Related documents
Insolvency Act, 1936
Act 24 of 1936
- Published in South African Government Gazette 2365 on 24 June 1936
- Commenced on 1 July 1943
- [This is the version of this document from 15 March 2023 and includes any amendments published up to 11 October 2024.]
- [Amended by Finance Act, 1938 (Act 17 of 1938) on 30 September 1938]
- [Amended by Income Tax Act, 1940 (Act 25 of 1940) on 20 May 1940]
- [Amended by Income Tax Act, 1941 (Act 31 of 1941) on 1 July 1941]
- [Amended by Hire-Purchase Act, 1942 (Act 36 of 1942) on 1 May 1942]
- [Amended by Insolvency Law Amendment Act, 1943 (Act 16 of 1943) on 1 July 1943]
- [Amended by Insurance Act, 1943 (Act 27 of 1943) on 1 April 1944]
- [Amended by General Law Amendment Act, 1952 (Act 32 of 1952) on 4 June 1952]
- [Amended by General Law Amendment Act, 1955 (Act 62 of 1955) on 6 July 1955]
- [Amended by General Law Amendment Act, 1956 (Act 50 of 1956) on 22 June 1956]
- [Amended by Insolvency Act, 1936: Remuneration of Trustee (Proclamation 229 of 1956) on 19 October 1956]
- [Amended by Merchant Shipping Act, 1951 (Act 57 of 1951) on 1 January 1960]
- [Amended by Farmers' Assistance Amendment Act, 1960 (Act 16 of 1960) on 1 April 1960]
- [Amended by Finance Act, 1960 (Act 64 of 1960) on 1 June 1960]
- [Amended by Amendment of Tariff A and Rules in the Second Schedule to the Insolvency Act, 1936 (Proclamation R210 of 1960) on 1 July 1960]
- [Amended by Income Tax Act, 1961 (Act 80 of 1961) on 7 July 1961]
- [Amended by Substitution of Tariff B in the Second Schedule to the Insolvency Act, 1936 (Proclamation R159 of 1961) on 15 December 1961]
- [Amended by Income Tax Amendment Act, 1963 (Act 6 of 1963) on 20 February 1963]
- [Amended by Insolvency Amendment Act, 1965 (Act 99 of 1965) on 7 July 1965]
- [Amended by Amendment of the Third Schedule to the Insolvency Act, 1936 (Proclamation R155 of 1971) on 1 August 1971]
- [Amended by Insolvency Amendment Act, 1972 (Act 6 of 1972) on 8 March 1972]
- [Amended by Income Tax Act, 1972 (Act 90 of 1972) on 28 June 1972]
- [Amended by Amendment of the Second Schedule to the Insolvency Act, 1936 (Proclamation R282 of 1972) on 1 December 1972]
- [Amended by Amendment of the Second Schedule to the Insolvency Act, 1936 (Proclamation PR87 of 1973) on 1 April 1973]
- [Amended by General Law Amendment Act, 1973 (Act 62 of 1973) on 27 June 1973]
- [Amended by General Law Amendment Act, 1974 (Act 29 of 1974) on 15 March 1974]
- [Amended by Income Tax Act, 1974 (Act 85 of 1974) on 29 November 1974]
- [Amended by Sales Tax Act, 1978 (Act 103 of 1978) on 28 June 1978]
- [Amended by Sales Tax Proclamation, 1978 (Proclamation AG40 of 1978) on 29 June 1978]
- [Amended by Insolvency Amendment Act, 1980 (Act 78 of 1980) on 25 June 1980]
- [Amended by Insolvency Amendment Act, 1985 (Act 14 of 1985) on 9 October 1985]
- [Amended by Amendment of Tariff A in the Second Schedule to the Insolvency Act, 1936 (Proclamation AG17 of 1986) on 1 April 1986]
- [Amended by Amendment of second and third schedules to the Insolvency Act, 1936 (Proclamation 12 of 1999) on 23 February 1999]
- [Amended by Repeal of Obsolete Laws Act, 2022 (Act 12 of 2022) on 15 February 2023]
- [Amended by Abolition of Payment by Cheque Act, 2022 (Act 16 of 2022) on 15 March 2023]
1. Repeal of laws
The Insolvency Act, 1916 (Act No. 32 of 1916), the Insolvency Act, 1916, Amendment Act, 1926 (Act No. 29 of 1926) (except the title and preamble thereof and sections one, seventy-one, seventy-two and seventy-four thereof) and section twenty of the Land Bank Amendment Act, 1934 (Act No. 58 of 1934) are hereby repealed: Provided that if an estate was sequestrated or assigned before the commencement of this Act the sequestration or assignment and all proceedings in connection therewith shall be completed, and a person whose estate was sequestrated or assigned before such commencement and any matter relating to such sequestration, assignment or person shall be dealt with as if this Act had not been passed; and provided further that if, before the said commencement, any action was taken under the said Act No. 32 of 1916 with a view to the surrender or sequestration of an estate but the surrender or sequestration was not effected before the said commencement, such action shall, after such commencement, be deemed to have been taken under this Act, in so far as this Act makes provision therefor.[Act 16 of 1943 provides for the following additional repeals in section 38:][“The Insolvency Ordinance, 1928 (Ordinance No. 7 of 1928), of the Territory, the Insolvency Law Amendment Proclamation, 1932 (Proclamation by the Administrator of the Territory No. 24 of 1932), and the Insolvency Ordinance Amendment Proclamation, 1933 (Proclamation by the Administrator of the Territory No. 21 of 1933), are hereby repealed: Provided that, if an estate was sequestrated or assigned in the Territory before the commencement of this Act, the sequestration or assignment and all proceedings in connection therewith shall be completed, and a person whose estate was sequestrated or assigned before such commencement and any matter relating to such sequestration, assignment or person shall be dealt with as if this Act had not been passed; and provided further that, if, before the said commencement, any action was taken under the said Ordinance No. 7 of 1928, with a view to the surrender or sequestration of an estate but the surrender or sequestration was not effected before the said commencement, such action shall, after such commencement, be deemed to have been taken under the principal Act, as amended by this Act, in so far as the principal Act so amended makes provision therefor.”][Additional repeals are made by section 8 of Act 6 of 1972:][Schedule][Laws Repealed]No. and year of Law | Short title. | Extent of repeal. |
