Minister of Constitutional Development and Another v South African Restructuring and Insolvency Practitioners Association and Others (CCT13/17) [2018] ZACC 20; 2018 (5) SA 349 (CC); 2018 (9) BCLR 1099 (CC) (5 July 2018)

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[2018] ZACC 20
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Minister of Constitutional Development and Another v South African Restructuring and Insolvency Practitioners Association and Others (CCT13/17) [2018] ZACC 20; 2018 (5) SA 349 (CC); 2018 (9) BCLR 1099 (CC) (5 July 2018)

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Heads of arguments

CONSTITUTIONAL
COURT OF SOUTH AFRICA
CCT 13/17
In the
matter between
MINISTER
OF JUSTICE AND CONSTITUTIONAL
DEVELOPMENT
First

Applicant
CHIEF
MASTER OF THE HIGH COURT OF SOUTH
AFRICA
Second

Applicant
and
SOUTH
AFRICAN RESTRUCTURING AND
INSOLVENCY
PRACTITIONERS
ASSOCIATION
First

Respondent
CONCERNED
INSOLVENCY PRACITTIONERS
ASSOCIATION
Second

Respondent
NATIONAL
ASSOCIATION OF MANAGING
AGENTS
Third

Respondent
SOLIDARITY
Fourth

Respondent
VEREENIGING
VAN REGSLUI VIR
AFRIKAANS
Fifth

Respondent
Neutral
Citation:
Minister of Constitutional Development and Another v
South African Restructuring and Insolvency Practitioners Association
and Others
[2018] ZACC 20
Coram:
Zondo ACJ, Cameron J, Froneman J, Jafta J, Kathree˗Setiloane AJ,
Kollapen AJ, Madlanga J, Mhlantla J, Theron J and Zondi
AJ.
Judgments:
Jafta J (majority): [1] to [60]
Madlanga
J (dissenting): [61] to [104]
Heard
on:
2 November 2017
Decided
on:
5 July 2018
Summary:
Section 9(2) of the Constitution — remedial and restitutionary
equality —
Van Heerden
test — arbitrariness and
rationality as separate requirements — rule of law
Van
Heerden
test — reasonably capable of attaining desired
outcome of transformation of the insolvency industry — facts on
record
do not show policy is reasonably likely to achieve equality
Insolvency
Act 24 of 1936
—
section 158
— policy for the appointment
of provisional trustees — ultra vires — displacement of
the Master’s discretion
Insolvency
Act 24 of 1936
—
section 158
— policy for the appointment
of provisional trustees — arbitrary — exclusion of
citizens born on and after 27
April 1994 — no reasons
justifying exclusion
Insolvency
Act 24 of 1936
—
section 158
— policy for the appointment
of provisional trustees — irrational — failure to show
policy is reasonably capable
of achieving equality
ORDER
On
appeal from the Supreme Court of Appeal (hearing an appeal from the
High Court of South Africa, Western Cape Division, Cape Town):
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the
costs of two counsel where applicable.
JUDGMENT
JAFTA J
(Zondo ACJ, Cameron J, Kathree-Setiloane AJ, Mhlantla J, Theron J and
Zondi AJ concurring)
Introduction
[1]
Restitutionary measures are a vital component of
our transformative constitutional order.  The drafters of our
Constitution
were alive to the fact that the abolition of
discriminatory laws and the guarantee of equal rights alone would not
lead to an egalitarian
society envisaged in the Constitution.
Something more had to be done in order to dismantle the injustices
and inequalities
arising from the apartheid legal order.
[1]
Hence the Bill of Rights, which is a cornerstone of our democratic
order, includes remedial measures.
[2]
[2]
Section 9(2) of the Constitution is one of the provisions that
authorises the adoption of remedial measures to address inequality

and advance persons who were disadvantaged by unfair discrimination.
This section provides:
“
Equality includes the full and equal enjoyment of
all rights and freedoms.  To promote the achievement of
equality, legislative
and other measures designed to protect or
advance persons, or categories of persons, disadvantaged by unfair
discrimination may
be taken.”
[3]
At the heart of this matter is the policy adopted
by the Minister of Justice and Constitutional Development which
regulates the
Master’s powers to appoint trustees under the
Insolvency Act.
[3
]
This policy was also designed to govern the appointment
of provisional liquidators in terms of the Companies Act and
liquidators
in terms of the Close Corporations Act.
[4]
Background
[4]
Acting in terms of
section 158
of the
Insolvency Act, section
10(1A)(a) of the Close Corporations Act
and section 339 of the Companies Act read with
section 158(2)
of the
Insolvency Act, the
Minister determined the impugned policy.
Section 158(2)
mandates the Minister to determine policy for the
appointment of trustees by the Master “in order to promote
consistency,
fairness, transparency and the achievement of equality
for persons previously disadvantaged by unfair discrimination”.
[5]
Upon learning about the policy and before it was implemented the
South African Restructuring and Insolvency Practitioners
Association
and the Concerned Insolvency Practitioners Association instituted
separate review applications in the Western Cape
Division of the High
Court.
[5]
The National Association of Managing Agents, Solidarity and
the Vereeniging Van Regslui vir Afrikaans joined the Associations as

applicants in the High Court.  All these parties will be
referred to as the Associations in this judgment.  They cited

the Minister and the Chief Master of the High Court as the
respondents. By agreement the two applications were heard together
and a single judgment was produced by the High Court.
[6]
The Associations divided the relief they sought
into two parts.  With regard to the first part they obtained an
interdict restraining
the applicants from implementing the policy in
question pending a finalisation of the review application.  The
second part
comprised a claim for the review and setting aside of the
policy
[6]
which was impugned on
these grounds—
a. the Minister exceeded his powers in making the policy
which also fettered the Master’s discretion;
b. the policy was irrational;
c. the policy violated the right to equality; and
d. the Minister failed to afford relevant stakeholders
an opportunity to make representations before adopting the policy.
[7]
With regard to the Minister’s alleged
failure to afford stakeholders a hearing in Parliament, the High
Court held that the
enabling provision did not oblige the Minister to
do more than follow the consultation process which had been
undertaken before
the adoption of the policy.
[7]
The High Court dismissed this ground on the basis that it lacked
substance.
[8]
However, the other grounds were upheld.
Relying on
Van Heerden
,
[8]
the High Court reformulated the rationality test.  It
stated that “a measure must be rationally related to the

information available to its designer/formulator at the time of
making his/her decisions” and “must bear a rational

relationship to its objectives”.
[9]
[9]
Following its formulation of the rationality test, the High
Court reviewed the statistical information relied upon by the
applicants
for the proposition that the insolvency industry needed to
be transformed.  Upholding the construction that the information

was inaccurate and insufficient, the High Court held:
“
It is not for a court to interfere with the
Minister’s decision to adopt a particular ratio against any
other.  That
lies firmly within the executive power.
However, there must be at least some evidence that whatever scheme he
adopts is done
so on a rational basis.  It is difficult to
understand how a proper determination of an appropriate policy could
be made with
significant gaps in the information considered by the
Minister.”
[10]
[10]
In relation to whether the policy met the
requirements of section 9(2) of the Constitution, the High Court
considered it necessary
to determine whether the impugned policy
established quotas and whether it catered for the interests of
creditors.  The Court
concluded that the ratios provided for in
the policy were rigid and amounted to quotas which were not permitted
under section 9(2).
[11]
[11]
Regarding the omission in the policy to promote the interests
of creditors the High Court stated:
“
The policy cannot, in forming the basis for
‘transformation of the insolvency industry’, change a
feature of the industry’s
regulatory framework which requires a
proper match between liquidator/trustee and a particular estate.”
[12]
[12]
Consequently, the policy was declared invalid for
being inconsistent with the Constitution.  Dissatisfied with
this declaration
of invalidity, the Minister and the Chief Master
appealed to the Supreme Court of Appeal.  That Court upheld the
High Court’s
conclusion to the effect that the policy does
not meet the requirements of section 9(2) of the
Constitution.
[13]
[13]
The main reason advanced in support of this conclusion was
that, owing to its rigidity, the policy was arbitrary and
capricious.
The Supreme Court of Appeal reasoned:
“
In an endeavour to overcome the rigidity of
clause 7.1 counsel for the Minister and Chief Master argued that the
requisite flexibility
was to be found in the Master’s powers
under clause 7.3.  She submitted that this vested the Master
with a discretion
in every case.  I disagree.  Clause 7.3
does not permit a departure from the appointment process prescribed
in clause
7.1 of the policy.  It provides the Master with a
mechanism, in an ill-defined range of cases, to compensate to some
degree
for the fact that the policy dictates the appointment of
someone not qualified to undertake the task, either because of its
complexity,
or because of their unsuitability – the two are not
mutually exclusive.  This power of appointment does not resolve
the fact that clause 7.1 requires the Master to make an appointment
in accordance with a rigid quota.  After all the unqualified

