MRL3701 INSOLVENCY LAW JAN/FEB 2022 EXAM. QUESTION 1
1.1 Epstein v Epstein 1987 (4) SA 606 (C)
Legal Question – is “friendly/ cordial sequestration blocked from a temporary sequestration
request being granted?
Facts – the candidate in an application for temporary sequestration request was...
INSOLVENCY LAW MRL3701
STUDENT NUMBER 66785871
JAN/FEB 2022 EXAM
23 February 2022
QUESTION 1
1.1 Epstein v Epstein 1987 (4) SA 606 (C)
Legal Question – is “friendly/ cordial sequestration blocked from a temporary sequestration
request being granted?
Facts – the candidate in an application for temporary sequestration request was the
respondent’s mother, whom he owed R6000.00 and to whom he composed a letter advising
her of his inability to reimburse her credit, subsequently submitting a demonstration of
bankruptcy. The respondent’s father by marriage paid a measure of R2500.00 into trust
record of candidate’s attorney’s distribution among respondent’s banks after the
sequestration costs had been met. The aim was to forestall respondent’s detainment.
Sequestration costs being estimated at R1500.00, an amount of R1000.00 would then stay
for circulation. This is an example of a “well-disposed sequestration”.
Findings- no, however court ought to investigate such applications with specific
consideration to protect the interest of loan bosses. Application for a temporary
sequestration request was refused.
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, Ratio decidendi- in an “amicable” sequestration, the borrower tries not to conform to
fundamental conventions for an application for deliberate acquiescence. Likewise, leasers
other than the “friendly” creditor don’t get notification ahead of time of the application nor
would they be able to pay heed to debtor’s financial position, as there is no assertion of
issues that lies for investigation. For these reasons there is a risk that a sequestration
request might be made in circumstances where it would indeed not be in light of a
legitimate concern for the gathering of the creditors as a whole. That is the reason the
courts pay special attention to the requirements Also, where a relative's presented of a little
commitment as the "price" for conceding a sequestration request, it was held that it ought
to hesitantly be approved. This system clashed with the standards basic the Act and the role
which it doled out to the court. It added up to standing up to the court with a not very
wholesome "carrot" to initiate it to give help in the event that it proved unable, and
wouldn't, otherwise do so. The court should oppose such unseemly cajolery .Although the
initial two necessities of giving a temporary request were fulfilled, the third prerequisite
connecting with benefit to lenders represented a problem .The concurrent creditors for this
situation could not have possibly gotten anything out of the home, in light of the fact that
the Receiver of Revenue had a preference case regarding arrear personal assessment, which
would in any occasion have gobbled up all that could have remained after payment of the
expenses of sequestration.
1.2 A sequestration request can be acquired by utilizing two strategies, the primary strategy
being called
Constrained sequestration. Mandatory sequestration results when a bank, entomb alia, can
demonstrate that the
Liquidity or reasonable valuation of a characteristic individual's home is not as much as his
nearby obligation, or
Where an individual has submitted an alleged demonstration of bankruptcy (for instance,
announcing a Nulla Bona to a
Sheriff executing a warrant of execution – (see Section 9 of the Insolvency Act).
The procedures are started by giving an application for sequestration as a notification of
Movement. The notification of movement is the principal record that will arrive at the
sheriff's office and is to be served
On the respondent (sec. 9).
Assuming the court is fulfilled that the candidate has demonstrated his case a temporary
sequestration request will be given. The temporary sequestration request will have a return
date and must be served by the sheriff.
The temporary sequestration request is a standard nisi and along these lines by suggestion a
break request, until the court at long last settles on the realities contained in the pertinent
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