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Marius Scheepers & Company Attorneys |
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Insolvency act, 1936 (updated 01/03)
[ASSENTED TO 17 JUNE
1936] [DATE OF COMMENCEMENT: 1
JULY 1936] (Signed by the
Governor-General in Afrikaans) as amended by Finance Act 17 of 1938 Income Tax Act 31 of 1941 Hire-Purchase Act 36 of 1942 Insolvency Law Amendment Act
16 of 1943 Insurance Act 27 of 1943 Merchant Shipping Act 57 of
1951 General Law Amendment Act 32
of 1952 General Law Amendment Act 62
of 1955 General Law Amendment Act 50
of 1956 Proclamation 229 of 1956 Farmers’ Assistance
Amendment Act 16 of 1960 Finance Act 64 of 1960 Proclamation 210 of 1960 Income Tax Act 80 of 1961 Proclamation 159 of 1961 Income Tax Amendment Act 6
of 1963 Insolvency Amendment Act 99
of 1965 Insolvency Amendment Act 6
of 1972 Income Tax Act 90 of 1972 General Law Amendment Act 62
of 1973 General Law Amendment Act 29
of 1974 Income Tax Act 85 of 1974 Sales Tax Act 103 of 1978 Insolvency Amendment Act 78
of 1980 Insolvency Amendment Act 101
of 1983 Insolvency Amendment Act 84
of 1984 Transfer of Powers and
Duties of the State President Act 97 of 1986 Insolvency Amendment Act 27
of 1987 Insolvency Amendment Act 89
of 1989 Insolvency Amendment Act 6
of 1991 Financial Institutions
Amendment Act 54 of 1991 General Law Amendment Act
139 of 1992 Security by Means of Movable
Property Act 57 of 1993 Insolvency Amendment Act 122
of 1993 General Law Third Amendment
Act 129 of 1993 General Law Fifth Amendment
Act 157 of 1993 Insolvency Amendment Act 32
of 1995 General Law Amendment Act 49
of 1996 Judicial Matters Amendment
Act 104 of 1996 Judicial Matters Amendment
Act 34 of 1998 Judicial Matters Second
Amendment Act 122 of 1998 Administration of Estates
Laws Rationalisation Act 20 of 2001 Judicial Matters Amendment
Act 42 of 2001 also amended by Cross-Border Insolvency Act 42 of 2000
[with effect from a date
to be proclaimed - see PENDLEX] ACT
To consolidate and amend
the law relating to insolvent persons and to their estates. 1 Repeal of laws The Insolvency Act,
1916 (Act 32 of 1916), the Insolvency Act, 1916, Amendment Act, 1926 (Act 29
of 1926) (except the title and preamble thereof and sections one,
seventy-one, seventy-two and seventy-four thereof) and section twenty of the
Land Bank Amendment Act, 1934 (Act 58 of 1934) are hereby repealed: Provided
that if an estate was sequestrated or assigned before the commencement of
this Act the sequestration or assignment and all proceedings in connection
therewith shall be completed, and a person whose estate was sequestrated or
assigned before such commencement and any matter relating to such
sequestration, assignment or person shall be dealt with as if this Act had
not been passed; and provided further that if, before the said commencement,
any action was taken under the said Act 32 of 1916 with a view to the
surrender or sequestration of an estate but the surrender or sequestration
was not effected before the said commencement, such action shall, after such
commencement, be deemed to have been taken under this Act, in so far as this
Act makes provision therefor. 2 Definitions In this Act unless
inconsistent with the context- ‘account’, in relation
to a trustee, means a liquidation account or a plan of distribution or of
contribution, or any supplementary liquidation account or plan of
distribution or contribution, as the case may require; ‘banking institution’
means a banking institution as defined in section 1 of the Banks Act, 1965
(Act 23 of 1965), and registered or provisionally registered or deemed to be
registered as a banking institution in terms of section 4 of that Act, but
does not include a provisionally registered banking institution which is so
registered provisionally after the coming into operation of the Insolvency
Amendment Act, 1972; [Definition of ‘banking institution’ inserted by s. 1 of
Act 6 of 1972.] ‘building society’ means
a building society as defined in section 1 of the Building Societies Act,
1965 (Act 24 of 1965), and finally registered or deemed to be finally
registered as a building society in terms of section 5 of that Act; [Definition of ‘building society’ inserted by s. 1 of Act
6 of 1972.] ‘Court’ or ‘the Court’,
in relation to any matter means the provincial or local division of the
Supreme Court which has jurisdiction in that matter in terms of section one
hundred and forty-nine or one hundred and fifty-one, or any judge of that
division; and in relation to any offence under this Act or in section eight,
twenty-six, twenty-nine, thirty, thirty-one, thirty-two, paragraph (a) of
subsection (3) of section thirty-four, seventy-two, seventy-three, seventy-five,
seventy-six, seventy-eight or one hundred and forty-seven the expression
‘Court’ or ‘the Court’ includes a magistrate’s court which has jurisdiction
in regard to the offence or matter in question; ‘debtor’, in connection
with the sequestration of the debtor’s estate, means a person or a
partnership or the estate of a person or partnership which is a debtor in the
usual sense of the word, except a body corporate or a company or other
association of persons which may be placed in liquidation under the law
relating to Companies; ‘disposition’ means any
transfer or abandonment of rights to property and includes a sale, lease,
mortgage, pledge, delivery, payment, release, compromise, donation or any
contract therefor, but does not include a disposition in compliance with an
order of the court; and ‘dispose’ has a corresponding meaning; [Definition of ‘disposition’ substituted by s. 1 of Act
27 of 1987.] ‘free residue’, in
relation to an insolvent estate, means that portion of the estate which is
not subject to any right of preference by reason of any special mortgage,
legal hypothec, pledge or right of retention; [Definition of ‘free residue’ amended by s. 2 (a) of Act
16 of 1943.] ‘Gazette’ ...... [Definition of ‘Gazette’ inserted by s. 2 (b) of Act 16
of 1943 and deleted by s. 1 of Act 49 of 1996.] ‘good faith’, in
relation to the disposition of property, means the absence of any intention
to prejudice creditors in obtaining payment of their claims or to prefer one
creditor above another; ‘immovable property’
means land and every right or interest in land or minerals which is
registrable in any office in the Republic intended for the registration of
title to land or the right to mine; ‘insolvent’ when used as
a noun, means a debtor whose estate is under sequestration and includes such
a debtor before the sequestration of his estate, according to the context; ‘insolvent estate’ means an estate under sequestration; ‘magistrate’ includes an additional magistrate and an assistant
magistrate; ‘Master’ in relation to
any matter, means the Master of the Supreme Court within whose area of
jurisdiction that matter is to be dealt with and includes an Assistant
Master; ‘messenger’ means a
messenger of a magistrate’s court and includes a deputy-messenger; ‘movable property’ means
every kind of property and every right or interest which is not immovable
property; ‘preference’, in
relation to any claim against an insolvent estate, means the right to payment
of that claim out of the assets of the estate in preference to other claims;
and ‘preferent’ has a corresponding meaning; ‘property’ means movable
or immovable property wherever situate within the Republic, and includes
contingent interests in property other than the contingent interests of a
fidei commissary heir or legatee; ‘Republic’ ...... [Definition of ‘Republic’ (“Union”) added by s. 2 (d) of
Act 16 of 1943 and deleted by s. 1 of Act 49 of 1996.] ‘security’, in relation
to the claim of a creditor of an insolvent estate, means property of that
estate over which the creditor has a preferent right by virtue of any special
mortgage, landlord’s legal hypothec, pledge or right of retention; ‘sequestration order’
means any order of court whereby an estate is sequestrated and includes a
provisional order, when it has not been set aside; ‘sheriff’ includes a deputy sheriff; ‘special mortgage’ means
a mortgage bond hypothecating any immovable property or a notarial mortgage
bond hypothecating specially described movable property in terms of section 1
of the Security by Means of Movable Property Act, 1993 (Act 57 of 1993), or
such a notarial mortgage bond registered before 7 May 1993 in terms of
section 1 of the Notarial Bonds (Natal) Act, 1932 (Act 18 of 1932), but
excludes any other mortgage bond hypothecating movable property; [Definition of ‘special mortgage’ inserted by s. 2 (c) of
Act 16 of 1943 and substituted by s. 4 of Act 57 of 1993 and by s. 1 (1) of
Act 157 of 1993.] ‘Supreme Court’ ...... [Definition of ‘Supreme Court’ inserted by s. 2 (c) of
Act 16 of 1943 and deleted by s. 1 of Act 49 of 1996.] ‘the Territory’ ...... [Definition of ‘the Territory’ inserted by s. 2 (c) of
Act 16 of 1943 and deleted by s. 1 of Act 49 of 1996.] ‘trader’ means any
person who carries on any trade, business, industry or undertaking in which
property is sold, or is bought, exchanged or manufactured for purpose of sale
or exchange, or in which building operations of whatever nature are
performed, or an object whereof is public entertainment, or who carries on
the business of an hotel keeper or boarding-house keeper, or who acts as a
broker or agent of any person in the sale or purchase of any property or in
the letting or hiring of immovable property; and any person shall be deemed
to be a trader for the purpose of this Act (except for the purposes of
subsection (10) of section twenty-one) unless it is proved that he is not a
trader as hereinbefore defined: Provided that if any person carries on the
trade, business, industry or undertaking of selling property which he
produced (either personally or through any servant) by means of farming
operations, the provisions of this Act relating to traders only shall not
apply to him in connection with his said trade, business, industry or
undertaking; ‘trustee’ means the
trustee of an estate under sequestration, and includes a provisional trustee. 3 Petition for acceptance of surrender of estate (1) An insolvent debtor or his agent or a person entrusted with the
administration of the estate of a deceased insolvent debtor or of an
insolvent debtor who is incapable of managing his own affairs, may petition
the court for the acceptance of the surrender of the debtor’s estate for the
benefit of his creditors. (2) All the members of a partnership (other than partners en
commandite or special partners as defined in the Special Partnerships Limited
Liability Act, 1861 (Act 24 of 1861) of the Cape of Good Hope or in Law 1 of
1865 of Natal) who reside in the Republic, or their agent, may petition the
court for the acceptance of the surrender of the estate of the partnership
and of the estate of each such member. (3) Before accepting or declining the surrender, the court may direct
the petitioner or any other person to appear and be examined before the
court. 4 Notice of surrender and lodging at Master’s office of statement
of debtor’s affairs (1) Before presenting a petition mentioned in section three the person
who intends to present the petition (in this section referred to as the
petitioner) shall cause to be published in the Gazette and in a newspaper
circulating in the district in which the debtor resides, or, if the debtor is
a trader, in the district in which his principal place of business is
situate, a notice of surrender in a form corresponding substantially with
Form A in the First Schedule to this Act. The said notice shall be published
not more than thirty days and not less than fourteen days before the date
stated in the notice of surrender as the date upon which application will be
made to the court for acceptance of the surrender of the estate of the
debtor. [Sub-s. (1) amended
by s. 3 (a) of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] (2) Within a period of seven days as from the date of publication of
the said notice in the Gazette, the petitioner shall deliver or post a copy
of the said notice to every one of the creditors of the debtor in question
whose address he knows or can ascertain. [Sub-s. (2) amended
by s. 3 (b) of Act 16 of 1943.] (3) The petitioner shall lodge at the office of the Master a statement
in duplicate of the debtor’s affairs, framed in a form corresponding
substantially with Form B in the First Schedule to this Act. That statement
shall contain the particulars for which provision is made in the said Form,
shall comply with any requirements contained therein and shall be verified by
an affidavit (which shall be free from stamp duty) in the form set forth
therein. (4) Upon receiving the said statement, the Master may direct the
petitioner to cause any property set forth therein to be valued by a sworn
appraiser or by any person designated by the Master for the purpose. (5) If the debtor resides or carries on business as a trader in any
district (other than the district of Wynberg, Simonstown or Bellville in the
Province of the Cape of Good Hope) wherein there is no Master’s office, the
petitioner shall also lodge a copy of the said statement at the office of the
magistrate of the district, or, if the debtor resides or so carries on
business in a portion of such district in respect of which an additional or
assistant magistrate permanently carries out the functions of the magistrate
of the district at a place other than the seat of magistracy of that
district, at the office of such additional or assistant magistrate. [Sub-s. (5) amended
by s. 19 of Act 62 of 1955.] (6) The said statement shall be open to the inspection of any creditor
of the debtor during office hours for a period of fourteen days from a date
to be mentioned in the notice of surrender. 5 Prohibition of sale in execution of property of estate after
publication of notice of surrender and appointment of curator bonis (1) After the publication of a notice of surrender in the Gazette in
terms of section four, it shall not be lawful to sell any property of the
estate in question, which has been attached under writ of execution or other
process, unless the person charged with the execution of the writ or other
process could not have known of the publication: Provided that the Master, if
in his opinion the value of any such property does not exceed R5 000, or the
Court, if it exceeds that amount, may order the sale of the property attached
and direct how the proceeds of the sale shall be applied. [Sub-s. (1)
substituted by s. 1 of Act 99 of 1965 and amended by s. 1 of Act 101 of
1983.] (2) After the publication of a notice of surrender as aforesaid in the
Gazette the Master may appoint a curator bonis to the debtor’s estate, who
shall forthwith take the estate into his custody and take over the control of
any business or undertaking of the debtor, as if he were the debtor, as the
Master may direct, including any business the debtor is licensed to carry on
in terms of the Liquor Act, 1928, but subject in every case, mutatis
mutandis, to the provisions of section seventy. [Sub-s. (2) amended
by s. 4 of Act 16 of 1943.] 6 Acceptance by court of surrender of estate (1) If the court is satisfied that the provisions of section four have
been complied with, that the estate of the debtor in question is insolvent,
that he owns realizable property of a sufficient value to defray all costs of
the sequestration which will in terms of this Act be payable out of the free
residue of his estate and that it will be to the advantage of creditors of
the debtor if his estate is sequestrated, it may accept the surrender of the
debtor’s estate and make an order sequestrating that estate. (2) If the court does not accept the surrender or if the notice of
surrender is withdrawn in terms of section seven, or if the petitioner fails
to make the application for the acceptance of the surrender of the debtor’s
estate before the expiration of a period of fourteen days as from the date
specified in the notice of surrender, as the date upon which application will
be made to the court for the acceptance of the surrender of the debtor’s
estate, the notice of surrender shall lapse and if a curator bonis was
appointed, the estate shall be restored to the debtor as soon as the Master
is satisfied that sufficient provision has been made for the payment of all
costs incurred under subsection (2) of section five. 7 Withdrawal of notice of surrender (1) A notice of surrender published in the Gazette may not be
withdrawn without the written consent of the Master. (2) A person who has published a notice of surrender in the Gazette
may apply to the Master for his consent to the withdrawal of the notice, and
if it appears to the Master that the notice was published in good faith and
that there is good cause for its withdrawal, he shall give his written
consent thereto. Upon the publication, at the expense of the applicant, of a
notice of withdrawal and of the Master’s consent thereto, in the Gazette and
in the newspaper in which the notice of surrender appeared, the notice of
surrender shall be deemed to have been withdrawn. 8 Acts of insolvency A debtor commits an
act of insolvency- (a) if he leaves the Republic or being out of the Republic remains
absent therefrom, or departs from his dwelling or otherwise absents himself,
with intent by so doing to evade or delay the payment of his debts; (b) if a court has given judgment against him and he fails, upon the
demand of the officer whose duty it is to execute that judgment, to satisfy
it or to indicate to that officer disposable property sufficient to satisfy
it, or if it appears from the return made by that officer that he has not
found sufficient disposable property to satisfy the judgment; (c) if he makes or attempts to make any disposition of any of his
property which has or would have the effect of prejudicing his creditors or
of preferring one creditor above another; (d) if he removes or attempts to remove any of his property with
intent to prejudice his creditors or to prefer one creditor above another; (e) if he makes or offers to make any arrangement with any of his
creditors for releasing him wholly or partially from his debts; (f) if, after having published a notice of surrender of his estate
which has not lapsed or been withdrawn in terms of section six or seven, he
fails to comply with the requirements of subsection (3) of section four or
lodges, in terms of that subsection, a statement which is incorrect or
incomplete in any material respect or fails to apply for the acceptance of
the surrender of his estate on the date mentioned in the aforesaid notice as
the date on which such application is to be made; (g) if he gives notice in writing to any one of his creditors that he
is unable to pay any of his debts; (h) if, being a trader, he gives notice in the Gazette in terms of
subsection (1) of section thirty-four, and is thereafter unable to pay all
his debts. 9 Petition for sequestration of estate (1) A creditor (or his agent) who has a liquidated claim for not less
than fifty pounds, or two or more creditors (or their agent) who in the
aggregate have liquidated claims for not less than one hundred pounds against
a debtor who has committed an act of insolvency, or is insolvent, may
petition the court for the sequestration of the estate of the debtor. [Sub-s. (1) amended
by s. 6 (a) of Act 16 of 1943.] (2) A liquidated claim which has accrued but which is not yet due on
the date of hearing of the petition, shall be reckoned as a liquidated claim
for the purposes of subsection (1). (3) (a) Such a petition shall, subject to the provisions of paragraph
(c), contain the following information, namely- (i) the full names and date of birth of the debtor and, if an
identity number has been assigned to him, his identity number; (ii) the marital status of the debtor and, if he is married, the full
names and date of birth of his spouse and, if an identity number has been assigned
to his spouse, the identity number of such spouse; (iii) the amount, cause and nature of the claim in
question; (iv) whether the claim is or is not secured and, if it is, the nature
and value of the security; and (v) the debtor’s act of insolvency upon which the petition is based
or otherwise allege that the debtor is in fact insolvent. (b) The facts stated in the petition shall be confirmed by affidavit
and the petition shall be accompanied by a certificate of the Master given
not more than ten days before the date of such petition that sufficient
security has been given for the payment of all fees and charges necessary for
the prosecution of all sequestration proceedings and of all costs of
administering the estate until a trustee has been appointed, or if no trustee
is appointed, of all fees and charges necessary for the discharge of the
estate from sequestration. (c) The particulars contemplated in paragraph (a) (i) and (ii) shall
also be set out in the heading to the petition, and if the creditor is unable
to set out all such particulars he shall state the reason why he is unable to
do so. (d) In issuing a sequestration order the registrar shall reflect any
of the said particulars that appear in the heading to the petition on such
order. [Sub-s. (3) amended
by s. 6 (b) of Act 16 of 1943 and substituted by s. 2 of Act 99 of 1965 and
by s. 1 of Act 122 of 1993.] (4) Before such a petition is presented to the court, a copy of the
petition and of every affidavit confirming the facts stated in the petition
shall be lodged with the Master, or, if there is no Master at the seat of the
court, with an officer in the public service designated for that purpose by
the Master by notice in the Gazette, and the Master or such officer may
report to the court any facts ascertained by him which would appear to him to
justify the court in postponing the hearing or in dismissing the petition.
The Master or the said officer shall transmit a copy of that report to the
petitioning creditor or his agent. (5) The court, on consideration of the petition, the Master’s or the
said officer’s report thereon and of any further affidavit which the
petitioning creditor may have submitted in answer to that report, may act in
terms of section ten or may dismiss the petition, or postpone its hearing or
make such other order in the matter as in the circumstances appears to be
just. 10 Provisional sequestration If the court to which the petition for the
sequestration of the estate of a debtor has been presented is of the opinion
that prima facie- (a) the petitioning creditor has established against the debtor a
claim such as is mentioned in subsection (1) of section nine; and (b) the debtor has committed an act of insolvency or is insolvent; and (c) there is reason to believe that it will be to the advantage of
creditors of the debtor if his estate is sequestrated, it
may make an order sequestrating the estate of the debtor provisionally. 11 Service of rule nisi upon the debtor (1) If the court sequestrates the estate of a debtor provisionally it
shall simultaneously grant a rule nisi calling upon the debtor upon a day
mentioned in the rule to appear and to show cause why his estate should not
be sequestrated finally. (2) If the debtor has been absent during a period of twenty-one days
from his usual place of residence and of his business (if any) within the
Republic, the court may direct that it shall be sufficient service of that
rule if a copy thereof is affixed to or near the outer door of the buildings
where the court sits and published in the Gazette, or may direct some other
mode of service. (3) Upon the application of the debtor the court may anticipate the
return day for the purpose of discharging the order of provisional
sequestration if twenty-four hours’ notice of such application has been given
to the petitioning creditor. 12 Final sequestration or dismissal of petition for sequestration (1) If at the hearing pursuant to the aforesaid rule nisi the court is
satisfied that- (a) the petitioning creditor has established against the debtor a
claim such as is mentioned in subsection (1) of section nine; and (b) the debtor has committed an act of insolvency or is insolvent; and (c) there is reason to believe that it will be to the advantage of
creditors of the debtor if his estate is sequestrated, it may sequestrate the estate of the debtor. (2) If at such hearing the court is not so satisfied, it shall dismiss
the petition for the sequestration of the estate of the debtor and set aside
the order of provisional sequestration or require further proof of the
matters set forth in the petition and postpone the hearing for any reasonable
period but not sine die. 13 Sequestration of partnership estate (1) If the court sequestrates the estate of a partnership (whether
provisionally or finally or on acceptance of surrender), it shall
simultaneously sequestrate the estate of every member of that partnership
other than a partner en commandite or a special partner as defined in the
Special Partnerships’ Limited Liability Act, 1861 (Act 24 of 1861) of the
Cape of Good Hope or in Law 1 of 1865 of Natal, who has not held himself out
as an ordinary or general partner of the partnership in question: Provided
that if a partner has undertaken to pay the debts of the partnership within a
period determined by the court and has given security for such payment to the
satisfaction of the registrar, the separate estate of that partner shall not
be sequestrated by reason only of the sequestration of the estate of the
partnership. [Sub-s. (1) amended
by s. 7 (a) of Act 16 of 1943.] (2) Where the individual estate of a partner is unable fully to meet
the costs of sequestration, the balance shall be paid out of the assets of
the estate of the partnership. [Sub-s. (2) added
by s. 7 (b) of Act 16 of 1943 and substituted by s. 3 of Act 99 of 1965.] (3) The surrender of the estate of a partnership shall not be accepted
unless and until the court is satisfied that petitions have been presented
for the acceptance of the surrender of the separate estates of all the
partners in the partnership concerned, and that in this regard the
requirements of section four have been observed. The petitions re the
surrender of the separate estates of the several partners may be incorporated
in the petition re the surrender of the estate of the partnership. [Sub-s. (3) added
by s. 7 (b) of Act 16 of 1943.] 14 Petitioning creditor to prosecute sequestration proceedings until
trustee appointed (1) The creditor upon whose petition a sequestration order has been
made shall, at his own cost, prosecute all the proceedings in the
sequestration until a provisional trustee has been appointed or if no
provisional trustee has been appointed until a trustee has been appointed. (2) The trustee shall pay to the said creditor out of the first funds
of the estate available for that purpose under section ninety-seven his
costs, taxed according to the tariff applicable in the court which made the
sequestration order. (3) In the event of a contribution by creditors under section one
hundred and six, the petitioning creditor, whether or not he has proved a
claim against the estate in terms of section forty-four, shall be liable to
contribute not less than he would have had to contribute if he had proved the
claim stated in his petition. 15 Compensation to debtor if petition malicious or vexatious Whenever the court
is satisfied that a petition for the sequestration of a debtor’s estate is
malicious or vexatious, the court may allow the debtor forthwith to prove any
damage which he may have sustained by reason of the provisional sequestration
of his estate and award him such compensation as it may deem fit. 16 Insolvent and spouse whose separate estate has not been
sequestrated must deliver his business records and lodge statement of his
affairs with Master (1) The registrar of the court granting a final order of sequestration
(including an order on acceptance of surrender) shall without delay cause a
copy thereof to be served by the deputy sheriff, in the manner provided by
the rules of court, on the insolvent concerned and if such order relates to
the separate estate of one of two spouses who are not living apart under a
judicial order of separation, also on the spouse whose estate has not been
sequestrated, and file with the Master a copy of the deputy sheriff’s return
of service. (2) An insolvent upon whom a copy of such order has been served shall- (a) forthwith deliver to the deputy sheriff all books and records
relating to his affairs, which have not yet been taken into custody in terms
of paragraph (a) of subsection (1) of section nineteen and obtain from the
deputy sheriff a detailed receipt therefor; and (b) within seven days of such service lodge, in duplicate, with the
Master a statement of his affairs as at the date of the sequestration order,
framed in a form corresponding substantially with Form B of the First
Schedule to this Act, containing the particulars for which provision is made
in the said Form and verified by an affidavit (which shall be free from stamp
duty) in the form set forth therein. (3) A spouse whose separate estate has not been sequestrated and upon
whom a copy of an order referred to in subsection (1) has been served shall
within seven days of such service lodge, in duplicate, with the Master a
statement of his affairs, as at the date of the sequestration order, framed
in a form corresponding substantially with Form B of the First Schedule to
this Act containing the particulars for which provision is made in the said
Form and verified by affidavit (which shall be free from stamp duty) in the
form set forth therein. (4) In the statement referred to in paragraph (b) of subsection (2) or
in subsection (3) any merchandise mentioned therein shall be valued at its
cost price or at its market value, at the same time of the making of the said
affidavit whichever is the lower. (5) If the Master is satisfied that the insolvent or a spouse referred
to in subsection (3) was unable to prepare, without assistance, such a
statement which he lodged as aforesaid, the person who assisted the insolvent
or such spouse with the preparation of the statement shall be entitled to a
reasonable fee, to be determined by the Master, which shall be deemed to be
part of the costs of the sequestration. [S.