person is still to be appointed and to have their share in the fees
accruing from the administration of the estate, even though
the
reason for invoking clause 7.3 is that they are not qualified or
unsuitable to perform that task.  The Master’s
ability to
insert a backstop into the process does not detract from the need in
every case to comply with clause 7.1.  The
system is arbitrary
and capricious.”
[14]
[14]
Notably, the Supreme Court of Appeal held that remedial
measures, like the policy we are dealing with here, must be
implemented
progressively.  The Court stated:
“
Remedial measures must therefore operate in a
progressive manner assisting those who, in the past, were deprived,
in one way or
another, of the opportunity to practise in the
insolvency profession.  Such remedial measures must not,
however, encroach,
in an unjustifiable manner, upon the human dignity
of those affected by them.  In particular, as stressed by
Moseneke J in
para 41 of
Van Heerden
,
when dealing with remedial measures, it is not sufficient that they
may work to the benefit of the previously disadvantaged.
They
must not be arbitrary, capricious or display naked preference.
If they do they can hardly be said to achieve the constitutionally

authorised end.  One form of arbitrariness, caprice or naked
preference is the implementation of a quota system, or one so
rigid
as to be substantially indistinguishable from a quota.”
[15]
[15]
In the second concurring judgment, the Supreme Court of Appeal
added a further ground for holding that the impugned policy was
invalid.
It was held that the policy was defective because it
omitted to cater for the wishes and interests of the creditors and as
a result
the policy did not serve the purpose of the relevant
legislation, which is to promote the interests of creditors.  It
was
declared that as a consequence of the omission, the Minister had
exceeded his power in promulgating the policy.
[16]
The Court proceeded to conclude:
“
In their legitimate desire to address past
discrimination and disadvantage, the Minister and the Chief Master
have overlooked the
fundamental purpose of the legislation that
governs the sequestration of estates and the winding-up of companies
and close corporations,
which is to serve the interests of creditors
as conceived by the creditors themselves.  The policy that has
been promulgated
is not directed at that purpose and disavows the
need for the process of appointment that it governs to have regard to
the views
or interests of creditors.  That is an exercise of
power for a purpose other than any for which it was bestowed.
It
should not be difficult for the Minister and the Chief Master
to devise a policy that serves both purposes instead of trying
to
serve one at the expense of the other.”
[16]
Leave
to Appeal
[17]
The Minister and the Chief Master seek leave to appeal the
order issued by the Supreme Court of Appeal.  The matter raises
important constitutional issues.  It concerns the exercise of a
public power to determine policy designed to transform and
redress
the inequality in the insolvency industry.  In defending the
impugned policy the Minister and the Chief Master invoked
section
9(2) of the Constitution.  Therefore, jurisdiction is
established.
[18]
What remains for consideration is whether it will be in the
interests of justice to grant leave.  The legal conclusions
reached
by the Supreme Court of Appeal are at the centre of this
enquiry.  Those conclusions impose conditions under which the
relevant
power may be exercised in the context of section 9(2).
Some of those conditions appear to have been imposed in error.

There are reasonable prospects of success which warrant the granting
of leave.
The
policy
[19]
Before I analyse the conclusion and reasoning of the Supreme
Court of Appeal it is necessary to set out the impugned policy.

Of the seven clauses in the policy, the Associations attacked only
two clauses, namely the sixth and seventh clauses.  These

clauses are essential to the structure and implementation of the
policy.  Clause 6 requires that insolvency practitioners
who
become eligible to be appointed as trustees must appear on a Master’s
list.  This list must be divided into four
categories.
category A must comprise African, Coloured, Indian and Chinese
females who became South African citizens before
27 April 1994.
This being the date on which democracy was established and a
constitutional order came into existence.
Notably the category
does not include people who became citizens on or after 27 April 1994
who belong to these groups
which were disadvantaged by the
discriminatory laws and practices of the apartheid era.
[20]
Category B consists of African, Coloured, Indian and Chinese
men who became South African citizens before 27 April 1994.

Category C must reflect white women who became citizens before
27 April 1994.  Curiously category D comprises white

men irrespective of when they became citizens.  Additionally
African, Coloured, Indian and Chinese practitioners who became

citizens on or after 27 April 1994 fall under this category
regardless of whether they are men or women.  White
women who
gained citizenship on or after that date also come under this
category.  For undisclosed reasons, there is no distinction

drawn between men and women falling under the previously
disadvantaged groups.
[21]
The names of practitioners in each category must be “arranged
in alphabetical order according to their surnames”.
But
the names that are added to the list after its completion do not have
to be arranged in this order.  They must simply
be added at the
end of the relevant category.  The list must also distinguish
between senior and junior practitioners within
each category.  A
senior practitioner is defined as a practitioner who has been
appointed as a trustee at least once in each
year of the preceding
five years.
[22]
The list is crucial to the implementation of the policy.
Clause 7 regulates the appointment of trustees.  It reads:
“
Appointment of insolvency practitioners by
Masters of High Courts
7.1 Insolvency practitioners must be appointed
consecutively in the ratio A4: B3: C2: D1, where—
‘
A’
represents African, Coloured, Indian and Chinese females who became
South African citizens before 27 April 1994;
‘
B’
represents African, Coloured, Indian and Chinese males who became
South African citizens before 27 April 1994;
‘
C’
represents White females who became South African citizens before 27
April 1994;
‘
D’
represents African, Coloured, Indian and Chinese females and males,
and White females, who have become South African citizens
on or after
27 April 1994 and White males who are South African citizens,
and the numbers 4: 3: 2: 1 represent the number of
insolvency practitioners that must be appointed in that sequence in
respect of
each such category.
7.2 Within the different categories on a Master’s
List, insolvency practitioners must, subject to paragraph 7.3, be
appointed
in alphabetical order.
7.3 The Master may, having regard to the complexity of
the matter and the suitability of the next-in-line insolvency
practitioner
but subject to any applicable law, appoint a senior
practitioner jointly with the junior or senior practitioner appointed
in alphabetical
order.  If the Master makes such a joint
appointment, the Master must record the reason therefor and, on
request, provide
the other insolvency practitioner therewith.”
[23]
In mandatory terms, this clause obliges the Master to appoint
practitioners “consecutively in the ratio A4: B3: C2: D1”.

This means that, when the Master needs to appoint a trustee, she must
first look at the practitioners in category A, before she
can proceed
to the other categories.  She may not appoint from the other
categories until four practitioners from category
A have been
appointed.  Their appointment must be made in alphabetical
order.  The clause does not tell us what order
must be followed
in respect of practitioners who are added to the list after its
compilation.  It will be recalled that their
names are simply
added at the end of the list.
[24]
Once the Master has appointed four practitioners from category
A, she may proceed to the next category, namely category B.
She
is required to appoint at least three practitioners from this
category before she can go to category C in which she may appoint
a
minimum of two practitioners before proceeding to category D.
In the latter category she may appoint only one practitioner
and must
then move back to category A.  This is the position despite the
fact that category D is probably the biggest as it
consists of all
races.
[25]
Clause 7 does not permit the Master to deviate from the method
of appointment outlined above.  But if the estate to be managed

is complex and the practitioner next in line for
appointment is not suitable, the clause mandates the Master to
appoint
a suitably qualified senior practitioner in addition to the
unsuitable practitioner.  This is the only occasion where the
Master is allowed to depart from the alphabetical order of
appointments.
[26]
It is now convenient to consider the legal conclusions and
reasoning of the Supreme Court of Appeal.
Ultra
Vires
[27]
In simple terms the concept means that a functionary has acted
outside her powers and as a result the function performed becomes

invalid.  The rule forms part of the principle of legality which
is an integral component of the rule of law.  In
Affordable Medicines
this Court affirmed the principle in
these terms:
“
The exercise of public power must therefore
comply with the Constitution, which is the supreme law, and the
doctrine of legality,
which is part of that law.  The doctrine
of legality, which is an incident of the rule of law, is one of the
constitutional
controls through which the exercise of public power is
regulated by the Constitution.  It entails that both the
legislature
and the executive ‘are constrained by the principle
that they may exercise no power and perform no function beyond that
conferred
upon them by law’.  In this sense the
Constitution entrenches the principle of legality and provides the
foundation
for the control of public power.”
[17]
[28]
Ordinarily, the
ultra vires
principle applies where the
repository of the public power performs a function outside of the
scope of the power conferred.
If the functionary had no power
at all, then the validity of the relevant action is not impugned with
reference to this principle.
It has to be challenged on other
grounds.  In applying the principle in
Affordable Medicines
the Court stated:
“
In
exercising the power to make regulations, the Minister had to comply
with the Constitution, which is the supreme law, and the
empowering
provisions of the Medicines Act.  If, in making regulations the
Minister exceeds the powers conferred by the empowering
provisions of
the Medicines Act, the Minister acts
ultra
vires
(beyond
the powers) and in breach of the doctrine of legality.  The
finding that the Minister acted
ultra
vires
is
in effect a finding that the Minister acted in a manner that is
inconsistent with the Constitution and his or her conduct is

