MRL3701
ASSIGNMENT 1
DUE DATE: 2 MARCH 2026
, MRL3701 Assignment 1 2026
DUE 2 MARCH 2026
QUESTION
Palesa and her best friend Mpho started a new restaurant business in 2023. Despite
their impressive culinary skills, the restaurant was not a success. Palesa lost a lot of
money which she had invested in the restaurant, leaving her in a dire financial
situation. By 1 October 2025,
(b) What is an undue preference and what elements must be proved for a court to
set aside an undue preference?
(a) Voidable preference
A voidable preference is a disposition made by an insolvent debtor that has the effect of
preferring one creditor above others shortly before sequestration. The policy behind
section 29 is to prevent a debtor who is close to insolvency from choosing which
creditors to pay and undermining the concursus creditorum.¹
In terms of section 29(1) of the Insolvency Act, the trustee must prove the following
requirements in order for a voidable preference to be set aside:
¹ Walker v Syfret NO 1911 AD 141.
ASSIGNMENT 1
DUE DATE: 2 MARCH 2026
, MRL3701 Assignment 1 2026
DUE 2 MARCH 2026
QUESTION
Palesa and her best friend Mpho started a new restaurant business in 2023. Despite
their impressive culinary skills, the restaurant was not a success. Palesa lost a lot of
money which she had invested in the restaurant, leaving her in a dire financial
situation. By 1 October 2025,
(b) What is an undue preference and what elements must be proved for a court to
set aside an undue preference?
(a) Voidable preference
A voidable preference is a disposition made by an insolvent debtor that has the effect of
preferring one creditor above others shortly before sequestration. The policy behind
section 29 is to prevent a debtor who is close to insolvency from choosing which
creditors to pay and undermining the concursus creditorum.¹
In terms of section 29(1) of the Insolvency Act, the trustee must prove the following
requirements in order for a voidable preference to be set aside:
¹ Walker v Syfret NO 1911 AD 141.