---|---|---|
Act 24 of 1922 | South West Africa Affairs Act, 1922 . . . . . . . . | Section 5(2) |
Act 30 of 1941 | Workmen’s Compensation Act, 1941 . . . . . . . . | Section 99 |
Act 27 of 1945 | Workmen’s Compensation Amendment Act, 1945 . . . . | Section 35 |
Act 51 of 1956 | Workmen’s Compensation Amendment Act, 1956 . . . . | Section 27 |
Act 58 of 1962 | Income Tax Act, 1962 . . . . . . . . . . . . | Section 93bis |
Act 64 of 1962 | Pneumoconiosis Compensation Act, 1962 . . . . . . . | Section 123 |
Act 6 of 1963 | Income Tax Amendment Act, 1963 . . . . . . . . | Section 17 |
Act 3 of 1966 | Community Development Act, 1966 . . . . . . . . | Section 47 |
Act 30 of 1966 | Unemployment Insurance Act, 1966 . . . . . . . . | Section 59 |
Act 95 of 1967 | Income Tax Act, 1967 . . . . . . . . . . . . | Section 24 |
2. Definitions
In this Act unless inconsistent with the context -“account”, in relation to a trustee, means a liquidation, account or a plan of distribution or of contribution, or any supplementary liquidation account or plan of distribution or contribution, as the case may require;“banking institution” means a banking institution as defined in section 1 of the Banks Act, 1965 (Act No. 23 of 1965), and registered or provisionally registered or deemed to be registered as a banking institution in terms of section 4 of that Act, but does not include a provisionally registered banking institution which is so registered provisionally after the coming into operation of the Insolvency Amendment Act, 1972;[The definition of “banking institution” is inserted by Act 6 of 1972. The Banks Act 23 of 1965 has been replaced by the Banking Institutions Act 2 of 1998.]“building society” means a building society as defined in section 1 of the Building Societies Act, 1965 (Act No. 24 of 1965), and finally registered or deemed to be finally registered as a building society in terms of section 5 of that Act;[The definition of “building society” is inserted by Act 6 of 1972. The Building Societies Act 24 of 1965 has been replaced by the Building Societies Act 2 of 1986.]“Court” or “the Court”, in relation to any matter means the provincial or local division of the Supreme Court which has jurisdiction in that matter in terms of section one hundred and forty-nine or one hundred and fifty-one, or any judge of that division; and in relation to any offence under this Act or in section eight, twenty-six, twenty-nine, thirty, thirty-one, thirty-two, paragraph (a) of sub-section (3) of section thirty-four, seventy-two, seventy-three, seventy-five, seventy-six, seventy-eight or one hundred and forty-seven the expression “Court” or “the Court” includes a magistrate’s court which has jurisdiction in regard to the offence or matter in question;“debtor”, in connection with the sequestration of the debtor’s estate, means a person or a partnership or the estate of a person or partnership which is a debtor in the usual sense of the word, except a body corporate or a company or other association of persons which may be placed in liquidation under the law relating to companies;“disposition” means any transfer or abandonment of rights to property and includes a sale, lease, mortgage, pledge, delivery, payment, release, compromise, donation or any contract therefor, but does not include a disposition in compliance with an order of the Court;“free residue”, in relation to an insolvent estate, means that portion of the estate which is not subject to any right of preference by reason of any special mortgage, legal hypothec, pledge or right of retention;[definition of “free residue” amended by Act 16 of 1943 to delete the proviso]“Gazette” means the Republic of South Africa Government Gazette, butin the application of this Act to the mandated territory of South-West Africa, means the Official Gazette of the said mandated territory.[The definition of “Gazette” is inserted by Act 16 of 1943. The full stop at the end should be a semicolon.]“good faith”, in relation to the disposition of property, means the absence of any intention to prejudice creditors in obtaining payment of their claims or to prefer one creditor above another;“immovable property” means land and every right or interest in land or minerals which is registrable in any office in the Republic intended for the registration of title to land or the right to mine;“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;“insolvent estate” means an estate under sequestration;“magistrate” includes an additional magistrate and an assistant magistrate;“Master” in relation to any matter, means the Master of the Supreme Court within whose area of jurisdiction that matter is to be dealt with and includes an Assistant Master;“messenger” means a messenger of a magistrate’s court and includes a deputy-messenger;“movable property” means every kind of property and every right or interest which is not immovable property;“preference”, in relation to any claim against an insolvent estate, means the right to payment of that claim out of the assets of the estate in preference to other claims; and “preferent” has a corresponding meaning;“property” means movable or immovable property wherever situate within the Republic, and includes contingent interests in property other than the contingent interests of a fidei commissary heir or legatee;“Republic” includes the mandated territory of South-West Africa.