invalid.  What would have been
ultra
vires
under
common law by reason of a functionary exceeding his or her powers, is
now invalid under the Constitution as an infringement
of the
principle of legality.  The question, therefore, is whether the
Minister acted
ultra
vires
in
making regulations that link a licence to compound and dispense
medicines to specific premises.  The answer to this question

must be sought in the empowering provisions.”
[18]
[29]
Here it is not disputed that the Minister was mandated by
section 158(2)
of the
Insolvency Act to
promulgate the impugned
policy.  It will be recalled that this provision authorises the
Minister to determine policy for the
appointment of trustees.
Therefore, he would have acted
ultra vires
, if, in doing so,
he had exceeded the conferred power.  Before the Supreme Court
of Appeal, the Associations had contended
that by obliging the Master
to appoint a practitioner who is next-in-line on the list, the policy
does not regulate the exercise
of a discretion by the Master but
completely erodes the discretion.
Section 18
of the
Insolvency
Act confers
the power of appointing provisional trustees on the
Master and not the Minister.  This appointment is however
subject to the
policy determined by the Minister in terms of
section 158.
The contention made was that in effect the
policy appoints the trustees.
[30]
The Minister and the Chief Master countered this argument by
submitting, with reference to clause 7.3 of the policy, that the
Master
has a discretion to exercise where the matter is complex and
the next-in-line practitioner is not suitable.  From a close
examination of this clause, it appears that the discretion enjoyed by
the Master relates to the appointment of a senior practitioner
to
join the unsuitable one.  The clause stipulates that the Master
may appoint a senior practitioner “jointly with the
junior or
senior practitioner appointed in alphabetical order”.
What emerges from the text of the clause is that the
Master has no
power to exclude the unsuitable practitioner.  Even if the
unsuitable practitioner is senior, the Master may
only pair her with
the second senior, brought in by reason of the complexity of the
matter.
[31]
Although, on the face of it, there is merit in
the argument that the Master’s discretion is dislodged in
respect of the practitioner
appointed according to the alphabetical
order, the Supreme Court of Appeal did not address this argument.
That Court evaluated
an allied submission to the effect that the
policy impermissibly fettered the Master’s discretion.
The Court rejected
this point on the ground that by subjecting the
exercise of power by the Master to the Minister’s policy,
section 18
of the
Insolvency Act fetters
the Master’s
discretion.  Therefore, the Master did not have an unfettered
discretion.
[19]
While
accepting that “there is a considerable restriction informed by
clause 7.1” on the Master’s discretion,
the Court held
that “some discretion remains in terms of clause 7.3”.
[20]
[32]
While it is true that clause 7.3 retains “a
limited residual discretion for the Master”,
[21]
this clause does not apply to the bulk of appointments which are made
in terms of clause 7.1.  In respect of those appointments,
it
appears that the Master has no discretion but to appoint whoever is
next-in-line, even if the practitioner is unsuitable.
Clause
7.3 is triggered only if two conditions are present.  These are:
a complex estate and the unsuitability of the next-in-line

practitioner.  In that event, the Master is free to appoint a
suitable senior practitioner to partner with the unsuitable
one.
Accordingly, clause 7.3 is no answer to the displacement of the
Master’s discretion in respect of appointments
to which clause
7.1 applies.
Legality
[33]
In the second concurring judgment, the Supreme Court of Appeal
held that the impugned policy was in “breach of the principle

of legality” because it omitted to direct the Master to promote
the interests of the creditors when appointing provisional
trustees.
It was stated that this duty flows from the fact that the overarching
purpose of the
Insolvency Act is
to protect and advance the interests
of creditors.  While accepting that the Minister formulated and
designed the policy to
achieve transformation, which is one of the
objects of
section 158(2)
, the Supreme Court of Appeal held that the
Minister acted in violation of the principle of legality by not
adopting a policy that
is consistent with the overall purpose of the
Insolvency Act.
>
[34]
In support of this conclusion that Court reasoned:
“
Given the purpose of the legislation with which
we are concerned, it seems to me that the actions of the Minister in
determining
the policy under
section 158
of the Act, and the actions
that the Master must undertake in terms of that policy, must be in
accordance with the interests of
creditors in the liquidation of the
estate or the winding up of the company or close corporation.
As the policy was
formulated on the basis that those interests were
irrelevant, and on its face it does not recognise or serve those
interests it
was in my view outside the legitimate powers vested in
the Minister and its promulgation involved a breach of the principle
of
legality.”
[22]
[35]
I disagree for two reasons.  First, the expressly stated
objectives of the policy are “to promote consistency, fairness,

transparency and the achievement of equality for persons previously
disadvantaged by unfair discrimination”.  The attainment

of some of these objectives, especially fairness, would advance the
interests of creditors.  The policy seeks to achieve fairness
to
creditors by requiring that the alphabetical list contains only
appropriately qualified insolvency practitioners and, where
a complex
matter arises, and the appointed practitioner is inappropriate to
manage the estate, the Master may then also appoint
a suitable senior
practitioner.  In addition, the policy requires that every
practitioner appointed must timeously lodge a
bond of security with
the Master and it disqualifies a practitioner who has a conflict of
interest from appointment in respect
of the estate where a conflict
arises.  This illustrates the synergy between the overall
objective of the
Insolvency Act and
section 158(2)
which sets out the
purposes for the policy the Minister is mandated to make.
[36]
Second, when the Master appoints provisional
trustees under
section 18
of the
Insolvency Act, the
objective is to
protect the interests of creditors.  While the process of
appointment must accord with the policy determined
by the Minister,
the overarching purpose is to preserve the assets of the insolvent
estate for the benefit of creditors.
Before the first meeting
of creditors, the Master steps into their shoes and is authorised to
give directions to the provisional
trustee, which could be given by
creditors at a meeting.
[23]
In addition, a provisional trustee may not sell the assets of the
estate without authorisation by the Master.  Therefore,
the
scheme of appointment created by the
Insolvency Act and
the policy
made by the Minister are in line with the overarching purpose of the
Insolvency Act.
[37
]
The Supreme Court of Appeal relied on
Gauteng
Gambling Board
for the proposition that the
impugned policy should have required the Master to have regard to the
wishes and interests of creditors.
[24]
But that case does not support this proposition.  It addressed
the issue of professing to exercise power for the attainment
of the
purpose for which the power was conferred, while in fact exercising
it to achieve a different purpose.  This was not
the position
here.  The Minister exercised power to attain the purpose of the
empowering provision.  Accordingly, reliance
on
Gauteng Gambling Board
was misplaced.
Section
9(2)
[38]
This section of the Constitution insulates from
attack measures adopted to protect or advance people who were
disadvantaged by unfair
discrimination.  In
Van Heerden
this Court construed the provision as laying
down three requirements which must be met by a restitutionary measure
for it not to
constitute unfair discrimination.
[25]
The first is whether the measure targets people or a category of
people who had been disadvantaged by unfair discrimination.
The
second is whether the measure is designed to protect and advance such
people.  The third is whether the measure promotes
the
achievement of equality.
[39]
For a restitutionary measure to comply with section 9(2) of
the Constitution, it must be reasonably capable of achieving
equality.
Formulating this requirement in
Van Heerden
,
the Court said:
“
The
second question is whether the measure is ‘designed to protect
or advance’ those disadvantaged by unfair discrimination.

In essence, the remedial measures are directed at an envisaged future
outcome.  The future is hard to predict.  However,
they
must be reasonably capable of attaining the desired outcome.  If
the remedial measures are arbitrary, capricious or display
naked
preference they could hardly be said to be designed to achieve the
constitutionally authorised end.  Moreover, if it
is clear that
they are not reasonably likely to achieve the end of advancing or
benefiting the interests of those who have been
disadvantaged by
unfair discrimination, they would not constitute measures
contemplated by section 9(2).”
[26]
[40]
While the policy targets persons who were disadvantaged by
unfair discrimination, it does not appear from the information on
record
that the policy is likely to transform the insolvency
industry.  Vital to its success is the Master’s list from
which
appointments are to be made.  But there is no clarity on
whether a single list would be applied throughout the country or each

Master would have their own list.  If a single list were to
apply it is not clear how it would be applied by each Master.

