INSOLVENCY LAW MRL3701 EXAM PACK

INSOLVENCY LAW MRL3701 EXAM PACK 2021 – MAY / JUNE EXAMINATION PAPER Question 1 Fill in the missing words: (a) The term "debtor" also embraces a person who is incapable of managing his own affairs. (2) (b) Thabo’s application for voluntary surrender must contain an allegation that it will be to the advantage of creditors if his estate is sequestrated. (2) (c) Christopher commits an act of insolvency by departing from his dwelling with the intent by doing so to evade payments of his debts. (2) (d) An application for compulsory sequestration brought by a creditor who is not at arm’s length is generally referred to as a " friendly " sequestration. (2) (e) Section 24(1) of the Insolvency Act which deals with the effect of prohibited contracts on third parties, places the onus upon a third party to prove that, at the time he received the property in question, he was neither aware, nor had any reason to suspect, that the debtor was insolvent. (2) (f) An insolvent’s right to earn and recover income relates only to lawful income. (2) (g) The solvent spouse must, within 7 days of service, lodge with the Master a statement of his/her affairs as at the date of sequestration, framed by the necessary requirements and verified by affidavit. (2) (h) With regard to a contract completed by an insolvent, a right to performance held by the estate lapses if the other party in good faith, and without knowledge of the sequestration, performs to the insolvent. (2) (i) Section 84(2) of the Insolvency Act, which deals with the returning of property sold in terms of an "instalment agreement" to the seller, is intended to enable the trustee to reclaim the property for the benefit of concurrent creditors. (2) (j) Regarding the meeting of creditors, the publication of any statement of affairs made at a meeting is priveleged to the same extent as the publication of a statement made in a court of law. (2) (k) The Master may remove a trustee from office on the ground that the majority of creditors has requested in writing that he be removed. (2) (l) The object of section 26 of the Insolvency Act is simply to prevent a person in insolvent circumstances from impoverishing his estate by giving away assets without receiving any appreciable advantage in return. (2) (m) In deciding whether a disposition was made in the ordinary course of business, an objective test is applied. (2) (n) In Estate Wege v Strauss 1932 AD 76 it was decided that although a wagering debt cannot be enforced in a court of law, it still creates a "natural obligation ". (2) (o) Compared to a common-law compromise, the main advantage of a statutory composition is that it does not depend on