[The definition of “Union” was inserted by Act 16 of 1943 and changed to a definition of “Republic” by virtue of the global substitution made by Act 99 of 1965, thus necessitating a change of placement to maintain correct alphabetical order. The full stop at the end should accordingly now be a semicolon.]“security”, in relation to the claim of a creditor of an insolvent estate, means property of that estate over which the creditor has a preferent right by virtue of any special mortgage, landlord’s legal hypothec, pledge or right of retention;“sequestration order” means any order of Court whereby an estate is sequestrated and includes a provisional order, when it has not been set aside;“sheriff” includes a deputy sheriff;“special mortgage” means a mortgage bond hypothecating any immovable property or a notarial mortgage bond hypothecating specially described movable property in terms of section one of the Notarial Bonds (Natal) Act, 1932 (Act No. 18 of 1932), but excludes any other mortgage bond hypothecating movable property;[definition of “special mortgage” inserted by Act 16 of 1943]“Supreme Court”, “Division of the Supreme Court” and “Provincial or Local Division of the Supreme Court”, include the High Court of South-West Africa;[definition of “‘Supreme Court’, ‘Division of the Supreme Court’ and ‘Provincial or Local Division of the Supreme Court’” inserted by Act 16 of 1943.]“the Territory” means the mandated territory of South-West Africa.[The definition of “the Territory” is inserted by Act 16 of 1943. The full stop at the end should be a semicolon.]“trader” means any person who carries on any trade, business, industry or undertaking in which property is sold, or is bought, exchanged or manufactured for purpose of sale or exchange, or in which building operations of whatever nature are performed, or an object whereof is public entertainment, or who carries on the business of an hotel keeper or boarding-house keeper, or who acts as a broker or agent of any person in the sale or purchase of any property or in the letting or hiring of immovable property; and any person shall be deemed to be a trader for the purpose of this Act (except for the purposes of sub-section (10) of section twenty-one) unless it is proved that he is not a trader as hereinbefore defined: Provided that if any person carries on the trade, business, industry or undertaking of selling property which he produced (either personally or through any servant) by means of farming operations, the provisions of this Act relating to traders only shall not apply to him in connection with his said trade, business, industry or undertaking;“trustee” means the trustee of an estate under sequestration, and includes a provisional trustee.[The definition of “Union” was inserted by Act 16 of 1943 and changed to a definition of “Republic” by virtue of the global substitution made by Act 99 of 1965, thus necessitating a change of placement to maintain correct alphabetical order.]3. Petition for acceptance of surrender of estate
4. Notice of surrender and lodging at Master’s office of statement of debtor’s affairs
5. Prohibition of sale in execution of property of estate after publication of notice of surrender and appointment of curator bonis
6. Acceptance by Court of surrender of estate
7. Withdrawal of notice of surrender
8. Acts of insolvency
A debtor commits an act of insolvency -9. Petition for sequestration of estate
10. Provisional sequestration
If the Court to which the petition for the sequestration of the estate of a debtor has been presented is of the opinion that prima facie -11. Service of rule nisi upon the debtor
12. Final sequestration or dismissal of petition for sequestration
13. Sequestration of partnership estate
14. Petitioning creditor to prosecute sequestration proceedings until trustee appointed
15. Compensation to debtor if petition malicious or vexatious
Whenever the Court is satisfied that a petition for the sequestration of a debtor’s estate is malicious or vexatious, the Court may allow the debtor forthwith to prove any damage which he may have sustained by reason of the provisional sequestration of his estate and award him such compensation as it may deem fit.16. Insolvent and spouse whose separate estate has not been sequestrated must deliver his business records and lodge statement of his affairs with Master
17. Notice of sequestration
18. Appointment of provisional trustee by Master
19. Attachment of property by deputy sheriff
20. Effect of sequestration on insolvent’s property
21. Effect of sequestration on property of spouse of insolvent
22. Payment of debts after sequestration
Every satisfaction in whole or in part of any obligation the fulfilment whereof was due or the cause of which arose before the sequestration of the creditor’s estate shall, if made to the insolvent after such sequestration, be void, unless the debtor proves that it was made in good faith and without knowledge of the sequestration.23. Rights and obligations of insolvent during sequestration
24. Provisions relating to property in possession of insolvent after sequestration
25. Estate to remain vested in trustee until composition or rehabilitation
26. Dispositions without value
27. Antenuptial contracts
28. ***
[section 28 deleted by Act 27 of 1943]29. Voidable preferences
30. Undue preference to creditors
31. Collusive dealings before sequestration
32. Proceedings to set aside improper disposition
