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Fax : 086 096 5452 www.llbexampacksandtutorials.co.za
__________________________________________________________________________________
MRL3701
INSOLVENCY LAW
ASSIGNMENT 2
MEMO
SEMESTER 1
2022
FOOTNOTES AND BIBLIOGRAPHY INCLUDED
9 PAGES
, Assignment 02
QUESTION:
Critically discuss the case of Harksen v Lane 1998 (1) SA 300 (CC) with
reference to the relevant legislation.
For a considerable period of time, section 21 of the insolvency Act1 has been the
subject of debate for both the courts and academics. 2 This section regulates the
position of a solvent spouses 3 during the sequestration of the insolvent's estate. One
of the results of the sequestration of the estate of one of two spouses is that all the
property of the spouse whose estate has not been sequestrated (solvent spouse)
vests in the Master and thereafter in the trustee 4 of the sequestrated estate, as if it
was the property of the sequestrated estate. The trustee is then empowered to deal
with such property as if it were the property of the insolvent, subject to the further
provisions of section 21.
Section 21 has, however, not been received without criticism. 5 The definition of
"spouse" is especially subject to criticism. While section 21 of the act has been
described as a drastic provision, 6 it was predicted that it would only be a matter of
time before the constitutionality of this provision would be tested in the Constitutional
court.7This then proved to be the case when the matter of Harksen v Lane8 was
referred to the Constitutional court. It was argued by the applicant that the vesting of
her assets in the trustee, in terms of section 21 of the act, was unconstitutional in
1
24 of 1936.
2
See eg De Villiers v Delta Cables (Pty) Ltd 1992 1 SA 9 (A); Snyman v Rheeder 1989 4 SA 496 (T); Smith The Law of
lnsolvency 108; Hockly The Law of lnsolvency 165; SA Law Commission Review of the Law of lnsolvency: Voidable
Dispositions and Dispositions that may be set aside and the Effects of Sequestration on the Spouse of the lnsolvent Working
Paper 41 Project 63 (1991); Evans 1996 THRHR 613-625 and 1997 THRHR 71-81.
3
That is the spouse married out of community of property to the insolvent.
4
Once he has been appointed.
5
Evans 1996 THRHR 614.
6
SA Law Commission Review of the Law of Insolvency: Voidable Dispositions and Dispositions that may be set aside and the
Effects of sequestration on the Spouse of the lnsolvent Working Paper 41 Project 63 (1991).
7
Evans 1997 THRHR 71-81.
8
Harksen v Lane 1998 1 SA 300 (CC), hereinafter referred to as the Harksen case.
PAST PAPERS & MEMOS, ASSIGNMENT MEMOS, NOTES, SUMMARIES & TUITONS.
Cell : 084 591 8661 Email:
Fax : 086 096 5452 www.llbexampacksandtutorials.co.za
__________________________________________________________________________________
MRL3701
INSOLVENCY LAW
ASSIGNMENT 2
MEMO
SEMESTER 1
2022
FOOTNOTES AND BIBLIOGRAPHY INCLUDED
9 PAGES
, Assignment 02
QUESTION:
Critically discuss the case of Harksen v Lane 1998 (1) SA 300 (CC) with
reference to the relevant legislation.
For a considerable period of time, section 21 of the insolvency Act1 has been the
subject of debate for both the courts and academics. 2 This section regulates the
position of a solvent spouses 3 during the sequestration of the insolvent's estate. One
of the results of the sequestration of the estate of one of two spouses is that all the
property of the spouse whose estate has not been sequestrated (solvent spouse)
vests in the Master and thereafter in the trustee 4 of the sequestrated estate, as if it
was the property of the sequestrated estate. The trustee is then empowered to deal
with such property as if it were the property of the insolvent, subject to the further
provisions of section 21.
Section 21 has, however, not been received without criticism. 5 The definition of
"spouse" is especially subject to criticism. While section 21 of the act has been
described as a drastic provision, 6 it was predicted that it would only be a matter of
time before the constitutionality of this provision would be tested in the Constitutional
court.7This then proved to be the case when the matter of Harksen v Lane8 was
referred to the Constitutional court. It was argued by the applicant that the vesting of
her assets in the trustee, in terms of section 21 of the act, was unconstitutional in
1
24 of 1936.
2
See eg De Villiers v Delta Cables (Pty) Ltd 1992 1 SA 9 (A); Snyman v Rheeder 1989 4 SA 496 (T); Smith The Law of
lnsolvency 108; Hockly The Law of lnsolvency 165; SA Law Commission Review of the Law of lnsolvency: Voidable
Dispositions and Dispositions that may be set aside and the Effects of Sequestration on the Spouse of the lnsolvent Working
Paper 41 Project 63 (1991); Evans 1996 THRHR 613-625 and 1997 THRHR 71-81.
3
That is the spouse married out of community of property to the insolvent.
4
Once he has been appointed.
5
Evans 1996 THRHR 614.
6
SA Law Commission Review of the Law of Insolvency: Voidable Dispositions and Dispositions that may be set aside and the
Effects of sequestration on the Spouse of the lnsolvent Working Paper 41 Project 63 (1991).
7
Evans 1997 THRHR 71-81.
8
Harksen v Lane 1998 1 SA 300 (CC), hereinafter referred to as the Harksen case.
