MRL3701
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 13 MAY 2025
, MRL3701
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 13 May 2025
Insolvency Law
Question 1: Dumisani’s request to apply for Benson’s sequestration
Dumisani is understandably frustrated about his brother Benson’s unpaid debt of
R24,000 for gardening services. However, before jumping to the idea of applying for the
compulsory sequestration of Benson’s estate, it’s important to understand what the law
says about sequestration and whether it is appropriate in this situation.
In South African law, sequestration is governed by the Insolvency Act 24 of 1936.
Sequestration is the legal process by which a person’s estate (their property and
assets) is declared insolvent, meaning they cannot pay their debts. For a court to grant
a compulsory sequestration order, Dumisani, as the creditor, must prove the following:
1. Benson is insolvent:
Insolvency means that Benson’s liabilities (what he owes) exceed his assets
(what he owns). Dumisani would need to provide evidence that Benson cannot
pay his debts.
2. Act of insolvency:
According to section 8 of the Insolvency Act, Dumisani must show that Benson
has committed an act of insolvency. There are several acts of insolvency listed in
section 8, such as:
o Transferring or hiding assets to avoid paying creditors.
o Fleeing the jurisdiction or leaving their home to avoid debts (section 8(b)).
o Failing to satisfy a court judgment.
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 13 MAY 2025
, MRL3701
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 13 May 2025
Insolvency Law
Question 1: Dumisani’s request to apply for Benson’s sequestration
Dumisani is understandably frustrated about his brother Benson’s unpaid debt of
R24,000 for gardening services. However, before jumping to the idea of applying for the
compulsory sequestration of Benson’s estate, it’s important to understand what the law
says about sequestration and whether it is appropriate in this situation.
In South African law, sequestration is governed by the Insolvency Act 24 of 1936.
Sequestration is the legal process by which a person’s estate (their property and
assets) is declared insolvent, meaning they cannot pay their debts. For a court to grant
a compulsory sequestration order, Dumisani, as the creditor, must prove the following:
1. Benson is insolvent:
Insolvency means that Benson’s liabilities (what he owes) exceed his assets
(what he owns). Dumisani would need to provide evidence that Benson cannot
pay his debts.
2. Act of insolvency:
According to section 8 of the Insolvency Act, Dumisani must show that Benson
has committed an act of insolvency. There are several acts of insolvency listed in
section 8, such as:
o Transferring or hiding assets to avoid paying creditors.
o Fleeing the jurisdiction or leaving their home to avoid debts (section 8(b)).
o Failing to satisfy a court judgment.