33. Improper disposition does not affect certain rights
34. Voidable sale of business
35. Uncompleted acquisition of immovable property before sequestration
If an insolvent, before the sequestration of his estate, entered into a contract for the acquisition of immovable property which was not transferred to him, the trustee of his insolvent estate may enforce or abandon the contract. The other party to the contract may call upon the trustee by notice in writing to elect whether he will enforce or abandon the contract, and if the trustee has after the expiration of six weeks as from the receipt of the notice, failed to make his election as aforesaid and inform the other party thereof, the other party may apply to the Court by motion for cancellation of the contract and for an order directing the trustee to restore to the applicant the possession of any immovable property under the control of the trustee, of which the insolvent or the trustee gained possession or control by virtue of the contract, and the Court may make such order on the application as it thinks fit: Provided that this section shall not affect any right which the other party may have to establish against the insolvent estate, a non-preferent claim for compensation for any loss suffered by him as a result of the non-fulfilment of the contract.36. Goods not paid for which debtor purchased not on credit
37. Effect of sequestration upon a lease
38. Contract of service terminated by insolvency of employer
The sequestration of the estate of an employer shall terminate the contract of service between him and his employees, but any employee whose contract of service has been so terminated shall be entitled to claim compensation from the insolvent estate of his former employer for any loss which he may have suffered by reason of the termination of his contract of service prior to its expiration.39. Time and place of meetings of creditors
40. First and second meetings of creditors
41. General meetings of creditors
The trustee of an insolvent estate may at any time and shall, whenever he is so required by the Master or by a creditor or creditors representing one-fourth of the value of all claims proved against the estate, convene in the manner prescribed by sub-section (3) of section forty, a-meeting of creditors (hereinafter called a general meeting of creditors) for the purpose of giving him directions concerning any matter relating to the administration of the estate and shall state in such notice the matters to be dealt with at that meeting.[section 41 substituted by Act 99 of 1965]42. Special meetings of creditors
After the second meeting of creditors the trustee shall convene by notice in the Gazette a special meeting of creditors for the proof of claims against the estate in question whenever he is thereto required by any interested person who at the same time tenders to the trustee payment of all expenses to be incurred in connection with such a meeting.[section 42 substituted by Act 6 of 1972]43. A creditor may register his name and address with trustee
Any person who claims to be a creditor of an insolvent estate may register his name and address in the Republic, with the trustee of that estate upon payment to the trustee of a fee of R25. Thereupon the trustee shall send to that address a notice of every meeting of creditors of that estate, a copy of every account which he is submitting to the Master and a notice of the date, time and place of the sale of any property over which the creditor has a preferent right by virtue of a special mortgage, pledge or right of retention or a landlord's tacit or legal hypothec. Failure on the part of the trustee to comply with a provision of this section shall constitute a failure to perform his duties but shall not invalidate anything done under this Act.[section 43 substituted by Act 99 of 1965 and amended by Act 14 of 1985]44. Proof of liquidated claims against estate
45. Trustee to examine claims
46. Set-off
If two persons have entered into a transaction the result whereof is a set-off, wholly or in part, of debts which they owe one another and the estate of one of them is sequestrated within a period of six months after the taking place of the set-off, or if a person who had a claim against another person (hereinafter in this section referred to as the debtor) has ceded that claim to a third person against whom the debtor had a claim at the time of the cession, with the result that the one claim has been set-off, wholly or in part, against the other, and within a period of one year after the cession the estate of the debtor is sequestrated; then the trustee of the sequestrated estate may in either case abide by the set-off or he may, if the set-off was not effected in the ordinary course of business, with the approval of the Master disregard it and call upon the person concerned to pay to the estate the debt which he would owe it but for the set-off, and thereupon that person shall be obliged to pay that debt and may prove his claim against the estate as if no set-off had taken place.47. Right of retention and landlord’s legal hypothec
If a creditor of an insolvent estate who is in possession of any property belonging to that estate, to which he has a right of retention or over which he has a landlord’s legal hypothec, delivers that property to the trustee of that estate, at the latter’s request, he shall not thereby lose the security afforded him by his right of retention or lose his legal hypothec, if, when delivering the property, he notifies the trustee in writing of his rights and in due course proves his claim against the estate: Provided, that a right to retain any book or document of account which belongs to the insolvent estate or relates to the insolvent’s affairs shall not afford any security or preference in connection with any claim against the estate.48. Proof of conditional claim
