ASSIGNMENT 1 – SEMESTER 1 – 2017:
1. The legislator has designated certain acts or omissions by a debtor as “acts of insolvency.”
2. A concurrent creditor does not enjoy any advantage over other creditors of the insolvent.
3. Once the new Companies Act 2008 came into effect, the law was divided. Since then, the
winding-up of solvent companies is dealt with in terms of the Companies Act 2008.
4. With regard to a close corporation, there are several important differences between
payments by reason of membership, and salaries or remuneration. The all-important
difference is the difference of capacity.
5. A voluntary business rescue starts with a resolution by the directors of the juristic person
concerned.
6. As a rule, only a Provincial or Local Division of the High Court may adjudicate upon an
insolvency matter.
6.1. True.
7. For sequestration to be to the advantage of creditors it must “yield at the least, a not negligible
dividend.
7.1. True.
8. If a trustee vacates his office, is removed from office, or dies, the estate revests in the insolvent
until a new trustee is appointed.
8.1. False: Correct Statement: the estate revests in the Master until a new trustee is appointed.
9. As a general rule, sequestration suspends or puts an end to a contract.
9.1. False: Correct statement: As a general rule, sequestration does not suspend or put an end to
the contract.
10. A minor is an example of a person absolutely disqualified from being a trustee.
10.1. True.
ASSIGNMENT 1 – SEMESTER 2 – 2017:
1. An application for compulsory sequestration brought by a creditor who is not arm's length is
generally referred to as a friendly sequestration.
2. A landlord who is owed rent has a hypothec over movable property brought on to the leased
premises for use by the tenant.
3. Once the new Companies Act 2008 came into effect, the law was divided. Since then, the
winding up of solvent companies is dealt with in terms of the Companies Act 1973.
4. With regard to a close corporation, there are several important differences between
payments by reason of membership, and salaries or remuneration. The all-important
difference is the difference of capacity.
5. A compulsory business rescue starts with an application to court.
6. The Notice of surrender (and consequently the debtor’s application for surrender) never lapses,
even if the court does not accept the surrender.
, 6.1. False: Correct statement: A notice of surrender lapses if the court does not accept the
surrender when the application is made, or, if the notice of surrender is properly withdrawn
in terms of the act, or, if the debtor fails to make the application for surrender within days
after the date advertised as the date of hearing of the application.
7. An insolvent who brings an action in the magistrate court is obliged to give security for the
costs of the action if the defendant requests it.
7.1. True.
8. Where the joint estate of spouses married in community of property is sequestrated, both
spouses become insolvent and s21, accordingly, has no application.
8.1. True.
9. A special meeting may be called for either of the following purposes: (i) Proof of claims and
(ii) to elect a trustee.
9.1. False: Correct statement: (i) proof of claims and (ii) Interrogation of the insolvent.
10. The Master may remove a trustee from office on the ground that the majority of creditors has
requested in writing that he be removed.
10.1. True.
EXAM: OCTOBER/NOVEMBER 2016:
QUESTION 1:
(a) The terms "sequestration" and "sequestration order" should strictly be used only with
references to a PERSON’S estate. (2)
(b) In Ex parte Henning, the statement of affairs that lay for inspection did not contain the
PERSONAL information (Annexure VIII). (2)
(c) According to section 8(G) of the Insolvency Act it is an act of insolvency if a debtor gives notice
in writing to a creditor that he is unable to pay one or more of his debts. (2)
(d) A debtor may not, without the WRITTEN consent of the trustee, enter into a contract which
adversely affects his estate. (2)
(e) The property of the spouse of the insolvent, where the marriage is out of community of
property, also vests in the trustee of the insolvent estate, until it is RELEASED by the trustee.
