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Practice Questions For Students For Weeks 1 and 2 - Chapters 1 - 3

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13 views

Practice Questions For Students For Weeks 1 and 2 - Chapters 1 - 3

Uploaded by

Deborah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Practice Questions for Students for Weeks 1 and 2: Chapters 1 - 3

Practice Question 1:

Dave and Janet are married in community of property. Dave’s company has been unable to pay its
debts. The company owns two trucks, some equipment and tools valued at R100 000.00. Due to the
recession, Dave is unable to obtain substantial contracts and the business is sinking further into
debt. As at 28 August, he owed his creditor ABC Construction Company (Pty) Limited
R750 000.00. Janet inherits an amount of R100 000.00 from her deceased grandmother’s estate.
Granny Jean specifically stated in her will that the inheritance must be excluded from Dave and
Janet’s joint estate to protect Janet’s estate. The couple own a 2018 Mercedes Benz worth
R400 000.00. David’s office is 30km from where they currently live and there is a Gautrain bus
station near their house. They also own movable assets that are valued at R100 000.00.
Dave approaches you for advice.

1.1 What is the main purpose of a sequestration order? (3 Marks)


1.2 Explain the two ways in which Dave’s estate may be sequestrated and who will bring the
application in each instance in the set of facts provided? (4 Marks)
1.3 Explain whether Dave’s estate insolvent? (3 Marks)
1.4 Dave decides to approach the court himself and apply for the sequestration of his estate.
What requirements must he prove in order to make such an application? (4 Marks)

Practice Question 2:

Sandra’s daughter, Tamara, owes, Brian R30 000 for paintings that he sold and delivered to her.

Sandra has brought an application to sequestrate Brian’s estate. He feels that Sandra’s application
for the sequestration of his estate is not brought in good faith. He is of the opinion that Sandra is
trying to prevent him from enforcing his claim of R30 000 against her daughter, Tamara. With
reference to case law as authority, advise Brian on how a court is likely to deal with the situation.
(10)

Practice Question 3:

Sizwe and Linda are married in community of property. Prior to their estate being sequestrated
Linda wrote a letter to Woolworths advising that they were unable to make payment of their debts
but offered to make payment of half of the amount. Their estate was subsequently sequestrated.
Sizwe inherits R500 000 from his father’s estate. His father’s will contains a provision that if Sizwe is
insolvent at the time of the testator’s death, the inheritance should be held in trust until Sizwe’s
rehabilitation. Sizwe and Linda have the following property in their estate:

a) household furniture,
b) an antique clock valued at R20 000.00,
c) a sewing machine used by L to earn a living and
d) an amount of R100 000.00 awarded to S for personal injuries he sustained in an accident
prior to the sequestration of their estate.

Sizwe approaches you for advice.

1.5 Explain the legal test of insolvency? (2 Marks)


1.6 What is the main purpose of a sequestration order? (3 Marks)
1.7 The action taken by Linda when she wrote the letter has a very specific term in our law, what
is is called, and which one did Linda commit. (2 Marks)
1.8 Sipho decides to approach the court himself and apply for the sequestration of his estate.
What requirements must be prove in order to make such an application? (4 Marks)

Practice Question 4:
Carol owes Sarah R10 000.00. Sarah wants to apply for the sequestration of Carol’s estate. Carol
writes a letter to Brian, another of Carol’s creditors to inform Brian that he is unable to pay the
money that he owes Brian.
With reference to the requirements for compulsory sequestration, will Sarah be successful with her
application?

Practice Question 5:

Linda is insolvent and was told by one of her friends that it is easier to bring a ‘friendly
sequestration’ application than an application for voluntary surrender. Linda is uncertain of what a
‘friendly’ sequestration is. Briefly explain this concept to her, and also explain the court’s attitude
towards ‘friendly’ sequestrations.

Practice Question 6:

In August 2017 Bruce became seriously ill and ended up in hospital. Unfortunately, he did not have
any medical aid. When Bruce was discharged from hospital a few weeks later he was in serious
financial trouble. One of Bruce’s creditors, Mrs Jones, to whom he owes R20 000, intends to apply
for the sequestration of his estate. Bruce approaches you for advice.

6.1 Explain the requirements that need to be proved in an application for compulsory sequestration
of his estate.

6.2 Mrs Jones’s daughter Tanya owes Bruce R30 000 for paintings that he sold to her. Mrs Jones is
trying to prevent Bruce from enforcing his claim of R30 000 against her daughter by bringing the
compulsory sequestration proceedings. With reference to authority, advise Brian on how a court is
likely to deal with the situation.
Practice Question 7:

Rich Bank has its head office in Johannesburg and wishes to sequestrate its debtor, Mr Twenty
Cents. It applies to the South Gauteng High Court for a sequestration order, since Mr Twenty Cents
had signed his loan agreement with the bank in Johannesburg.

Mr Twenty Cents resides in Durban with his wife and three children, and is employed there. His
children attend school there and he owns property in the Durban area. His previous business
partners also reside there.

Discuss whether the South Gauteng High Court is the appropriate forum for this application. Your
answer should include appropriate case discussion as well as the relevant provisions of the
Insolvency Act.

Practice Question 8:

Anita, Donald’s girlfriend approaches you for legal advice. She has with her a letter that Donald has
written a letter to her, informing her that he is unable to pay her an amount of R550 that he owes
her. She would like to assist Donald as he is facing financial difficulties and requests your advice on
how she may assist Donald, and whether she is allowed to do so?

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