MRL3701
Assignment 2 Semester 1 2024
Unique Number:
Due Date: 9 April 2024
QUESTION 1
a.
In terms of section 8 of the Act, any creditor who is owed more than R100 can apply
to court for the compulsory sequestration of the debtor's estate.
Section 9(1) allows proceedings for the compulsory sequestration of a debtor’s
estate. Court must be satisfied that:
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QUESTION 1
a.
In terms of section 8 of the Act, any creditor who is owed more than R100 can apply to court for
the compulsory sequestration of the debtor's estate.
Section 9(1) allows proceedings for the compulsory sequestration of a debtor’s estate. Court
must be satisfied that:
• The applicant has established a claim which entitles him, in terms of s9(1) to apply for
sequestration of the debtor's estate.
• the debtor has committed an act of insolvency or is insolvent.
• 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
b.
Zozo may successfully apply for a court order for the sequestration of Wandile's estate as she
meets the criteria set out in the Insolvency Act.
Firstly, Zozo is a creditor to whom Wandile owes R400,000, which is well above the threshold of
R100 for a creditor to apply for sequestration. This entitles her, in terms of section 9(1) of the
Act, to apply for sequestration of Wandile's estate.
Secondly, Wandile's financial situation demonstrates that he has committed an act of insolvency
or is insolvent. His liabilities exceed his assets by R800,000, and he has failed to pay some of
his debts, including the R400,000 owed to Zozo. This indicates that he is unable to meet his
financial obligations as they become due.
Lastly, there is reason to believe that it will be to the advantage of creditors, including Zozo, if
Wandile's estate is sequestrated. By sequestrating his estate, the trustee can use his assets to
pay off his debts, thereby maximizing the amount that creditors are able to recover.
Therefore, Zozo has established a claim entitling her to apply for sequestration of Wandile's
estate, and there are grounds to believe that the sequestration will be to the advantage of his
creditors. As such, she may successfully apply for a court order for the sequestration of
Wandile's estate.
