Mr. Speaker, as regards the business of this House I just wish to announce on behalf of the hon. the Leader of the House that the Prime Minister’s Vote will be debated on Monday, 28 April. Directly afterwards this House will proceed to deal with the Defence Vote, and following that, with the business as set out in the Order Paper.

Mr. Chairman, in discussions which have taken place between myself and the hon. member for Klerksdorp, who was the chairman of the commission of inquiry, and with Advocate Bräsler, I am happy to tell hon. members that we considered the amendments which I had on the Order Paper concerning this and other clauses. As a sort of subcommittee of the commission we went a little further than was expected of us, but as a result I think we shall be able to save this House quite a lot of time with regard to further amendments which I shall now not proceed with and also with regard to amendments with which I shall proceed. One amendment with which I shall proceed is the amendment which provides for the addition of a new subsection (2). This is an amendment to an amendment which appeared on a previous Order Paper. I trust this is not too confusing. What I originally intended to do was to create a situation in terms of which, if an amendment is to be made to paragraph 7 of the memorandum or articles of a company, provision can indeed be made therefor. However, in terms of clause 9, if there is a change to the name, that change can take place without the payment of any fee. What I originally tried to do was to have the same provision for clause 7 as is contained in clause 9, but on reconsideration of the matter, and after further discussion, we felt that the amendment which I intended moving would best be moved to clause 2, and I accordingly move—

This is not an amendment to the clause as such. But there is a side-note to the clause concerning exemption from the provisions of the Act. That, I take it, will be altered in due course to include “fees payable” in terms of the Companies Act.

Mr. Chairman, the amendment is acceptable to me. The hon. member will realize that this will entail a special decision, and that there is a small cost involved, which must be provided for. In any case, I accept the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 7:

Mr. Chairman, I shall not pursue the amendment on the Order Paper, as it is included in the previous amendment.

Clause agreed to.

Clause 8:

Mr. Chairman, I have been requested by the hon. member for Klerksdorp to move the amendments which are printed in his name on today’s Order Paper. Unfortunately, due to other obligations, including an appointment with the Schlebusch Commission this morning, he is unable to be here. To summarize, I want to say that the sole objective of all three amendments in his name is to bring the Bill in line with the recommendations and the objective of the commission which investigated the legislation, of which the hon. member for Klerksdorp was the chairman. I am referring specifically to the amendment with regard to clause 8, and more specifically to clause 8(c). The wording of clause 8(c) means that the prohibition on a share block company to alienate the property in respect of which a share block scheme is operated, does not apply in the case where the share block scheme is operated on leasehold land, in contrast to freehold land. This is not the objective, and therefore it is necessary to bring the wording in line with the recommendation of the commission so that the prohibition may apply where a share block scheme is operated on both freehold and leasehold land. This is the position in Durban in particular, where there are many of these schemes and where flats are erected on leasehold land and where there is no question of freehold land.

The second amendment with regard to clause 8 is aimed at extending the prohibition to the cession of rights, whilst at the moment it holds good only with regard to the sale of freehold land or rights. The hon. member wants to include the cession of these rights too. Consequently, I move the following amendments—

Mr. Chairman, I am sorry the hon. member for Klerksdorp is not here, but I am sure the hon. member for Albanie has ably moved the amendments. We have had discussions with regard to this as well. I am happy to support the two amendments on behalf of the official Opposition. The hon. member is correct as far as Durban is concerned. It is on leasehold property. They do not have immovable property as such, but they have the right to immovable property, and therefore it is necessary to cover that. As far as the session is concerned, having covered the original contract, obviously the session should be covered as well.

Mr. Chairman, I accept the amendments.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 13:

Mr. Chairman, the problem here basically is to avoid the situation which I outlined during the Second Reading debate concerning the case of Barcelona v. Coinland, where Coinland was supposed to collect moneys on behalf of Barcelona to pay off a bond. It was then found that they did not have to use that specific money to pay off the bond and there was further doubt about their ability and legal right to pay off the bond. This clause provides for the establishment of a levy fund by the share block company and my intention is to remove uncertainty regarding moneys paid in terms of this clause. The levy fund is a very important fund because it involves payment to cover rates and taxes, electricity, gas, water, sanitary fees and all services in connection with a share block company. If this is not paid, it can result in serious consequences in that the company can be sued and have its immovable property attached, to the detriment of the interests of the shareholders. I thought that in terms of subsection (3) that we would have to provide that the amount should be deposited directly instead of into a separate account in order to avoid the middleman, but I have been persuaded at the discussion which I mentioned earlier, that the intention is in fact to implement the provision I had hoped to cover even further through my amendment. I have been given the assurance that the money must be deposited forthwith into an account of the company or into the account of the practitioner or the estate agent. It means that the money can in fact remain in a separate account of the company. This account should be kept at a bank or building society. I think it must be clearly understood that in terms of subsection (3a) the deposit should be made into a separate account which the company shall open and keep with a bank or building society and that that account must be transferred forthwith to a bank or building society. I have that assurance, and as it is clear that this will be the modus operandi of the company, I will not pursue the amendment printed in my name on the Order Paper.

Clause agreed to.

Clause 14:

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

The amendment relates to subsection (7) of clause 14. Originally, clause 14(7) was not recommended by the commission as a separate subsection. It was part of the clause. As clause 14(7) reads at the moment, it can be interpreted as if the entire loan obligation has to be replaced by another loan obligation. The aim was, and is, that a loan or part of a loan, could be replaced in this way, and the object of the amendment is to rectify this.

Mr. Chairman, the amendment is merely a correction and consequently I am prepared to accept it.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 15:

Mr. Chairman, with regard to this clause I have also been persuaded that what I want to cure through my first three amendments has already been covered in the argument on clause 13. I therefore wish to withdraw those amendments.

With regard to my fourth amendment, which seeks to insert the words “and for such period as he may deem fit”, and my fifth amendment, which seeks to add a proviso to the effect that when an objection is lodged by a person to the Registrar to hold up and freeze the trust account, the Registrar should first afford the company an opportunity to answer the allegation, I have been assured that in practice that is what will happen. In any event, the company has the opportunity in terms of the rules of the Supreme Court to make application to have the position restored. As far as the time period is concerned, the Registrar has the power in terms of the Companies Act to impose a time period and to reinstate a situation which he initially held up. In those circumstances, and in view of the assurances that I have been given and which have now been placed on record, I will not move my amendment.

Mr. Chairman, I should like to comment briefly on this. I thank the hon. member for at least relieving me of the duty to refute some of the arguments I have before me. I agree there has been cause for some doubt in connection with this matter. Nevertheless, I am very glad that the hon. member thrashed this out beforehand.

Clause agreed to.

Clause 16:

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

This clause relates to the contract for the acquisition of a share and a use agreement entered into, and any amendment or session of such contract or agreement, all of which shall be reduced to writing after the commencement of this Bill as an Act. We are quite happy with the wording of the clause. We have no argument with the fact that the contract should be in writing. The point at issue is that in a deed of cession it does not say that the use agreement should be attached to the cession itself. Hon. members will know that in the case of a deed of cession all one need do is to draw up one single document wherein one states: “I, Jack Jones, transfer to Daan van der Merwe my rights and title in and to my shares in X Share Block Company (Pty.) Limited.” That is then a deed of cession and it is valid in law. That would therefore suffice. However, the whole idea behind share block schemes is to protect the innocent purchaser and the purchaser who is perhaps not so alive to and does not take sufficient notice of what we call the “fine print” in an agreement. As hon. members will see from schedule 2, these agreements are lengthy. Although in every share block transaction the people concerned should consult an attorney, we must accept that many persons do not do so. They rely upon their own judgment. Therefore, as regards the principle the commission adopted and which is incorporated in the Bill, we want to protect the purchaser of a share block in terms of a cession. Rights having been acquired by way of cession, that cession should contain the use agreement. The wording of the amendment in this regard is very clear—

Mr. Chairman, it appears that the proviso for clause 16 is not essential. According to the law advisers, it is actually not suitable to include it there. It is not essential. There are legal rules in clause 17 which describe the manner in which the contents of the documents must be conveyed. The rights of the sessionary, or in any event, the duties of the person who transfers it, are set out. I believe that the person to whom it is ceded can only prove his rights in any event if he has that document. Since this is something which, in our view, is of necessity implied in the legislation, the law advisers feel that it would be superfluous to insert the provisos here. Consequently I cannot accept the amendment.

Mr. Chairman, I am sorry that that was the advice of the law advisers. I am speaking from practical knowledge, and I am sure many of my colleagues will share my view from practical knowledge, that as regards a cession, we are in fact entirely defeating the object we are trying to achieve. By a single document, a cession, the man acquires those rights, but he will not have available the terms and conditions of the use agreement. I think that that is totally unfair to him. I think it was, in actual fact, suggested by the hon. member for Yeoville in his Second Reading speech that we should go even further. He said that we should actually attach the articles of association of the company as well, because very often the articles of association—those articles are, of course, a domestic arrangement between the shareholders and the company itself—lay down the terms and conditions for the use of the share and the apartment itself. In my amendment I am not even going as far as that, because all I am asking is that the agreement in terms of schedule 2 should be attached.

I hope that the hon. the Minister, although he has been advised and seems firm on this basis, will possibly consider the matter further, and should he find merit in it, move an appropriate amendment in the Other Place.

Mr. Chairman, I do not wish to take up the Committee’s time unnecessarily, but I believe, as I have been advised, that the existing legal rules clearly provide that when rights are ceded, the person to whom they are ceded, is to receive the documents from which his rights are evident. He must, after all, gain possession of those documents. That is the position as far as I know the existing legal rules. The person needs those documents in order to be able to prove his rights. For the very reason that this is, or should be, the ordinary practice, I do not believe that we should include unnecessary provisions in the legislation. If this does create problems however, we can have a look at the legislation in the course of the year. I assure the hon. member that we shall in fact do so.

†In this case the amendment is superfluous. Furthermore, should I accept the amendment, there is the possibility that it may create problems of another kind on which I do not want to go in at the moment. I am glad the hon. member accepts my bona fides.

Amendment negatived (Official Opposition and New Republic Party dissenting).

Clause agreed to.

Clause 19:

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

There is an amendment in the name of the hon. member for Hillbrow on the Order Paper, which is worded in terms almost identical to this one, but the amendment I moved, goes further than the one of the hon. member for Hillbrow without excluding it. Consequently, I am of the opinion that the two amendments complement one another.

I want to motivate my amendment as follows: The clause places an obligation on the directors of a share block company to insure the fixed property, which is the property of the company, adequately. The Bill makes the directors personally responsible for damages which are suffered if they should fail to obtain the necessary insurance, apart from the penal sanction which will apply in terms of clause 22 if they have failed to do so.

The question that arises now is: What must be understood by “adequately insure”? This is something which may create serious problems for the directors. It is clear that there should rather be a directive from the members of the company to advise the directors with regard to the insurance required for the property. If the directive is not carried out, the directors will be subject to penal sanctions and they will also be able to be held personally responsible. It is only fair and desirable for the directors to know what the extent of the insurance is which is considered adequate by members of the company, otherwise the directors are running a great risk.

As it is worded at present, the directors can be held responsible due to inflation and the concomitant increasing building and replacement costs of properties and buildings. This state of affairs may lead to there being few people who are prepared to come forward and accept responsibility for directorships of such a company. In terms of this amendment it is now laid down that the directors must receive a directive from members of the company with regard to insurance on an annual basis, which means that the responsibility is shifted away from the director and that they will simply be responsible when they neglect to carry out specific directives. The commission adopted a very strict standpoint on the insurance of fixed property, and the amendment does not detract from the commission’s strong feeling and recommendations with regard to the insurance as such. It simply creates a more practical, useful and fair regulation.

Mr. Chairman, as the hon. member for Albany rightly said, the commission felt very strongly with regard to the whole idea which is incorporated in clause 19 with regard to insurance. Very often the levy is made “leviable”, if that is the right word, on all the shareholders to cover the estimated expenses of a share-block company with regard to its rates and taxes. One difficulty is to estimate maintenance, because something could break down and have to be repaired, for example a lift in the building. It could be very expensive to repair and require a special levy on all the shareholders. Or damage could be done to the building by an act of God, damage that could not be covered by the levy fund. For that reason, and also for the reason that this clause is actually borrowed from the Sectional Titles Act—one is compelled to have insurance under sectional title—it is necessary to have this insurance clause. When the commission first worded and discussed it, they had to deal with the question of “adequate” cover. On reconsideration it appeared that the word “adequate” would cause problems in interpretation in so far as the law was concerned, particularly in view of the penalties. Not only is there a penalty of R2 000 as far as clause 21 is concerned, but there is also a personal liability upon the directors if it is proved that, unless they were unaware of this failure, this has not been done. When it comes to the question of adequacy as far as insurance is concerned, many of us actually fall victim to being inadequately insured in our own homes. I think of how often it may have happened to hon. members that, having had a burglary, the insurance assessor came and then found that they were underinsured and that they would consequently not get the 100% payment, but only a percentage payment. That could be the case with regard to a share-block company where, having assessed the damage, the assessor then says that the company is not properly covered and that it is therefore not adequately insured. Therefore the amendment which was moved by the hon. member for Albany on behalf of the hon. member for Klerksdorp in fact dovetails extremely well with the amendment that I am going to move. In the first place the whole decision of what insurance to take is covered by the amendment that I am going to move, on the basis of a resolution taken by the shareholders. Since that position is covered, the word “adequate”, which is a mischievous word in law, should then fall away. I therefore support the amendment of the hon. member for Albany, and I move—

Mr. Chairman, I think that the element of compulsory insurance in this case is something that was really omitted. It should have been there. It increases the surety, it protects, and in addition to that I also agree with the hon. member that the word “adequate” is unnecessary in a case like this. Therefore I accept the amendments both of the hon. member for Hillbrow and the hon. member for Albany on behalf of the hon. member for Klerksdorp.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 21:

Mr. Chairman, this is a clause which causes us considerable difficulty and that is what made us bring out a minority report after the session of the commission. Our basic objection is that the commission was persuaded by the evidence given, particularly by that of the Association of Law Societies, as well as through its own discussions, that there should not be criminal sanctions for what are purely commercial transactions. I believe that is the principle that was agreed upon by the commission. It was in fact stated so in the commission’s report, with special reference to the development of land in terms of the amendment agreed upon to the Sale of Land on Instalments Act, which has been completely revised by the commission and which may even, with a bit of luck, be placed before Parliament during this session, if a further meeting takes place, as I understand it will, still during this parliamentary session.

The commission actually recommended that the Sale of Land on Instalments Act be amended in eight respects. I suppose it would be a bit difficult for hon. members if I should bother them now with all the details of the matter. I think it will be sufficient for me to point out at this stage that sections 7, 8, 10, 11, 14, 16 and 18 of the Act have all been recommended by the commission to be amended in order to have criminal sanctions removed and to provide other sorts of sanctions instead, for example penalties depriving people of interest to which they would otherwise have been entitled, as well as other commercial penalties. In our approach to the legislation the hon. member for Green Point and I accepted the fact that where there is a contravention of a law in which criminal sanctions are justifiable, then obviously those criminal sanctions should apply. I should like, however, to draw the attention of the House to clause 3(2) of the Bill with which we are dealing now, and I quote—

That means that all the offences and penalties which are currently listed in the Companies Act, 1973, also apply to share block companies. One only needs to look, for example, at section 441 of the Companies Act, 1973, to realize that this is indeed so. I cannot quote all the penalties for offences as they are listed in section 441 of the Act. I merely want to quote section 441(1), which reads as follows—

And then the penalties are listed from (a) to (o). The first one, section 441(1)(a) reads as follows—

I specifically quote this particular penalty because section 132 of the Act contains a very important provision. It relates to offences such as forgery, impersonation and unlawful engravings in respect of things like shares, debentures, utterings, etc. I submit that we are covered to a large extent by the Companies Act. The Bill now before the House can also be viewed as a measure similar to the Companies Act. Of course, the Bill contains a number of provisions which, I do not believe, warrant the three categories of offences as set out in clause 21. When we read the clause we see that contraventions of clauses 5(1), 7, 10, 11(a) or 17 are punishable by a fine of R500 or imprisonment of six months. Contraventions of clauses 8(3), 9, 12 or 13 carry a penalty of a fine of R1 000 or imprisonment of one year, while contraventions of any other clauses will be punishable by a fine of R2 000 or imprisonment for a period of two years. We think this is indeed somewhat extravagant because, as I see it, in all cases of people contravening any of the provisions referred to in clause 21 the Companies Act will apply. Therefore, we do not believe that it is at all necessary for us to invoke any further penalties by way of the Bill presently under discussion. For that reason we see no need for the provisions contained in clause 21. It is, I submit, sufficiently covered by the provisions of the Companies Act.

However, there is also common law affording civil remedies in court where judgment can be obtained in respect of specific performance and where damages can be claimed if necessary. I think that all aspects of anything going wrong can be covered in those circumstances. I do not think we should make criminals out of people who, for example, enter into an agreement and do not attach the correct section or schedule, or who make a mistake with all the fine print and detail in the schedule as a result of which the schedule does not comply with the requirements as to what a schedule should contain. There is a remedy for it in law, and this Bill also provides that the agreement can be revoked by the seller, after which damages and compensation can be obtained by the buyer. Conversely, if the purchaser revokes it, the seller can claim damages and compensation. However, the clause also stipulates that if both the parties, the seller and the purchaser, have met all their obligations, and the transaction has been concluded as far as payment and delivery are concerned, there will be no cancellation and the contract will be regarded as valid. Why then should there be criminal sanctions? Why should the insurance provision we have just discussed make it a criminal offence not to take out the correct insurance, an offence which carries a penalty of a fine of R2 000 or imprisonment of up to two years, and for which the directors should, in addition, be punished by being made personally liable for the damages which have resulted from the failure to insure the property? I know that this was a flashpoint, a point of argument, between us in these benches and various other hon. members during the Second Reading debate, but I must pursue the point and therefore move, on behalf of this side of the House, that this clause be negatived.

Mr. Chairman, apparently the hon. member feels very strongly on this matter. However, we have a problem in this regard. Let us look at the matter in perspective once again. The Bill was drawn up as a result of certain abuses that arose. This Bill contains certain provisions with regard to actions to which the Companies Act does not apply. However, even if I were to examine the minority report closely, in which the aim is not set out, I would still have a problem. I definitely do not believe that when two football teams play against one another there should be no referee. I think a referee must act in spheres where transgressions may occur. If problems arise in future, we shall be able to look at it again, but if I accept this amendment, I shall have to look at this entire Bill once again, or withdraw it so that I can approach it once again from a different point of view and lay down prescriptions with a view to rectifying what those hon. members may have in mind. Together with the majority of the members— and those hon. members have also signed this report—we shall have to reconsider the entire Bill. We cannot leave this aspect out and then think that we have no obligations with regard to the rest of the Bill, the very aim of which is to eliminate abuse. The word “abuses” presupposes that there must be a penalty. I am very sorry, but I nevertheless think that we must provisionally keep the Bill as it is. If, for instance, it is argued that the Sectional Titles Act contains no criminal sanctions, it must be borne in mind that precautions have been taken for the Registrar of Deeds to keep it under surveillance at all times, etc. Therefore, we shall have to do more homework if we want to solve that problem. I agree with the hon. member that it will be a good thing if we can prevent such a problem arising. Unfortunately, for that reason I cannot accept the hon. member’s amendment.

