In a milestone development for the legal, insolvency and business rescue communities, the Johannesburg High Court has announced the establishment of a pilot dedicated insolvency court. Effective from 14 April 2025, this initiative aims to streamline the handling of insolvency-related proceedings, providing a structured and expedited process for both applications and trials in insolvency and business rescue matters. The establishment of the dedicated insolvency court is intended to recognize the commercial imperative of expedition in insolvency legal practice and to implement procedures that afford quick turnaround lead times within the existing litigation framework.

Key Highlights from the High Court’s Directives of 10 March 2025:

  1. Objective:  The primary objective of the dedicated insolvency court is to divert all insolvency-related applications from the general motion rolls to a specialised insolvency motion court (IMC).
  1. Procedural Innovations for Applications:
  • The IMC will handle a broad spectrum of insolvency disputes, including sequestration, rehabilitation, winding-up, business rescue proceedings, and reviews of related decisions by the Master of the High Court and other officials. It will also deal with the perfection of security in the context of insolvency and applications to extend the powers of provisional liquidators.
  • The directive outlines the procedure for the enrolment and hearing of insolvency matters, starting with their classification as such at the point of issuing papers, and their enrolment in the fourth week after a request for enrolment is filed. The 4-week cycle (applicable to both unopposed and opposed motions) is intended to eliminate the need for urgent applications in most cases. A case can only be scheduled earlier in exceptional circumstances and must meet the usual urgent motion requirements. The urgent motion court will not handle insolvency cases, except during court recess periods.
  1. Procedural Innovations for Trials: An Insolvency Trial Court will handle more complex insolvency disputes that need oral evidence or a trial, such as actions for impeaching dispositions and section 424 actions under the Companies Act, 1973. Parties involved in insolvency and related actions are required to cooperate to render the case ripe for allocation. Once a case is deemed trial-ready, the parties must approach the Deputy Judge President with a motivated request for the allocation of a trial date. The directive emphasizes compliance with prevailing practice directives to establish trial readiness, including the plaintiff’s attorney making the prescribed statement to that effect.
  1. Transitional Arrangements: Insolvency cases already on the general court rolls will automatically transfer to the dedicated insolvency roll starting 12 May 2025. Practitioners are requested to avoid removing matters set down far into the future to prevent overwhelming the new court.
  1. Evaluation and Future Incorporation: The pilot will be evaluated before being added to the Johannesburg High Court Division’s practice manual. The number of judges for the insolvency roll will depend on availability and the number of cases.

Conclusion

The new dedicated insolvency pilot court in Johannesburg is a welcomed development and aims to speed up insolvency cases and reduce the load on the general motion court rolls. Every effort is needed to make it work so that it becomes a permanent feature. Legal practitioners should familiarize themselves with the new procedures to ensure the success of this initiative.