A creditor whose claim against an insolvent estate is dependent upon a condition, may prove that claim in the manner set forth in section forty-four but subject to the following provisions:-49. Claims against partnership distinct from claims against partners
50. Arrear interest Debt due after sequestration
51. Withdrawal of claim already proved against estate
52. Voting at meeting of creditors
53. Questions upon which creditors may vote
54. Election of trustee
55. Persons disqualified from being trustees
Any of the following persons shall be disqualified from being elected or appointed a trustee:-56. Appointment of trustee. Security for his administration.
[The punctuation of the heading is reproduced as it appears in the Government Gazette.]57. Appointment of trustee or co-trustee by Master
58. Vacation of office of trustee
A trustee shall vacate his office -59. Court may declare a person disqualified from being a trustee, or remove a trustee
On the application of any person interested the Court may either before or after the appointment of a trustee, declare that the person appointed or proposed is disqualified from holding the office of trustee, and, if he has been appointed, may remove him from office and may in either case declare him incapable of being elected or appointed trustee under this Act during the period of his life or such other period as it may determine, if -60. Removal of trustee by Master
The Master may remove a trustee from his office on the ground -61. Leave of absence or resignation of trustee
At the request of a trustee the Master may permit him to absent himself from the Republic for a period longer than 60 days or may relieve him of his office, in either case upon such conditions as the Master may think fit to impose and subject to his giving such notice of his intention to be so absent from the Republic or to resign as the Master may direct.[section 61 substituted by Act 14 of 1985]62. Election of new trustee
63. Remuneration of trustee or curatorbonis
64. Insolvent and others to attend meetings of creditors
65. Interrogation of insolvent and other witnesses
66. Enforcing summonses and giving of evidence
67. Steps to be taken on suspicion of an offence
68. Presumption as to record of proceedings and validity of acts at meetings of creditors
69. Trustee must take charge of property of estate
70. Banking accounts and investments
71. Record of all receipts
72. Unlawful retention of moneys or use of property by trustee
73. Trustee may obtain legal advice
74. Improper advising or conduct of legal proceedings
If it appears to the Court that any attorney or counsel has, with intent to benefit himself, improperly advised the institution, defence or conducting of legal proceedings by or against an insolvent estate or has incurred any unnecessary expense therein, the Court may order the whole or part of the expense thereby incurred to be borne by that attorney or counsel personally.75. Legal proceedings against estate
76. Continuance of pending legal proceedings by surviving or new trustee
77. Recovery of debts due to estate
A trustee shall, in the notification of his appointment in the Gazette, in terms of sub-section (3) of section fifty-six, call upon all persons indebted to the estate of which he is trustee to pay their debts within a period and at a place mentioned in that notice, and if any such person fails to do so, the trustee shall forthwith recover payment from him, if need be by legal proceedings.78. Extension of time for payment or compounding of debts due to estate, and arbitration
79. Subsistence allowance for insolvent and family
At any time before the second meeting of creditors the trustee may, with the consent of the Master, allow the insolvent such moderate sum of money or such moderate quantity of goods out of the estate as may appear to the trustee to be necessary for the support of the insolvent and his dependants.80. Continuation of insolvent’s business
80bis. Sale of movable or immovable property on authorization of Master
81. Trustees report to creditors
82. Sale of property after second meeting and manner of sale
83. Realization of securities for claims
84. Special provision in case of goods delivered to a debtor in terms of an instalment sale transaction
85. Exclusion or limitation of preference under legal hypothec
86. Effect of general bond and general clause
No general mortgage bond registered after the thirty-first day of December, 1916, shall confer any preference in respect of immovable property, and no general clause in a mortgage bond hypothecating immovable property registered after the said date shall confer any preference in respect of any property: Provided that the preceding provisions of this section shall not affect any preference conferred by a general clause in any mortgage bond passed before the commencement of this Act by a widower or widow in favour of a Master, for the purpose of securing the payment to his or her child of any sum of money due to the child from the estate of the widower’s or widow’s deceased spouse.[section 86 amended by Act 16 of 1943]87. Ranking of mortgages for future debts