Clause agreed to (Official Opposition dissenting).

Clause 23:

Mr. Chairman, clause 23 relates to the amendment of the Sectional Titles Act itself. Hon. members will recall that during the Second Reading I indicated that there was a strong body of opinion that on the one hand that we should amend the Companies Act and on the other hand amend the Sectional Titles Act. Nevertheless we decided to come with one Act, and this particular clause deals with the amendment of the Sectional Titles Act. Having said that, the difficulty that we raised at Second Reading and the difficulty under which a number of people are labouring today, relates to those people who had shared in a share block company which cannot at present obtain sectional title, because they do not comply with the provisions of the town-planning scheme, mostly because they are overbulk or because there has been some other contraventions of the town-planning scheme. So when an application for sectional title is made and the local authority has to give a certificate in terms of section 4 of the Act, it will not give a certificate. The commission feel very strongly that as far as protecting people is concerned, which I think we have done, the ultimate and most desirable feature is to convert the share block company to sectional title as soon as possible, because there is no doubt that in law the ultimate protection that can be given to an owner of a flat is that given by a person who has sectional title. It is not only against third parties that cannot be resisted. It also facilitates the financing of the acquisition of flats, because the building societies will then be prepared to grant loans on the security of the hypothecation of a mortgage bond because they are now dealing with immovable property in terms of sectional title. That is therefore the ultimate. We now have to face the situation in accepting that there are many share block owners who will not be able to get sectional title because they cannot get past the local authority. Therefore I now move the amendment printed in my name on the Order Paper, as follows—

The purpose of this amendment is to give the hon. the Minister the power, after good cause has been shown. A case must be made out to him as to why this should take place. Secondly, he has to consult with the local authority concerned. We are not asking him to ride rough-shod over the local authority, to interfere with their town-planning schemes, their amending schemes or their proposed amending schemes or town-planning schemes. I even anticipate that the local authority might say: “Look, these people have been very naughty. They have contravened the regulations and they should be punished. There should be a levy or fine imposed upon them.” That is fine. Let there be a levy or a fine, but let us somehow bring this impasse to an end. It does not matter whether it is a fine for a contravention or whatever else. Do not let us perpetuate an impasse to the detriment of innocent shareholders who have paid good money and purchased shares in an apartment. Therefore, the purpose of what I am asking is to ask the hon. the Minister to take these powers, after due consultation with the local authority and after good cause have been shown, to grant exemption from the operation of the approved or proposed town-planning scheme so that that “struikelblok” will be removed from the avenue of converting it to sectional title. I think this amendment is reasonable. I think we are going to protect a lot of people in doing so. I have been told, however, that perhaps the hon. the Minister would like to consult with local authorities beforehand. I admit, too, that this amendment did come subsequently. But having given the matter thought, I do think this is a good provision. I therefore hope the hon. the Minister will consider it.

While I am on the subject, although it does not relate to the subject-matter of the amendment before us, there is another situation which I had thought was impassable, namely that where the property is built on leasehold—as mostly happens in Durban—and because one cannot get a sectional title on leasehold, an impasse is created. I thought we could perhaps not get pass this, but the hon. member for Yeoville advanced an argument to which I hope the hon. the Minister will give very serious consideration. I think the hon. member for Durban Point also mentioned the difficulty with regard to leasehold property. Perhaps on further consideration the hon. the Minister will come to the conclusion that there is in fact no reason why, if a person can take transfer in the Deeds Office of an immovable property which is leasehold, for example, in terms of the old mining titles of the Witwatersrand, of which the chairman is probably well familiar, and those leases have 99 years or lesser periods to run, a registered title is given to those people, bonds are registered on those leasehold properties, the Sectional Titles Act should not be further amended so that sectional title can be given on leasehold property as well. I hope the hon. the Minister will give consideration to my second plea as well.

Mr. Chairman, unfortunately it is not possible to accept this amendment either. I think, if I had to summarize it, that the hon. member wants the Minister, subject to certain conditions, inter alia, consultation with local authorities and that the building shall already have been constructed prior to the commencement of the legislation, etc., to have the right to set them a time-limit within which they must comply with the requirements under a shareblock scheme. The idea is that they must be able to open the sectional title register. This is so, but I do wish to tell the hon. member in the first place that I am not inclined to interfere, even if it is by way of consultation, with an operation which is in reality the responsibility of a local authority. There is a definition of our relationship, but it does not include that I can do this type of thing, and consequently I feel disinclined to accept it. In the second place, the Sectional Titles Act, which now enters the picture here, is also the responsibility of another hon. Minister. We shall consult with all the people, but I honestly believe that it is not part of my responsibility to do the work of others. According to section 4(6) of the Sectional Titles Act of 1971 a local authority may not consider an application for approval of a development scheme if it is satisfied that the proposed scheme is in conflict with a townplanning scheme. The hon. member cannot now expect me to interfere and amend the Act by implication. It remains the responsibility of the hon. the Minister of Justice.

I would be changing certain aspects, which by implication means that I would also be changing the Act, but it will have no practical effect.

That is the problem. In the first place therefore my main consideration is that it does not fall under me, and I do not know whether the hon. member has consulted the local authorities about his argument. It is a sensitive matter. In the second place I do not wish to saddle the Minister who is responsible for the Sectional Titles Act with administrative problems. There will be a great deal of administrative work for them in any case. If I add up all the reasons—I tried to state them in sequence—the hon. member will understand why I cannot accept the amendment. I hope that the hon. member will accept it in this spirit.

Mr. Chairman, the hon. Minister and hon. members will recall that in the Second Reading I spoke about this, and it is necessary for me to repeat what I said. I shall use the example of a block of flats on the Sea Point beach-front which was designed by an architect who exceeded the bulk and thus contravened the town-planning regulations. I believe he was subsequently arraigned before a court for various things. Nevertheless, there are people living in the block and they have bought shares in the share block company. The block, which is very attractive, has been levied a fine of R8 000 per year for the past 16 years by the Cape Town City Council.

Does the hon. the Minister think that that is a desirable position? Why should people who have innocently bought flats in that block and who were not a party to the architect’s mistake, be penalized by having their levy fund swelled to pay the fine? Surely this is an impasse we do not want to perpetuate but bring to an end. I am aware of the fact that the hon. the Minister has difficulties. His first difficulty is that this particular aspect concerns another hon. Minister, and I accept that. His second difficulty is that this obviously affects the provincial authorities who have a town-planning ordinance which provides for local authorities to have town-planning schemes. We are therefore touching on the authority of the provincial administrations and the local authorities themselves. I want to persuade the hon. the Minister and hon. members of the Committee that we want to help to remove this impasse. If the hon. the Minister thinks we have a case, if he has the will there will be a way, and we can find that way. The first way of solving this problem is for the hon. the Minister to persuade the hon. the Minister of Justice, who handles the portfolio with regard to sectional titles, that there is a case to be made out for this. The matter can then be referred to the provincial authorities, and in turn to the various municipal associations of the provinces and the United Municipal Executive for their report and backing. I do not propose that we should ride rough-shod over people, but people are suffering, and our aim, and the commission’s aim, is to release that suffering and bring relief as soon as possible. In those circumstances I must stand by the amendment which is printed in my name on the Order Paper.

Mr. Chairman, the hon. the Minister has already pointed out that this matter, which the hon. member for Hillbrow referred to, does not fall under his department. It is, however, a real problem because we are passing legislation in which reference is being made in clause 5 to proposed schemes. The situation is that it has never been possible to finalize the Natal town-planning scheme. If one of those buildings, as in the case with share block schemes, possesses rights which differ from those provided for at present in the proposed scheme, people who were not involved in the construction of the buildings experience problems as a result of a situation in which they played no part. We accept that the hon. the Minister can do nothing about this, and I also accept that the hon. the Minister and his department did everything they possibly could, but the fact remains that where a proposed scheme remains merely a proposed town-planning scheme, a subsequent municipality can refuse to accept such a proposed scheme. Suppose it is not built under the subsectional part of the scheme, and is replaced by another proposed scheme, can the legislation then be declared null and void?

Clause 5 refers very clearly to a proposed town-planning scheme. I indicated in my Second Reading speech that people are purchasing properties under a proposed town-planning scheme. Surely one can expect that if one is buying a stand under a title which contains business premise rights, one would in fact be able to establish a business undertaking there and that one would be able to erect such a building to a height allowed by the proposed scheme. But if the scheme is not subsequently accepted, one is saddled with a problem. One can take the case to court, but it will be said that it is a proposed scheme which has not yet been finalized. If the Natal Provincial Council were simply to say that they do not like the legislation, they can in certain respects destroy it by quite simply changing the proposed scheme into a town-planning scheme. The person who has erected the building is then on the receiving end. He cannot obtain satisfaction from the court because the scheme has not been finalized. Even a proposed town-planning scheme can be changed again into another proposed town-planning scheme and neither the Minister nor the court will be able to remedy this matter.

Have you read the amendment?

Yes, I have read the amendment. I am not going to vote for it because one cannot move an amendment to change it to what the hon. member for Hillbrow is asking. I am only pointing out to the hon. the Minister that there are problems. We are aware of the fact that he cannot solve them in terms of the present Act. However, knowing the hon. the Minister and his department, we know that if we point out the problems they will try their level best to do whatever they can to remedy the situation, but it cannot be done in terms of this Act. My purpose was only to bring this to the attention of the hon. the Minister.

Mr. Chairman, I regret that I must cross swords with my hon. colleague, who also served on the commission. He is wrong on two points. The first point on which he is wrong is that according to him we cannot do this in terms of this legislation. If we want to, we can. Nothing on earth can stop us. Hon. members will know that we were in fact told by a law society that from a practitioner’s point of view it would be better to have two separate amending Bills: One to amend the Companies Act and the other to amend the Sectional Titles Act. Instead of amending the two separately, we have before us one Bill amending both those Acts. The Sectional Titles Act is clearly being amended.

What about the provincial legislation?

The hon. member for Langlaagte should read clause 23. Subsection (1) reads as follows—

One cannot amend a scheme.

How can he then say we cannot oppose a law? He is wrong. I am sorry to have to tell him he is wrong, because I believe he actually supports the principle of what we are trying to achieve. I believe the hon. member actually supports the idea that we should come to the rescue of people who find themselves in this impasse.

His second mistake is, unfortunately, that, as the hon. member for Pinelands has said, he has not read our amendment, which very clearly provides that the Minister may permit a share block scheme—

We have taken into consideration what happens when, as is the case in the Cape and in Natal, there is no town planning scheme in operation by using the words “approved or proposed town planning scheme”. That is therefore covered.

There is a difficulty, and the hon. the Minister has set it out. It is the question of whether one should consult the provincial and local authorities or ride roughshod over them. The hon. the Minister seems to feel he cannot get past the one point. I would say he can. If he wants to do it now, he can. There is nothing on earth to stop him from doing it now and accepting the amendment. If he feels that he has to consult with his colleague, the Minister administering the Sectional Titles Act, I believe he should do so. However, in that case the hon. the Minister with great respect—and I am sorry to have to say this—is shirking his duty because he is in fact amending the Sectional Titles Act without his colleague, the Minister charged with administering the Sectional Titles Act. It is being amended in clause 23 and it is clearly stated that it is being amended.

With his consent.

Well, if we need his consent, let us get it before the matter becomes final. We must have this proviso inserted. I am sure that if he is a reasonable man, he will not withhold his consent to assist the thousands of people in getting the very protection the commission has tried to obtain for them.

Mr. Chairman, the birth of this new legislation is going to be accompanied by some labour pains. That cannot be evaded. I realize and accept that there are problems here. By telling us the story of the flat in Sea Point, the hon. member has thrown some light on the problems we are and will be experiencing. That is why I feel I should not be negative in my approach towards his amendment. I have, however, told him that if I agree to any amendment to this Bill, I will do so in an amicable manner. The hon. member has said that the problems in this case are so urgent that we should accept his amendment.

*I feel that the spirit throughout was the right one. We want good legislation. I explained my problems to the hon. member, and I think things should remain as they are. I listened carefully to what the hon. member for Langlaagte said. He had told me about those things beforehand. I think hon. members should, in the year which lies ahead, bring me examples to prove that there is a good case for making a change. We should not try to evade our responsibilities by raising ridiculous arguments here. We shall give careful consideration to the motivated problems which were raised here, and then furnish the necessary reply. If we feel that further action is necessary, we can take further action, but I cannot give my colleagues and local authorities the impression that I am passing legislation precipitately. That is why I cannot accept this amendment.

Amendment negatived (Official Opposition and New Republic Party dissenting).

Clause agreed to.

Schedule 1:

Mr. Chairman, this Bill was drawn up with the idea that it must in a certain sense be augmenting legislation. Perhaps the word “augmenting” is not the right one, because what actually happens is that reference is made in the Bill to the Limitation and Disclosure of Finance Charges Act. As hon. members know, notice has been given that such legislation shall appear on the Order Paper. However, in schedule 1 of the Bill at present before us, there is specific reference to section 6A of the Limitation and Disclosure of Finance Charges Act, 1968, but the Act in question has not yet been amended as it should be amended. Consequently the error must be rectified. I therefore move the following amendments—

Amendments agreed to.

Schedule, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Third Reading

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

Mr. Speaker, I think we have reached a milestone in that we have achieved a closing of the gap which existed in the legislation, namely the lack of protection for people who had purchased flats by way of share-block schemes, borrowed from the old condominium style of the American-type apartments in regard to which a company was formed and different shares related to different apartments. Therefore, because there was no sectional title scheme in this country, the share block companies existed for many years. I think that it would perhaps be remiss of me, at this stage, not to mention the name of the Sonny Emdin who for many years fought for the Sectional Titles Act which was eventually passed in 1971, because that did bring about a situation in terms of which registered title could be given. We are approaching that same situation in copying that as far as possible and giving as much protection as the law will allow under share-block schemes, short of that one, final protection, i.e. the registered title in the name of the individual himself. Short of that protection, which is a very important—and we trust that share-block companies will, as soon as is practicable, convert to sectional title—and which gives them the right to go against the whole world to retain their property, all the provisions that have now been introduced will have the effect of curing the mischief that has been complained of and brought to the commission’s attention in regard to money which is paid in by people but which is not used for the purpose for which it is paid in. It has happened that people take bonds on their property and do not use the money for the benefit of the share-block company, but for their own particular use, or that the share-block directors pursue ventures which would enable them to acquire more and more share-blocks without regard to their ultimate ability to pay their debts under all those hypothecations, and this is to the ultimate detriment of the people who, in fact, own the shares. In such cases the consequences are very dire ones, because it was not just a question of tenants having lost their money, but of also having lost the very roof over their heads. There have been tremendous changes, however, as hon. members will know. Owners have taken old buildings and, wherever possible, have acquired the rights under sectional title, converted to sectional title and sold their properties under sectional title. In cases where they have not achieved that, they have converted to share-block schemes and sold those shares. We have therefore entered a new era with a new kind of ownership, with people attaching greater permanence to apartments. This is a change because, for many years, the South African way of life has seen an apartment as a temporary abode for young people until they have children and move to larger homes, or an abode for people whose children have grown up and left home and who then want a quiet little place to live in. It was never looked upon as a real permanent domicile. Now, however, it is being looked upon as a permanent residence. I trust that this legislation will assist people to do so. Since we cannot protect people from their own folly, we have tried to plug all the gaps and give them the ultimate possible protection. They must, however, when they enter into agreements, be aware of their sectional title rights. I believe it is necessary to mention this, because I do not think we have stressed this sufficiently. Section 23 of the Sectional Titles Act, in terms of which a single shareholder in a block is entitled to apply for a sectional title, provided he has the consent of the mortgagee, the commission recommended should be revoked because they considered it to be unfair. It now means that 30% of the shareholders in a share-block will have to submit a requisition for a sectional title deed. Having done that and having taken all the other necessary steps, it then requires a resolution moved by that 30% of the shareholders. It also involves the distribution of proper notice and the stating of reasons for the submission of the said requisition.

We also agree with the provision which stipulates that at the meeting called 50% of the shareholders, holding not less than 30% of the shares, should be present. This is an improvement in regard to the conversion of sectional titles. Another difficulty we have in respect of sectional titles, a difficulty we have not quite thrashed out yet, and to which, I believe, consideration should be given, is in connection with a case in which a sectional title has been obtained and in which the question now arises whether we can or should force every other share-block holder to take a sectional title, even if they do not want to. In terms of the amendment to schedule 1 it is clear that only if a share block holder requests a sectional title—and only then—can it be granted to him. That means that if he never requests a sectional title he can remain without it. We do not think that hybrid schemes in terms of which a single block of flats can consist partly of sectional titles and partly of share blocks, both governed under a separate set of rules, is a desirable situation. I really think we should give consideration to that matter again at a later stage.

Finally, as far as schedule 2 is concerned, we can only hope that people will read the fine print contained therein in order to become fully acquainted with their rights and obligations, because, if I may say so, I believe the commission has done a very thorough job and has given very thorough advice on what such an agreement should contain. I believe it covers all the gaps and gives the ultimate protection to such purchasers. By and large, although I want to thank the hon. the Minister for accepting a number of the amendments moved by us, I regret he has not accepted some of the other amendments. Nevertheless, I do hope this is not the end of the story. We do, however, support the Bill and will therefore not oppose its Third Reading.

Mr. Speaker, if anything has to be placed on record this morning, I think it is the patience that this hon. Minister and the department have shown in the difficult task which they had to carry out in this regard. It was a task in which we all had to try to eliminate causes of friction and to solve the problems of the consumer by means of a compromise between the system of free enterprise on the one hand and the protection of the consumer on the other.

In this respect the hon. the Minister and his officials have really accomplished a great task by settling a very difficult matter together, during many long hours of work. They solved problems that even we as a Committee were unable to solve at times. In several cases we were simply unable to reach a compromise, although we never really opposed one another. Everyone on that commission co-operated very well.

The final result of what that commission achieved, was aimed at giving the consumer all the possible benefits of a contract which are his due. The question of disclosure, which was most probably the most important aspect of the legislation, has been taken to as far as possible in this case. Therefore, it is now possible for every buyer to know exactly what he is letting himself in for.

The hon. member for Hillbrow pointed out in a serious way that all share-block schemes cannot be transformed into sectional title schemes. For instance, there are cases of leasehold, cases in which definite problems may arise. When I started work as a young man in Johannesburg, it was possible to buy leasehold. At that time one could still buy a house for R3 000. Later on, however, it could happen that one had to pay some mining company or other an additional R2 000 for the same house, merely to transform leasehold into freehold. Therefore, we cannot simply without further ado attempt to change the share block scheme. This is because we do not know what the relevant leasehold schemes entail, especially not what has to be paid for the release of leasehold.

[Inaudible.]

No, the hon. member for Hillbrow may do well to listen to me for a while now. Many of those things that he moved here today, cause serious problems in practice. It is one thing to allege that one should simply transform a share block scheme into a sectional title scheme at once. However, there is a great problem involved here. The problem lies in the fact that a farmer from the Free State who wants to rent a flat for December only, does not want a sectional title flat, but a flat that falls under a block scheme, because under that scheme, a company can rent him a flat on a monthly basis. Therefore, 12 people can occupy that flat in turn during the year.

