The Constitutional disqualification for unrehabilitated insolvents from being members of Parliament

• Jurisdiction: South Africa
• Date: 01 June 2023
• Pages: 25-42
• Author: Zingapi Mabe
• Published date: 01 June 2023
• DOI: 10.17159/2225-7160/2023/v56a3

Disqualification for unrehabilitated insolvents from being members of Parliament 25

The Constitutional disqualification for

unrehabilitated insolvents from being

members of Parliament

Zingapi Mabe

LLB LLM PhD

Senior Lecturer, Mercantile Law Department, University of Pretoria

SUMMARY

In South Africa, the status of being an unrehabilitated insolvent has many

effects and one of them is the disqualification from being a member of

parliament (MP). This article considers the constitutional disqualification of

unrehabilitated insolvents to serve as MPs within the context of statutory

restrictions that apply to such insolvents. It further discusses the rationale

for the constitutional disqualification of unrehabilitated insolvents to serve

as MPs in light of international guidelines that advocate for the protection

of the income of the debtor that is necessary for the insolvent and his

dependents to live decent lives taking into account possible changing living

standards. The pertinent question is whether such reasons are still

justifiable considering international policy considerations

1Introduction

An insolvent person1 in South Africa faces many disabilities in the form

of statutory disqualifications as regards his or her capacity to earn a

living. While this article focuses on statutory disqualifications that are

imposed on insolvent debtors during sequestration, particularly the

disqualification of an unrehabilitated insolvent from being a member of

parliament (MP), for an understanding of how a debtor becomes an

unrehabilitated insolvent, the nature and methods by which a debtor’s

estate can be sequestrated in South Africa will be discussed briefly.

Insolvency is a status of diminished legal capacity imposed by the

courts on persons whose liabilities exceed their assets.2 This diminished

legal capacity deprives the insolvent of certain rights and certain legal

capacities.3 A person is legally insolvent in South Africa if his or her estate

has been sequestrated by an order of the court.4 The Insolvency Act

1 *This article derives from my PhD doctoral thesis.

The words “insolvent person” and “bankrupt person” are used

interchangeably.

2 Bertelsmann et al Mars The law of insolvency in South Africa (2019) 189;

Sharrock, Van der Linde and Smith Hockly’s insolvency law (2012) 63; Wille,

Du Bois and Bradfield Wille’s principles of South African law (2007) 387.

3Spencer v Standard Building Society 1931 TPD 481 (hereinafter Spencer v

Standard Building Society) 484; Wille, Du Bois and Bradfield (2007) 387.

4 S 2 of the Insolvency Act 24 of 1936 (Insolvency Act or the Act).

Bertelsmann et al (2019) 3; Sharrock, Van der Linde and Smith (2012) 3.

How to cite: Mabe ‘The Constitutional disqualification for unrehabilitated insolvents from being members of

Parliament’ 2023 De Jure Law Journ al 25-42

http://dx.doi.org/10.17159/2225-7160/2023/v56a3

26 2023 De Jure Law Journal

provides for two different methods by which a debtor’s estate can be

sequestrated namely voluntary surrender and compulsory sequestration.

In voluntary surrender, the debtor applies for the sequestration of his

or her estate.5 A court may accept the surrender of the debtor’s estate

and grant a sequestration order if the debtor is insolvent; if he owns

realisable property of sufficient value to defray all costs of sequestration

which will in terms of the Insolvency Act be payable out of the free

residue of the estate; and that it will be to the advantage of creditors of

the debtor if the estate is sequestrated.6 However, before a court can

even consider an application for voluntary surrender, the debtor must

first satisfy the procedural requirements. He or she must publish a notice

of surrender in the Government Gazette and in a newspaper circulating

in the district in which he or she resides.7 Further, a statement of affairs

with supporting documents must be lodged at the Master’s office for

inspection by creditors.8 It is important to note that amongst the things

that must be listed in the statement are the causes of the debtor’s

insolvency.9 Establishing the reason for the insolvency may reveal

whether the insolvency was caused by the debtor’s fraudulent or

dishonest dealings, or whether it was caused by unfortunate financial

disruptions. This has the effect of distinguishing between dishonest

debtors and honest but unfortunate debtors.

In compulsory sequestration, creditors apply for the sequestration of

a debtor’s estate.10 In an application for compulsory sequestration, the

court has the discretion to grant a provisional order of sequestration if it

believes that prima facie11 the applicant has a claim which entitles him

or her to apply for the sequestration of the debtor’s estate. The debtor

has committed an act of insolvency12 or presents facts that indicate that

the debtor is in fact insolvent, or other important facts showing the

debtor’s conduct leading to his or her insolvency.13 Lastly, there is

reason to believe that the sequestration will be to the advantage of

creditors. The court will make a final order of sequestrations if it is

satisfied that the above requirements have been met.14

5 Ss 3 and 6 of the Act.

6S 6 of the Act.

7 S 4(1) of the Act. See Van der Linde, Smith and Calitz Hockly’s law of

insolvency (2022) 28.

8 S 4(6) of the Act.

9 Sharrock, Van der Linde and Smith (2012) 22-23; Bertelsmann et al (2019)

65.

10 Bertelsmann et al (2019) 113.

11 S 10 of the Act. See Van der Linde, Smith and Calitz (2022) 29.

12 S 8 of the Act.

13 S 9(3)(a)(v) of the Act.

14 S 12 of the Act.