Interrogation proceedings in insolvency law: a comparative study
Mwelase, Musamuni Barrah
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Interrogation proceedings in insolvency circumstances have always been a thorny issue in South Africa, even prior to the advent of the new constitutional democracy. After the adoption of the new Constitution in 1993, a number of court cases seeking adjudication on constitutional compliance came before our courts. The insolvency of both natural and juristic persons necessitates the employment of specified proceedings such as insolvency interrogations. The latter is done to enable an efficient and effective collection and collation of information that would assist in the administration, sequestration and winding-up of the affairs of the affected person. These proceedings are intended to benefit creditors of an insolvent (natural and juristic). The matters of Ferreira v Levin; Vryenhoek v Powell 1996 (1) SA 984 (CC) (1996) (1); Bernstein and Others v Bester 1996 (2) SA 751 (CC); Harksen v Lane 1998 (1) SA 300 (CC; De Lange v Smuts 1998 (1) SA 736 (C) are still leading cases in relation to the constitutionality of interrogations in insolvency circumstances. The Constitutional Court has on a number of occasions, declared the interrogation proceedings in insolvency matters constitutional, with minor amendments on a case-by-case basis. The effect of these judgements is that, in every case in which an insolvent debtor has to undergo an interrogation process, the presiding officer must ensure that compliance with the constitutional requirements are in place. The current position in which the sequestration of insolvent estates and the winding-up of insolvent companies are respectively regulated by two statutes, is a matter for concern. This situation has led to duplication and contradictions in the two statutes. Further, the absence of specialist tribunals or officers dedicated to the administration of insolvency related matters is a further hurdle to the effective and efficient finalisation of the affairs of insolvent estates or insolvent companies’ affairs. The matter of Leong comes to mind. In this case, the Master of the High Court issued a warrant of arrest for a witness who was subpoenaed to appear at the meeting of creditors in his insolvent estate. This was the case, despite the fact that Leong had previously submitted a medical certificate to the effect that he was unable to attend the meeting due to illness. This case is a clear indication of a lack of proper guidelines to deal with insolvency related matters - for non-judicial officers (such as the Master of the High Court). This incident took place in 2016, long after the decision in De Lange v Smuts 1998 (1) SA 736 (CC). Interrogation processes in insolvency circumstances in Namibia and Botswana are almost similar to South Africa’s processes. Divergent provisions in Namibia and Botswana exist, but not to a great extent. Like South Africa, the above-mentioned jurisdictions adopted a constitutional democracy long before South Africa. One would have expected that interrogation proceedings in insolvency circumstances would be in line with human rights. Further, as is the case in South Africa, insolvency of natural persons and of juristic persons are regulated by two separate statutes in these jurisdictions. This thesis investigates issues relating to the interrogation process in insolvency proceedings in the three SADC countries, namely South Africa, Namibia and Botswana. It compares the position to two foreign jurisdictions, namely England and Canada – as leading jurisdictions in human rights. Thereafter, suggestions on processes and methods of information gathering in line with human rights and in specialist tribunals will be made. In addition, recommendations for inclusion in a unified statute regulating insolvencies of both natural and juristic persons will be made. This will be done taking into consideration the economical and socio-political circumstances of South Africa and the SADC countries forming part of this thesis.
- Law