Bernstein and Others v Bester NO and Others (CCT23/95) [1996] ZACC 2; 1996 (4) BCLR 449; 1996 (2) SA 751 (27 March 1996)

Bernstein and Others v Bester NO and Others (CCT23/95) [1996] ZACC 2; 1996 (4) BCLR 449; 1996 (2) SA 751 (27 March 1996)

Sections 417 and 418 of the Companies Act, as construed in light of the Constitution and the Supreme Court's supervisory powers, are not inconsistent with constitutional rights to freedom, privacy, administrative justice, fairness in civil litigation, or equality. The mechanism for compulsory examination is justified by important public policy objectives, including the need for liquidators to recover assets and protect creditors. The Supreme Court retains jurisdiction to prevent oppressive, vexatious, or unfair application of these provisions. The only unconstitutional aspect, already decided in Ferreira v Levin, is the use of compelled self-incriminating answers in subsequent criminal...

Citation
[1996] ZACC 2
Parties
Applicant: Harold Bernstein and Others; Respondent: L. Von Wielligh Bester NO and Others
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
27 March 1996
Case Number
CCT23/95
Procedural Posture
Constitutional Referral / Final Judgment on Constitutional Validity of Statutory Provisions
Outcome
Sections 417 and 418 of the Companies Act are not inconsistent with the Constitution, except as previously declared invalid regarding the use of compelled self-incriminating answers in criminal proceedings.
Judges
Ackermann, Chaskalson, Mahomed, Madala, Langa, Mokgoro, Ngoepe, Sachs, Kriegler, Didcott, O'Regan
Legal Topics
Companies Act Section 417 and 418, Privilege Against Self Incrimination, Right to Privacy, Administrative Action, Fair Trial Rights, Equality Before the Law
Constitutional Law Commercial and Corporate Civil Procedure Companies Act Section 417 and 418 Privilege Against Self Incrimination Right to Privacy Administrative Action Fair Trial Rights +1 more

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Parties

Harold Bernstein and Others

Applicant

L. Von Wielligh Bester NO and Others

Respondent

Procedural Posture

Constitutional Referral / Final Judgment on Constitutional Validity of Statutory Provisions

Legal Issues

  1. 1 Whether sections 417 and 418 of the Companies Act 61 of 1973 are inconsistent with the Constitution and invalid.
  2. 2 Whether the mechanism for compulsory examination under these sections violates the right to freedom and security of the person, privacy, administrative justice, fairness in civil litigation, or equality.
  3. 3 Whether compelled answers at such enquiries may be used against examinees in subsequent criminal or civil proceedings.

Ratio Decidendi

Sections 417 and 418 of the Companies Act, as construed in light of the Constitution and the Supreme Court's supervisory powers, are not inconsistent with constitutional rights to freedom, privacy, administrative justice, fairness in civil litigation, or equality. The mechanism for compulsory examination is justified by important public policy objectives, including the need for liquidators to recover assets and protect creditors. The Supreme Court retains jurisdiction to prevent oppressive, vexatious, or unfair application of these provisions. The only unconstitutional aspect, already decided in Ferreira v Levin, is the use of compelled self-incriminating answers in subsequent criminal...

Court Disposition

Sections 417 and 418 of the Companies Act are not inconsistent with the Constitution, except as previously declared invalid regarding the use of compelled self-incriminating answers in criminal proceedings.

Orders

  • Save to the extent that section 417(2)(b) was declared invalid in Ferreira v Levin, sections 417 and 418 are declared not inconsistent with the Constitution.
  • All parties are to pay their own costs.