16 amended by s. 9 of Act 16 of 1943 and substituted by s. 4 of Act 99 of
1965.] 17 Notice of sequestration (1) The registrar shall without delay transmit- (a) one original of every sequestration order and of every order
relating to an insolvent estate or to a trustee or to an insolvent, made by
the court, to the Master; (b) one original of every provisional sequestration order or if a
final sequestration order was not preceded by a provisional sequestration
order, then of that final order, and of every order amending or setting aside
any prior order so transmitted, which was made by the court to- (i) the deputy-sheriff of every district in which it appears that
the insolvent resides or owns property; (ii) every officer charged with the registration of title to any
immovable property in the Republic; (ii)bis every officer having charge of a register of
ships kept at a port of registry appointed as such in terms of paragraph (c)
of section four of the Merchant Shipping Act, 1951, for the registration of
ships; [Sub-para. (ii)bis
inserted by s. 1 of Act 57 of 1951.] (iii) every sheriff and every messenger who or
whose deputy holds under attachment any property belonging to the insolvent
estate. (2) Every officer who has received an order transmitted to him in
terms of subsection (1), or a certificate and a copy of an order transmitted
to him in terms of section 18A, shall register each such order, certificate
or copy and note thereon the day and hour when it was received in his office. [Sub-s. (2)
substituted by s. 2 (a) of Act 122 of 1993.] (3) (a) Upon the receipt by any officer referred
to in subparagraph (ii) of paragraph (b) of subsection (1) of a sequestration
order, or of a certificate and a copy of an order referred to in section 18A,
he shall, if he has not yet entered such a caveat, enter a caveat against the
transfer of all immovable property or the cancellation or cession of any bond
registered in the name of or belonging to the insolvent, and if the
sequestration order or the certificate referred to in section 18A contains
the name of the spouse of the insolvent, he shall in like manner enter a
caveat in respect of such spouse. (b) A caveat
contemplated in this subsection, whether it was entered before or after the
commencement of the Insolvency Amendment Act, 1993, shall expire ten years
after the date of the sequestration order in question, or six months after
the commencement of the said Act, whichever date is the later. [Sub-s. (3)
substituted by s. 2 (b) of Act 122 of 1993.] (3)bis Upon the receipt by any officer referred to in subparagraph (ii)bis
of paragraph (b) of subsection (1) of a sequestration order he shall enter a
caveat against the transfer of every ship or share in a ship or the
cancellation or cessation of every deed of mortgage of a ship or share in a
ship registered in the name of or belonging to the insolvent or his or her
spouse. [Sub-s. (3)bis
inserted by s. 1 of Act 57 of 1951.] (4) When the Master has received a sequestration order or an order
setting aside a provisional sequestration order he shall in each case give
notice in the Gazette of such order. [Sub-s. (4)
substituted by s. 10 of Act 16 of 1943.] 18 Appointment of provisional trustee by Master (1) As soon as an estate has been sequestrated (whether provisionally
or finally) or when a person appointed as trustee ceases to be trustee or to
function as such, the Master may appoint a provisional trustee to the estate
in question who shall give security to the satisfaction of the Master for the
proper performance of his duties as provisional trustee and shall hold office
until the appointment of a trustee. (2) At any time before the first meeting of the creditors of an
insolvent estate in terms of section forty, the Master may, subject to the
provisions of subsection (3) of this section, give such directions to the
provisional trustee as could be given to a trustee by the creditors at a
meeting of creditors. (3) A provisional trustee shall have the powers and the duties of a
trustee, as provided in this Act, except that without the authority of the
court or for the purpose of obtaining such authority he shall not bring or
defend any legal proceedings and that without the authority of the court or
Master he shall not sell any property belonging to the estate in question.
Such sale shall furthermore be after such notices and subject to such
conditions as the Master may direct. [Sub-s. (3) amended
by s. 11 of Act 16 of 1943.] (4) When a meeting of creditors for the election of a trustee has been
held in terms of section forty and no trustee has been elected, and the
Master has appointed a provisional trustee in the estate in question, the
Master shall appoint him as trustee on his finding such additional security
as the Master may have required. 18A Trustee to furnish particulars of insolvent Any
person appointed as provisional trustee after the commencement of the
Insolvency Amendment Act, 1993, or if no provisional trustee has been
appointed, or if the provisional trustee has failed to perform the duties
mentioned below, a trustee appointed after the said commencement shall as
soon as possible after his appointment determine whether the particulars
referred to in section 9 (3) (a) (i) and (ii) are correctly reflected in the
sequestration order, and if any of such particulars are not so reflected or
are incorrectly reflected he shall forthwith take all reasonable steps to
obtain the correct particulars and shall transmit a certificate containing
such particulars, a copy of the sequestration order and of his appointment to
every officer charged with the registration of title to any immovable
property in the Republic and to the Master. [S.
18A inserted by s. 3 of Act 122 of 1993.] 18B Trustee may cause caveat to be entered (1) A trustee may, before or after the rehabilitation of an insolvent,
with the written consent of the Master, by notice to the officer charged with
the registration of title to immovable property in the Republic, in respect
of immovable property or a bond registered in the name of the insolvent or of
his spouse contemplated in section 21 (13), cause a caveat to be entered
against the transfer of the immovable property or the cancellation or cession
of the bond referred to in the notice. (2) The notice referred to in subsection (1) shall be accompanied by
the written consent of the Master contemplated in that subsection and shall
identify sufficiently the person in respect of whom and the property or bond
in respect of which the caveat is to be entered so as to enable the officer
charged with the registration to enter the caveat as contemplated in the said
subsection. (3) The caveat shall remain in force until the date indicated by the
Master in his consent. [S. 18B inserted by s. 3
of Act 122 of 1993.] 19 Attachment of property by deputy sheriff (1) As soon as a deputy-sheriff has received a sequestration order he
shall attach, as hereinafter provided and make an inventory of the movable
property of the insolvent estate which is in his district and is capable of
manual delivery and not in the possession of a person who claims to be
entitled to retain it under a right of pledge or a right of retention or
under attachment by a messenger, that is to say- (a) he shall take into his own custody all books
of account, invoices, vouchers, business correspondence, and any other
records relating to the affairs of the insolvent, cash, share certificates,
bonds, bills of exchange, promissory notes, and other securities, and remit
all such cash to the Master; [Para. (a)
substituted by s. 5 (a) of Act 99 of 1965.] (b) he shall leave movable property other than animals in a room or
other suitable place properly sealed up or appoint some suitable person to
hold any movable property in his custody; (c) he shall hand to the person so appointed a copy of the inventory,
with a notice that the property has been attached by virtue of a
sequestration order. That notice shall contain a statement of the offence
constituted by section one hundred and forty-two and the penalty provided
therefor; (d)he
shall make a detailed list of all such books and records and endorse thereon
any explanation offered by the insolvent in respect thereof or in respect of
any books or records relating to his affairs which the insolvent is unable to
produce; [Para. (d) inserted
by s. 5 (b) of Act 99 of 1965.] (e) if the insolvent is present he shall enquire from him whether the
list referred to in paragraph (d) is a complete list of the books and records
relating to his affairs and record his reply thereto. [Para. (e) inserted
by s. 5 (b) of Act 99 of 1965.] (1)bis If an insolvent has in reply to the deputy sheriff’s enquiry
intimated that the list referred to in paragraph (d) of subsection (1) is a
complete list of the books and records relating to his affairs, the books and
records referred to in such list shall, unless the contrary is proved, in any
criminal proceedings against him under this Act, be deemed to be the only
books and records maintained by him. [Sub-s. (1)bis
inserted by s. 5 (c) of Act 99 of 1965.] (2) Any person interested in the insolvent estate or in the property
attached may be present or may authorize another person to be present when
the deputy-sheriff is making his inventory. (3) The deputy-sheriff shall- (a) immediately after effecting the attachment, report to the Master
in writing that the attachment has been effected and mention in his report
any property which to his knowledge is in the lawful possession of a pledgee
or of a person who is entitled to retain such property by virtue of a right
of retention and shall submit with such report a copy of the inventory made
by him under subsection (1); (b) as soon as possible after the appointment of the trustee, submit a
copy of such inventory to him. [Sub-s. (3) substituted
by s. 5 (d) of Act 99 of 1965.] (4) A messenger shall transmit to the Master without delay an
inventory of all property attached by him which he knows to belong to an
insolvent estate. (5) The deputy-sheriff shall be entitled to fees taxed by the Master
according to tariff A in the Second Schedule to this Act and the rules for
the construction of that tariff. (6) The Minister of Justice may by notice in the Gazette amend the
said tariff A and rules. [Sub-s. (6) added by s.
11 of Act 50 of 1956 and amended by ss. 46 and 47 of Act 97 of 1986.] 20 Effect of sequestration on insolvent’s property (1) The effect of the sequestration of the estate of an insolvent
shall be- (a) to divest the insolvent of his estate and to vest it in the Master
until a trustee has been appointed, and, upon the appointment of a trustee,
to vest the estate in him; (b) to stay, until the appointment of a trustee, any civil proceedings
instituted by or against the insolvent save such proceedings as may, in terms
of section twenty-three, be instituted by the insolvent for his own benefit
or be instituted against the insolvent: Provided that if any claim which
formed the subject of legal proceedings against the insolvent which were so
stayed, has been proved and admitted against the insolvent’s estate in terms
of section forty-four or seventy-eight, the claimant may also prove against
the estate a claim for his taxed costs, incurred in connection with those
proceedings before the sequestration of the insolvent’s estate; (c) as soon as any sheriff or messenger, whose duty it is to execute
any judgment given against an insolvent, becomes aware of the sequestration
of the insolvent’s estate, to stay that execution, unless the court otherwise
directs; (d) to empower the insolvent, if in prison for debt, to apply to the
court for his release, after notice to the creditor at whose suit he is so
imprisoned, and to empower the court to order his release, on such conditions
as it may think fit to impose. (2) For the purposes of subsection (1) the estate of an insolvent
shall include- (a) all property of the insolvent at the date of the sequestration,
including property or the proceeds thereof which are in the hands of a
sheriff or a messenger under writ of attachment; (b) all property which the insolvent may acquire or which may accrue
to him during the sequestration, except as otherwise provided in section
twenty-three. 21 Effect of sequestration on property of spouse of insolvent (1) The additional effect of the sequestration of the separate estate
of one of two spouses who are not living apart under a judicial order of
separation shall be to vest in the Master, until a trustee has been
appointed, and, upon the appointment of a trustee, to vest in him all the
property (including property or the proceeds thereof which are in the hands
of a sheriff or a messenger under a writ of attachment) of the spouse whose
estate has not been sequestrated (hereinafter referred to as the solvent
spouse) as if it were property of the sequestrated estate, and to empower the
Master or trustee to deal with such property accordingly, but subject to the
following provisions of this section. (2) The trustee shall release any property of the solvent spouse which
is proved- (a) to have been the property of that spouse immediately before her or
his marriage to the insolvent or before the first day of October, 1926; or (b) to have been acquired by that spouse under a marriage settlement;
or (c) to have been acquired by that spouse during the marriage with the
insolvent by a title valid as against creditors of the insolvent; or (d) to be safeguarded in favour of that spouse by section twenty-eight
of this Act; or [Para. (d) amended by s.
12 of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] (e) to have been acquired with any such property
as aforesaid or with the income or proceeds thereof. (3) If the solvent spouse is in the Republic and the trustee is able
to ascertain his or her address, the trustee shall not, except with the leave
of the court, realize property which ostensibly belonged to the solvent
spouse, until the expiry of six weeks’ written notice of his intention to do
so, given to that spouse. Such notice shall also be published in the Gazette
and in a newspaper circulating in the district in which the solvent spouse
resides or carries on business, and shall invite all separate creditors for
value of that spouse to prove their claims as provided in subsection (5). (4) The solvent spouse may apply to the court for an order releasing
any property vested in the trustee of the insolvent estate under subsection
(1) or for an order staying the sale of such property or, if it has already been
sold, but the proceeds thereof not yet distributed among creditors, for an
order declaring the applicant to be entitled to those proceeds; and the court
may make such order on the application as it thinks just. (5) Subject to any order made under subsection (4) any property of the
solvent spouse realized by the trustee shall bear a proportionate share of
the costs of the sequestration as if it were property of the insolvent estate
but the separate creditors for value of the solvent spouse having claims which
could have been proved against the estate of that spouse if it had been the
estate under sequestration, shall be entitled to prove their claims against
the estate of the insolvent spouse in the same manner and, except as in this
Act is otherwise provided, shall have the same rights and remedies and be
subject to the same obligations as if they were creditors of the insolvent
estate; and the creditors who have so proved claims shall be entitled to
share in the proceeds of the property so realized according to their legal
priorities inter se and in priority to the separate creditors of the
insolvent estate, but shall not be entitled to share in the separate assets
of the insolvent estate. (6) If any property of the solvent spouse (other than property mentioned
in paragraph (d) of subsection (2) has been released by virtue of subsection
(2) or (4) the separate creditors of that spouse shall only be entitled to
share in the proceeds of any property of the solvent spouse which has been
realized by the trustee, after the property so released and any property of
that spouse acquired by her or him since the sequestration, have been
excussed. (7) Before awarding any such creditor a share in such proceeds, the
trustee may require the creditor to lodge with him, within a period to be
determined by the Master, an affidavit, supported by such evidence as may be
available, setting forth the result of such excussion and disclosing the
balance of his claim which remains unpaid. He shall then be entitled to share
as aforesaid in respect of that balance only: Provided that any creditor who
has incurred costs in excussing the separate property of the solvent spouse
and has been unable to recover those costs from the proceeds of that property
shall be entitled to add the amount of those costs to the amount of his claim
as proved. (8) If, during the period determined by the Master, any such creditor
has failed either to lodge with the trustee such an affidavit as aforesaid,
or to excuss any separate property of the solvent spouse still available for
the satisfaction of his claim, he shall be debarred from sharing as aforesaid
unless the court otherwise orders. (9) A creditor of the solvent spouse who has proved a claim as
provided in subsection (5) shall not be liable to make any contribution under
section one hundred and six, and shall not be entitled to vote at any meeting
of the creditors of the insolvent estate held in terms of section forty,
forty-one or forty-two; but any direction of the creditors of the insolvent
estate which infringes the rights of any first-mentioned creditor may be set
aside by the court on the application of such creditor. (10) If the solvent spouse
is carrying on business as a trader, apart from the insolvent spouse or if it
appears to the court that the solvent spouse is likely to suffer serious
prejudice through the immediate vesting of the property of that spouse in the
Master of the trustee, and the court is satisfied in either case that the
solvent spouse is willing and able to make arrangements whereby the interest
therein of the insolvent estate in the said property will be safeguarded
without such a vesting, the court, either when making the sequestration order
or at some later date, but subject to the immediate completion of such
arrangement as aforesaid, may exclude that property or any part thereof from
the operation of the order, for such period as it thinks fit. During that
period the solvent spouse shall lay before the trustee the evidence available
in support of her or his claim to such property and within that period the
trustees shall notify the solvent spouse in writing whether or not he will
release such property in accordance with subsection (2). If the property has
not been so released, then upon the expiry of the said period that property
shall vest in the Master or in the trustee, but subject to the provisions of
this section. (11) If application is made
to the court for the sequestration of the estate of the solvent spouse on the
ground of an act of insolvency committed by that spouse since the vesting of
her or his property in the Master or the trustee of the insolvent estate, and
the court is satisfied that the act of insolvency alleged in that application
was due to such vesting, then if it appears- (a) that an application is being or, if necessary, will be made under
subsection (4) for the release of any property of the solvent spouse; or (b) that any property of the solvent spouse has been released since
the making of the sequestration order, and that the solvent spouse is now in
a position to discharge her or his liabilities, the
court may postpone the hearing of the said application or may make such
interim order thereon as to it may seem just. (12) If the trustee has in
accordance with the preceding provisions of this section released any
property alleged to belong to the solvent spouse, he shall not be debarred
thereby from proving that it belongs to the insolvent estate and from
recovering accordingly. (13) In this section the
word ‘spouse’ means not only a wife or husband in the legal sense, but also a
wife or husband by virtue of a marriage according to any law or custom, and
also a woman living with a man as his wife or a man living with a woman as
her husband, although not married to one another. 22 Payment of debts after sequestration Every satisfaction
in whole or in part of any obligation the fulfilment whereof was due or the
cause of which arose before the sequestration of the creditor’s estate shall,
if made to the insolvent after such sequestration, be void, unless the debtor
proves that it was made in good faith and without knowledge of the
sequestration. 23 Rights and obligations of insolvent during sequestration (1) Subject to the provisions of this section and of section
twenty-four, all property acquired by an insolvent shall belong to his
estate. (2) The fact that a person entering into any contract is an insolvent,
shall not affect the validity of that contract: Provided that the insolvent
does not thereby purport to dispose of any property of his insolvent estate;
and provided further that an insolvent shall not, without the consent in
writing of the trustee of his estate, enter into any contract whereby his
estate or any contribution towards his estate which he is obliged to make, is
or is likely to be adversely affected, but in either case subject to the
provisions of subsection (1) of section twenty-four. (3) An insolvent may follow any profession or occupation or enter into
any employment, but he may not, during the sequestration of his estate
without the consent in writing of the trustee of his estate, either carry on,
or be employed in any capacity or have any direct or indirect interest in,
the business of a trader who is a general dealer or a manufacturer: Provided
that any one of the creditors of the insolvent’s estate or the insolvent
himself may, if the trustee gives or refuses such consent, appeal to the
Master, whose decision shall be final. (3)bis Where a trustee has given his consent to an insolvent to enter
into a contract, or to carry on a trade in terms of subsection (2) or
subsection (3), as the case may be, he shall forthwith forward to the Master
a copy of such consent. Any trustee who does not so forward such consent
within one week after it has been granted, shall be deemed to have contravened
the provisions of paragraph (b) of section sixty. [Sub-s. (3)bis
inserted by s. 13 of Act 16 of 1943.] (4) The insolvent shall keep a detailed record of all assets received
by him from whatever source, and of all disbursements made by him in the
course of his profession, occupation or employment, and, if required thereto
by the trustee, shall transmit to the trustee in the first week of every
month a statement verified by affidavit of all assets received and of all
disbursements made by him during the preceding month. The trustee may inspect
such record at all reasonable times and may demand the production of
reasonable vouchers in support of any item in such accounts and of the
expenditure of the insolvent for the support of himself and those dependent
upon him. (5) The trustee shall be entitled to any moneys received or to be
received by the insolvent in the course of his profession, occupation or
other employment which in the opinion of the Master are not or will not be
necessary for the support of the insolvent and those dependent upon him, and
if the trustee has notified the employer of the insolvent that the trustee is
entitled, in terms of this subsection, to any part of the insolvent’s
remuneration due to him at the same time of such notification, or which will
become due to him thereafter, the employer shall pay over that part to the
trustee. (6) The insolvent may sue or may be sued in his own name without
reference to the trustee of his estate in any matter relating to status or
any right in so far as it does not affect his estate or in respect of any
claim due to or against him under this section, but no cession of his
earnings after the sequestration of his estate, whether made before or after
the sequestration shall be of any effect so long as his estate is under
sequestration. (7) The insolvent may for his own benefit recover any pension to which
he may be entitled for services rendered by him. (8) The insolvent may for his own benefit recover any compensation for
any loss or damage which he may have suffered, whether before or after the
sequestration of his estate, by reason of any defamation or personal injury:
Provided that he shall not, without the leave of the court, institute an
action against the trustee of his estate on the ground of malicious
prosecution or defamation. (9) Subject to the provisions of subsection (5) the insolvent may
recover for his own benefit, the remuneration or reward for work done or for
professional services rendered by or on his behalf after the sequestration of
his estate. (10) The insolvent may be
sued in his own name for any delict committed by him after the sequestration
of his estate, and his insolvent estate shall not be liable therefor. (11) Any property claimable
by the trustee from the insolvent under this section may be recovered from
the insolvent by writ of execution to be issued by the registrar upon the
production to him of a certificate by the Master that the property stated
therein is so claimable. (12) The insolvent shall at
any time before the second meeting of the creditors of his estate held in
terms of section forty, at the request of the trustee assist the trustee to
the best of his ability in collecting, taking charge of or realising any
property belonging to the estate: Provided that the trustee shall, during the
period of such assistance, give to the insolvent out of the estate such an
allowance in money or goods as is, in the opinion of the Master, necessary to
support the insolvent and his or her dependants. (13) The insolvent shall
keep the trustee of his estate informed of his residential and postal
addresses. (14) Any notice or
information which is to be conveyed to an insolvent in terms of this Act, may
be delivered to him personally or may be delivered at or sent in a registered
letter by post to an address given by the insolvent to the trustee in terms
of subsection (13). 24 Provisions relating to property in possession of insolvent after
sequestration (1) If an insolvent purports to alienate, for valuable consideration,
without the consent of the trustee of his estate any property which he
acquired after the sequestration of his estate (and which by virtue of such
acquisition became part of his sequestrated estate) or any right to any such
property to a person who proves that he was not aware and had no reason to
suspect that the estate of the insolvent was under sequestration the
alienation shall nevertheless be valid. (2) Whenever an insolvent has acquired the possession of any property,
such property shall, if claimed by the trustee of the insolvent’s estate, be
deemed to belong to that estate unless the contrary is proved; but if a
person who became the creditor of the insolvent after the sequestration of
his estate, alleges (whether against the trustee or against the insolvent) that
any such property does not belong to the said estate and claims any right
thereto, the property shall be deemed not to belong to the estate, unless the
contrary is proved. 25 Estate to remain vested in trustee until composition or
rehabilitation (1) The estate of an insolvent shall remain vested in the trustee
until the insolvent is reinvested therewith pursuant to a composition as in
section 119 provided, or until the rehabilitation of the insolvent in terms
of section 127 or 127A: Provided that, subject to the provisions of
subsection (3), any property which immediately before the rehabilitation is
vested in the trustee shall remain vested in him after the rehabilitation for
the purposes of realization and distribution. [Sub-s. (1)
substituted by s. 2 of Act 6 of 1972 and by s. 4 (a) of Act 122 of 1993.] (2) When a trustee has vacated his office or has been removed from
office or has resigned or died the estate shall vest in the remaining
trustee, if any; otherwise it shall vest in the Master until another trustee
has been appointed. (3) After the expiry of every caveat entered in terms of section 17
(3), 18B or 127A in respect of the property of an insolvent any act of
registration in respect of such property brought about by him shall be valid
in spite of the fact that the property formed part of his insolvent estate. [Sub-s. (3) added
by s. 4 (b) of Act 122 of 1993.] (4) If a person who is or was insolvent unlawfully disposes of
immovable property or a right to immovable property which forms part of his
insolvent estate, the trustee may, notwithstanding the provisions of
subsection (3), recover the value of the property or right so disposed of- (a) from the insolvent or former insolvent; (b) from any person who, knowing such property or right to be part of
the insolvent estate, acquired such property or right from the insolvent or
former insolvent; or (c) from any person who acquired such property or right from the
insolvent or former insolvent without giving sufficient value in return, in
which case the amount so recovered shall be the difference between the value
of the property or right and any value given in return. [Sub-s. (4) added by s.