(2)
(f) Section 23(8) allows the insolvent to recover for his own benefit compensation for any loss or
damage which he may have suffered, whether before or after sequestration of his estate, by
reason of DEFAMATION or personal injury. (2)
, (g) The trustee is obliged to release property which was acquired by the solvent spouse during
her marriage with the insolvent by a valid TITLE against creditors of the insolvent. (2)
(h) The SEQUESTRATION of an employer’s estate suspends the employment contract between
him and his employees with immediate effect. (2)
(i) If the insolvent has carried out his side of the contract and only the other party’s performance
is outstanding, the right to that performance is an ASSET in the insolvent estate and vests in
the trustee.
(j) After receiving a final sequestration order the Master must immediately convene (cause to
come together) a FIRST meeting of creditors by notice in the Government Gazette. (2)
(k) A nurse who has treated the insolvent’s deceased wife or MINOR CHILD may have a preferent
claim against the insolvent estate if further requirements are met. (2)
(l) Note that as a result of a relative ground for disqualification such a person cannot be a trustee
of a specific insolvent estate. This prohibition differs from the ABSOLUTE grounds for
disqualification where such a person may not be a trustee of any insolvent estate whatsoever.
(2)
(m) The term "disposition" does not include a disposition made in compliance with an ORDER OF
COURT / COURT ORDER (2)
(n) A valid PLEDGE is constituted where there is delivery of movable property to a creditor on the
understanding that it will be retained by him until his claim has been satisfied. (2)
(o) Interest due on a secured claim for a period not exceeding TWO years immediately preceding
the date of sequestration is secured as if it were part of the capital sum. (2)
(p) The rehabilitation of an insolvent is a matter which lies solely within the discretion of the
COURT. (2)
(q) The human beings (the natural persons) who administer the business of the company are its
DIRECTORS. (2)
(r) When a partnership is dissolved because the estate of one of the partners has been
sequestrated, the partnership assets are divided among the partners in terms of the
partnership contract or the COMMON-LAW. (2)
(s) Rehabilitation has the effect of putting an end to the SEQUESTRATION. (2)
(t) Employees are "preferred UNSECURED creditors" for unpaid but due and payable sums of
remuneration, reimbursements for expenses, or other employment-related money before the
business rescue proceedings began.
1. The legislator has designated certain acts or omissions by a debtor as “acts of insolvency.”
2. A concurrent creditor does not enjoy any advantage over other creditors of the insolvent.
3. Once the new Companies Act 2008 came into effect, the law was divided. Since then, the
winding-up of solvent companies is dealt with in terms of the Companies Act 2008.
4. With regard to a close corporation, there are several important differences between
payments by reason of membership, and salaries or remuneration. The all-important
difference is the difference of capacity.
5. A voluntary business rescue starts with a resolution by the directors of the juristic person
concerned.
6. As a rule, only a Provincial or Local Division of the High Court may adjudicate upon an
insolvency matter.
6.1. True.
7. For sequestration to be to the advantage of creditors it must “yield at the least, a not negligible
dividend.
7.1. True.
8. If a trustee vacates his office, is removed from office, or dies, the estate revests in the insolvent
until a new trustee is appointed.
8.1. False: Correct Statement: the estate revests in the Master until a new trustee is appointed.
9. As a general rule, sequestration suspends or puts an end to a contract.
9.1. False: Correct statement: As a general rule, sequestration does not suspend or put an end to
the contract.
10. A minor is an example of a person absolutely disqualified from being a trustee.
10.1. True.
ASSIGNMENT 1 – SEMESTER 2 – 2017:
1. An application for compulsory sequestration brought by a creditor who is not arm's length is
generally referred to as a friendly sequestration.
2. A landlord who is owed rent has a hypothec over movable property brought on to the leased
premises for use by the tenant.
3. Once the new Companies Act 2008 came into effect, the law was divided. Since then, the
winding up of solvent companies is dealt with in terms of the Companies Act 1973.
4. With regard to a close corporation, there are several important differences between
payments by reason of membership, and salaries or remuneration. The all-important
difference is the difference of capacity.
5. A compulsory business rescue starts with an application to court.
6. The Notice of surrender (and consequently the debtor’s application for surrender) never lapses,
even if the court does not accept the surrender.
