Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others

• Jurisdiction: South Africa
• Judge: Chaskalson P, Mahomed DP, Ackermann J, Didcott J, Kriegler J, Langa J, Madala J, Mokgoro J, O'Regan J, Sachs J and Trengove AJ
• Judgment Date: 06 December 1995
• Citation: 1996 (1) SA 984 (CC)
• Docket Number: CCT 5/95
• Hearing Date: 09 May 1995
• Counsel: R D Levin SC (with him D Unterhalter) for the applicants in both applications. S A Cilliers SC (with him R Strydom) for the second respondents in the Ferreira application. C Edeling for the third respondent in the Vryenhoek application. W H Trengove SC (with him G J Marcus) for the amici curiae (J S N Fourie and others).
• Court: Constitutional Court

Ackermann J:

The issues

F [1] The two referrals before us (the 'Ferreira referral' and the 'Vryenhoek referral') were heard together for the sake of convenience (as they were in the Witwatersrand Local Division of the Supreme Court by Van Schalkwyk J) because identical issues arise in both cases. These issues concern the alleged inconsistency of certain provisions in s 417 of the G Companies Act 61 of 1973, as amended ('the Act'), relating to the examination of persons in winding-up proceedings, with the Constitution of the Republic of South Africa 200 of 1993 ('the Constitution' or 'the transitional Constitution'). Section 417 of the Act provides as follows -

'417. Summoning and examination of persons as to affairs of company.

H (1) In any winding-up of a company unable to pay its debts, the Master or the Court may, at any time after a winding-up order has been made, summon before him or it any director or officer of the company or person known or suspected to have in his possession any property of the company or believed to be indebted to the company, or any person whom the Master or I the Court deems capable of giving information concerning the trade, dealings, affairs or property of the company.

(1A) Any person summoned under ss (1) may be represented at his attendance before the Master or the Court by an attorney with or without counsel.

(2)(a) The Master or the Court may examine any person summoned under ss (1) on oath or affirmation concerning any matter referred to in that subsection, either orally or on written interrogatories, and may reduce J his answers to writing and require him to sign them.

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(b) A Any such person may be required to answer any question put to him at the examination, notwithstanding that the answer might tend to incriminate him, and any answer given to any such question may thereafter be used in evidence against him.

(3) The Master or the Court may require any such person to produce any books or papers in his custody or under his control relating to the B company but without prejudice to any lien claimed with regard to any such books or papers, and the Court shall have power to determine all questions relating to any such lien.

(4) If any person who has been duly summoned under ss (1) and to whom a reasonable sum for his expenses has been tendered, fails to attend before the aster or the Court at the time appointed by the summons without lawful C excuse made known to the Master or the Court at the time of the sitting and accepted by the Master or the Court, the Master or the Court may cause him to be apprehended and brought before him or it for examination.

(5) Any person summoned by the Master under ss (1) shall be entitled to such witness fees as he would have been entitled to if he were a witness in civil proceedings in a magistrate's court.

D (6) Any person who applies for an examination or enquiry in terms of this section or s 418 shall be liable for the payment of the costs and expenses incidental thereto, unless the Master or the Court directs that the whole or any part of such costs and expenses shall be paid out of the assets of the company concerned.

E (7) Any examination or enquiry under this section or s 418 and any application therefor shall be private and confidential, unless the Master or the Court, either generally or in respect of any particular person, directs otherwise.'

Although the matters before us are referrals, and not appeals or applications in the ordinary sense, the parties will be referred to (and described) as they were in the Court below. F

[2] In the winding-up of two companies unable to pay their debts, the applicants were summoned for examination ('the s 417 examination' or 'the s 417 enquiry') pursuant to the provisions of ss (1) and (2) of s 417 of the Act. During the course of their examination, the applicants in both G the Ferreira and the Vryenhoek cases objected to being compelled, by virtue of the provisions of s 417(2)(b), to answer questions put to them which might tend to incriminate them. They applied to the Witwatersrand Local Division of the Supreme Court for a temporary interdict against the respondents, prohibiting the further interrogation of the applicants pending the determination of the constitutionality of s 417(2)(b) of the Act.

