does not really want and cannot really afford. I have already referred to the mail-order situation. There are many mail-order companies in South Africa who offer a service, particularly to people on the platteland, e.g. to farmers and their wives, who do not have the opportunity to get to the major towns to buy the sort of article they want. The mail-order people then send their catalogues around and these are perused by many, many people who then make out their orders and send them to the mail-order company. One might find that they buy something on hire-purchase with a mail-order. No pressure has been put on them, either by salesmen or otherwise, which could create an unfair situation. All the amendments says is that in those circumstances the mail-order company —which has made no personal contact, but contact only through the post or perhaps through an advertisement—should not be subjected to this cooling-off period.

I should like to remind the hon. the Minister that, if his reply to me is that there will perhaps be misleading advertisements which will create a situation whereby the customer then applies for an article, buys it and then finds that the advertisement was misleading and he has been put in a bad position, then I would say that the hon. the Minister has the rectification of that situation entirely in his own hands, because he can by regulation spell out the sort of things that must be put into an advertisement, items such as what the actual credit charge is in terms of the percentage per annum, what the total amount of the finance charge is and many other items. The hon. the Minister himself can prescribe these things. He can prescribe them in such a way that there will be no doubt in anybody’s mind that the consumer will not be mislead by an advertisement or by a mail order catalogue.

Once again, I believe that this clause is a clause which merits a great deal of thought and attention from the hon. the Minister and his department. I believe genuinely that it is a very, very good one and I agree with the necessity for the cooling-off period, but I think there should be more exceptions to this cooling-off period than are currently provided for in the Bill.

Mr. Chairman, I agree with the hon. member for Albany that this clause is one of the most important, if not the most important, clause in the Bill for the specific purpose of protecting the unsophisticated buyer against abuses by way of high-pressure sales techniques. The hon. member for. East London North referred to the mail order services, but I must once again remind him that we are not dealing here with the ordinary case in which a person orders a certain article by post and the article is, for example, delivered to him cash on delivery. We are dealing here solely with the case of a credit agreement. Consequently the vast majority of cases relating to mail orders to which the hon. member referred, are not affected by this Bill in any way.

Of course it does. Have you read the Bill?

Of course I have. The hon. member also made a major issue of the so-called delay on delivery. But, once again, what is the practice? The practice, in any event, is that goods are not simply handed to the purchaser by the door-to-door salesman. He places an order and then the order is in any event only executed over a period of days, and sometimes weeks or months. Thus this is not such a major stumbling block as the hon. member makes out.

Business interrupted in accordance with Standing Order No. 22.

House Resumed:

Progress reported and leave granted to sit again.

The House adjourned at 6.00 p.m.