Quote of the week

The recommendation for criminal charges is particularly applicable to Mr Anoj Singh and Mr Koko, who by false pretences led Eskom, through the officials who processed the R659 million payment, to believe that the R659 million payment was in the nature of pre-payment for coal, as was the R1.68 billion pre-payment, later converted into a guarantee, when in truth and fact they knew that the prepayment and the guarantee were needed to enable the Guptas to complete and save the sale of share transaction.

State Capture Commission Report
Volume 4, Part IV
4 September 2009

The death of Dingaan Nyathi was not in vain – Paul Hoffman SC

The Death of Dingaan Nyathi was not in vain

Paul Hoffman SC

Institute for Accountability in Southern Africa.

12 August 2009

The famous Nyathi case, in which the Constitutional Court struck down as unconstitutional section 3 of the State Liability Act of 1957, as amended in 1993, was back in Court this week with the authorities asking for more time to make the amendments to the law which the decision of the Constitutional Court requires. The state even wishes to change the Constitution, in a manner which is, arguably, itself unconstitutional, in order to meet the exigencies of the situation. This is a contribution to the debate aimed at ensuring that the late Dingaan Nyathi did not die in vain.

His untimely death is attributable to a combination of medical malpractice in a provincial hospital and the omission on the part of officialdom to pay timeously a final judgement he obtained against the state.

The state has been directed to clean up its act concerning unsatisfied final judgements obtained against it and remedial legislation has been ordered by the Court. It is accordingly necessary to give consideration how best to amend section 3 which reads at present:

Satisfaction of Judgment

No execution, attachment or like process shall be issued against the defendant or respondent in any such action or proceedings or against any property of the State, but the amount, if any, which may be required to satisfy any judgment or order given or made against the nominal defendant or respondent… may be paid out of the National Revenue Fund or a Provincial Revenue Fund, as the case may be.”

It is the prohibition against execution and attachment in cases against organs of state that has been found to be unconstitutional. The “property of the State” however remains the “family silver” of the nation. The mace in Parliament, the Presidential jet and the art collection at the Constitutional Court will all be subject to attachment and sale in execution when the ban on execution is made history in accordance with the ruling of the Court.

In considering the appropriate avenue for the amendment of the section, consideration must be given to the mischief the new legislation will be addressing. That mischief is easily identified. The public service, whose responsibility it is to pay judgements obtained against the provinces and central government is grievously at fault.

Described by the Supreme Court of Appeal as “terminally lethargic” ( per Conradie JA in the Jayiya’s case 2004(2) SA 611 at 617 ) and  “at war with its own citizens” (per Cameron JA in the Ngxuza’s case 2001(4) SA 1184 at 1197 ), it is the public service that is to blame for the sad state of affairs that gave rise to the litigation which led to the demise of the section, insofar as it prohibits execution against state property. It is not the case that the applicable revenue funds are depleted in any way: it is simply that no public servant seems to feel responsible for seeing to it that judgements are paid.

Any reasonable judgment creditor would much prefer to receive cash than go through the arduous, time-consuming and expensive process of attachment and sale in execution of movable, or in the absence of movables, immovable property.

The situation with judgments against the state is that there is money available, but no legislated mechanism for getting at it. There is also a need to protect the “family silver” of the nation as it is obviously not in the interests of the public for heart-lung machines, ambulances and other property of public utility to be sold in execution to satisfy judgments obtained against the state. Accordingly, it would seem that the solution to the problem of unsatisfied judgments is to create a suitable mechanism that will ensure judgments are in fact paid once they are obtained.

Having regard to the paucity of talent in the public service, a high-ranking public servant has to be the link in the chain between judgment and payment. Treasury officials are a possibility, but the most likely suspect for the task at hand would appear to be the State Attorney for the Court in which the judgement is obtained. Not only would this official have an appreciation of the gravity of the non-payment of the judgment, there would also be the necessary skills level and a proper understanding of the situation as well as the capacity to see to it that all genuinely final judgments are in fact paid without delay.

As is so often the case: the devil is in the detail. How to recast section 3 to make it a constitutionally compliant and effective piece of legislation aimed at satisfaction for those who obtain final judgments against the state is the issue. A myriad of suggestions present themselves, all with pros and cons. Here is a tentative suggestion for consideration, improvement and possible consideration by the State Law Advisers, whose unenviable task it is to come up with a formulation that is workable and constitutionally compliant.

“S 3 Satisfaction of judgment

Before execution, attachment or like process may be issued against the defendant or respondent in any such action or proceedings or against any property of the State the judgment creditor shall:

(a) Hand deliver a copy of the judgment obtained to the State Attorney of the Court in which the judgment was obtained together with a certificate by the Registrar or Clerk of the Court in which the judgment was obtained to the effect that the judgment is final and that no appeal, review or rescission proceedings are pending in respect of it.

(b) Afford the State Attorney a period of 14 days from such hand delivery to arrange for payment of the judgment debt to be effected out of the National Revenue Fund or the applicable Provincial Revenue Fund, as the case may be, or to initiate such appeal, review or rescission proceedings as may be indicated.

This formulation protects the “family silver” of the nation to some extent, while still giving the victims of sluggish public service the opportunity of attaching property in satisfaction of debts which remain unpaid after the State Attorney has been accorded the opportunity of doing the necessary. The sensible way to execute would always be to attach the applicable revenue fund first, and only proceed to property of other kinds in need.

The most attractive feature of this proposed formulation is that, unlike that at present under consideration, it is a means of satisfying the judgment in Nyathi’s case without resorting to unnecessary and possibly unconstitutional tinkering with the Constitution itself.

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