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A2 Notes

The document discusses impeachable dispositions in insolvency law. It defines an impeachable disposition as a pre-sequestration sale or transfer of an asset by the debtor that can be set aside by the court. It also lists the types of dispositions that are impeachable and exclusions.

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16 views

A2 Notes

The document discusses impeachable dispositions in insolvency law. It defines an impeachable disposition as a pre-sequestration sale or transfer of an asset by the debtor that can be set aside by the court. It also lists the types of dispositions that are impeachable and exclusions.

Uploaded by

danielaschultz3
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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INSOLVENCY A2

TOPICS 5-8

DANIELA MICHELE | MERCANTILE LAW 312 | MID- YEAR EXAMS


OVERVIEW
5. Collection of the estate assets (Mr Msutu)
Outcomes: After completion of this theme you should have full knowledge and
understanding of the following:

• The preservation of the estate pending the trustee’s appointment;


• The election of the trustee;
• The duties and powers of the trustee;
• The position in regard to impeachable dispositions;
• The duties of the insolvent.

Compulsory reading:

• Hockly’s chapter 8, paras 10.1 – 10.3 of chapter 10, chapters 11, 12 and 14;
• Cooper and another v Merchant Trade Finance 2000 (3) SA 1009 (SCA);
• Enyati Resources Ltd v Glaum NO & another 1989 (2) SA 314 (C);
• Gainsford and others v Tiffski Property Investments (Pty) Ltd 2012 (3) SA 35 (SCA);
• Gore & Another v Shell South Africa (Pty) Ltd 2004 (2) SA 521 (C);
• Griffiths v Janse van Rensburg & another NNO 2016 (3) SA 389 (SCA);
• Joosab v Ensor NO 1966 (1) SA 319 (A);
• Louw NO and Another v Sobabini CC and Others (3532/13) [2015] ZAECGHC 153 (28
January 2015);
• Pretorius’s Trustee v Van Blommenstein 1949 (1) SA 267 (O);
• Strydom NO & others v Snowball Wealth (Pty) Ltd & others [2022] ZASCA 91 (15
June 2022);
• Van Wyk Van Heerden Attorneys v Gore NO & another [2022] ZASCA 128 (30
September 2022)

6. Creditors and their ranking (Mr Msutu)


Outcomes: After completion of this theme you should have full knowledge and
understanding of the following:

• The meeting of creditors and proof of claims;


• The realisation of the estate assets;
• Creditors’ claims and their rankings;
• The estate accounts and the distribution of the estate.

PAGE 1
Compulsory reading:

• Hockly’s Chapters 9,15,16 and 17;


• Betterbridge (Pty) Ltd v Masilo and Others NNO 2015 (2) SA 396 (GP).

7. Composition and rehabilitation (Mr Msutu)


Outcomes: After completion of this theme you should have full knowledge and
understanding of the following:

• The common law compromise;


• An offer of composition in terms of section 119;
• The acceptance of a section 119-composition;
• The consequences of a section 119-composition;
• What rehabilitation entails: o Automatic rehabilitation;
 Rehabilitation by the court;
 The effects of rehabilitation;
 Declaratory order regarding property.

Compulsory reading:

• Hockly’s Chapters 18 and 19;


• Ex Parte Fourie [2008] (4) All SA 340 (D)

8. Cross-border insolvency (Mr Msutu)


Outcomes: After completion of this theme you should have full knowledge and
understanding of the following:

• Main problems of cross-border insolvency


• South African common law of cross-border insolvency
• Cross-Border Insolvency Act

Compulsory reading:

• Hockly’s Chapter 29;


• Cross-Border Insolvency Act 42 of 2000
• UNCITRAL Model Law on Cross-border Insolvency

PAGE 2
1 IMPEACHABLE DISPOSITIONS
Section 26

PAGE 3
Section 29

Section 30

PAGE 4
Section 31

PAGE 5
Section 34

PAGE 6
In Summary:
 What is then, an impeachable disposition?
o A [pre- sequestration] sale or transfer of an asset [property] made by the
debtor which may be set aside by the court
o “Disposition” is defined in S2:
 Transfer or abandonment of rights to property

INCLUDES EXCLUDES
Property= Repudiation of inheritance =
- Immovable + movable - SCA: the beneficiary merely has
- Situated within + outside Republic. competence [power] to accept the
- “within” = extend it to property inheritance… until he does, it does
beyond territorial limits of court not form part of his estate
- Includes foreign assets - In repudiating [refusing to accept]
the beneficiary does not abandon
any right to property
A contract providing for the alienation Insurance Benefit =
or abandonment of rights to property = - Change of beneficiary under life
- [“uncompleted disposition”] insurance policy from insured 
3rd party does not amount to a
disposition by the insured
- Nomination of 3rd party beneficiary
merely gives him a power
[competence] and is thus not a
transfer or an abandonment of a
right

PAGE 7
A contract of suretyship= Disposition made in compliance with
- Provides for the payment by the order of court=
debtor - Pmt of contractual debt / delivery
of property
- Would only be a disposition if the
court order was obtained by the
creditor by fraud or in collusion
with insolvent + intention of
prejudicing / preferring creditors
(onus on party seeking to set aside
disposition)

Issuing of a cheque by the insolvent=


- Where bank account is in credit ;
and
- Where he has been granted
overdraft facilities
Contract between the insolvent and
party indebted to him
- Party who owes the insolvent is
required to pay the amount of the
debt to a creditor of the insolvent
Arrangement between insolvent and
third party to lend money
- 3rd party required to pay the
amount of the loan into the bank
account of 3rd person
- Purpose is to channel the amount
to a creditor of the insolvent

 There exist 5 types of impeachable dispositions:


1. S26: disposition without value
2. S29: Voidable preference
3. S30: Undue preference to creditors
4. S31: Collusive dealings before sequestration
5. S34: Voidable sale of business

PAGE 8

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