Minister of Justice and Constitutional Development v Firstrand Bank Limited and Others

Firstrand Bank Limited, as a creditor, obtained a provisional liquidation order against Retail Apparel Group Limited. The Master appointed four provisional liquidators. Acting under a directive from the Minister of Justice and Constitutional Development, purportedly issued in terms of s 371(3) of the Companies Act 61 of 1973, the Master appointed a fifth provisional liquidator, Mr E M Motala. The directive was based on advice that s 371 empowered the Minister to intervene in the appointment of provisional liquidators. Firstrand Bank and others applied to the Durban High Court to review and set aside both the Minister’s directive and Mr Motala’s appointment. The High Court upheld the application, and the Minister alone appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel. The High Court’s order setting aside the Minister’s directive and the appointment of Mr Motala as provisional liquidator was confirmed.

The case authoritatively clarifies that s 371 of the Companies Act does not apply to provisional liquidators and underscores the centrality of the statutory nomination process in liquidation proceedings. It limits ministerial intervention in liquidation appointments and affirms the separation between provisional and final liquidators within the statutory scheme, thereby reinforcing legality and procedural certainty in insolvency administration.