Summary Exam Notes for Topic 5: Collection of Estate Assets.

Topic 5: Collection of the Estate Assets..................................................................2

5.1 The preservation of the estate pending the appointment of a trustee...................2

5.2 The election of the trustee.........................................................................................4

5.3 The rights and duties of the trustee..........................................................................6

5.4 The duties of the insolvent........................................................................................7

5.5 Impeachable Dispositions..........................................................................................7
Disposition made for no value....................................................................................................... 9
Voidable Preference.................................................................................................................... 11
Undue Preference....................................................................................................................... 12
Collusion..................................................................................................................................... 12
Section 34 Dispositions............................................................................................................... 13
Comparison................................................................................................................................. 15

Prescribed Cases.....................................................................................................15

Button v Akbur................................................................................................................ 15

Cooper v Merchant Trade Finance................................................................................15

Duet and Magnum Financial Services CC v Koster.....................................................17

Gainsford v Tiffski Property Investments.....................................................................18

Gazit Properties v Botha................................................................................................19

Gore v Shell South Africa..............................................................................................20

Joosab v Ensor............................................................................................................... 21

Louw v Sobabini............................................................................................................. 22

Pretorius v Stock Owners Co-operative.......................................................................22

Pretorius’s Trustee v Van Blommenstein.....................................................................22

Learning Outcome....................................................................................................22

The preservation of the Estate pending the Trustee’s appointment..........................22

The election of the Trustee............................................................................................23

The duties and powers of the Trustee..........................................................................23

The position in regard to impeachable dispositions...................................................23

The duties of the Insolvent............................................................................................23

,Past Paper Questions..............................................................................................23

Dispositions made for no value:...................................................................................23

Intention to prefer one creditor above another in the making of a disposition.........25

Voidable Preferences.....................................................................................................25

Difference between collusion, undue preference and voidable preference?............26

Dispositions in terms of s34 (voidable sales of a business or asset of a business) 26




Topic 5: Collection of the Estate Assets.
5.1 The preservation of the estate pending the appointment of a trustee.
 The aim here is to preserve the estate until a trustee has been appointed.

,  Section 17: Notice of sequestration order.
o Immediately after a sequestration order is granted.
o The registrar is obliged to transmit one original copy of the order to:
 The Master
 Who will then publish it in the Gazette.
 The sheriff of every district in which the insolvent resides or
owns property
 Every registrar of deeds
 Every office having charge of an official register of ships
 Every sheriff who is holding any of the debtors property under
attachment
o This to ensure that all interested parties are informed of the
sequestration of the estate and to prevent any improper dealings with
the insolvents property.
 Section 19: Service of order and attachment of property.
o Service of order
 The registrar of the court granting an order of final sequestration
must cause a copy of the order to be served on:
 the insolvent and the spouse of the insolvent
 And file with the master the sheriff’s return of service.
 On being served with the order:
 The insolvent is obliged to hand over to the sheriff all
records relating to his affairs
 And lodge with the master a statement of his affairs
 The solvent spouse who is served with a sequestration
order must also lodge her statement of affairs with the
master.
o Attachment of property
 The sheriff is required to attach and make an inventory of the
movable property of the estate
 The sheriff need take great care when executing this duty