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 T...
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, Question 1
1.1 Explain the concept "concursus creditorum" as well as what it
presupposes. (5)
The term “concursus creditorum” means that upon the granting of a
sequestration order (or provisional order) “coming together of creditors” is
established, and the interests of creditors as a group enjoy preference over the
interests of individual interests.
The debtor is divested of his estate and cannot burden it with any further debts.
A creditor’s rights to recover his claim in full by judicial proceedings is replaced
by the right, on proving a claim against the insolvent estate, to share with all
other proved creditors in the proceeds of the estate assets. Apart from what is
permitted by the Insolvency Act, nothing may be done which would have the
effect of diminishing the estate assets or prejudicing the rights of creditors.
Walker v Syfret NO 1911 AD 141.
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)
As a rule, only a Provincial or Local Division of the High Court (“HC”) may
adjudicate upon an insolvency matter, but a Magistrate’s Court (“MC”) may
preside over prosecutions for criminal offences under the Act, setting aside of
voidable dispositions and a few other matters if the jurisdictional limits are not
exceeded.
Jurisdiction over a debtor and his estate
In terms of Section 149 of the Act, a court has jurisdiction over a debtor and his
estate if:
on the date of lodging, the debtor is domiciled or owns property, or is entitled
to property, situated within the jurisdiction of the court; or
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