In practice, one could also rent the flat for December or July only for a space of four or 10 years. The expenditure of the consumers has decreased. The hon. the Minister and his officials gave attention to that. For the man who wants to live in a flat on a permanent basis, it is, of course, more advantageous to rent a sectional title flat. He also enjoys greater protection under such a scheme. But a man who rents a holiday house or flat under a sectional title scheme, must get somebody to look after the building and clean it. The block scheme is a better solution to the requirements of such a person. That is why the hon. the Minister and his officials looked at these problems. In South Africa no more than 5% of people can afford two houses, one to live in and one to spend holidays in. That is why we must adapt ourselves to the block scheme situation.

I think that Mr. Bräsler, his officials and Mr. Van der Walt have accomplished a very great task. I want to tell the hon. the Minister that we can always feel at liberty to discuss legislation with him because we can see that he always acts in the interests of the consumer of South Africa. I am pleased to support this Bill.

Mr. Speaker, I want to thank both the hon. members who have just spoken for the fact that they support the Bill. When I received the fourth report of the commission of inquiry into the subject of the development of the share-block schemes Bill, it reminded me of the UN’s lengthy, drawn-out names for its many commissions. For a short while I almost felt that I had made a mistake in accepting this portfolio. But time brings wisdom. I can really testify to the favourable attitudes of hon. members on both sides of the House, an attitude for which we may thank our united striving to place better legislation on the Statute Book for the sake of all those people who really need this aid. Consequently, it was our duty to given attention to it. That is why I want to express my gratitude for the assistance and help which I received in this regard. I do not think there is anything else for me to say.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, the amendments which the hon. member for Hillbrow has already moved, first of all relate to the omission of certain words and subsequently to the formulation of a subsection (4) in terms of which the cooling-off period should not apply if there has been no personal contact between credit grantor and credit receiver. We have already had a certain amount of discussion on this, and the hon. member for Mossel Bay suggested that the mail-order agreement in any case did not fall within the provisions of this clause and that the nature of the transaction was such that it would not fall under the provisions of this Act. Of course one must realize that in the first place the hon. the Minister in terms of this Act has the power to apply it if he so wishes and, secondly, that many mail-order situations are in fact hire-purchase instalment situations. A mail-order catalogue might be sent out offering such articles as television sets for sale, and in those circumstances very often the mail-order firm would say in its blurb, in the advertisement it sends out, that the set is available for X deposit and Y payment a month. In that event it will of course definitely fall within this Act, and we in these benches believe very sincerely that there has been no sharp practice, there has been no undue salesmanship brought to bear or undue pressure brought to bear on the consumer, on the receiver of the credit. Therefore he should not be entitled to this cooling-off period under those circumstances.

The other aspect that I should like to mention in regard to this particular clause and which as yet has not been mentioned—and I want to obtain clarity from the hon. the Minister on this situation—is that if during the cooling-off period the article is returned to the credit grantor, then, in terms of subsection (3) of this clause, the situation arises that—

So now the supplier of the article and the supplier of the credit have to return every single bit of money that was paid for the article. This appears to be so regardless of whether the article is returned in the same condition in which it was received or not. I think we must all realize that there will be numerous occasions on which the article that is returned has perhaps been slightly damaged or has somewhat deteriorated and could in fact be worth a lot less than when it was delivered four or five days previously. This is entirely possible. I want to ask the hon. the Minister whether he is of the opinion that, in terms of clause 16 of the Bill, the credit grantor will have some sort of right of redress from the consumer. Will he be put into an equitable position in law? Having returned all the money, will he be entitled to sue the consumer for damage to the articles? I must confess that I do not particularly like it in this form. If some matter were subject to dispute, if the article returned was not in the same condition, or if the credit grantor disputes where the credit agreement had been signed, for instance if he contends that it was signed on his own premises and not on the premises of the credit receiver, I think it would be far more equitable if the moneys were not refunded under these circumstances. I think this could be useful in terms of this legislation, and I should like the hon. the Minister to give us his view on whether the credit grantor can recover any funds if the articles returned to him are not in the same condition as when he delivered them.

Mr. Chairman, in response to the hon. member for East London North, I wish to emphasize that I made it perfectly clear that I believe that the bulk of mail-order transactions do not fall under this clause. I readily concede that a particular transaction emanating from a mail-order advertisement may fall under this clause.

*However, I do not think that the important principle which is contained in this clause should be jettisoned merely for the sake of a few credit agreements. As has already been said, I think that the clause is one of the most important protective measures against the exploitation of the unsophistication of some purchasers. In view of the importance of the protection, I believe that we should keep the clause as it is and not water it down in any respect.

The fact of this situation is that door-to-door pedlars persuade people, with their high-pressure salesmanship, to place orders for articles they often do not need and cannot afford either. The clause is aimed at that practice, and it applies to the vast majority of transactions. If there is a transaction in a specific case, as the hon. member for East London North contended, which is going to be detrimentally affected, I believe that the need to protect the buying public is so great, however much one may regret this, that that specific transaction should rather be detrimentally affected. I content myself with supporting once again the clause as it stands in the Bill.

Mr. Chairman, with respect to the hon. member for Mossel Bay, we do not want to destroy the principle of the clause. On the contrary, we accept it totally.

You want to whittle it down.

We are as much in favour of the clause as the hon. member is. The very argument he has advanced tends to make me believe even more strongly that this is the right amendment, because what he has said is that the amendment is not going to affect a great number of people. The hon. member has said that the number of instances of the kind that I mentioned would not be very large. Perhaps the hon. member is right. Therefore, in qualifying the clause, we shall only be doing so for a fairly small number of people. Nevertheless, in terms of ordinary commercial practice in South Africa, it is still necessary for us to pass the amendment. One can have a very detrimental effect on mailorder businesses by passing clause 13 as it is, i.e. without the amendment. Picture a situation—I am sorry I have to stress this again—and the particular circumstances I have outlined where a TV set is ordered through a mail order. The head office of the firm offering the service to the customer in the country might be in Johannesburg, while the customer might be in Kuruman or somewhere in that area. How can one expect that under those circumstances the customer must go to Johannesburg to sign the credit agreement on the credit grantor’s business premises? It is patently not on. It therefore means that the credit agreement is going to have to be signed shall we say on a farm in the Kuruman district. Thereupon the five-day cooling-off period starts. I can tell hon. members that very, very few firms would be prepared to undertake to deliver an expensive TV set to a farm out in the country somewhere, knowing that it could be returned to them five days later, with a possibility that it may have been damaged on the farm or during transport. They will simply not be prepared to undertake that sort of transaction. I believe this to be the case. That being so, what will we actually do by passing the Bill? Once again, we will ensure that consumers in South Africa will not be able to get the service that they have got in the past with mail orders through credit branches of this nature. Not only will we make things considerably more difficult for the trader. I believe we will in fact be penalizing the consumer, because I believe that the trader, the credit grantor, will not be prepared to undertake transactions of this nature, with the cooling-off clause applying.

Mr. Chairman, it is clear from our motivation, which was further amplified by the hon. member for East London North, that this amendment is extremely necessary. I am still hoping that either the hon. member for Mossel Bay or the hon. the Minister will clarify the difficulty we have with this clause. Our difficulty is that if we do not remove the words “in respect of which the initiative emanated from any credit grantor or his manager, agent or employee”, how are the courts likely to interpret the word “initiative”? I am still waiting on an answer to my argument that if a credit grantor places an advertisement to sell an article in a newspaper, and a reader of that paper telephones to say that he wants to buy that particular article, which results in an agreement being entered into, but not at the place of business of the credit grantor, on whose initiative did that take place? Did it take place on the initiative of the credit grantor who advertised and offered his goods for sale, or is it on the initiative of the person who accepted the offer through a telephone call saying that he wants to buy the goods? Why does the hon. the Minister introduce a Bill which creates difficulties and lacks clarity of interpretation? The second effect of not accepting this amendment is to widen the scope of the improvement to the credit receiver. More people will be able to enjoy the protection of the five-day cooling-off period, but the proviso should be added that there should be no personal contact between credit grantor and credit receiver, and that it shall not apply if the credit receiver has, on a prior date, signed an order or application for credit in respect of the goods at premises where the credit grantor ordinarily carries on business.

The hon. member for East London North quite correctly complained about subsection (3) in terms of which, if the credit agreement is terminated, the credit grantor must, within 10 days of the termination of such credit agreement, return all payments he has received. An amendment to clause 27 stands on the Order Paper in the name of the hon. member for Yeoville. This amendment seeks to change the 10-day period mentioned in that clause to 21 days. It would therefore be inconsequential not to have the 10 days changed to 21 days as we propose to do in clause 27, because my second amendment might then not be in order. I therefore move as a further amendment—

I think we must act in a reasonable fashion towards big businesses, which may receive many cancellations and may face administrative problems, by giving them a period of 21 days to make the necessary refunds. I do not think that this is an unreasonable amendment.

Mr. Chairman, I understand the hon. member for Hillbrow, in reply to a question by the hon. member for Albany yesterday, to say that he was prepared to proceed with his first amendment even if the second amendment is rejected.

That is correct.

In that case I am prepared to concede that the hon. member’s first amendment may be an improvement. I have no quarrel with him on that score. I cannot, however, accept the second amendment, for the reasons I have stated previously.

In respect of what the hon. member for East London North has just said, I have to point out that in the hypothetical case of a television set being sold to someone in, say, the district of Kuruman in terms of a mail order agreement, I can hardly envisage the television set being delivered within a five-day period from, say, Johannesburg or Cape Town, or elsewhere for that matter.

That is not the point. It is five days from the credit agreement being signed.

Exactly, but the credit agreement may be signed on the day when the representative calls on the person concerned or …

Then there will be personal contact and this does not apply.

Ignore the question of personal contact for the moment.

One cannot.

Well, in terms of the clause as it stands, a representative may call on a person in the Kuruman district and the agreement may be signed on the farm or in the person’s house. The representative will then probably go back to Johannesburg or he will notify his head office in Johannesburg that he has got an order for a television set. In the ordinary course of business it will in any event probably take five days to have the set delivered to Kuruman. I can therefore not see any hardship in the clause as it stands.

*The hon. member implied that I had allegedly said that few transactions would be affected by the clause, but unfortunately his argument does not hold water either. Although it may now be the hon. member’s intention to accommodate only the small group of transactions by means of his amendment, his amendment goes much further than that. If we pass his amendment, we shall not only be accommodating this small group of mail order transactions, we shall be accommodating far more than that, and that is my difficulty. If the hon. member’s amendment were worded in such a way that it would accommodate only that small group of transactions, we could have considered it on merit. However, to place such a wide restriction on the scope of this clause, is in my opinion totally unjustifiable—least of all to accommodate such a small group of transactions. This was my real argument. The fact that according to the hon. member only such a small group of transactions would be affected, does not exclude the fact that many more would be let through in practice if we were to accept his amendment.

Mr. Chairman, if I can put a final point to the hon. the Minister and the hon. member for Mossel Bay, I want to quote from a booklet I have which was issued by the Department of Trade and Industry in England. It is entitled Reform of the Law on Consumer Credit. This was presented to the British Parliament by the Secretary for Trade and Industry in September 1973. It is a report on a similar Bill in the British Parliament. Let me read the relevant portion which describes the cooling-off period they also have there. Paragraph 37 reads as follows—

That is just an example.

What I am just trying to say is that the opinion over there was that the inclusion of a provision of this nature was not destroying the effect of the clause as a whole, because the cooling-off period was still there and was still important. They did, however, consider it important enough—and easy enough to handle—to include in the Bill, though it would appear that the hon. member for Mossel Bay does not. One hopes that the hon. the Minister will have a different viewpoint, because I do not think that he has actually replied to this yet.

The matter is even taken further. In paragraph 38 the following is stated—

which is the equivalent of approximately R50—

We, however, do not have this in this particular legislation. We have no maximum amount and no minimum amount stipulated for any transaction. I would therefore suggest to the hon. the Minister that in prescribing regulations for different categories of goods he should also bear this minimum amount in mind, and not only a maximum amount. He must bear the minimum price in mind as well, because the “cooling-off” clause, which has been accepted in principle by the Committee, is such a new principle in South African law that one will have to be far more careful in prescribing regulations in the future. I do not really think it will be sufficient merely to prescribe regulations pertaining to a maximum price. There should also be regulations pertaining to a minimum price, because as I have said this is a clause that is going to create many problems for traders and others, and we certainly do not want it to be applied in a manner which would create an outcry in due course.

Mr. Chairman, in principle I really have no objection to the first amendment on the Order Paper, but I think that the present wording should be retained. I do not want this cooling-off period to apply to all kinds of credit transactions because I think that would cause hardship, something which is not to be welcomed. I think it should only apply in cases where the initiative emanated from the credit grantor. I do not have much difficulty in understanding what, in lay terms, “initiative” means. In the context of the Bill it means the person offering his goods for sale in a personal capacity.

That includes newspaper offers.

An onus must also be placed on the credit grantor’s manager, agent or employee who is able to go from house to house on his behalf to try to palm something off on someone. If the provision in regard to personal contact is eliminated, those people can simply carry on regardless. Let us keep things simple. I am not prepared to allow people simply to carry on doing what they were able to do in the past. It could also be that an order has already been filled before the credit agreement is really legal. Nor can I accept the amendment which proposes that subsection (4) be inserted after subsection (3), a subsection which provides that subsection (1), (2) and (3) shall not be applicable unless there was personal contact. I am saying this merely to make it clear that I cannot accept either of the two amendments, as set out, because they do not offer me a solution to the problem in regard to those who act on behalf of a credit grantor and cause malpractices to occur. We must remember that we are solving practical problems here in a way which is not perfect, but which at least has been argued out reasonably and is to a large extent based on what is happening in practice.

I accept that there was also a proposal for the refund of moneys by the credit grantor within 21 days. I think that we should, provisionally, leave the period of ten days. Transactions of this kind are transactions which are undesirable. In numerous cases there will be transactions where the credit transaction, or the instalment and sales transaction was in fact initiated by the seller. In such a case there will be no problems. Then it is a bona fide seller whom everyone knows. No one thinks of his place of residence. His mode of conduct determines this, and there will be no problems. We are seeking a solution here to the problem of the person who commits a contravention. When he does so, he is pinned down by clause 13, which provides that he must bring it to the attention of the purchaser that those are not the premises where he normally carries on business. In other words, he is being restricted. But there will be many others who will also do this, but then there will be no problems, because we initially agreed that most of these transactions will be bona fide transactions in respect of both parties. I really do not want us to make this matter more difficult for ourselves by splitting hairs. As it stands at present in the Bill it has been clarified and is in the form in which we think it ought to be included in the Act, even if it does possibly have quite a wide-ranging effect. In isolated cases it might even lead to people not being treated as they should really have been treated, for example as a result of the fact, as the hon. member said, that the credit grantor has to make a refund within ten days, but that the goods returned to him are no longer in a good condition. I definitely believe that he will have the right, in terms of the sections of the proposed legislation, to apply to court if the value of such goods has diminished since they were supplied. I believe that such a provision is in the legislation by implication, although I cannot point out the specific clause. Consequently I regret that I cannot accept these amendments.

Amendments negatived (Official Opposition dissenting).

Clause agreed to.

Clause 15:

Mr. Chairman, we believe that clause 15 is a good clause. It concerns the rights of parties to a credit agreement, which is an instalment sale after the return of goods. However, we perceive a possible difficulty and the hon. member for Yeoville has put two amendments on the Order Paper in this regard. The second amendment is consequential upon the first. The first is that on page 17, in line 8, after “exceeds”, “or is less than” be inserted. What we are trying to cover here is this: The situation arises where the goods are returned to the credit grantor. The clause now refers to “the value thereof … exceeds the amount still owing …”.

In that event it is obviously quite right that the excess must be returned. What, however, if less is recovered? This is not covered in this particular clause. If it is less than the amount, it is necessary to put that in the Bill as well and to make the relevant arrangements which we do in the second amendment. This will have the effect that the money will be returned by one to the other. It is a quid pro quo type of situation. While we have no real objection to this clause, we still believe that the alternative should apply, and therefore I move the following amendments—

Mr. Chairman, according to the advice I have obtained it does not seem to be necessary to provide that the value of the returned goods, if it is less than the amount still owing on such goods— this is of course in terms of the agreement— should be amended in any respect. Therefore I do not think that it is necessary to amend the legislation in this respect.

In clause 17 of the Bill under discussion, provision is being made for a credit grantor to be able to apply to a court for an order for the return of any amount still owing to him. Consequently I think that the machinery which is required in this respect already exists.

†I believe clause 17 makes ample provision for a credit grantor to apply to a court of law to issue an order for the recovery of any amount owing to him. Therefore, it is obvious that the amendment of the hon. member for East London North in this respect is quite unnecessary.

The second amendment moved by the hon. member for East London North is also unnecessary because it is merely consequential. The hon. member said so himself. Therefore I am not prepared to accept these two amendments.

Amendments negatived.

Clause agreed to.

Clause 16:

Mr. Chairman, as regards clause 16, a problem has emerged as a result of representations which were made to me, which indicated that the present wording of the clause calls in question the date on which the valuation of goods which have been returned shall be made. I agree with the people who made the representations to me. After I had studied the clause again, it appeared that the present wording could in fact be interpreted to mean that the valuation shall only be made on the day on which the goods are returned, in order to comply literally with the statutory requirements. Such a situation could of course create unnecessary problems for people in practice. Actually we only wish to ensure that the true value of the goods shall be ascertained on the date of return. However this can also be done later. It need not necessarily be made on that specific day. That is why I wish to move the following amendment—

I think this will have the effect of eliminating this objection.

Furthermore, a problem was experienced in regard to the question of costs incurred in this case. It is the costs of necessary repairs which are specifically involved here. It is felt that we should also make provision here for a slightly wider application of the provision by the insertion of the words “reasonable costs”. As a second amendment I therefore move—

Mr. Chairman, the philosophy behind the first amendment the hon. the Minister moved is precisely the philosophy behind my first amendment on the Order Paper. Our complaint concerns the value placed on the goods. We are now dealing with a clause which provides for the valuation of goods once they have been returned. I quote from clause 16(1)—

I think the hon. the Minister and I both feel that the question of the date could give us problems. It is impractical to evaluate those goods on the very day they are returned. That is why our amendment reads “as soon as practical after”. In other words, those goods must be valued on the day of return or as soon as possible thereafter. That is the purpose of my amendment.

I should like to have a look at the amendment the hon. the Minister has moved. I do not see it on the Order Paper.

It is a better amendment.

We have just received it now.

I have not seen it yet. Perhaps my hon. colleague will also have a look at it. We must have a look at it to see how our two amendments can be reconciled since we are both trying to achieve the same thing. If the wording of the hon. the Minister’s amendment is better, I shall gladly accept it.

Further, I move the second and third amendments, now renumbered (1) and (2), printed in the name of the hon. member for Yeoville on the Order Paper, as follows—

I now want to refer to the question of refunds in respect of goods. Clause 16(1)(a) reads as follows—

My second amendment provides that the words “after due allowance for finance charges” must be inserted after the word “exceeding” and before—

I think we have failed to take the finance charges into account. I think those finance charges should, in fact, be calculated.

