Much heartache has levelled the insolvency and business rescue playing field in South Africa from an administrative, general efficiency and legal assurance standpoint. A pilot project aimed at curbing these challenges is the introduction of a dedicated Insolvency Court (“the IC”) at the Gauteng Local Division, Johannesburg High Court which came into effect on 14 April 2025.
The IC has been divided into two forums, namely the Insolvency Trial Court (“ITC”) which handles insolvency-based trials on the one hand and the Insolvency Motion Court (“IMC”) which handles insolvency-based applications on the other.
More particularly, the ITC focuses exclusively on hearing action proceedings pertaining to:
- Impeaching dispositi
- Personal liability of individuals under section 424 of the Companies Act 61 of 1973.
- General insolvency disputes.
Akin to actions in the ordinary course, the IC’s directives clearly place emphasis on the litigating parties ensuring their matters reach trial readiness where-after the parties must approach the Deputy Judge President to motivate and request a trial date.
The IMC will deal with insolvency-based applications in connection with:
- Liquidation and business rescue.
- Sequestration and rehabilitation
- Reviews relating to decisions or acts of the Masters Office.
- Perfection of security such as security under a notarial bond.
- Extension of powers of provisionally appointed liquidators.
As per the IC’s directives, the IMC operates on a 4-week initial cycle inclusive of issuing and enrolment of the above-mentioned applications and mandates the transfer of all active insolvency cases from the opposed and unopposed motion rolls to an exclusive insolvency roll. Whilst the aim of this structure is intended to remove the need for urgent applications, such applications will be entertained strictly on an ad hoc basis.
It is thus imperative that all legal practioners and the broader public become familiar with the IC and its forums as well as processes to ensure maximum efficiency and benefit to all.
The IC will be evaluated prior to its incorporation into the consolidated practice manual of the Gauteng Local Division which is currently being drafted. Should this pilot initiative be successful, however, specialised insolvency courts will most likely be adopted by high courts in other provinces thereby becoming a permanent feature in the country. Only time will tell.
You may contact me at daniel@caf.co.za or on 021 487 7900 should you have any questions.
Written by Daniel Marcus
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).