Minister's appointment system for insolvency practitioners contested

A policy aiming to transform the appointment of insolvency practitioners does not want to be a panacea‚ but hopes to redress the injustices of the past.

That was the argument of the minister of Justice and Constitutional Development and the Chief Master of the High Court of South Africa on Thursday in the Constitutional Court.

"One in 10 appointments is better than one in no appointments‚" advocate Renata Williams SC‚ representing the minister‚ argued in front of 10 judges. They appealed the rulings by the Western Cape High Court and the Supreme Court of Appeal (SCA) which declared the Policy on the Appointment of Insolvency Practitioners‚ promulgated in 2014‚ unconstitutional.

These courts ruled the policy fetters with the Master to appoint insolvency practitioners to estates and does not take the demographics of insolvency practitioners into account. The majority of insolvency practitioners are white males.

The minister argued the policy is a legitimate form of affirmative action in line with the Constitution and does not interfere with the Master’s discretion.

According to the policy the master has to appoint the practitioners following a rotation list which separates practitioners according to race‚ gender and seniority. It does not take the practitioner's skills and experience into account.

According to the policy for every 10 insolvency matters‚ the Master has to appoint:

• Four African‚ Coloured‚ Indian or Chinese women who became South African citizens before 27 April 1994;

• Three African‚ Coloured‚ Indian and Chinese males who became South African citizens before 27 April 1994;

• Two White females who became South African citizens before 27 April 1994; and

• One White‚ African‚ Coloured‚ Indian or Chinese female and male who became South African citizens on or after 27 April 1994.

The South African Restructuring and Insolvency Practitioners Association (Saripa)‚ Concerned Insolvency Practitioners Association‚ trade union Solidarity and Vereniging van Regslui vir Afrikaans argued the policy is unconstitutional and creditors will suffer.

Advocate Martin Brassy‚ SC‚ representing Saripa‚ said there should rather be targets than quotas. "When you have targets‚ you are generating aspirations by reference to which you can measure how successfully you are pursuing a transformative goal."

Solidarity wants to the policy to be sent back to the minister‚ because they consider the policy to be a dictate and not a guideline. "What the minster does here is to drill down and say precisely the order in which the appointments must be made."

Judgement has been reserved. - TimesLIVE