Insolvency act 24 of 1936 sa sa gg 2365 came into force in south west africa on 1 july 1943 when act 19 of 1943 was brought into force in south west africa see also section 158. Rehabilitation in south african consumer insolvency law. Sharrock et al hocklys insolvency law casebook 1999 juta cape town meskin on insolvency law looseleaf, butterworths. Pdf the procreditor approach in south african insolvency law.
Standard bank of south africa limited v mccrae 201517903. Practical guidance insolvency law provides detailed, stepbystep guidance on the application processes, requirements and procedures as set out in the insolvency act 24 of 1936. In the courts view, it could not be inferred that strauss had committed the act of insolvency alleged. To provide effective mechanisms for dealing with cases of crossborder insolvency. Cliffe dekker hofmeyr section 34 of the insolvency act. Solvent and insolvent winding up of companies what is solvent. On the gross proceeds of movable property other than shares or similar securities sold, or on the gross amount collected under. Cliffe dekker hofmeyr section 34 1 of the insolvency act. Chapter 6 of the companies act, 2008 the act deals with business rescue. This is however, only a temporary solution until a new and comprehensive insolvency act 24 of 1936 is drafted and incorporated into south african law. In relation to the legal position of foreign creditors of south africa debtors, the law of crossborder insolvency is governed by the cross border insolvency act cbia. This situation will often lead to an entity failing to pay off its obligations as they become due. Notes lawblogsa a lawblog for south african students.
Understanding acts of insolvency 8 acts of insolvency. Furthermore, the law regulates proceedings which are aimed at rescuing businesses in dire financial straits. During the last three decades south africa has witnessed not only a sharp increase in consumer debt, but also a strong increase in the granting of credit to individuals. Application by debtor for liquidation of estate of natural person or partnership.
The companies act therefore requires that companies have to satisfy the conditions of section 4 solvency and liquidity test before certain types of transactions occur. The insolvency act organisation of south african law. In line with this trend, chapter 6 of the new companies act, no. Cases summary lawblogsa a lawblog for south african. She had sailed from durban to new zealand, and had sold her property and furniture before doing so. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Insolvency act 24 of 1936 international insolvency institute. A general, or special, notarial bond cannot be created or registered over an aircraft. Taking security in south africa a comparative guide for investors provides an overview of the types of assets over which security can be taken in south africa, the different types of security, as well as the related procedures. The insolvency act governs the sequestrations of trusts, partnerships and the estates of individuals that are insolvent. To provide for the administration of insolvent and assigned estates and the consolidation of insolvency legislation in zimbabwe. Users are supported from the preliminary steps including the types of sequestration and liquidation, drafting the applications, and offences, which a party may encounter. E it enacted by the parliament of the republic of south africa.
Insolvency law jan to july 2018 national bar council of. The companies act when is a company financially distressed. In the south african jurisdiction, business rescue has taken three years to bed itself down. Insolvency act 24 of 1936 sa legal assistance centre. The law of insolvency has been revised by a team of eleven authors to include developments in the law of insolvency and associated areas of the. For an applicant to successfully obtain an insolvency order against his debtor, the applicant. Insolvency act 24 of 1936 organisation of south african law. Insolvency act 24 of 1936 south african government. Insolvency is defined as a situation whereby the liabilities of an entity exceed the assets fair value. As the supreme law in south africa, it applies to all law and conduct. Prohibition of sale in execution of property of estate. Durban this is the leading work on the law of insolvency in south africa.
Business rescue is largely selfadministered by the company, under independent supervision within the constraints set out by the act, and could be subject to court intervention, at any time, on application by any of the stakeholders. The law of insolvency in south africa 10th edition. Insolvency trading whilst factually insolvent rsm south. South african companies that are financially distressed in south africa.