4 (b) of Act 122 of 1993.] 26 Disposition without value (1) Every disposition of property not made for value may be set aside
by the court if such disposition was made by an insolvent- (a) more than two years before the sequestration of his estate, and it
is proved that, immediately after the disposition was made, the liabilities
of the insolvent exceeded his assets; (b) within two years of the sequestration of his estate, and the
person claiming under or benefited by the disposition is unable to prove
that, immediately after the disposition was made, the assets of the insolvent
exceeded his liabilities: Provided
that if it is proved that the liabilities of the insolvent at any time after
the making of the disposition exceeded his assets by less than the value of
the property disposed of, it may be set aside only to the extent of such
excess. (2) A disposition of property not made for value, which was set aside
under subsection (1) or which was uncompleted by the insolvent, shall not
give rise to any claim in competition with the creditors of the insolvent’s
estate: Provided that in the case of a disposition of property not made for
value, which was uncompleted by the insolvent, and which- (a) was made by way of suretyship, guarantee or indemnity; and (b) has not been set aside under subsection (1), the beneficiary
concerned may complete with the creditors of the insolvent’s estate for an
amount not exceeding the amount by which the value of the insolvent’s assets
exceeded his liabilities immediately before the making of that disposition. [Sub-s. (2) substituted
by s. 1 of Act 84 of 1984.] 27 Antenuptial contracts (1) No immediate benefit under a duly registered antenuptial contract
given in good faith by a man to his wife or any child to be born of the
marriage shall be set aside as a disposition without value, unless that man’s
estate was sequestrated within two years of the registration of that
antenuptial contract. (2) In subsection (1) the expression ‘immediate benefit’ means a
benefit given by a transfer, delivery, payment, cession, pledge, or special
mortgage of property completed before the expiration of a period of three
months as from the date of the marriage. 28 ...... [S. 28 repealed by
s. 78 of Act 27 of 1943.] 29 Voidable preferences (1) Every disposition of his property made by a debtor not more than
six months before the sequestration of his estate or, if he is deceased and
his estate is insolvent, before his death, which has had the effect of
preferring one of his creditors above another, may be set aside by the Court
if immediately after the making of such disposition the liabilities of the debtor
exceeded the value of his assets, unless the person in whose favour the
disposition was made proves that the disposition was made in the ordinary
course of business and that it was not intended thereby to prefer one
creditor above another. [Sub-s. (1) amended
by s. 9 (a) of Act 64 of 1960 and substituted by s. 6 of Act 99 of 1965.] (2) ...... [Sub-s. (2) deleted by
s. 9 (b) of Act 64 of 1960.] (3) Every disposition of property made under a power of attorney
whether revocable or irrevocable, shall for the purposes of this section and
of section thirty be deemed to be made at the time at which the transfer or
delivery or mortgage of such property takes place. (4) For the purposes of this section any period during which the
provisions of subsection (1) of section eleven of the Farmers’ Assistance
Act, 1935 (Act 48 of 1935), applied in respect of any debtor as an applicant
in terms of the said Act, shall not be taken into consideration in the
calculation of any period of six months. [Sub-s. (4) added
by s. 17 of Act 16 of 1960.] 30 Undue preference to creditors (1) If a debtor made a disposition of his property at a time when his
liabilities exceeded his assets, with the intention of preferring one of his
creditors above another, and his estate is thereafter sequestrated, the court
may set aside the disposition. (2) For the purposes of this section and of section twenty-nine a
surety for the debtor and a person in a position by law analogous to that of
a surety shall be deemed to be a creditor of the debtor concerned. 31 Collusive dealings before sequestration (1) After the sequestration of a debtor’s estate the court may set
aside any transaction entered into by the debtor before the sequestration,
whereby he, in collusion with another person, disposed of property belonging
to him in a manner which had the effect of prejudicing his creditors or of
preferring one of his creditors above another. (2) Any person who was a party to such collusive disposition shall be
liable to make good any loss thereby caused to the insolvent estate in
question and shall pay for the benefit of the estate, by way of penalty, such
sum as the court may adjudge, not exceeding the amount by which he would have
benefited by such dealing if it had not been set aside; and if he is a creditor
he shall also forfeit his claim against the estate. (3) Such compensation and penalty may be recovered in any action to
set aside the transaction in question. 32 Proceedings to set aside improper disposition (1) (a) Proceedings to recover the value of property or a right in
terms of section 25 (4), to set aside any disposition of property under
section 26, 29, 30 or 31, or for the recovery of compensation or a penalty
under section 31, may be taken by the trustee. (b) If the trustee
fails to take any such proceedings they may be taken by any creditor in the
name of the trustee upon his indemnifying the trustee against all costs
thereof. [Sub-s. (1)
substituted by s. 5 of Act 122 of 1993.] (2) In any such proceedings the insolvent may be compelled to give
evidence on a subpoena issued on the application of any party to the
proceedings or he may be called by the court to give evidence. When giving
such evidence he may not refuse to answer any question on the ground that the
answer may tend to incriminate him or on the ground that he is to be tried on
a criminal charge and may be prejudiced at such a trial by his answer. (3) When the Court sets aside any disposition of property under any of
the said sections, it shall declare the trustee entitled to recover any
property alienated under the said disposition or in default of such property
the value thereof at the date of the disposition or at the date on which the
disposition is set aside, whichever is the higher. 33 Improper disposition does not affect certain rights (1) A person who, in return for any disposition which is liable to be
set aside under section twenty-six, twenty-nine, thirty, or thirty-one, has
parted with any property or security which he held or who has lost any right
against another person, shall, if he acted in good faith, not be obliged to
restore any property or other benefit received under such disposition, unless
the trustee has indemnified him for parting with such property or security or
for losing such right. (2) Section twenty-six, twenty-nine, thirty, or thirty-one shall not
affect the rights of any person who acquired property in good faith and for
value from any person other than a person whose estate was subsequently
sequestrated. 34 Voidable sale of business (1) If a trader transfers in terms of a contract any business
belonging to him, or the goodwill of such business, or any goods or property
forming part thereof (except in the ordinary course of that business or for
securing the payment of a debt), and such trader has not published a notice
of such intended transfer in the Gazette, and in two issues of an Afrikaans
and two issues of an English newspaper circulating in the district in which
that business is carried on, within a period not less than thirty days and
not more than sixty days before the date of such transfer, the said transfer
shall be void as against his creditors for a period of six months after such
transfer, and shall be void against the trustee of his estate, if his estate
is sequestrated at any time within the said period. [Sub-s. (1)
substituted by s. 12 of Act 32 of 1952, by s. 2 (a) of Act 27 of 1987 and by
s. 1 (a) of Act 6 of 1991.] (2) As soon as any such notice is published, every liquidated
liability of the said trader in connection with the said business, which
would become due at some future date, shall fall due forthwith, if the
creditor concerned demands payment of such liability: Provided that if such
liability bears no interest, the amount of such liability which would have
been payable at such future date if such demand had not been made, shall be
reduced at the rate of eight per cent per annum of that amount, over the
period between the date when payment is made and that future date. [Sub-s. (2) amended
by s. 2 of Act 101 of 1983.] (3) If any person who has any claim against the said trader in
connection with the said business, has before such transfer, for the purpose
of enforcing his claim, instituted proceedings against the said trader- (a) in any court of law, and the person to whom the said business was
transferred knew at the time of the transfer that those proceedings had been
instituted; or (b) in a Division of the Supreme Court having jurisdiction in the
district in which the said business is carried on or in the magistrate’s
court of that district, the transfer shall
be void as against him for the purpose of such enforcement. [Sub-s. (3)
substituted by s. 2 (b) of Act 27 of 1987 and by s. 1 (b) of Act 6 of 1991.] (4) For the purposes of this section ‘transfer’, when used as a noun,
includes actual or constructive transfer of possession, and, when used as a
verb, has a corresponding meaning. [Sub-s. (4) added
by s. 1 (c) of Act 6 of 1991.] 35 Uncompleted acquisition of immovable property before
sequestration If an insolvent,
before the sequestration of his estate, entered into a contract for the
acquisition of immovable property which was not transferred to him, the
trustee of his insolvent estate may enforce or abandon the contract. The
other party to the contract may call upon the trustee by notice in writing to
elect whether he will enforce or abandon the contract, and if the trustee has
after the expiration of six weeks as from the receipt of the notice, failed
to make his election as aforesaid and inform the other party thereof, the
other party may apply to the court by motion for cancellation of the contract
and for an order directing the trustee to restore to the applicant the
possession of any immovable property under the control of the trustee, of
which the insolvent or the trustee gained possession or control by virtue of
the contract, and the court may make such order on the application as it
thinks fit: Provided that this section shall not affect any right which the
other party may have to establish against the insolvent estate, a
non-preferent claim for compensation for any loss suffered by him as a result
of the non-fulfilment of the contract. 35A Transactions on an
exchange (1) In this section- ‘exchange’ means a
licensed stock exchange as defined in section 1 of the Stock Exchanges
Control Act, 1985 (Act 1 of 1985), or a financial exchange or clearing house
as defined in section 1 of the Financial Markets Control Act, 1989 (Act 55 of
1989); ‘market participant’
means a stockbroker or a member as defined in section 1 of the Stock
Exchanges Control Act, 1985, or a financial instrument principal or a
financial instrument trader as defined in section 1 of the Financial Markets
Control Act, 1989, or a client of such a stockbroker, member or financial
instrument trader or any other party to a transaction; [Definition of ‘market
participant’ substituted by s. 2 of Act 104 of 1996.] ‘rules of an exchange’
means rules made pursuant to either section 12 of the Stock Exchanges Control
Act, 1985, or section 17 of the Financial Markets Control Act, 1989; ‘transaction’ means any transaction to which the rules of an exchange
apply. (2) If upon the sequestration of the estate of a market participant
the obligations of such market participant in respect of any transaction
entered into prior to sequestration have not been fulfilled, the exchange in
question in respect of any obligation owed to it, or any other market
participant in respect of obligations owed to such market participant, shall
in accordance with the rules of that exchange applicable to any such
transaction be entitled to terminate all such transactions and the trustee of
the insolvent estate of the market participant shall be bound by such
termination. (3) No claim as a result of the termination of any transaction as
contemplated in subsection (2) shall exceed the amount due upon termination
in terms of the rules of the exchange in question. (4) Any rules of an exchange and the practices thereunder which
provide for the netting of a market participant’s position or for set-off in
respect of transactions concluded by the market participant or for the
opening or closing of a market participant’s position shall upon
sequestration of the estate of the market participant be binding on the
trustee in respect of any transaction or contract concluded by the market
participant prior to such sequestration, but which is, in terms of such rules
and practices, to be settled on a date occurring after the sequestration, or
settlement of which was overdue on the date of sequestration. (5) Section 341 (2) of the Companies Act, 1973 (Act 61 of 1973), and
sections 26, 29 and 30 of this Act shall not apply to property disposed of in
accordance with the rules of an exchange. [S. 35A inserted by s. 1
of Act 32 of 1995.] 35B Agreements on informal markets (1) In this section ‘agreement’ means any agreement, other than a
transaction as defined in section 35A, providing primarily for delivery,
exchange, settlement or payment, as the case may be, on a future date, of, or
in connection with, or based on, or based on the price of, currency of a
country other than the Republic, interest rates, exchange rates, indices,
gold, precious or base metals, financial instruments as defined in section 1
of the Financial Markets Control Act, 1989 (Act 55 of 1989), whether or not
it is a standardised contract as defined therein, securities as defined in
section 1 of the Stock Exchanges Control Act, 1985 (Act 1 of 1985), or such
other commodity or corporeal or incorporeal thing or agreement as may be
specified by the Minister, after consultation with the Minister of Finance,
by notice in the Gazette, or any combination of, or option on, any of the
aforegoing agreements. (2) If upon sequestration of the estate of a party to an agreement,
any obligation, whether then immediately claimable or not, arising out of
such agreement has not been fulfilled, the right of a party to claim specific
performance in terms of such agreement shall be replaced by a claim for
payment of damages as at the date of sequestration, which damages shall be
deemed to constitute a liquidated claim for purposes of netting or set-off. (3) Any provision in an agreement for the netting or set-off of the
parties’ claims under one or more agreements shall, upon sequestration of the
estate of any party, be binding on the trustee in respect of any agreement
concluded prior to such sequestration but which is, in terms of such
agreement, to be settled on a date occurring after the sequestration, or
settlement of which was overdue on the date of sequestration. (4) Section 341 (2) of the Companies Act, 1973 (Act 61 of 1973), and
sections 26, 29 and 30 of this Act shall not apply to property disposed of in
terms of an agreement. [S. 35B inserted by s. 1
of Act 32 of 1995.] 36 Goods not paid for which debtor purchased not on credit (1) If a person, before the sequestration of his estate, by virtue of
a contract of purchase and sale which provided for the payment of the
purchase price upon delivery of the property in question to the purchaser,
received any movable property without paying the purchase price in full, the
seller may, after the sequestration of the purchaser’s estate, reclaim that
property if within ten days after delivery thereof he has given notice in
writing to the purchaser or to the trustee of the purchaser’s insolvent
estate or to the Master, that he reclaims the property: Provided that if the
trustee disputes the seller’s right to reclaim the property, the seller shall
not be entitled to reclaim it, unless he institutes, within fourteen days
after having received notice that the trustee so disputes his right, legal
proceedings to enforce his right. (2) For the purposes of subsection (1) a contract of purchase and sale
shall be deemed to provide for the payment of the purchase price upon
delivery of the property in question to the purchaser, unless the seller has
agreed that the purchase price or any part thereof shall not be claimable
before or at the time of such delivery. (3) The trustee of the purchaser’s insolvent estate shall not be
obliged to restore any property reclaimed by the seller in terms of
subsection (1) unless the seller refunds to him every part of the purchase
price which he has already received. (4) Except as in this section provided, a seller shall not be entitled
to recover any property which he sold and delivered to a purchaser whose
estate was sequestrated after the sale, only by reason of the fact that the
purchaser failed to pay the purchase price. (5) The owner of the movable property which was in the possession or
custody of a person at the time of the sequestration of that person’s estate,
shall not be entitled to recover that property if it has, in good faith, been
sold as part of the said person’s insolvent estate, unless the owner has, by
notice in writing, given, before the sale, to the curator bonis if one has
been appointed or to the trustee of the insolvent estate, or if there is no
such curator bonis or trustee, to the Master, demanded a return of the
property. (6) If any such property has been sold as part of the insolvent
estate, the former owner of that property may recover from the trustee,
before the confirmation of any trustee’s account in the estate in terms of
section one hundred and twelve, the net proceeds of the sale of that property
(unless he has recovered the property itself from the purchaser), and
thereupon he shall lose any right which he may have had to recover the
property itself in terms of subsection (5). 37 Effect of sequestration upon a lease (1) A lease entered into by any person as lessee shall not be
determined by the sequestration of his estate, but the trustee of his
insolvent estate may determine the lease by notice in writing to the lessor:
Provided that the lessor may claim from the estate, compensation for any loss
which he may have sustained by reason of the non-performance of the terms of
such lease. (2) If the trustee does not, within three months of his appointment
notify the lessor that he desires to continue the lease on behalf of the
estate, he shall be deemed to have determined the lease at the end of such
three months. (3) The rent due under any such lease, from the date of the
sequestration of the estate of the lessee to the determination or the cession
thereof by the trustee, shall be included in the costs of sequestration. (4) The determination of the lease by the trustee in terms of this
section shall deprive the insolvent estate of any right to compensation for
improvements, other than improvements made in terms of an agreement with the
lessor, made on the leased property during the period of the lease. (5) A stipulation in a lease that the lease shall terminate or be
varied upon the sequestration of the estate of either party shall be null and
void, but a stipulation in a lease which restricts or prohibits the transfer
of any right under the lease or which provides for the termination or
cancellation of the lease by reason of the death of the lessee or of his
successor in title, shall bind the trustee of the insolvent estate of the
lessee or of his successor in title, as if he were the lessee or the said
successor, or the executor in the estate of the lessee or his said successor,
as the case may be. [Sub-s. (5) substituted
by s. 14 of Act 16 of 1943.] 38 Contract of service terminated by insolvency of employer The sequestration of
the estate of an employer shall terminate the contract of service between him
and his employees, but any employee whose contract of service has been so
terminated shall be entitled to claim compensation from the insolvent estate
of his former employer for any loss which he may have suffered by reason of
the termination of his contract of service prior to its expiration. 39 Time and place of meetings of creditors (1) Whenever the Master convenes any meeting of creditors as
hereinafter provided, he shall appoint it to be held at such time and place
as he considers to be most convenient for all parties concerned and may, if
necessary, alter the time and place of any such meeting: Provided that he
shall publish in the Gazette sufficient notice of any such alteration. (2) All meetings of creditors held in the district wherein there is a
Master’s office shall be presided over by the Master or an officer in the
public service, designated, either generally or specially, by the Master for
that purpose. Meetings of creditors held in any other district shall be held
in accordance with the direction of the Master and shall be presided over by
the magistrate of the district, or by an officer in the public service,
designated, either generally or specially, by the magistrate for that
purpose. [Sub-s. (2)
substituted by s. 7 of Act 99 of 1965.] (3) The officer presiding at such a meeting shall keep a record of the
proceedings, which he shall certify at the conclusion of the proceedings, and
if he is not the Master, he shall transmit the record to the Master. (4) If at a meeting of creditors held in a district where there is no
Master, an officer other than the magistrate presides, the presiding officer
shall state in the record of the proceedings the reason for the magistrate’s
absence. (5) The officer presiding at a meeting of creditors may, if necessary
or desirable, adjourn the meeting from time to time. (6) The place where a meeting of creditors is held shall be accessible
to the public and the publication of any statement made at such a meeting
shall be privileged to the same extent as in the publication of a statement
made in a court of law. 40 First and second meetings of creditors (1) On the receipt of an order of the court sequestrating an estate
finally, the Master shall immediately convene by notice in the Gazette, a
first meeting of the creditors of the estate for the proof of their claims
against the estate and for the election of a trustee. (2) The Master shall publish such notice on a date not less than ten
days before the date upon which the meeting is to be held and shall in such
notice state the time and place at which the meeting is to be held. (3) (a) After the first meeting of creditors and the appointment of a
trustee, the Master shall appoint a second meeting of creditors for the proof
of claims against the estate, and for the purpose of receiving the report of
the trustee on the affairs and condition of the estate and giving the trustee
directions in connection with the administration of the estate. (b) The trustee shall convene the second meeting of
creditors by notice in the Gazette and in one or more newspapers circulating
in the district in which the insolvent resides or his principal place of
business is situate. (c) Whenever the notice referred to in paragraph (b) is published in
any newspaper, the publication shall take place simultaneously in the
Afrikaans language and in the English language and in the case of each such
language in a newspaper circulating in the district referred to in the said
paragraph which appears mainly in that language and the publication in each
such language shall as far as practicable occupy the same amount of space:
Provided that where in the district in question any newspaper appears
substantially in both such languages publication in both such languages may
take place in that newspaper. [Sub-s. (3)
substituted by s. 8 of Act 99 of 1965.] 41 General meetings of creditors The trustee of an
insolvent estate may at any time and shall, whenever he is so required by the
Master or by a creditor or creditors representing one-fourth of the value of
all claims proved against the estate, convene in the manner prescribed by
subsection (3) of section forty, a meeting of creditors (hereinafter called a
general meeting of creditors) for the purpose of giving him directions
concerning any matter relating to the administration of the estate and shall
state in such notice the matters to be dealt with at that meeting. [S. 41 substituted
by s. 9 of Act 99 of 1965.] 42 Special meetings of creditors (1) After the second meeting of creditors the trustee shall convene by
notice in the Gazette a special meeting of creditors for the proof of claims
against the estate in question whenever he is thereto required by any
interested person who at the same time tenders to the trustee payment of all
expenses to be incurred in connection with such a meeting. (2) The trustee may at any time, and shall whenever he is thereto
required by a creditor who has proved his claim against the estate, provided
that the Master consents thereto, convene by notice in the Gazette a special
meeting of creditors for the purpose of interrogating an insolvent, and at
such interrogation the provisions of section 65 shall mutatis mutandis apply. [Sub-s. (2) added by s.
3 of Act 27 of 1987.] [S. 42 substituted by s.
3 of Act 6 of 1972.] 43 A creditor may register his name and address with trustee Any person who
claims to be a creditor of an insolvent estate may register his name and
address in the Republic, with the trustee of that estate upon payment to the
trustee of a fee of R25. Thereupon the trustee shall send to that address a
notice of every meeting of creditors of that estate, a copy of every account
which he is submitting to the Master and a notice of the date, time and place
of the sale of any property over which the creditor has a preferent right by
virtue of a special mortgage, pledge or right of retention or a landlord’s
tacit or legal hypothec. Failure on the part of the trustee to comply with a
provision of this section shall constitute a failure to perform his duties
but shall not invalidate anything done under this Act. [S. 43 substituted
by s. 10 of Act 99 of 1965 and amended by s. 3 of Act 101 of 1983.] 44 Proof of liquidated claims against estate (1) Any person or the representative of any person who has a
liquidated claim against an insolvent estate, the cause of which arose before
the sequestration of that estate, may, at any time before the final
distribution of that estate in terms of section one hundred and thirteen, but
subject to the provisions of section one hundred and four, prove that claim
in the manner hereinafter provided: Provided that no claim shall be proved
against an estate after the expiration of a period of three months as from
the conclusion of the second meeting of creditors of the estate, except with
leave of the Court or the Master, and on payment of such sum to cover the
cost or any part thereof, occasioned by the late proof of the claim, as the
Court or Master may direct. (2) ...... [Sub-s. (2) deleted by
s. 4 of Act 101 of 1983.] (3) A claim made against an insolvent estate shall be proved at a
meeting of the creditors of that estate to the satisfaction of the officer
presiding at that meeting, who shall admit or reject the claim: Provided that
the rejection of a claim shall not debar the claimant from proving that claim
at a subsequent meeting of creditors or from establishing his claim by an
action at law, but subject to the provisions of section seventy-five: and
provided further that if a creditor has twenty-four or more hours before the
time advertised for the commencement of a meeting of creditors submitted to
the officer who is to preside at that meeting the affidavit and other
documents mentioned in subsection (4), he shall be deemed to have tendered
proof of his claim at that meeting. [Sub-s. (3) amended
by s. 11 (a) of Act 99 of 1965.] (4) Every such claim shall be proved by affidavit in a form
corresponding substantially with Form C or D in the First Schedule to this
Act. That affidavit may be made by the creditor or by any person fully
cognizant of the claim, who shall set forth in the affidavit the facts upon
which his knowledge of the claim is based and the nature and particulars of
the claim, whether it was acquired by cession after the institution of the
proceedings by which the estate was sequestrated, and if the creditor holds
security therefor, the nature and particulars of that security and in the
case of security other than movable property which he has realized in terms
of section eighty-three, the amount at which he values the security. The said
affidavit or a copy thereof and any documents submitted in support of the
claim shall be delivered at the office of the officer who is to preside at
the meeting of creditors not later than twenty-four hours before the
advertised time of the meeting at which the creditor concerned intends to
prove the claim, failing which the claim shall not be admitted to proof at
that meeting, unless the presiding officer is of opinion that through no
fault of the creditor he has been unable to deliver such evidences of his
claim within the prescribed period: Provided that if a creditor has proved an
incorrect claim, he may, with the consent in writing of the Master given
after consultation with the trustee and on such conditions as the Master may
think fit to impose correct his claim or submit a fresh correct claim. [Sub-s. (4) amended
by s. 15 of Act 16 of 1943 and substituted by s. 11 (b) of Act 99 of 1965.] (5) Any document by this section required to be delivered before a
meeting of creditors at the office of the officer who is to preside at that
meeting, shall be open for inspection at such office during office hours free
of charge by any creditor, the trustee or the insolvent or the representative
of any of them. (6) A claim against an insolvent’s estate for payment of the purchase
price of goods sold and delivered to the insolvent on an open account shall
not be admitted to proof unless a statement is submitted in support of such
claim showing the monthly total and a brief description of the purchases and
payments for the full period of trading or for the period of twelve months
immediately before the date of sequestration, whichever is the lesser. [Sub-s. (6)
substituted by s. 11 (c) of Act 99 of 1965.] (7) The officer presiding at any meeting of creditors may of his own
motion or at the request of the trustee or his agent or at the request of any
creditor who has proved his claim, or his agent, call upon any person present
at the meeting who wishes to prove or who has at any time proved a claim
against the estate to take an oath, to be administered by the said officer,
and to submit to interrogation by the said officer or by the trustee or his
agent or by a creditor or the agent of a creditor whose claim has been
proved, in regard to the said claim. (8) If any person who wishes to prove or who has at any time proved a
claim against the estate is absent from a meeting of creditors the officer
who presided or who presides thereat, may summon him in writing to appear
before him at a place and time stated in the summons, for the purpose of
being interrogated by the said officer or by the trustee or his agent or by a
creditor or the agent of a creditor whose claim has been proved, and if he appears
in answer to the summons the provisions of subsection (7) shall apply. (9) If any such person fails without reasonable excuse to appear in
answer to such summons or having appeared or when present at any meeting of
creditors refuses to take the oath or to submit to the said interrogation or
to answer fully and satisfactorily any lawful question put to him, his claim,
if already proved, may be expunged by the Master, and if not yet proved, may
be rejected. 45 Trustee to examine claims (1) After a meeting of creditors the officer who presided thereat
shall deliver to the trustee every claim proved against the insolvent estate
at that meeting and every document submitted in support of the claim. (2) The trustee shall examine all available books and documents
relating to the insolvent estate for the purpose of ascertaining whether the
estate in fact owes the claimant the amount claimed. (3) If the trustee disputes a claim after it has been proved against
the estate at a meeting of creditors, he shall report the fact in writing to
the Master and shall state in his report his reasons for disputing the claim.
Thereupon the Master may confirm the claim, or he may, after having afforded
the claimant an opportunity to substantiate his claim, reduce or disallow the
claim, and if he has done so, he shall forthwith notify the claimant in
writing: Provided that such reduction or disallowance shall not debar the
claimant from establishing his claim by an action at law, but subject to the
provisions of section seventy-five. 46 Set-off If two persons have
entered into a transaction the result whereof is a set-off, wholly or in
part, of debts which they owe one another and the estate of one of them is
sequestrated within a period of six months after the taking place of the
set-off, or if a person who had a claim against another person (hereinafter
in this section referred to as the debtor) has ceded that claim to a third
person against whom the debtor had a claim at the time of the cession, with
the result that the one claim has been set-off, wholly or in part, against
the other, and within a period of one year after the cession the estate of
the debtor is sequestrated; then the trustee of the sequestrated estate may
in either case abide by the set-off or he may, if the set-off was not
effected in the ordinary course of business, with the approval of the Master
disregard it and call upon the person concerned to pay to the estate the debt
which he would owe it but for the set-off, and thereupon that person shall be
obliged to pay that debt and may prove his claim against the estate as if no
set-off had taken place: Provided that any set-off shall be effective and
binding on the trustee of the insolvent estate if it takes place between an
exchange or a market participant as defined in section 35A and any other
party in accordance with the rules of such an exchange, or if it takes place
under an agreement defined in section 35B. [S. 46 amended by s.
2 of Act 32 of 1995.] 47 Right of retention and landlord’s legal hypothec If a creditor of an
insolvent estate who is in possession of any property belonging to that
estate, to which he has a right of retention or over which he has a
landlord’s legal hypothec, delivers that property to the trustee of that
estate, at the latter’s request, he shall not thereby lose the security
afforded him by his right of retention or lose his legal hypothec, if, when
delivering the property, he notifies the trustee in writing of his rights and
in due course proves his claim against the estate: Provided, that a right to
retain any book or document of account which belongs to the insolvent estate
or relates to the insolvent’s affairs shall not afford any security or
preference in connection with any claim against the estate. 48 Proof of conditional claim A creditor whose
claim against an insolvent estate is dependent upon a condition, may prove
that claim in the manner set forth in section forty-four but subject to the
following provisions:- (a) If the condition is of such a nature that it will be fulfilled, if
at all, within a year of the sequestration, the creditor may prove his claim,
but he shall have no vote in respect of that claim at a meeting of creditors.
If a dividend is awarded on such a claim it shall be paid by the trustee to
the Master, who shall pay it to the creditor, if the condition has been
fulfilled, and otherwise shall return it to the trustee for distribution
among the other creditors. (b) If the condition is not such as is described in paragraph (a), the
creditor may call upon the trustee at a meeting of creditors to place a value
upon the claim and the trustee shall thereupon lay before the officer
presiding at that meeting a written valuation of the claim with the reasons
therefor, and the presiding officer shall admit that claim at such value as
he may determine, or reject it: Provided that when the condition has been
fulfilled, before the confirmation, by the Master, in terms of section one
hundred and twelve, of a trustee’s account in the liquidation of the estate,
the creditor may prove his claim as if it had been unconditional. 49 Claims against partnership distinct from claims against partners (1) When the estate of a partnership and the estates of the partners
in that partnership are under sequestration simultaneously, the creditors of
the partnership shall not be entitled to prove claims against the estate of a
partner and the creditors of a partner shall not be entitled to prove claims
against the estate of the partnership; but the trustee of the estate of the
partnership shall be entitled to any balance of a partner’s estate that may
remain over after satisfying the claims of the creditors of the partner’s
estate in so far as that balance is required to pay the partnership’s debts
and the trustee of the estate of a partner shall be entitled to any balance
of the partnership’s estate that may remain over after satisfying the claims
of the creditors of the partnership estate, so far as that partner would have
been entitled thereto, if his estate had not been sequestrated. (2) Nothing in this section shall be construed as preventing the
Secretary for Inland Revenue from proving in the manner provided in this Act
a claim against the estate of a partnership in respect of any sum referred to
in paragraph (b) of section one hundred and one, or any interest due on such
sum. [Sub-s. (2) added by s.
21 of Act 6 of 1963, substituted by s. 12 of Act 99 of 1965 and amended by s.