In light of the paucity of information on the implementation of the
policy, it cannot be said that the policy is likely to achieve
the
goal of equality.
[41]
But the most serious defect in the policy is to be found in
category D.  It will be recalled that this is the largest
category
because it does not only include white male practitioners
but also practitioners from other races if they became citizens on or

after 27 April 1994.  Here lies the problem.  On the
Minister’s version, the purpose of the policy is to address
the
inequality created by the racist practices of apartheid which
resulted in the current situation of white males constituting
a
majority among practitioners.  The implementation of category D
is unlikely to achieve equality in the future.  This
is because
appointing one practitioner in alphabetical order from this category
entrenches the status quo.  Since white males
are in the
majority, most appointments would go to them.
[42]
Therefore category D perpetuates the disadvantage which the
policy seeks to eradicate.  It lumps African, Coloured, Indian
and Chinese practitioners with the advantaged white males who
dominate the entire industry in terms of numbers and affords
everybody
in this category an equal opportunity of being appointed.
Moreover, the category impermissibly discriminates against other

races on the ground that they became citizens on or after 27 April
1994.  To this extent the policy does not constitute a

restitutionary measure envisaged in section 9(2) of the
Constitution.  A section 9(2) measure may not discriminate
against
persons belonging to the disadvantaged group whose interests
it seeks to advance.
[43]
As observed in
Van
Heerden
, the section 9(2) remedial measures
are “directed at an envisaged future outcome”.
[27]
By placing all those who became citizens on or after 27 April 1994 in
category D, the policy effectively punishes all young
practitioners
who were born on or after that date.  This undermines in a
serious manner the progressive realisation of equality
which the
other parts of the policy are designed to achieve.
[44]
It is apparent from the statement quoted in
paragraph 41 that there is an overlap between the second and the
third requirements
laid down in
Van Heerden
.
While addressing the second requirement which demands that the
restitutionary measure be designed to protect and advance
those who
were disadvantaged by unfair discrimination, Moseneke J stated
that such measure “must be reasonably capable
of attaining the
desired outcome”.
[28]
The outcome referred to here is the achievement of equality.
[45]
And later when dealing with the third requirement Moseneke J
said:
“
The third and last requirement is that the
measure ‘promotes the achievement of equality’.
Determining whether
a measure will in the long run promote the
achievement of equality requires an appreciation of the effect of the
measure in the
context of our broader society.  It must be
accepted that the achievement of this goal may often come at a price
for those
who were previously advantaged.  Action needs to be
taken to advance the position of those who have suffered unfair
discrimination
in the past.”
[29]
[46]
What is common to both the second and third requirements is
the reasonable likelihood that the restitutionary measure concerned
would achieve the purpose of equality.  It is important to note
that during the implementation of such measures, it is inevitable

that those who were previously advantaged would be affected
adversely.  This is the price demanded by the Constitution to

remedy the injustices of the past order and to attain social justice.
[47]
In the course of articulating the second
requirement, reference was also made to arbitrariness and
capriciousness.  It was
stated that measures that are arbitrary,
capricious or display naked preference could not be said to be
designed to achieve a constitutionally
authorised purpose.
While this is correct, the statement must not however be read as
incorporating into the second requirement
the demand that a
restitutionary measure should not be arbitrary or capricious.
These are separate requirements of the Constitution
which are not
restricted to restitutionary measures contemplated in section 9(2)
but apply to the exercise of public power generally.
Just as
the exercise of such power must meet the rationality standard.
[30]
[48]
The facts placed on record by the applicants do not show that
the policy is likely to achieve equality.  Therefore, the second

and third requirements stipulated in
Van Heerden
were not
satisfied.
Arbitrariness
[49]
The Constitution proscribes arbitrary action and
requires that every action taken in the exercise of public power must
be underpinned
by plausible reasons.  Such reasons must justify
the action taken.  If action is taken for no reason or no
justifiable
reason it is arbitrary.
[31]
In
Makwanyane
Ackerman
J stated:
“
We have moved from a past characterised by much
which was arbitrary and unequal in the operation of the law to a
present and a future
in a constitutional state where state action
must be such that it is capable of being analysed and justified
rationally.  The
idea of the constitutional state presupposes a
system whose operation can be rationally tested against or in terms
of the law.
Arbitrariness, by its very nature, is dissonant
with these core concepts of our new constitutional order.  Neither
arbitrary
action nor laws or rules which are inherently arbitrary or
must lead to arbitrary application can, in any real sense, be tested

against the precepts or principles of the Constitution.”
[32]
This
statement was later affirmed by this Court in
Pharmaceutical
Manufacturers
.
[33]
[50]
Although the policy we are concerned with here was adopted in
pursuit of a laudable purpose of transforming the insolvency
industry,
which everyone agrees needs to be transformed, the
implementation of the policy contains arbitrary terms.  The
policy differentiates
between people who were disadvantaged by
discriminatory laws and practices of the past era.  Those who
became citizens before
27 April 1994 enjoy the benefits flowing from
the policy.  It will be recalled that during the apartheid era
millions of black
people were stripped of their South African
citizenship and were declared to be citizens of the so-called
independent homelands.
For no apparent reason, and the
applicants have provided none, the policy restricts its application
to disadvantaged people, who
became citizens before 27 April 1994.
This was the date on which South Africa became a democracy.
[51]
Disadvantaged people who became citizens on 27 April 1994 are
denied the benefits of the policy.  And the policy also does not

apply to those who became citizens after that date.  Instead,
the policy places all these people in the same category as white

males and affords them the same benefits.  Again, no reasons
were advanced for treating previously disadvantaged people in
the
same manner as those who were advantaged, in a measure designed to
eliminate consequences of unfair discrimination and achieve
equality.
[52]
In the absence of reasons justifying it, the unequal operation
of the policy is arbitrary and leads to impermissible
differentiation.
Makwanyane
informs us that:
“
Arbitrariness must also inevitably, by its very
nature, lead to the unequal treatment of persons.  Arbitrary
action, or decision
making, is incapable of providing a rational
explanation as to why similarly placed persons are treated in a
substantially different
way.  Without such a rational justifying
mechanism, unequal treatment must follow.”
[34]
[53]
It is apparent from this statement that arbitrariness
inevitably leads to unequal treatment proscribed by the
Constitution.
I have already illustrated how unequally the
policy treats previously disadvantaged people purely on the basis of
the date on which
they became citizens.  While it is permissible
for the state to differentiate between people, it may not do so in an
arbitrary
fashion.  In
Prinsloo
this Court held:
“
In
regard to mere differentiation the constitutional state is expected
to act in a rational manner.  It should not regulate
in an
arbitrary manner or manifest ‘naked preferences’ that
serve no legitimate governmental purpose, for that would
be
inconsistent with the rule of law and the fundamental premises of the
constitutional state.  The purpose of this aspect
of equality
is, therefore, to ensure that the state is bound to function in a
rational manner.  This has been said to promote
the need for
governmental action to relate to a defensible vision of the public
good, as well as to enhance the coherence and integrity
of
legislation.”
[35]
[54]
The failure by the Minister to provide reasons justifying why
disadvantaged people should be treated differently, on account of the

date on which they became citizens, establishes the arbitrariness of
the policy.  Every action or decision taken in the exercise
of
public power must be supported by plausible reasons.  Those
reasons must show that power was exercised to achieve a legitimate

government purpose, for which that specific power was conferred.
It is those reasons which may insulate the exercise of power
against
a challenge on the ground of arbitrariness.
Rationality
[55]
While there may be an overlap between arbitrariness and
rationality these are separate concepts against which the exercise of
public
power is tested.  Arbitrariness is established by the
absence of reasons or reasons which do not justify the action taken.

Rationality does not speak to justification of the action but to a
different issue.  Rationality seeks to determine the link

between the purpose and the means chosen to achieve such purpose.
It is a standard lower than arbitrariness.  All that
is required
for rationality to be satisfied is the connection between the means
and the purpose.  Put differently, the means
chosen to achieve a
particular purpose must reasonably be capable of accomplishing that
purpose.  They need not be the best
means or the only means
through which the purpose may be attained.
[56]
The discretion to choose suitable means is that of the
repository of public power.  The exercise of that discretion is
not
susceptible to review on the ground of irrationality unless there
is no rational link between the chosen means and the objective
for
which power was conferred.  In
Albutt
this Court
formulated the rationality test in these terms:
“
The executive has a wide discretion in selecting
the means to achieve its constitutionally permissible objectives.
Courts
may not interfere with the means selected simply because
they do not like them, or because there are other more appropriate
means
that could have been selected.  But, where the decision is
challenged on the ground of rationality, courts are obliged to
examine the means selected to determine whether they are rationally
related to the objective sought to be achieved.  What must
be
stressed is that the purpose of the enquiry is to determine not
whether there are other means that could have been used, but
whether
the means selected are rationally related to the objective sought to
be achieved.  And if objectively speaking they
are not, they
fall short of the standard demanded by the Constitution.”
[36]
[57]
Here the primary purpose of the impugned policy is the
transformation of the insolvency industry.  This is one of the
purposes
of
section 158
of the
Insolvency Act which
empowers the
Minister to make policy.  In other words, the impugned policy
constitutes the means adopted by the Minister to
achieve
transformation and equality in an industry dominated by white males.
What needs to be determined is whether there
is a rational link
between the policy and transformation towards equality in the
industry concerned.
[58]
I have already found that the policy is not reasonably capable
of achieving equality.  The reasons supporting this finding are

equally applicable to the rationality enquiry.  This is so
because the failure to prove that the policy is reasonably likely
to
achieve equality must mean that there is no proof of a rational link
between the policy and the purpose sought to be achieved.

