Section 27 of the Insolvency Act 24 of 1936 as a violation of the equality clause of the Constitution of South Africa: a critical analysis

Abstract

This paper examines section 27 of the Insolvency Act 24 of 1936 within the context of the right to equality in section 9 of the Constitution of the Republic of South Africa, 1996 (the Constitution). Section 27 of the Insolvency Act protects benefits arising from an antenuptial contract and given by a man to his wife or to a child born of their marriage, from being set aside as dispositions without value during sequestration proceedings. It excludes men, same-sex partners, children born outside of wedlock and children born to same-sex partners from keeping benefits given to them in an antenuptial contract. It affords such a privilege only to a wife or a child born in the marriage. The right to equality in the Constitution seeks to provide equal benefits before the law to persons in the same or similar positions by prohibiting unfair discrimination. This paper points out that the limitations in section 27 make it vulnerable to constitutional review under section 9(3) of the Constitution on the grounds of marital status, sexual orientation and birth. Certain proposals have been made to develop section 27 to be consistent with the Constitution by amending the definition of spouse in section 21(13) of the Insolvency Act. Such proposals will be considered to illustrate the progress made in reforming the section and to establish whether the reform measures proposed will protect all those affected by the discrimination arising from section 27. The paper concludes that if the proposals are implemented in a future Insolvency Act, they will eliminate the discriminatory effect section 27 has on husbands and wives, civil unions, and children adopted by civil union partners. However, as regards the right to birth, the proposals extend the benefit only to children born of a customary marriage or union, children who are adopted by partners in a civil union, or children who are born to parents who live together as partners in a partnership. Children born outside of marriage or to parents who do not live together in a relationship as partners are still excluded. It is submitted, therefore, that the proposal still distinguishes between the rights afforded to children and still violates the right to birth in section 9(3) of the Constitution.

Keywords: Insolvency; sequestration; dispositions; antenuptial contract; right to equality; discrimination; marital status; sexual orientation; birth; civil union; civil marriages; customary marriages; section 27 of the Insolvency Act 24 of 1936