WYNDHAM HARTLEY

CAPE TOWN — Draft legislation designed to allow state property to be sold in execution of an unpaid debt has run into trouble, with submissions to Parliament’s justice committee insisting that the bill is still unconstitutional.

The State Liability Amendment Bill came about when the Constitutional Court in 2008 struck down elements of the original act and gave the state 12 months to correct the law.

The court found the law discriminated against ordinary citizens because they could not attach state property when the state failed to pay its debts.

The amendments before the committee allow movable state property to be sold in execution, but only if the sale does not harm service delivery or put national security at risk.

Alasdair Sholto-Douglas, in a submission for the General Council of the Bar, said the restriction on immovable property was arguably unconstitutional because “such restriction discriminates against ordinary citizens and may, depending on the peculiarity and nature of movables belonging to the state, still leave ordinary citizens in no better a position unless they can also execute against immovable property belonging to the state”.

Commenting on the service delivery and national security exclusions, Mr Sholto-Douglas said “the issue that arises is how, why and when the ordinary citizen must know that execution against movables of the state would severely disrupt service delivery, threaten life or put the security of the public at risk?

“How must the creditor or the sheriff know the extent to which or not, for example, the attachment of tables and chairs in a police station would severely disrupt service delivery, or which beds in a hospital can be removed without threatening life?” He said the onus should be on the state and proper procedures should be provided.

This was echoed by Wendy Dobson in a submission for Standard Bank. She said while the Constitutional Court had found the legislation did not treat all judgment creditors as equal before the law, the amendment “still provides for materially unequal treatment”. This was due to the limitation to movable assets when there “appears to be no justifiable reason for this restriction, especially since movable assets may well be insufficient to cover the amount due and payable to satisfy the judgment debt”.

Source: Business Day