, 6.1. False: Correct statement: A notice of surrender lapses if the court does not accept the
surrender when the application is made, or, if the notice of surrender is properly withdrawn
in terms of the act, or, if the debtor fails to make the application for surrender within days
after the date advertised as the date of hearing of the application.
7. An insolvent who brings an action in the magistrate court is obliged to give security for the
costs of the action if the defendant requests it.
7.1. True.
8. Where the joint estate of spouses married in community of property is sequestrated, both
spouses become insolvent and s21, accordingly, has no application.
8.1. True.
9. A special meeting may be called for either of the following purposes: (i) Proof of claims and
(ii) to elect a trustee.
9.1. False: Correct statement: (i) proof of claims and (ii) Interrogation of the insolvent.
10. The Master may remove a trustee from office on the ground that the majority of creditors has
requested in writing that he be removed.
10.1. True.
EXAM: OCTOBER/NOVEMBER 2016:
QUESTION 1:
(a) The terms "sequestration" and "sequestration order" should strictly be used only with
references to a PERSON’S estate. (2)
(b) In Ex parte Henning, the statement of affairs that lay for inspection did not contain the
PERSONAL information (Annexure VIII). (2)
(c) According to section 8(G) of the Insolvency Act it is an act of insolvency if a debtor gives notice
in writing to a creditor that he is unable to pay one or more of his debts. (2)
(d) A debtor may not, without the WRITTEN consent of the trustee, enter into a contract which
adversely affects his estate. (2)
(e) The property of the spouse of the insolvent, where the marriage is out of community of
property, also vests in the trustee of the insolvent estate, until it is RELEASED by the trustee.
(2)
(f) Section 23(8) allows the insolvent to recover for his own benefit compensation for any loss or
damage which he may have suffered, whether before or after sequestration of his estate, by
reason of DEFAMATION or personal injury. (2)
, (g) The trustee is obliged to release property which was acquired by the solvent spouse during
her marriage with the insolvent by a valid TITLE against creditors of the insolvent. (2)
(h) The SEQUESTRATION of an employer’s estate suspends the employment contract between
him and his employees with immediate effect. (2)
(i) If the insolvent has carried out his side of the contract and only the other party’s performance
is outstanding, the right to that performance is an ASSET in the insolvent estate and vests in
the trustee.
(j) After receiving a final sequestration order the Master must immediately convene (cause to
come together) a FIRST meeting of creditors by notice in the Government Gazette. (2)
(k) A nurse who has treated the insolvent’s deceased wife or MINOR CHILD may have a preferent
claim against the insolvent estate if further requirements are met. (2)
(l) Note that as a result of a relative ground for disqualification such a person cannot be a trustee
of a specific insolvent estate. This prohibition differs from the ABSOLUTE grounds for
disqualification where such a person may not be a trustee of any insolvent estate whatsoever.
(2)
(m) The term "disposition" does not include a disposition made in compliance with an ORDER OF
COURT / COURT ORDER (2)
(n) A valid PLEDGE is constituted where there is delivery of movable property to a creditor on the
understanding that it will be retained by him until his claim has been satisfied. (2)
(o) Interest due on a secured claim for a period not exceeding TWO years immediately preceding
the date of sequestration is secured as if it were part of the capital sum. (2)
(p) The rehabilitation of an insolvent is a matter which lies solely within the discretion of the
COURT. (2)
(q) The human beings (the natural persons) who administer the business of the company are its
DIRECTORS. (2)
(r) When a partnership is dissolved because the estate of one of the partners has been
sequestrated, the partnership assets are divided among the partners in terms of the
partnership contract or the COMMON-LAW. (2)
(s) Rehabilitation has the effect of putting an end to the SEQUESTRATION. (2)
(t) Employees are "preferred UNSECURED creditors" for unpaid but due and payable sums of
remuneration, reimbursements for expenses, or other employment-related money before the
business rescue proceedings began.
