Jaintilal Parbhoo and Others v Arnold Getz NO and Another

The applicants were former directors of Plymouth International (Pty) Limited, which was wound up on 15 October 1996. The first respondent was appointed as liquidator. One of Plymouth's creditors, Commercial Union Trade Finance (Pty) Limited (Cutfin), alleged that the directors had fraudulently inflated the value of Plymouth's outstanding debtors to induce Cutfin to make excessive payments under their discounting agreement. A commission of enquiry was held into Plymouth's affairs under sections 417 and 418 of the Companies Act. During December 1996, the applicants were advised they would be required to attend a meeting of creditors and be interrogated in terms of sections 414 and 415 of the Companies Act. The applicants were concerned that under section 415(3) read with section 415(5), they would be compelled to answer incriminating questions and that their testimony could be used against them in subsequent criminal proceedings. Before the interrogation, they approached the Witwatersrand Local High Court challenging the constitutionality of these provisions. Southwood J granted an unopposed application declaring the provisions constitutionally invalid to the extent they permitted incriminating evidence to be used in criminal proceedings. The matter was referred to the Constitutional Court for confirmation under section 167(5) of the 1996 Constitution.

• Whether section 415(3) read with section 415(5) of the Companies Act 61 of 1973 is inconsistent with the right to a fair trial guaranteed by section 35(3) of the Constitution of 1996
• Whether the provision permitting the use of compelled incriminating evidence in criminal proceedings violates the privilege against self-incrimination
• What procedure should be followed for confirmation of declarations of invalidity by the Constitutional Court in the absence of legislation under section 172(2)(c)
• Whether the Constitutional Court should exercise its inherent power under section 173 to regulate its own process in confirming the High Court's order

The Constitutional Court confirmed the order of Southwood J declaring section 415(3) read with section 415(5) of the Companies Act 1973 invalid to the extent that the words 'any evidence given under this section shall be admissible in any proceedings instituted against the person who gave that evidence' apply to the use of such answers in criminal proceedings against the person who gave the answer, except for proceedings relating to perjury, false evidence, false statements, or failure to answer questions fully and satisfactorily in connection with the interrogation. The Court ordered that no incriminating answer given pursuant to section 415(3) shall be used against the person in criminal proceedings, except for the specified perjury-type offences.

Section 415(3) read with section 415(5) of the Companies Act 61 of 1973, to the extent that it permits incriminating answers compelled under section 415(3) to be used as evidence in criminal proceedings against the person who gave such answers, is inconsistent with the right to a fair trial guaranteed by section 35(3) of the Constitution of 1996 and is therefore constitutionally invalid. The privilege against self-incrimination is inherent in the rights enumerated in section 35(3), including the right to be presumed innocent, to remain silent, and not to be compelled to give self-incriminating evidence. However, such compelled evidence may still be used in criminal proceedings for perjury-type offences relating to the administering or taking of an oath, giving false evidence, making false statements, or failing to answer lawful questions fully and satisfactorily in connection with the interrogation itself. In the absence of legislation under section 172(2)(c) providing for referral of orders of constitutional invalidity to the Constitutional Court, the Court may exercise its inherent power under section 173 of the Constitution to sanction appropriate procedures for confirmation of such orders to avoid legal uncertainty.

The Court made several important observations: (1) It appears undesirable for any court to make an order of constitutional invalidity under section 172(2)(a) concerning the invalidity of an Act of Parliament or provincial Act, where a relevant organ of state is not a party to the proceedings, unless that organ has had an opportunity to intervene. The appropriate stage for the relevant organ of state to adduce evidence is when the court is first seized of the matter, to avoid unnecessary delay and inconvenience at the confirmation stage. (2) The Court noted that the applicants or other interested parties such as the Minister of Trade and Industry or Minister of Justice could have brought an application directly to the Constitutional Court for confirmation under section 172(2)(d), but the High Court judge adopted a cautious, practical and sensible approach by directing the Registrar to refer the matter to avoid leaving the order 'hanging in the air' with legal uncertainty. (3) The Court emphasized that its inherent power under section 173 must be exercised with caution, though it declined to decide whether it is subject to the same constraints that applied to the Appellate Division's inherent powers before the 1996 Constitution. (4) The Court indicated that pending enactment of relevant legislation and rules, it should adopt a procedure that follows as closely as possible the intended purpose of sections 167(5) and 172(2) of the Constitution.

This case is significant in South African constitutional jurisprudence for several reasons: (1) It applied and extended the principles established in Ferreira v Levin regarding the constitutional protection against self-incrimination to interrogations of directors at creditors' meetings under section 415 of the Companies Act. (2) It confirmed that the privilege against self-incrimination is a fundamental component of the right to a fair trial under section 35(3) of the 1996 Constitution, and that compelled incriminating evidence cannot be used in criminal proceedings against the person compelled to testify. (3) It established important procedural precedent for how declarations of invalidity should be referred to and confirmed by the Constitutional Court under sections 167(5) and 172(2) of the Constitution in the absence of specific legislation or rules. (4) It demonstrated the Constitutional Court's willingness to exercise its inherent power under section 173 to regulate its own process in extraordinary circumstances to avoid legal uncertainty. (5) It balanced the legitimate interests of creditors and liquidators in investigating company affairs with fundamental constitutional rights of individuals not to incriminate themselves in criminal proceedings. The case reinforced constitutional supremacy over statutory provisions that violate fair trial rights.