1 of Act 49 of 1996.] 50 Arrear interest. Debt due after sequestration (1) When a debt bearing interest became due before the sequestration
of the debtor’s estate, the creditor to whom that debt is owing may include
in his claim against the debtor’s estate in respect of that debt any interest
thereon, which is in arrear, to the date of the sequestration. (2) If a person, before the sequestration of his estate, incurred a
debt which is payable upon a date (hereinafter referred to as the due date)
after the date of the sequestration, the creditor, towards whom the debt was
incurred, may claim from the insolvent estate the full amount of that debt as
if it were payable on the date of sequestration: Provided that if the debt
bears no interest and a distribution account in the estate in question is
confirmed by the Master in terms of section 112 before the due date, an
amount shall be paid on that claim equal to the amount which would have been
paid thereon under the distribution account if the debt had been payable on
the date of sequestration, less eight per cent of that amount per annum,
reckoned from the date of sequestration to the due date. [Sub-s. (2) amended by
s. 5 of Act 101 of 1983.] 51 Withdrawal of claim already proved against estate (1) A creditor who has proved a claim against an insolvent estate may
withdraw his claim by registered letters addressed to the Master and to the
trustee and the latter shall in writing notify the other creditors of the
withdrawal: Provided that the creditor so withdrawing his claim shall remain
liable in terms of section one hundred and six for his pro rata share of the
costs of sequestration and all costs lawfully incurred by the trustee in
connection with the sequestration up to the time when he received the
creditor’s letter of withdrawal. (2) A creditor who has so withdrawn his claim may, by registered
notice addressed to the Master and to the trustee, cancel his withdrawal, but
if he does so, he shall not become liable for any costs in connection with
the sequestration for which he was not liable at the time of cancellation and
he shall not be entitled to any payment out of the estate in respect of his
claim until all the other creditors who have proved their claims have been
paid in full. [Sub-s. (2) substituted
by s. 13 of Act 99 of 1965.] 52 Voting at meeting of creditors (1) Save as in this section and in section forty-eight is otherwise
provided, every creditor of an insolvent estate shall be entitled to vote at
any meeting of the creditors of that estate as soon as his claim against the
estate has been proved. (2) The vote of any creditor shall be reckoned according to the value
of his claim, except when it is provided in this Act that votes shall be
reckoned in number. (3) The vote of a creditor shall in co case be reckoned in number,
unless his or her claim is of the value of at least R1 000. [Sub-s. (3)
substituted by s. 6 of Act 101 of 1983 and by s. 21 (1) of Act 20 of 2001.] (4) A creditor may not vote in respect of any claim which was ceded to
him after the commencement of the proceedings by which the estate was
sequestrated. (5) A creditor holding any security for his claim shall, except in the
election of a trustee and upon any matter affecting that security, be
entitled to vote only in respect of the amount by which his claim exceeds the
amount at which he valued his security when proving his claim, or if he did
not value his security, in respect of the amount by which his claim exceeds
the amount of the proceeds of the realization of his security in terms of
section eighty-three. (6) A creditor may not vote on the question as to whether steps should
be taken to contest his claim or preference. [Sub-s. (6) added
by s. 16 of Act 16 of 1943.] 53 Questions upon which creditors may vote (1) A creditor may vote at a meeting of creditors upon all matters
relating to the administration of the estate, but may not vote in regard to
matters relating to the distribution of the assets of the estate, except for
the purpose of directing the trustee to contest, compromise or admit any
claim against the estate. (2) Subject to the provisions of section fifty-four and subsection (7)
of section one hundred and nineteen, every matter upon which a creditor may
vote shall be determined by the majority of votes reckoned in accordance with
subsection (2) of section fifty-two, and every creditor may vote either
personally or by an agent specially authorized thereto or acting under his
general power of attorney: Provided that no creditor shall vote by any agent
being- (a) the trustee or a person nominated for election as trustee in the
estate concerned; (b) the employer or employee of such trustee or person; (c) the employee of any person or association of persons, whether
corporate or unincorporate, by whom or by which such trustee or the person
referred to in paragraph (a) is employed; (d) the spouse of or a person related to such trustee or the person
referred to in paragraph (a) by consanguinity or affinity within the third
degree; or (e) a person directly or indirectly having a pecuniary interest in the
remuneration of such trustee or the person referred to in paragraph (a). [Sub-s. (2) substituted
by s. 14 (a) of Act 99 of 1965.] (3) Every resolution of creditors at a meeting of creditors and the
result of the voting on any matter as declared by the officer presiding at
that meeting, shall be recorded upon the minutes of the meeting and shall be
binding upon the trustee in so far as it is a direction to him; and no other
direction of creditors shall be binding upon him. (4) Any direction by creditors which infringes the rights of any
creditor may be set aside by the court on the application of the creditor
whose rights are affected or of the trustee with the consent of the Master. (5) The majority of creditors (reckoned in number and in value) may
direct the trustee to employ or not to employ a particular attorney or
auctioneer in connection with the administration of the estate and if the
trustee has reason to believe that it will not be in the interests of the
estate to carry out such direction, he may submit the matter to the Master,
whose decision, after considering any representations in writing by the
trustee and the creditors, shall be final. [Sub-s. (5) substituted
by s. 14 (b) of Act 99 of 1965.] 54 Election of trustee (1) At the first meeting of the creditors of an insolvent estate the
creditors who have proved their claims against the estate may elect one or
two trustees. (2) Any person who has obtained a majority in number and in value of
the votes of the creditors entitled to vote, who voted at such meeting, shall
be elected trustees. (3) If no person has obtained such a majority of votes then- (a) the person who has obtained a majority of votes in number, when no
other person has obtained a majority of votes in value, or has obtained a
majority of votes in value, when no other person has obtained a majority of
votes in number, shall be deemed to be elected sole trustee; (b) if one person has obtained a majority of votes in value and
another a majority of votes in number, both such persons shall be deemed to
be elected trustees, and if either person declines a joint trusteeship, the
other shall be deemed to be elected sole trustee. (4) For the purposes of this section ‘majority of votes in number’
means a greater number of votes (apart from the value of the claims which
they represent, but subject to the provisions of subsection (3) of section
fifty-two) than has been obtained by any competitor and ‘majority of votes in
value’ means votes representing claims of a greater aggregate value than the
votes obtained by any competitor. (5) If at any meeting of creditors convened for the purpose of
electing a trustee, no trustee is elected and the estate is not vested at the
time of that meeting in a provisional trustee, the Master may appoint a
trustee and if he does not so appoint a trustee, the Master or the insolvent
with the Master’s consent, may apply, at the cost of the estate, to the court
by petition to set aside the sequestration and the court may make such order
thereon as it thinks fit. 55 Persons disqualified from being trustees Any of the following
persons shall be disqualified from being elected or appointed a trustee- (a) any insolvent; (b) any person related to the insolvent concerned by consanguinity or
affinity within the third degree; (c) a minor or any other person under legal disability; (d) any person who does not reside in the Republic; [Para. (d) amended by s.
17 of Act 16 of 1943.] (e) any person who has an interest opposed to the general interest of
the creditors of the insolvent estate; (f) a former trustee disqualified under section seventy-two; (g) any person declared under section fifty-nine to be incapacitated
for election as trustee, while any such incapacity lasts, or any person
removed by the court, on account of misconduct, from an office of trust; (h) a corporate body; (i) any person who has at any time been convicted (whether in the
Republic or elsewhere) of theft, fraud, forgery or uttering a forged
document, or perjury and has been sentenced to imprisonment without the
option of a fine, or to a fine exceeding R2 000; [Para. (i)
substituted by s. 21 (1) of Act 20 of 2001.] (j) any person who was, at any time, a party to an agreement or
arrangement with any debtor or creditor whereby he undertook that he would,
when performing the functions of a trustee or assignee, grant or endeavour to
grant to, or obtain or endeavour to obtain for any debtor or creditor any
benefit not provided for by law; (k) any person who has by means of any misrepresentation or any
reward or offer of any reward, whether direct or indirect, induced or
attempted to induce any person to vote for him as trustee or to effect or
assist in effecting his election as trustee of any insolvent estate; (l) any person who at any time during a period of twelve months
immediately preceding the date of sequestration acted as the bookkeeper, accountant
or auditor of the insolvent; [Para. (l) inserted
by s. 15 of Act 99 of 1965.] (m) any agent authorized specially or under a general power
of attorney to vote for or on behalf of a creditor at a meeting of creditors
of the estate concerned and acting or purporting to act under such special
authority or general power of attorney. [Para. (m) added by
s. 15 of Act 99 of 1965.] 56 Appointment of trustee. Security for his administration (1) If a trustee was elected at a meeting of creditors at which a
person other than the Master presided, the election shall not be valid unless
it has been confirmed by the Master. (2) Subject to the provisions of section fifty-seven, the Master
shall, when a person so elected has given security to his satisfaction for the
proper performance of his duties as trustee, confirm his election and appoint
him as trustee by delivering to him a certificate of appointment, which shall
be valid throughout the Republic. [Sub-s. (2) amended
by s. 18 of Act 16 of 1943 and substituted by s. 16 (a) of Act 99 of 1965.] (3) On receipt of his certificate of appointment the trustee shall
notify his appointment and address in the Gazette. (4) When two trustees have been appointed or when the Master has
appointed a co-trustee in terms of section 57 (5) both or all three trustees
shall act jointly in performing their functions as trustees and each of them
shall be jointly and severally liable for every act performed by them
jointly. [NB: Sub-s. (4) has
been substituted by s. 1 of the Insolvency Amendment Act 89 of 1989, which is
not yet in operation. See PENDLEX.] (5) Whenever the trustees in the estate disagree on any matter
relating to the estate of which they are trustees, the matter shall be
referred to the Master who shall determine the question in issue or give
directions as to the procedure to be followed for the determination thereof. [Sub-s. (5)
substituted by s. 16 (b) of Act 99 of 1965.] (6) Subject to the provisions of subsection (1) of section eighty-nine
the cost of giving the security mentioned in subsection (2), to an amount
which the Master considers reasonable, shall be paid out of the estate in
question as part of the costs of sequestration. (7) When a trustee has, in the course of liquidating an insolvent
estate accounted to the Master, to his satisfaction, for any property in the
estate, the Master may consent to a reduction of the security mentioned in
subsection (2) if he is satisfied that the reduced security will suffice to
indemnify the estate or the creditors thereof against any maladministration
by the trustee of the remaining property in the estate. 57 Appointment of trustee or co-trustee by Master (1) If a person who has been elected as trustee was not properly
elected or is disqualified, under section fifty-five, from being elected or
appointed a trustee or is disqualified from being a trustee of the estate in
question or has failed to give within a period of seven days as from the date
upon which he was notified that the Master had confirmed his election, or within
such further period as the Master may allow, the security mentioned in
subsection (2) of section fifty-six or if in the opinion of the Master the
person elected as trustee should not be appointed as trustee to the estate in
question, the Master shall give notice in writing to the person so elected
that he declines to confirm his election or to appoint him as trustee and
shall, in that notice, state his reason for declining to confirm his election
or to appoint him: Provided that if the Master declines to confirm the
election of a trustee because he is of the opinion that the person elected
should not be appointed as trustee, it shall be sufficient if the Master
states, in that notice, as such reason, that he is of the opinion that the
person elected should not be appointed as trustee to the estate in question. [Sub-s. (1)
substituted by s. 17 (a) of Act 99 of 1965.] (2) When the Master has declined to confirm the election of a trustee
or to appoint a person elected as a trustee, or the Minister has under subsection
(9) set aside the appointment of a trustee, the Master shall in accordance
with the provisions of subsections (1) and (2) of section forty convene a
meeting of creditors of the estate in question for the purpose of electing
another trustee in the place of the person whose election as a trustee the
Master declined to confirm or whom the Master declined to appoint or whose
appointment as trustee has been so set aside. In the notice convening the
meeting the Master shall state that he has declined to confirm the election
of the person previously elected as trustee, or to appoint the person so
elected, and the reasons therefor (but subject to the proviso to subsection
(1)), or that the appointment of the person previously appointed as trustee
has been set aside by the Minister, as the case may be, and that the meeting
is convened for the purpose of electing another trustee. The Master shall
post a copy of the notice to every creditor whose claim against the estate
was previously proved and admitted. [Sub-s. (2)
substituted by s. 17 (a) of Act 99 of 1965.] (3) A meeting mentioned in subsection (2) shall be deemed to be the
continuation of a first meeting of creditors held after an adjournment
thereof. (4) If the Master declines, for any reason mentioned in subsection
(1), to confirm the election of a person who was elected as trustee at a
meeting mentioned in subsection (2), or to appoint a person so elected, he
shall act in accordance with the provisions of subsection (1) and thereupon,
if the person whose election the Master declined to confirm or whom the
Master declined to appoint, was elected as sole trustee, or if two trustees
were elected and the Master did not appoint both or one of them, the Master
shall appoint as trustee of the estate in question any other person who is
not disqualified from being a trustee of that estate. (5) Whenever the Master considers it desirable, he may appoint a
person not disqualified from holding the office of trustee who has given the
security mentioned in section 56 (2) as a co-trustee, with the trustee or
trustees of an insolvent estate. [NB: Sub-s. (5) has
been substituted by s. 2 of the Insolvency Amendment Act 89 of 1989, a
section which is not yet in operation. See PENDLEX.] (6) All the provisions of this Act, relating to a trustee shall apply
to a trustee or a co-trustee appointed by the Master under this section. (7) Any person aggrieved by the appointment of a trustee or the
refusal of the Master to confirm the election of a trustee or to appoint a
person elected as a trustee, may within a period of seven days from the date
of such appointment or refusal request the Master in writing to submit his
reasons for such appointment or refusal to the Minister of Justice. [Sub-s. (7)
inserted by s. 17 (b) of Act 99 of 1965.] (8) The Master shall within seven days of the receipt by him of the
request referred to in subsection (7) submit to the Minister, in writing, his
reasons for such appointment or refusal together with any relevant documents,
information or objections received by him. [Sub-s. (8)
inserted by s. 17 (b) of Act 99 of 1965.] (9) The Minister may after consideration of the reasons referred to in
subsection (8) and any representations made in writing by the person who made
the request referred to in subsection (7) and of all relevant documents,
information or objections submitted to him or the Master by any interested
person, confirm, uphold or set aside the appointment or the refusal by the
Master and, in the event of the refusal by the Master being set aside, direct
the Master to confirm the election of the trustee concerned and to appoint
him as trustee to the estate in question. [Sub-s. (9)
inserted by s. 17 (b) of Act 99 of 1965.] (10) The decision of the
Minister under subsection (9) shall be final. [Sub-s. (10) inserted by
s. 17 (b) of Act 99 of 1965.] 58 Vacation of office of trustee A trustee shall
vacate his office- (a) if his estate is sequestrated under this Act; or (b) if an order is issued under the law relating to mental disorders
for his reception and detention in an institution, or if he is declared by a
competent court to be incapable of managing his own affairs; or (c) if he is convicted of any offence and sentenced to serve any term
of imprisonment without the option of a fine, or if he is convicted (whether
in the Republic or elsewhere) of theft, fraud, forgery or uttering a forged
document, or perjury. 59 Court may declare a person disqualified from being a trustee, or
remove a trustee On the application
of any person interested the court may either before or after the appointment
of a trustee, declare that the person appointed or proposed is disqualified
from holding the office of trustee, and, if he has been appointed, may remove
him from office and may in either case declare him incapable of being elected
or appointed trustee under this Act during the period of his life or such
other period as it may determine, if- (a) he has accepted or expressed his willingness to accept from any
person engaged to perform any work on behalf of the estate in question, any
benefit whatever in connection with any matter relating to that estate; or (b) in order to induce a creditor to vote for him at the election of a
trustee or in return for his vote at such election, or in order to exercise
any influence upon his election as trustee, he has- (i) wrongfully omitted or included or been privy to the wrongful
omission or inclusion of the name of a creditor from any record by this Act
required; or (ii) directly or indirectly given or offered or agreed to give to any
person any consideration; or (iii) offered to or agreed with any person to
abstain from investigating any previous transactions of the insolvent
concerned; or (iv) been guilty of or privy to the splitting of claims for the purpose
of increasing the number of votes. 60 Removal of trustee by Master The Master may
remove a trustee from his office on the ground- (a) that he was not qualified for election or appointment as trustee
or that his election or appointment was for any other reason illegal, or that
he has become disqualified from election or appointment as a trustee or has
been authorized, specially or under a general power of attorney, to vote for
or on behalf of a creditor at a meeting of creditors of the insolvent estate
of which he is the trustee and has acted or purported to act under such
special authority or general power of attorney; or (b) that he has failed to perform satisfactorily any duty imposed upon
him by this Act or to comply with a lawful demand of the Master; or (c) that he is mentally or physically incapable of performing
satisfactorily his duties as trustee; or (d) that the majority (reckoned in number and in value) of creditors
entitled to vote at a meeting of creditors has requested him in writing to do
so; or (e) that, in his opinion, the trustee is no longer suitable to be the
trustee of the estate concerned. [S. 60 substituted by s.
18 of Act 99 of 1965.] 61 Leave of absence or resignation of trustee At the request of a
trustee the Master may permit him to be absent from the Republic for a period
longer than 60 days or may relieve him of his office, in either case upon
such conditions as the Master may think fit to impose and subject to his
giving such notice of his intention to be so absent from the Republic or to resign
as the Master may direct. [S. 61 substituted
by s. 7 of Act 101 of 1983.] 62 Election of new trustee (1) When a Court or the Master has removed one of two joint trustees
from office, the Master may convene a meeting of the creditors of the estate
in question for the purpose of electing a new trustee in the place of the
trustee who was removed. [Sub-s. (1)
substituted by s. 19 (a) of Act 99 of 1965.] (2) When a sole trustee has vacated his office or has been removed
from office, has resigned or died, the Master shall convene a meeting of the
creditors of the estate in question for the purpose of electing a new
trustee, and in the meantime the Master may appoint a provisional trustee for
the preservation of the estate. (3) When one of two joint trustees has vacated his office or has
resigned or died the Master may convene a meeting of the creditors of the
estate in question for the purpose of electing a new trustee in the place of
the trustee who has vacated his office or has resigned or died. [Sub-s. (3)
substituted by s. 19 (b) of Act 99 of 1965.] (4) The provisions of section fifty-four shall apply in connection
with the election of a new trustee in terms of this section. 63 Remuneration of trustee or curator bonis (1) Every trustee or curator bonis shall be entitled to a reasonable
remuneration for his services, to be taxed by the Master according to tariff
B in the Second Schedule to this Act: Provided that the Master may, for good
cause, reduce or increase his remuneration, or may disallow his remuneration
either wholly or in part on account of any failure of or delay in the
discharge of his duties or on account of any improper performance of his
duties. (1)bis The Minister
of Justice may by notice in the Gazette amend the said tariff B. [Sub-s. (1)bis
inserted by s. 12 of Act 50 of 1956 and amended by ss. 46 and 47 of Act 97 of
1986.] (2) A person who employs or is a fellow employee or is ordinarily in
the employment of the trustee shall not be entitled to any remuneration out
of the insolvent estate for services rendered to the estate, and a trustee or
his partner shall not be entitled to any remuneration out of the estate for
services rendered to the estate, except the remuneration to which under this
Act he is entitled as trustee. 64 Insolvent and others to attend meetings of creditors (1) An insolvent shall attend the first and second meetings of the
creditors of his estate and every adjourned first and second meeting, unless
he has previously obtained the written permission of the officer who is to
preside or who presides at such meeting granted after consultation with the
trustee to absent himself. The insolvent shall also attend any subsequent
meeting of creditors if required so to do by written notice of the trustee of
his estate. (2) The officer who is to preside or who presides at any meeting of
creditors may summon any person who is known or upon reasonable ground
believed to be or to have been in possession of any property which belonged
to the insolvent before the sequestration of his estate or which belongs or
belonged to the insolvent estate or to the spouse of the insolvent or to be
indebted to the estate, or any person (including the insolvent’s spouse) who
in the opinion of said officer may be able to give any material information concerning
the insolvent or his affairs (whether before or after the sequestration of
his estate) or concerning any property belonging to the estate or concerning
the business, affairs or property of the insolvent’s spouse, to appear at
such meeting or adjourned meeting for the purpose of being interrogated under
section sixty-five. (3) The said officer may also summon any person who is known or upon
reasonable grounds believed to have in his possession or custody or under his
control any book or document containing any such information as is mentioned
in subsection (2), to produce that book or document, or an extract therefrom
at any such meeting of creditors. 65 Interrogation of insolvent and other witnesses (1) At any meeting of the creditors of an insolvent estate the officer
presiding thereat may call and administer the oath to the insolvent and any
other person present at the meeting who was or might have been summoned in
terms of subsection (2) of section sixty-four and the said officer, the
trustee and any creditor who has proved a claim against the estate or the
agent of any of them may interrogate a person so called and sworn concerning
all matters relating to the insolvent or his business or affairs, whether
before or after the sequestration of his estate, and concerning any property
belonging to his estate, and concerning the business, affairs or property of
his or her spouse: Provided that the presiding officer shall disallow any
question which is irrelevant and may disallow any question which would
prolong the interrogation unnecessarily. (2) In connection with the production of any book or document in
compliance with a summons issued under subsection (3) of section sixty-four
or at an interrogation of a person under subsection (1) of this section, the
law relating to privilege as applicable to a witness summoned to produce a
book or document or giving evidence in a court of law, shall apply: Provided
that a banker at whose bank the insolvent in question or his or her spouse
keeps or at any time kept an account, shall be obliged to produce, if
summoned to do so under subsection (3) of section sixty-four, any cheque in
his possession which was drawn by the insolvent or his or her spouse within
one year before the sequestration of the insolvent’s estate, or if any cheque
so drawn is not available, then any record of the payment, date of payment
and amount of that cheque which may be available to him, or a copy of such
record and if called upon to do so, to give any other information available
to him in connection with such cheque or the account of the insolvent or his
or her spouse; and provided further that a person interrogated under
subsection (1) shall not be entitled at such interrogation to refuse to
answer any question upon the ground that the answer would tend to incriminate
him or upon the ground that he is to be tried on a criminal charge and may be
prejudiced at such a trial by his answer. [Sub-s. (2)
amended, by s. 3 (a) of Act 89 of 1989.] (2A) (a) Where any
person gives evidence in terms of the provisions of this section and is
obliged to answer questions which may incriminate him or, where he is to be
tried on a criminal charge, may prejudice him at such trial, the presiding
officer shall, notwithstanding the provisions of section 39 (6), order that
such part of the proceedings be held in camera and that no information
regarding such questions and answers may be published in any manner
whatsoever. (b) No evidence
regarding any questions and answers contemplated in paragraph (a) shall be
admissible in any criminal proceedings, except in criminal proceedings where
the person concerned stands trial on a charge relating to the administering
or taking of an oath or the administering or making of an affirmation or the
giving of false evidence or the making of a false statement in connection
with such questions and answers, and in criminal proceedings contemplated in
section 139 (1) relating to a failure to answer lawful questions fully and
satisfactorily. (c) Any person who contravenes any provision of an order contemplated
in paragraph (a), shall be guilty of an offence and liable on conviction to
the penalty mentioned in subsection (5) of section 154 of the Criminal
Procedure Act, 1977 (Act 51 of 1977). [Sub-s. (2A) inserted by
s. 3 (b) of Act 89 of 1989.] (3) The presiding officer shall record or cause to be recorded in the
manner provided by the rules of court for the recording of evidence in a
civil case before a magistrate’s court the statement of any person giving
evidence under this section: Provided that if a person who may be required to
give evidence under this section made to the trustee or his agent a statement
which was reduced to writing, or delivered a statement in writing to the
trustee or his agent, that statement may be read by or read over to that
person when he is called as a witness under this section and if then adhered
to by him, shall be deemed to be evidence given under this section. [Sub-s. (3) amended
by s. 20 of Act 99 of 1965.] (4) The insolvent shall at such interrogation be required to make a
declaration that he has made a full and true disclosure of all his affairs. (5) Any evidence given under this section shall, subject to the
provisions of subsection (2A), be admissible in any proceedings instituted
against the person who gave that evidence. [Sub-s. (5)
substituted by s. 3 (c) of Act 89 of 1989.] (6) Any person called upon to give evidence under this section may be
assisted at his interrogation by counsel, an attorney or agent. (7) Any person summoned to attend a meeting of creditors for the
purpose of being interrogated under this section (other than the insolvent
and his or her spouse) shall be entitled to witness fees to be paid out of
the estate, to which he would be entitled if he were a witness in any civil proceedings
in a court of law. (8) If the insolvent or his or her spouse is called upon to attend any
meeting of creditors held after the second meeting or an adjourned second
meeting, he or she shall be entitled to an allowance out of the insolvent
estate to defray his or her necessary expenses in connection with such
attendance. 66 Enforcing summonses and giving of evidence (1) If a person summoned under section sixty-four fails to appear at a
meeting of creditors, in answer to the summons, or if an insolvent fails to
attend any meeting of creditors in terms of subsection (1) of section
sixty-four, or fails to remain in attendance at that meeting, the officer
presiding at such meeting may issue a warrant, authorizing any member of the
police force to apprehend the person summoned or the insolvent, as the case
may be, and to bring him before the said officer. [Sub-s. (1)
substituted by s. 21 of Act 99 of 1965.] (2) Unless the person summoned or the insolvent, as the case may be,
satisfies the said officer that he had a reasonable excuse for his failure to
appear at or attend such meeting, or for absenting himself from the meeting,
the said officer may commit him to prison to be detained there until such
time as the said officer may appoint, and the officer in charge of the prison
to which the said person or insolvent was committed, shall detain him and
produce him at the time and place appointed by the first-mentioned officer
for his production. [Sub-s. (2)
substituted by s. 21 of Act 99 of 1965.] (3) If a person summoned as aforesaid, appears in answer to the
summons but fails to produce any book or document which he was summoned to
produce, or if any person who may be interrogated at a meeting of creditors
in terms of subsection (1) of section sixty-five refuses to be sworn by the
officer presiding at a meeting of creditors at which he is called upon to
give evidence or refuses to answer any question lawfully put to him under the
said section or does not answer the question fully and satisfactorily, the
officer may issue a warrant committing the said person to prison, where he
shall be detained until he has undertaken to do what is required of him, but
subject to the provisions of subsection (5). (4) If a person who has been released from prison after having undertaken
in terms of subsection (3) to do what is required of him, fails to fulfil his
undertaking, the said officer may commit him to prison as often as may be
necessary to compel him to do what is required of him. (5) Any person committed to prison under this section may apply to the
court for his discharge from custody and the court may order his discharge if
it finds that he was wrongfully committed to prison or is being wrongfully
detained. (6) In connection with the apprehension of a person or with the
committal of a person to prison under this section, the officer who issued
the warrant of apprehension or committal to prison shall enjoy the same
immunity which is enjoyed by a judicial officer in connection with any act
performed by him in the exercise of his functions. 67 Steps to be taken on suspicion of an offence (1) If it appears from any statement made at an interrogation under
section sixty-five that there are reasonable grounds for suspecting that any
person has committed any offence the Master shall transmit the said
statement, or a certified copy thereof, and all necessary documents to the
Attorney-General in whose area of jurisdiction the interrogation was held or
the offence is suspected to have been committed, to enable him to determine whether
any criminal proceedings shall be instituted in the matter. [Sub-s. (1) amended
by s. 19 of Act 16 of 1943 and substituted by s. 22 of Act 99 of 1965.] (2) When any such statement has been made at a meeting at which an
officer other than the Master presided, the presiding officer, when
transmitting the record of the proceedings to the Master, in terms of
subsection (3) of section thirty-nine, shall direct the attention of the
Master to what appears to him to be reasonable grounds for suspecting that
the insolvent has been guilty of a contravention of this Act. (3) For the purposes of this section and sections sixty-four and
sixty-five, a person who was, before the sequestration of an estate, an
executor, curator or administrator of that estate, shall after the
sequestration of that estate, be deemed to be an insolvent in relation to
that estate. 68 Presumption as to record of proceedings and validity of acts at
meetings of creditors (1) Any record purporting to be a record of any proceedings at a meeting
of the creditors of an insolvent estate held under this Act and purporting to
have been signed by a person describing himself as Master, magistrate or
other presiding officer shall, upon its mere production by any person, be
received as prima facie evidence of the proceedings recorded therein. (2) Unless the contrary is proved, it shall be presumed that any
meeting, of the proceedings whereat there was kept and signed such a record
as is mentioned in subsection (1), was duly convened and held and that all
acts performed thereat were validly performed. 69 Trustee must take charge of property of estate (1) A trustee shall, as soon as possible after his appointment, but
not before the deputy-sheriff has made the inventory referred to in
subsection (1) of section nineteen, take into his possession or under his
control all movable property, books and documents belonging to the estate of
which he is trustee and shall furnish the Master with a valuation of such
movable property by an appraiser appointed under any law relating to the
administration of the estates of deceased persons or by a person approved of
by the Master for the purpose. [Sub-s. (1)
substituted by s. 23 of Act 99 of 1965.] (2) If the trustee has reason to believe that any such property, book
or document is concealed or otherwise unlawfully withheld from him, he may
apply to the magistrate having jurisdiction for a search warrant mentioned in
subsection (3). (3) If it appears to a magistrate to whom such application is made,
from a statement made upon oath, that there are reasonable grounds for
suspecting that any property, book or document belonging to an insolvent
estate is concealed upon any person, or at any place or upon or in any
vehicle or vessel or receptacle of whatever nature, or is otherwise
unlawfully withheld from the trustee concerned, within the area of the
magistrate’s jurisdiction, he may issue a warrant to search for and take
possession of that property, book or document. (4) Such a warrant shall be executed in a like manner as a warrant to
search for stolen property, and the person executing the warrant shall
deliver any article seized thereunder to the trustee. 70 Banking accounts and investments (1) The trustee of an insolvent estate- (a) shall open an account from which amounts are withdrawable by
cheque, in the name of the estate with a banking institution within the
Republic, and shall deposit therein to the credit of the estate from time to
time all sums received by him on behalf of the estate; (b) may open a savings account in the name of the estate with a
banking institution or a building society within the Republic, and may
transfer thereto moneys deposited in the account referred to in paragraph (a)
and not immediately required for the payment of any claim against the estate; (c) may place moneys deposited in the account referred to in
paragraph (a) and not immediately required for the payment of any claim
against the estate, on interest-bearing deposit with a banking institution or
building society within the Republic. [Sub-s. (1) substituted
by s. 8 (a) of Act 101 of 1983.] (2) Whenever required by the Master to do so, the trustee shall in
writing notify the Master of the banking institution or building society and
the office, branch office or agency thereof with which he has opened an
account referred to in subsection (1) and furnish the Master with a bank
statement or other sufficient evidence of the state of the account. (3) A trustee referred to in subsection (2) shall not transfer any
account so referred to from any such office, branch office or agency to any
other such office, branch office or agency except after written notice to the
Master. [Sub-s. (3)
substituted by s. 8 (b) of Act 101 of 1983.] (4) All cheques or orders drawn upon any such account shall contain
the name of the payee and the cause of payment and shall be drawn to order
and be signed by every trustee or his duly authorized agent. (5) The Master and any surety for the trustee, or any person
authorized by such surety, shall have the same right to information in regard
to that account as the trustee himself possesses, and may examine all
vouchers in relation thereto, whether in the hands of the banking institution
or building society or of the trustee. (6) The Master may, after notice to the trustee, in writing direct the
manager of any office, branch office or agency with which an account referred
to in subsection (1) has been opened, to pay over into the Guardians’ Fund
all moneys standing to the credit of that account at the time of the receipt,
by the said manager, of that direction, and all moneys which may thereafter
be paid into that account, and the said manager shall carry out that
direction. [S. 70 substituted
by s. 4 of Act 6 of 1972.] 71 Record of all receipts (1) Immediately after his appointment the trustee of an insolvent
estate shall open a book wherein he shall enter as soon as possible a
statement of all moneys, goods, books, accounts and other documents received
by him on behalf of the estate. (2) The Master may at any time direct the trustee in writing to
produce the said book for inspection and every creditor who has proved his
claim against the estate, and, if the Master so orders, every person claiming
to be a creditor or a surety for the trustee may inspect the said book at all
reasonable times. 72 Unlawful retention of moneys or use of property by trustee (1) A trustee who, without lawful cause, retains any money exceeding
twenty pounds belonging to the estate of which he is trustee, or knowingly
permits his co-trustee to retain such a sum of money longer than the earliest
day after its receipt on which it was possible for him or his co-trustee to
pay that money into a bank, or who uses or knowingly permits his co-trustee
to use any property of the estate except for the benefit of the estate,
shall, in addition to any other penalty to which he may be liable, be liable
to pay into the estate an amount equal to double the amount so retained or
double the value of the property so used. (2) The amount which a trustee is so liable to pay may be deducted
from any claim which the said trustee may have against the estate in question
or may be recovered from him by action in a court of law at the instance of
his co-trustee, the Master or any creditor of the estate who has proved his claim. (3) A person whose estate is sequestrated while he is, in terms or
subsection (1) indebted to an estate of which he was trustee for any sum of
money which he misappropriated from that estate, shall be for ever incapable
of holding the office of trustee, provisional trustee, liquidator, curator
dative, tutor dative, curator bonis, or executor dative. 73 Trustee may obtain legal assistance (1) Subject to the provisions of this section and section 53 (4), the
trustee of an insolvent estate may with the prior written authorization of
the creditors engage the services of any attorney or counsel to perform the
legal work specified in the authorization on behalf of the estate: Provided
that the trustee- (a) if he or she is unable to obtain the prior written authorization
of the creditors due to the urgency of the matter or the number of creditors
involved, may with the prior written authorization of the Master engage the
services of any attorney or counsel to perform the legal work specified in
the authorization on behalf of the estate; or (b) if it is not likely that there will be any surplus after the
distribution of the estate, may at any time before the submission of his or
her accounts obtain written authorization from the creditors for any legal
work performed by any attorney or counsel, and
all costs incurred by the trustee, including any costs awarded against the
estate in legal proceedings instituted on behalf of or against the estate, in
so far as such costs result from any steps taken by the trustee under this
subsection, shall be included in the cost of the sequestration of the estate.
