SCA Finds Racial Quotas ‘Unconstitutional and Irrational’

Written by: Daniël Eloff

On Friday, 2 December 2016, the Supreme Court of Appeal in Bloemfontein handed down one of the strongest judgements with regards to racial quotas.

This case was in front of the SCA after it was appealed from the High Court in Cape Town by the Minister of Justice and Constitutional Development and the Chief Master of the High Court of South Africa. The issue at hand was a policy determining the appointment of insolvency practitioners which implemented a racial quota with regards to the appointment of liquidators. This policy was published by the Minister of Justice and Constitutional Development in the Government Gazette of February 2014 and came into effect at the end of March 2014.

This policy forced the Master of the High Court of South Africa to appoint insolvency practitioners according to the determined ratio across all classes of appointment – without any consideration for the wishes of the creditors.

The Supreme Court of Appeal found that this policy and system is unconstitutional and irrational based on the fact that it only gives regard to race and no other factor. The Court declared it to be unlawful and invalid. In the judgment, the SCA stated that while Transformation is still paramount it must still be remembered that "affirmative action measures are designed to ensure that suitably qualified people, who were previously disadvantaged, have access to equal opportunities and are equitably represented in all occupation categories and levels".

The SCA was wary of the fact that the policy on the appointment of insolvency practitioners amounts to unqualified and unsuitable people being appointed. This goes against section 9(2) of the Constitution as there is no room for flexibility in the appointment of insolvency practitioners, the Court found.

More needs to be done than merely increase numbers of previously disadvantaged people in the profession to appease Transformation goals.

The judgement can be viewed here.

Daniël Eloff is an admitted attorney and the Principal Legal Advisor to the Executive Mayor of Cape Town.