MRL3701/201/1/2025
Tutorial letter 201/1/2025
Insolvency Law
MRL3701
Semester 1
Department of Mercantile Law
IMPORTANT INFORMATION:
This tutorial letter contains important information
about the assignments in your module.
BARCODE
1 INTRODUCTION AND WELCOME
, MRL3701/201/1/2025
1 INTRODUCTION AND WELCOME
Dear Student,
1.1 Tutorial matter
So far, this academic year you should have received the following study material:
1. Study Material on MyModules;
2. Tutorial letter 101/3/2025 (Various topics).
2 CONTENTS OF THIS TUTORIAL LETTER
• Suggested Answers to Assessment 1
• Suggested Answers to Assessment 2
• Questions for Assessment 3 (not compulsory, for self-study)
• Suggested Answers to Assessment 3
• Information about the Examination Paper
3 SUGGESTED ANSWERS TO ASSESSMENT 1
(MAX 10 Marks)
Maria may bring an application for the compulsory sequestration of Thabo’s estate (1)
She must prove the following:
1. She has a liquidated claim of at least R100 (1)
• In this case Maria qualifies as she is owed R320 000 (1)
2. The debtor is actually insolvent (1) or has committed an act of insolvency (1)
• The facts show that Thabo was factually insolvent by 30 November 2024 as his liabilities
exceeded his assets (1)
• Additionally, Thabo committed an act of insolvency (1)
• by preferring one creditor over another Section 8 (c) (1)
• OR in that he paid his cousin ahead of other creditors (intention) Section 8(d) (1)
3. There is reason to believe that sequestration will be to the benefit of the creditors (1)
• Creditors will benefit (1)
In this case there was an Act of Insolvency (students motivate answer for 8 (c) or 8 (d) (1)
, MRL3701/201/1/2025
In this case there is a reasonable prospect that if Thabo’s estate is sequestrated (1)
Creditors may receive a dividend from the sale of Thabo’s remaining assets (1)
Therefore can apply for sequestration (1)
4 SUGGESTED ANSWERS TO ASSESSMENT 2
(MAX 10 Marks)
Upon sequestration, all the assets belonging to the insolvent, including assets acquired during
sequestration but before rehabilitation, will fall into the insolvent estate, unless the property is
specifically excluded by s23 of the Insolvency Act (1)
Kabelo is not yet rehabilitated (1)
The car falls into the insolvent estate (1)
Therefore if Kabelo wants to keep the car he must apply for rehabilitation (1)
Upon rehabilitation the assets in the insolvent estate do not pass to insolvent again (subject to
one exception) (1)
The car Kabelo won forms part of the insolvent estate as it is not excluded (1)
Kabelo may approach the court to apply for a declaratory order to enable him to keep the car. (1)
The order may be applied for when he applies for rehabilitation (1)
The basis for a declaratory order is that the creditors have waived their rights with respect to the
property (car) (1)
The reason for the requirement is that creditors cannot waive rights which they are unaware of
(1)
The court has no discretion to make a declaratory order if one or more creditors are opposed to
it (1)
Kabelo will have to give notice in the Government Gazette of his intention to apply for a declaratory
order and give copies of the notice to the Master, the trustee and all unpaid creditors (1)
He must also indicate that the trustee and his creditors have been fully informed of about the
property and lay no claim to the property (1)
, MRL3701/201/1/2025
In this case, it is highly unlikely that creditors who had to pay a contribution will waive their rights
to the property (1)
Even if the creditors do not object to the declaratory order, the court may make Kabelo’s
rehabilitation conditional on the repayment of the contributions to the creditors (1)
5 QUESTIONS FOR SELF-ASSESSMENT 3
1. Name one of the ways in which a sequestration order can be obtained.
2. What is the definition of “disposition” in terms of section 2 of the Insolvency Act 24 of 1936?
3. Under which circumstances may a court having jurisdiction over a debtor refuse (or
postpone) the surrender or sequestration of the debtor’s estate?
4. Explain why the Constitutional Court in Brink v Kitshoff 1996 4 SA 197 (CC) found section
44(1) and (2) of the Insurance Act 27 of 1943 incompatible with Chapter 3 of the Interim
Constitution of 1993.
5. Does the right of a spouse (A) to share, in terms of the Matrimonial Property Act 88 of
1984, in the accrual of the estate of the other spouse (B) form part of the insolvent estate
of the first spouse (A)? Give reasons for your answer.
6. The trustee may terminate employment contracts between the insolvent employer and the
employees after consultation with certain parties. Name these parties.
7. Name one consequence of a composition in terms of section 119 of the Insolvency Act 24
of 1936.
8. Name three situations in which the court may postpone the insolvent’s application for
rehabilitation.
9. Name one of the two ways in which a company may be wound up under the legislation on
companies.
10. A court has given judgment of R10 000 against Sam in favour of Jen. Upon the demand
ofthe officer whose duty it is to execute the judgment, Sam fails to satisfy it and also fails
to indicate to the officer, disposable property sufficient to satisfy it. The return made by the
officer states that he has not found sufficient disposable property to satisfy the judgment.
Explain to Jen what the implications of the aforementioned facts may be.
