The Dignity Jurisprudence of the Constitutional Court of South Africa: Cases and Materials, Volumes I & II

Bernstein

Bernstein and Others v. Bester and Others NNO  () SA  (CC) CASE SUMMARY Facts Following one of the largest financial collapses in South African history, the Cape Provincial Division of the High Court ordered, in terms of sections  and  of the Companies Act, a commission of enquiry into the affairs of certain companies in the Tollgate Group. Mr. Bernstein and other partners and employees of a partnership of chartered accountants that audited the Tollgate Group (“the applicants”) were summoned to the commission of enquiry. The applicants’ attorneys were furnished with a number of issues the commission wished to engage during the questioning of the auditor’s witnesses. However, it became evident to all concerned that the respondent liquidators were considering the civil liability of the auditors and intended to gather evidence to support such a suit during the  and  examinations. In terms of the extant legislation, answers the applicants gave in the sections  and  inquiries could be used against them in any subsequent civil claim. Moreover, the refusal to answer questions during the inquiries could result in imprisonment. On the third day of the examination, the applicants challenged the constitutionality of the proceedings in terms of sections  and  and the examination was deferred. Legal History The applicants had approached the High Court for an order to rescind the previous order of that court to hold a commission of enquiry to the extent that it authorized Bernstein the applicants to be summoned to the commission pursuant to sections  and . They also sought an interdict to prevent the respondents from investigating the auditors’ firm and from using or disclosing evidence given or documents obtained from the applicants. The High Court referred the question of the constitutionality of sections  and  to the Constitutional Court. Issues Does the power to require, on pain of imprisonment, individual people to provide answers in an inquiry into the affairs of a company in receivership, who might, in so answering, leave themselves open to subsequent civil litigation, violate their constitutional rights? Decision of the Constitutional Court The impugned provisions were challenged on the grounds that they were wholly or in part inconsistent with the constitutional rights to freedom and security of the person, privacy, equality, and a fair trial. Justice Ackermann, writing for the majority of the court, rejected these challenges. The court held that the process was necessary to serve an important public interest: enabling the liquidator to determine the assets and the liabilities of the company and distribute them correctly. In addition the High Courts and the Supreme Court of Appeal had already developed, and will continue to develop, a thorough body of case law to regulate the proceedings in terms of sections  and  in order to ensure that they are not “oppressive, vexatious and unfair” (paragraph ). Accordingly, the court concluded that none of the applicants’ rights were violated. The court reasoned as follows: the threat of imprisonment, following a fair procedure and the opportunity for exceptions in justi fiable cases, did not violate the protection of the right to freedom and security of the person. Concerning the right to privacy, Justice Ackermann held that merely requiring a person to be present at an inquiry could not interfere with their right to privacy. While requiring answers to specific questions or the production of specific materials might infringe the right to privacy, the legislation should be interpreted so that personal information irrelevant to the inquiry need not be disclosed. Turning to the right to fair administrative action, Justice Ackermann found that even if the procedure was administrative action—which he doubted—the procedure was entirely fair. He also dismissed the claim under Interim Constitution section  as being the same as the issue under the right to equality, namely that sections  and  permitted a party in civil litigation to gain an unfair advantage. As he could find no comparable holding in any other open and democratic society, Justice Ackermann dismissed this claim as well. Order The court held that apart from those sections of the Companies Act that had been declared invalid in Ferreira v. Levin NO (see previous case)—and which prevented  Bernstein answers from the inquiry from being used in criminal prosecutions—the provisions of sections  and  of the act were not inconsistent with the provisions of the Interim Constitution. Comment The court reaches different conclusions in Ferreira and Bernstein. In Ferreira the court upholds the challenge based on the possibility of criminal...