(2) Subject to the provisions of subsection (3), costs incurred under
this section, except costs awarded against the estate in legal proceedings,
shall not be subject to taxation by the taxing master of the court if the
trustee has entered into any written agreement in terms of which the fees of
any attorney or counsel will be determined in accordance with a specific
tariff: Provided that no contingency fees agreement referred to in section 2
(1) of the Contingency Fees Act, 1997 (Act 66 of 1997), shall be entered into
without the express prior written authorization of the creditors. (3) If- (a) the trustee has not entered into an agreement under subsection (2);
or (b) there is any dispute as to the fees payable in terms of such an
agreement, the costs shall be
taxed by the taxing master of the High Court having jurisdiction or, where
the costs are not subject to taxation by the said taxing master, such costs
shall be assessed by the law society or bar council concerned or, where the
counsel concerned is not a member of any bar council, by the body or person
designated under section 5 (1) of the Contingency Fees Act, 1997. (4) No bill of costs based upon an agreement entered into under
subsection (2) shall be accepted as cost of the sequestration of the estate,
unless such bill is accompanied by a declaration under oath or affirmation by
the trustee stating- (a) that he or she had been duly authorized by either the creditors or
the Master, as the case may be, to enter into such an agreement; (b) that any legal work specified in such bill has been performed to
the best of his or her knowledge and belief; (c) that any disbursements specified in such bill have been made to
the best of his or her knowledge and belief; and (d) that, to the best of his or her knowledge and belief, the attorney
or counsel concerned has not overreached him or her. (5) Notwithstanding anything to the contrary contained in this Act,
the Master may disallow any costs incurred under this section if the Master
is of the opinion that any such costs are incorrect or improper or that the
trustee acted in bad faith, negligently or unreasonably in incurring any such
costs. [S. 73 amended by s. 20
of Act 16 of 1943, by s. 24 of Act 99 of 1965, by s. 1 of Act 78 of 1980 and
substituted by s. 1 of Act 34 of 1998.] 74 Improper advising or conduct of legal proceedings If it appears to the
court that any attorney or counsel has, with intent to benefit himself,
improperly advised the institution, defence or conducting of legal
proceedings by or against an insolvent estate or has incurred any unnecessary
expense therein, the court may order the whole or part of the expense thereby
incurred to be borne by that attorney or counsel personally. 75 Legal proceedings against estate (1) Any civil legal proceedings instituted against a debtor before the
sequestration of his estate shall lapse upon the expiration of a period of
three weeks as from the date of the first meeting of the creditors of that
estate, unless the person who instituted those proceedings gave notice,
within that period, to the trustee of that estate, or if no trustee has been
appointed, to the Master, that he intends to continue those proceedings, and
after the expiration of a period of three weeks as from the date of such
notice, prosecutes those proceedings with reasonable expedition: Provided
that the court in which the proceedings are pending may permit the said
person (on such conditions as it may think fit to impose) to continue those
proceedings even though he failed to give such notice within the said period,
if it finds that there was a reasonable excuse for such failure. (2) After the confirmation, by the Master, of any trustee’s account in
an insolvent estate in terms of section one hundred and twelve, no person
shall institute any legal proceedings against that estate in respect of any
liability which arose before its sequestration: Provided that the court in
which it is sought to institute proceedings may, on such conditions as it may
think fit to impose, but subject to the provisions of the said section,
permit the institution of such proceedings after the said confirmation, if it
finds that there was a reasonable excuse for the delay in instituting such
proceedings. 76 Continuance of pending legal proceedings by surviving or new
trustee (1) Whenever a trustee of an insolvent estate has vacated his office
or has been removed from office or has resigned or died, no legal proceedings
previously instituted, in which the said estate is involved, shall lapse
merely by reason of the vacating, removal, resignation or death. (2) The court in which any such proceedings are pending may, upon
receiving notice of the vacating, removal, resignation or death, allow the
name of the surviving or new trustee to be substituted for the name of the
former, and the proceedings shall thereupon continue as if the surviving or
new trustee had originally represented the estate in those proceedings. 77 Recovery of debts due to estate A trustee shall, in
the notification of his appointment in the Gazette, in terms of subsection
(3) of section fifty-six, call upon all persons indebted to the estate of
which he is trustee to pay their debts within a period and at a place
mentioned in that notice, and if any such person fails to do so, the trustee
shall forthwith recover payment from him, if need be by legal proceedings. 78 Extension of time for payment or compounding of debts due to
estate, and arbitration (1) The trustee may accept from a debtor of the insolvent estate who
is unable to pay his or her debt in full, any reasonable part of the debt in
discharge of the whole debt or grant any debtor of the estate an extension of
time for the payment of his or her debt in so far as this is compatible with
section 91: Provided that if the debt exceeds R2 000, the trustee shall not
accept a part of the debt in discharge of the whole debt, unless he or she
has been authorised thereto by the creditors of the estate, or if no creditor
has proved a claim against the estate, by the Master. [Sub-s. (1) amended
by s. 9 of Act 101 of 1983 and substituted by s. 21 (1) of Act 20 of 2001.] (2) If authorized thereto by the creditors, or if no creditor has
proved a claim against the estate, by the Master, the trustee may submit to
the determination of arbitrators any dispute concerning the estate or any
claim or demand upon the estate, when the opposite party consents to
arbitration. (3) If authorized thereto by the creditors or if no creditor has
proved a claim against the estate, by the Master, the trustee may compromise
or admit any claim against the estate, whether liquidated or unliquidated if
proof thereof has been duly tendered at a meeting of creditors. When a claim
has been so compromised or admitted, or when it has been settled by a
judgment of a court, it shall be deemed to have been proved and admitted
against the estate in the manner set forth in section forty-four, unless the
creditor informs the trustee in writing within seven days of the compromise
or admission or judgment that he abandons his claim: Provided that the
preceding provisions of this subsection shall not debar the trustee from
appealing against such judgment, if authorized thereto by the creditors. [Sub-s. (3) amended
by s. 21 of Act 16 of 1943.] 79 Subsistence allowance for insolvent and family At any time before
the second meeting of creditors the trustee may, with the consent of the
Master, allow the insolvent such moderate sum of money or such moderate
quantity of goods out of the estate as may appear to the trustee to be
necessary for the support of the insolvent and his dependants. 80 Continuation of insolvent’s business (1) A trustee shall not carry on the business of the insolvent
concerned or any part thereof unless authorized thereto by the creditors of
the insolvent’s estate or, in the absence of instructions from the creditors,
by the Master. Such authorization may be given by the Master at any time,
whether before or after the second meeting of creditors. [Sub-s. (1) amended
by s. 22 of Act 16 of 1943.] (2) If the trustee is authorized to carry on any such business, he
shall, unless the creditors have otherwise directed him, purchase for cash
only and only out of the takings of that business any goods which he may
require for that business. 80bis Sale of movable or
immovable property on authorization of Master (1) At any time before the second meeting of creditors the trustee
shall, if satisfied that any movable or immovable property of the estate
ought forthwith to be sold, recommend to the Master in writing accordingly,
stating his reasons for such recommendation. (2) The Master may thereupon authorize the sale of such property, or
of any portion thereof, on such conditions and in such manner as he may
direct: Provided that, if the Master has notice that such property or a
portion thereof is subject to a right of preference, he shall not authorize
the sale of such property or such portion, unless the person entitled to such
right of preference has given his consent thereto in writing or the trustee
has guaranteed that person against loss by such sale. [S. 80bis inserted by s.
23 of Act 16 of 1943 and substituted by s. 10 of Act 101 of 1983.] 81 Trustees report to creditors (1) A trustee shall investigate the affairs and transactions of the
insolvent concerned before the sequestration of his estate and shall, at the
second meeting or, with the written permission of the Master obtained before
the second meeting, at an adjourned second meeting of the creditors of that
estate, or, if an offer of composition has been accepted by creditors in
terms of section one hundred and nineteen, within one month after the
acceptance of such offer of composition, submit a full written report on
those affairs and transactions and on any matter of importance relating to
the insolvent or the estate, and more especially in regard to- (a) the assets and liabilities of the estate; (b) the cause of the debtor’s insolvency; (c) the books relating to the insolvent’s affairs, and the question
whether the insolvent appears to have kept a proper record of his
transactions, and if not, in what respect the record is insufficient,
defective or incorrect; (d) the question whether the insolvent appears to have contravened this
Act or to have committed any other offence; (e) any allowance he has made to the insolvent in terms of section
seventy-nine and the reasons therefor; (f) any business which he may have been carrying on on behalf of the
estate, any goods he may have purchased for that business, and the result of
carrying on that business; (g) any legal proceedings instituted by or against the insolvent which
were suspended by the sequestration of his estate which may be pending or
threatened against the estate; (h) any matter mentioned in section thirty-five or thirty-seven; (i) any matter in regard to the administration or realization of the
estate requiring the direction of the creditors. [Sub-s. (1) amended by
s. 25 (a) of Act 99 of 1965.] (1)bis (a) The trustee shall, at least fourteen
days before the date specified in the notice in the Gazette for the holding
of the meeting at which the report referred to in subsection (1) is to be
submitted, send by registered post to each creditor of the estate whose name
and address is known to him a copy of such report and of the inventory
transmitted to him by the deputy sheriff under section nineteen and of the
valuation furnished by him to the Master under section sixty-nine and shall
submit therewith any recommendation in respect of any resolution or direction
which in his opinion ought to be passed or given at such meeting. (b)
The trustee shall at least twenty-four hours before the time advertised for
the commencement of the meeting referred to in paragraph (a) submit to the officer
who is to preside at that meeting an affidavit setting out the names and
addresses of the creditors to whom copies of the report, inventory and
valuation have been sent in terms of paragraph (a) and containing full
particulars of each resolution and direction recommended by him to such
creditors under the said paragraph. [Sub-s. (1)bis inserted
by s. 25 (b) of Act 99 of 1965.] (2) For the purpose of any investigation mentioned in subsection (1)
the Commissioner for Inland Revenue and the officers under him shall
(notwithstanding the provisions of the law relating to income tax) permit a
trustee to inspect any return rendered to the Commissioner by or on behalf of
the insolvent in question in connection with income tax, and shall permit the
trustee to make copies of any such return. At the request of the trustee the
said Commissioner or any officer under him who is in charge of any such
return shall certify as correct any such copy which is correct, and if any
entry in such return is relevant in any proceedings, whether civil or
criminal, in which the insolvent estate or the insolvent is involved, that
return or a copy thereof, purporting to have been certified as aforesaid,
shall be admissible in evidence in those proceedings, on its mere production
by any person and any such certified copy shall have the same force and
effect as the original return. (3) (a)
The creditors may, at the meeting in question, direct what action shall be
taken by the trustee in respect of any matter reported to them under paragraph
(e), (f), (g), (h) or (i) of
subsection (1). (b) If no directions have been given by the
creditors at the second meeting of creditors, any resolution or direction
alleged in the affidavit referred to in paragraph (a) of subsection (1)bis to
have been recommended to the creditors of the estate and which could lawfully
have been passed or given by the creditors at such meeting shall, if the
Master so approves, be deemed to have been passed or given, as the case may
be, by the creditors at such meeting. (c) Subject to the provisions of this Act, the Master may, if no
directions have been given by the creditors at the second meeting of
creditors, in addition to any resolution or direction approved of by him
under paragraph (b) or if no such resolution or direction has been so
approved of, give such directions relating to any matter reported to the
creditors under subsection (1) or to the administration or realization of the
estate as he thinks fit. (d) Notwithstanding the provisions of subsection (3) of section
fifty-three, any resolution or direction approved under paragraph (b) and any
direction given by the Master under paragraph (c) shall be binding upon the
trustee. [Sub-s. (3)
substituted by s. 25 (c) of Act 99 of 1965.] (4) The report referred to in subsection (1) shall contain full
particulars of all the facts relating to any alleged contravention of this
Act by the insolvent or the alleged commission by him of any offence reported
in terms of paragraph (d) of that subsection and the trustee shall furnish
such further information in regard thereto as the Master or the
Attorney-General may require. [Sub-s. (4)
substituted by s. 25 (d) of Act 99 of 1965.] 82 Sale of property after second meeting and manner of sale (1) Subject to the provisions of sections eighty-three and ninety the
trustee of an insolvent estate shall, as soon as he is authorized to do so at
the second meeting of the creditors of that estate, sell all the property in
that estate in such manner and upon such conditions as the creditors may
direct: Provided that if any rights acquired from the State under a lease,
licence, purchase, or allotment of land is an asset in that estate, the
trustee shall, in his administration of the estate, act in accordance with
those provisions (if any) which by the law under which the rights were
acquired, are expressed to apply in the event of the sequestration of the
estate of the person who acquired those rights: Provided that if the
creditors have not prior to the final closing of the second meeting of
creditors of that estate given any directions the trustee shall sell the
property by public auction or public tender. A sale by public auction or
public tender shall be after notice in the Gazette and after such other
notices as the Master may direct and in the absence of directions from
creditors as to the conditions of sale, upon such conditions as the Master
may direct. (2) When the sale is by public tender, every tenderer shall transmit
his tender in duplicate in a sealed envelope to the Master, or if the Master
has so directed, to a magistrate specified by him. The Master or such
magistrate shall keep each tender unopened until the expiry of the period for
the lodging of tenders. He shall then open the sealed envelopes and, in the
case of the Master, file one duplicate of each tender or, in the case of the
magistrate, transmit one duplicate of each tender to the Master. The Master
or the magistrate (as the case may be) shall forthwith transmit the other
duplicate of each tender to the trustee. The Trustee or his representative
shall have the right to be present when the Master or the magistrate opens
the tenders. (3) and (4) ...... [Sub-ss. (3) and (4)
deleted by s. 26 (a) of Act 99 of 1965.] (5) After the opening of the tenders no further offer for the property
in question shall be considered and unless the creditors have otherwise
directed, or if they have given no directions, unless the Master has
otherwise directed, the trustee shall accept the best tender or reject all
the tenders and sell the property by public auction. [Sub-s. (5)
substituted by s. 26 (b) of Act 99 of 1965.] (6) From the sale of the movable property shall be excepted the
wearing apparel and bedding of the insolvent and the whole or such part of
his household furniture, and tools and other essential means of subsistence
as the creditors, or if no creditor has proved a claim against the estate, as
the Master may determine and the insolvent shall be allowed to retain, for
his own use any property so excepted from the sale. (7) The trustee or an auctioneer employed to sell property of the
estate in question, or the trustee’s or the auctioneer’s spouse, partner,
employer, employee or agent shall not acquire any property of the estate
unless the acquisition is confirmed by an order of the court. (8) If any person other than a person mentioned in subsection (7) has
purchased in good faith from an insolvent estate any property which was sold
to him in contravention of this section, or if any person in good faith and
for value acquired from a person mentioned in subsection (7) any property
which the last mentioned person acquired from an insolvent estate in
contravention of that subsection, the purchase or other acquisition shall
nevertheless be valid, but the person who sold or otherwise disposed of the
property shall be liable to make good to the estate twice the amount of the
loss which the estate may have sustained as a result of the dealing with the
property in contravention of this section. 83 Realization of securities for claims (1) A creditor of an insolvent estate who holds as security for his
claim any movable property shall, before the second meeting of the creditors
of that estate, give notice in writing of that fact to the Master, and to the
trustee if one has been appointed. (2) If such property consists of a marketable security, a bill of
exchange or a financial instrument as defined in section 1 of the Financial
Markets Control Act, 1989 (Act 55 of 1989), the creditors may, after giving
the notice mentioned in subsection (1) and before the second meeting of
creditors, realize the property in the manner and on the conditions mentioned
in subsection (8). [Sub-s. (2)
substituted by s. 30 (a) of Act 54 of 1991.] (3) If such property does not consist of a marketable security or a
bill of exchange, the trustee may, within seven days as from the receipt of
the notice mentioned in subsection (1) or within seven days as from the date
upon which the certificate of appointment issued by the Master in terms of
subsection (1) of section eighteen or subsection (2) of section fifty-six
reached him, whichever be the later, take over the property from the creditor
at a value agreed upon between the trustee and the creditor or at the full
amount of the creditor’s claim, and if the trustee does not so take over the
property the creditor may, after the expiration of the said period but before
the said meeting, realize the property in the manner and on the conditions
mentioned in subsection (8). (4) If no trustee has been appointed before the said meeting, the
creditor may, with the permission in writing of the Master and before the
said meeting, realize in manner and on the conditions mentioned in subsection
(8) any such property which he is not entitled to realize in terms of
subsection (2). (5) The creditor shall, as soon as possible after he has realized such
property, prove in terms of section forty-four the claim thereby secured and
he shall attach to the affidavit submitted in proof of his claim a statement
of the proceeds of the realization and of the facts on which he relies for
his preference. (6) If he has not so realized such property before the second meeting
of creditors, he shall as soon as possible after the commencement of that
meeting deliver the property to the trustee, for the benefit of the insolvent
estate and if the creditor has not delivered the said property to the trustee
within a period of three days as from the commencement of the said meeting
the trustee may demand from him delivery of such property. If the creditor
fails to comply with such demand of the trustee, the Master, at the request
of the trustee and after notice to the creditor shall direct the
deputy-sheriff within whose area of jurisdiction the property is situate to
attach the property and to deliver it to the trustee, and in that case the
creditor shall be liable for the deputy-sheriff’s costs, as taxed and allowed
by the Master. If those costs cannot be recovered from the creditor, they
shall be paid out of the estate as part of the costs of the sequestration. (7) When the trustee has received the property mentioned in subsection
(6), the said creditor may prove his claim and place a value upon the said
property in terms of subsection (4) of section forty-four. (8) The creditor may realize such property in the manner and on the
conditions following, that is to say- (a) if it is- (i) any property of a class ordinarily sold through a stockbroker as
defined in section 1 of the Stock Exchanges Control Act, 1985 (Act 1 of
1985), the creditor may, subject to the provisions of the said Act and (where
applicable) the rules referred to in section 12 thereof, forthwith sell it
through a stockbroker, or if the creditor is a stockbroker, also to another
stockbroker; or (ii) a financial instrument referred to in subsection (2), the
creditor may, subject to the provisions of the Financial Markets Control Act,
1989, and rules referred to in section 17 thereof, forthwith sell it through
a financial instrument trader as defined in section 1 of the said Act, or, if
the creditor is a financial instrument trader or financial instrument
principal as defined in section 1 of the said Act, also to another financial
instrument trader or financial instrument principal; [Para. (a) substituted
by s. 30 (b) of Act 54 of 1991.] (b) if
it is a bill of exchange, the creditor may realize it in any manner approved
of by the trustee or by the Master; (c) if
it consists of a right of action, the creditor shall not realize it approval of the trustee or of the Master; (d) if
it is any other property, the creditor may sell it by public auction after
affording the trustee a reasonable opportunity to inspect it and after giving
such notice of the time and place of the sale as the trustee directed. (9) As soon as the trustee has directed a creditor in terms of
paragraph (d) of subsection (8) to give notice of a sale by public auction,
the trustee shall give notice in writing to all the other creditors of the
estate in question of the time and place of the proposed sale. (10) Whenever a creditor
has realized his security as hereinbefore provided he shall forthwith pay the
net proceeds of the realization to the trustee, or if there is no trustee, to
the Master and thereafter the creditor shall be entitled to payment, out of
such proceeds, of his preferent claim if such claim was proved and admitted
as provided by section forty-four and the trustee or the Master is satisfied
that the claim was in fact secured by the property so realized. If the
trustee disputes the preference, the creditor may either lay before the
Master an objection under section one hundred and eleven to the trustee’s
account, or apply to court, after notice or motion to the trustee, for an
order compelling the trustee to pay him forthwith. Upon such application the
court may make such order as to it seems just. (11) If a creditor has
valued his security when proving his claim, the trustee, if authorized by the
creditors, may, unless the creditor has realized his security in terms of
subsection (2) or (3), within three months as from the date of his
appointment or as from the date of the proof of the claim (whichever is the
later) take over the property (whether movable or immovable) which
constitutes the security at the value placed thereon by the creditor when his
claim was proved: Provided that if two or more creditors have a pledge or
special mortgage of the same property, a creditor who has valued his security
shall be deemed to have valued, and the trustee shall be entitled to take
over, only the preferent rights of the creditor in respect of the property,
and not the property itself. If the trustee does not, within that period,
take over the said property or security he shall realize it for the benefit
of all creditors whose claims are secured thereby, according to their
respective rights. [Sub-s. (11)
amended by s. 24 (a) of Act 16 of 1943 and substituted by s. 27 of Act 99 of
1965.] (12) If the claim of a
secured creditor exceeds the sum payable to him in respect of his security he
shall be entitled to rank against the estate in respect of the excess, as an
unsecured creditor, and if the net proceeds of any such property exceed all
claims secured thereby the balance, after payment of those claims, shall be
added to the other free residue (if any) in the estate in question. (13) The preceding
provisions of this section shall apply mutatis mutandis in respect of any
creditor for value of a solvent spouse mentioned in section twenty-one, who
holds as security for his claim against that spouse any movable property
belonging to that spouse. [Sub-s. (13)
substituted by s. 24 (b) of Act 16 of 1943.] 84 Special provision in case of goods delivered to a debtor in terms
of an instalment sale transaction (1) If any property was delivered to a person (hereinafter referred to
as the debtor) under a transaction which is an instalment sale transaction
contemplated in paragraphs (a) and (b) of the definition of ‘instalment sale transaction’ in section 1
of the Credit Agreements Act, 1980, such a transaction shall be regarded on
the sequestration of the debtor’s estate as creating in favour of the other
party to the transaction (hereinafter referred to as the creditor) a hypothec
over that property whereby the amount still due to him under the transaction
is secured. The trustee of the debtor’s insolvent estate shall, if required
by the creditor, deliver the property to him, and thereupon the creditor
shall be deemed to be holding that property as security for his claim and the
provisions of section 83 shall apply. (2) If the debtor returned the property to the creditor within a
period of one month prior to the sequestration of the debtor’s estate, the
trustee may demand that the creditor deliver to him that property or the
value thereof at the date when it was so returned to the creditor, subject to
payment to the creditor by the trustee or to deduction from the value (as the
case may be) of the difference between the total amount payable under the
said transaction and the total amount actually paid thereunder. If the
property is delivered to the trustee the provisions of subsection (1) shall
apply. [S. 84 amended by s. 23
of Act 36 of 1942 and substituted by s. 11 of Act 101 of 1983.] 85 Exclusion or limitation of preference under legal hypothec (1) A tacit or legal hypothec (other than a landlord’s legal hypothec
or the hypothec mentioned in subsection (1) of section eighty-four) shall not
confer any preferent right against an insolvent estate. (2) A landlord’s legal hypothec shall confer a preference with regard
to any article subject to that hypothec for any rent calculated in respect of
any period immediately prior to and up to the date of sequestration but not
exceeding- (a) three months, if the rent is payable monthly or at shorter
intervals than one month; (b) six months, if the rent is payable at intervals exceeding one
month but not exceeding three months; (c) nine months, if the rent is payable at intervals exceeding three
months but not exceeding six months; (d) fifteen months in any other case. [Sub-s. (2) amended by
s. 25 of Act 16 of 1943.] 86 Effect of general bond and general clause No general mortgage
bond registered after the thirty-first day of December, 1916, shall confer
any preference in respect of immovable property, and no general clause in a
mortgage bond hypothecating immovable property registered after the said date
shall confer any preference in respect of any property: Provided that the
preceding provisions of this section shall not affect any preference
conferred by a general clause in any mortgage bond passed before the commencement
of this Act by a widower or widow in favour of a Master, for the purpose of
securing the payment to his or her child of any sum of money due to the child
from the estate of the widower’s or widow’s deceased spouse. [S. 86 amended by s.