Insolvency in south african law refers to a status of diminished legal capacity imposed by the courts on persons who are unable to pay their. The objective of business rescue is to allow financially distressed companies to restructure and reorganise, to avoid insolvency and allow the company to continue on a solvent basis, andor to maximise returns to creditors or shareholders. The financial markets act is a very narrow act it focuses primarily on regulation of financial market infrastructures and posttrade requirements. In addition to our first article in which we referred to the verdict that was given in tayfin financial accountant pty ltd v aniza noormahomed n.
Act to amend the insolvency act, 1936, so as to require notice of a petition for the sequestration of a debtors estate to be given to employees of the debtor, registered trade unions representing such employees, the south african revenue service and. None of the other south african amendments after the date of transfer and prior to namibian independence. Part i preliminary 1 short title this act may be cited as the insolvency act chapter 6. The law of insolvency in south africa is a specialist work that has for decades been the guide for anyone who practices in this important area of law. South africa by the convention on international interests in mobile equipment act 2007. Payment of debts out of assets subject to floating charge. Insolvency law jan to july 2018 national bar council. The full text is available on the my lexisnexis database on the ru library webpage under electronic information resources. The principal act as amended by this act, shall apply to the mandated territory of southwest africa and the port and settlement of walvis. By riza moosa on may 21, 2014 posted in banking certain sections of the 1973 companies act still apply to the winding up and liquidation of companies by virtue of the transitional arrangements in schedule 5 to the 2008 companies act. In south africa insolvency is regulated primarily by the insolvency act 24 of 1936 the insolvency act. Business rescue is largely selfadministered by the company, under independent supervision within the constraints set.
Insolvency in south african law refers to a status of diminished legal capacity capitis diminutio imposed by the courts on persons who are unable to pay their debts, or which amounts to the same thing whose liabilities exceed their assets. As a general principle in south african law, a party instituting a claim for delictual damages must proceed against the person who has caused the harm, subject to specific circumstances where this principle has been altered through the enactment of legislation, for example the application of the road accident fund act 56 of 1996, as amended by. The insolvency act, 1916 act 32 of 1916, the insolvency act, 1916, amendment act, 1926 act 29 of 1926 except the title and preamble thereof and sections one, seventyone, seventytwo and seventyfour thereof and section twenty of the land bank amendment act. Companies winding up section part i company voluntary arrangements the proposal 1. In the haste of closing a deal, whether in the form of a sale of business or a sale of assets, the parties often agree not to comply with the provisions of s341 of the insolvency act, no 24 of 1936 act, each willing to take the risk in not doing so. The law of insolvency in south africa has established itself as a specialist work that has for decades been the guide for anyone who practices in this important area of law the tenth edition of mars. As a result, the relevant interests constitute an international interest, and can be enforced by thirdparty creditors where the asset is located in south africa. A framework for corporate insolvency law reform in south africa by david alan burdette thesis submitted in partial fulfilment of the requirements for the degree doctor legum in the faculty of law at the university of pretoria promoter. Standard bank of south africa limited v mccrae 201517903 2017 zagpjhc 402 30 november 2017 download original files.
Loubser ensuring advantage to everyone in a modern south african insolvency law 1997. The principal act as amended by this act, shall apply to the mandated territory of southwest africa and the port and settlement of walvis bay, and for the purposes of such application the said port and settlement shall be deemed to be a portion of the said mandated territory. In this article rehabilitation in terms of current south african consumer insolvency law as well as relevant law reform initiatives currently on the table are investigated. The act was initially applied to south west africa by the insolvency amendment act 16 of 1943, which stated in section 37.
