The constitutionality of section 21 of the Insolvency Act 24 of 1936

• Jurisdiction: South Africa
• Citation: (1998) 9 Stell LR 359
• Pages: 359-372
• Published date: 27 May 2019
• Date: 27 May 2019
• Author: Roger G Evans

THE CONSTITUTIONALITY OF SECTION 21 OF

THE INSOLVENCY ACT 24 OF 1936

Roger G Evans

BLC LLM

Senior Lecturer, University of South Africa

1 Introduction

For a considerable period of time section 21 of the Insolvency Act

1

has been the subject of debate by both the courts and academics.

2

It

was predicted that it would only be a matter of time before the

constitutionality of this provision of the Insolvency Act would be tested

before the Constitutional Court.

3

This then proved to be the case when

the matter of

Harksen v Lane

4

was referred to the Constitutional Court

by the Cape of Good Hope Provincial High Court. The majority

judgment of the Constitutional Court was delivered by Goldstone J on

7 October 1997.

5

This judgment and the dissenting judgment of

O'Regan J will be considered in this contribution.

The applicant in this case was Mrs Harksen whose husband had been

finally sequestrated in 1995. They were married out of community of

property. The first and second respondents were the trustees in the

insolvent estate of Mr Harksen, the third respondent the Master of the

Cape of Good Hope Provincial High Court, and the fourth respondent

the Minister of Justice. None of the respondents were represented in the

Constitutional Court due to insufficient funds being available in the

insolvent estate to allow them to brief counsel, and they agreed to abide

by the decision of the Court. Counsel appeared on behalf of an

amicus

curiae,

the Council of South African Banks.

The application for the referral of this case to the Constitutional Court

was launched on 18 December 1996, prior to the coming into operation

of the Constitution of the Republic of South Africa.

6

Therefore, in

accordance with the provisions of the interim Constitution

?

and the 1996

24 of 1936.

2

See eg

De Villiers NO v Delta Cables (Pty) Ltd

1992 1 SA 9 (A);

Snyman v Rheeder NO

1989 4 SA 496

(T) and the many citations therein; Smith

The Law of Insolvency

(1988) 108; De la Rey

Mars: The Law

of Insolvency in South Africa

8 ed (1988) 165; SA Law Commission

Review of the Law of Insolvency

("Voidable Dispositions and Dispositions that may be set aside and the Effect of Sequestration on the

Spouse of the Insolvent") Working Paper 41 Project 63 (1991); Ailola "The Rights of the Separate

Creditors of a Solvent Spouse — Understanding Section 21 is the Key" 1993

J for Judicial Science

143;

Evans "A Critical Analysis of Section 21 of the Insolvency Act 24 of 1936" 1996

THRHR

613 and 1997

THRHR 71.

3

Evans 1997

THRHR

71 81.

4

(C) 1997-03-25 Case no 16552/96.

5

Reported as

Harksen v Lane NO

1997 11 BCLR 1489 (CC).

6

108 of 1996.

7

S 4(1) and s 7(2) of the Constitution of the Republic of South Africa 200 of 1993 (the interim

Constitution).

359

(1998) 9 Stell LR 359

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