Court to decide on liquidation matter

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Johannesburg - A court decision expected today could bring a last-minute halt to the implementation of a policy aimed at transforming the liquidators’ industry.

The new policy is set to take effect on Monday but is at the centre of a legal battle in the Western Cape High Court.

Among the allegations that have emerged – in court and in court papers – was that if it was implemented, the policy would create “almost a complete barrier” against white people being appointed by the Master of the High Court as provisional liquidators and trustees, that white men would only get 10 percent of the work available and that a number of white men would not be able to continue practising in the profession.

However, there are also allegations that in the present situation, the requisition system was “skewed” and lacked transparency, and that black liquidators were being sidelined. The court is expected to hand down a decision today over whether it should grant an interim interdict that would temporarily stop the implementation of the policy pending a full review.

Judge Pat Gamble heard arguments yesterday.

According to papers before the court, insolvency practitioners would be split, in terms of the policy, into four categories: A, B, C and D. The first was African, coloured, Indian and Chinese women (A), followed by African, coloured, Indian and Chinese men (B); white women (C) and white men (D).

Appointments had to be made consecutively by first taking four from category A, then three from B, two from C and one from D. Lawyers for the South African Restructuring and Insolvency Practitioners’ Association, which lodged the court application, contended that the policy was unconstitutional and that it offended the right to equality.

Advocate Brendan Manca SC, acting for the association, argued that the wording of the policy effectively excluded certain black people who were not South African citizens prior to April 27, 1994 from appointment. This, he said, did not extend to the categories for white liquidators, meaning a white English person who immigrated to South Africa after April 27, 1994 could still be appointed.

“There is no attempt to justify that unfair discrimination,” said Manca.

But advocate Ishmael Semenya SC, representing two of the three respondents – the Minister of Justice and Constitutional Development and the Chief Master of the High Court – said this did not invalidate the policy.

He further contended that the policy was being implemented as a measure to correct the issue of equality after “300 years of exclusion” and that the association hadn’t shown that there would be “irreparable harm” to any particular group of individuals if the policy was implemented pending the review.

Advocate Ismail Jamie SC, acting for the third respondent, the Association for Black Business Rescue and Insolvency Practitioners of South Africa, said that the requisition system was “clearly not equal”. - Leila Samodien from the Cape Times

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