Accordingly, I hold that the impugned policy is also irrational.
Consequently, the appeal must fail.
Costs
[59]
Since the Minister and the Chief Master have failed in their
appeal, they are liable for costs.
Order
[60]
In the result the following order is made:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the
costs of two counsel where applicable.
MADLANGA
J (Kollapen AJ and Froneman J concurring):
“
What happens to a dream deferred?
Does it dry up
like a raisin in the sun?
Or fester like a sore—
And then run?
Does it stink like rotten meat?
Or crust and sugar over—
like a syrupy sweet?
Maybe it just sags
like a heavy load.
Or does it explode?
”
[37]
(Emphasis in the original)
[61]
Throughout the many many years of the struggle for freedom,
the greatest dream of South Africa’s oppressed majority was the

attainment of equality.  By that I mean remedial, restitutionary
or substantive equality, not just formal equality.
Pronouncing
itself on the content of this equality, this Court held:
“
[P]ersons belonging to certain categories have
suffered considerable unfair discrimination in the past.  It is
insufficient
for the Constitution merely to ensure, through its Bill
of Rights, that statutory provisions which have caused such unfair
discrimination
in the past are eliminated.  Past unfair
discrimination frequently has ongoing negative consequences, the
continuation of
which is not halted immediately when the initial
causes thereof are eliminated, and unless remedied, may continue for
a substantial
time and even indefinitely.  Like justice,
equality delayed is equality denied.”
[38]
[62]
Contrasting this with formal equality, Currie and De Waal say:
“
Formal equality simply requires that all persons
are equal bearers of rights.  On this view, inequality is an
aberration that
can be eliminated by extending the same rights and
entitlements to all in accordance with the same ‘neutral’
norm or
standard of measurement.  Formal equality does not take
actual social and economic disparities between groups and individuals

into account.  Substantive equality, on the other hand, requires
an examination of the actual social and economic conditions
of groups
and individuals in order to determine whether the Constitution’s
commitment to equality is being upheld.”
[39]
[63]
Has the dream for substantive equality been attained, or does
its attainment continue to be deferred?  In the lives of nations

the 24 years of South African freedom is a very short time.  It
does not require rocket science to realise that at the dawn
of our
constitutional democracy virtually all meaningful fields of human
activity would be dominated by white people.  That
was because
white people were disproportionately better qualified.  That, as
a result of black people being blatantly and
unashamedly denied equal
opportunities.  Even where miraculously black people would have
worked themselves up and attained
equal qualifications, white people
would still be preferred for selection to any meaningful area of
human endeavour through naked
racial and racist preference.
Therefore, the reason white people were – and
continue to be – disproportionately
better qualified
and more experienced is a function of the subjugation of black people
and their exclusion from accessing equal
opportunities through
centuries of colonialism and apartheid.
[64]
The impugned policy is one of many steps taken by the state in
the tortuous, long road towards the attainment of substantive
equality.
The question is whether – in terms of
constitutional prescripts – the policy is a misstep.

The majority judgment by Jafta J says it is; I say it is not.
Why do I say so?
[65]
I agree with the majority judgment’s conclusion that the
view that the policy breaches the principle of legality for failing

to cater for the interests of creditors cannot be upheld.  But I
agree for different reasons.  On what is before us it
is
uncontested that appointments are on the basis that all practitioners
who make it to Masters’ lists are suitably qualified
to
practise as insolvency attorneys.  The very fact that each
practitioner on the list is suitably qualified does cater for
the
interests of creditors.  In the case of complex insolvencies
that cannot be handled by a practitioner appointed for being
the
next-in-line (junior practitioner), clause 7.3 of the policy makes
provision for a senior practitioner to be appointed jointly
with the
junior practitioner.  Clause 7.3 provides:
“
The Master may, having regard to the complexity
of the matter and the suitability of the next-in-line insolvency
practitioner but
subject to any applicable law, appoint a senior
practitioner jointly with the junior or senior practitioner appointed
in alphabetical
order.  If the Master makes such a joint
appointment, the Master must record the reason therefor and, on
request, provide
the other insolvency practitioner therewith.”
[66]
Crucially, nothing in this says the appointment
of the senior practitioner must be subject to the alphabetical order
of practitioners
on a Master’s list.  What is subject to
the list is the appointment of the junior who gets paired with the
senior practitioner.
[40]
Thus in selecting the senior practitioner, the Master is at liberty
to select a practitioner that she or he is satisfied
will be suitably
qualified to handle the complex insolvency.  This too does
ensure that the interests of creditors are protected.
[67]
If the interests of creditors will be said to
have been taken into account only if the views of creditors have been
solicited, that
has the potential of disadvantaging section 9(2)
beneficiaries.
[41]
Largely capital is in the hands of white people.  It follows
that preponderantly it will be them and their entities
who will be
owed money and thus be major players in the insolvency industry.
Experience has shown – and this
is something that is
so in the public domain or “notorious” as to entitle this
Court to take judicial notice of it
[42]
– that
white people and their entities tend to appoint white professionals
for all manner of activity.  So,
factoring the views of
creditors at this stage may well have the effect of skewing the
appointment patterns and watering down what
the policy seeks to
achieve.
[68]
Of importance, there is no statutory requirement
that the input of creditors be solicited on the selection of
provisional
trustees,
which is the only stage to which the impugned policy applies.
[43]
[69]
In this discussion and elsewhere in this judgment
I consciously choose to use “section 9(2) beneficiaries”
because those
that section 9(2) of the Constitution seeks to uplift
largely continue to be disadvantaged.  And – although

commonly used, including in statutes
[44]
– the
term “previously disadvantaged” is a misnomer.
[70]
I also agree with the majority judgment that the lumping with
white men in category D of all practitioners – regardless

of race or gender – who attained citizenship on or
after 27 April 1994 is constitutionally invalid.  And I
agree
with this for the reasons given in the majority judgment.
However, the invalidity does not affect the policy as a whole.

The policy is invalid to the extent that it places in category D
citizens who – but for having attained citizenship
on or after
27 April 1994 – would otherwise have
qualified to be in other categories.
[71]
As for the rest, I disagree with the majority judgment.
Lack
of discretion
[72]
The majority judgment holds that in appointments
made under clause 7.1
[45]
the
policy constitutes a “displacement” of the discretion
conferred on the Master
[46]
by
section 18
of the
Insolvency Act and
is, as a result,
ultra
vires
and inconsistent with
section 18.
[73]
Section 18(1)
of the
Insolvency Act confers
the power on the
Master to appoint a provisional trustee.  It provides:
“
As soon as an estate has been sequestrated
(whether provisionally or finally) or when a person appointed as
trustee ceases to be
trustee or to function as such, the Master may,
in accordance with policy determined by the
Minister
, appoint a provisional trustee to
the estate in question who shall give security to the satisfaction of
the Master for the proper
performance of his or her duties as
provisional trustee and shall hold office until the appointment of a
trustee.”
(Emphasis added.)
The
words “in accordance with policy determined by the Minister”
were inserted in
section 18(1)
by section 3 of the Judicial Matters
Amendment Act.
[47]
[74]
Section 18 itself subjects the Master’s appointment to
the policy determined by the Minister.  That is important.

Mathopo JA writing for the Supreme Court of Appeal
held, correctly:
“
Section 18(1) confers on the Master a power to
make appointments of provisional trustees ‘in accordance with
the policy determined
by the Minister’.  The Master does
not have an unfettered discretion.  That may have been the case
in the past
before the amendments to the Act brought about in 2003,
but it is no longer the case.  The Master’s discretion is
now
to make appointments in accordance with the policy.  So the
existence of the policy cannot be taken as unduly fettering the

Master’s discretion, because the Master only has a discretion
to exercise in accordance with the policy.”
[48]
[75]
In addition, I accept what he held to the effect that a
discretion remains, albeit curtailed.  Here is what he held:
“
I accept for the purposes of argument that the
provisions of section 18 do not mean that the Minister is entitled to
remove all
discretion from the Master.  It merely means that the
Minister may circumscribe the parameters within which the Master
exercises
the discretion.  Viewed in that light there is a
considerable restriction imposed by clause 7.1, but some discretion
remains
in terms of clause 7.3.  If the Master decides that an
estate is a complex estate, or that the next in line practitioner is

