In the case of Harksen v Lane NO and Others,32 one of the grounds upon which the
constitutional validity of section 21was challenged was that it was a denial of equality before the law and equal protection before the law and that it constituted unfair
discrimination.33 It was contended, on behalf of Mrs Harksen, that the e¡ect of section 21 was to impose severe burdens, obligations and disadvantages on spouses of
insolvent persons beyond those applicable to other persons with whom the insolvent
had dealings or close relationships or whose property is found in the possession of the insolvent. It was argued that by favouring solvent spouses who are‘traders’, section 21(10), in e¡ect, discriminates against spouses who are not ‘traders’. It was
further submitted that section 21(2) does not ‘save’ the provision, as there may be
innocent reasons why the solvent spouse is not able to establish that the property
belongs to him or her. The court was split 5:4 on this aspect, the majority holding
that section 21 did not violate the right to equality. However, the minority judges
registered strong dissent, and comparison of the viewpoints reveals valuable
insights. the insolvent. It was argued that by favouring solvent spouses who are‘traders’, section 21(10), in e¡ect, discriminates against spouses who are not ‘traders’. It was
further submitted that section 21(2) does not ‘save’ the provision, as there may be
innocent reasons why the solvent spouse is not able to establish that the property
belongs to him or her. The court was split 5:4 on this aspect, the majority holding
that section 21 did not violate the right to equality. However, the minority judges
registered strong dissent, and comparison of the viewpoints reveals valuable
insights.
Goldstone J, delivering the majority judgment, held34 that section 21 di¡erentiated between the solvent spouse and other persons with whom the insolvent had
had dealings and that such di¡erentiation arose from their attributes or characteristics as solvent spouses, namely their usual close relationship with the insolvent
spouse and the fact that they usually live together in a common household. However, Goldstone J took into account35 the purpose of section 21, i.e. to prevent, or
at least to hamper, collusion between spouses to the detriment of creditors of the
insolvent estate, especially nowadays, with more and more women becoming
economically active and themselves contributing to the property of a common
household, without necessarily keeping accurate records of their contribution.
Goldstone J viewed section 21 as providing crucial assistance to a trustee in determining which property in the possession of spouses belongs to the insolvent estate,
and as a statutory mechanism which is both appropriate and e¡ective, and not arbitrary or without rationality. Further, the learned judge considered the common
law and the statutory remedies relating to impeachable transactions to be insu⁄-
cient to enable the Master or the trustee to ensure that all the property of the insolvent spouse found its way into the insolvent estate. As far as the incidence of onus
was concerned, Goldstone J found that there was good reason to transfer the onus
from the Master or trustee to the solvent spouse in that often facts necessary to
determine the question of ownership would be peculiarly within the knowledge of
the solvent spouse. Support was found for this in Didcott J’s remarks in Prinsloo v
Van der Linde and Another,
36
‘In our adversarial system of civil litigation one side or the other has to bear the onus of proof. Di¡erentiation between the parties in that regard is thus inevitable. So is the disadvantage under which the side carrying the load often labours. Its location for speci¢c
issues depends not on doctrinaire considerations, but on wholly pragmatic ones.’
Thus the majority found that there existed a rational connection between the di¡erentiation and the governmental purpose behind the enactment of section 21, and
that reasonable procedures were introduced to safeguard the interests of the solvent
spouse in his or her property. Goldstone J further held that the discrimination
against solvent spouses was not unfair: they, as a group, had not su¡ered discrimination in the past nor were they vulnerable; section 21 protected the public interest (the rights of the creditors of insolvent estates) and was thus not inconsistent with
the underlying values protected by the right to equality; and the cumulative e¡ect
of section 21, looked at from the perspective of solvent spouses, is the kind of inconvenience and burden that any citizen may face when litigation becomes necessary.
O’Regan J, delivering a minority judgment,37 agreed that there was a rational
connection between the purpose and the provisions of section 21, but was of the
view that the section discriminates on the basis of marital status and on the basis
of personal intimacy. Applying a test for ‘discrimination’ similar to that adopted
by the Honourable L’Heureux-Dube¤ in Egan v Canada,
38 for the purposes of section
15 of the Canadian Charter of Rights and Freedoms, O’Regan J found39 that the
treatment of spouses of insolvents was, in light of comments made by the South
African Law Reform Commission40 and recommendations made by the Cork
Committee, in the United Kingdom,41 anachronistic and that the extent of the
impairment of the solvent spouse’s interests was substantial and su⁄cient to constitute unfair discrimination. Further, O’Regan J held that the invasion caused by
section 21 was out of proportion to its importance, purpose and e¡ects: section 21
catches within its net all spouses of insolvents, even those innocent of collusion,
and all property, no matter how remote the relationship between it and the estate
of the insolvent, yet it does not a¡ect a range of people who may be in a similarly
questionable relationship with the insolvent, for instance, close family members,
personal friends or business associates.
1 answer
In the case of Harksen v Lane NO and Others, Mrs. Harksen challenged the constitutional validity of section 21, claiming it denied equality before the law and unfairly discriminated against spouses of insolvent individuals. Her argument was that the section imposed more burdens on these spouses than on others with ties to the insolvent, particularly favoring solvent spouses who are 'traders.' The court was divided, with a 5-4 majority ruling that section 21 did not violate the right to equality. The majority opinion, delivered by Goldstone J, acknowledged that while the section differentiated between solvent spouses and others, this distinction stemmed from the close living arrangements and relationships typical of spouses. He emphasized the section's purpose was to prevent collusion detrimental to creditors, especially with the increasing economic participation of women. Goldstone J concluded that section 21 was necessary for trustees to identify property belonging to the insolvent estate and that shifting the onus of proof to the solvent spouse was rational, given their knowledge of ownership.
Conversely, O’Regan J, in the minority opinion, recognized a rational purpose behind section 21 but argued it discriminated based on marital status and proximity to the insolvent. She found this discrimination to be outdated and substantial enough to be considered unfair. O’Regan J asserted that the section's broad reach unfairly affected innocent spouses while exempting others in potentially similar relationships with the insolvent, highlighting a disproportionate impact relative to its intended purpose.