26 of Act 16 of 1943.] 87 Ranking of mortgages for future debts Priority under any
mortgage bond to secure the payment of future debts shall depend on the date
of the registration of that mortgage bond, and not on the date upon which any
such debt comes into existence. 88 Certain mortgages are invalid A mortgage bond,
other than a kustingbrief, whether special or general passed for the purpose
of securing the payment of a debt not previously secured, which was incurred
more than two months prior to the lodging of the bond with the registrar of
deeds concerned for registration or for the purpose of securing the payment
of a debt incurred in novation of or substitution for any such
first-mentioned debt, shall not confer any preference if the estate of the
mortgage debtor is sequestrated within a period of six months after such
lodging: Provided that a mortgage bond shall be deemed not to have been
lodged as aforesaid, if it was withdrawn from registration. 89 Costs to which securities are subject (1) The cost of maintaining, conserving and realizing any property
shall be paid out of the proceeds of that property, if sufficient and if
insufficient and that property is subject to a special mortgage, landlord’s
legal hypothec, pledge, or right of retention the deficiency shall be paid by
those creditors, pro rata, who have proved their claims and who would have
been entitled, in priority to other persons, to payment of their claims out
of those proceeds if they had been sufficient to cover the said cost and
those claims. The trustee’s remuneration in respect of any such property and
a proportionate share of the costs incurred by the trustee in giving security
for his proper administration of the estate, calculated on the proceeds of
the sale of the property, a proportionate share of the Master’s fees, and if
the property is immovable, any tax as defined in subsection (5) which is or
will become due thereon in respect of any period not exceeding two years
immediately preceding the date of the sequestration of the estate in question
and in respect of the period from that date to the date of the transfer of
that property by the trustee of that estate, with any interest or penalty
which may be due on the said tax in respect of any such period, shall form
part of the costs of realization. (2) If a secured creditor (other than a secured creditor upon whose
petition the estate in question was sequestrated) states in his affidavit
submitted in support of his claim against the estate that he relies for the
satisfaction of his claim solely on the proceeds of the property which
constitutes his security, he shall not be liable for any costs of
sequestration other than the costs specified in subsection (1), and other
than costs for which he may be liable under paragraph (a) or (b) of the proviso
to section one hundred and six. (3) Any interest due on a secured claim in respect of any period not
exceeding two years immediately preceding the date of sequestration shall be
likewise secured as if it were part of the capital sum. (4) Notwithstanding the provisions of any law which prohibits the
transfer of any immovable property unless any tax as defined in subsection
(5) due thereon has been paid, that law shall not debar the trustee of an
insolvent estate from transferring any immovable property in that estate for
the purpose of liquidating the estate, if he has paid the tax which may have
been due on that property in respect of the periods mentioned in subsection
(1) and no preference shall be accorded to any claim for such a tax in
respect of any other period. (5) For the purposes of subsections (1) and (4) ‘tax’ in relation to
immovable property means any amount payable periodically in respect of that
property to the State or for the benefit of a provincial administration or to
a body established by or under the authority of any law in discharge of a
liability to make such periodical payments, if that liability is an incident
of the ownership of that property. [Sub-s. (5) amended by
s. 27 of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] 90 Land Bank not affected by this Act The provisions of
this Act shall not affect the provisions of any other law which confer powers
and impose duties upon the Land and Agricultural Bank of South Africa in
relation to any property belonging to an insolvent estate. [S. 90 amended by s.
28 of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] 91 Liquidation account and plan of distribution or contribution Subject to the
provisions of sections one hundred and nine and one hundred and ten, a
trustee shall within a period of six months as from the date of his
appointment, submit to the Master a liquidation account and a plan of
distribution of the proceeds of the property in the estate available for
payment to creditors, or, if all realizable property in the estate has been
realized and brought to account and the proceeds are insufficient to cover
the costs and charges mentioned in section ninety-seven, a plan of
contribution apportioning the liability for the deficiency among creditors
who are liable to contribute. [S. 91 substituted
by s. 28 of Act 99 of 1965.] 92 Manner of framing liquidation account (1) A liquidation account shall contain an accurate record of all
moneys received and of all moneys disbursed by the trustee otherwise than in
the course of a business which he carried on for the insolvent estate in
question. (2) The record of each such receipt and disbursement shall set forth
the amount and date thereof and sufficient particulars to explain its nature. (3) The liquidation account shall be accompanied by the trustee’s bank
pass book and by vouchers in support of the record of receipts and
disbursements. (4) If a liquidation account is not the final liquidation account, the
trustee shall further set forth therein- (a) all property still unrealized; (b) all outstanding debts due to the estate; (c) the reasons why that property has not been realized or those
debts have not been collected. In
that event the trustee shall, from time to time and as the Master may direct,
but at least once in every six months, unless he has received an extension of
time as provided in section one hundred and nine, frame and submit to the
Master periodical accounts in form and in all other respects similar to the
account mentioned in subsections (1) and (2). (5) If the estate of a partnership is under sequestration, separate
trustees’ accounts shall be framed in the estate of the partnership and in
the estate of each member of that partnership whose estate is under
sequestration. 93 Trading account If the trustee has
carried on any business on behalf of the estate, he shall submit to the
Master, in addition to the liquidation account, a trading account containing
the following data and no others, namely- (a) a record of the value of the stock on hand at the date of
sequestration; (b) a record of the value of the stock on hand on the date up to which
the account is made up; (c) the daily totals of receipts and payments in connection with the
business; (d) the result of his conduct of the business. 94 Form of plan of distribution A plan of
distribution shall show in parallel columns under separate headings- (a) every claim or the part of every claim against the estate in
question which is secured or otherwise preferent; (b) every claim or the part of every claim against the estate which is
unsecured and otherwise non-preferent; (c) the amount awarded under that plan and under any previous plan of
distribution to every creditor of the estate; (d) the deficiency in respect of each claim; and
shall make provision for the division of the proceeds of the property in the
insolvent estate in the order of preference and in the manner set forth in
sections ninety-five to one hundred and four inclusive. 95 Application of proceeds of securities (1) The proceeds of any property which was subject to a special
mortgage, landlord’s legal hypothec, pledge or right of retention, after
deduction therefrom of the costs mentioned in subsection (1) of section
eighty-nine, shall be applied in satisfying the claims secured by the said
property, in their order of preference, with interest thereon calculated in
manner provided in subsection (2) of section one hundred and three from the
date of sequestration to the date of payment, but subject to the provisions
of subsection (4) of section ninety-six. (2) If a creditor whose claim is secured by a mortgage over immovable
property belonging to the insolvent estate has not proved his claim and the
trustee is not satisfied that the debt in question has been discharged or
abandoned, he shall deposit with the Master for payment into the Guardians’
Fund the proceeds of the sale of any such property to an amount not exceeding
such capital amount of the said mortgage and such arrears of interest as the
mortgagee would have had a preferent right to claim, after deduction of an
amount equal to the costs which he would have had to pay if he had proved his
claim and had stated in the affidavit submitted in support of his claim that
he relied for the satisfaction of his claim solely on the proceeds of the
sale of the said property. The amount so deposited or the part thereof to
which the former mortgagee may be entitled shall be paid to him if, within a
period of one year after confirmation in terms of section one hundred and
twelve of the distribution account under which the money is distributed, he
applies therefor to the Master and the Master is satisfied after proof of his
claim, that he is entitled to the amount or part thereof. (3) Any amount deposited with the Master in terms of subsection (2)
which has not been paid out to the former mortgagee, as in that subsection
provided, shall after the expiry of the year mentioned in that subsection be
distributed among the creditors who have proved claims against the insolvent
estate prior to the confirmation of the said distribution account, as if the
amount had, at the time of such confirmation, been available for distribution
among them. (4) Any creditor claiming to be entitled to share in the said
distribution shall make written application to the Master for payment of his
share, and the Master may pay out to such creditor or may hand the money to
the trustee, if any, for distribution among the creditors entitled thereto,
or, if there is no trustee, may appoint a trustee on such conditions as he
may think fit to impose for the purpose of making such distribution. (5) Any trustee charged with the duty of making such a distribution
shall submit to the Master a supplementary plan of distribution in respect
thereof, and the provisions of this Act relating to a plan of distribution
shall apply in respect of such supplementary plan. 96 Funeral and death-bed expenses (1) Any free residue of an insolvent estate shall be applied in the
first place in defraying the expenses of the funeral of the insolvent, if he
died before the trustee’s first plan of distribution was submitted to the
Master in terms of section 91, and the expenses of the funeral of the
insolvent’s wife or minor child, if those expenses were incurred within the
period of three months immediately preceding the sequestration of the
insolvent’s estate, but the amount payable under this subsection shall not
exceed R300 in all. [Sub-s. (1)
substituted by s. 29 of Act 99 of 1965 and by s. 12 (a) of Act 101 of 1983.] (2) Thereafter any balance of the free residue shall be applied in defraying
the death-bed expenses of the insolvent if they were incurred before the
trustee’s first plan of distribution was submitted to the Master in terms of
section 91, and the death-bed expenses of the debtor’s wife or minor child,
if those expenses were incurred within the period of three months immediately
preceding the sequestration of the insolvent’s estate, but the amount payable
under this subsection shall not exceed R300 in all. [Sub-s. (2)
substituted by s. 29 of Act 99 of 1965 and by s. 12 (b) of Act 101 of 1983.] (3) In subsection (2) ‘death-bed expenses’ means expenses incurred for
medical attendance, nursing, medicines and medical necessaries, and claims
for those expenses shall rank pari passu and abate in equal proportion, if
necessary. [Sub-s. (3)
substituted by s. 29 of Act 99 of 1965 and by s. 1 of Act 122 of 1998.] (4) If the free residue of the estate is insufficient to defray the
expenses mentioned in subsections (1) and (2), the deficiency shall be
defrayed out of the proceeds of any other assets of the estate in proportion
to their value. 97 Cost of sequestration (1) Thereafter any balance of the free residue shall be applied in
defraying the costs of the sequestration of the estate in question with the
exception of the costs mentioned in subsection (1) of section eighty-nine. (2) The costs of the sequestration shall rank according to the
following order of priority- (a) the sheriff’s charges incurred since the sequestration; (b) fees payable to the Master in connection with the sequestration; (c) the following costs which shall rank pari passu and abate in
equal proportions if necessary, that is to say: the taxed costs of
sequestration (as defined in subsection (3), the fee mentioned in section 16
(5), the remuneration of the curator bonis and of the trustee and all other
costs of administration and liquidation including such costs incurred by the
trustee in giving security for his proper administration of the estate as the
Master considers reasonable, in so far as they are not payable by a
particular creditor in terms of section 89 (1), any expenses incurred by the
Master or by a presiding officer in terms of section 53 (2) and the salary or
wages of any person who was engaged by the curator bonis or the trustee in
connection with the administration of the insolvent estate. [Para. (c) substituted
by s. 2 of Act 84 of 1984.] (3) In paragraph (c) of subsection (2) the expression ‘taxed costs of
sequestration’ means the costs (as taxed by the registrar of the court)
incurred in connection with the petition of the debtor for acceptance of the
surrender of his estate or of a creditor for the sequestration of the
debtor’s estate, but it does not include the costs of opposition to such a
petition, unless the court directs that they shall be included. 98 Costs of execution (1) Thereafter any balance of the free residue shall be applied in
defraying- (a) the taxed fees of the sheriff or messenger in connection with any
execution upon any property of the insolvent and in connection with any
proceedings which resulted in that execution; and (b) any other taxed costs in those proceedings not exceeding a sum of
R50, [Para. (b)
substituted by s. 13 of Act 101 of 1983.] to a total amount
not exceeding the proceeds of that property if that property was still under
attachment or if the proceeds of the sale in execution of that property were
still in the hands of the sheriff or messenger at the time of the
sequestration of the insolvent’s estate. (2) The attachment of any property in execution of any judgment shall,
after the sequestration of the estate of the judgment debtor, not have the
effect of conferring upon the judgment creditor, any other preference than
the preference provided for in subsection (1). 98A Salaries or wages of former employees of
insolvent (1) Thereafter any balance of the free residue shall be applied in
paying- (a) to any employee who was employed by the insolvent- (i) any salary or wages, for a period not exceeding three months,
due to an employee*; (ii) any payment* in respect of any period of leave or holiday due to
the employee which has accrued as a result of his or her employment by the
insolvent in the year of insolvency or the previous year, whether or not
payment thereof is due at the date of sequestration; (iii) any payment* due in respect of any other form
of paid absence for a period not exceeding three months prior to the date of
the sequestration of the estate; and (iv) any severance or retrenchment pay* due to the employee in terms of
any law, agreement, contract or wage-regulating measure; and (b) any contributions which were payable* by the insolvent, including
contributions which were payable in respect of any of his or her employees,
and which were, immediately prior to the sequestration of the estate, owing
by the insolvent, in his or her capacity as employer, to any pension,
provident, medical aid, sick pay, holiday, unemployment or training scheme or
fund, or to any similar scheme or fund. (2) (a) In order to ensure that the balance of the free residue is
applied in an equitable manner, the Minister of Justice may by notice in the
Gazette determine maximum amounts which shall be paid out in terms of
subsection (1) in respect of- (i) paragraph (a), any or all the subparagraphs thereof or any
single employee; and (ii) paragraph (b) or any single scheme or fund, and different maximum
amounts may be so determined in respect of different schemes or funds. (b) In order to take
into account subsequent fluctuations in the value of money, the Minister of
Justice may from time to time supplement, amend or withdraw the relevant
maximum amounts by like notice in the Gazette. (c) The Minister of Justice may at any time replace a notice referred
to in paragraph (a) with a new notice issued under the said paragraph (a). (d) The Minister of Justice shall not exercise the powers conferred
upon him or her by paragraph (a) or (c), unless he or she- (i) has caused to be published in the Gazette a draft of the
proposed notice, together with a notice inviting all interested parties to
lodge with the Director-General: Justice in writing within a period of 60
days from the date of the publication of the notice any representations that
they may wish to make in connection with the proposed notice; and (ii) has caused to be forwarded to the National Economic, Development
and Labour Council established by section 2 (1) of the National Economic,
Development and Labour Council Act, 1994 (Act 35 of 1994), a copy of such
draft. (3) An employee shall be entitled to salary, wages, leave or other
payments in terms of subsection (1) (a) even though he or she has not proved
his or her claim therefor in terms of section 44, but the trustee may require
such employee to submit an affidavit in support of his or her claim for such
salary, wages, leave or payment. (4) (a) The claim referred to in subsection (1) (a) (i) shall be
preferred to the claims referred to in subsections (1) (a) (ii), (iii) and
(iv) and (1) (b). (b) The claims
referred to in subsection (1) (a) (ii), (iii) and (iv) shall be preferred to
the claims referred to in subsection (1) (b) and shall rank equally and abate
in equal proportions, if necessary. (c) The claims referred to in subsection (1) (b) shall rank equally
and abate in equal proportions, if necessary. (5) For the purposes of this section- (a) ‘employee’ means any person, excluding an independent contractor,
who works for another person and who- (i) receives, or is entitled to receive, any salary or wages; or (ii) in any manner assists in carrying on or in conducting the
business of an employer; (b) ‘salary or wages’ includes all cash earnings received by the
employee from the employer; (c) ‘unemployment fund’ does not include the unemployment insurance
fund referred to in section 6 of the Unemployment Insurance Act, 1966 (Act 30
of 1966). (6) The Minister of Justice may, after consultation with the National
Economic, Development and Labour Council established by section 2 (1) of the
National Economic, Development and Labour Council Act, 1994, by notice in the
Gazette exclude from the operation of the provisions of this section a
category of employees, schemes or funds specified in the notice- (a) in the case of employees, by reason of the particular nature of
the employment relationship between the employer and the employees*; (b) in the case of employees, schemes or funds, by reason of the fact
that there exists any other type of guarantee which affords the employees,
schemes or funds protection which is equivalent to the protection as provided
in this section; or (c) in the case of schemes or funds, by reason of the fact that the
sequestration of the employer’s estate will make it impossible to achieve the
objects of the schemes or funds. [S. 98A inserted by s. 2
of Act 122 of 1998.] 99 Preference in regard to certain statutory obligations (1) Thereafter
any balance of the free residue shall be applied in defraying-
section (a) any amount which in terms of the Workmen’s Compensation Act, 1941
(Act 30 of 1941), was, immediately prior to the sequestration of the estate,
due to the Workmen’s Compensation Commissioner by the insolvent in his
capacity as an employer, in respect of any assessment, penalty or other
payment, or the compensation then due in respect of any workman, including
the cost of medical aid and any amount paid or payable in terms of section 40
(2), 44, 76 (2) or 86 (2) of that Act, and in the case of a continuing
liability, also the capitalized value, as determined by the Workmen’s
Compensation Commissioner, of the pension (irrespective of whether a lump sum
is at any time paid in lieu of the whole or a portion of such pension in
terms of section 49 of that Act), periodical payment or allowance, as the
case may be, which constitutes the liability; (b) any amount which the insolvent- (i) has under the provisions of section 35 (2) of the Income Tax
Act, 1962 (Act 58 of 1962), deducted or withheld from any amount referred to
in section 9 (1) (b) of that Act in respect of any other person’s obligation
to pay normal tax; (ii) has under the provisions of section 64E of that Act deducted or
withheld from any amount of interest referred to in section 64A of that Act
in respect of the non-residents tax on interest payable in respect of such
amount of interest; (iii) is under the provisions of section 99 of the
said Act required to pay in respect of any tax due by any other person and
has deducted or withheld from any moneys, including pensions, salary, wages,
remuneration and amounts of any other nature, held by him for or due by him
to such person; [Sub-para. (iii)
substituted by s. 69 of Act 85 of 1974 and by s. 3 (a) of Act 139 of 1992.] (iv) has under the provisions of the Fourth Schedule to the said Act
deducted or withheld by way of employees’ tax from remuneration or any other
amount paid or payable by him to any other person; or [Sub-para. (iv)
substituted by s. 30 (b) of Act 90 of 1972, by s. 69 of Act 85 of 1974 and by
s. 3 (a) of Act 139 of 1992.] (v) has under the provisions of the Sixth Schedule to the said Act
deducted or withheld from any insurance benefit under any insurance policy,
in respect of the liability of any person for normal tax, [Sub-para. (v)
inserted by s. 30 (c) of Act 90 of 1972 and substituted by s. 69 of Act 85 of
1974.] but did not pay to
the Secretary for Inland Revenue prior to the sequestration of the estate,
and any interest payable under that Act in respect of such amount in respect
of any period prior to the date of sequestration of the estate; (c) any amount which in terms of the Pneumoconiosis Compensation Act,
1962 (Act 64 of 1962), was, immediately prior to the sequestration of the
estate, due to the General Council for Pneumoconiosis Compensation by the
insolvent in his capacity as an owner or a former owner of a mine, and any
interest due thereon in respect of any period prior to the date of
sequestration of the estate; (cA) the amount of any customs, excise or
sales duty or interest, fine or penalty which in terms of the Customs and
Excise Act, 1964 (Act 91 of 1964), was, immediately prior to the
sequestration of the estate, due by the insolvent; [Para. (cA)
inserted by s. 6 of Act 62 of 1973.] (cB) any amount provided to the insolvent by
the State from the National Supplies Procurement Fund for any purpose
contemplated in the National Supplies Procurement Act, 1970 (Act 89 of 1970); [Para. (cB)
inserted by s. 9 of Act 29 of 1974.] (cC) the amount of any sales tax, interest,
fine or penalty which in terms of the Sales Tax Act, 1978, was, immediately
prior to the sequestration of the estate, due by the insolvent. [Para. (cC)
inserted by s. 50 of Act 103 of 1978.] (cD) the amount of value-added tax, interest,
fine or penalty which in terms of the Value-Added Tax Act, 1991 (Act 89 of
1991), was due by the insolvent immediately prior to the sequestration of the
estate. [Para. (cD)
inserted by s. 3 (b) of Act 139 of 1992.] (d) the amount of any appreciation contribution which in terms of the
Community Development Act, 1966 (Act 3 of 1966), was, immediately prior to
the sequestration of the estate, due to the Community Development Board by
the insolvent; (e) any amount which in terms of the Unemployment Insurance Act, 1966
(Act 30 of 1966), was, immediately prior to the sequestration of the estate,
due to the Unemployment Insurance Fund by the insolvent in his capacity as an
employer, in respect of any contribution, penalty or other payment; and (f) ...... [Para. (f) deleted by s.
3 of Act 122 of 1998.] (2) The claims
referred to in subsection (1) shall rank pari passu and abate in equal
proportion, if necessary.