unsuitable, they are accorded the power to exercise their discretion
by making an additional appointment of a senior practitioner
to
supplement the appointment made in terms of clause 7.1.  In
doing so the Master is not bound by the requirements of clause
7.1
and may simply appoint a senior practitioner who the Master believes
will remedy the deficiency.  The Master is left to
determine
what is a complex estate and may exercise judgement in regard to the
capabilities of different insolvency practitioners.
There is a
limited residual discretion left for the Master to exercise in making
these appointments.  That suffices to hold
that the Master’s
discretion is not improperly fettered.”
[49]
[76]
The majority judgment rejects the idea of looking
at clauses 7.1 and 7.3 conjointly for purposes of determining whether
a discretion
exists.  Whilst accepting that clause 7.3
retains a limited residual discretion, it holds that this clause
“does
not apply to the bulk of appointments which are made in
terms of clause 7.1”.  It adds that clause 7.3 is
triggered
only when – because of the complexity of an
estate – it becomes necessary to appoint a senior
practitioner
in addition to a junior practitioner.  It then
concludes that clause 7.3 is no answer to the displacement of the
Master’s
discretion in respect of appointments under clause
7.1.
[50]
For me, there
is no reason why the appointment process should be compartmentalised
into discrete components.  What we
should consider is what the
Act that introduces the policy seeks to achieve and whether the
process as a whole is consonant with
that.
[77]
Leaving complex matters aside for a moment, if all
practitioners on Masters’ lists are suitably qualified to
handle insolvencies,
what do the respondents want flexibility for?
Is it a for-the-sake-of-it insistence on flexibility?  It is
exactly flexibility
that may lead to undue preferences of some and
the disadvantaging of others.  Indeed, the stated objectives of
the policy
are “to promote consistency, fairness, transparency
and the achievement of equality for persons previously disadvantaged
by unfair discrimination”.  The possibility of unfair,
unjustified preference is eliminated by this transparent and
consistent process.  Just what is wrong with that?  In my
book, nothing whatsoever.
[78]
Practitioners on Masters’ lists are all suitably
qualified.  “Suitably” is a conscious choice of
word.
This is not necessarily about experience.  With
regard to experience, white people, in particular white men, are
disproportionately
more experienced.  And that is a function of
previous naked racist preferences and the exclusion of other groups
from acquiring
skills and opportunities.  It makes sense then
that no for-the-sake-of-it advantage should be enjoyed by white
people as a
result of their unfairly obtained disproportionate
experience.  If we take the evil that the policy is seeking to
address
seriously, nothing clamantly demands that at times a suitably
qualified practitioner should be skipped for another in the exercise

of a discretion.  Other than the unfairly obtained
disproportionate experience, what more does that other practitioner
have
that the one being skipped does not have?  A simple
practical formula that eliminates any possibility of undue preference
and – at the same time – does not
expose creditors to practitioners that are not suitably qualified

eminently commends itself.  After all, it is a requirement of
the policy that only suitably qualified practitioners should
be on
Masters’ lists.
Quotas,
impermissible rigidity and arbitrariness
[79]
Despite what it held with regard to the argument
on lack of a discretion, the Supreme Court of Appeal held that clause
7.1 requires
that appointments be made in accordance with a rigid
quota.  For a variety of reasons, it held that this was
constitutionally
impermissible.  This Court has in the past
pointed towards the possibility of the use of quotas being
constitutionally impermissible
under certain legislation.
[51]
I do not find it necessary to engage in a debate whether – under
section 9(2) – quotas are
similarly outlawed.
What I will do instead is to remind us of the words of Moseneke J who
said in
Van Heerden
:
“
It is . . . incumbent on courts to scrutinise in
each equality claim the situation of the complainants in society;
their history
and vulnerability; the history, nature and purpose of
the discriminatory practice and whether it ameliorates or adds to
group disadvantage
in real life context, in order to determine its
fairness or otherwise in the light of the values of our Constitution.
In
the assessment of fairness or otherwise a flexible but
‘situation-sensitive’ approach is indispensable because
of shifting
patterns of hurtful discrimination and stereotypical
response in our evolving democratic society.”
[52]
[80]
Thus before invalidating a measure meant to achieve
substantive equality for being rigid, it must be looked at in context
or in
a “situation-sensitive” manner.  It can never
be a one-size-fits-all.  Take the example of
Van Heerden
;
for those members of Parliament who had served even during apartheid,
their pensions – like those of new members – were

funded only by employer and employee contributions.  Likewise,
in
Solidarity
, for appointments to the Department of
Correctional Services there was no avenue other than the one governed
by the policy that
was the subject of the litigation.  This must
be contrasted with the present scenario.  The impugned policy
applies only
to provisional sequestrations.  That means if, as
it is not disputed, the entire industry – at the
provisional
and final stages – was hugely dominated
by white people, they will continue to disproportionately command
more
work in the final stage.  So, by contrast to the
Van
Heerden
and
Solidarity
scenarios and to scenarios that the
proscription of true quotas seeks to address, here – in
addition to what is
governed by the policy – there is
another significant source for white insolvency practitioners to earn
a living.
[81]
Effectively, we are being told to shut our eyes to the
indisputable reality of the domination of the final stage by white
practitioners;
that work is theirs only.  And it should not be
factored into the question of the validity of the policy.  They
are entitled
to fight for something more than what the policy gives
them at the provisional stage.  That is downright outrageous.

The provisional and final stages make up one area of
practice – insolvency practice.  Whatever
perceived
disadvantage white people may seem to suffer under the
policy is compensated for by their undeniable continued dominance at
the
final stage.  I say “perceived” because in a
normal society, which South Africa with its pervading, painful
inequality
is yet to become, there can never be any justification for
white people, a small minority, to disproportionately dominate most
professions and industries, including insolvency practice, as they
do.  Unsurprisingly, upon being engaged during oral argument,

counsel for the first respondent could not justify why appointments
at the final stage should not come into the equation.
[82]
For these reasons the policy takes heed of the
words of Moseneke ACJ writing for the majority in
Solidarity
that remedial measures “must not unduly invade the
human dignity of those affected by them, if we are truly to achieve a
non-racial,
non-sexist and socially inclusive society”.
[53]
[83]
It was suggested that some white practitioners are to close
their practices because of the policy.  What about black
insolvency
practitioners who cannot even begin truly to make a living
in this area of practice because of its unfair, disproportionate
dominance
by white practitioners?  What about black would-be
insolvency practitioners who cannot even make a break into this area
of
practice because of this dominance?  If, for the practices of
white insolvency practitioners to continue in existence, it is

necessary that white people as a group must not only continue to
disproportionately dominate insolvency practice at the final stage

but must also derive more benefit than what the policy has given
them, then tough luck.  After all,
Van Heerden
has
held that remedial measures will have casualties or result in “hard
cases”.  Lest redress towards the attainment
of
substantive equality will move at such a snail pace that the dream
for equality will be as good as not being realised, it just
cannot be
business as usual.
Van Heerden
held:
“
The starting point of equality analysis is almost
always a comparison between affected classes.  However, often it
is difficult,
impractical or undesirable to devise a legislative
scheme with ‘pure’ differentiation demarcating precisely
the affected
classes.  Within each class, favoured or otherwise,
there may indeed be exceptional or ‘hard cases’ or
windfall
beneficiaries.  That however is not sufficient to
undermine the legal efficacy of the scheme.  The distinction
must be
measured against the majority and not the exceptional and
difficult minority of people to which it applies.”
[54]
[84]
The Court quoted
Thibaudeau
with approval.  There the Canadian Supreme Court
said “[t]he fact that [a measure] may create a disadvantage
in
certain exceptional cases while benefiting a legitimate group as a
whole does not justify the conclusion that it is prejudicial”.
[55]
[85]
For these same reasons, I thus cannot agree even with the
Supreme Court of Appeal’s approach on
arbitrariness.
In that approach the Supreme Court of Appeal
nit-pickingly deals with the turns of members in the various groups

to be appointed.  First, it concludes that because category A
comprising African, Coloured, Indian and Chinese women is the

smallest group, the turn of each member in that category will come
round relatively rapidly (four in every ten appointments).

Second, it concludes that the turn of white men and practitioners of
every race and gender born after 27 April 1994, all of whom
are in
category D and whose group is larger, will come around but rarely.
[86]
I am not aware that there is evidence before us that gives
statistics on the numbers of practitioners of every race and gender
born
after 27 April 1994 who thus fall under category D.  But
surely these practitioners are much fewer than white men.  This

follows because – relative to their national
demographics – white men disproportionately dominate

