MRL3701
Assignment 2 Semester 2 2025
2 2025
Unique Number:
Due date: 9 September 2025
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1 (3 DIFFERENT ANSWERS PROVIDED)
Once a court grants an order for the sequestration of Bongani’s estate under the
Insolvency Act 24 of 1936, the legal status and management of his estate change
significantly. The immediate effect is that Bongani is declared insolvent, and his
estate—comprising all assets and liabilities—is handed over to the Master of the
High Court, and later to a trustee, who manages the estate on behalf of the creditors.
According to section 20(1)(a) of the Act, all of Bongani’s property, including his flat
(valued at R1,250,000) and motor vehicle (R200,000), will vest in the Master and,
upon appointment, in the trustee. Bongani loses control over his assets and can no
longer manage, sell, or dispose of any property in his name. Performance under
contracts must now be directed to the trustee, not to Bongani personally.
Under section 23(1), Bongani’s capacity to enter into contracts or litigate is restricted.
He may not enter into binding agreements or appear in court without the assistance
of the trustee. Furthermore, all civil proceedings against him are stayed (s 20(1)(b)),
and any ongoing lawsuits are suspended unless continued by or against the trustee.
Additionally, sequestration has implications for Bongani’s income. Section 23(5)
permits the trustee to claim a portion of his future income if the court finds that he
can contribute from such income toward the benefit of creditors. This includes
earnings from employment or business conducted with the trustee’s consent.
Creditors such as Flora may now lodge claims against the insolvent estate, and if
proven, they may receive a dividend. Bongani’s estate will be liquidated to pay
creditors, and preference is given according to the Insolvency Act's ranking of
claims.
Lastly, Bongani’s financial and personal freedom is impacted. He cannot hold certain
public offices, and his creditworthiness is severely damaged. Rehabilitation can only
occur in terms of sections 119–129, and only once legal conditions are met.
In summary, the sequestration order strips Bongani of control over his estate, limits
his legal capacity, subjects his income to trustee control, and initiates a legal process
to distribute his assets among creditors as per the Insolvency Act 24 of 1936.
Assignment 2 Semester 2 2025
2 2025
Unique Number:
Due date: 9 September 2025
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1 (3 DIFFERENT ANSWERS PROVIDED)
Once a court grants an order for the sequestration of Bongani’s estate under the
Insolvency Act 24 of 1936, the legal status and management of his estate change
significantly. The immediate effect is that Bongani is declared insolvent, and his
estate—comprising all assets and liabilities—is handed over to the Master of the
High Court, and later to a trustee, who manages the estate on behalf of the creditors.
According to section 20(1)(a) of the Act, all of Bongani’s property, including his flat
(valued at R1,250,000) and motor vehicle (R200,000), will vest in the Master and,
upon appointment, in the trustee. Bongani loses control over his assets and can no
longer manage, sell, or dispose of any property in his name. Performance under
contracts must now be directed to the trustee, not to Bongani personally.
Under section 23(1), Bongani’s capacity to enter into contracts or litigate is restricted.
He may not enter into binding agreements or appear in court without the assistance
of the trustee. Furthermore, all civil proceedings against him are stayed (s 20(1)(b)),
and any ongoing lawsuits are suspended unless continued by or against the trustee.
Additionally, sequestration has implications for Bongani’s income. Section 23(5)
permits the trustee to claim a portion of his future income if the court finds that he
can contribute from such income toward the benefit of creditors. This includes
earnings from employment or business conducted with the trustee’s consent.
Creditors such as Flora may now lodge claims against the insolvent estate, and if
proven, they may receive a dividend. Bongani’s estate will be liquidated to pay
creditors, and preference is given according to the Insolvency Act's ranking of
claims.
Lastly, Bongani’s financial and personal freedom is impacted. He cannot hold certain
public offices, and his creditworthiness is severely damaged. Rehabilitation can only
occur in terms of sections 119–129, and only once legal conditions are met.
In summary, the sequestration order strips Bongani of control over his estate, limits
his legal capacity, subjects his income to trustee control, and initiates a legal process
to distribute his assets among creditors as per the Insolvency Act 24 of 1936.