I now want to set out the philosophy behind the third amendment. I quote clause 16(1)(b)—

My third amendment proposes that the words “and removal, storage and insurance of” be inserted after the word “to” in line 25 and before—“those goods …”. In other words, what I am asking is that in these calculations concerning the return and the valuation of goods we take into account finance charges on the one hand and the removal, storage and insurance on the other hand, because who is otherwise going to bear those costs? I think these factors should be included in the valuation in the circumstances.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Chairman, before business was suspended the hon. member for Hillbrow and the hon. the Minister had moved certain amendments. As I recall the situation, the hon. member for Hillbrow moved the second and third amendments on the Order Paper, but he did not move his first amendment. However, having had the time, during the lunch hour, to consider the amendments of the hon. the Minister I would suggest, with my hon. colleague’s consent, that his second amendment relating to “removal, storage and insurance of” should in fact not be put because the hon. the Minister’s amendment substituting “reasonable costs” is a wider-reaching amendment and does cover all the points raised in the amendment of the hon. member for Hillbrow.

The second amendment of the hon. member, however, still needs some discussion. This amendment relates to clause 16(1)(a) which states—

Included in the price at which goods are subsequently sold there could be a number of expenses, the foremost of which are, of course, finance charges. The cash price may be R1 000, but the price with finance charges could perhaps be R1 300. The Bill does not make it clear that it is the cash price of R1 000 that is the important price in terms of this clause. We realize full well that it is not the intention of the hon. the Minister to include finance charges in this. We do not believe that it is sufficiently clear in the legislation, however, and we therefore believe that the amendment submitted by the hon. member for Hillbrow is an amendment which should receive favourable consideration.

I now wish to move as an amendment—

This amendment I have now moved is an amendment which I believe goes further than the amendment of the hon. the Minister. That is fairly obvious. The hon. the Minister’s amendment adds a reasonable amount to the valuation amount to be retained by the dealer who resells, but the definition of a reasonable amount is going to be very, very difficult to establish. Picture the situation of the trader who has repossessed the article concerned. He is then put to a number of expenses in terms of the financing of that vehicle for the period that it is in stock, its storage and its reconditioning. All these items could be described as reasonable expenses. In addition to that, however, in all probability he may have to advertise the goods for sale, again at a cost. He also has to pay a commission to his sales staff, again at a cost. He has to contribute towards his overheads, which can be considerable in certain trades, and the only way he can contribute towards his overheads is by selling articles. The situation, as I understand it, is that in this instance the trader has to have a completely new transaction. The old transaction has fallen apart, he has repossessed the goods and now he has to find a buyer for this article. He has certain customers who support him, customers who perhaps otherwise, if that repossessed article were not for sale on his lot, would buy another vehicle, another television set or whatever it might be that he did have for sale and on which he would make a profit. Therefore I believe that 15% is a very reasonable amount to insert, in terms of common practice. After all, the trader now has to go through a completely new sale. I am not suggesting that this should necessarily happen in terms of wholesale deals. In fact, one could arrive at a situation where there has been a certain amount of collusion between traders, so that instead of handling one’s own repossessed article, one reaches some sort of an arrangement with a dealer, in the same town and handling the same type of produce. One then sells one’s repossessed article at a trade price, which would be a fair price. However, this trade price would obviously not exceed the amount that the debtor owes on the article. One’s competitive trader then sells it and makes his normal retail profit. One has a contrary arrangement with him whereby he in turn supplies one with his repossessions, and then one makes one’s normal profit, which I believe is legitimate because it is profit the trader is in business to make and which he should be allowed to make, not merely on articles which he has traded in or purchased, but also on articles which he has repossessed. It is not his fault that those articles have had to be repossessed. The fault lies with the purchaser who has not fulfilled his obligations in terms of the Hire-Purchase Act. That purchaser has not met his commitments; he has not paid. It is not the traders fault that this has happened. We must recall that we have allowed a lot of leniency in this Bill towards the consumer. We have given him a cooling-off period and have protected him left, right and centre. But at the end of the story, if that consumer still has not played the game by not meeting his obligations, by paying, to penalize the dealer further, which I believe is what the clause does, is not, fair and just legislation. I would therefore recommend very strongly to the hon. the Minister that he allows a reasonable margin. I do not think 15% off the retail price is unreasonable.

I must tell hon. members that, in terms of the trade I know best, 15% is very conservative by comparison with what the used-car trade reckons to make on the used cars they sell. It is a very, very conservative margin indeed. I therefore believe it is reasonable and equitable, while, if the clause goes through in its present form, it will not be equitable and would encourage the sort of situation that I have outlined whereby dealers get together and sell their repossessions to one another in order that the other dealer may make a profit and the dealer who repossesses is not put to the sort of expenses which I have outlined. He is not put to the sort of expense, in terms of his overheads when selling the car, which, I am sure, even taking the hon. the Minister’s amended clause, he will still not be able to recover.

Mr. Chairman, I ask leave to withdraw amendment No. (2).

Amendment No. (2), with leave, withdrawn.

Mr. Chairman, I agree that there are certain facets in the arguments of the hon. member for East London North which one can consider, but at the same time, we are moving in a direction of amounts in legislation which are not based on general principles, but have been arbitrarily determined.

†Even 15%, though it may be a reasonable amount, is still an arbitrary percentage. I feel, and I have been advised, that finance costs— actually all kinds of costs—that pertain to what happens between the credit receiver and grantor are included in the concept of adequate or reasonable costs. Although I grant the possibility of all these costs occurring, I cannot deviate from the standpoint that I had from the beginning. At the same time, as far as the 15%, or a specified number or amount, is concerned, this really falls under the purview of a Bill that still has to be placed on the Order Paper.

*I am referring to the Limitation and Disclosure of Financial Charges Act. This is an aspect, therefore, which strictly speaking does not belong under this legislation. What we are really concerned with here is the definition of reasonable costs which have a bearing on a contract as such and not on money as such. This is the best way we could find under the circumstances to satisfy and protect the credit grantor. Therefore I think it is the best I can do under the circumstances to accommodate hon. members on the other side of the House in respect of this amendment so that we may arrive at a generally acceptable solution. I accept that we may have differences about the particulars, but I am quite sure that we are all trying to do our best. However, someone has to take a decision, and my decision is that the inclusion of reasonable costs is sufficient. Consequently I cannot accept the amendments.

Mr. Chairman, with respect, I think we will be making a grave mistake if we do not amend the Bill to make provision for finance charges. The general reasonable cost in terms of subsection (b) does not cover the question of finance charges. The hon. member for Mossel Bay as well earlier raised the question of finance charges. I do not think it is an argument between us that finance charges should not be taken into consideration when the goods are valued, and that the amount exceeding that amount should be repaid after due allowance for finance charges. I do not think it is fair that it must be incorporated in the amount that has to be paid back. Finance charges has been incurred. It is not part of the intrinsic value of the article and should therefore not be taken into consideration at valuation. We would, with respect, be making a mistake should the finance charges not be included, and we therefore stand by our amendment.

Mr. Chairman, I want to speak to the amendment which I moved as opposed to the one which the hon. member for Hillbrow moved and which I obviously support. The hon. the Minister in his reply said that to state a figure of 15% was to take an arbitrary figure. I want to point out to the hon. the Minister that somewhere, some day, somebody is going to have to decide what the hon. the Minister means by “reasonable” costs. If we leave the legislation as it now stands, the inevitable consequence is going to be that in due course there will be a court case about this aspect to decide what “reasonable” costs are. This is going to be a highly expensive undertaking for a number of people, including the consumer, the finance company and the trader. It is going to mean that some magistrate, very possibly some judge, is going to have to sit in judgment to decide on what was in our minds when we decided to pass this legislation which contained the words “reasonable costs”. What are reasonable circumstances and what are not reasonable circumstances? Once that has been established, it will make things a lot easier, but it is a very expensive way of establishing it. Once we have a court ruling on this matter, the traders and the credit grantors will know what is expected of them, what they will be entitled to charge and what they can deduct from the price. But until such time as that has been decided on in a court case, there is going to be a whole variety of different methods in different trades by different people whereby they take off different amounts and justify them in different ways. I frankly believe that this is a messy situation. I accept that 15% is an arbitrary figure, but I must also say that it is a figure which is based on, certainly as far as I am concerned, the experience of a considerable number of years in a trade of this nature. I believe that, while it is arbitrary, it is reasonable. I believe it is reasonable for the trader and for the consumer. One must never forget that, when we are talking about the consumer in this regard, we are not talking about the everyday consumer but only about the defaulting consumer, the consumer whose remedy is in his own hands, the consumer in respect of whom we have the cooling-off clause, the 30 days’ notice of intention to repossess, a further 30 days after repossession in which he can go back to the trader and say: “Here is the money I owe you; I want my article back,” after which the trader must give it to him. We have therefore given this man every protection all along the line. Then we get to this clause. It comes in after all these various processes have been gone through and the consumer still has not made good his obligations. At the end one arrives at the situation where one has to decide what reasonable costs are. I do not think it is going overboard to accept the figure of 15%. I believe it is a very reasonable figure. I believe it will save the country a lot of money in litigation. I believe it will perhaps save the hon. the Minister having to make regulations, to decide in different trades what reasonable costs are. There are so many articles that can be repossessed. It does not only concern motor vehicles, but also electrical goods and even, as the hon. member for Umhlanga has just told me, clothing. How does one decide what just and reasonable costs are in this event?

I think there are not many trades in this country in which considerably more than 15% is not made in the normal course of business transactions. I am now talking about a gross profit margin, not a net profit margin. I believe there are very few trades which, as a whole, have less than a 15% gross profit margin. The only exceptions are in respect of commodities such as petrol. In any event in that case the profit margin for the dealer is of the order of 10% and, of course, the volume of sales in that regard is tremendous and is all cash business. Administered prices also pertain in the case of, for instance, bread, and perhaps newspapers. In the case of everyday articles sold over the counter, the profit margins are perhaps smaller. In general, however, in every trade in which hire purchase will apply, I am certain that the average profit margin of the dealer involved in making a sale is considerably higher than 15%. As I have said, this concerns sales by the dealer. Where the stock came from, whether it was repossessed stock, purchased stock or traded-in stock, is not important. The point is that he has to go through all the motions of making a sale as in the normal course of his business.

I fully expect that the hon. the Minister is not going to approve this amendment at this stage. I think he probably needs time to discuss it with his officials and I would ask him please to take the trouble to discuss this amendment with his advisers. Hopefully, he will then amend the clause himself in the Other Place.

Mr. Chairman, it would definitely be unwise to insert an arbitrary percentage in the Bill. In the first place the hon. member for East London North himself pointed out that sellers in general have a bigger profit margin than 15%. If a figure of 15% is written into the Bill it will therefore not be fair to the seller in a specific case. The hon. member spoke of an average. An average will, in the nature of things, benefit some people and prejudice others. To insert a fixed percentage is therefore in direct contrast to the concept of “reasonable costs”. In the one case it is unfair to one party and in the other case to the other party. Consequently it is never reasonable. So I believe that the concept of “reasonable costs” is far more acceptable than working with a fixed percentage in this case.

The hon. member said the concept “reasonable costs” is an uncertain concept, and will inevitably lead to litigation. If one ascertains what happens in practice one finds that in the case of the repossession of sold goods, the seller will agree with the purchasers that a specific amount is a reasonable amount to set off. If the purchaser is not satisfied with the amount, the purchaser may have recourse to the court which will determine what is reasonable in that specific case. I can very well imagine that what is reasonable costs in the one case will not in fact be reasonable costs in another. I can imagine that the reasonable transport costs, the reasonable storage costs and so on will in the one case be far more than the reasonable transport costs, the reasonable storage costs and so on, in another case. Consequently I cannot in any way imagine how a person is able to cover all this under the umbrella of one fixed percentage.

I do not think that the hon. member’s amendment was well considered, and in my opinion it cannot be supported.

Mr. Chairman, I think the hon. member for Mossel Bay must truly put this in context. The amendment I have moved concerns clause 16(1)(a). If the clause is amended, it will read—

One must not forget that it is further qualified by paragraph (b) which then goes on to say that the credit grantor can also take into account the necessary repairs to the goods.

The point is that one starts off by taking off the 15% from the retail price and then one can further deduct the cost of the necessary repairs to those goods. The cost of transportation from the point where one repossesses the goods back to the point where one sells them will obviously also be included. I therefore think that the hon. member has not made this clear in his speech. He has also not taken into account that there are two different paragraphs, and that the one is dependent upon the other. I doubt in any event whether, after one has taken off the charges incurred in terms of paragraph (b), the costs will exceed 15%.

I know that.

Mr. Chairman, I must admit that the hon. member for Mossel Bay is right. Since we have now begun with the profits which these people make, I wish to state it as a fact that the credit grantor definitely does take his due profit at the outset. After all, provision is being made for overhead costs. If something is returned after two or three days, a provision that it must be 15%, will definitely not be fair. Consequently I warn that we must be careful about taking arbitrary decisions in this connection. I think we should leave at “reasonable costs”.

†That is how it usually develops. One can specify cost items, revert to arbitrary determination, etc. Eventually that costs more than trying to find an acceptable definition to cover more than one aspect. I think that this is the way it usually goes. It is an accepted concept in the development of law, and I think that the concept of reasonable cost is already accepted. It is well known in law. I am sorry, but I do not think that we shall get any further. I feel that I should stand by what I said at the start. I can, of course, grant the hon. member certain of his arguments, but I nevertheless feel that even trial and error is better in principle than to specify things like costs or perhaps allocate an arbitrary 15% to the credit grantor when he takes back the goods. That is why I feel that I cannot agree to that.

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

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

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

Clause, as amended, agreed to.

Clause 20:

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

These are both relatively minor amendments, and as such they do not need much motivation. The first one is to the effect that on page 19, in line 46, the word “shall” be inserted after the word “knowingly”. We believe that this is generally a good principle in law, and the clause will then read—

I think one can see the difficulty here, and I am sure that the hon. the Minister can see the difficulty. A credit grantor cannot really be expected to know the circumstances of the credit receiver. He will obviously ask the credit receiver what his circumstances are and ask him to fill in forms, but those forms are not necessarily always filled in correctly. It often happens that one asks a customer whether he has been sued for debt on any occasion and that his answer is “No”. One then checks the court records and finds that he has 72 convictions for debt against his name. In general, we do not believe that the credit grantor should be penalized in these circumstances. We believe that he should only be penalized if he has done this knowingly, if he was aware of the situation. Therefore we ask the hon. the Minister to accept this amendment.

On the same page, in line 49, we want to omit the word “price” and to substitute “cash price”. This is the same difficulty we have had in the previous clause. It is a difficulty which also exists in other previous clauses we have dealt with. The difficulty arises when the price payable in terms of a trade agreement exceeds R100. The price payable, however, could include a number of changes. It could be cash price plus the finance charges plus the insurance plus a number of other likely things that are added on. I think the intention here is quite clear. It is the cash price that we are talking about, the over-the-counter price. If this is the case— and we believe it is the case—we see no reason why it should not be clearly spelt out in the Bill as being the cash price.

Therefore we ask the hon. the Minister to accept these two amendments. Neither of them is going to alter the intent of the clause. Neither of them is going to alter the principle of the clause. Both are merely items of clarification which, we believe, are necessary.

Mr. Chairman, I do not think the first amendment of the hon. member is really necessary. I can follow the hon. member’s argumentation, but I think that the Criminal Procedure Act nevertheless states the requirement that mens rea will definitely have to be proved. That will settle the objection raised by the hon. member for East London North.

But I also know that uncertainty sometimes exists as to the question of whether mens rea is a requirement in the case of statutory contraventions. That is why I have a measure of sympathy for the first proposed amendment of the hon. member of East London North in particular. But I do not know whether other problems may perhaps have arisen, which I did not foresee, problems which the department itself is aware of. The hon. the Minister will of course be conversant with these matters. But if there are no problems of another nature, I think that it could in fact lead to the elimination of any possible difficulty, although I am still convinced that it is, strictly speaking, not necessary that the amendment, as proposed by the hon. member for East London North, should be effected, because the concept of “mens rea” is in any case sufficient.

As regards the second amendment of the hon. member for East London North, I was also under the impression that the intention there was to refer to the cash price. If there is any uncertainty about that, however, it would perhaps be the right thing to consider remedying this.

Mr. Chairman, I do not want to enter into an argument on semantics regarding the interpretation of the Criminal Procedures Act. I also do not want to argue about whether mens rea is to be proven in order to establish whether a criminal offence has been committed or not. We are now dealing with a statute as such and not with a definition of theft, fraud or any other type of criminal offence. We are dealing with commercial legislation in terms of which, if one should indeed be suspected of having committed an offence, extreme penalties can be imposed.

The word “knowingly” has been used in this House and has been inserted in numerous pieces of legislation before. We have therefore agreed as it were to use the word “knowingly” in legislation. I believe that the amendment moved by the hon. member for East London North is necessary when it relates to transactions of this nature in order to show that an offence must be committed knowingly before the offender can suffer the consequences thereof. Therefore I believe we stand by that amendment.

Mr. Chairman, I am having problems myself with regard to this matter. For that reason I have just tried to clarify the matter by consulting my officials.

†This proposed amendment of the hon. member for East London North is to me quite clear. I can understand exactly what the hon. member and his colleagues have in mind. They understand the cash price of an article to be viewed in terms of readily available money. I am actually referring to the hon. member’s second amendment. Elsewhere, in other legislation, and also in this particular Bill we are referring to the cash price plus other costs. That is what is actually meant here. We have credit agreements, financing costs, etc. That is why we cannot accept “cash price” as such, although I understand completely what the hon. member has in mind.

As far as the first amendment is concerned, I want to say that I consulted the law advisers about this, because it also bothered me as a layman. I thought that by inserting the word “knowingly” one could prove actual intent, in other words, one could prove that somebody knew what he was doing. I have been advised—and I have to agree with it at this stage, because otherwise it is that hon. member against them—that the insertion of the word “knowingly” really has no legal consequence and should not be accepted. That is the advice I have received and I have to abide by it. Therefore I regret that I cannot accept the amendment.

Mr. Chairman, I hope the hon. the Minister’s advisers are better informed than the sources from which we have obtained advice on the subject. It would be a very great pity if they were not.

The second amendment the hon. the Minister has referred to concerns the price of R100. Do I now understand from the hon. the Minister that it is the intention to include the other charges in this amount of R100? I ask this, because I have just understood him to say that if the total price of the article, including the finance charges and whatever leasing charges there might be if it is a leasing transaction, exceeds R100, this particular clause will apply. In looking at this Bill I certainly had not understood that this was to be the case. This means that in all probability the actual cash price of the article concerned would be something of the order of R70 to R80.

R75.

Something of that nature. This is an even lower figure. I think the hon. the Minister will agree with me that R100 does not buy very much nowadays and that R75, of course, buys even less. I just want to get complete clarity on that point. If that is the intention, then obviously the hon. the Minister must go ahead. If it is the intention that this R100 should include all the finance charges and everything else, as I have understood him to say, then obviously the hon. the Minister cannot accept our amendment. However, on reading the Bill it certainly did not strike me that this was the intention.

A price paid is value given for value received.

Amendments negatived.

Clause agreed to.

