MRL3701 - STUDY UNIT 4 COMPULSORY
SEQUESTRATION(CORRECT ANSWERS ..A+)
REQUIREMENTS - Court must be satisfied:
1. The applicant has established a claim which entitles him, in terms of s9(1) to apply for sequestration
of the debtor's estate.
2. the debtor has committed an act of insolvency or is insolvent
3. 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.
APPLICANT ENTITLED TO APPLY IN TERMS OF s9(1) - Proceedings for the compulsory sequestration of
debtors estate to be instituted by:
a. creditor or his agent who has a liquidated claim against the debtor for not less than R100
b. two or more creditors or their agents who have liquidated claims against the debtor amounting, in
aggregate, to not less than R200.
Agent must be authorised to do so prior to bringing the application. Applicants lack of authority cannot
be cured by ratification once the application has been launched (SOUTH AFRICAN MILLING CO v REDDY.
LIQUIDATED CLAIM - Is a monetary claim - a claim for transfer of property, for instance, does not give
locus to apply, the amount which is fixed by agreement, judgment, or otherwise.
EXAMPLES OF LIQUIDATED CLAIMS - 1. claim for the price of goods sold and delivered (KATHRADA
BROS V ASMAT)
2. claim based upon a provisional sentence judgement (MESKIN V AMOD)
3. a claim for return of the price paid under a sale which has been cancelled due to the sellers
repudiation (BAGATLA BA MAKAU TRIBE)
, 4. Delictual claim for the theft of a fixed and determinable sum of money (Premier Western Cape &
Others v Parker & Mohammed & Others)
5.
EXAMPLES OF UNLIQUIDATED CLAIMS - 1. damages for failure to carry out obligations in terms of a
consent paper (EX PARTE BRUCE)
2. claim for payment of an untaxed attorney and client bill of costs (SIMPSON & LIESCHING V VAN
BREDA)
SECTION 9(2) - Provides that a liquidated claim which has accrued but which is not yet due by the time
the application is heard must be regard as liquidated for these purposes.
PROVISIONALLY SEQUESTRATED - Debtor himself cannot make a payment to the sequestrating creditor
so as the extinguish the latters claim or reduce it below R100 (VENTER v VAN GRAAN)
third party such as surety, may make payment on the debtor's behalf and if the payment extinguishes
the claim or reduces it to less than R100 the provision order must be discharged (JOHANNSBURG
LIVESTOCK CO V HERR)
Creditor is not entitled to refuse payment in full - but may reject part payment by a third person
Where the sequestrating creditor's locus standi is eliminated by a payment, another creditor may
intervene and apply for a further provisional order of sequestration to be granted on discharge of the
first order.
ACTS OF INSOLVENCY - Legislature has designated certain acts or omissions by a debtor as "acts of
insolvency"
An act of insolvency need to be committed vis-a-vis the sequestration creditor. Section 9(1) gives any
creditor of the debtor the right to apply for sequestration once the debtor commits an act of insolvency,
whether or not the debtor directed the act at the creditor concerned or intendedto have any bearing on
that credit's affairs (BEIRA V RAPHAELY-WEINER AND OTHERS)
SEQUESTRATION(CORRECT ANSWERS ..A+)
REQUIREMENTS - Court must be satisfied:
1. The applicant has established a claim which entitles him, in terms of s9(1) to apply for sequestration
of the debtor's estate.
2. the debtor has committed an act of insolvency or is insolvent
3. 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.
APPLICANT ENTITLED TO APPLY IN TERMS OF s9(1) - Proceedings for the compulsory sequestration of
debtors estate to be instituted by:
a. creditor or his agent who has a liquidated claim against the debtor for not less than R100
b. two or more creditors or their agents who have liquidated claims against the debtor amounting, in
aggregate, to not less than R200.
Agent must be authorised to do so prior to bringing the application. Applicants lack of authority cannot
be cured by ratification once the application has been launched (SOUTH AFRICAN MILLING CO v REDDY.
LIQUIDATED CLAIM - Is a monetary claim - a claim for transfer of property, for instance, does not give
locus to apply, the amount which is fixed by agreement, judgment, or otherwise.
EXAMPLES OF LIQUIDATED CLAIMS - 1. claim for the price of goods sold and delivered (KATHRADA
BROS V ASMAT)
2. claim based upon a provisional sentence judgement (MESKIN V AMOD)
3. a claim for return of the price paid under a sale which has been cancelled due to the sellers
repudiation (BAGATLA BA MAKAU TRIBE)
, 4. Delictual claim for the theft of a fixed and determinable sum of money (Premier Western Cape &
Others v Parker & Mohammed & Others)
5.
EXAMPLES OF UNLIQUIDATED CLAIMS - 1. damages for failure to carry out obligations in terms of a
consent paper (EX PARTE BRUCE)
2. claim for payment of an untaxed attorney and client bill of costs (SIMPSON & LIESCHING V VAN
BREDA)
SECTION 9(2) - Provides that a liquidated claim which has accrued but which is not yet due by the time
the application is heard must be regard as liquidated for these purposes.
PROVISIONALLY SEQUESTRATED - Debtor himself cannot make a payment to the sequestrating creditor
so as the extinguish the latters claim or reduce it below R100 (VENTER v VAN GRAAN)
third party such as surety, may make payment on the debtor's behalf and if the payment extinguishes
the claim or reduces it to less than R100 the provision order must be discharged (JOHANNSBURG
LIVESTOCK CO V HERR)
Creditor is not entitled to refuse payment in full - but may reject part payment by a third person
Where the sequestrating creditor's locus standi is eliminated by a payment, another creditor may
intervene and apply for a further provisional order of sequestration to be granted on discharge of the
first order.
ACTS OF INSOLVENCY - Legislature has designated certain acts or omissions by a debtor as "acts of
insolvency"
An act of insolvency need to be committed vis-a-vis the sequestration creditor. Section 9(1) gives any
creditor of the debtor the right to apply for sequestration once the debtor commits an act of insolvency,
whether or not the debtor directed the act at the creditor concerned or intendedto have any bearing on
that credit's affairs (BEIRA V RAPHAELY-WEINER AND OTHERS)
