Composition of Master’s panel questioned in court

June 1st, 2012

By Nomfundo Manyathi

A Pretoria liquidator has claimed an initial victory in the High Court after being removed from the Master of the South Gauteng High Court’s previously disadvantaged individuals (PDI) panel of liquidators.

This was after liquidator Cornelia Cloete challenged the Master’s decision to replace the PDI panel with a black economic empowerment (BEE) one, which effectively removed her – as a white woman – from the panel.

On 16 March the North Gauteng High Court, per Preller J, ordered the Master of the South Gauteng High Court to provide reasons within 20 days why Ms Cloete was removed from the PDI panel of liquidators, or alternatively to provide reasons why he failed to appoint her as a PDI curator, liquidator and/or judicial manager in insolvent estates from the panel he administered. In addition, the court ordered the Master to provide a copy of the current policy guidelines regarding the appointments of liquidators and trustees from the PDI/BEE panel.

Ms Cloete, who practises under the style of Xirimele Trustees SA (Pty) Ltd, applied to the court for an order, in terms of s 5(1) of the Promotion of Administrative Justice Act 3 of 2000, to compel the Master to provide specific reasons why she was removed from the panel, alternatively why the Master refused to appoint her as a PDI curator, liquidator and/or judicial manager in insolvent estates from the panel. In addition, Ms Cloete sought an order in terms of the Promotion of Access to Information Act 2 of 2000, ordering the Master to provide certain related documents.

Ms Cloete, who has been a liquidator and curator since 2001, had formerly been a member of the Master’s PDI panel. To qualify to be on this panel, one had to be a South African citizen prior to the interim Constitution who –

  • had no right to vote in the elections due to the apartheid policy in place at the time; and/or
  • is female; and/or
  • has a disability.

However, in 2005 Ms Cloete was removed from the panel, which prompted her to request the policy in effect that regulated the appointment of liquidators. Ms Cloete received two letters from the Master, one stating that the policy did not ‘go as far as addressing the imbalances of the past’ and that a decision was made by the Master’s branch that in each insolvent estate a black liquidator must be appointed.

Following this, the applicant again received appointments as a liquidator. However, in 2009 these appointments decreased.

In the court matter, Ms Cloete’s legal representative, Francois Botes, claimed that the Master had taken a decision to remove all white females from the panel, alternatively to exclude all white females from appointments as liquidators in insolvent estates without providing:

  • adequate notice of the nature and purpose of the proposed administrative action;
  • the applicant with a reasonable opportunity to make any representations;
  • a clear statement of the administrative action;
  • adequate notice of a right of review or internal appeal, if applicable; and
  • the applicant with information of the right to request reasons in terms of s 5 of the Promotion of Administrative Justice Act.

The issues in dispute at the hearing were whether or not a PDI panel existed and whether it included white females, whether the applicant formed part of the panel and whether the Master removed the applicant from this panel.

The Master denied removing Ms Cloete from the PDI panel, stating that no such panel existed. He added that he implemented a black economic empowerment policy when appointing black persons. In addition, the Master’s legal representative, Nano Matlala, stated in a letter that formed part of the court file that the Master had a panel of previously disadvantaged communities, which included Indian, coloured and African people, but excluded white females. In addition, the Master had a panel on which all liquidators and curators were listed.

Mr Botes said that Ms Cloete had no problem with the appointment of black persons, but that she objected to her removal from the PDI panel. Further, if the PDI panel, which included white females, was changed to a BEE panel, which excluded white females, without a decision being taken, the Master’s ‘unilateral conduct’ in amending the panel was unlawful, he claimed.

Following Preller J’s ruling, Mr Botes told De Rebus that once the Master provided the reasons and information, as ordered, he and Ms Cloete would study the reasons and then lodge an application in the High Court to have the Master’s decision reviewed. He added that this application would determine the course for all liquidators on the Master’s panel.

At the time of going to print, Ms Cloete advised De Rebus that the Master had not yet provided the reasons as ordered as he had filed notice of leave to appeal the ruling.

Nomfundo Manyathi,

This article was first published in De Rebus in 2012 (June) DR 12.

De Rebus