MRL3701 PORTFOLIO MEMO - SEMESTER 2 - 2022 - OCT./NOV. - UNISA ( WITH DETAILED REFERENCES)

Question 1 1.1 Explain the concept "concursus creditorum" as well as what it presupposes. (5) 1.2 ABC Ltd is a British company that owns property which is lying in a warehouse in Cape Town harbour. ABC Ltd does not have a place of business in South Africa. Will the Western Cape High Court, Cape Town, have jurisdiction to sequestrate ABC Ltd.’s estate? (5) 1.3 Fred approaches you for advice. He informs you that Jenna owes him R24 000 for cleaning services rendered by his company. Fred explains to you that despite various attempts to get Jenna to pay her debts over several months, she has yet to make any payment. Fred is especially upset because he has heard a rumour that Jenna has a sister living in the United States of America, and so as to avoid creditors‘ claims on her outstanding debts, she wants to send some of her property to her sister in Las Vegas to keep safe on her behalf. Fred wants to know from you whether you can assist him to apply for the compulsory sequestration of Jenna‘s estate. Refer to the relevant act of insolvency, including a reference to the relevant legislation. (10) 1.4 Discuss Amod v Khan 1947 (2) SA 432 (N). (10) 1.5 Explain how section 27 of the Insolvency Act 24 of 1936 has the potential to violate section 9(3) of the Constitution. (10) 1.6 Benny works as a CEO at BIG Pty (Ltd). Benny is married to Maggy in community of property, and they have been married for seven years. The couple does not own a house but rent a very expensive apartment in Sandton for R20, 000 a month. As Benny has a taste for expensive things, nine months ago he purchased a 2021 Toyota SUV for R 3, 000 000 financed by Rand Bank, which duly registered security over the car. In terms of the loan agreement, Benny is expected to pay R43, 000 every month for five years. However, Benny missed two months of his payment to the bank. Benny has also not paid rent for the last three months. Realising his financial difficulties, Benny resorts to launching an application to voluntarily surrender his estate. Mr Mpho, the trustee of Benny’s insolvent estate, believes it would be in the best interest of creditors to repudiate the contract with Rand Bank. Discuss the legal implications should Mr Mpho repudiate this contract. In your answer, reflect on the trustee’s position in relation to uncompleted contracts, and the consequences thereof. (10) TOTAL QUESTION 1: [50] Question 2 2.1 Regarding meetings of creditors, and with reference to a “General Meeting” discuss when the meeting may be convened, what the purpose of the meeting is, and how it must be convened. (5) 2.2 With reference to voidable dispositions, discuss Pretorius‘ Trustee v Van Blommenstein 1949 (1) SA 267 (O). (10) 2.3 What must a plaintiff prove to succeed in bringing the actio Pauliana action? (5) 2.4 Provide reasons why an insolvent person is prohibited from holding certain offices. (5) TOTAL QUESTION 2: [25] Question 3 3.1 Lerato owns a solar installation and maintenance business. During the COVID-19 pandemic lockdown period, her business suffered financially. As a result, her estate has been provisionally sequestrated. Lerato’s trustee informs her that she may enter some form of arrangement with her creditors to stop the sequestration process from running its full course. Advise Lerato on the two forms of arrangements that she may enter into with her creditors. In your answer explain the differences between the two procedures. (10) 3.2 Critically discuss the legal principles set forth in Rand Air (Pty) Ltd v Ray Bester Investments (Pty) Ltd 1985 (2) SA 345 (W) regarding the need to establish a “just and equitable” ground for the winding up of a company. (10) 3.3 Explain briefly when a company is deemed to be unable to pay its debts. (5) TOTAL QUESTION 3: [25] TOTAL MARKS: [100]