Clause 24:

Mr. Chairman, we are now dealing with a clause which deals with the question of directors or their managers, agents or employees doing or omitting to do certain acts. This clause provides that it is a criminal offence unless it is proved that, and I quote from clause 24(1)—

Paragraph (c) deals with a more vicarious liability. I quote further from clause 24(1)—

We are now dealing with a presumption in law, whereby the onus is shifted—

It then goes on to say, and these are the words we want to delete—

There are two things which are wrong with the words which we want deleted after the word “thereof”. The first is that they are contradictory to the paragraph. They are also contradictory to the paragraph (b), because one of the onuses is that “all reasonable steps were taken by the credit grantor to prevent any such act or the omission to do any such act”. Now we are saying that the mere fact that he has issued instructions forbidding any such act or omission, shall not in itself be sufficient proof. But in a court of law, and I now come to my second argument, the court may well find that the instructions given by him were indeed sufficient to comply with the onuses, and therefore he himself has not committed an offence, because he has taken all reasonable steps.

The second thing which is wrong is that one is denying the court a quo a right. That court has to listen to the case and make a decision, but it is denied the right to decide what is reasonable. I think this is palpably wrong. I think we must cure the wrong, and the way to cure the wrong is by accepting my amendment, and consequently I move—

Mr. Chairman, in my opinion the interpretation of the hon. member for Hillbrow is not correct. What is stated here does not deprive the court of the discretion of finding, in an appropriate case, that the instructions from the credit grantor to his employee did constitute sufficient steps on his part. It could therefore in an appropriate case be found that he did indeed do everything which could reasonably have been expected of him. What is being stated here is simply that those steps were per se not sufficient, in other words the credit grantor cannot simply say that he issued instructions that certain things may not be done and that the steps taken were in contravention of his instructions and that is the end of the matter. As though he had in that way, complied with the onus of proof which rested on him. That is what is stated here. It does not state that when the court does indeed find that such steps on his part were in fact adequate, it would not apply.

If we were to accept the amendment and in that way leave this loophole in the clause, then we would be totally depriving this clause of its effect in practice, for what would happen in practice? Time and again the credit grantor would simply say that he in fact issued instructions and he will, if need be, submit a written confirmation to this effect, which might possibly have been written afterwards. He would even hand in a confirmation that he issued instructions to the effect that certain actions ought not to be taken. With that the credit grantor would be relieved of all responsibility. Therefore this amendment cannot be accepted without undermining the whole effect of the clause. The argument of the hon. member for Hillbrow does not hold water. I do not think his interpretation was correct.

Mr. Chairman, with all due respect, I believe that the hon. member for Mossel Bay is supporting my case, for he himself says that the court has to decide, and the court may in fact decide of the steps which were taken were sufficient under the circumstances. These circumstances may vary from case to case, and it may well be that the steps taken in a certain case, were sufficient. The court may in fact arrive at such a finding. Why should we now deprive the court of that right? Consequently I stand by my amendment.

Mr. Chairman, perhaps I should try to explain it to the hon. member in English.

Order! The hon. member may do that as long as he does not repeat himself.

As it may please you, Mr. Chairman.

†Mr. Chairman, the point that I have tried to emphasize is that if one accepts the amendment, it would mean that the credit grantor could simply say that he has given instructions to act, or not to act, in a particular way. That would then, by itself, be proof that he had done everything necessary to relieve himself of the onus placed on him by this clause. However, if one leaves the clause as it is, then it does still not take away the court’s option to find, in a proper case, that it amounted to reasonable and sufficient action on the part of the credit grantor to relieve himself of the onus that is placed on him. One is, therefore, not curtailing the power of the court, but is leaving it to the court to decide in its discretion.

Mr. Chairman, the hon. member no doubt understands English better than he understands Afrikaans; so I shall try to repeat what I said in English. [Interjections.] Let us look at the matter again, carefully and rationally.

Unless we remove the words proposed, the clause will mean that the mere fact that the credit grantor has given instructions is not in itself sufficient proof. In other words, if he says to the court: “Look, I did all that I could do. I gave instructions for this to happen,” the court can say: “No, the court is terribly sorry. The law says that that is not a defence, because it says that the fact that he issued instructions forbidding any such act or omission shall not of itself be sufficient proof.” In other words, one is taking away the fact that of itself it may be the only reason, the only thing he does. In the circumstances, the court may find that in view of the particular nature of the business, the steps the person has taken are reasonable and that he has satisfied the requirements. In fact, the court may be satisfied that he took all reasonable steps in the circumstances. But it is not a defence. The court says: “The court is terribly sorry. The court believes you took reasonable steps, but the law says that it is not a defence. The court must convict you.” That is the point, and that is why it must be removed.

Mr. Chairman, one is always sorry when this kind of thing happens, because every responsible employer has often been faced with this kind of thing. However, once one begins to make exceptions and to water down responsibility, one is depriving the court of the right to ascertain whether the person did his very best in the spirit of his duty—irrespective of formal notification—to ensure that his organization acted in the right way, so that this type of thing could not happen.

†I think what the amendment does is to diminish the responsibility of the credit giver in this instance, responsibility for the actions and omissions of his employees, agents and so on. That we cannot do. If we start diminishing that, I think we will be frustrating the effect the Act. Therefore I do not consider it to be acceptable. I think it is written in many laws and it might sometimes be regarded as unfair. I think our courts know that they have to take all the aspects of a case like this into account. They do not decide on one single fact alone, but take many factors into account. I do not think that the fact that a person can say that he has given instructions should be regarded as sufficient reason why he should be acquitted.

But he may be.

I do not think that “of itself” is an adequate reason.

What other steps can he take?

Those are really the words that carry weight in the Bill. I do not think it is fair that the person should expect to be acquitted solely on that. In such cases we must allow the court to take all aspects into account before deciding whether a person is really to be indicted for what has been done. Therefore I cannot accept the amendment.

Mr. Chairman, let us assume that I am the managing director of a large chain store which has 400 branches and I, as managing director, issue 400 letters in which I explain precisely to my staff that they are not allowed to take certain steps. It would be interesting to have the hon. the Minister spell out what additional steps the managing director of a business can take other than issuing instructions that certain things are not to be done. What other steps can he take? Could the hon. the Minister explain what other things should happen, because I really do not understand this terribly well. I have been involved in this type of business for a long time and the strongest line of action one can take is to issue an instruction to one’s staff that they may not do certain things. It is obviously a fireable offence if the person should transgress, but by that time it is too late. It has been done, it has gone before the court and the court has to look at what the legislation says. The court will then say that the fact that instructions have been issued shall not “of itself” be sufficient proof. I do not really see the force of the words “of itself” because what other plea can one submit? What other steps can one have taken to have prevented this. There must, in fact, be very few other steps that one can take to prevent a situation of this nature. I believe that if this clause were deleted we would be leaving it up to the court to decide, and I am personally very happy to leave it in the hands of the court without having to prescribe it in legislation of this nature.

I do not want to see us authorizing all these things by regulation by the hon. the Minister and not stipulated in the legislation itself, but I do not want to see this House prescribing to the courts either. We must not prescribe to the courts how they should look at evidence and how they should reach their decisions, and this is what we are really doing here. This is actually an instruction to the courts and nothing else. We are saying to the courts that under these circumstances they must act in a certain manner, and I do not believe that is fair and equitable. I personally have sufficient faith in our magistrates and courts. I do not believe this clause is going to protect the consumer, which is after all what we are trying to do in this Bill. I do not think one is going to protect the consumers by telling the courts that they have to act in a certain manner in terms of this legislation. I really cannot see any single good reason why this matter should not be left in the hands of the courts.

But it is in the hands of the courts.

It is not in the hands of the courts as long as this particular clause remains part of the Bill.

Order! The hon. member has already made that point.

The hon. member for Mossel Bay pins great faith on the words “of itself”.

But that is the crux of the whole clause.

The way the clause reads, I cannot agree that that is the crux of the clause. All it means is that, if it is the only defence in such a court case, it cannot be used. That is what “of itself” means. In fact, perhaps it is the crux. It is the crux of our argument here.

I shall explain it to you later.

There are a number of issues in this Bill we have argued at length. I think we have done so for a very good reason and I would hope that in due course the legal advisers of the State will have a look at the Hansard of the Committee Stage of this Bill. I think that if they do so, they might perhaps advise the Minister to make a number of amendments later in the session or next session.

Mr. Chairman, I am inclined to make a few comments on what the hon. member opposite has said. The courts usually act on instructions in every case. Any Act they have to deal with is a set of instructions which they have to interpret. They also have to interpret a thing like this. They do not interpret the letter of the law. They interpret justice as it is enshrined in the letter of the law. In this instance the courts are not confined to this man giving an instruction. That might be a formality. If one is a good boss and one sees that instructions are carried out in a certain way and if there is control and cross-control, all that will come out in the court of law. If, after one has detected that something has gone wrong, one does one’s utmost to set the matter right, that is something any court of law will take into account. It is precisely because we want the courts to take into account every aspect when anybody comes before a court of law because of this, that we specify that one single excuse per se is not enough and should not be enough. This type of excuse is universal. It is universally heard. Whenever I have listened to court cases, I have heard: “I told him this. I told him that. I have instructed him thus.” That is too easy an excuse. We are really trying to broaden the court’s jurisdiction and letting the court decide, because we feel we should not just restrict this to one excuse and consider that sufficient to set a man free from such an indictment.

Mr. Chairman, may I ask the hon. the Minister this question: If you were the manager of a chain store …

Order! The hon. member must address the Chair.

Through you, Sir; If the hon. the Minister were the manager or director of a chain store with 400 shops throughout South Africa, what steps would he take to protect himself from prosecution under this legislation?

If I come to be a manager of such a big shop, I will not fear anything as far as this legislation is concerned.

You would sell the business.

No, it is not really for me to specify what I would do. I merely mentioned certain specific instances that might arise and that might add to the court’s ability to decide on the cogency of the arguments of someone before the court. The hon. member must not, however, ask me what I would do if I were to win one of the bonus bond prizes.

I do not know what I would do if I were such a manager.

I might be so flabbergasted or aghast that I would be unable even to think about it. Therefore, the hon. member must not ask me such hypothetical questions. They might send my blood pressure up.

Amendment negatived (Official Opposition dissenting).

Clause agreed to.

Clause 25:

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

I think we have to go a little bit further. I think we shall also have to delete “(2)” in line 36 because we are deleting the whole of subsection (1) and there are only two subsections. There is therefore no need to retain “(2)”.

I want to motivate the amendment. The clause provides—

shall upon mere production by any person in any proceedings … be prima facie proof of the actual cash price of such goods or service.

I do not believe that this is good enough. By his very nature the inspector concerned is highly unlikely to be a commercial person with a wide experience of the sales of articles and therefore the cash price of these articles on a particular date. In order to be able to carry out his function, he shall therefore have to obtain advice from people in the trade affected. There can be many conflicting opinions as to what the cash price of a particular article was at a certain date and particularly in relation to something that has been sold used. One must bear in mind that the condition of the particular unit on the date on which it was sold is going to be extremely important. One can have variations of thousands of rands in price depending on the condition of the article.

It reminds me of something that happened in my home town some time ago where a used car trader who was a fairly slick businessman particularly wanted to buy a used car that was offered. The customer was not prepared to accept his price and he then offered the customer R10 more than he could get from anybody else in town. The customer, being very pleased with this, went round to all the other used car dealers. He found another used car dealer who was not particularly friendly with dealer A. So he wrote out on a piece of paper that he was prepared to offer for the used car concerned R300 more than dealer A. The customer was very pleased and returned to dealer A. He told him that dealer B had offered him R300 more than he had. Thereupon dealer A put his hand into his pocket and took a R10 note out which he gave to the customer. He said to the customer: “There you have your R10 more. Now go to collect the balance from dealer B.”

One can therefore arrive at a whole variation of prices within this situation. I believe that the court should be entitled to hear argument and have submissions from both sides in court cases on the particular aspect of what a fair cash price would have been on the date in question.

We must also remember that the inspector is not going to be knowledgeable in the trade. It is certain that the inspector has no chance of being knowledgeable in the trade concerned because he is not dealing with just one trade, but with a variety of trades. Even if he is drawn from one trade, he will not be knowledgeable in another trade. If it is the intention to have an inspector for every trade, we can argue the position further when we come to clause 26. I shall be very pleased to be further informed.

In these circumstances I I do not believe that the court should be instructed to rely entirely on the affidavit of the inspector as being sufficient, fair and just.

Mr. Chairman, I really think the hon. member for East London North is completely wide of the mark this time. In a previous case I had a certain degree of sympathy with him and I was able to support him to a certain extent, but this time he is completely wide of the mark, because he does not know what it means if it is provided that this is prima facie proof. He says the effect of this is that the court cannot now hear any further arguments in regard to the matter. But that is not what the words prima facie mean. I could try to spell it out to him that if the inspector has issued such a statement, it is the accepted value until the contrary has been proved. However, there is nothing in the wording of the clause as it reads at present which prevents any party from submitting evidence that that prima facie proof is not the final and correct amount. Consequently the court will still be able to form an opinion.

This provision was included primarily because the onus rests on the State in the first place to prove the correctness of an amount. The State may find itself in a difficult situation to prove that the prima facie amount is correct. That is why the State is being assisted here with the adducing of evidence. It is not the case that the onus is being shifted in any way. The prima facie evidence will only become the final evidence if there is now other evidence before the court, but in this way the possibility is not in any way being excluded that other evidence may be submitted to the court. This is a principle which occurs in various other pieces of legislation, and it is merely a law of evidence measure to facilitate the task of the State. I wish to emphasize, however, that it is not the intention to exclude any further evidence.

If the position had been as the hon. member saw it, I could still perhaps have seen some merit in his case, but that is not so. Therefore I suggest that his case has no merit and consequently that there is no reason to agree to his amendment.

Mr. Chairman, I have listened with interest to the argument of the hon. member for Albany. It is true that what we are dealing with here is a certificate by an inspector in terms of clause 26 of the Bill which will be prima facie proof to the court. There could obviously be other methods of proving that. I think, however, that the argument hinges more specifically on the fact that the inspector who is appointed in terms of clause 26 is not the right person to give these affidavits.

There are two things I should like to know. In the first place, I should like to know what is the motivation behind the clause to have an inspector, and secondly, how well equipped is an inspector from the Department of Commerce and Consumer Affairs to issue affidavits which would be prima facie proof in a court of law in actions of this nature.

Mr. Chairman, the way in which the inspectors will act in general is to go to the credit grantor and examine his books to see at what price he sold a particular article. That is a logical step in any case. All these things are done by way of codes. The minimum educational qualifications for inspectors is matriculation and usually one does not appoint such a person if he has not had at least a few years’ experience.

The inspector must quite simply ascertain certain truths. These are not very high technically matters. He must establish whether one article is a blanket and another a motor vehicle. He must simply establish the truth. He must try to ascertain amounts. The inspectors in my department usually have matriculation, and four years’ training in their profession. As far as I am concerned, these people have the ability, because they have had the training and because one does not usually send one’s worst employees to do that work. They have the ability at least to establish these simple facts. What is necessary here, is integrity. These people must be screened so that we get only the best. We are dealing with the trade here, and not with people who are completely without intelligence and without an understanding in these matters. The inspector must also realize that he could be confronted and asked whether he is in fact an inspector. What he does will normally be seen by people who know something. However, I must leave the matter at that now. We do not wish to disparage the inspectors as such. Nor do I believe that this is the object. Nevertheless the hon. member has the right to ask what their qualifications are. But this provision is not unusual either. It occurs quite frequently in legislation.

†A similar provision exists in the Trade Practices Act, as all hon. members will know. Over the years we have learnt that this type of provision is necessary. Because it is necessary that we should have such a provision, I cannot accept this amendment. That is why I request hon. members opposite to consider what I have just said and to try to abide by it.

Amendment negatived.

Clause agreed to.

Clause 27:

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

I shall be very brief in explaining our reason for moving this amendment. It merely concerns the repayment of certain moneys by the credit grantor. In terms of the clause, as it now stands, such moneys will have to be repaid within 10 days after the credit grantor has received a request in writing to do so from the credit receiver. This also ties up with clause 13(3), as has already been mentioned.

We feel very strongly, however, that the credit grantor should be given sufficient time to make this sort of repayment. Therefore we believe that 21 days is a more reasonable time than 10 days. That is why I have moved this amendment.

Mr. Chairman, the hon. member has moved a reasonable amendment. I shall accept it. I thank the hon. member for moving this amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 28:

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

I think these two amendments are both reasonably straight forward. I hope I will have the same success as the hon. member for Hillbrow in having one of these amendments accepted by the hon. the Minister. I should like to suggest that the first amendment, to omit “criminal” and to substitute “legal”, is an entirely sensible amendment. The clause reads as follows—

What does this mean? It means that in civil proceedings the person concerned cannot give evidence. We are well aware of the fact that the bulk of actions that arise out of credit agreement sales are civil actions. It is normally only after the civil action has taken place that a criminal action can follow it up. We therefore believe that to remove the word “criminal” in paragraph (b) and to substitute “legal” will widen the scope of this clause, will make it more effective and will certainly enable justice to be done more properly in civil proceedings as well as in criminal proceedings.

The second amendment proposes to add certain words right at the end of paragraph (b) so that it will read—

What we are saying is that the person cannot be brought in to give evidence on a matter which is completely extraneous to the Bill before us. We refer specifically to credit transactions and this is a credit transactions Bill. We believe that it would not be equitable for a person to be pulled in in terms of the provisions of this Bill to give evidence and to disclose knowledge he has on a matter that is completely extraneous. I think that, if one were to do this, one would perhaps be defeating the ends of justice.

Mr. Chairman, the hon. member for East London North may be surprised to learn that I agree that there may be merit in his first amendment.

*To my mind the important words in this clause are the words which provide that the information may be furnished by order of the court. To my mind this is the most important guarantee that information will not be disclosed arbitrarily.

†It can only be done by order of a competent court. However, for this very reason I cannot support the hon. member’s second amendment.

*I cannot support it. For if we leave this matter to the discretion of the court, it is to my mind sufficient guarantee that the evidence and the information will not be disclosed in preceedings which are not related to the credit transaction concerned. While I see some merit in the first amendment moved by the hon. member, I cannot therefore support his second amendment at all.

Mr. Chairman, this clause and the amendment to it refers to the confidentiality of information which public servants deal with in the course of their normal daily task. They may not disclose the information they have at their disposal. That is part of the whole State organization. It is an important aspect which we must bear in mind. If any person commits a criminal offence he cannot plead immunity. As the hon. member said, however, many civil cases will result from this legislation. As I understand it, of course, the word “legal” refers to both civil and criminal cases. It will happen very frequently that inspectors—and we shall have to take steps frequently in these cases— are called to give evidence in court on civil cases, but it is not acceptable. That is why I cannot accept the second amendment which in fact flows from this—and in addition credit agreements are defined in it. Unfortunately it is not possible to be kind to the hon. member here at the end as well. It is a principle which we cannot accept. It is as simple as that.

