Exam (elaborations)
MRL3701 Assignment 2 2024
- Course
- MRL3701 (MRL3701)
- Institution
- University Of South Africa (Unisa)
MRL3701 Assignment 2 2024
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, MRL3701 Assessments 2024Assessment 02:
Question 1: (10 marks)
Wandile owes a total of R3 million to various creditors. His creditors include Zozo to
whom he owes R400 000. He also owes R1,3 million to DRG Bank.
Last year Wandile invested in a get-rich-quick scheme as a result of which he lost a lot
of money. This left him in a dire financial situation. By 31 October 2023 his liabilities
exceeded his assets by R800 000. Over the past few months Wandile has failed to pay
some of his debts. In particular he failed to pay the R400 000 he owes to Zozo. This
debt was due and payable on 1 February 2024.
Disappointed at not having been paid back the R400 000 owed to her, Zozo undertook
an investigation into Wandile’s financial situation. The investigation turned up
unassailable proof that Wandile had owed R100 000 to his father-in-law, and that
Wandile repaid R80 000 to his father-in-law on 3 February 2024. Mindful that he was
technically insolvent and that one of his creditors could apply for the sequestration of
his estate at any time, Wandile had wanted to ensure that whatever happened, his
father-in-law would at least get something from his estate. Hence, he repaid the loan
that he had obtained from his father-in-law even though the amount was only due and
payable on 30 November 2024.
Zozo has established that Wandile owns a house in Mamelodi valued at R700 000,
household furniture valued at R300 000 and a motor vehicle valued at R800 000. Zozo
is planning to apply for the sequestration of Wandile’s estate.
Answer the following questions based on the facts given above:
a. Discuss the requirements that an applicant must prove in order to obtain a court
order for the sequestration of a debtor’s estate.
Under Section 8 of the Insolvency Act of 1936, any creditor owed more than R100 has
the right to petition the court for the compulsory sequestration of the debtor's estate.
Section 9(1) outlines the requirements for initiating such proceedings.
In compliance with Section 8, creditors with claims exceeding R100 are entitled to
commence court proceedings seeking the compulsory sequestration of the debtor's
estate. Section 9(1) specifies the conditions for such actions, necessitating the
petitioner to establish the following to the court's satisfaction:
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