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Power, Boundaries & Constitutional Balance
In the previous issue, we explored how Ferreira v Levin reshaped the legal landscape of Section 417 enquiries by introducing constitutional safeguards for witnesses. Today, we turn our attention to the Commissioner – the person tasked with conducting these enquiries – and ask: What is their role, and how far does their power go?
The Commissioner's Mandate
Under Section 418 of the Companies Act, a Commissioner may be appointed to preside over an enquiry into the affairs of a company in liquidation. This person would typically be a magistrate, advocate, or attorney, with experience in this field of law and is empowered to:
- Summon witnesses,
- Examine them under oath,
- Request relevant documentation.
In essence, the Commissioner steps into the shoes of the Master or the Court for the purposes of the enquiry.
Boundaries of Power: Enter Section 35 of the Constitution
While the Commissioner has broad investigative powers, these are not unlimited. The right to remain silent and the protection against self-incrimination, as enshrined in Section 35 of the Constitution, act as a constitutional boundary.
This means that although the Commissioner may solicit responses from witnesses, they must do so within the confines of the amended Section 417 – specifically 417(2)(c), which now provides immunity for self-incriminating testimony.
What Does This Look Like in Practice?
- Witnesses must answer questions, even if the answers are self-incriminating.
- However, those answers cannot be used in criminal proceedings, except in cases of perjury or refusal to cooperate.
- The Commissioner must ensure that witnesses are informed of their rights and that the enquiry does not become a backdoor to criminal prosecution.
Why This Balance is Significant
The Commissioner's role is investigative, not punitive. Their power must be exercised in a way that promotes transparency in liquidation while respecting the constitutional rights of individuals.
This balance is not just a legal technicality – it's essential to maintaining the integrity of the process and ensuring that justice is both done and seen to be done.
In Issue 3, we'll turn our attention to the legal representatives involved in Section 417 enquiries. We will unpack their role, responsibilities, and scope of power, and explore how they help safeguard constitutional rights during these proceedings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
