Legislation: Credit Bill’s relief measures ‘permissible and lawful’

While debt relief measures proposed in a sixth draft of the National Credit Amendment Bill do ‘constitute a deprivation of property’, in the view of Advocate Wim Trengove SC they are ‘permissible and lawful under section 25(1) of the Constitution’ since they do not amount to its arbitrary deprivation. This, notes Pam Saxby for Legalbrief Policy Watch, is according to a summary of Trengove’s opinion on specific clauses of the draft Bill, which was sought last month at the request of the National Assembly’s Trade and Industry Committee. The summary was circulated at yesterday’s meeting. Trengove has nevertheless expressed concern about the constitutionality of the draft Bill’s clauses 13 and 29, respectively seeking to amend sections 86 (application for a debt review) and 171 (regulations) of the Act to empower the Minister to ‘extend the operation’ of a debt-extinguishing measure and to ‘prescribe a debt intervention measure’. He believes these amount to ‘the delegation of plenary powers’.

Having unpacked Trengove’s concerns, parliamentary legal adviser Charmaine van der Merwe recommended that the committee consider ‘other means to achieve the same result’ proposed in clause 13. To that end, she suggested that the clause should instead seek to empower the Minister to review the impact of proposals in clause 15 – which deals with ‘other orders related to debt intervention’ mooted for insertion in the Act’s section 87 (rearranging a consumer’s obligations). Van der Merwe further recommended that the review envisaged be conducted within 36 months of the promulgation of the proposed new sub-section 86(6)(e). This seeks to address a situation in which a consumer qualifies for debt intervention but has insufficient income and assets to allow for his/her debt obligations to be rearranged during the period envisaged. Should the review point to the need for a suitable intervention, Parliament would then consider how best to proceed. 

Noting that the purpose of clause 29 is to empower the Minister to provide immediate relief in the event of ‘significant economic circumstances’ constituting ‘an exogenous shock’ causing ‘widespread job losses’, or a ‘regional disaster … of grave public interest’, Van der Merwe advised members that – since provision is already made for this in the draft Bill’s ‘longer-term measures’, as well as in ‘other laws regulating grave public interest and disasters’ – the clause could be deleted. The committee is scheduled to meet today and on 7 and 8 August to consider Van der Merwe’s recommendations as well as her own and Department of Trade and Industry comments on public submissions received on proposed new clauses not included in the original draft Bill. As Legalbrief Today has already reported, these were released in May for comment.