MRL3701
ASSIGNMENT 1
DUE DATE: 12 AUGUST 2025
, MRL3701 ASSIGNMENT 1 2025
SEMESTER 2 2025
OPEN 5 AUGUST, AND THE DUE DATE IS 12 AUGUST.
QUESTION:
Thandeka and Owen are married out of community of property. They came to see
you as their legal representative. Their separate businesses were affected by the
COVID-19 pandemic. As a result, their finances have been affected and they are
struggling to make ends meet. They have thought it in their best interests to both
get sequestrated. To save on sequestration costs, they wish to bring only one
application before the court, but to each sequestrate their own estates in that one
application, since they are married out of community of property and do not have
a joint estate.
a. Briefly explain the purpose of a sequestration order.
According to section 2 of the Insolvency Act 24 of 1936, a sequestration order is the
formal declaration by a court that a debtor’s estate is insolvent, granted either at the
debtor’s own instance (voluntary surrender) or at the instance of one or more creditors
(compulsory sequestration)¹. The primary purpose of such an order is to secure the
orderly and equitable distribution of all realizable assets among creditors in the order of
their prescribed preference. Once granted, it creates a concursus creditorum (a “coming
together” of creditors) so that no individual creditor may recover more than its fair share
at the expense of others².
¹ Insolvency Act 24 of 1936, s 2 (“insolvent estate”); Study Unit 1: Introduction to Insolvency Law, Meaning
of Insolvency.
² Study Unit 1: Purpose of a Sequestration Order – establishment of concursus creditorum; Insolvency
Law MRL301
ASSIGNMENT 1
DUE DATE: 12 AUGUST 2025
, MRL3701 ASSIGNMENT 1 2025
SEMESTER 2 2025
OPEN 5 AUGUST, AND THE DUE DATE IS 12 AUGUST.
QUESTION:
Thandeka and Owen are married out of community of property. They came to see
you as their legal representative. Their separate businesses were affected by the
COVID-19 pandemic. As a result, their finances have been affected and they are
struggling to make ends meet. They have thought it in their best interests to both
get sequestrated. To save on sequestration costs, they wish to bring only one
application before the court, but to each sequestrate their own estates in that one
application, since they are married out of community of property and do not have
a joint estate.
a. Briefly explain the purpose of a sequestration order.
According to section 2 of the Insolvency Act 24 of 1936, a sequestration order is the
formal declaration by a court that a debtor’s estate is insolvent, granted either at the
debtor’s own instance (voluntary surrender) or at the instance of one or more creditors
(compulsory sequestration)¹. The primary purpose of such an order is to secure the
orderly and equitable distribution of all realizable assets among creditors in the order of
their prescribed preference. Once granted, it creates a concursus creditorum (a “coming
together” of creditors) so that no individual creditor may recover more than its fair share
at the expense of others².
¹ Insolvency Act 24 of 1936, s 2 (“insolvent estate”); Study Unit 1: Introduction to Insolvency Law, Meaning
of Insolvency.
² Study Unit 1: Purpose of a Sequestration Order – establishment of concursus creditorum; Insolvency
Law MRL301