11. Anne is an insolvent. She very much wishes to stand as a candidate in the coming
provincial elections for the FEM party. Her trustee is of the opinion that she should not
Tutorial letter 201/1/2025
Insolvency Law
MRL3701
Semester 1
Department of Mercantile Law
IMPORTANT INFORMATION:
This tutorial letter contains important information
about the assignments in your module.
BARCODE
1 INTRODUCTION AND WELCOME
, MRL3701/201/1/2025
1 INTRODUCTION AND WELCOME
Dear Student,
1.1 Tutorial matter
So far, this academic year you should have received the following study material:
1. Study Material on MyModules;
2. Tutorial letter 101/3/2025 (Various topics).
2 CONTENTS OF THIS TUTORIAL LETTER
• Suggested Answers to Assessment 1
• Suggested Answers to Assessment 2
• Questions for Assessment 3 (not compulsory, for self-study)
• Suggested Answers to Assessment 3
• Information about the Examination Paper
3 SUGGESTED ANSWERS TO ASSESSMENT 1
(MAX 10 Marks)
Maria may bring an application for the compulsory sequestration of Thabo’s estate (1)
She must prove the following:
1. She has a liquidated claim of at least R100 (1)
• In this case Maria qualifies as she is owed R320 000 (1)
2. The debtor is actually insolvent (1) or has committed an act of insolvency (1)
• The facts show that Thabo was factually insolvent by 30 November 2024 as his liabilities
exceeded his assets (1)
• Additionally, Thabo committed an act of insolvency (1)
• by preferring one creditor over another Section 8 (c) (1)
• OR in that he paid his cousin ahead of other creditors (intention) Section 8(d) (1)
3. There is reason to believe that sequestration will be to the benefit of the creditors (1)
• Creditors will benefit (1)
In this case there was an Act of Insolvency (students motivate answer for 8 (c) or 8 (d) (1)
, MRL3701/201/1/2025
In this case there is a reasonable prospect that if Thabo’s estate is sequestrated (1)
Creditors may receive a dividend from the sale of Thabo’s remaining assets (1)
Therefore can apply for sequestration (1)
4 SUGGESTED ANSWERS TO ASSESSMENT 2
(MAX 10 Marks)
Upon sequestration, all the assets belonging to the insolvent, including assets acquired during
sequestration but before rehabilitation, will fall into the insolvent estate, unless the property is
specifically excluded by s23 of the Insolvency Act (1)
Kabelo is not yet rehabilitated (1)
The car falls into the insolvent estate (1)
Therefore if Kabelo wants to keep the car he must apply for rehabilitation (1)
Upon rehabilitation the assets in the insolvent estate do not pass to insolvent again (subject to
one exception) (1)
The car Kabelo won forms part of the insolvent estate as it is not excluded (1)
Kabelo may approach the court to apply for a declaratory order to enable him to keep the car. (1)
The order may be applied for when he applies for rehabilitation (1)
The basis for a declaratory order is that the creditors have waived their rights with respect to the
property (car) (1)
The reason for the requirement is that creditors cannot waive rights which they are unaware of
(1)
The court has no discretion to make a declaratory order if one or more creditors are opposed to
it (1)
Kabelo will have to give notice in the Government Gazette of his intention to apply for a declaratory
order and give copies of the notice to the Master, the trustee and all unpaid creditors (1)
He must also indicate that the trustee and his creditors have been fully informed of about the
property and lay no claim to the property (1)
, MRL3701/201/1/2025
In this case, it is highly unlikely that creditors who had to pay a contribution will waive their rights
to the property (1)
Even if the creditors do not object to the declaratory order, the court may make Kabelo’s
rehabilitation conditional on the repayment of the contributions to the creditors (1)
5 QUESTIONS FOR SELF-ASSESSMENT 3
1. Name one of the ways in which a sequestration order can be obtained.
2. What is the definition of “disposition” in terms of section 2 of the Insolvency Act 24 of 1936?
3. Under which circumstances may a court having jurisdiction over a debtor refuse (or
postpone) the surrender or sequestration of the debtor’s estate?
4. Explain why the Constitutional Court in Brink v Kitshoff 1996 4 SA 197 (CC) found section
44(1) and (2) of the Insurance Act 27 of 1943 incompatible with Chapter 3 of the Interim
Constitution of 1993.
5. Does the right of a spouse (A) to share, in terms of the Matrimonial Property Act 88 of
1984, in the accrual of the estate of the other spouse (B) form part of the insolvent estate
of the first spouse (A)? Give reasons for your answer.
6. The trustee may terminate employment contracts between the insolvent employer and the
employees after consultation with certain parties. Name these parties.
7. Name one consequence of a composition in terms of section 119 of the Insolvency Act 24
of 1936.
8. Name three situations in which the court may postpone the insolvent’s application for
rehabilitation.
9. Name one of the two ways in which a company may be wound up under the legislation on
companies.
10. A court has given judgment of R10 000 against Sam in favour of Jen. Upon the demand
ofthe officer whose duty it is to execute the judgment, Sam fails to satisfy it and also fails
to indicate to the officer, disposable property sufficient to satisfy it. The return made by the
officer states that he has not found sufficient disposable property to satisfy the judgment.
Explain to Jen what the implications of the aforementioned facts may be.
11. Anne is an insolvent. She very much wishes to stand as a candidate in the coming
provincial elections for the FEM party. Her trustee is of the opinion that she should not
