MRL3701
ASSIGNMENT 1 (SEMESTER 1)
DUE DATE: 25 March 2025
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than March 2025. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
To determine whether Maria is likely to be successful in an application for the sequestration of
Thabo's estate, we need to analyze the relevant requirements for sequestration under South
African law. The primary law governing sequestration is the Insolvency Act 24 of 1936, which
provides a framework for the sequestration of individuals' estates. In this case, Maria, as a creditor,
can apply for Thabo’s sequestration if she meets the necessary requirements.
Key Requirements for Sequestration:
1. Proof of Insolvency:
Maria must show that Thabo is insolvent. Insolvency occurs when a person’s liabilities exceed
their assets. In this case, Thabo’s liabilities have exceeded his assets since 30 November 2024,
which means that Thabo is insolvent. The fact that Thabo’s debts outweigh the value of his assets
is crucial for Maria’s sequestration application.
According to the Insolvency Act, insolvency can be proven by submitting a statement of Thabo’s
financial position, showing that his liabilities exceed his assets. Since Thabo has failed to pay his
, debts for several months and has acknowledged that his liabilities exceed his assets, Maria can
successfully demonstrate that Thabo is insolvent.
2. Due Debt:
Maria must establish that Thabo’s debt to her is due and payable. The debt owed by Thabo to
Maria, R320,000, was due and payable on 5 January 2025. Since Thabo failed to pay the debt by
the due date, the debt remains outstanding, satisfying the requirement for a due debt under
South African law.
The debt being due and unpaid supports Maria’s application for sequestration, as she has a valid
and due claim against Thabo’s estate.
3. Unable to Pay Debts:
Maria must prove that Thabo is unable to pay his debts. This is often demonstrated by the fact
that the debtor has failed to make payments as they become due. In Thabo’s case, he has failed
to pay his debts for several months, and his liabilities exceed his assets. This is a strong
indication that Thabo is unable to pay his debts as they arise.
The failure to pay his creditors, including Maria, further establishes that Thabo is in a state of
financial distress, which strengthens the grounds for Maria’s sequestration application.
4. An Act of Insolvency:
Maria needs to show that Thabo has committed an act of insolvency. An act of insolvency is an
act that shows the debtor’s inability to meet his debts. Thabo’s early payment to his cousin in
full on 29 January 2025 could potentially be considered an act of insolvency. If Thabo made this
payment knowing that he was unable to pay his creditors and with the intention to prefer his
cousin over other creditors, this could be seen as an undue preference.
The Insolvency Act provides that preferential payments made by a debtor to one creditor over
others in a period of insolvency may constitute an act of insolvency. Maria could argue that the
payment to Thabo’s cousin, which was due only on 30 April 2025, was made in an attempt to
prevent his cousin from being affected by sequestration proceedings. If this payment was made with
ASSIGNMENT 1 (SEMESTER 1)
DUE DATE: 25 March 2025
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than March 2025. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
To determine whether Maria is likely to be successful in an application for the sequestration of
Thabo's estate, we need to analyze the relevant requirements for sequestration under South
African law. The primary law governing sequestration is the Insolvency Act 24 of 1936, which
provides a framework for the sequestration of individuals' estates. In this case, Maria, as a creditor,
can apply for Thabo’s sequestration if she meets the necessary requirements.
Key Requirements for Sequestration:
1. Proof of Insolvency:
Maria must show that Thabo is insolvent. Insolvency occurs when a person’s liabilities exceed
their assets. In this case, Thabo’s liabilities have exceeded his assets since 30 November 2024,
which means that Thabo is insolvent. The fact that Thabo’s debts outweigh the value of his assets
is crucial for Maria’s sequestration application.
According to the Insolvency Act, insolvency can be proven by submitting a statement of Thabo’s
financial position, showing that his liabilities exceed his assets. Since Thabo has failed to pay his
, debts for several months and has acknowledged that his liabilities exceed his assets, Maria can
successfully demonstrate that Thabo is insolvent.
2. Due Debt:
Maria must establish that Thabo’s debt to her is due and payable. The debt owed by Thabo to
Maria, R320,000, was due and payable on 5 January 2025. Since Thabo failed to pay the debt by
the due date, the debt remains outstanding, satisfying the requirement for a due debt under
South African law.
The debt being due and unpaid supports Maria’s application for sequestration, as she has a valid
and due claim against Thabo’s estate.
3. Unable to Pay Debts:
Maria must prove that Thabo is unable to pay his debts. This is often demonstrated by the fact
that the debtor has failed to make payments as they become due. In Thabo’s case, he has failed
to pay his debts for several months, and his liabilities exceed his assets. This is a strong
indication that Thabo is unable to pay his debts as they arise.
The failure to pay his creditors, including Maria, further establishes that Thabo is in a state of
financial distress, which strengthens the grounds for Maria’s sequestration application.
4. An Act of Insolvency:
Maria needs to show that Thabo has committed an act of insolvency. An act of insolvency is an
act that shows the debtor’s inability to meet his debts. Thabo’s early payment to his cousin in
full on 29 January 2025 could potentially be considered an act of insolvency. If Thabo made this
payment knowing that he was unable to pay his creditors and with the intention to prefer his
cousin over other creditors, this could be seen as an undue preference.
The Insolvency Act provides that preferential payments made by a debtor to one creditor over
others in a period of insolvency may constitute an act of insolvency. Maria could argue that the
payment to Thabo’s cousin, which was due only on 30 April 2025, was made in an attempt to
prevent his cousin from being affected by sequestration proceedings. If this payment was made with