[S. 99 amended by s. 29
of Act 16 of 1943 and substituted by s. 30 of Act 99 of 1965 and by s. 5 of
Act 6 of 1972.] 100 ...... [S. 100 amended by
s. 13 of Act 32 of 1952, by s. 31 of Act 99 of 1965, by s. 14 of Act 101 of
1983 and by s. 4 of Act 139 of 1992 and repealed by s. 4 of Act 122 of 1998.] 101 Preference in regard to taxes on persons or the incomes or
profits of persons Thereafter any
balance of the free residue shall be applied in paying- (a) any tax on persons or the incomes or profits of persons for which the
insolvent was liable under any Act of Parliament or Ordinance of a Provincial
Council in respect of any period prior to the date of sequestration of his
estate, whether or not that tax has become payable after that date; [Para. (a) amended
by s. 1 of Act 49 of 1996.] (a)bis any amount payable by the insolvent under
any Act of Parliament by way of interest in respect of any period prior to
the date of sequestration of his estate in respect of any tax referred to in
paragraph (a); [Para. (a)bis
inserted by s. 22 of Act 6 of 1963.] (b) in the case of an insolvent partnership, so much of any tax due
and payable by any partner as is referable to the taxable income derived by
him from the partnership, the amount so referable being deemed to be a sum
which bears to the total amount due by him as tax the same ratio as his
taxable income derived from the partnership bears to his total taxable income
from all sources within the Republic. [S. 101 substituted
by s. 23 of Act 25 of 1940 and by s. 87 of Act 31 of 1941, amended by s. 30
of Act 16 of 1943 and substituted by s. 32 of Act 80 of 1961.] 102 Preference under a general bond Thereafter any
balance of the free residue shall be applied in the payment of any claims
proved against the estate in question which were secured by a general
mortgage bond, in their order of preference with interest thereon calculated
in manner provided in subsection (2) of section one hundred and three. 103 Non-preferent claims (1) Any balance of the free residue after making provision for the
expenditure mentioned in sections ninety-six to one hundred and two
inclusive, shall be applied- (a) in the payment of the unsecured or otherwise non-preferent claims
proved against the estate in question in proportion to the amount of each
such claim; (b) if the unsecured or otherwise non-preferent claims have been paid
in full, in the payment, thereafter, of interest on such claims from the date
of sequestration to the date of payment, in proportion to the amount of each
such claim. (2) The interest mentioned in subsection (1) shall be calculated at
the rate of eight per cent per annum, unless the amount of any claim bears a
higher rate of interest by virtue of a lawful stipulation in writing, when
the interest on that amount shall be calculated at the stipulated rate of
interest. [Sub-s. (2) substituted
by s. 15 of Act 101 of 1983.] 104 Late proof of claims (1) Subject to the provisions of section 95 (2) and section 98A (3), a
creditor of an insolvent estate who has not proved a claim against that
estate before the date upon which the trustee of that estate submitted to the
Master a plan of distribution in that estate, shall not be entitled to share
in the distribution of assets brought up for distribution in that plan:
Provided that the Master may, at any time before the confirmation of the said
plan permit any such creditor who has proved his claim after the said date to
share in the distribution of the said assets, if the Master is satisfied that
the creditor has a reasonable excuse for the delay in proving his claim. [Sub-s. (1) amended
by s. 5 of Act 122 of 1998.] (2) A creditor of an insolvent estate who proved a claim against that
estate after the date upon which the trustee submitted to the Master a plan
of distribution in that estate and who was not permitted to share in the
distribution of assets under that plan, in terms of subsection (1), shall be
entitled to be awarded under any further plan of distribution submitted to
the Master after the proof of his claim, the amount which would have been
awarded to him under the previous plan of distribution, if he had proved his
claim prior to the submission of that plan to the Master: Provided that the
Master is satisfied that the creditor had a reasonable excuse for the delay
in proving his claim; and provided further that any creditor who was aware
that proceedings had been instituted under section twenty-six, twenty-nine,
thirty or thirty-one and who delayed proving his claim until the court had
given judgment in those proceedings, shall not be entitled to share in the
distribution of any money or the proceeds of any property recovered as a
result of such proceedings. (3) If any creditor has under subsection (1) of section 32 taken
proceedings to recover the value of property or a right under section 25 (4),
to set aside any disposition of or dealing with property under section 26,
29, 30 or 31 or for the recovery of damages or a penalty under section 31, no
creditor who was not a party to the proceedings shall derive any benefit from
any moneys or from the proceeds of any property recovered as a result of such
proceedings before the claim and costs of every creditor who was a party to
such proceedings have been paid in full. [Sub-s. (3)
substituted by s. 6 of Act 122 of 1993.] 105 Form of plan of contribution A plan of
contribution shall show in parallel columns- (a) each claim in respect of which the claiming creditor is liable to
contribute; and (b) the amount which he is liable to contribute, and
shall make provision for all such contributions in accordance with the
provisions of section one hundred and six. 106 Contributions by creditors towards cost of sequestration when
free residue insufficient Where there is no
free residue in an insolvent estate or when the free residue is insufficient
to meet all the expenses, costs and charges mentioned in section
ninety-seven, all creditors who have proved claims against the estate shall
be liable to make good any deficiency, the non-preferent creditors each in
proportion to the amount of his claim and the secured creditors each in
proportion to the amount for which he would have ranked upon the surplus of
the free residue, if there had been any: Provided that- (a) if all the creditors who have proved claims against the estate are
secured creditors who would not have ranked upon the surplus of the free
residue, if there had been any, such creditors shall be liable to make good
the whole of the deficiency, each in proportion to the amount of his claim; (b) if a creditor has withdrawn his claim, he shall be liable to
contribute in respect of any deficiency only so far as is provided in section
fifty-one, and if a creditor has withdrawn his claim within five days after
the date of any resolution of creditors he shall be deemed to have withdrawn
the claim before anything was done in pursuance of that resolution; (c) if all the creditors who would have ranked upon the surplus of
the free residue, if there had been any, have withdrawn their claims and,
after payment of their contribution in terms of paragraph (b) there is still
a deficiency, the remaining creditors whose claims have been proved against
the estate shall, notwithstanding the fact that they would not have ranked
upon the surplus of the free residue, if there had been any, be liable to
make good such deficiency, each in proportion to the amount of his claim. [S. 106 amended by s. 32
of Act 99 of 1965.] 107 Trustee’s account to be signed and verified A trustee shall sign
every account which he submits to the Master and he shall verify by his affidavit
(which shall be free from stamp duty) that the account is a full and true
account of the administration of the estate in question up to the date of the
account and that, so far as he is aware, all the assets of the estate have
been disclosed in the account. 108 Inspection of trustee’s accounts by creditors (1) If an insolvent resided or carried on business, before the
sequestration of his estate, in a district (other than the district of
Wynberg, Simonstown or Bellville in the Province of the Cape of Good Hope) in
which there is no Master’s office, the trustee of that estate shall transmit
to the magistrate of that district or, if the insolvent resided or carried on
business in a portion of that district in respect of which an additional or
assistant magistrate permanently carries out the functions of the magistrate
of that district at a place other than the seat of magistracy of that
district, to such additional or assistant magistrate, a duplicate of every
account which he submitted to the Master as hereinbefore provided. [Sub-s. (1) amended
by s. 20 of Act 62 of 1955.] (2) The trustee shall, as soon as possible after he has submitted an
account to the Master, give notice in the manner prescribed by paragraphs (b)
and (c) of subsection (3) of section forty that he has so submitted such
account and that the account will lie open for inspection by the creditors of
the estate at the place or places and during the period stated in the notice. [Sub-s. (2)
substituted by s. 33 of Act 99 of 1965.] (3) Every such account and every duplicate thereof transmitted to a
magistrate shall be open for the inspection by creditors of the estate in
question at the office of the Master and of such magistrate during a period
of fourteen days as from the date of publication of the said notice in the
Gazette. (4) A magistrate who has received a trustee’s account shall cause to
be affixed in a public place in or about his office a notice that he has
received the account and that it will lie open for inspection in his office
during a period stated in that notice. (5) After the expiration of the said period the magistrate shall
endorse upon the account a certificate (which shall be free from stamp duty)
that the account was open in his office for inspection as hereinbefore provided,
and shall transmit the account to the Master. 109 Extension of period for submission of account by trustee (1) If a trustee is unable to submit an account to the Master within
the period prescribed therefor by section 91, he shall before the expiration
of such period or within the further period as the Master may allow- (a) submit to the Master an affidavit in which he shall state- (i) the reasons for his inability so to submit the account
concerned; (ii) those affairs, transactions or matters of importance relating to
the insolvent or the estate as the Master may require; (iii) the amount of money available for payment to
creditors or, if there is no free residue or the free residue is insufficient
to meet all the costs referred to in section 97, the deficiency the creditors
are liable to make good; (b) send to each creditor of the estate who proved a claim against the
estate, by registered post a copy of the affidavit referred to in paragraph
(a), and
the Master may thereupon extend such period to a date determined by him. (2) If a trustee fails to submit an account to the Master within the
period prescribed therefor by section 91 or before the date determined under
subsection (1), the Master, subject to the provisions of section 110, or any
person having an interest in the insolvent estate may serve a notice on the
trustee in which he is required- (a) to submit the account concerned to the Master; or (b) if he is unable to submit such account, to submit an affidavit as
contemplated in subsection (1) to the Master and to send a copy thereof to
each creditor of the estate who proved a claim against that estate, within
a period of 14 days from the date of the notice and the Master may, if the
account concerned is not submitted and the said affidavit is submitted to
him, after the expiration of the said period of 14 days extend such period to
a date determined by him. (3) If the Master refuses to extend the said period under subsection
(1) or (2) or does not so extend such period within a period of 14 days as
from the date on which the affidavit referred to in subsection (1) has been
submitted to him, the trustee may apply by motion to the court (after having
given the Master notice of his intention to make the application) for an
order extending the said period and the court may thereupon make such order
as it thinks fit. [S. 109 substituted by
s. 16 of Act 101 of 1983.] 110 Compelling trustee to submit accounts (1) If a trustee has funds in hand which, in the opinion of the
Master, ought to be distributed among the creditors of the estate in question
and the trustee has not submitted to the Master a plan for the distribution
of those funds, the Master may direct him in writing to submit to him a plan
for the distribution of those funds, although the period prescribed in
section ninety-one may not have elapsed. (2) If a trustee has failed to submit an account to the Master within
the period and in the manner hereinbefore prescribed, the Master may direct
the trustee in writing to submit his account. (3) ...... [Sub-s. (3) deleted by
s. 34 of Act 99 of 1965.] 111 Objections to trustee’s account (1) The insolvent or any person interested in the estate may, at any
time before the confirmation of the trustee’s account, in terms of section
one hundred and twelve, lay before the Master in writing any objection, with
the reasons therefor, to that account. (2) If the Master is of the opinion that any such objection is well
founded or if, apart from any objection, he is of the opinion that the
account is in any respect incorrect or contains any improper charge or that
the trustee acted mala fide, negligently or unreasonably in incurring any
costs included in the account and that the account should be amended, he may
direct the trustee to amend the account or may give such other direction in
connection therewith as he may think fit: Provided that- (a) any person aggrieved by any such direction of the Master or by the
refusal of the Master to sustain an objection so lodged, may apply by motion
to the court within fourteen days as from the date of the Master’s direction,
or as from the date of intimation to the objector of the Master’s refusal to
sustain his objection, after notice to the trustee, for an order to set aside
the Master’s decision and the court may thereupon confirm the account or make
such order as it thinks fit; and (b) when any such direction affects the interests of a person who has
not lodged an objection with the Master, the account so amended shall again
lie open for inspection by the creditors in the manner and with the notice
hereinbefore prescribed, unless the person affected as aforesaid consents in
writing to the immediate confirmation of the account. [Sub-s. (2) amended by
s. 35 of Act 99 of 1965.] 112 Confirmation of trustee’s accounts When a trustee’s
account has been open to inspection by creditors as hereinbefore prescribed
and- (a) no objection has been lodged; or (b) an objection has been lodged and the account has been amended in
accordance with the direction of the Master and has again been open for
inspection if necessary as in paragraph (b) of subsection (2) of section one
hundred and eleven prescribed and no application has been made to the court
in terms of paragraph (a) of the said subsection (2) to set aside the
Master’s decision; or (c) an objection has been lodged but withdrawn or has not been
sustained and the objector has not applied to the court in terms of the said
paragraph (a), the Master shall confirm
the account and his confirmation shall be final save as against a person who
may have been permitted by the court before any dividend has been paid under
the account, to reopen it. 113 Distribution of estate and collection of contributions from
creditors (1) Immediately after the confirmation of a trustee’s account, the trustee
shall give notice of the confirmation in the Gazette and shall state in that
notice according to the circumstances, that a dividend to creditors is in
course of payment or that a contribution is in course of collection from the
creditors and that every creditor liable to contribute is required to pay to
the trustee the amount for which he is so liable. (2) If any contribution is payable, the trustee shall specify fully in
that notice the address at which the payment of the contribution is to be
made, and shall deliver or post a copy of the notice to every creditor liable
to contribute. (3) Immediately after the confirmation of a trustee’s account the
trustee shall in accordance therewith distribute the estate or collect from
each creditor liable to contribute the amount for which he is liable. 114 Trustee to produce acquittances for dividends or to pay over
unpaid dividends to Master (1) The trustee shall without delay lodge with the Master the receipts
for dividends paid to creditors and if there is a contribution account the
vouchers necessary to complete the account: Provided that a cheque purporting
to be drawn payable to a creditor in respect of any dividend due to him and
paid by the banker on whom it is drawn, may be accepted by the Master in lieu
of any such receipt. [Sub-s. (1) amended
by s. 36 (a) of Act 99 of 1965.] (2) If any such dividend has at the expiration of a period of two
months as from the confirmation of the account under which it is payable, not
been paid out to the creditor entitled thereto, the trustee shall immediately
pay in the dividend to the Master who shall deposit it in the Guardians’ Fund
for account of the creditor. (3) ...... [Sub-s. (3) deleted by
s. 36 (b) of Act 99 of 1965.] 115 ...... [S. 115 repealed by
s. 37 of Act 99 of 1965.] 116 Surplus to be paid into Guardians’ Fund until rehabilitation
of insolvent (1) If after the confirmation of a final plan of distribution there is
any surplus in an insolvent estate which is not required for the payment of
claims, costs, charges or interest, the trustee shall, immediately after the
confirmation of that account, pay that surplus over to the Master, who shall
deposit it in the Guardians’ Fund and after the rehabilitation of the
insolvent shall pay it out to him at his request. (2) ...... [Sub-s. (2) deleted by
s. 38 of Act 99 of 1965.] 116bis Failure by trustee to submit
account or to perform duties (1) If any trustee fails to submit any account to the Master as and
when required by or under this Act, or to submit any vouchers in support of
such account or to perform any other duty imposed upon him by this Act or to
comply with any reasonable demand of the Master for information or proof
required by him in connection with the liquidation or distribution of an
estate, the Master or any person having an interest in the liquidation or
distribution of the estate may, after giving the trustee not less than
fourteen days’ notice, apply to the court for an order directing the trustee
to submit such account or any vouchers in support thereof or to perform such
duty or to comply with such demand. (2) The costs adjudged to the Master or to such person shall, unless
otherwise ordered by the Court, be payable by the trustee de bonis propriis. [S. 116bis inserted by
s. 39 of Act 99 of 1965.] 117 Enforcement of order of court (1) If a trustee has failed to comply with any order of the Court made
under section one hundred and sixteen bis, the Court may direct that any sum
of money which that trustee was ordered to pay be recovered by attachment and
sale of the goods of the trustee and may further commit him to prison for
contempt of the Court. [Sub-s. (1)
substituted by s. 40 of Act 99 of 1965.] (2) If the court has ordered a trustee to pay out of his own means the
costs of any proceedings instituted under any provision of this Act, and the
person in whose favour the order was made is unable to recover those costs
from the trustee, those costs shall be paid as part of the costs of the
sequestration out of any assets of the estate in question, which have not yet
been distributed among the creditors. 118 Enforcing payment of contributions (1) After the expiration of a period of thirty days as from the
delivery or posting in a registered letter to any creditor of the notice
mentioned in subsection (2) of section one hundred and thirteen, the trustee
may take out a writ of execution in the magistrate’s court in which the
creditor could be sued for the contribution in question against any such
creditor who, being liable to contribute under the plan of contribution, has
failed to pay the amount of his liability. (2) Whenever a creditor liable to contribute under a plan of
contribution is in the opinion of the Master and of the trustee unable to pay
the contribution for which he is liable or whenever the trustee has incurred
in connection with the recovery of any contribution any expenses which are in
the opinion of the Master and of the trustee irrecoverable, the trustee shall
as soon as practicable and in any event within such period as the Master may
prescribe therefor, frame and submit to the Master a supplementary plan of
contribution wherein he shall apportion the share of the creditor who is
unable to pay or the expenses in question among the other creditors who are
in the opinion of the Master and of the trustee able to pay. (3) The provisions of subsection (2) shall mutatis mutandis apply
whenever a creditor liable to contribute under a first or further
supplementary plan of distribution is, in the opinion of the Master and of
the trustee, unable to pay the contribution for which he is liable, or
whenever the trustee has incurred expenses in connection with the recovery of
a contribution under a first or further supplementary plan of distribution
which are, in the opinion of the Master and the trustee, irrecoverable by the
trustee. (4) A trustee may, in lieu of complying with the requirements of
section one hundred and eight in connection with any supplementary plan of
contribution, furnish a copy of that plan to every creditor liable to contribute
thereunder and thereupon the provisions of subsection (1) shall mutatis
mutandis apply. 119 Composition (1) At any time after the first meeting of the creditors of an
insolvent estate, the insolvent may submit to the trustee of his estate a
written offer of composition. (2) If the trustee is of the opinion that the creditors will probably
accept the offer of composition, he shall as soon as possible after receipt
of the offer post in a registered letter or deliver to every creditor who has
proved his claim, a copy of the offer with his report thereon. (3) If the trustee is of the opinion that there is no likelihood that
the creditors will accept the offer of composition, he shall inform the
insolvent that the offer is unacceptable and that he does not propose to send
a copy thereof to the creditors. (4) The insolvent may thereupon appeal to the Master who, after having
considered a report from the trustee, may, if he considers the offer of
composition sufficient for submission to the creditors, direct the trustee to
post or deliver a copy of the offer to every creditor who has proved his
claim. (5) Whenever the trustee posts or delivers to the creditors a copy of
an offer of composition in terms of the preceding provisions of this section,
he shall simultaneously convene and give notice to the creditors of a meeting
for the purpose of considering the said offer and any other matter mentioned
in the notice. (6) The said meeting shall be convened for a date not earlier than
fourteen days and not later than twenty-eight days after the date upon which
the said notice is posted or delivered to any creditor. (7) If the offer of composition has been accepted by creditors whose
votes amount to not less than three-fourths in value and three-fourths in
number (calculated in accordance with the provisions of section fifty-two) of
the votes of all the creditors who proved claims against the estate, and
payment under the composition has been made or security for such payment has
been given as specified in the composition, the insolvent shall be entitled
to a certificate under the hand of the Master of the acceptance of the offer:
Provided that no offer may be so accepted if it contains any condition
whereby any creditor would obtain as against another creditor any benefit to
which he would not have been entitled upon the distribution of the estate in
the ordinary way; and provided further that any condition which makes the
offer of composition or the fulfilment thereof or of any part thereof subject
to the rehabilitation or to the consent of the creditors to the
rehabilitation of the insolvent shall be of no effect, and provided also that
if the composition provides for the giving of any security, the nature of
that security shall be fully specified, and if it is to consist of a surety
bond or guarantee, every surety shall be named. [Sub-s. (7) amended
by s. 31 of Act 16 of 1943.] (8) In subsection (7) the word ‘creditor’ includes a creditor who has
not proved a claim against the insolvent estate in question. 120 Effect of composition (1) An offer of composition which has been accepted as aforesaid shall
be binding upon the insolvent and upon all the creditors of the insolvent
estate in so far as their claims are not secured or otherwise preferent but
the right of any preferent creditor shall not be prejudiced thereby, except,
in so far as he has expressly and in writing waived his preference. (2) If it be a condition of the composition that any property in the
insolvent estate shall be restored to the insolvent, the acceptance of the
composition shall divest the trustee of such property and re-invest the
insolvent therewith as from the date upon which such property is in pursuance
of the composition to be restored to the insolvent, but subject to any
condition provided for in the composition. (3) A composition shall not affect the liability of a surety for the
insolvent. 121 If
insolvent partner enters into composition, trustee of partnership estate may
take over his estate (1) When the estate of a partnership and the estate of a partner in
that partnership are simultaneously under sequestration, the acceptance of an
offer of composition by the separate creditors of the partner shall not take
effect until the expiration of a period of six weeks as from the date of a notice
in writing of that acceptance given by the trustee of the partner’s separate
estate to the trustee of the partnership estate, or if the trustee of the
partner’s estate is also the trustee of the partnership estate, as from the
date of the acceptance. The said notice shall be accompanied by a copy of the
deed embodying the composition. (2) At any time during the said period of six weeks the trustee of the
partnership estate may take over the assets of the estate of the insolvent
partner if he fulfils the obligations of the insolvent partner in terms of
the composition except obligations to render any service or obligations which
only the insolvent partner can fulfil: Provided that if the composition
provides for the giving of any specific security, the Master shall determine
what other security the trustee of the partnership estate may give in lieu
thereof. 122 Effect of composition on spouse of the insolvent A composition shall
not be binding on the separate creditors of the spouse of the insolvent concerned;
but upon the acceptance of the offer of composition the property or, if it
has been realized, the proceeds of the property of that spouse shall be
restored to her or him, without prejudice to the claims of the creditors of
that spouse or to any right of preference of any of them at the time when the
property was vested in the trustee: Provided that any movable property held
as security by any such creditor when the property was vested in the trustee
shall be restored to that creditor; and provided further that the proceeds of
any security whatsoever which has been realized shall be paid to the person
or persons entitled thereto, according to their rights. 123 Functions of trustee under composition (1) Any moneys to be paid and anything to be done for the benefit of
creditors in pursuance of a composition shall be paid and shall be done, as
far as practicable, through the trustee: Provided that any creditor who has
failed to prove his claim before the trustee has made a final distribution
among those creditors who have proved their claims, shall be entitled to
recover direct from the insolvent within six months as from the confirmation
by the Master, of the account under which the distribution was made, any
payments to which he may be entitled under the composition and the trustee
shall have no duty in regard thereto and after the said distribution the
creditor shall have no claim against the insolvent estate. (2) When a composition has been entered into between an insolvent and
the creditors of his estate, the trustee of that estate shall frame a
liquidation account and plan of distribution of the assets which are or will
become available for distribution among the creditors under the composition,
and all the provisions of this Act which relate to a liquidation account and
plan of distribution and to the distribution of assets among creditors shall
apply in connection with the first-mentioned liquidation account and plan of
distribution, and with the first-mentioned assets. 124 Application for rehabilitation (1) An insolvent who has obtained from the Master the certificate
mentioned in subsection (7) of section one hundred and nineteen may apply to
the court for an order for his rehabilitation: Provided that he has not less
than three weeks before making the application, given, by advertisement in
the Gazette notice of his intention to make the application and delivered or
posted in a registered letter to the trustee of his estate a copy of that
notice: and provided further that the said certificate shows that payment has
been made or the security prescribed by subsection (7) of section one hundred
and nineteen has been given for the payment of not less than ten shillings
for every pound of every claim proved or to be proved against the estate of
the insolvent. [Sub-s. (1) amended
by s. 32 (a) of Act 16 of 1943 and by s. 41 of Act 99 of 1965.] (2) An insolvent who is not entitled under subsection (1) to apply to
the court for his rehabilitation and who has previously given to the Master
and to the trustee of his estate in writing and by advertisement in the
Gazette not less than six weeks’ notice of his intention to apply to the
court for his rehabilitation may so apply- (a) after twelve months have elapsed from the confirmation by the
Master, of the first trustee’s account in his estate, unless he falls within
the provisions of paragraph (b) or (c); or (b) after three years have elapsed from such confirmation if his
estate has either under this Act or a prior law been sequestrated prior to
the sequestration to which he desires to put an end and if he does not fall
within the provisions of paragraph (c); or (c) after five years have elapsed from the date of his conviction of
any fraudulent act in relation to his existing or any previous insolvency or
of any offence under section one hundred and thirty-two, one hundred and
thirty-three or one hundred and thirty-four of this Act or under any
corresponding provision of the Insolvency Act, 1916 (Act 32 of 1916): [Para. (c) amended by s.
32 (b) of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] Provided
that no application for rehabilitation under this subsection shall be granted
before the expiration of a period of four years from the date of
sequestration of the estate of the applicant, except upon the recommendation
of the Master. (3) After the expiration of a period of six months as from the
sequestration of an estate, the insolvent concerned may apply to the court
for his rehabilitation- (a) if he has, not less than six weeks before making the application,
given to the Master and to the trustee, if any, of his estate notice in
writing, and published in the Gazette a notice of his intention to make the
application; and (b) if, at the time of making the application, no claim has been
proved against his estate; and (c) if he has not been convicted of an offence mentioned in paragraph
(c) of subsection (2); and (d) if his estate was not sequestrated under any law prior to the
sequestration which he desires to end. (4) A trustee who has received a notice mentioned in subsection (1),
(2), or (3) shall report to the Master any facts which in his opinion would
justify the court in refusing, postponing, or qualifying the insolvent’s
rehabilitation. (5) At any time after the confirmation by the Master, of a plan of
distribution providing for the payment in full of all claims proved against
an insolvent estate, with interest thereon from the date of sequestration,
calculated in terms of subsection (2) of section one hundred and three and of
all the costs of sequestration, the insolvent concerned may apply to the
court for his rehabilitation: Provided that he has not less than three weeks
before making the application given notice in writing to the Master and to
the trustee of his estate of his intention to make the application. 125 Security to be furnished prior to application for
rehabilitation Not less than three
weeks before applying to the court for his rehabilitation an insolvent shall
furnish to the registrar of the court security, to the amount or value of
R500, for the payment of the costs of any person who may oppose the
rehabilitation and be awarded costs by the court. [S. 125 substituted
by s. 17 of Act 101 of 1983.] 126 Facts to be averred on application for rehabilitation In support of an
application for his rehabilitation, an insolvent shall submit his affidavit
that he has made a complete surrender of his estate and has not granted or
promised any benefit whatever to any person or entered into any secret
agreement with intent to induce his trustee or any creditor not to oppose the
rehabilitation. Such affidavit shall include a statement of his assets and
liabilities and of his earnings at the date of the application. Information
shall also be laid before the court as to what dividend was paid to his
creditors, what further assets in his estate are available for realization
and the estimated value thereof, the total amount of all claims proved
against his estate, and the total amount of his liabilities at the date of
the sequestration of his estate. If application for rehabilitation is made
pursuant to subsection (1) of section one hundred and twenty-four the
insolvent shall set out the particulars of the composition and shall state
whether there are or are not creditors whose claims against his estate have
not been proved, and if there are such creditors, he shall state their names
and addresses and particulars of their claims. 127 Opposition to or refusal by court of rehabilitation (1) Upon the day fixed for the hearing of an application for
rehabilitation the Master shall report thereon to the court, and the Master,
the trustee or any creditor or other person interested in the estate of the
applicant may appear in person or by counsel to oppose the grant of the
application. (2) Whether the application be opposed or not, the court may refuse an
application for rehabilitation or may postpone the hearing of the application
or may rehabilitate the insolvent upon such conditions as it may think fit to
impose and may order the applicant to pay the costs of any opposition to the
application if it is satisfied that the opposition was not vexatious. (3) Among the conditions referred to in subsection (2), the court may
require the insolvent to consent to judgment being entered against him for
the payment of any unsatisfied balance of any debt which was or could have
been proved against his estate, or of such lesser sum as the court may
determine, but in such case execution shall not be issued on the judgment
except with leave of the court and on proof that the insolvent has since the
date of sequestration of his estate acquired property or income available for
the payment of his debts; or apart from any such judgment the court may
impose any other condition with respect to any property, or income which may
accrue to the insolvent in the future. (4) In granting an application for rehabilitation made under
subsection (1) of section one hundred and twenty-four the court may order
that any obligation incurred by the applicant before the sequestration of his
estate which, but for that order, would be discharged as a result of the
applicant’s rehabilitation, shall remain of full force and affect,
notwithstanding the rehabilitation. (5) The registrar of the court shall forthwith give notice to the
Master of every rehabilitation of an insolvent granted by the court. 127A Rehabilitation by effluxion of time (1) Any insolvent not rehabilitated by the court within a period of
ten years from the date of sequestration of his estate, shall be deemed to be
rehabilitated after the expiry of that period unless a court upon application
by an interested person after notice to the insolvent orders otherwise prior
to the expiration of the said period of ten years. (2) If a court issues an order contemplated in subsection (1), the
registrar shall transmit a copy of the order to every officer charged with
the registration of title to any immovable property in the Republic. (3) Upon receipt of the order by such officer he shall enter a caveat
against the transfer of all immovable property or the cancellation or cession
of any bond registered in the name of or belonging to the insolvent. (4) The caveat shall remain in force until the date upon which the
insolvent is rehabilitated. [S. 127A inserted by s.