H [3] On 28 November 1994 Van Schalkwyk J dismissed both the applications for interim relief, granted leave to appeal against such dismissal to the Full Bench of the Transvaal Provincial Division or the Witwatersrand Local Division, [*] if the Judge President so directed, and referred the following I matters to the Constitutional Court in terms of s 102(1) of the Constitution:

'1.

Whether s 417(2)(b) of the Companies Act 61 of 1973, as

Ackermann J

A amended ("the Act"), is unconstitutional in that it compels a person summoned to an enquiry to testify and produce documents, even though such person seeks to invoke the privilege against self-incrimination.

2.

Whether evidence given by a person at an enquiry in terms of s 417 of B the Act falls to be excluded in any subsequent criminal proceedings brought against such person where the evidence may be incriminating and was extracted without recognition of such person's privilege against self-incrimination.

3.

Whether a person appearing at an enquiry in terms of s 417 of the Act is entitled to have prior access to:

3.1

C a copy of the record of the examination of all other persons examined at the inquiry;

3.2

all documents in the possession of the liquidator or those prosecuting the inquiry relevant to the interrogation of such person.

4.

D Whether a person is required to give testimony at an inquiry in terms of s 417 which testimony may tend or have the effect of supporting a civil claim against such person.

5.

Whether a person who has given testimony at an enquiry in terms of s 417, which testimony tends to support a civil claim against such E person, may have such testimony excluded in any subsequent civil proceedings.'

The referral took place before the current rules of the Constitutional Court were promulgated on 6 January 1995.

[4] Of the respondents in the two matters, only the second respondent in F the Ferreira application and the third respondent in the Vryenhoek application opposed the relief sought and were represented at the hearing in this Court. The third respondent in the Ferreira application (the Master) lodged a memorandum in the form of an affidavit but did not oppose the relief sought. Certain of the partners and employees of Coopers and Lybrand, the auditors of Prima Bank Holdings Ltd (one of the companies in G liquidation), were granted leave to intervene as amici curiae in terms of Constitutional Court Rule 9 and to present viva voce argument as well. Written memoranda were invited and accepted from the Association of Law Societies, the Public Accountants' and Auditors' Board, the South African H Institute of Chartered Accountants and the Association of Insolvency Practitioners of Southern Africa. We are at the beginning stages of utilising the amicus curiae intervention procedures for which provision is made in Constitutional Court Rule 9. We wish to acknowledge the valuable assistance derived by this Court from the argument on behalf of the amici curiae, J S N Fourie and others, as well as from the memoranda filed by I the above-mentioned professional bodies.

[5] All parties were in agreement (expressly or tacitly) that the matter in para 1 of the order of referral had been properly referred to this Court by Van Schalkwyk J in terms of the provisions of s 102(1) of the Constitution. The correctness of this agreement (or assumption) was not J questioned at the hearing of the matter before us. On reflection, the

Ackermann J

A assumption appears to be wrong in law and the correctness of it, inasmuch as it involves a matter of law (constitutional law in fact), must be considered by this Court. In so doing it is necessary to say something about the meaning and use of s 102(1) in general.

[6] For present purposes the relevant part of s 102(1) provides that: B

'If, in any matter before a Provincial or Local Division of the Supreme Court, there is an issue which may be decisive for the case, and which falls within the exclusive jurisdiction of the Constitutional Court in terms of s 98(2) and (3), the Provincial or Local Division concerned shall, if it considers it to be in the interest of justice to do so, refer C such matter to the Constitutional Court for its decision. . . .'

Section 102(1) does not confer a general discretion on the Court in question to refer matters to the Constitutional Court. The referral is mandatory ('the Provincial or Local Division concerned shall . . . refer') D and the power and duty to refer only arises when the following three conditions are fulfilled:

(a)

there is an issue in the matter before the Court in question which may be decisive for the case;

(b)

such issue falls within the exclusive jurisdiction of the Constitutional Court; and,

(c)

E the Court in question considers it to be in the interests of justice to refer such issue to the Constitutional Court.

(I use the word 'issue' in para (c) above instead of the word 'matter', which appears in the text of s 102(1), because this is the construction F which Didcott J, writing for the Court in S v Vermaas; S v Du Plessis [1] gave to the word 'matter' where it appears for the second time in s 102(1).)

These conditions are conjunctive and all have to be fulfilled before the Court has the power to refer an issue to the Constitutional Court in terms G of s...