MRL 3701 Assignment 1 2026
NB – Remember to paraphrase to avoid plagiarism.
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1. Voidable Preference (2 marks)
A voidable preference is when an insolvent debtor pays or transfers assets to a creditor,
thereby placing that creditor in a better position than others. To set aside such a
preference, it must be proven that:
• The debtor was insolvent at the time or became insolvent as a result of the
transaction.
• The transaction preferred one creditor above others within the statutory period
before sequestration.
2. Undue Preference (2 marks)
An undue preference occurs when a debtor intentionally favors one creditor to the
detriment of others. The court can set it aside if:
• The debtor was insolvent at the time or immediately after the preference.
• The debtor acted with intent to prefer that creditor during the relevant statutory
period.
3. Trustee Recovery: Palesa-Andile Payment (6 marks)
The trustee may recover the R900,000 paid to Andile if it qualifies as a voidable or undue
preference. Palesa was insolvent at the time, the transaction favored Andile over other
creditors, and it occurred within the statutory period. If intent to prefer is shown or inferred,
the payment can be set aside and recovered for the benefit of all creditors.
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NB – Remember to paraphrase to avoid plagiarism.
Text us on our WhatsApp Number for HELP on ALL your Assignments. UNIQUE
ANSWERS JUST FOR YOU! WhatsApp: 0753811378 Solutions Tutors
1. Voidable Preference (2 marks)
A voidable preference is when an insolvent debtor pays or transfers assets to a creditor,
thereby placing that creditor in a better position than others. To set aside such a
preference, it must be proven that:
• The debtor was insolvent at the time or became insolvent as a result of the
transaction.
• The transaction preferred one creditor above others within the statutory period
before sequestration.
2. Undue Preference (2 marks)
An undue preference occurs when a debtor intentionally favors one creditor to the
detriment of others. The court can set it aside if:
• The debtor was insolvent at the time or immediately after the preference.
• The debtor acted with intent to prefer that creditor during the relevant statutory
period.
3. Trustee Recovery: Palesa-Andile Payment (6 marks)
The trustee may recover the R900,000 paid to Andile if it qualifies as a voidable or undue
preference. Palesa was insolvent at the time, the transaction favored Andile over other
creditors, and it occurred within the statutory period. If intent to prefer is shown or inferred,
the payment can be set aside and recovered for the benefit of all creditors.
Text us on our WhatsApp Number for HELP on ALL your Assignments. UNIQUE
ANSWERS JUST FOR YOU! WhatsApp: 0753811378 Solutions Tutors