South African legal practice.  If – as I
hold – the other practitioners are to be taken out
of
category D, only white men will remain.  What is the problem
with them getting one in ten appointments?  They should
not, of
necessity, benefit because of being a larger group.  They are a
larger group exactly because racism and patriarchy
placed them at the
top of the pile.  Conversely and by comparison, the women in
category A were – and continue
to be – at
the bottom.  It only makes sense then that redress must
disproportionately afford advantage to
those most affected by racism,
patriarchy and, in the case of women, even misogyny.  This
follows only logically.  Otherwise
things would stay the same.
It thus makes perfect sense that white men should receive the least
amount of work.  As
I said, their situation is ameliorated by
the fact that they continue to dominate appointments at the final
stage.
Van
Heerden
[87]
In
Van Heerden
this Court held:
“
When a measure is challenged as violating the
equality provision, its defender may meet the claim by showing that
the measure is
contemplated by section 9(2) in that it promotes the
achievement of equality and is designed to protect and advance
persons disadvantaged
by unfair discrimination.  It seems to me
that to determine whether a measure falls within section 9(2) the
enquiry is threefold.
The first yardstick relates to whether
the measure targets persons or categories of persons who have been
disadvantaged by
unfair discrimination; the second is whether the
measure is designed to protect or advance such persons or categories
of persons;
and the third requirement is whether the measure promotes
the achievement of equality.”
[56]
[88]
The majority judgment holds that the second and third of these
requirements have not been met.  On the second it holds that
“it
does not appear from the information on record that the policy is
likely to transform the insolvency industry”.
In
substantiating this it says:
“
While the policy targets persons who were
disadvantaged by unfair discrimination, it does not appear from the
information on record
that the policy is likely to transform the
insolvency industry.  Vital to its success is the Master’s
list from which
appointments are to be made.  But there is no
clarity on whether a single list would be applied throughout the
country or
each Master would have their own list.  If a single
list were to apply it is not clear how it would be applied by each
Master.
In light of the paucity of information on the
implementation of the policy, it cannot be said that the policy is
likely to achieve
the goal of equality.”
[57]
[89]
I will assume for a moment that the view that it does not
appear from the information on record that the policy is likely to
transform
the insolvency industry is pegged on what follows it in the
quotation.  On that assumption, this view must fall on the same

basis that I think the rest of what is quoted must fall.  I deal
with that basis shortly.  But if this view is independent
of
what follows it, here is my response.  Manifestly in time the
measure must, and will, transform the insolvency industry.
It
affords section 9(2) beneficiaries significant advantage, albeit in
varying degrees.  Properly applied I do not see how
that
significant advantage cannot eventually uplift these beneficiaries to
a point where the industry will be transformed.
That to me is
so plain as to require no explanation from the applicants.  Once
equality has been attained, there will no longer
be a need to retain
the policy.  In the event that the Minister does not withdraw
it, any person adversely affected by the
continued application of the
policy may well be entitled to bring an equality challenge to
invalidate the policy.  None of
this affects the validity of the
policy today.
[90]
The future cannot always be predicted with
precision; and that is an understatement.  As
Van
Heerden
tells us, “the future is hard
to predict”.
[58]
And “[t]o require a sponsor of a remedial measure to establish
a precise prediction of a future outcome is to set a
standard not
required by section 9(2)
.
Such
a test would render the remedial measure stillborn and defeat the
objective of section 9(2).”
[59]
Courts must exercise caution before knocking down measures calculated
to redress the inequality of the past.  Of course,
a measure
that does not meet the requirements of section 9(2) or any other
constitutional prescripts must be declared invalid.
[91]
Moving to the other parts of the quotation from the majority
judgment set out in paragraph 88, I disagree that there is no clarity

on whether each Master is to have her or his own list.  In so
many words, the very clause that is at the centre of the
attack – clause
7 – makes plain that
each Master has her or his list.  Clause 7.2 refers to
“different categories on
a
Master
’s list”
(emphasis added).  The article “a” and singular
“Master” followed by an apostrophe
suggest that reference
is to a list of an individual Master, or a list of the Master
concerned.  Also, the impugned policy
stipulates that
“insolvency practitioners on
every
Master’s list
must be divided into” the relevant race and gender categories
(emphasis added).  This is supported
by the definition of
“Master” in clause 1 of the policy.  That definition
says “‘Master’ means
a Master, Deputy Master or
Assistant Master
of a High Court
as referred to in the
definition of ‘Master’ in section 1 of the Administration
of Estates Act (Act No. 66 of 1965)”

(emphasis added).  Section 1 of the Administration of Estates
Act provides that “‘Master’, in relation to
any
matter, property or estate, means the Master, Deputy Master or
Assistant Master of a High Court appointed under section 2,
who has
jurisdiction in respect of that matter, property or estate”.
Section 2 of that Act provides that the Minister
shall appoint
a Master in respect of the area of jurisdiction of each division of
the High Court.  Therefore, reference to
a “Master’s
list” can only be reference to the list of an individual
Master.
[92]
Therefore, the conclusion in the majority judgment that “[i]f
a single list were to apply it is not clear how it would be applied

by each Master” falls away.
[93]
The majority judgment’s view that there is paucity of
information on the implementation of the policy appears to be based
on the conclusions: that there is no clarity on whether a single list
would be applied throughout the country or each Master would
have her
or his own list; and that if a single list were to apply it is not
clear how it would be applied by each Master.
I have shown that
those conclusions cannot stand.  That must mean the conclusion
on paucity of information cannot stand as
well.  I do not see
what more can lead to the conclusion reached by the majority
judgment.  Thus it cannot be said that
the policy is not likely
to achieve the goal of equality.  As I say, properly applied,
the policy quite plainly does advantage – and

justifiably so – those that must be uplifted from the
continuing inequality wrought by the legacy of colonialism
and
apartheid.
Rationality
[94]
The majority judgment holds that the policy is irrational for
the same reasons on which it bases its conclusion that the policy is

not reasonably capable of achieving equality.  I counter this by
equally relying on my reasons for disagreeing with that conclusion.
[95]
The respondents raised a few arguments around the
numbers.  For example, it was contended that the 4:3:2:1
formula
[60]
in accordance with
which the policy must be applied was a thumbsuck.  Also, a
suggestion was made that the formula ought to
have had a bearing on
the statistics of practitioners involved in insolvency practice.
[96]
To justify the numbers, the applicants relied on a policy
dated February 2013. That policy explains that the point of reference
was the State Attorneys’ target of 75% for allocating work to
section 9(2) beneficiaries.  But – instead
of
using 75% – numbers that work with ease in practice
(4:3:2:1) were opted for.  This policy also sets out
the 2011
population estimates by Statistics South Africa by population group.
According to these: black women made up 47%
of the population;
black men 44.1%; white women 4.6%; and white men 4.4%.  The
policy notes that the “percentages for
whites according to the
policy allocations are considerably higher than the percentages for
population estimates”.  For
instance, the policy allocates
white women who make up only 4.6% of the population 20% of the work.
The Minister – moving
from national demographics as a
point of reference – adjusted the total of 91.1% for
black people downwards to
a 70% allocation of work.  This had
the effect of allowing white people proportionally more work than
their 9% national demographic.
If anything, the respondents
appear to be criticising the policy on whatever basis they can think
of, no matter how unfounded.
[97]
Still in the line of throwing any criticism they could muster,
the respondents argued that the policy says nothing about what should

happen if the section 9(2) beneficiaries have more work than they can
handle.  The suggestion was that the beneficiaries would

continue taking work with no regard for the fact that they might be
overstretching themselves.  This is downright patronising.

In legal practice it happens all the time that some practitioners
will be inundated with work.  Most know what to do when
they
have enough.  Why the respondents suggest that section 9(2)
beneficiaries will not know what to do and, instead gluttonously
chew
more than they can swallow escapes me.  Yes, human beings being
what they are, there may be some section 9(2) beneficiaries
who may
take more work than they can handle.  That would not be anything
new.  And the normal legal rules that apply
to practitioners who
do not carry out their mandate will apply.  I do not understand
why the respondents want the policy to
cater for every possible
eventuality.  This is unlike the launching of a rocket into
space where, if you lack the necessary
precision, the rocket may
explode, killing the crew and those watching the launch or veer off
in a wrong direction with all the
hazards that this may entail.
The policy is but a measure meant to address socio legal ills
which, although it must
comply with constitutional prescripts, should
not be expected not to have a few shortcomings.
[98]
I see no irrationality in distributing work in a way that uses
the demographic make-up of South Africa as a point of departure in

order to promote equality.  To the extent that there is a
“discrepancy” in the numbers, that works to the advantage

of white people.  Add to that the work that is unaffected by the
policy and which white people continue to dominate.
[99]
If the current make-up of the profession were to be the
guiding standard, the policy would not be transformative at all – it

would simply entrench the status quo.  The demographics of the
profession are what they are exactly because of the discriminatory

policies of colonialism and apartheid.  To use them has the
potential of perpetuating the very imbalance sought to be corrected.
[100]
Quite conceivably, a number of people could come up with a
variety of other suggested policies, including formulae.  Some
could
even be better than the Minister’s policy.  But that
is beside the point because that is not what rationality is about.

In
Democratic Alliance
this Court held:
“
[R]ationality
review is really concerned with the evaluation of a relationship
between means and ends: the relationship, connection
or link (as it
is variously referred to) between the means employed to achieve a
particular purpose on the one hand and the purpose
or end itself.
The aim of the evaluation of the relationship is not to
determine whether some means will achieve the purpose
better than
others but only whether the means employed are rationally related to
the purpose for which the power was conferred.
Once there is a
rational relationship, an executive decision of the kind with which
we are here concerned is constitutional
.”
[61]
[101]
Here there definitely is a rational connection between the
means (that is, the policy) and the purpose of achieving equality.