Priority under any mortgage bond to secure the payment of future debts shall depend on the date of the registration of that mortgage bond, and not on the date upon which any such debt comes into existence.88. Certain mortgages are invalid
A mortgage bond, other than a kustingsbrief, whether special or general, passed for the purpose of securing the payment of a debt not previously secured, which was incurred more than two months prior to the lodging of the bond with the registrar of deeds concerned for registration or for the purpose of securing the payment of a debt incurred in novation of or substitution for any such first-mentioned debt, shall not confer any preference if the estate of the mortgage debtor is sequestrated within a period of six months after such lodging: Provided that a mortgage bond shall be deemed not to have been lodged as aforesaid, if it was withdrawn from registration.89. Costs to which securities are subject
90. Land Bank not affected by this Act
The provisions of this Act shall not affect the provisions of any other law which confer powers and impose duties upon the Land and Agricultural Bank of South Africa or the Land and Agricultural Bank of South West Africa in relation to any property belonging to an insolvent estate.[section 90 amended by Act 16 of 1943]91. Liquidation account and plan of distribution or contribution
Subject to the provisions of sections one hundred and nine and onehundred and ten, a trustee shall within a period of six months as from the date of his appointment, submit to the Master a liquidation account and a plan of distribution of the proceeds of the property in the estate available for payment to creditors, or, if all realizable property in the estate has been realized and brought to account and the proceeds are insufficient to cover the costs and charges mentioned in section ninety-seven, a plan of contribution apportioning the liability for the deficiency among the creditors who are liable to contribute.[section 91 substituted by Act 99 of 1965]92. Manner of framing liquidation account
93. Trading account
If the trustee has carried on any business on behalf of the estate, he shall submit to the Master, in addition to the liquidation account, a trading account containing the following data and no others, namely -94. Form of plan of distribution
A plan of distribution shall show in parallel columns under separate headings -95. Application of proceeds of securities
96. Funeral and death-bed expenses
97. Cost of sequestration
98. Costs of execution
99. Preference in regard to certain statutory obligations
100. Salary or wages of former employees of insolvent
101. Preference in regard to taxes on persons or the incomes or profits of persons
Thereafter any balance of the free residue shall be applied in paying -102. Preference under a general bond
Thereafter any balance of the free residue shall be applied in the payment of any claims proved against the estate in question which were secured by a general mortgage bond, in t heir order of preference, with interest thereon calculated in manner provided in sub-section (2) of section one hundred and three.103. Non-preferent claims
104. Late proof of claims
105. Form of plan of contribution
A plan of contribution shall show in parallel columns 106. Contributions by creditors towards cost of sequestration when free residue insufficient
Where there is no free residue in an insolvent estate or when the free residue is insufficient to meet all the expenses, costs and charges mentioned in section ninety-seven, all creditors who have proved claims against the estate shall he liable to make good any deficiency, the non-preferent creditors each in proportion to the amount of his claim and the secured creditors each in proportion to the amount for which he would have ranked upon the surplus of the free residue, if there had been any; Provided that -[The Government Gazette uses a semicolon rather than a colon before the proviso.]107. Trustee’s account to be signed and verified
A trustee shall sign every account which he submits to the Master and he shall verify by his affidavit (which shall be free from stamp duty) that the account is a full and true account of the administration of the estate in question up to the date of the account and that, so far as he is aware, all the assets of the estate have been disclosed in the account.108. Inspection of trustee’s accounts by creditors
109. Extension of period for submission of account by trustee
110. Compelling trustee to submit accounts
111. Objections to trustee’s account
112. Confirmation of trustee’s accounts
When a trustee’s account has been open to inspection by creditors as hereinbefore prescribed and -113. Distribution of estate and collection of contributions from creditors
114. Trustee to produce acquittances for dividends or to pay over unpaid dividends to Master
115. ***
[section 115 deleted by Act 99 of 1965]116. Surplus to be paid into Guardians’ Fund until rehabilitation of insolvent
116bis. Failure by trustee to submit account or to perform duties
117. Enforcement of order of Court
118. Enforcing payment of contributions
119. Composition
120. Effect of composition
121. If insolvent partner enters into composition, trustee of partnership estate may take over his estate
122. Effect of composition on spouse of the insolvent