6 of Act 6 of 1972 and substituted by s. 7 of Act 122 of 1993.] 128 Partnership cannot be rehabilitated A partnership whose
estate has been sequestrated shall not be rehabilitated. 129 Effect of rehabilitation (1) Subject to the provisions of subsection (3) and subject to such
conditions as the court may have imposed in granting a rehabilitation, the
rehabilitation of an insolvent shall have the effect- (a) of putting an end to the sequestration; (b) of discharging all debts of the insolvent, which were due, or the
cause of which had arisen, before the sequestration, and which did not arise
out of any fraud on his part; (c) of relieving the insolvent of every disability resulting from the
sequestration. (2) A rehabilitation granted on an application made in circumstances
described in subsection (3) of section one hundred and twenty-four shall have
the effect of reinvesting the insolvent with his estate. (3) A rehabilitation shall not effect- (a) the rights of the trustee or creditors under a composition; (b) the powers or duties of the Master or the duties of the trustee in
connection with a composition; (c) the right of the trustee or creditors to any part of the
insolvent’s estate which is vested in but has not yet been distributed by the
trustee, but subject to the provisions of subsection (2); (d) the liability of a surety for the insolvent; (e) the liability of any person to pay any penalty or suffer any
punishment under any provision of this Act. 130 Illegal inducements to vote for composition or not to oppose
rehabilitation Any undertaking to
grant any benefit to any person in order to induce him or any other person to
accept an offer of composition or to agree to, or refrain from opposing the
rehabilitation of an insolvent, or as a consideration for the acceptance of
an offer of composition or for the agreement to or non-opposition of the
rehabilitation of an insolvent (whether by the person for whom the benefit is
intended or by any other person), shall be void and any person who has
accepted any such benefit or who has stipulated for any such benefit, whether
for himself or any other person shall be liable to pay by way of penalty for
the benefit of the creditors of the insolvent estate in question- (a) a sum equal to the amount of the claim (if any) which he
originally proved against the estate; and (b) the amount or value of any benefit given or promised; and (c) in case of a composition, the amount paid or to be paid to him
under the composition. 131 Recovery of penalty The trustee may
enforce and recover any penalty mentioned in section one hundred and thirty
and if he fails to do so any creditor may do so in the name of the trustee,
upon his indemnifying the trustee against all costs in connection with such
action. 132 Concealing or destroying books or assets An insolvent shall
be guilty of an offence and liable to imprisonment for a period not exceeding
three years if at any time before or after the sequestration of his estate he
does any of the following acts, unless it is proved that he had no intention
to defraud; that is to say, if he- (a) conceals, parts with, destroys, mutilates, falsifies or makes any
false entry or erasure in any book or document relating to his business,
property or affairs or permits any other person to commit any such act in
regard to any such book or document; or (b) conceals or permits the concealment of any assets which ought to
be placed at the disposal of the trustee; or (c) otherwise than in the ordinary course of business makes, or
permits the making of a disposition of any property which he has obtained on credit
and has not paid for; or (d) otherwise than in the ordinary course of business destroys,
damages, removes or makes a disposition of, or permits the destruction,
damage, removal or the making of a disposition of, any assets in his estate
if such destruction, damage, removal or disposition has prejudiced or is
calculated to prejudice his creditors: Provided that- (i) whenever in any proceedings for a contravention of paragraph (a)
any act described in that paragraph is proved to have been committed in
regard to any book or other document relating to the business, property or
affairs of the insolvent, he shall be deemed to have committed or permitted
such act unless it is proved that he neither committed it nor could have
prevented the commission; (ii) in any proceedings for a contravention of paragraph (c) or
paragraph (d) any disposition, destruction, damage or removal of assets
proved to have been committed shall, unless the contrary is proved, be deemed
to have been otherwise than in the ordinary course of business; (iii) if it appears from any book or document
relating to the business, property or affairs of the insolvent or if it is
proved in any other manner whatsoever that there ought to be available to the
trustee at least ten per cent more assets of the estate than the assets
actually available to him, such insolvent shall be deemed to have removed or
made a disposition of assets of a value equal to the difference between the
value of the assets which ought to be available, and the value of the assets
actually so available, in contravention of paragraph (d), unless he fully and
accurately accounts for or explains the deficiency and proves that the
deficiency was not caused by his action and that he could not have prevented
it. 133 Concealment of liabilities or pretext to existence of assets An insolvent shall
be guilty of an offence and liable to imprisonment for a period not exceeding
three years if, within two years immediately preceding the sequestration of
his estate, when making any statement either verbally or in writing in regard
to his business, property or affairs to any person who was then his creditor
or to any person who became his creditor on the faith of such a statement, he
concealed any liability, present or future, certain or contingent, which he
may then have contracted, or failed to disclose the full extent of his
liability or mentioned, as if it were an asset, any right or property which
at the time was not an asset, or represented that he had more assets than he
in fact had or made any false statement in regard to the amount, quality or
value of his assets, or in any way concealed or disguised or attempted to
conceal or disguise any loss which he had sustained, or gave any incorrect
amount thereof, unless it is proved that he had good reason to believe that
the said statement was correct in every respect and that he was not
concealing or failing to disclose or disguising any relevant fact. 134 Failure to keep proper records (1) An insolvent shall be guilty of an offence and liable to
imprisonment for a period not exceeding one year if his occupation or
transactions prior to the sequestration of his estate were such that he might
reasonable be expected to keep a record of his transactions, and he failed to
keep a proper record of his transactions in the English or the Dutch language
and to preserve that record during a period of not less than three years. [Sub-s. (1) amended
by s. 33 of Act 16 of 1943 and by s. 1 of Act 49 of 1996.] (2) For the purposes of this section a proper record of transactions
includes all such records, wherein is set forth clearly the nature of all
such person’s transactions, as (regard being had to his occupation) he can
reasonably be expected to have kept. A trader shall be deemed not to have
kept a proper record of his transactions unless he kept a record which
includes- (a) detailed stock sheets (which shall disclose the cost price of
every article on hand at the date of stocktaking which has been purchased by
the trader for the purpose of his business) and balance sheets completed for
each of his three financial or business years immediately preceding the
sequestration of his estate, or if he commenced business less than three
years before the sequestration, completed at the commencement of his business
and thereafter for each financial or business year preceding the
sequestration; (b) records exhibiting for the period since the commencement of his
business or since the commencement of his financial or business year next but
one before the financial or business year in which his estate was
sequestrated (whichever period is the less) the following particulars- (i) all property purchased in the course of the business, duly
supported by the original invoices; (ii) all cash receipts and disbursements and the dates thereof; (iii) a daily record of all property sold on
credit, and such a continuous record of all transactions as a trader may be
expected to keep in the ordinary course of his business; (iv) the name of every person indebted to the trader and of every
person to whom the trader is indebted and the address of every such person at
the time when the indebtedness arose or at any time thereafter; [Para.(b) amended by s.
7(b) of Act 6 of 1972.] (c) a record of all cheques drawn during the period mentioned in
paragraph (b) and the counterfoils of such cheques, showing clearly, in the
case of each cheque and on each counterfoil, the name of the payee, the
amount of the cheque, and the date of the cheque: Provided that a trader
who proves that his turnover for the two years immediately preceding the
sequestration of his estate or since the commencement of the business
(whichever period is the less), was at the rate of less than R10 000 per
annum shall be deemed to have kept a proper record, if the court dealing with
the matter in question, having regard to the nature and circumstances of the
business, is satisfied that he has kept a sufficient record of his
transactions and that the record complies with the requirements of
subparagraph (iv) of paragraph (b). [Sub-s. (2) amended by
s. 7 (a) of Act 6 of 1972 and by s. 18 of Act 101 of 1983.] 135 Undue preferences, contracting debts without expectation of
ability to pay, etc (1) An insolvent shall be guilty of an offence and liable to
imprisonment not exceeding one year, if, prior to the sequestration of his
estate, he made a disposition of any part of his property with the intention
of preferring one or more of his creditors above the others or any other if
at the time when he made that disposition his liabilities exceeded the value
of his assets: Provided that any such disposition which had the effect of
preferring, or was calculated to prefer, one or more creditors above the
others or any other shall, unless the contrary is proved, be deemed to have
been made with the intention of preferring such creditor or creditors above
the others or any other. Provided, further, that if the insolvent’s estate
was sequestrated within a period of six months as from the date of making
such a disposition, his liabilities shall be deemed to have exceeded the
value of his assets at that date, unless the contrary is proved. (2) In subsection (1) the expression ‘creditor’ includes a surety for
the insolvent as well as a person who in law is in a position analogous to
that of a surety. (3) An insolvent shall be guilty of an offence and liable to
imprisonment for a period not exceeding two years if, prior to the
sequestration of his estate- (a) he contracted any debt of fifteen pounds or more or debts to the
aggregate of fifty pounds or more, without any reasonable expectation of
being able to discharge such debt or debts; or (b) at a time when his liabilities exceeded his assets or during the
period of six months immediately preceding the sequestration of his estate,
he diminished his assets by gambling, betting, hazardous speculations or
expenditure, not reasonably necessary in connection with his business or
vocation or for the maintenance of himself and his dependants, or being a
trader, alienated any business belonging to him, or the goodwill of such
business or any goods or property forming part thereof not in the ordinary
course of that business, without publishing a notification of his intention
so to alienate in the Gazette and in a newspaper, in terms of the provisions
of subsection (1) of section thirty-four: [Para. (b) amended by s.
14 of Act 32 of 1952.] Provided
that in any proceedings for a contravention of paragraph (a) the insolvent
shall, unless the contrary is proved, be deemed to have contracted the debt
or debts without having had a reasonable expectation of discharging it or
them, if the debt was or the debts were contracted- (i) at a time when his liabilities exceeded his assets; or (ii) within the period of six months immediately preceding the
sequestration of his estate. 136 Failure to give information or to deliver assets, books, etc An insolvent shall
be guilty of an offence and liable to imprisonment for a period not exceeding
three years- (a) if at any time during the sequestration of his estate he, knowing
or suspecting that any person has proved or intends to prove a false claim
against his estate, fails to inform the Master and the trustee of his estate
in writing of that knowledge or suspicion, within seven days as from the date
upon which he acquired that knowledge or upon which his suspicion was
aroused; (b) if he fails within fourteen days as from the appointment of the
trustee of his estate- (i) to deliver to the trustee or as the trustee may in writing
direct any property of whatever nature belonging to the estate which may be
in his possession or custody or under his control; or (ii) to inform the trustee of the existence and whereabouts of any
property belonging to the estate (other than property mentioned in
subparagraph (i)), which is not fully disclosed in the statement of his
affairs mentioned in section four or sixteen or which is not already in the
possession of the trustee; or (iii) to deliver to the trustee or deputy sheriff,
or as either of them may direct all books and documents in his possession or
custody or under his control, relating to his affairs; or (iv) to inform the trustee of the existence or whereabouts of any such
book or document not in his possession or custody or under his control, if it
is not already in the possession of the trustee; unless,
in any such case, he proves that he had a reasonable excuse for such failure; (c) if, at any time after the sequestration of his estate, he fails
to furnish at the request of the trustee complete and truthful information
regarding any property which was at any time in his possession or custody or
under his control, or regarding the time when or the manner or circumstances
in which he disposed of such property or ceased to be in possession, custody
or control thereof, unless he proves that he had a reasonable excuse for such
failure. 137 Obtaining credit during insolvency, offering inducements, etc Any person shall be
guilty of an offence and liable to imprisonment for a period not exceeding
one year- (a) if, during the sequestration of his estate, he obtains credit to
an amount exceeding ten pounds without previously informing the person from
whom he obtains credit that his is an insolvent, unless he proves that such
person had knowledge of that fact; or (b) if he grants, promises, or offers any consideration whatever in
order to procure the acceptance by any creditor of an offer of composition or
to prevent opposition to a rehabilitation or, during the sequestration of any
estate, to induce any person to refrain from investigating any matter
relating to that estate or from disclosing any information in regard thereto;
or (c) if he contravenes or fails to comply with the provisions of
section sixteen, or of subsection (3), (4) or (12) of section twenty-three
unless he proves that he had a reasonable excuse for such contravention or
failure; or (d) if he makes any false statement in the statement of his affairs
mentioned in section four or sixteen, or in the statement mentioned in
subsection (4) of section twenty-three. 138 Failure to attend meetings of creditors or give certain
information An insolvent shall
be guilty of an offence and liable to imprisonment for a period not exceeding
six months- (a) ...... [Para. (a) deleted by s.
42 of Act 99 of 1965.] (b) if he fails, when thereto required in writing by the trustee of
his estate, to give a true, clear and detailed explanation of his insolvency
or fails to account correctly and in detail for the excess of his liabilities
over his assets; or (c) if, at a meeting of the creditors of his estate, when thereto
required by the trustee or the officer presiding or any creditor or by the
agent of any of them, he fails to account for or to disclose what has become
of any property which was in his possession so recently that in the ordinary
course he ought to be able to account therefor; or (d) if he fails to comply with the requirements of subsection (13) of
section twenty-three. 138bis in case of
prosecution for failure to notify change of address If in any prosecution for a contravention of paragraph
(d) of section one hundred and thirty-eight it is proved that the insolvent
has changed his residential or postal address it shall, unless the contrary
is proved, be presumed that he has failed to notify the trustee of such
change. [S. 138bis inserted by
s. 43 of Act 99 of 1965.] 139 Failure to appear or to give evidence or giving false evidence (1) Any person shall be guilty of an offence and liable to a fine not
exceeding R500 or to imprisonment without the option of a fine for a period
not exceeding six months if he is guilty of an act or omission for which he
has been or might have been lawfully committed to prison in terms of
subsection (2) or (3) of section 66. [Sub-s. (1)
substituted by s. 19 of Act 101 of 1983.] (2) Any person shall be guilty of an offence and liable to the
punishment provided by law for the crime of perjury, if, when being
interrogated on oath under this Act, he wilfully makes, relative to the
subject in connection wherewith he is interrogated, any statement whatever
which he knows to be false or which he does not know or believe to be true. 140 Failure of insolvent or spouse to appear to give evidence An insolvent or the
spouse of an insolvent shall be guilty of an offence and liable to
imprisonment for a period not exceeding six months if, when summoned to give
evidence in any proceedings instituted by or against the trustee of the
insolvent estate he or she conceals himself or herself or quits the Republic
or without reasonable excuse fails to attend those proceedings or refuses to
answer any question which may be lawfully put to him or her in the course of
those proceedings. 141 Acceptance of consideration for certain illegal acts or
omissions Any person shall be
guilty of an offence and liable to a fine not exceeding R500 or to
imprisonment without the option of a fine for a period not exceeding six
months if he accepts any benefit or the promise or offer of any benefit as a
consideration for having refrained from or discontinued, or for his
undertaking to refrain from or to discontinue any proceedings for the
sequestration of an estate or for having agreed to, or not opposed, or for
his undertaking to agree to or not to oppose a composition in an insolvent
estate or the rehabilitation of an insolvent, or for having refrained or
undertaken to refrain from investigating any matter relating to an insolvent
or an insolvent estate or from disclosing any information in regard to an
insolvent or an insolvent estate. [S. 141 substituted
by s. 20 of Act 101 of 1983.] 142 Removing or concealing property to defeat an attachment or
failure to disclose property (1) Any person shall be guilty of an offence and liable to
imprisonment for a period not exceeding three years if, either before or
after the sequestration of an estate, he removes, conceals, disposes of,
deals with or receives any asset belonging to that estate with intent to
defeat an attachment by virtue of a sequestration order, or with intent to
prejudice the creditors in that estate: Provided that in any proceedings for an
offence under this subsection, any such removal, concealment, disposal of,
dealing with or receipt of assets which had the effect of defeating or was
calculated to defeat such attachment or which prejudiced or was calculated to
prejudice the creditors of that estate, shall, unless the contrary is proved,
be deemed to have been committed with intent to defeat the attachment or (as
the case may be) to prejudice those creditors. (2) Any person who has in his possession or custody or under his
control any property belonging to an insolvent estate and who knows of the
sequestration of the estate and that the property belongs to it, shall be
guilty of an offence and liable to a fine not exceeding R1 000 or to
imprisonment without the option of a fine for a period not exceeding one year
if he fails to inform the trustee of the estate as soon as possible of the
existence and whereabouts of the property and (subject to the provisions of
section 83) to deliver it to, or place it at the disposal of, the trustee. [Sub-s. (2)
substituted by s. 21 of Act 101 of 1983.] (3) The provisions of subsections (1) and (2) shall not apply to an
insolvent in respect of any property belonging to his own insolvent estate. (4) A secured creditor of an insolvent estate who has realized his
security in terms of section eighty-three and who has failed after written
demand to pay over the proceeds of the realization in accordance with the
provisions of subsection (10) of that section, shall, apart from any other
offence which he may have committed in connection with those proceeds, be
guilty of an offence and liable to the penalties mentioned in subsection (2). 143 Criminal liability of partners, administrators, servants or
agents (1) A person who- (a) is or was a member of a partnership and who does or omits to do in
relation to any property or to the affairs of that partnership or of the
insolvent estate of that partnership; or (b) is or was charged with the administration of an estate and who
does or omits to do in relation to any property or to the affairs of that
estate; or (c) as a servant or agent has or had the sole or practical control of
any property or of the affairs of his employer or principal and who does or
omits to do in relation to that property or to the affairs of his employer or
principal or of the insolvent estate of his former employer or principal, any
act which, if done or omitted by him in the like circumstances in relation to
his own property or affairs or to any property belonging to, or the affairs
of his insolvent estate, would have constituted an offence under this Act,
shall be deemed to have committed that offence. (2) The liability under subsection (1) of a partner, servant or agent
shall not affect the liability under that subsection or under any other provision
of this Act, of another partner or of a servant or agent of the same
partnership, or of the employer or principal of the employee or agent who is
so liable. 144 Criminal liability of trustee for neglect of certain duties If it was the duty
of a trustee to submit an account to the Master or to pay a sum of money to
the Master or to a creditor, and he failed to submit that account or to pay
that sum of money within a period of two months as from the time when that
duty arose, he shall (apart from any other offence which he may have
committed in connection with such sum of money) be guilty of an offence and
liable to a fine not exceeding R500. [S. 144 substituted
by s. 22 of Act 101 of 1983.] 145 Obstructing trustee Any person who
obstructs or hinders a curator bonis appointed under this Act or a trustee or
a representative of either in the performance of his functions as such shall
be guilty of an offence and liable to a fine not exceeding R500, or to
imprisonment without the option of a fine for a period not exceeding six
months. [S. 145 substituted
by s. 23 of Act 101 of 1983.] 146 Evidence of liability incurred by insolvent Whenever in any
criminal proceedings under this Act any liability incurred by an insolvent or
the date or time when the liability was incurred, is in issue or relevant to
the issue, proof that a claim in respect of that liability has been admitted
against the estate of the insolvent in accordance with any provision of this
Act shall be sufficient evidence of the existence of the liability and any
such liability shall be deemed to have been incurred upon the date or at the
time alleged in any document submitted in accordance with any provision of
this Act in support of that claim: Provided that the accused or the
prosecutor in those proceedings may prove that no such liability or that a
lesser or a greater liability was incurred or that it was incurred on a date
or at a time other than the date or time so alleged. 147 Offences committed by insolvent in different provinces may be
tried at his place of business or residence (1) Any court of law which has jurisdiction to try an insolvent in
respect of an offence under this Act committed at the place where the
insolvent mainly carried on business or resided at the time of the commission
of the offence, shall have jurisdiction to try the insolvent in respect of
such an offence committed anywhere in the Republic. (2) In subsection (1) ‘insolvent’ includes a person who is liable
under subsection (1) of section one hundred and forty-three. 148 ...... [S. 148 amended by
s. 34 of Act 16 of 1943 and repealed by s. 24 of Act 101 of 1983.] 149 Jurisdiction of the court (1) The court shall have jurisdiction under
this Act over every debtor and in regard to the estate of every debtor who-
(a) on the date on which a petition for the acceptance of the
surrender or for the sequestration of his estate is lodged with the registrar
of the court, is domiciled or owns or is entitled to property situate within
the jurisdiction of the court; or (b) at any time within twelve months immediately preceding the lodging
of the petition ordinarily resided or carried on business within the
jurisdiction of the court: Provided that when
it appears to the court equitable or convenient that the estate of a person
domiciled in a State which has not been designated in terms of section 2 of
the Cross-Border Insolvency Act, 2000 (Act 42 of 2000), should be
sequestrated by a court outside the Republic, or that the estate of a person
over whom it has jurisdiction be sequestrated by another court within the
Republic, the court may refuse or postpone the acceptance of the surrender or
the sequestration. [Sub-s. (1) amended
by s. 2 of Act 42 of 2001.] [NB: Sub-s. (1) has
been amended by s. 33 of the Cross-Border Insolvency Act 42 of 2000, a
provision which will be put into operation by proclamation. See PENDLEX.] (2) The court may rescind or vary any order
made by it under the provisions of this Act.
150 Appeal (1) Any person aggrieved by a final order of sequestration or by an order
setting aside an order of provisional sequestration may, subject to the
provisions of section 20 (4) and (5) of the Supreme Court Act, 1959 (Act 59
of 1959), appeal against such order. [Sub-s. (1)
substituted by s. 1 of Act 129 of 1993.] (2) Such appeal shall be noted and prosecuted as if it were an appeal
from a judgment or order in a civil suit given by the court which made such
final order or set aside such provisional order, and all rules applicable to
such last-mentioned appeal shall mutatis mutandis but subject to the
provisions of subsection (3), apply to an appeal under this section. (3) When an appeal has been noted (whether under this section or under
any other law), against a final order of sequestration, the provisions of
this Act shall nevertheless apply as if no appeal had been noted: Provided
that no property belonging to the sequestrated estate shall be realized
without the written consent of the insolvent concerned. (4) If an appeal against a final order of sequestration is allowed,
the court allowing such appeal may order the respondent to pay the costs of
sequestrating and administering the estate. (5) There shall be no appeal against any Order made by the court in
terms of this Act, except as provided in this section. [Sub-s. (5) added
by s. 35 of Act 16 of 1943.] 151 Review Subject to the
provisions of section fifty-seven any person aggrieved by any decision,
ruling, order or taxation of the Master or by a decision, ruling or order of
an officer presiding at a meeting of creditors may bring it under review by
the court and to that end may apply to the court by motion, after notice to
the Master or to the presiding officer, as the case may be, and to any person
whose interests are affected: Provided that if all or most of the creditors
are affected, notice to the trustee shall be deemed to be notice to all such
creditors; and provided further that the court shall not re-open any duly
confirmed trustee’s account otherwise than as is provided in section one
hundred and twelve. [S. 151 amended by
s. 44 of Act 99 of 1965.] 151 bis Costs of review If
the court reviewing any matter referred to in section one hundred and
fifty-one confirms any decision, ruling, order or taxation of the Master or
officer referred to in that section the costs of the applicant for the review
of that matter shall not be paid out of the assets of the estate concerned
unless the Court otherwise directs. [S. 151bis inserted by
s. 45 of Act 99 of 1965.] 152 Master may direct trustee to deliver documents or property or
call upon any person to furnish certain information (1) The Master may at any time direct a trustee to deliver to him any
book or document relating or any property belonging to the insolvent estate
of which he is trustee. (2) If at any time after the sequestration of the estate of a debtor
and before his rehabilitation, the Master is of the opinion that the
insolvent or the trustee of that estate or any other person is able to give
any information which the Master considers desirable to obtain, concerning
the insolvent, or concerning his estate or the administration of the estate
or concerning any claim or demand made against the estate, he may by notice
in writing delivered to the insolvent or the trustee or such other person
summon him to appear before the Master or before a magistrate or an officer
in the public service mentioned in such notice, at the place and on the date
and hour stated in such notice, and to furnish the Master or other officer
before whom he is summoned to appear with all the information within his
knowledge concerning the insolvent or concerning the insolvent’s estate or
the administration of the estate. [Sub-s. (2)
substituted by s. 46 of Act 99 of 1965.] (3) After having interrogated the person summoned as aforesaid the
Master or other officer concerned may deliver to him a written notice to
appear again before the Master or other officer at a place and upon a date
and hour stated in such notice and to submit to the Master or such other
officer any further information or any book or document specified in such
notice. (4) When any person summoned as aforesaid appears before the Master or
other officer in question in compliance with a notice issued under subsection
(2) or (3) the Master or such other officer may administer the oath to him
and the Master or such other officer and if a person other than the trustee
was summoned, also the trustee (or his agent) may interrogate the person
summoned in regard to any matter relating to the insolvent or his estate or
the administration of the estate. (5) The provisions of subsection (2) of section 65 shall, subject to
subsection (2A) of that section, mutatis mutandis apply in connection with
the production of any book or document or with the interrogation of any
person under the preceding provisions of this section. [Sub-s. (5)
substituted by s. 4 of Act 89 of 1989.] (6) The provisions of section sixty-six shall mutatis mutandis apply
in connection with a person summoned, and with his interrogation, under this
section and the Master or other officer concerned shall, with reference to a
person so summoned or with reference to such interrogation, have the powers
and immunity conferred upon an officer mentioned in section sixty-six. (7) The provisions of subsection (7) of section sixty-five shall mutatis
mutandis apply in connection with any person (other than a trustee) who has
been summoned under this section for the purpose of furnishing any
information: Provided that if there are no assets in the estate in question
sufficient to pay the witness fees in question, those fees shall be paid by
the State. 153 Fees of office and certain costs (1) The Master shall recover in respect of the several matters and in
the manner mentioned in the Third Schedule to this Act the fees therein
specified. [Sub-s. (1) amended
by s. 21 (a) of Act 62 of 1955.] (1)bis The Minister
of Justice may from time to time by notice in the Gazette amend the said
Third Schedule. [Sub-s. (1)bis
inserted by s. 21 (b) of Act 62 of 1955 and amended by ss. 46 and 47 of Act
97 of 1986.] (2) Any expenses incurred by the Master or by an officer who is to
preside or presides or has presided at a meeting of the creditors of an
insolvent estate in the protection of the assets of an insolvent estate or in
carrying out any provision of this Act shall, unless the court otherwise
orders, be regarded as part of the costs of the sequestration of that estate. 154 Custody of documents. Admissibility of copies or certificates (1) The Master shall have the custody of all documents relating to
insolvent estates. (2) If there is endorsed upon or attached to any document or record a
certificate purporting to have been signed by a person describing himself as
Master, wherein he describes the nature of the document or record and states
that it relates to a specified insolvent or insolvent estate, that document
or record shall on its mere production by any person prima facie be deemed to
be what the certificate describes it to be. (3) Any document or record upon which there is endorsed or to which
there is attached a statement purporting to have been signed by a person
describing himself as Master, wherein he certifies that the document or
record is a true copy of or extract from a document or record relating to a
specified insolvent or insolvent estate, and wherein he describes the nature
of the original document or record, shall on its mere production by any
person be as admissible in evidence in any court of law and be of the same
force and effect as the original document or record would be if it bore or
had attached to it the certificate mentioned in subsection (2). (4) A certificate, purporting to have been signed by a person
describing himself as Master, stating that the estate of a person or
partnership mentioned therein was sequestrated on a date therein specified,
or that an insolvent named therein has or has not been rehabilitated, or that
any person named therein has or has not complied with any particular
requirement of this Act, shall upon its mere production by any person be
received as prima facie evidence of the facts therein stated. 155 Destruction of documents (1) After six months have elapsed as from the confirmation by the
Master of the final trustees’ account in any insolvent estate, the trustee
may, with the consent in writing of the Master, destroy all books and
documents in his possession relating to the estate. (2) After five years have elapsed as from the rehabilitation of an
insolvent the Master may destroy all records in his office relating to the
estate of that insolvent. (3) This section shall apply to all insolvent estates which have been
finally liquidated or are in course of liquidation at the commencement of
this Act. 156 Insurer obliged to pay third party’s claim against insolvent Whenever any person
(hereinafter called the insurer) is obliged to indemnify another person
(hereinafter called the insured) in respect of any liability incurred by the
insured towards a third party, the latter shall, on the sequestration of the
estate of the insured, be entitled to recover from the insurer the amount of
the insured’s liability towards the third party but not exceeding the maximum
amount for which the insurer has bound himself to indemnify the insured. 157 Formal defects (1) Nothing done under this Act shall be invalid by reason of a formal
defect or irregularity, unless a substantial injustice has been thereby done,
which in the opinion of the court cannot be remedied by any order of the
court. (2) No defect or irregularity in the election or appointment of a
trustee shall vitiate anything done by him in good faith. 158 Regulations The Minister of
Justice may from time to time make regulations not inconsistent with the
provisions of this Act, prescribing- (a) the procedure to be observed in any Master’s office in connection
with insolvent estates; (b) the form of, and manner of conducting proceedings under this Act; (c) the manner in which fees payable under this Act shall be paid and
brought to account. [S. 158 amended by s. 46
of Act 97 of 1986.] 158bis Minister of Justice
may amend First Schedule The Minister of Justice may by notice in the Gazette
amend the First Schedule. [S. 158bis inserted by
s. 13 of Act 50 of 1956 and amended by ss. 46 and 47 of Act 97 of 1986.] 158ter ...... [S. 158ter inserted by
s. 47 of Act 99 of 1965 and repealed by s. 1 of Act 49 of 1996.] 159 Short title and date of commencement This Act shall be called
the Insolvency Act, 1936, and shall come into operation on the first day of
July, 1936. First Schedule FORMS FORM A NOTICE OF SURRENDER OF A
DEBTOR’S ESTATE (SECTION 4(1)) Notice is hereby given
that application will be made to the............................. Division of the Supreme
court on...........the..............day of........................... 19......at......o’clock
in the forenoon or as soon thereafter as the matter can be heard, for the
acceptance of the surrender of the estate of*.................. of.........................and
that a statement of his affairs will lie for inspection at the office of the Master of
the Supreme Court at*.................(and at the office of.....) for a period of fourteen
days as from the.............day of.......19....... ................................................. Attorney
for.............................. .................... ...................19...... FORM B STATEMENT OF DEBTOR’S
AFFAIRS (SECTIONS 4 (3) AND 16) Balance sheet of ................................*
Liabilities Assets £.s.d. £.s.d. Debts due as per Annexure
IV Immovable property
as per Annexure I. Movable
property, furniture, stock-in-trade
etc. as per Annexure II Outstanding claims, etc., as
per Annexure III Deficiency. TOTAL TOTAL ANNEXURE
I
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