SOME ADMINISTRATIVE LAW ASPECTS OF STATE REGULATION OF INSOLVENCY LAW REVISITED Musenwa v Master of the North Gauteng High Court (Unreported 54849/10) [2010] ZAGPPHC 190 (5 November 2010)

Juanitta Calitz Juanitta Calitz

doi:10.17159/obiter.v32i3.12249

Abstract

A general analysis of the global norms recognised by international institutions worldwide yields the conclusion that the essential proposition of insolvency practitioners in all systems is the same: that every effective insolvency system requires competent and ethical insolvency practitioners who should have the experience and expertise necessary to deal with the range of business and legal issues which arise in insolvency matters. In Standard Bank v The Master of the High Court (2010 4 SA 405 (SCA)) the Supreme Court of Appeal also held that liquidators occupy a position of trust towards creditors and companies in liquidation and that they are required to beindependent, to regard equally the interests of all creditors, and to carry out their duties without fear, favour or prejudice. This contribution is a discussion of the recent decision in Musenwa v Master of the North Gauteng High Court ((Unreported) 54849/10) [2010]ZAGPPHC 190 (5 November 2010)) in which the core issue was to decide on the competence and integrity of an insolvency practitioner in order to decide whether the Master of the High Court (Master) acted lawfully in removing the practitioner from its panel. The note will attempt to underline the importance of a fresh approach by policy and law makers to the concept of regulation of South African insolvency law.

Highlights

A general analysis of the global norms recognised by international institutions worldwide yields the conclusion that the essential proposition of insolvency practitioners in all systems is the same: that every effective insolvency system requires competent and ethical insolvency practitioners who should have the experience and expertise necessary to deal with the range of business and legal issues which arise in insolvency matters (see Principle D8 of the World Bank’s “Principles for Effective Insolvency and Creditor/debtor Regimes” http://siteresources.worldbank.org/INTGILD/Re sources/ICRPrinciples_Jan2011.pdf)
This contribution is a discussion of the recent decision in Musenwa v Master of the North Gauteng High Court ((Unreported) 54849/10) [2010] ZAGPPHC 190 (5 November 2010)) in which the core issue was to decide on the competence and integrity of an insolvency practitioner in order to decide whether the Master of the High Court (Master) acted lawfully in removing the practitioner from its panel
The Master at present acts as regulator in South African insolvency law, but is limited in power and scope to the functions and powers granted within the four corners of the Insolvency Act (see Calitz (LLD thesis, University of Pretoria, 2009 part IV) for a detailed discussion of the administrative law aspects of state regulation in South African insolvency law)

Summary

Introduction

A general analysis of the global norms recognised by international institutions worldwide yields the conclusion that the essential proposition of insolvency practitioners in all systems is the same: that every effective insolvency system requires competent and ethical insolvency practitioners who should have the experience and expertise necessary to deal with the range of business and legal issues which arise in insolvency matters (see Principle D8 of the World Bank’s “Principles for Effective Insolvency and Creditor/debtor Regimes” http://siteresources.worldbank.org/INTGILD/Re sources/ICRPrinciples_Jan2011.pdf (accessed 2011-08-30)). The note will attempt to underline the importance of a fresh approach by policy and law makers to the concept of regulation of South African insolvency law This matter was heard in the urgent court on 18 October 2010 in which the application was for interim interdicts, pending a review of a decision of the Master. The Master concluded that the applicant was implicated in the misappropriation of funds and was not a fit and proper person to be appointed as office-holder in the case in question and should be removed in all those cases where he had previously been appointed He was removed from the Master’s so-called panel of liquidators (par 6). The court believed that the formal enquiry conducted by the Master into the behaviour of the liquidator in this particular estate was sufficient and amounted to a fair hearing (par 12)

Reference to certain matters arising from the judgment

Discussion and Comments

Conclusion