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, MRL3701 Assessment 1 Semester 1 2026 DUE 2 MARCH 2026
Question 1: Purpose of Section 21 of the Insolvency Act 24
of 1936
Section 21 of the Insolvency Act 24 of 1936 deals with the
vesting of an insolvent’s estate in the Master of the High
Court. The intended purpose of this section is threefold:
1. To secure the assets of the insolvent estate – Upon the
declaration of insolvency, the insolvent’s estate
automatically vests in the Master, ensuring that all
property is preserved for the benefit of creditors.
2. To centralize control – The section provides that the
Master of the High Court, through the appointed trustee,
manages the insolvent’s estate, preventing unauthorized
disposal or alienation of property.
3. To promote equitable distribution – By vesting the
estate, section 21 ensures that creditors are treated fairly,
as the estate is administered according to statutory
priorities rather than the insolvent’s discretion.
In essence, section 21 safeguards the collective interests of
creditors while allowing for orderly administration of the
insolvent’s property.
Question 2: Harksen v Lane 1998 (1) SA 300 (CC) and
Section 21
In Harksen v Lane, the Constitutional Court considered whether
section 21 of the Insolvency Act constituted expropriation in
violation of the Interim Constitution (specifically the right to
property under section 28(1) of the Interim Constitution).
Harksen argued that the automatic vesting of her estate in the
Master deprived her of property rights without compensation.
The Court held that section 21 did not infringe her rights for
the following reasons:
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, MRL3701 Assessment 1 Semester 1 2026 DUE 2 MARCH 2026
Question 1: Purpose of Section 21 of the Insolvency Act 24
of 1936
Section 21 of the Insolvency Act 24 of 1936 deals with the
vesting of an insolvent’s estate in the Master of the High
Court. The intended purpose of this section is threefold:
1. To secure the assets of the insolvent estate – Upon the
declaration of insolvency, the insolvent’s estate
automatically vests in the Master, ensuring that all
property is preserved for the benefit of creditors.
2. To centralize control – The section provides that the
Master of the High Court, through the appointed trustee,
manages the insolvent’s estate, preventing unauthorized
disposal or alienation of property.
3. To promote equitable distribution – By vesting the
estate, section 21 ensures that creditors are treated fairly,
as the estate is administered according to statutory
priorities rather than the insolvent’s discretion.
In essence, section 21 safeguards the collective interests of
creditors while allowing for orderly administration of the
insolvent’s property.
Question 2: Harksen v Lane 1998 (1) SA 300 (CC) and
Section 21
In Harksen v Lane, the Constitutional Court considered whether
section 21 of the Insolvency Act constituted expropriation in
violation of the Interim Constitution (specifically the right to
property under section 28(1) of the Interim Constitution).
Harksen argued that the automatic vesting of her estate in the
Master deprived her of property rights without compensation.
The Court held that section 21 did not infringe her rights for
the following reasons:
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