MRL3701 Assignment 01 Unique number: 619641
Due date: 16 April 2021 Ashleigh Hala Semester 01
1. The domestic employees, the Stratfords, the Minister of Labour and the
Minister of Justice were seeking an order to firstly declare section 9(4A) of
the Insolvency Act 24 of 1936 unconstitutional, as it creates an indirect
discrimination against domestic employees. Secondly, that there was a
breach of the domestic employees’ constitutional rights to fair labour
practices and access to courts due to the failure to notify them of the
sequestration proceedings, resulting in the domestic employees being
unable to seek legal advice or oppose the application (Stratford v Investec
Bank Ltd 2015 (3) SA 1 (CC) [9]) (hereinafter the Stratford case).
2. The issues that were faced in the Constitutional Court were firstly to decide
whether domestic employees are included in the provisions of section 9(4A)
of the Insolvency Act 24 of 1936. Secondly, the issue of whether this
provision should then be declared inconsistent with the Constitution if
domestic employees are not included in this section. Thirdly, whether
compliance with section 9(4A) is peremptory or directory and lastly, was the
correct decision made by the High Court in the granting of a final
sequestration order (the Stratford case [17]).
3. For a court to have reason to believe that sequestration will be to the
advantage of the creditors, the court needs to believe that sequestration will
be the only way that some form of payment will be made to the creditors or
that there is reasonable prospect that some pecuniary benefit will result to
the creditors (the Stratford case [45]). In this case, Investec has detailed
impeachable transactions adding up to over R37 million, which gives the
court reason to believe that it will be to the creditors advantage to set these
impeachable transactions aside (the Stratford case [46], as well as,
Investec having proved on a balance of probabilities that there were
prospects of pecuniary benefit to the creditors and that a proper
investigation into the Stratford’s joint estate would uncover additional assets
(the Stratford case [12]).
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Due date: 16 April 2021 Ashleigh Hala Semester 01
1. The domestic employees, the Stratfords, the Minister of Labour and the
Minister of Justice were seeking an order to firstly declare section 9(4A) of
the Insolvency Act 24 of 1936 unconstitutional, as it creates an indirect
discrimination against domestic employees. Secondly, that there was a
breach of the domestic employees’ constitutional rights to fair labour
practices and access to courts due to the failure to notify them of the
sequestration proceedings, resulting in the domestic employees being
unable to seek legal advice or oppose the application (Stratford v Investec
Bank Ltd 2015 (3) SA 1 (CC) [9]) (hereinafter the Stratford case).
2. The issues that were faced in the Constitutional Court were firstly to decide
whether domestic employees are included in the provisions of section 9(4A)
of the Insolvency Act 24 of 1936. Secondly, the issue of whether this
provision should then be declared inconsistent with the Constitution if
domestic employees are not included in this section. Thirdly, whether
compliance with section 9(4A) is peremptory or directory and lastly, was the
correct decision made by the High Court in the granting of a final
sequestration order (the Stratford case [17]).
3. For a court to have reason to believe that sequestration will be to the
advantage of the creditors, the court needs to believe that sequestration will
be the only way that some form of payment will be made to the creditors or
that there is reasonable prospect that some pecuniary benefit will result to
the creditors (the Stratford case [45]). In this case, Investec has detailed
impeachable transactions adding up to over R37 million, which gives the
court reason to believe that it will be to the creditors advantage to set these
impeachable transactions aside (the Stratford case [46], as well as,
Investec having proved on a balance of probabilities that there were
prospects of pecuniary benefit to the creditors and that a proper
investigation into the Stratford’s joint estate would uncover additional assets
(the Stratford case [12]).
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