Policy on appointment of insolvency practitioners flawed‚ ConCourt finds

The highest court in the country has sent the Minister of Justice and Constitutional Development back to the drawing board regarding a policy which is aimed at transforming the appointment of insolvency practitioners to redress past injustices.

A majority judgment by the Constitutional Court‚ written by Justice Chris Jafta‚ was delivered on Thursday and ruled that the policy was flawed. The Minister and the Chief Master of the High Court appealed against rulings by the Western Cape High Court and the Supreme Court of Appeal (SCA) which declared that the Policy on the Appointment of Insolvency Practitioners‚ promulgated in 2014‚ was unconstitutional.

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.

For every 10 insolvency matters‚ the Master has to appoint:
- Four African‚ Coloured‚ Indian or Chinese women who became South African citizens before April 27 1994;
- Three African‚ Coloured‚ Indian and Chinese males who became South African citizens before April 27 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 April 27 1994.

Jafta said the policy was flawed‚ because the largest category entrenched the status quo‚ as it consisted of white male practitioners and those who had become citizens on or after April 27‚ 1994.

“By placing all those who became citizens on or after April 27 1994 in category D‚ the policy effectively punishes all young practitioners who were born on or after that date‚” Jafta said.

“It lumps African‚ Coloured‚ Indian and Chinese practitioners with the advantaged white males who dominate the entire industry in terms of numbers and affords everybody in this category an equal opportunity of being appointed.” Jafta added: “For no apparent reason‚ and the applicants have provided none‚ the policy restricts its application to disadvantaged people‚ who became citizens before April 27 1994.”

The minister argued last year that the policy was not a panacea‚ but hoped to redress past injustices.

“One in 10 appointments is better than one in no appointments‚” Advocate Renata Williams SC‚ representing the minister‚ said on November 2 in the Constitutional Court last year.