MRL3701 Assignment 2 Semester 2024 Answers

MRL3701
Assignment 2 Semester 1 2024

Detailed Solutions, References & Bibliography
Due Date: 9 April 2024
QUESTION 1
a.
In terms of section 8 of the Act, any creditor who is owed more than R100 can apply to court
for the compulsory sequestration of the debtor's estate.
Section 9(1) allows proceedings for the compulsory sequestration of a debtor’s estate.
Court must be satisfied that:
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QUESTION 1
a.
In terms of section 8 of the Act, any creditor who is owed more than R100 can apply
to court for the compulsory sequestration of the debtor's estate.
Section 9(1) allows proceedings for the compulsory sequestration of a debtor’s estate.
Court must be satisfied that:
 The applicant has established a claim which entitles him, in terms of s9(1) to
apply for sequestration of the debtor's estate.
 the debtor has committed an act of insolvency or is insolvent.
 there is reason to believe that it will be to the advantage of creditors of the
debtor if his estate is sequestrated (s12(1))
Onus of satisfying court on these three matters rests throughout on the sequestrating
creditor
b.
Zozo may successfully apply for a court order for the sequestration of Wandile's estate
as she meets the criteria set out in the Insolvency Act.
Firstly, Zozo is a creditor to whom Wandile owes R400,000, which is well above the
threshold of R100 for a creditor to apply for sequestration. This entitles her, in terms
of section 9(1) of the Act, to apply for sequestration of Wandile's estate.
Secondly, Wandile's financial situation demonstrates that he has committed an act of

insolvency or is insolvent. His liabilities exceed his assets by R800,000, and he has
failed to pay some of his debts, including the R400,000 owed to Zozo. This indicates
that he is unable to meet his financial obligations as they become due.
Lastly, there is reason to believe that it will be to the advantage of creditors, including
Zozo, if Wandile's estate is sequestrated. By sequestrating his estate, the trustee can
use his assets to pay off his debts, thereby maximizing the amount that creditors are
able to recover.
Disclaimer
Extreme care has been used to create this document, however the contents are provided “as is” without
any representations or warranties, express or implied. The author assumes no liability as a result of
reliance and use of the contents of this document. This document is to be used for comparison, research
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and reference purposes ONLY. No part of this document may be reproduced, resold or transmitted in any
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form o r b y a n y m e an s.
Therefore, Zozo has established a claim entitling her to apply for sequestration of
Wandile's estate, and there are grounds to believe that the sequestration will be to the
advantage of his creditors. As such, she may successfully apply for a court order for
the sequestration of Wandile's estate.
c.
An act of insolvency refers to a specific action or event that demonstrates the debtor's
inability to pay their debts. It is a legal concept that indicates a clear indication of the
debtor's financial instability and inability to meet their financial obligations. Some
common examples of acts of insolvency include the fraudulent disposal of assets,
absconding or attempting to abscond, and the failure to satisfy a legal order to pay a
debt.
The main purpose of section 8 of the Insolvency Act 24 of 1936 is to provide creditors
with a legal process to seek the compulsory sequestration of a debtor's estate. This
section sets out the criteria that creditors must meet in order to apply for the
sequestration of an individual's estate, including the threshold amount owed to the
creditor and the need to provide evidence of the debtor's insolvency. By outlining the
requirements for compulsory sequestration, section 8 aims to protect the rights of
creditors and provide a structured legal mechanism for dealing with insolvent debtors
Disclaimer
Extreme care has been used to create this document, however the contents are provided “as is” without
any representations or warranties, express or implied. The author assumes no liability as a result of
reliance and use of the contents of this document. This document is to be used for comparison, research
Downloaded by: BradleyCooper12 | [email protected] Want to earn
and reference purposes ONLY. No part of this document may be reproduced, resold or transmitted in any
Distribution of this document is illegal R1 3,6 2 5 p e r y e a r ?
form o r b y a n y m e an s.
Bibliography
Books
Hockly’s Insolvency Law
Case Law
Standard Bank of SA Ltd v Sewpersadh & another 2005 (4) SA 148 (C) 152-3
Ex parte Geeringh 1980 (2) SA 788 (O) 789
Nedbank Ltd v Norton 1987 (3) SA 619 (N)
Legislation
Insolvency Act 24 of 1936

MRL3701 Assignment 2 Semester 2024 Answers

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MRL3701 Assignment 2 Semester 2024 Answers

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MRL3701

Assignment 2 Semester 1 2024

Due Date: 9 April 2024

Secondly, Wandile's financial situation demonstrates that he has committed an act of

Hockly’s Insolvency Law

Ex parte Geeringh 1980 (2) SA 788 (O) 789

Nedbank Ltd v Norton 1987 (3) SA 619 (N)

Insolvency Act 24 of 1936

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