Harksen v Lane NO and Others

Mr Jürgen Harksen’s estate was sequestrated in 1995. His wife, Mrs Jeanette Harksen, was married to him out of community of property and was herself solvent. In terms of section 21 of the Insolvency Act 24 of 1936, the sequestration of Mr Harksen’s estate resulted in all of Mrs Harksen’s property automatically vesting in the Master and thereafter in the trustees, pending proof that such property belonged to her and was protected under the Act. Her property, valued at over R6 million, was attached and not released. She was also summoned under sections 64 and 65 of the Act to be interrogated at creditors’ meetings regarding her own and her husband’s financial affairs. Mrs Harksen challenged the constitutionality of sections 21, 64 and 65 of the Insolvency Act, arguing that they infringed her rights to property, equality, dignity and freedom under the interim Constitution.

Section 21 of the Insolvency Act was declared unconstitutional to the extent that it infringed the equality clause of the interim Constitution. The declaration of invalidity was suspended for a period to allow Parliament to remedy the defect. Sections 64 and 65 of the Insolvency Act were upheld as constitutionally valid.

This case is a leading authority on the constitutional scrutiny of insolvency legislation and introduced a structured equality analysis that later became known as the ‘Harksen test’. It clarified the distinction between deprivation and expropriation of property under South African constitutional law and affirmed that marital status is a protected ground for equality analysis.