HIGHER EDUCATION PROGRAMMES
Academic Year 2025:
January - June
Formative Assessment 1:
Law of Insolvency (HLWI230-1)
NQF Level, Credits:
6, 12
Weighting:
20%
Assessment Type:
Essay Questions
Educator:
Ndivhuwo Tshikota
Examiner:
Lizelle Green
Due Date:
27 March 2025
Total:
100 Marks
Instructions:

This paper consists of six (6) questions.

It is based on Units 1 - 4 of your prescribed textbook.

All questions are compulsory.

Your assessment must be typed using:
o Font: Arial
o Font size: 12
o Line spacing: 1.5
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The following Learning Outcomes are assessed in this assessment:
Unit 1:

Understand and determine the purpose of a sequestration order.

Understand and analyse different jurisdictions of the various courts in
relation to insolvent estates.

Explain the appointment of the Master
Unit 2:

Understand and explain, in detail, the effects of a notice of surrender.

Understand and explain in detail the different forms and acts of insolvency.
Unit 3:

Understand the function of the trustee.

Know which property falls into the insolvent estate.
Unit 4:

2
Explain the role of the curator bonis.
HLWI230-1-Jan-June2025-FA1-LG-V3-28012025
Question 1
(29 marks)
Read the fictitious scenario and answer the questions that follow:
Tobias is a South African businessman who has been facing financial difficulties due
to several failed ventures over the past year. On January 15, 2024, he decided to file
an application for the voluntary surrender of his estate at the Pretoria High Court.
Although he has been living in Johannesburg for the last six years, he has spent the
past three months in Nairobi, Kenya, working on a business project.
Tobias owns a residential property in Johannesburg and is still the registered owner
of several commercial properties in South Africa, which he plans to sell in order to pay
off his debts. Tobias's creditors, including a South African bank, are seeking
clarification on whether the Pretoria High Court has jurisdiction over his estate for the
purposes of sequestration.
Required:
1.1.
Outline when a court has jurisdiction over a debtor and their estate for purposes
of sequestration. Refer to applicable legislation in your answer.
1.2.
Analyse whether the Pretoria High Court has jurisdiction over Tobias’s estate
for purposes of sequestration.
3
(14 marks)
HLWI230-1-Jan-June2025-FA1-LG-V3-28012025
(15 marks)
Question 2
(12 marks)
2.1. Identify the legislation in terms of which the Master appointed.
(1 mark)
2.2. Describe the role and structure of the Masters in the Provincial Divisions of the
High Court.
4
(11 marks)
HLWI230-1-Jan-June2025-FA1-LG-V3-28012025
Question 3
(11 marks)
With reference to legislation, discuss the effect of the publication of a notice of
surrender on the sale of attached property under South African insolvency law.
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Question 4
(18 marks)
Read the fictitious scenario and answer the question that follows:
Marcus, a businessman with substantial debts, has recently been struggling to meet
his financial obligations. One evening, Marcus suddenly leaves South Africa for
Zambia without informing any of his creditors. He cancels all upcoming business
meetings and ceases to respond to any communication from his financial advisors.
His creditors, including Compound Financial Services, are concerned that Marcus has
fled the country to avoid paying his debts and have decided to file for sequestration of
his estate. They argue that Marcus’s absence constitutes an act of insolvency under
the Insolvency Act.
Required:
With reference to relevant legislation and case law, determine whether Marcus has
committed an act of insolvency.
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Question 5
(23 marks)
Read the fictitious scenario and answer the questions that follow:
Layla, a 37-year-old unemployed woman, has been struggling to repay her debts for
some time. Layla’s unemployment stems from the injury she sustained in the
workplace. She received compensation for the injury sustained in terms of
Occupational Injuries and Diseases Act 130 of 1993.
Despite several creditors obtaining judgments against her, her debts remain unpaid.
As Layla's liabilities exceed her assets, her creditors successfully applied for her
insolvency, and a sequestration order was granted. Her estate vested in the Master of
the High Court, and a trustee was appointed.
Layla owns a R10,000,000 house in Plattekloof, Cape Town, inherited from her
grandfather, and the property is registered in her name. A writ of execution was issued,
and the sheriff recently attached the house.
Layla is married to Ryan, a 30-year-old teacher, who has no significant assets apart
from a 2012 Volkswagen Polo. They were married out of community of property in
1996, and the marriage subsists.
Layla is also the creator of patented software used in South Africa’s solar energy
sector. She holds the intellectual property rights to the software.
All furniture and clothing in the house were purchased before Layla’s financial
difficulties began.
Required:
5.1.
Briefly describe the function of the trustee.
(3 marks)
5.2.
Explain what the insolvent estate consists of.
(5 marks)
5.3.
Identify and briefly explain which property, in the given scenario, will form part
of Layla’s insolvent estate.
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(15 marks)
Note to student:
It is not necessary to refer to specific provisions of the Insolvency Act 24 of 1936 (“the
Act”), or to case law.
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Question 6
(7 marks)
Read the fictitious scenario and answer the question that follows:
April, a small business owner, has decided to apply for the sequestration of her estate
due to mounting financial troubles. A curator bonis, named Mark, is appointed to take
control of April's estate while the sequestration application is being processed.
Required:
Advise April when the curator bonis is appointed and what the role of the curator bonis
in April's case is before sequestration is finalised?
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