All south african laws must be consistent with the constitution. Dec 10, 2015 insolvency in south africa primarily governed by the insolvency act 24 of 1936. Insolvency act 1986 chapter 45 arrangement of sections the first group of parts company insolvency. The insolvents diminished legal capacity entails deprivation of certain. The principal act as amended by this act, shall apply to the mandated territory of south west africa and the port and settlement of walvis bay, and for the purposes of such application the said port and settlement shall be deemed to be a portion of the said mandated territory. In recent years, derivatives markets have been brought. Companies act, which address the circumstances of when a company may be wound up and when a company is deemed unable to pay its debts, and concluded that section 345 should be used to determine whether or not a company is insolvent for purposes of section 79 of the new act. Notice of surrender and lodging at masters office of statement of debtors affairs. Meaning of insolvency section 2 of the insolvency act, 24 of 1936 act definitions insolvent when used as a noun, means a debtor whose estate is under sequestration and includes such a debtor before the sequestration of his estate, according to the context. Jul 18, 20 this act has its own page in the egrey book of seychelles.
The aim is to measure the south african laws against international trends as well as the guidelines provided by the world bank and eventually to make proposals for law reform. Insolvency act 24 of 1936 signed by the governorgeneral in afrikaans assented to. Insolvency act, 2018 to provide for the administration of insolvent and assigned estates and the consolidation of insolvency legislation in zimbabwe. Insolvency act 24 of 1936 organisation of south african. Business rescue is the only formal rescue proceeding in south africa chapter 6, companies act 2008. There is often no time to waste and a deal must be closed as soon as possible. Insolvency amendment act 122 of 1993 general law third amendment act 129 of 1993 general law fifth amendment act 157 of 1993 insolvency amendment act 32 of 1995 general law amendment act 49 of 1996 judicial matters amendment act 104 of 1996 judicial matters amendment act 34 of 1998 judicial matters second amendment act 122 of 1998 crossborder insolvency act 42 of 2000 administration of estates laws rationalisation act 20 of 2001 judicial matters amendment act. South african bank of athens ltd v zennies fresh fruit cc 2018 3 sa 278 wcc. Insolvency act 1936 southern african legal information. Regarding companies, the companies act, 71 of 2008 the companies act 2008 and the companies act, 61 of 1973 the companies act 1973 and together with the companies act 2008, the companies acts would also apply. Solvent and insolvent winding up of companies what is. Cliffe dekker hofmeyr section 34 1 of the insolvency. An act to amend and consolidate the law in force in swaziland relating to insolvent persons and the administration of their estates.
The act leaves many south african financial markets unregulated. Act to amend the insolvency act, 1936, so as to further regulate the effect of sequestration on employment contracts and claims for severance and retrench ment pay. Minister of constitutional development and another v south african restructuring and insolvency practitioners association and others cct17 2018 zacc 20 5 july 2018 minister of environmental affairs v recycling and economic development initiative of south africa npc 2018 3 sa 604 wcc. Insolvency amendment act 122 of 1993 general law third amendment act 129 of 1993 general law fifth amendment act 157 of 1993 insolvency amendment act 32 of 1995 general law amendment act 49 of 1996 judicial matters amendment act 104 of 1996 judicial matters amendment act 34 of 1998 judicial matters second amendment act 122 of 1998 crossborder insolvency act 42 of 2000 administration of estates laws rationalisation act 20 of 2001 judicial matters amendment act 42 of 2001 insolvency amendment. The foreign creditor must provide security for costs to be incurred in the invocation and conduct of local proceedings. Insolvency act, 20 seychelles legal information institute. Cases summary insolvency law mrl301m magnum financial holdings pty ltd in liquidation v summerly no 1984 1 sa 160w facts a company in liquidation had a claim for r 1,6 million, which was due and payable, against the summerly trust who. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. The insolvency act and most of its amendments were enacted well. In bishop v baker, the creditor averred that the debtor had left south africa with the intention of evading or delaying payment of her debts. An example of this is the new south african business rescue regime introduced by chapter 6 of the south african companies act, 2008. Procedure where nominee is not the liquidator or adminis trator. South african insolvency law regulates three main types of insolvency proceedings, namely the sequestration of personal estates, the windingup of companies and the windingup of close corporations. An act to make provision for the administration of insolvent and assigned estates.
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