A composition shall not be binding on the separate creditors of the spouse of the insolvent concerned; but upon the acceptance of the offer of composition the property or, if it has been realized, the proceeds of the property of that spouse shall be restored to her or him, without prejudice to the claims of the creditors of that spouse or to any right of preference of any of them at the time when the property was vested in the trustee: Provided that any movable property held as security by any such creditor when the property was vested in the trustee shall be restored to that creditor; and provided further that the proceeds of any security whatsoever which has been realized shall be paid to the person or persons entitled thereto, according to their rights.123. Functions of trustee under composition
124. Application for rehabilitation
125. Security to be furnished prior to application for rehabilitation
Not less than three weeks before applying to the court for his rehabilitation an insolvent shall furnish to the registrar of the court security, to the amount or value of R500, for the payment of the costs of any person who may oppose the rehabilitation and be awarded costs by the court.[section 125 substituted by Act 14 of 1985]126. Facts to be averred on application for rehabilitation
In support of an application for his rehabilitation, an insolvent shall submit his affidavit that he has made a complete surrender of his estate and has not granted or promised any benefit whatever to any person or entered into any secret agreement with intent to induce his trustee or any creditor not to oppose the rehabilitation. Such affidavit shall include a statement of his assets and liabilities and of his earnings at the date of the application. Information shall also be laid before the Court as to what dividend was paid to his creditors, what further assets in his estate are available for realization and the estimated value thereof, the total amount of all claims proved against his estate, and the total amount of his liabilities at the date of the sequestration of his estate. If application for rehabilitation is made pursuant to sub-section (1) of section one hundred and twenty-four the insolvent shall set out the particulars of the composition and shall state whether there are or are not creditors whose claims against his estate have not been proved, and if there are such creditors, he shall state their names and addresses and particulars of their claims.127. Opposition to or refusal by Court of rehabilitation
127A. Rehabilitation by effluxion of time
Any insolvent not rehabilitated by the court within a period of ten years from the date of sequestration of his estate, shall be deemed to be rehabilitated after the expiry of that period unless a court upon application by an interested person after notice to the insolvent orders otherwise prior to the expiration of the said period of ten years or before the 31st December, 1972, whichever date is the later.[section 127A inserted by Act 6 of 1972]128. Partnership cannot be rehabilitated
A partnership whose estate has been sequestrated shall not be rehabilitated.129. Effect of rehabilitation
130. Illegal inducements to vote for composition or not to oppose rehabilitation
Any undertaking to grant any benefit to any person in order to induce him or any other person to accept an offer of composition or to agree to, or refrain from opposing the rehabilitation of an insolvent, or as a consideration for the acceptance of an offer of composition or for the agreement to or non-opposition of the rehabilitation of an insolvent (whether by the person for whom the benefit is intended or by any other person), shall be void and any person who has accepted any such benefit or who has stipulated for any such benefit, whether for himself or any other person shall be liable to pay by way of penalty for the benefit of the creditors of the insolvent estate in question -131. Recovery of penalty
The trustee may enforce and recover any penalty mentioned in section one hundred and thirty and if he fails to do so any creditor may do so in the name of the trustee, upon his indemnifying the trustee against all costs in connection with such action.132. Concealing or destroying books or assets
An insolvent shall be guilty of an offence and liable to imprisonment for a period not exceeding three years if at any time before or after the sequestration of his estate he does any of the following acts, unless it is proved that he ha d no intention to defraud; that is to say, if he -133. Concealment of liabilities or pretext to existence of assets
An insolvent shall be guilty of an offence and liable to imprisonment for a period not exceeding three years if, within two years immediately preceding the sequestration of his estate, when making any statement either verbally or in writing in regard to his business, property or affairs to any person who was then his creditor or to any person who became his creditor on the faith of such a statement, he concealed any liability, present or future, certain or contingent, which he may then have contracted, or failed to disclose the full extent of his liability or mentioned, as if it were an asset, any right or property which at the time was not an asset, or represented that he had more assets than he in fact had or made any false statement in regard to the amount, quality or value of his assets, or in any way concealed or disguised or attempted to conceal or disguise any loss which he had sustained, or gave any incorrect amount thereof, unless it is proved that he had good reason to believe that the said statement was correct in every respect and that he was not concealing or failing to disclose or disguising any relevant fact.134. Failure to keep proper records