Mr. Chairman, I wonder if the hon. the Minister can help me. I have a small problem regarding the clause itself. This is the clause which deals with secrecy. The clause states that—

Let us forget about the arguments contained in (a) and (b) for the moment. What do these words actually mean? As I see it, prima facie, it means that in the course of my duties as a person who deals with hire-purchase agreements—I am, for example, the credit manager of a firm—it comes to my knowledge that Mr. A is a good mark and Mr. B is a bad mark, so I must not deal with him. I think it is common cause that one gives references in the trade, and one checks up on a person who wants to enter into an agreement before one grants him credit. In this hypothetical case it has come to my knowledge, as credit manager, that Mr. B is a bad risk. In fact, he defaulted two or three times in dealings with me. Am I committing an offence if somebody in another firm telephones me and says: “Look here, I have Mr. B over here and he says that he has dealt with you. Can I give him credit?” Now I have information that has come to my knowledge—because this is not a court of law and it is not part of my duties or functions in terms of the Act—but I am prohibited, as I see it, from giving this person information by telling him that his client is a bad risk. There may be other secret information, which I cannot disclose to anyone, that I have acquired in the course of my duties whilst working for this firm. Is this what we are trying to achieve? I see difficulties here.

Mr. Chairman, the hon. member now wants a State official to pass judgment in a situation where a person’s case can be completely prejudiced. In that situation he is himself playing the role of a judge in the case. That is what is really behind this. Even if a person has been found not guilty on fourteen murder charges, one cannot state in court the fifteenth time that he is a bad risk, even though there was a great deal of evidence to indicate that he was. I honestly do not think that we have a problem there. It is not only a matter of this type of inspector. It is a general principle that a State official must do his work and make his facts available. When a criminal act is committed, he cannot invoke immunity. When it is a civil case, which deals with the rights of people versus people, one cannot place the State official in a position of having to choose sides. He will be in an impossible position, even if he knows as well as you and I that he would side with one person if he were the judge. If there has been a contravention, it is of course a different matter. I am truly sorry, but we cannot do it.

Mr. Chairman, I support the amendments moved by the hon. member for East London North. I think they obviously have merit. However, I am now talking about something completely different. I am not talking about whether I give evidence in a court of law, or whether a matter is legal or criminal, and I am not talking about performing my duties or functions in terms of the Act, but I am talking about information which has come to my knowledge in the course of my duties. Let us say I have received information that Mr. X is a bad risk. Someone in another firm telephones me and says that he wants to give a man credit. If I tell him not to give the man credit because he is a defaulter, am I giving away secret information in terms of this clause? That is the simple issue.

Mr. Chairman, the State official is not there to give advice on credit transactions. He is simply there to institute an inquiry. He cannot be an employee of a credit grantor by giving him advice. There is no such thing. This is a free country. One can make a fool of oneself if one wishes and one can make mistakes in one’s ignorance. The State has to protect, but that is usually after things have already happened.

We are now dealing with duties in terms of the Act—and I want to say this finally to the hon. member, because we cannot discuss the matter all day—and it is a standing rule that a State official is not supposed to be a judge by implication in civil actions through the kind of evidence which he gives, unless the State expects him to furnish certain facts.

Mr. Chairman, the hon. the Minister has made out a very good and convincing case, but he keeps talking about a State official. I would ask the hon. the Minister where a State official is mentioned in clause 28. A State official is not mentioned once in clause 28. The clause only says “no person”. If the hon. the Minister is prepared to amend the clause, I would be quite happy to see our amendments fall away. The hon. the Minister could, for instance, insert “no inspector, as appointed in clause 26”—he is basically the person who is going to be primarily involved in clause 28—but then I think we alter the whole sense, reason and effect of the clause.

I am sorry, but can the hon. the Minister point out to me where clause 28 says it is going to be a State official, because he has continually used those words in the presentation of his argument? It is not in the clause, and if the hon. the Minister’s whole argument is based on those words, let us put them in. I think the best way of doing so is to refer to “inspector, as described in clause 26” or “who is appointed in terms of clause 26”. If that is not acceptable, let us put in “State official”, because it seems that the hon. the Minister prefers those words.

I am sorry, but I think the hon. the Minister has built up a case on a false presumption.

Mr. Chairman, it need not specifically by a State official as such, but it is a person acting in the spirit of the duties under the Act, and as such it is merely a formality with which the hon. member is now rectifying his case. The duties of this person determine his further actions in regard to the proceedings which will follow. That it has to be a State official is not the point. If I had referred only to an ordinary State official, it would perhaps have been stated too generally, because in reality it is a person who has been appointed to do his duties under the Act. As far as I am concerned, if the hon. member wishes to insert the words “State official”, we can do so. If the hon. member now wishes to move such an amendment for the sake of better legislation, because it worries him at present, he may do so. In other words, the hon. member is free to move an amendment that the words “State official” should be inserted.

Mr. Chairman, I then move as a further amendment—

Mr. Chairman, could the hon. member please repeat that?

Mr. Chairman, where it says that “no person shall”, we say “no inspector shall”. In other words, everything else applies to the inspector and not to a person.

Mr. Chairman, the hon. member for East London North used the words “State official”.

Mr. Chairman, I am happy about that.

Mr. Chairman, there must be a proper definition for “State official”. I do not want to insert the words “State official” if this term should create a problem with the definitions, but I know what the hon. member is getting at. I shall find out from my legal adviser whether the words “State official” would be better than the word “inspector”. If it is not, we can insert the word “inspector” in the Other Place.

Mr. Chairman, that was in fact the word I originally used when I formulated the amendment. I moved that the word “person” be deleted and the words “State official” be substituted.

Mr. Chairman, it seems to me that if we are going to substitute for the word “person”, the word “State official” or “inspector”, or however we are going to word it, in order to limit the meaning, it is going to leave the other person who is not a State official and who has information entirely outside the jurisdiction of the court.

But he is not.

If we look at the original clause as it now stands, we find that it reads—

We agree that such a person, who could also be a person other than an inspector or a State official, may not disclose information, except in terms of the provisions of clause 28(a) or clause 28(b) which reads—

If we were to substitute the word “State official” for the words “no person”, we would be covering only the case of the State official. In other words, then the court would not be able to order any other person to furnish information. Consequently it seems to me that if we were to narrow the clause down to a State official or inspector, we would enable another category of persons to withhold any evidence which the court might wish to have disclosed in the interests of law and justice.

It therefore seems to me as if it would be better to accept the first amendment of the hon. member and to extend the scope of the clause even to civil cases, bearing in mind that the information may only be disclosed on a court order. This is not done arbitrarily, but only on the order of a competent court. We must accept that the court will not order the disclosure of such information, for example in a civil case, unless it is essential. It would therefore seem as though the first amendment of the hon. member has more merit than the amendment which has now been moved.

Mr. Chairman, I enjoy it very much to see the lawyers in this House using both hands. Someone once said that he would very much like to have an attorney, but the attorney should only have one arm. [Interjections.] It was really interesting to listen to how various points of departure are able to emerge when one is discussing a problem such as this.

Yet I just wish to say that, considering what I have just pointed out, the idea here is that it should only be State officials. If we could find a method by way of regulation of ensuring that these people would all be State officials or people appointed for that purpose as officials of the State, I cannot accept the first amendment. I think my learned friend opposite will concede to me that I cannot accept the first amendment. As I have said, however, I can by way of regulation ensure when such a person does this work for these purposes, he will in fact be a State official or a person in the employ of the State. In view of this I wish to ask the hon. member to wait with his amendment. I shall then consider the definition aspects to establish which word would be the best to insert there and rectify the matter in the Other Place.

Mr. Chairman, I should like to thank the hon. the Minister for his undertaking to alter the legislation in the Other Place and to put the most acceptable word in the place of the word “person”. I appreciate his undertaking and with the leave of the Committee I should consequently like to withdraw my last amendment, the one I hastily scribbled out.

At this point in the Committee Stage, which has lasted almost four hours, I should personally like to thank the hon. the Minister for his patience and fortitude in handling this matter. I think we have had a debate on this matter which will be valuable in the future and which, I think, has been valuable in that a number of amendments have been accepted. I thank the hon. the Minister.

Further amendment, with leave, withdrawn.

Amendment (1) negatived and amendment (2) dropped.

Clause agreed to.

House Resumed:

Bill reported with amendments.

Mr. Speaker, I move—

Because the Act to which the Bill refers is seldom discussed in this House, you will permit me, with, I am sure, the full support of all the opposition parties, to convey on this occasion my thanks and appreciation to the provincial boxing control boards, and the national board that have done so much for professional boxing and wrestling in our country over the years. It seldom occurs that amendments to the principal Act are effected and therefore very little of the important work these bodies do for us comes to our attention.

It is not generally known, either, that the Boxing and Wrestling Control Amendment Act is the only Act administered by the Department of Sport and Recreation as an Act. I should like to convey my gratitude to the chairman of the national boxing control board, Mr. Justice H. W. O. Klopper and members, Mr. Tempel, Dr. Labuschagne, Messrs. Mortimer, Van Biljon, Beyers Hoek and Stanley Christodoulou.

†I think hon. members will agree that professional boxing went the last couple of months through a stage which resulted in achievements of which we can be very, very proud. A lot has been achieved for our country in spite of very difficult circumstances. I want to give credit where credit is due, and that is to the Boxing Control Board. [Interjections.] I think it was a great achievement to have the world boxing title match between Gerrie Coetzee and John Tate staged in our country. I think we ought to thank these gentlemen for having it arranged with those who co-operated with them.

Whilst we are isolated from world sport, it is also a great honour for our country that Mr. Stan Christodoulou is still regarded as one of the greatest referees in the world and is frequently invited to many countries. I think we can be proud of Mr. Christodoulou’s achievements.

To the Natalians I want to say that we are also proud of the achievements of Mr. Mike Mortimer who is chairman of the World Boxing Association’s Championships Committee. He has been going on so magnificently that his achievements have been referred to by the rest of the world as truly great.

This is all being done under the leadership of Mr. Justice Klopper. On behalf of the sportsmen and women of South Africa and all our sport-loving people in the country we pay tribute today to all these men and to those who were involved with the staging of the boxing matches which we have had in this country over the past year.

I want to place it on record that notwithstanding our isolation we did manage to have another world championship fight, but in this fight the South African also lost. Two South Africans have therefore lost, but I think we can nevertheless be proud of them because they reached the top of the ladder.

In view of the assurance that we shall not deal at length with the Bill, I want to deal briefly with the various clauses. I want to say, too, that I have notified the official Opposition’s spokesman on sport that amendments to the regulations are urgently required, and I think he agrees with me. I can promise that it is something which will be attended to as soon as possible.

*I now come to the aims of the Bill which I should like to elucidate briefly.

In order to provide for the control of certain persons who train boxers, it has become essential that the word “trainer” be included in the definition of “official” in section 1 of the Boxing and Wrestling Control Act. This will mean that coaches, too, will in future have to be registered with a boxing control board. The amendment in clause 1 will enable boxers to make use of the best coaches. Poor coaches who can do a boxer serious harm are eliminated in this way.

Clause 2 provides for the replacement of the word “Union” by the word “Republic” in section 3. This is merely a rectification.

Clause 3 relates to Section 7(c), 7(c)(ii), 7(d), 7(d)(i) and 7(4)(i) and only incorporates consequential amendments relating to section 1. I just wish to elucidate the amendment in section 7(g)(i). It often happens that a fight promoter enters into an agreement with an official to act at such a fight, and after the fight has been concluded, he refuses to comply with the agreement. This leads to serious embarrassment for the board in question, and if, on top of that, such an official comes from overseas, as is often the case, it not only casts the boxing control board in a poor light but also jeopardizes South Africa’s good image.

In section 7(g)(ii) a consequential amendment is effected which relates to section 3. With regard to section 7(g)(iv) I want to say that it has occurred in the past that unfavourable and even disparaging articles concerning the conduct of a boxing control board or its members have appeared in a boxing programme or advertisement. This casts the member or the board in a poor light as far as the general boxing public is concerned. It is now being provided that a specimen of every proposed programme or amendment relating to a tournament should first be submitted to the local boxing control board for approval.

In section 7(h) a consequential amendment is being effected which relates to section 7(iv)(i) and in section 9(f) a consequential amendment relating to section 1 is affected.

Due to the increase in the number of tournaments and the resultant heavier workload this places on the present members of provincial boards of control, it has become essential to extend the membership of the boards in order to exercise better and more effective control at tournaments, particularly, too, since the sport of boxing is practised by other population groups. At present the boards consist of a chairman and four members and the aim of the amendment in section 13 is to extend the membership of the boards to seven, namely a chairman and six members.

With regard to the proposed amendment of section 18(1)(a) and (b) I want to say that at present there are only two local boards consisting of three members each, namely one in Border (East London) and the other in the Eastern Province (Port Elizabeth), the members of which are appointed by the Cape Boxing Control Board. In order to carry out its activities more effectively, persons may be co-opted to the local boards.

In section 21(b) and (d) a consequential amendment is effected which relates to section 1.

The amendment of section 21(b)(i) is essential because, for example, the body known as the “Boxing Unity Movement” has come into being in the Eastern Cape with the exclusive aim of undermining the authority of the official S.A. National Boxing Control Board. This subversive activity is carried on by arranging tournaments on the same date as official tournaments, by complying with all the regulations involved. In this way they totally disrupt official tournaments. Use is made at these tournaments of registered professional boxers or former professional boxers whose registration in some cases has been refused or withdrawn by boxing control boards. It is also maintained that such tournaments are not for gain. This dodge—because there is evidence that participants are in fact secretly remunerated—prevents the S.A. National Control Board from taking action against them in this regard.

A consequential amendment to section 21B(2) is being effected which ties in with section 21B(1).

Section 22(4) concerns boxing and wrestling control boards. Such boards are statutory bodies that take the steps deemed necessary for the proper and effective regulation or control of boxing or wrestling at tournaments or for the proper and effective supervision thereof. At present South Africa is taking part in world boxing, and the powers at present vested in the police, magistrates or assistant magistrates appear to be out of proportion to what is deemed necessary for the proper control of boxing and wrestling contests or exhibitions. The hon. member for Innesdal must take note of that. This matter is being rectified by way of the amendment proposed and provision is being made for all action taken by the police, magistrates or assistant magistrates to be taken in consultation with the board in question. There would be adverse consequences for South African boxing if a police officer, magistrate or assistant magistrate, who sometimes knows little or nothing about boxing, were to stop a fight for a world title, since a fight for a world title is controlled by an official appointed by the World Boxing Association.

By the amendment of section 23, provision is being made for the penalties that may be imposed if sections 7(i), 7(c)(i), 7(g)(iv), 20, 21, 20A and 20B are contravened.

Just to elucidate the amendments to Section 9 that are being effected, I want to say that initially it was the National Boxing and Wrestling Control Board which, with the approval of the Minister of Justice, could make regulations in terms of section 9 of the Act. The Boxing and Wrestling Control Amendment Act, 1973, (Act No. 51 of 1973) vested the power to make regulations in the Minister of Sport and Recreation after consultation with the Board. Therefore there was not simply a replacement of the authority that could make the regulations, but also an amendment of the procedure which had to precede the intended making of regulations. This amendment resulted in the regulations made by the previous authority, in other words the boards, lapsing when the amending Act came into operation. Unfortunately, therefore, the position is that from 1973 up to date, regulations have been followed which no longer exist. The Bill inserts a provision in terms of which the regulations shall be deemed to have made by the Minister of Sport and Recreation with affect from October 1973.

Mr. Speaker, first of all I should like to offer a word of apology in advance in that, having spoken to this Bill, I shall have to leave the House almost immediately. I therefore ask hon. members to excuse me, as I will not be able to listen to the rest of this debate.

The Act which is to be amended now has been on the Statute Book since 1954, and has been in fact the only piece of legislation which was directly administered by the Department of Sport and Recreation. It is therefore something of a rarity for this hon. Minister to introduce a Second Reading debate on this matter in his capacity as Minister of National Education. That is as it should be. I believe that sport, in the general sense, should not be subject to legislation or to ministerial or departmental control.

As I have emphasized in this House over a period of some seven years, decisions relating to sport belong with the sports administrators and not with a government department. The exceptions, however, go to prove the rule, and as far as hon. members on this side of the House are concerned, I believe that there can be no objection in principle to a measure of control being exercised over boxing and wrestling. These are rather exceptional sports. They are deliberately violent and potentially physically dangerous. They are emotive in crowd response, and not least, in the professional field prize-fighting has become a sport of really big money. Many people, of course, do not regard boxing or wrestling as a sport at all, but rather as a primitive and barbaric medium of channelling aggression, whether as a participant or vicariously as a spectator. Be that as it may, there is a clear case for having a law to exclude abuse, to limit and prevent permanent physical injury, and to stop malpractices and corruption. There is also an even stronger case for updating its provisions from time to time as circumstances change, as new developments take place.

At the present time boxing and wrestling are controlled and supervised by the national, provincial and local boards created in terms of the Act. The law provides that all boxers, wrestlers, promoters, judges, referees, timekeepers, etc., shall be registered as such by the boards concerned. This is a necessary provision if a standard of competence is to be maintained and if the standard of integrity is to be enhanced. A glaring gap in the legislation is to be found in the fact that trainers are not mentioned at all and are therefore free of any restriction, of any control or of the necessity to acquire any qualification, real skill or expertise. The trainer’s function is an important one. It is becoming an increasingly important one in modern boxing, as anyone who has followed the careers of South African champions over the years will immediately grasp. I believe it is an undesirable anomaly that, while all other boxing and wrestling officials must satisfy the requirements of the various boards, trainers are exempt. One of the main intentions of this Bill is, therefore, to rectify that situation. We on this side of the House welcome that provision.

The several amending clauses giving effect to this intention will in due course ensure a broader competence at this level, which in time will help to raise standards and—and this is most vital—reduce injuries in the ring.

In recent years boxers in particular more often than not are having their affairs managed by other people. They are guided by others, while they themselves devote their time to improving their physical prowess. This is a modern development and there is in fact nothing wrong with it. Long, however, is the sorry history in South Africa and in other parts of the world of boxers fighting until there is nothing left in them, only to find at the end of their careers that they are broken men, both physically and financially, despite the fact that during their years of boxing they have earned large sums of money in many tournaments. Another welcome provision to be found in this Bill, therefore, is the provision which ensures that all contracts entered into on behalf of boxers will be subject to board scrutiny. In this way a measure of protection is afforded to fighters, investors, contractors, contractees and the public.

Some of the important provisions of this Bill provide for an increase in numbers of the provincial and local boards and will thus, as the hon. the Minister has stated, give him greater scope than presently exists for bringing new life into these bodies. I am referring to the provisions in clauses 5 and 6 of the Bill before us.

While it is our intention to support these clauses because they represent an improvement on the existing position, I think I must express my disappointment to the hon. the Minister that he has not grasped this rare opportunity of legislation of this sort being introduced in the House to institute far-reaching reforms in regard to the system of board appointments, be they national, provincial or local. Anyone who has read the Act and who knows a little bit about boxing and wrestling and their management, must concede that the boards as constituted in the Act are in fact self-perpetuating. Once one is elected or appointed by the Minister, it is most difficult, in fact almost impossible, to be ousted from one of those boards. Because of the methods prescribed in the Act, methods which are not affected by this Bill, it is even more difficult to break into the somewhat closed shop and obtain fresh representation on any of these boards. This cannot be a healthy situation and should enjoy the attention of the hon. the Minister as a matter of urgency.

