MRL3701 - Study Unit 4 Compulsory Sequestration Questions with Correct Answers REQUIREMENTS Correct Answer Court must be satisfied:
1. The applicant has established a claim which entitles him, in terms of s9(1) to apply for
sequestration of the debtor's estate.
2. the debtor has committed an act of insolvency or is insolvent
3. there is reason to believe that it will be to the advantage of creditors of the debtor if his estate is sequestrated (s12(1))
ONUS of satisfying court on these three matters rests throughout on the sequestrating creditor.
APPLICANT ENTITLED TO APPLY IN TERMS OF s9(1) Correct Answer Proceedings for the compulsory sequestration of debtors estate to be instituted by:
a. creditor or his agent who has a liquidated claim against the debtor for not less than R100
b. two or more creditors or their agents who have liquidated claims against the debtor amounting, in aggregate, to not less than R200.
Agent must be authorised to do so prior to bringing the application. Applicants lack of authority cannot be cured by ratification once the application has been launched (SOUTH AFRICAN MILLING CO v REDDY.
LIQUIDATED CLAIM Correct Answer Is a monetary claim - a claim for transfer of property, for instance, does not give locus to apply, the amount which is fixed by agreement, judgment, or otherwise.
EXAMPLES OF LIQUIDATED CLAIMS Correct Answer 1. claim for the price of goods sold and delivered (KATHRADA BROS V ASMAT)
2. claim based upon a provisional sentence judgement (MESKIN V AMOD)
3. a claim for return of the price paid under a sale which has been cancelled due to the sellers repudiation (BAGATLA BA MAKAU TRIBE)
4. Delictual claim for the theft of a fixed and determinable sum of money (Premier Western Cape & Others v Parker & Mohammed & Others)
5.
EXAMPLES OF UNLIQUIDATED CLAIMS Correct Answer 1. damages for failure to carry out obligations in terms of a consent paper (EX PARTE BRUCE)
2. claim for payment of an untaxed attorney and client bill of costs (SIMPSON & LIESCHING V VAN BREDA) SECTION 9(2) Correct Answer Provides that a liquidated claim which has accrued but which is not yet due by the time the application is heard must be regard as liquidated for
these purposes.
PROVISIONALLY SEQUESTRATED Correct Answer Debtor himself cannot make a payment to the sequestrating creditor so as the extinguish the latters claim or reduce it below R100 (VENTER v VAN GRAAN)
third party such as surety, may make payment on the debtor's behalf and if the payment
extinguishes the claim or reduces it to less than R100 the provision order must be discharged (JOHANNSBURG LIVESTOCK CO V HERR)
Creditor is not entitled to refuse payment in full - but may reject part payment by a third person Where the sequestrating creditor's locus standi is eliminated by a payment, another creditor may intervene and apply for a further provisional order of sequestration to be granted on discharge of the first order.
ACTS OF INSOLVENCY Correct Answer Legislature has designated certain acts or omissions by a debtor as "acts of insolvency"
An act of insolvency need to be committed vis-a-vis the sequestration creditor. Section 9(1) gives any creditor of the debtor the right to apply for sequestration once the debtor commits an act of insolvency, whether or not the debtor directed the act at the creditor concerned or intendedto have any bearing on that credit's affairs (BEIRA V RAPHAELY-
WEINER AND OTHERS)
An act of insolvency committed by a spouse to a marriage in community of property operates as an act of insolvency by both spouses and, accordingly, is a good ground for
sequestration of the joint estate (STANDARD BAN OF SAL LTD v SEWPERSADH & ANOTHER) and for sequestration of the separate estate of the other spouse after dissolution of the marriage by divorce (BP SOUTH AFRICA v VILJOEN & ANDER)
CONDUCT DESIGNATED AS ACTS OF INSOLVENCY (A) Correct Answer a). Absence from Republic or dwelling
If he leaves the Republic or, being out of the Republic, remains absent from it. or departs from his dwelling or otherwise absent himself, with intent by doing so to evade or delay payment of his debts (s8(a))
- Credit mus establish debtor's intention to evade payment of his debts (ESTATE SALZMANN V VAN ROOYEN) - Proo fof departure or absence is not sufficient, because a person may leave or absent himself for reasons complete unconnected with the paymenr or non-payment of debts. (BISHOP V BAKER)
CONDUCT DESIGNATED AS ACTS OF INSOLVENCY (B) Correct Answer b). Failure to satisfy judgement
1. The applicant has established a claim which entitles him, in terms of s9(1) to apply for
sequestration of the debtor's estate.
