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, MRL3701 Assignment 2 Semester 1 2026 - DUE 24 March 2026
Question 1: Intended Purpose of Section 21 of the Insolvency
Act 24 of 1936 (3 marks)
Section 21 of the Insolvency Act 24 of 1936 deals with the vesting
of the estate of an insolvent in the Master of the High Court. Its
intended purpose is to:
1. Protect the rights of creditors by ensuring that the
insolvent’s estate is preserved and managed in a lawful and
orderly manner.
2. Prevent the insolvent from dissipating assets once the
insolvency proceedings begin, as all property vests in the
Master immediately upon sequestration.
3. Facilitate equitable distribution of assets among creditors by
centralizing control and administration under a neutral authority
(the Master of the High Court).
In short, section 21 ensures that once a person is declared
insolvent, all assets automatically vest in the Master, securing
them for the benefit of creditors.
Question 2: Harksen v Lane 1998 (1) SA 300 (CC) and Section
21 (7 marks)
In Harksen v Lane, the Constitutional Court considered whether
section 21 of the Insolvency Act infringed the applicant’s right to
property under the Interim Constitution. Harksen argued that the
automatic vesting of her property in the Master amounted to
expropriation without compensation.
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, MRL3701 Assignment 2 Semester 1 2026 - DUE 24 March 2026
Question 1: Intended Purpose of Section 21 of the Insolvency
Act 24 of 1936 (3 marks)
Section 21 of the Insolvency Act 24 of 1936 deals with the vesting
of the estate of an insolvent in the Master of the High Court. Its
intended purpose is to:
1. Protect the rights of creditors by ensuring that the
insolvent’s estate is preserved and managed in a lawful and
orderly manner.
2. Prevent the insolvent from dissipating assets once the
insolvency proceedings begin, as all property vests in the
Master immediately upon sequestration.
3. Facilitate equitable distribution of assets among creditors by
centralizing control and administration under a neutral authority
(the Master of the High Court).
In short, section 21 ensures that once a person is declared
insolvent, all assets automatically vest in the Master, securing
them for the benefit of creditors.
Question 2: Harksen v Lane 1998 (1) SA 300 (CC) and Section
21 (7 marks)
In Harksen v Lane, the Constitutional Court considered whether
section 21 of the Insolvency Act infringed the applicant’s right to
property under the Interim Constitution. Harksen argued that the
automatic vesting of her property in the Master amounted to
expropriation without compensation.
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