For the interest of hon. members who enjoy boxing and wrestling and have an interest in the management thereof, I should like to quote some statistics relating to boxing in particular. In the amateur ranks, excluding school children, there are approximately 500 Indian, 1 635 Coloured, 2 670 White and 8 620 Black adults who participate in boxing in South Africa. In the professional ranks the statistics follow roughly the same pattern, though of course the numbers are a lot smaller. If one lumps boxers and officials together for purposes of quoting the statistics the figures disclose the following: In South Africa there are 15 Indians, 57 Coloureds, 397 Whites and 1 003 Blacks who are professional boxers or officials. It is obvious therefore that, like soccer, boxing is a sport which, both at amateur and professional level, is predominantly supported and being kept alive by Black participation. As standards rise and opportunities open up, more and more South African Blacks will take their place in the world rankings. This development is the result of a virtual revolution which has occurred in South African boxing over the past five years, and it says a great deal for the corps of administrators and boxers who have moved quickly to eliminate discrepancies and discrimination in this sport. Good men and true though they may be, however, it is not right that the statutory boards should be as unrepresentative as they are at the present time. For instance, the six-man national board has no non-White representation on it at all. Neither have the provincial boards any non-White representation on them at all, with the exception of the Cape, which I believe has one recently appointed member. Let us now leave aside the racial connotations. Quite apart from the racial connotations, the very method of self-perpetuation of these boards militates against their being fully representative of the boxing fraternity. I do appeal to the hon. the Minister to look at the provisions of the sections of the Act with a view to instituting a more democratic form of election right down to local level, to ensure that all sections of the sport, as also all communities, are represented.

I should now like to read a letter which I received some while ago from a Black man who lives in Soweto, a man who has had to do with boxing in South Africa for many years. It is a letter addressed to me and, if the hon. the Minister will forgive me, I am not going to quote this gentleman’s name. However, the problem that he has raised in this letter is being dealt with, and I am assisting him in dealing with it, but I should like to give hon. members an idea of the sort of problem. He says—

He obviously asked me to find out what had happened to his application, which I am doing. This person has not as yet received his licence, but his case is in fact being reconsidered. The refusal to grant this gentleman a licence is not at issue in the passing of this legislation. The fact, however, that he feels aggrieved and discriminated against, as he has told me he does, is indeed at issue. He believes, rightly or wrongly, that there is no one on the board to whom he can turn and that he has no say in the membership of the board whatsoever.

The law at present provides that unlicenced tournaments may not be held. This is determined by the terms of section 20 of the existing Act. I might just interpolate here, in reference to the hon. the Minister’s reference to the Unity Boxing Movement, which I am going to discuss in a moment, that it could easily be dealt with under section 20. I am not at all certain that it is necessary to introduce a new section, which I do not think changes the position materially at all. Nonetheless, allow me to continue and say that unlicenced tournaments may not be held in terms of section 20 of the existing Act and that all public tournaments may only be staged after sanction from one of the boards has been received. Criminal sanctions have long been imposed for contravention of the relevant sections.

Clauses 7 to 10 of the Bill tidy up the provisions to ensure that registered officials do not take part in unlicenced tournaments. So on the face of it this is unobjectionable— and we shall support this clause—but we must not forget for a moment the tensions which are prevalent in our country from time to time, and in fact at this very time. I would like to read a letter received some weeks ago—it is dated 12 March 1980—from a boxing man in the eastern Cape. It concerns a matter to which the hon. the Minister has already referred, but it gives another side of the story. It is headed “The S.A. Unity Boxing Board of Control.” The letter reads—

1. (a) That no boxing tournaments were allowed in the townships.
2. (b) That in the eastern Cape there was only one promoter, at that time a White man, who was promoting tournaments, and in these tournaments there was segregated seating. On this point we were told that the tournaments were multinational or multiracial, because boxers of different groups fought.
3. (c) We were not happy about the fact that no Blacks were represented on the boxing boards. On this point, we were told that there was no provision in the Act for representation by Blacks on the boards.

I believe the hon. gentleman is wrong on that point, but the fact remains that that was his view—

That is what the gentleman wrote to me. Just having a look at the legal side, I believe that the complaints which this correspondent has registered are neither helped nor hurt by the provisions of the Bill before us, but are rooted in the founding legislation.

I want to point out a potential problem to the hon. the Minister, which I think he should see in advance and look at very carefully. That is that world boxing is already divided into two sections: The World Boxing Council with Larry Holmes as its champion and the World Boxing Association with Mike Weaver as its champion. I believe it would be folly to allow a situation to develop in South Africa where that division rears its head here, as it has done in cricket. We have the S.A. Cricket Board and the S.A. Cricket Union, which stand at arm’s length from one another. There is a tremendous fight being carried on between the two organizations. Mr. Varachia and Mr. Howa are the respective presidents. Mr. Varachia’s association is affiliated to the S.A. Cricket Union, and through that to the Imperial Cricket Conference. Mr. Hassan Howa’s association is affiliated to Sacos, and through that to the Supreme Council of Sport in Africa. If we allow a division of that sort to start developing in South Africa within the framework of boxing, I want to tell hon. members that there is going to be unending strife and disunity in this sport, which will only redound to the disadvantage of our boxers and of boxing as such.

This problem cuts across racial lines because there are proportionately as many unhappy White administrators as Black administrators. The key to the solution lies in the method of election of the various control boards. It is in this aspect that the hon. the Minister must introduce reforms to ensure that the boards become representative of the fraternity that they control. This sort of grievance holds potential danger for South African boxing, danger which we may not easily perceive while boxing is riding the crest of the wave, but which will hit very hard when it does hit South Africa. If rival factions mushroom, even boxing could find itself thrown back into total division and world isolation. In all humility I want to tell the hon. the Minister that the answer does not lie in strong-arm tactics. It rather lies in conciliation and in bringing the whole sport together under one democratic umbrella, with emphasis on the word “democratic”. While we will support this legislation, we urge the hon. the Minister to move quickly to prevent a breach among the supporters of this sport, something which will redound to the disadvantage of all.

I would like to close by associating myself with the words of the hon. the Minister when he congratulated the members of the National Boxing Board. In particular he mentioned Judge Klopper, Mr. Christodoulou and Mr. Mortimer, all of whom have achieved world recognition for their efforts and all of whom have, despite the deficiencies of the actual legislation, received the respect of boxing administrators throughout the world. I believe that we can be proud of the standard of excellence achieved by our boxing administrators and officials in the professional work they do and in the integrity they bring to this sport. I should like to associate myself with the remarks of the hon. the Minister in this regard.

The hon. the Minister has come to the conclusion, as I have, that the regulations relating to the Boxing and Wrestling Act are in an incredible mess. I think the hon. the Minister said it because he realized that if he did not say it, I would say it first. I am not even sure that the regulations are legal, not ultra vires. Trying to find which regulations apply, who has authority and what the particular situation is, is like negotiating a minefield. I do hope the hon. the Minister will take an early opportunity of revoking all the existing regulations and bringing in a new set which people can understand and which will be less confusing. With that, I want to say that we will be supporting the Second Reading of this Bill.

Mr. Speaker, I wish not only to support the Bill on behalf of this side of the House, but also to convey my appreciation to the department for the improved legislation at present before the House. Unfortunately I have the same problem as the hon. member for Sandton. I think he and I were on the same aeroplane and he played a small trick on me. It is true that over the past three years we in South Africa have experienced a virtually unprecedented revival, particularly in the field of boxing and, to a lesser extent, in the field of wrestling. I think that in the field of boxing it has been the heavyweights in particular, such as Mike Schutte, Kallie Knoetze and Gerrie Coetzee, and recently Jimmy Abbott, too, that have been arousing interest. However, among the light-weight boxers there have also been men like Harold Volbrecht, Bashew Sibaca and Happy Boy Mgxaji, all of whom have either fought for the world title or have had their names on the world ratings. It is this very ability of the boxers that has aroused the interest of the public, and it is this very interest that has been aroused among the public which has exposed certain loopholes which must be eliminated in the interests of the sport and the spectator. It is true that when there is a lot of interest, it is possible to collect vast sums by way of admission fees and well-disposed guarantors. Unfortunately, there is a danger in this that fortune seekers can misuse the boxer and the sport as well to feather their own nests. It is only fair that the promoters, trainers, officials and even the boxers should be subject to certain norms, because it is also true that our boxers and administrators deal with administrators who are known and recognized throughout the world, particularly when our boxers appear on the world ratings and fight for the world title. It would be a sad day if the standards we apply in South Africa were to prejudice the opportunities of our own boxers or wrestlers in the international sphere due to poor administration. Just as we seek to protect our boxers, I think it is also fair that we should protect the responsible officials and responsible trainers, as the act indeed does. Moreover, it is also necessary that the public, the spectators, should be protected. That is why we are grateful that consideration is also being given to the way in which various boxers are being used as a bait to attract large crowds to the fights.

What the boxers whose names I have mentioned have done in the field of sport, men like Jan Wilkens have done in the field of wrestling. Accordingly, the same applies to this sport. I know that there are many people who are opposed to the element of exhibitionism in the sport. However the fact remains that there are many spectators who enjoy these meetings as a form of recreation. When control of these meetings is implemented as provided for in the Bill I believe that the officials, the wrestlers themselves, and the public, too, will enjoy the necessary protection.

Since this Bill is also going to contribute towards affording non-White administrators opportunities to gain experience, the Bill is a worthwhile one in this field as well. We express the hope and the confidence that the control of boxing and wrestling will be such, and will improve to such an extent, that it will also bring about an improvement in the standard of our administrators and sportsmen and that this Bill will help to afford sportsmen of world standard the opportunity to become worthy ambassadors for South Africa.

We support this Bill and we wish the administrators and the sportsmen practising the various sports all of the best and the finest achievements.

Mr. Speaker, we on these benches intend supporting the Second Reading of this Bill. We believe it is an improvement on the existing position. We also believe it is necessary from time to time for the hon. the Minister to take cognizance of the developments that are taking place and to bring about amendments to the Boxing and Wrestling Control Act, amendments which normally are perhaps based on recommendations from the National Board.

At the very outset I should like to associate myself with the hon. the Minister’s words of praise to the National Board of Control, particularly in view of the fact that they have had to administer professional boxing, often in difficult times, and have done so without any incidents having reflected on the good name of South Africa. Indeed, they have brought a great deal of credit to the name of South Africa as far as professional boxing is concerned. The fact that the country is still recognized by the World Boxing Association and that many of the officials of the World Boxing Association are drawn from South Africa is indeed a compliment to the good administration of professional boxing in the Republic.

It is pleasing to see that, in introducing this legislation, the hon. the Minister in his capacity as the Minister in charge of sport has taken into account that it will be necessary to amend particularly the clauses dealing with the provincial boards to extend the size of the provincial boards and to enable local boards, which are appointed, to co-opt a prescribed number of persons. The hon. the Minister indicated in his Second Reading speech that due recognition would be given to the need for the members of groups other than the White group to be accommodated in an appointment to the boards.

The hon. member for Sandton dealt at length with certain aspects in regard to representations that were made to him, and I intend to pass comment on that as well. I should like first of all to say that the question of making provision for a trainer to be registered with the board in order to introduce a degree of control by ensuring that the trainer has a degree of competence is to be welcomed. Obviously, as far as the trainer is concerned, it is vitally important for the boxer and for the progress he makes to see that he is trained by a competent trainer. It also means that the health of the boxer will be taken into account. One of the main reasons for controlling professional boxing, I believe, is to ensure the health of the boxers. Particularly in the present trend where big money is involved, sponsorship has come forward to make certain guarantees in the case of large tournaments with substantial amounts of money involved. Consequently the health of the boxer is indeed a most important factor. It is therefore vitally important that he has a competent trainer who is able to ascertain to a great extent the fitness and competence of a boxer. Such a trainer can then advise the manager of the boxer who in turn can negotiate with the match-maker from the promotion point of view. We know that the promoters are basically honest people, but where there is a large amount of money involved one has to take care that proper provision is made for the care particularly of those who are providing that attraction, and they are the boxers.

The question of deaths in the ring has been raised from time to time, but I was interested to read an article in which tighter control in boxing is asked for. The article appeared on 13 March 1978 and an eminent doctor is quoted as follows—

The article then detailed the steps the doctor believed should be taken in the interest of the boxer so as to see that a boxer, when he goes into the ring, is fully fit and fully equipped to defend himself in a contest, and that he is not overmatched, as sometimes has happened in the past, with the result that a boxer is taking tremendous punishment which leaves him with permanent injury. It is important that those aspects are taken care of and we are pleased to know that they are being taken care of in terms of the regulations.

The recognition of the trainer is equally important. I therefore believe that the provision which requires the trainer to register with the board is an important step towards improving the overall control as far as professional boxing is concerned.

As far as the National Board is concerned, we know that it basically consists of the chairman of the board together with the chairmen of the various provincial boards. Consequently the provincial board, the chairman of which is appointed by the Minister, has to be improved from time to time. If the Minister believes that certain members ought to be replaced, they must be replaced with persons who are able to take on the required responsibility and who have a knowledge of professional boxing.

The number of provincial board members is being increased from four to six in addition to the chairman, and I hope that the hon. the Minister will indicate whether, in view of the fact that we have an increasing number of persons from race groups other than Whites getting involved in professional boxing as promoters, boxers, managers and trainers, he intends seeing that some representation, but on the basis of merit—the board must be appointed purely on merit—is also accorded those people.

The provisions dealing with local boards are also of importance. Membership of local boards was previously restricted to three, but it can now be increased. The hon. the Minister has indicated that here in the Cape, which is a large geographical area, we have a local board in the Eastern Province and another one in the Border area. The question of co-opting people on that board is very important and I hope that the provincial board will take due cognizance of what the position is in relation to the numbers of people who are participating in the various areas. It is essential that these people should have representation. I believe that representation on those boards will go a long way towards alleviating the position which presently exists and causes some of those people to feel that they are being precluded from playing a part in the administration at the higher levels.

This leads me to the provisions dealing with the prohibition of certain contests and exhibitions as set out in clauses 7, 8 and 10. The position in this regard is now clarified. The hon. member for Sandton indicated that in terms of the principal Act there already was a prohibition to a certain extent. Here there are definite guidelines laid down as well as more prescribed steps that have to be taken to ensure that a person will not be able to put on a tournament in regard to which the public will not be protected. The public also have to pay, quite a large sum of money in many instances, to attend these tournaments. They could find that boxers who are not registered are being used. These boxers could perhaps be deemed to be ex-boxers, boxers whose licences the national or provincial board has refused to renew, sometimes on the grounds of the health of the boxers. Although such a boxer may have a good name based on his past record in the ring, he could be used at such a tournament to the detriment of his own health, and, in addition, in such a case the public would not be protected from a certain degree of exploitation. After all, one finds repeated in clause 2 of the amending Bill what the objects of the board are, and it is stated quite clearly there that those objects are “the protection of the interests of boxers, wrestlers, trainers, promoters, officials and the public generally”. We have tournaments taking place in which persons can be used in an uncontrolled way by promoters, while the provisions that are contained in the principal Act are aimed at bringing about a degree of control, the main aims and objects of which I have just mentioned. So the position is that these tournaments, which could be held without receiving the sanction of the provincial board or the local board could not be to the advantage of boxing in general. It also often happens that boxers are brought out from another country and then find that there are insufficient funds and that their deposits cannot be met. They then stage another tournament and could be open to a certain degree of exploitation. In this regard there is protection as far as the board is concerned.

We know that there are people who, as far as the board is concerned, object to paying an amount which constitutes 6% of the gross gate to the Boxing Board of Control. This could also lead to people believing that they could put on tournaments for the public on their own and thus save themselves that 6% which has to be paid to the National Board. This is not in the interests of boxing in general, particularly not as far as the boxers are concerned. The hon. the Minister has the responsibility to ensure that there will be local boards, provincial boards and a national board which will be truly representative of the people that are involved in the whole question of the control of boxing, the participants. I hope that this fact, together with the provisions as outlined in this Bill, will ensure that that high degree of control we had in the past will be further improved.

I also view with a degree of concern the situation where people might wish to form themselves into a separate organization or association, as is the case in amateur circles in various other sports and also in professional soccer. The hon. the Minister will be aware of what the problems are as far as professional soccer is concerned in this country. I hope that we shall be able to obviate a similar situation developing as far as professional boxing is concerned.

Another aspect is that this Bill has been mentioned as having been the only piece of legislation that was administered by the Department of Sport and Recreation. We in these benches believe that these are the people who should administer this legislation. In the past it was administered by the Department of Justice, but we believe that the Department of Sport and Recreation was in a better position to ensure that all sportsmen connected with the sport of boxing and, of course, wrestling would receive due recognition. We support the Second Reading of this Bill.

Mr. Speaker, I should like to thank those who were prepared to enter the ring for their contributions, and also for the clean way in which they delivered the blows they wished to deliver.

It was a good clean fight.

I should like to reply just briefly to the few points which were raised, because I think that we shall have the opportunity to discuss all the issues raised here today at length when the Vote is discussed. Consequently I shall not deal in detail with matters such as those raised by the hon. member for Sandton and the hon. member for Umbilo. This, of course, is not due to any lack of respect for their standpoints. I should like to discuss them when I have all the necessary information at my disposal. However, such information is not always readily available when one discusses specific legislation. I should, however, like to make one correction. The hon. member for Sandton maintained that only one non-White served on one of these boards. I can inform the hon. member, however, that there is an Indian doctor in Natal who serves on that province’s boxing control board. I believe that the hon. member for Umbilo, too, can confirm this.

†I should like to point out that this one piece of legislation which is administered by the Department of National Education—the Department of Sport and Recreation as it was formerly—makes no mention whatsoever of colour. Nowhere in either the Act or this Bill is there any reference to colour. Colour has never been mentioned in this legislation, and as far as I am concerned it need not and should never be mentioned there. By the same token, however, I think we should also insist that when colour is brought into our discussions we should be careful, as far as possible, to avoid causing the feeling amongst other colour groups—if I may distinguish them from the White group—that they are being discriminated against.

I have been attending amateur boxing tournaments for many, many years, and I have never seen any discrimination there. As a matter of fact, at the last such tournament, staged in Johannesburg—and I was also present there—there were Black referees, and Black officials in the various boxers comers, and there was no restriction of any kind on people who wanted to attend the tournament and cheer for the boxer of their choice. When the participants in that tournament entered the boxing-ring they did so in a spirit of sportsmanship and everything went very well. Seeing as it has been mentioned, however, I feel that I have to warn that movements such as the Unity Boxing Movement should keep themselves in check. The Unity Boxing Movement, for instance, has members who write scores of letters and distribute them all over the country. For some reason or other— and they might have good reasons too—they are doing that.

Surely not all people who serve on the Boxing Control Board are members of the NP or supporters of the Government of the day. It must therefore have been decided on merit that they would not be allowed to get this licence. I am worried that they now seem to consider themselves justified in approaching the Opposition parties in White politics with their complaints.

