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Insolvency Law Cases Summary
- Course
- Law of Succession
- Institution
- University Of South Africa
This great document contains All 11 cases are summarized for the purpose of exam preparation. Quality stuff!!
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1Insolvency Law Cases
1. EX PARTE HENNING 1981
Facts: Application for voluntary surrender, opposed by creditors as spouse
(married OUTCOP) contributed monthly payments to creditors.
Issue:
1. At what point should costs of sequestration be calculated to comply
with the requirements that must be able to cover costs of sequestration?
(Date of application)
2. Could wife’s monthly contribution be included in decision regarding
advantage of the creditors? (No)
3. Could the court condone an irregularity/ formal defect?
(Yes, as long as the creditors were not prejudiced)
Decision: Yes
2. AMOD V KHAN 1947
Facts: Applicant applied for compulsory sequestration of debtor to prevent the
debtor from enforcing his claim against the applicant’s son.
Issue: Should court grant final sequestration order?
Held: No, motive behind bringing application was not to the advantage of the
creditors. It was to assist applicant’s son from paying debtor. Court held that
application was an abuse of court proceedings and refused the application!
3. EPSTEIN V EPSTEIN 1987
Facts: Application for compulsory surrender by an amicable creditor (debtor’s
mother) based on an act of Insolvency (Nature of inability to pay)
Issue:
1. Would sequestration be to the advantage of a creditor?
2. Should the court automatically refuse a friendly sequestration?
Decision:
1. No
2. No
Held: Creditors would benefit financially (debtor had no assets and a father
was contributing only a negligible amount to entice the court to accept the
sequestration application)(regarded as an abuse of the Judicial System)
, 2
4. MAGNUM FINANCIAL HOLDINGS (PTY) LTD (IN LIQUIDATION) V SUMMERLY NO
1984
Facts: Unopposed application for sequestration of an insolvent trust.
Issue: Should the trust be sequestrated or liquidated?
Decision: Sequestrated
Held: Trust not regarded as body corporate in terms of the Companies Act. A
trust is regarded as a debtor in the usual sense of the word. Insolvency Act
applicable and estate will be sequestrated.
5. HENDRIKS NO V SWANEPOEL 1962
Facts: 800 sheep sold to debtor. Debtor couldn’t pay for them and eventually
returned 726 sheep (in a far worse condition) and a post-dated cheque for the
balance of sheep.
Issue: Was this a section 29 disposition?
Held: Yes, not in ordinary course of business. Would not have done the same
thing if the debtor were solvent.
6. PRETORIUS’ TRUSTEE V VAN BLOMMENSTEIN 1949
Facts: Debtor pledged his lorry to gain extra time to pay his creditor.
Issue: Was this disposition in the ordinary course of business (i.e. not a s29
disposition)
Held: Yes, purpose was to avoid insolvency and hopefully be able to pay all
his creditors therefore no intention to prefer
7. PRETORIUS NO V STOCK OWNER’S CO-OPERATIVE CO LTD 1959
Facts: Debtor owed money and delivered 193 heads of cattle as payment just
before he was sequestrated.
Issue: Was it a section 30 disposition?
Held: Yes, No special relationship between them but clearly there was an
intention to prefer payment made even though there was no pressure/motive
for payment to be made.
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