2. the debtor has committed an act of insolvency or is insolvent
3. there is reason to believe that it will be to the advantage of creditors of the debtor if his estate is sequestrated (s12(1))
ONUS of satisfying court on these three matters rests throughout on the sequestrating creditor.
APPLICANT ENTITLED TO APPLY IN TERMS OF s9(1) Correct Answer Proceedings for the compulsory sequestration of debtors estate to be instituted by:
a. creditor or his agent who has a liquidated claim against the debtor for not less than R100
b. two or more creditors or their agents who have liquidated claims against the debtor amounting, in aggregate, to not less than R200.
Agent must be authorised to do so prior to bringing the application. Applicants lack of authority cannot be cured by ratification once the application has been launched (SOUTH AFRICAN MILLING CO v REDDY.
LIQUIDATED CLAIM Correct Answer Is a monetary claim - a claim for transfer of property, for instance, does not give locus to apply, the amount which is fixed by agreement, judgment, or otherwise.
EXAMPLES OF LIQUIDATED CLAIMS Correct Answer 1. claim for the price of goods sold and delivered (KATHRADA BROS V ASMAT)
2. claim based upon a provisional sentence judgement (MESKIN V AMOD)
3. a claim for return of the price paid under a sale which has been cancelled due to the sellers repudiation (BAGATLA BA MAKAU TRIBE)
4. Delictual claim for the theft of a fixed and determinable sum of money (Premier Western Cape & Others v Parker & Mohammed & Others)
5.
EXAMPLES OF UNLIQUIDATED CLAIMS Correct Answer 1. damages for failure to carry out obligations in terms of a consent paper (EX PARTE BRUCE)
2. claim for payment of an untaxed attorney and client bill of costs (SIMPSON & LIESCHING V VAN BREDA) SECTION 9(2) Correct Answer Provides that a liquidated claim which has accrued but which is not yet due by the time the application is heard must be regard as liquidated for
these purposes.
PROVISIONALLY SEQUESTRATED Correct Answer Debtor himself cannot make a payment to the sequestrating creditor so as the extinguish the latters claim or reduce it below R100 (VENTER v VAN GRAAN)
third party such as surety, may make payment on the debtor's behalf and if the payment
extinguishes the claim or reduces it to less than R100 the provision order must be discharged (JOHANNSBURG LIVESTOCK CO V HERR)
Creditor is not entitled to refuse payment in full - but may reject part payment by a third person Where the sequestrating creditor's locus standi is eliminated by a payment, another creditor may intervene and apply for a further provisional order of sequestration to be granted on discharge of the first order.
ACTS OF INSOLVENCY Correct Answer Legislature has designated certain acts or omissions by a debtor as "acts of insolvency"
An act of insolvency need to be committed vis-a-vis the sequestration creditor. Section 9(1) gives any creditor of the debtor the right to apply for sequestration once the debtor commits an act of insolvency, whether or not the debtor directed the act at the creditor concerned or intendedto have any bearing on that credit's affairs (BEIRA V RAPHAELY-
WEINER AND OTHERS)
An act of insolvency committed by a spouse to a marriage in community of property operates as an act of insolvency by both spouses and, accordingly, is a good ground for
sequestration of the joint estate (STANDARD BAN OF SAL LTD v SEWPERSADH & ANOTHER) and for sequestration of the separate estate of the other spouse after dissolution of the marriage by divorce (BP SOUTH AFRICA v VILJOEN & ANDER)
CONDUCT DESIGNATED AS ACTS OF INSOLVENCY (A) Correct Answer a). Absence from Republic or dwelling
If he leaves the Republic or, being out of the Republic, remains absent from it. or departs from his dwelling or otherwise absent himself, with intent by doing so to evade or delay payment of his debts (s8(a))
- Credit mus establish debtor's intention to evade payment of his debts (ESTATE SALZMANN V VAN ROOYEN) - Proo fof departure or absence is not sufficient, because a person may leave or absent himself for reasons complete unconnected with the paymenr or non-payment of debts. (BISHOP V BAKER)
CONDUCT DESIGNATED AS ACTS OF INSOLVENCY (B) Correct Answer b). Failure to satisfy judgement