During last year’s session the hon. member for Umbilo and the hon. member for Sandton pointed out the dangers of movements such as the S.A. Council of Sport in the field of amateur sport. Perhaps one may warn again that the whole matter of Sacos will have to be discussed again. It is a body which is being administered, to a very great extent, from the offices of the United Nations in New York, and by people who are not only directly opposed to the Government of this country, but even worse, who are seeking the destruction of this country. Therefore, we have to be very careful whom we associate with in this regard. With that I do not imply that the Unity Boxing Movement has any such ulterior motives. I have no such proof at the moment. Nevertheless, I should like to appeal to them to go through the proper channels in applying for registration.

*Finally, I should just like to thank hon. members for their support for this Bill. We shall have to amend the regulations, and other amendments will have to be effected from time to time as well. I should like to associate myself with the hon. member for Bethlehem who talked about Harold Volbrecht and Nkosane Mxgaji, who have fought for world titles, as well as all the officials participating in the control of professional boxing and wrestling in the country, as well as in the control of the amateur sport, which still precedes professional participation.

I thank hon. members for their support and I hope that we shall have a pleasant and fruitful discussion when the National Education Vote is discussed.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

The amendments proposed here were for the most part initiated by the Heraldry Council. We replied on their advice in drafting this amending Bill. They are the people who have to implement and carry out the Act in practice. The council at present consists of the hon. Chief Justice V. G. Hiemstra as chairman, Dr. C. Pama, Lt.-Gen. H. de V. du Toit, Prof. N. O. Roos, Prof. B. E. Bierman, Prof. H. H. Smith, Mr. J. F. Preller and Mr. N. F. Hartman, the State Herald. I should like to thank the members of the council and the State Herald and his staff for the work they have so painstakingly done.

Seen as a whole, the amendments being proposed are aimed at establishing a better regulated administration and more effective operation. Heraldry is an exceptionally interesting subject, but in certain respects it is complicated, too, and therefore I wish to explain a few of the amendments to the best of my ability.

The first that I wish to stress is the provision made for the registration of the official coats of arms of foreign States. At present only domestic authorities can register their coats of arms at the Bureau of Heraldry.

The presence of various developing neighbouring States around us, as also the establishment of independent States within the borders of our country, have created the need for expert advice and assistance with regard to the designing of State symbols for the authorities in question. Here one calls to mind such matters as flags, coats of arms, badges and decorations, all of which ought to be of a sophisticated nature because it is a matter of national prestige and, to a considerable extent, the image of a country is conveyed by means of such emblems. Such assistance provided by our Bureau of Heraldry can also be helpful in the recognition and respecting of one another’s State emblems.

Here I wish to emphasize that it will be a requirement that the council will only consider such an application for registration, deletion etc. if the application in question is accompanied by the written permission therefore of the highest official authority of the country of the applicant.

†The second provision in the Bill which I wish to mention here, concerns the insertion of a punitive clause for the misuse of the names of associations or institutions and of designatory initials implying the possession of educational qualifications granted by such bodies. The relevant provisions of the Heraldry Act are a legacy of the old Protection of Names, Uniforms and Badges Act of 1935, which provided for civil remedy only, and this but to a very limited degree. These penalties have in fact proved to be an ineffective deterrent. In view of the importance of the matter to the business and scientific communities, who admit persons to membership of their professional societies only after stringent requirements have been met, it is felt that designations indicating professional status should, in the public interest, be afforded greater legal protection. Transgressions have therefore been subjected to fines of up to R1 000.

*The third matter to which I wish to refer briefly is the vesting in the state herald of the power to delete, with the permission of the heraldry committee, the details of coats of arms etc., from the register, if he is convinced that the body in question no longer exists. For example it may occur, and indeed has occurred, that bodies have dissolved and have wished to give up their registered names or coats of arms. Family coats of arms will not be subject to this power of deletion, because even if the original owner no longer exists, the coat of arms must remain on the register in order to protect the rights of descendants. However, provision is being made for notice in the Gazette of a proposed deletion so that any interested person may register an objection.

The final point I want to mention is the steps to restrict the unrestricted trade in family coats of arms being carried on in the Republic. Here I refer to persons who make themselves out to be the providers of authentic coats of arms, whereas the products of their work cannot be justified on heraldic or genealogical grounds. I have also been informed that there are still today many of these so-called historic family coats of arms which were purchased in good faith and are displayed in homes as precious gems, which in fact appear to be relatively recent fabrications. In future, if the Bill is passed, it will be required of sellers of such family coats of arms first to submit evidence to the State Herald in support of the genuineness of their products and to obtain from him a certificate to the effect that the coat of arms in question could in fact have been lawfully borne by an ancestor of that family. It is hoped that in this way it will be possible in future to put a stop to the sale to the public of coats of arms based on unproven assumptions or obvious misconceptions. After all, family coats of arms are symbols of family pride and family cohesion, and this aspect of our national life ought not to be subject to exploitation.

For the rest, the proposed legal amendments merely involve the clearer definition of existing provisions and the adjustment of certain provisions to changed circumstances; all aimed at the elimination of any doubt that may exist and the establishment of an increasingly efficient heraldic service.

Mr. Speaker, since the establishment of the Heraldry Council 17 years ago, a great deal has been achieved with regard to the regulation of heraldic representations and phenomena in South Africa and, with the assistance of the heraldry bureau and the State Herald, this council has clearly achieved a great deal of success with the registration of heraldic emblems, particularly as regards the coats of arms of official, semi-official and private bodies. Unfortunately the issue of family coats of arms, as the hon. the Minister has himself indicated, is not yet on a sound footing because unauthorized persons are still selling family coats of arms, sometimes at excessive prices and in forms that have not been approved by the council. We are pleased, therefore, that this legislation should effect an improvement in that regard by means of the prohibitions suggested here and the authorization granted for steps to be taken against such abuses. Moreover, a more comprehensive register which will be kept by the council will now eliminate any possible excuse that might be put forward when false representations are offered for sale.

After the years of experience in the field of heraldry in South Africa, it is now necessary to streamline the whole organization, and in terms of this Bill significant steps are being taken in that direction. For example, it has been decided that this body will no longer remain a body of the first instance for the consideration of applications for registration and that this work will now to a large extent be carried out by a committee of the council. It is obvious that this arrangement will result in economy and streamlining and therefore we support clause 4 of the Bill.

A further important addition, in our opinion, is the list of tasks of the heraldry division, in that the council may from now on amend and delete heraldic representations where necessary, in addition to the registration thereof. This extension is incorporated in various clauses and we support it because it is essential that clearly the council should have the power not only to be able to register, but also to be able to clear the register of undesirable items when necessary.

Another new principle with which we are particularly satisfied is something that could perhaps be referred to as the inheritance of family coats of arms. Provision is made in clause 5 for people with the same family name as that of a person with a registered coat of arms to obtain the use of the registered coat of arms, even when it has been registered in favour of another person. To us, this provision appears reasonable and sound. The powers in clause 2 to furnish interested parties with assistance and advice in connection with heraldry also appear to us to be sound. That is as far as the positive aspects go.

There are just two problems which I want to put to the hon. the Minister, but before coming to them, I wish to say that we support the Bill wholeheartedly. The first of these two minor problems I want to put to him is perhaps largely of a semantic nature and appears in clauses 1 and 4. It concerns the rendering of the English concept “differencing”. The minor differences that can be introduced to a family coat of arms in order to indicate different families with the same name, is, in general terms, the meaning of the word “differencing” in the English text. It is therefore a highly technical and legalistic concept which, in the nature of the matter, also requires a special version in Afrikaans. Accordingly a parallel definition is given in the Afrikaans definition and the word “differensiëring” was decided on. We agree with that; to us it sounds like a meaningful translation of “differencing”, and moreover it sounds to us like a word which in the normal course does not have a general meaning in the Afrikaans language and which is therefore appropriate and useful in achieving the specific purpose aimed at in the Bill.

However, it is true that in clause 5 the word “differensiasie” is used in two places, viz. in lines 47 and 57 on page 8 of the Bill. I should just like to draw the attention of the hon. the Minister to that. In general usage, of course, the word “differensiasie” is more or less synonymous with the word “differensiëring”, but in highly technical language the synonymous nature is no longer so valid, and we therefore wish to recommend that the hon. the Minister give attention to this. We consider that the replacement of “differensiasie” by “differensiëring” in both instances would be more correct, both in terms of the legislation and grammatically, and would eliminate any possibility of confusion.

The second problem I just wish to mention briefly also appears in clause 5, more specifically in the proposed section 7(2), in which it is provided that if an official authority in a foreign country should apply to the bureau for the registration, amendment or deletion of an item on the register, the council’s decision will be final without hearing the evidence of the foreign party with regard to the matter. Therefore this foreign party does not enjoy the same privilege as in the case of a party in this country, because before an unfavourable decision may be taken, such a party always has the right to be heard. The golden rule of our administration of justice, the audi alteram partem rule, is therefore not being taken into account here and we should just like to hear why the hon. the Minister deemed it necessary to eliminate this privilege. We believe that the possibility that this protection should also be afforded a foreign authority deserves the attention of the hon. the Minister. We therefore support the Bill.

Mr. Speaker, I welcome this Bill. I do so particularly in view of one of its facets, namely the protection and control of family coats of arms. The Afrikaans-speaking section of our population in particular attaches tremendous value to family coats of arms. Now, it is true that many of the coats of arms are borne by persons who are not really the owners of such coats of arms. I think that these amendments will enable family coats of arms to come into their own again. The fundamental idea of heraldry is and remains the clear and personal identification of the bearer of the coat of arms. Each coat of arms must be unique and may not clash with existing coats of arms or be borne by anyone other than the owner and his direct descendants in the male line. To be able to achieve this, registers of coats of arms, effective control, legal protection and expert aid and guidance in this regard are necessary. The Bill makes provision for this.

Unfortunately, we in South Africa have the problem that family coats of arms are borne by people who have no claim to such coats of arms, often their genuineness cannot be verified and they are often unregistered. In this way a great deal of harm is done to heraldic principles, and such bearing of a coat of arms is totally in vain. Whereas it ought to be something very personal, many people, in their ignorance, parade in borrowed plumes.

This Bill now makes provision for heraldry, particularly as regards family coats of arms, to come into its own and for unlawful family coats of arms to be legalized by registration. This situation arose out of ignorance and commercialism. Because it has sentimental value, many people exploited it. Family coats of arms are being sold today which cannot really be borne by the families who have purchased them. Secondly, people have family coats of arms printed at vast expense, on cutlery, for example, whereas in fact they can lay no claim to those family coats of arms. I wish to express the hope that in view of the necessary expert guidance that will now be provided, together with the registration of family coats of arms, this matter will now be rectified.

Mr. Speaker, heraldry as we know it today harks back to the end of the twelfth century when the bright colours of heraldry first made their appearance in the world. Today those colours are still wellknown and heraldry survives and in fact thrives, serving to identify individuals, families and corporations through an art form which we know to be both gothic and symbolic.

The language of heraldry is highly specialized, as we have already seen in the potential and possible difficulties with the translation of some of the terms in the legislation before us. That language is an aggregate of largely Middle English with a lot of dialects including Arabic, Slavonic, old High German and even modern French.

There are two entries that are of particular interest in the major encyclopedia relating to matters of heraldry. I might say that that encyclopedia is accepted throughout most of the Western World as being highly authoritative. One of the interesting entries tells us that Adam and Eve are used as the animate representations in the coat of arms of the “Worshipful Company of Fruiterers”. I think that that is very fitting. The other refers to the Van Riebeeck decoration which was founded in our own country in 1952. In a rapidly changing world, such as the one we are living in, ties within families are very often loose or non-existent. The days of the large family gatherings and pride of association with one’s family are waning. Less emphasis than ever before is today being placed on family history and family association. Yet the family is such an important unit in the structure of a society. Family histories contribute much to the tradition and culture the citizens of a country hold dear. A family coat of arms can be a source of tremendous pride to members of a family whose forerunners have achieved a name or a degree of fame in various fields of business, politics, etc.

Although this legislation which is before us, namely the Heraldry Amendment Bill, is hardly a matter of life or death, it is nevertheless an important guide to the control measures to be applied in deciding upon an acceptable crest for a particular family, business or institution. This amendment Bill gives far greater powers to the Heraldry Council, and to the hon. the Minister, to remove a member of the council from office. The proposed new section 7(5) seems to indicate a more lenient approach to the registration of a particular family coat of arms in the name of any descendant or in that of any other person who bears the same family name. It seems further that the Heraldry Committee will enjoy more flexibility than in the past as regards decisions they are empowered to take. The penalties prescribed for unauthorized use of heraldic representations are raised significantly in terms of this Bill. I would say that we would normally be inclined to query or perhaps even reject such heavy penalties, but we must see the fines in the correct light. Sophisticated poaching of heraldic representation could financially be very rewarding in certain circumstances. This must clearly be guarded against. We appreciate the need for legislation of this kind, and it is with pleasure that we of the NRP support this legislation.

Mr. Speaker, I thank the hon. members wholeheartedly for their support I just want to reply briefly to the hon. member for Green Point and say that as far as the word “differensiëring” is concerned, I thank him for the suggestion. I shall have it investigated by a lawyer in order to determine what should be done. I agree with him that it is a better word, and I shall have it amended as such before the legislation goes to the Other Place. Secondly, I just want to tell him why the same right of appeal cannot be granted to foreigners. The reason is that such heraldic representations are not necessarily recognized in the country where the person lives. It is registered not in that country, but in South Africa. With a view to the differences in the administration of justice in various countries, it would be difficult even with such a limited judicial authority, to grant the right of access to citizens of another country. We shall also order an investigation to determine whether there are any possible solutions in this regard. Once again I thank hon. members sincerely for their support.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

During its 1979 session this House passed the State Trust Board Act, Act No. 88 of 1979. The Act made provision for the establishment of the State Trust Board and regulates, inter alia, the composition, powers and functions of the board, but was in a certain sense born of necessity. This was at a time when a body had to be established urgently in order to salvage the many secret projects of the former Department of Information.

The State Trust Board was the first institution of its kind. Consequently it was not possible to draw on previous experience. Yet the board has functioned well in practice and it is, step by step, expertly creating order out of the chaos brought about by the Information debacle. However, practical experience has made several amendments to the State Trust Board Act essential in the interests of greater efficiency. In its first tabled report the State Trust Board pointed out certain deficiencies in the Act. The purpose of the Bill is to eliminate those efficiencies. The nature and scope of the provisions of the Bill may briefly be summarized as follows:

Clause 1 entails the deletion of subsection (3) of section 2 of Act 88 of 1979. The amendment which is being effected in this way is the logical outcome of the fact that as more and more of the projects which the board is working on at present are disposed of, the activities of the board will deminish to such an extent that the need for a full-time chairman will in due course fall away. This amendment now creates the possibility of appointing a part-time chairman, when and if such a step becomes necessary.

According to the provisions of section 6(2)(b) of Act 88 of 1979 the board may issue a certificate to the effect that certain assets or rights have been acquired by means of the application of State Funds. Such a certificate is sufficient proof that such assets or rights have in fact been acquired, unless the contrary is proved. This certificate simply brings about a shifting of the onus without the board gaining direct and immediate control of the rights or assets concerned. It leaves the opposite party in continued control of the assets, and consequently the possibility of alienation, particularly in the case of shares, is not excluded. If the board should wish to prevent alienation a court order would have to be applied for every time, which could give rise to unnecessary costs and litigation, thus causing delays and making the functions of the board extremely difficult.

The effect of the proposed clause 2 is that in the case of shares the board, after issuing a certificate, obtains effective control over the shares with adequate protection of any person’s legitimate claim to such shares. The proposed clause ought to obviate unnecessary litigation and will at the same time promote the efficient functioning of the board without prejudice to any person.

Since the commencement of the board’s activities, problems have been experienced in establishing whether certain assets were in fact obtained through the application of secret State funds. If the board were, under these circumstances, simply to issue certificates to the effect that the assets or rights were in fact so acquired, it could give rise to a series of court proceedings, something which would be undesirable. To promote effective functioning of the board it has been considered essential that the board shall have the necessary powers to summon and examine witnesses.

Clause 3 provides that the board may in this connection institute certain inquiries. It regulates further the obtaining and recording of evidence at such an inquiry, the procedure appropriate to the holding of such an inquiry, and also the rights and obligations of witnesses at such an inquiry.

The principle that in salvage operations or in actions comparable with the actions of the State Trust Board, no person may refuse to reply to a question during examination on the grounds that his reply may incriminate him, is contained in various other measures of this House, for example in section 65 of the Insolvency Act, sections 260 and 417 of the Companies Act and section 9 of the Inspection of Financial Institutions Act. A similar provision appears in clause 3 of the measure which is now before this House.

For obvious reasons it is essential that claims against and on behalf of the board should be disposed of as soon as possible. Clause 4 provides that claims arising from obligations such as those referred to in section 6(1) of Act 88 of 1979, shall be lodged against the board prior to 1 March 1981, with written notice of one month to the board of the action and cause of such action.

Clause 5 provides briefly that members of the board as well as officers are indemnified against claims for bona fide actions. It has been necessary to make the provision with retrospective effect.

The premise of the Bill is to facilitate the functions of the board. Greater efficiency by the board is being envisaged, and I trust that this measure will, for that reason, be supported by everyone in this House.

Mr. Speaker, first of all I should like to say that we are fully aware of the hon. the Minister’s problems. I shall therefore endeavour to be as brief as possible so that we can complete the debate on this proposed legislation by the close of the sitting. I want to apologize to the hon. the Minister on behalf of the hon. member for Bezuidenhout that he is unfortunately not able personally to handle this Bill as he is sitting in the Schlebusch Commission at the moment.

No, he is not.

Nonsense!

Let me also congratulate the hon. the Minister on the method he has adopted in presenting this Bill to the House. I want to state that the hon. the Minister has given all the Opposition parties every opportunity to inspect this Bill before it was put on the Order Paper, and the opportunity to discuss proposed amendments with him. I think I can say that this Bill is a Bill which has been agreed on by all the various parties. We in these benches shall certainly support it.

I should like to say that clause 2 embodies a principle which I personally think is a very bad principle in terms of law. However, we concede that these are special circumstances, and it is only in special circumstances of this nature that we in these benches would agree to a provision of this nature. However, I should like to commend one thought to the hon. the Minister’s attention and that concerns the proposed section 6(2)(c)(iii), which stipulates that—

I wonder whether a time limit such as “or for 90 days, whichever shall be the longer period” should not be inserted after the words “disposed of” in order to allow the person who has had the shares transferred out of his name into the name of the State Trust Board more time in which to react. I shall not move this as an amendment in the Committee Stage, but I should like to suggest to the hon. the Minister that he perhaps could consider it and, if necessary, propose it as an amendment in the Other Place. We therefore support this Bill.

Mr. Speaker, I have prepared a lengthy reply to the hon. the Minister and I am sure that he will be glad to hear that I shall be taking a long time to support this measure! However, in view of the circumstances I only want to express my appreciation that both the problems we had with this have been met; one by the insertion in the Bill of the provision that the owner of shares will be notified when those shares are transferred, and the other by satisfactory explanation. We shall therefore support this measure through all its stages.

Mr. Speaker, I wish to thank hon. members for their support of this measure. I shall certainly give attention to the element of the time limit proposed by the hon. member for East London North.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

Order! To the hon. members who have remained present until the end, I should like to say in the words of Lady Macbeth: Stand not upon the order of your going, but go at once. [Interjections.]

Question agreed to.