MRL3701 PORTFOLIO MEMO - OCT./NOV. 2023 - SEMESTER 2 - UNISA - DUE 26 OCTOBER 2023 - DETAILED ANSWERS WITH FOOTNOTES & BIBLIOGRAPHY- DISTINCTION GUARANTEED!

MRL3701 PORTFOLIO MEMO - OCT./NOV. 2023 - SEMESTER 2 - UNISA - DUE 26 OCTOBER 2023 - DETAILED ANSWERS WITH FOOTNOTES & BIBLIOGRAPHY- DISTINCTION GUARANTEED! Question 1 CONFIDENTIAL 8 of 11 1.1 Explain when a formal defect in an application for the sequestration of an insolvent estate will be considered as fatal. (5) 1.2 Explain why the court in Ex Parte Arntzen (Nedbank Ltd as Intervening Creditor) 2013 (1) SA 49 (KZP) held that creditors are more vulnerable in voluntary surrender applications than in compulsory sequestration which then gives rise to the requirement of a higher level of disclosure. (15) 1.3 One of the requirements of the Insolvency Act 24 of 1936 is that one can apply for the sequestration of an estate if you comply with section 8 of the Act. Explain what section 8 of this Act refers to and also describe the main purpose that this section of the Act serves. (10) 1.4 Critically discuss the case of Amod v Khan 1947 (2) SA 432 (N) with reference to the relevant legislation. (10) 1.5 Explain how section 27 of the Insolvency Act 24 of 1936 has the potential to violate section 9(3) of the Constitution of the RSA, 1996. In your answer you should include a discussion on Transformative Constitutionalism. (10) TOTAL QUESTION 1: [50] Question 2 CONFIDENTIAL 9 of 11 2.1 See the table below and match the columns to answer the following questions: (15) (a) (b) (c) (d) (e) MRL3701 October/November 2023 Case Name: Ratio decidendi of the case: Area of Insolvency Law applicable: Estate Wege v Strauss 2932 AD 76 This was an application for rehabilitation. Several cases of abuses of the sequestration process. Attorneys should limit their fees and expenses to those stated in application and trustees may not consent to taxation of attorney's bill without it. The effects of rehabilitation in terms of s 124(3), if the order is granted, is to reinvest insolvent with his estate. Section 29 Insolvency Act 24 of 1936 Sarrahwitz v Maritz NO and Another 2015 (4) SA 491 (CC) Although a betting transaction was an invalid agreement and thus unenforceable in a court of law, payment of such a wavering debt was not a disposition without value. Section 119 Insolvency Act 24 of 1936 Pretorius’ Trustee v Van Blommenstein 1949 (1) SA 267 (O) Regarding the requirement that three-fourths in value and in number of the creditors who proved their claims, must accept the offer of composition to render it valid and enforceable. Rehabilitation and abuse of sequestration proceedings. Ex Parte Snooke 2014 (5) SA 426 (FB) A court must determine whether the defence of “ordinary course of business” and “intention to prefer” is applicable in each case. Section 26 Insolvency Act 24 of 1936 Prinsloo en ‘n Ander v Van Zyl NO 1967 (1) SA 581 (T) The statute did not provide for the transfer of a residential property from the insolvent estate in order to prevent a vulnerable purchaser being left homeless. The purchaser had paid the full purchase price within one year of the contract. This outcome was found to be inconsistent with the Constitution of the Republic of South Africa, 1996 and invalid. Alienation of Land Act 68 of 1981 (as amended) CONFIDENTIAL 10 of 11 You must therefore match three columns; case name, ratio decidendi of the case, and area of Insolvency Law applicable and answer the question as follows on your exam answer sheet (see example below). You have to do so for every question (a) – (e). EXAMPLE: (a) 1. Case name: Magnum Financial Holdings (PTY) Ltd (In Litigation) v Summerly and NNO 1984 (1) SA 160 (W). 2. Ratio decidendi of the case: Can a trust be a debtor? 3. Area of Insolvency Law applicable: A trust can be a debtor and can therefore be sequestrated. 2.2 Rachel is an insolvent. She very much wishes to stand as a candidate in the upcoming municipal elections for the SAD party. Her trustee is of the opinion that she should not begin her political career at this stage. Explain whether Rachel’s trustee may interfere with her intended political career. (5) 2.3 The Master may, under certain circumstances, remove a trustee from office. Name and discuss these instances. (5) TOTAL QUESTION 2: [25] MRL3701 October/November 2023 Question 3 CONFIDENTIAL 11 of 11 3.1 Regarding meetings of creditors, a “Special Meeting” may be called for one of two purposes. Discuss the section regarding “Proof of Claims” only. (5) 3.2 Regarding creditors’ claims, explain the difference between a: (5) (a) Pledge, (b) Right of Retention. 3.3 Daniel’s estate was sequestrated in 2022. His concurrent creditors received no dividend and even had to pay contributions. Daniel has not yet been rehabilitated. He has just won a motorcar to the value of R250 000 in a competition. The trustee of Daniel’s insolvent estate has heard about his good fortune and claims delivery of the car. Explain whether Daniel has to deliver the car to the trustee. (5) 3.4 Ryan approaches you for advice. He is a member of the CozWhyNot Company. He informs you that he knows of many people that simply are not keen to continue being members of this company. He has heard of a winding-up application that members may bring. Explain to him what a “Members’ voluntary winding-up” is. (5) 3.5 Saranda, as member of a Close Corporation, approaches you for advice. She has heard through the grapevine that their Close Corporation will possibly be wound-up by the courts. She does not know what this means. Explain to her the 4 grounds on which a Close Corporation may be wound up by court. (5) © UNISA 2023 MRL3701 October/November 2023 TOTAL QUESTION 3: [25] TOTAL MARKS: [100]