MRL3701
Assignment 2
Semester 1
Due 24 March 2026
, Question
With reference to relevant legislation, explain why the Constitutional Court
in Harksen v Lane NO 1998 (1) SA 300 (CC) found that section 21 of the
Insolvency Act 24 of 1936 did not infringe the applicant’s rights under the
Interim Constitution. Also explain the intended purpose of section 21.
Section 21 of the Insolvency Act 24 of 1936 provides that when one spouse is
sequestrated, the property of the solvent spouse vests temporarily in the trustee of the
insolvent estate. Mrs Harksen challenged this provision on the basis that it amounted to
an unconstitutional expropriation of her property in terms of section 28 of the Interim
Constitution.
The Constitutional Court rejected this challenge after considering the nature, operation,
and purpose of section 21 within the broader framework of insolvency law and
constitutional property protection.
The nature of section 21 of the Insolvency Act
Section 21 does not permanently deprive the solvent spouse of ownership of their
property. The section provides only for the temporary vesting of the solvent spouse’s
property in the trustee for purposes of control, investigation, and administration.
Ownership remains with the solvent spouse throughout, subject to the trustee’s duty to
determine whether the property forms part of the insolvent estate (Insolvency Act 24 of
1936 s 21(2)).
The Constitutional Court emphasised that vesting in this context is procedural rather
than proprietary. It does not transfer ownership to the state, the trustee, or the creditors,
but merely enables the trustee to fulfil their statutory duties effectively (Harksen v Lane
NO 1998 (1) SA 300 (CC)).
Assignment 2
Semester 1
Due 24 March 2026
, Question
With reference to relevant legislation, explain why the Constitutional Court
in Harksen v Lane NO 1998 (1) SA 300 (CC) found that section 21 of the
Insolvency Act 24 of 1936 did not infringe the applicant’s rights under the
Interim Constitution. Also explain the intended purpose of section 21.
Section 21 of the Insolvency Act 24 of 1936 provides that when one spouse is
sequestrated, the property of the solvent spouse vests temporarily in the trustee of the
insolvent estate. Mrs Harksen challenged this provision on the basis that it amounted to
an unconstitutional expropriation of her property in terms of section 28 of the Interim
Constitution.
The Constitutional Court rejected this challenge after considering the nature, operation,
and purpose of section 21 within the broader framework of insolvency law and
constitutional property protection.
The nature of section 21 of the Insolvency Act
Section 21 does not permanently deprive the solvent spouse of ownership of their
property. The section provides only for the temporary vesting of the solvent spouse’s
property in the trustee for purposes of control, investigation, and administration.
Ownership remains with the solvent spouse throughout, subject to the trustee’s duty to
determine whether the property forms part of the insolvent estate (Insolvency Act 24 of
1936 s 21(2)).
The Constitutional Court emphasised that vesting in this context is procedural rather
than proprietary. It does not transfer ownership to the state, the trustee, or the creditors,
but merely enables the trustee to fulfil their statutory duties effectively (Harksen v Lane
NO 1998 (1) SA 300 (CC)).