Therefore, the differentiation made by the policy is not one reached
irrationally.  I might add that in fact, the Minister’s

policy choice is not even arbitrary.
[102]
Without derogating from the point I have just made above, I
can think of only one concrete suggestion that the respondents made
on how the plight of the section 9(2) beneficiaries could be
addressed.  The suggestion was that an earlier 2001
policy – Procedures
for Appointment of Liquidators
and Trustees – should have been retained.  In
terms of that policy a section
9(2) beneficiary was appointed as a
co-provisional trustee.  What that policy meant in practical
terms was that white practitioners
continued to dominate the industry
and section 9(2) beneficiaries were appointed as mere appendages to
them.  I need not dignify
this outrageous suggestion with much
of a counter.  Suffice it to say that it is not only outrageous
but also patronising
of section 9(2) beneficiaries.
Conclusion
[103]
The policy meets the requirements of section 9(2) and thus,
rather than constituting unfair discrimination, promotes the
achievement
of equality.  Also, it is neither irrational nor
arbitrary.
[104]
I would grant leave and uphold the appeal except insofar as
the policy relates to citizens who have been placed on category D for

no reason other than the fact that they became citizens on or after
27 April 1994.  I would invalidate the policy to the extent
of
this placement.
For the
Applicants: R T Williams SC and A L Platt SC instructed by the State
Attorney.
For the
First Respondent: B Manca SC, E van Huyssteen and M Adhikari
instructed by De Klerk & Van Grend Inc.
For the
Second Respondent: M S M Brassey SC instructed by Tintingers Inc.
For the
Fourth Respondent:
M J Engelbrecht instructed by
Serfontein Viljoen & Swart Attorneys
[1]
Bato Star Fishing (Pty) Ltd v Minister of
Environmental Affairs and Tourism
[2004]
ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) at para 74.
[2]
Section 7(1) of the Constitution provides:
“
This
Bill of Rights is a cornerstone of democracy in South Africa.  It
enshrines the rights of all people in our country
and affirms the
democratic values of human dignity, equality and freedom.”
[3]
24 of 1936.
[4]
61 of 1973 and 69 of 1984 respectively.
[5]
The same wording is provided in relation to the appointment of
liquidators in terms of section 10(1A)(a) of the Close Corporations

Act and incorporated into the operation of the Companies Act through
a reading of section 339 of that Act read with
section 158(2)
of the
Insolvency Act.
[6
]
See [19] to [25] for the terms of the policy.
[7]
South African Restructuring and Insolvency
Practitioners Association v Minister of Justice and Constitutional
Development; In
Re: Concerned Insolvency Practitioners Association
NPC v Minister of Justice and Constitutional Development
[2015] ZAWCHC 1
;
2015 (2) SA 430
(WCC);
2015 (4) BCLR
447
(WCC) (High Court judgment) at para 223.
[8]
Minister of Finance v Van Heerden
[2004]
ZACC 3
;
2004 (6) SA 121
(CC);
2004 (11) BCLR 1125
(CC)
(
Van Heerden
).
[9]
High Court judgment at para 165.
[10]
Id at para 177.
[11]
Id at para 231.
[12]
Id at para 156.
[13]
Minister of Justice and Constitutional
Development v South African Restructuring and Insolvency
Practitioners Association
[2016] ZASCA 196
;
2017 (3) SA 95
(SCA) (Supreme Court of Appeal judgment) at para 38.
[14]
Id at para 34.
[15]
Id at para 32.
[16]
Id at para 65.
[17]
Affordable Medicines Trust v Minister of
Health
[2005] ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC) (
Affordable Medicines
)
at para 49.
[18]
Id at para 50.
[19]
Supreme Court of Appeal judgment at para 44.
[20]
Id at para 45.
[21]
Id.
[22]
Id at para 63.
[23]
Section 18(2)
of the
Insolvency Act provides
:
“
At
any time before the meeting of the creditors of an insolvent estate
in terms of section
forty
,
the Master may, subject to the provisions of subsection (3) of this
section, give such directions to the provisional trustee
as could be
given to a trustee by the creditors at a meeting of creditors.”
[24]
Gauteng Gambling Board v MEC for Economic
Development, Gauteng Provincial Government
[2013]
ZASCA 67
;
2013 (5) SA 24
(SCA) at paras 46-7.
[25]
Van Heerden
above n 8
at para 37.
[26]
Id at para 41.
[27]
Id.
[28]
Id.
[29]
Id at para 44.
[30]
Pharmaceutical Manufacturers Association of
South Africa: In re Ex Parte President of the Republic of South
Africa
[2000] ZACC 1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241(CC)
(
Pharmaceutical
Manufacturers
).
[31]
Kadiaka v Amalgamated Beverage Industries
(1999) 20 ILJ 373 (LC);
Bernberg
v De Aar Licensing Board
1947 (2) SA 80
(C)
at 92;
Beckingham v Boksburg Licensing Court
1931 TPD 280
at 282-3; Baxter
Administrative
Law
(Juta & Co Ltd, Cape Town 1989) at
521-2.
[32]
S v Makwanyane
[1995]
ZACC 3
;
1995 (3) SA 391
(CC);
1995 (6) BCLR 665
(CC) at para ….
[33]
Pharmaceutical Manufacturers
above
n 30 at para 84.
[34]
Makwanyane
above n 32
at para 156.
[35]
Prinsloo v Van der Linde
[1997]
ZACC 5
;
1997 (3) SA 1012
(CC);
1997 (6) BCLR 759
(CC) at para 25.
[36]
Albutt v Centre for the Study of Violence and
Reconciliation
[2010] ZACC 4
;
2010 (3) SA
293
(CC);
2010 (5) BCLR 391
(CC) at para 51.
[37]
Hughes, “Harlem” from
Montage of
a Dream Deferred
(Holt, 1951) in Rampersad &
Roessel (eds)
The Collected Poems of
Langston Hughes
(Vintage Classics, New York
1995).  Langston Hughes was an African-American author and
acclaimed poet.  Such was his
acclaim that in 1981 his home in
Harlem, New York City, was awarded New York City Landmark status and
in 1982 it was included
in the National Register of Places (see
https://www.biography.com/people/langston-hughes-9346313).  The
focus of his writings
was the oppression of African-Americans in the
United States of America.
[38]
National Coalition for Gay and Lesbian
Equality v Minister of Justice
[1998] ZACC
15
;
1999 (1) SA 6
(CC);
1998 (12) BCLR 1517
(CC) at para 60.
[39]
Currie and De Waal
The Bill of Rights
Handbook
6 ed (Juta & Co Ltd, Cape Town
2013) at 213.
[40]
See what was held by the Supreme Court of Appeal quoted at [75]
below.
[41]
Section 9(2) of the Constitution provides:
“
Equality
includes the full and equal enjoyment of all rights and freedoms. To
promote the achievement of equality,
legislative and other measures designed to protect or advance
persons, or categories of persons,
disadvantaged by unfair
discrimination may be taken.”
[42]
On circumstances under which courts may take judicial notice, see
S
v Mthimkulu
1975
(4) SA 759
(A) at 765D-E, w
here it was
held:
“
In
my view, a court is entitled to take judicial notice of a process as
notorious and straightforward as weighing on a scale.
No
evidence was necessary to explain this process or to attest its
reliability.”
[43]
That the policy applies only to the appointment of provisional
trustees is provided for in
section 18(1)
of the
Insolvency Act,
which
reads:
“
As
soon as an estate has been sequestrated (whether provisionally or
finally) or when a person appointed as trustee ceases to
be trustee
or to function as such, the Master may, in accordance with policy
determined by the Minister, appoint a provisional
trustee to the
estate in question who shall give security to the satisfaction of
the Master for the proper performance of his
or her duties as
provisional trustee and shall hold office until the appointment of a
trustee.”
[44]
See, for example,
section 2(1)(e)
of the
Skills Development Act 97 of 1998
;
section 4(2)(d)
and (e) of the
Marketing of Agricultural
Products Act 47 of 1996
; and
section 10(1A)
of the
Close
Corporations Act 69 of 1984
.
[45]
These are appointments in terms of which the practitioner
next-in-line on the list is appointed.
[46]
See [32].
[47]
16 of 2003.
[48]
Supreme Court of Appeal judgment above n 13 at para 44.
[49]
Id at para 45.
[50]
See [32].
[51]
In
South African Police Service v Solidarity
obo Barnard
[2014] ZACC 23
;
2014 (6) SA 123
(CC);
2014 (10) BCLR 1195
(CC) (
Solidarity
)
at para 54 Moseneke ACJ, writing for the majority, made the point
that the Employment Equity Act 55 of 1998 prohibits quotas.
[52]
Van Heerden
above n 8
at para 27.
[53]
Solidarity
above n 51
at para 32.
[54]
Van Heerden
above n 8
at para 39.
[55]
Thibaudeau v Canada
[1995]
2 S.C.R 627
at 696.
[56]
Van Heerden
above n 8
at para 37.
[57]
See [40].
[58]
Van Heerden
above n 8
at para 41.
[59]
Id at para 42.
[60]
The ratio of appointments is, respectively, 4:3:2:1 for the A:B:C:D
categories.
[61]
Democratic Alliance v President of South
Africa
[2012] ZACC 24
;
2013 (1) SA 248
(CC);
2012 (12) BCLR 1297
(CC) at para 32.