The South African Restructuring and Insolvency Practitioners Association (Saripa), the Concerned Insolvency Practitioners Association, the National Association of Managing Agents, trade union Solidarity and the Vereeniging van Regslui vir Afrikaans had challenged the Department of Justice’s racial quota system, which the department said was meant to facilitate access to work for black people and women.
According to the department, the policy for the appointment of liquidators was meant to transform South Africa’s insolvency profession.
In opposition to the policy, the various organisations alleged, among others, that Masutha had exceeded his powers, that the policy was irrational and that it violated the right to equality.
The Western Cape High Court last year declared that the policy was invalid because it was inconsistent with the Constitution.
The Department of Justice subsequently took the matter to the Supreme Court of Appeal which upheld the ruling of the High Court. The Supreme Court of Appeal said the policy was “arbitrary and capricious”.
The Constitutional Court yesterday dismissed the Department of Justice’s appeal with costs. In yesterday’s ruling, Justice Chris Jafta said the policy was irrational and not capable of achieving the intended equality.
But in a minority judgment, Justice Mbuyiseli Madlanga said black insolvency practitioners were struggling to make a living “in this area of practice, because of its unfair, disproportionate dominance by white practitioners. What about black would-be insolvency practitioners who cannot even make a break into this area of practice because of this dominance?”