135. Undue preferences, contracting debts without expectation of ability to pay, etc.
136. Failure to give information or to deliver assets, books, etc.
An insolvent shall be guilty of an offence and liable to imprisonment for a period not exceeding three years -137. Obtaining credit during insolvency, offering inducements, etc.
Any person shall be guilty of an offence and liable to imprisonment for a period not exceeding one year -138. Failure to attend meetings of creditors or give certain information
An insolvent shall be guilty of an offence and liable to imprisonment for a period not exceeding six months -138bis. Presumption in case of prosecution for failure to notify change of address
If in any prosecution for a contravention of paragraph (d) of section one hundred and thirty-eight it is proved that the insolvent has changed his residential or postal address it shall, unless the contrary is proved, be presumed that he has failed to notify the trustee of such change.[section 138bis inserted by Act 99 of 1965]139. Failure to appear or to give evidence or giving false evidence
140. Failure of insolvent or spouse to appear to give evidence
An insolvent or the spouse of an insolvent shall be guilty of an offence and liable to imprisonment for a period not exceeding six months if, when summoned to give evidence in any proceedings instituted by or against the trustee of the insolvent’s estate he or she conceals himself or herself or quits the Republic or without reasonable excuse fails to attend those proceedings or refuses to answer any question which may be lawfully put to him or her in the course of those proceedings.141. Acceptance of consideration for certain illegal acts or omissions
Any person shall be guilty of an offence and liable to a fine not exceeding R500 or to imprisonment without the option of a fine for a period not exceeding six months if he accepts any benefit or the promise or offer of any benefit as a consideration for having refrained from or discontinued, or for his undertaking to refrain from or to discontinue any proceedings for the sequestration of an estate or for having agreed to or not opposed, or for his undertaking to agree to or not to oppose a composition in an insolvent estate or the rehabilitation of an insolvent, or for having refrained or undertaken to refrain form investigating any matter relating to an insolvent or an insolvent estate or from disclosing any information in regard to an insolvent or an insolvent estate.[Section 141 is substituted by Act 14 of 1985. The word “form” should be “from” in the phrase “to refrain form investigating”.]142. Removing or concealing property to defeat an attachment or failure to disclose property
143. Criminal liability of partners, administrators, servants or agents
144. Criminal liability of trustee for neglect of certain duties
If it was the duty of a trustee to submit an account to the Master or to pay a sum of money to the Master or to a creditor, and he failed to submit that account or to pay that sum of money within a period of two months as from the time when that duty arose, he shall (apart from any other offence which he may have committed in connection with such sum of money) be guilty of an offence and ·liable to a fine not exceeding R500.[section 144 substituted by Act 14 of 1985]145. Obstructing trustee
Any person who obstructs or hinders a curator bonis appointed under this Act or a trustee or a representative of either in the performance of his functions as such shall be guilty of an offence and liable to a fine not exceeding R500, or to imprisonment without the option of a fine for a period not exceeding six months.[section 145 substituted by Act 14 of 1985]146. Evidence of liability incurred by insolvent
Whenever in any criminal proceedings under this Act any liability incurred by an insolvent or the date or time when the liability was incurred, is in issue or relevant to the issue, proof that a claim in respect of that liability has been admitted against the estate of the insolvent in accordance with any provision of this Act shall be sufficient evidence of the existence of the liability and any such liability shall be deemed to have been incurred upon the date or at the time alleged in any document submitted in accordance with any provision of this Act in support of that claim: Provided that the accused or the prosecutor in those proceedings may prove that no such liability or that a lesser or a greater liability was incurred or that it was incurred on a date or at a time other than the date or time so alleged.147. Offences committed by insolvent in different provinces may be tried at his place of business or residence
148. Deportation of certain persons for certain offences
If a person born elsewhere than in a part of South Africa which has been included in the Republic, has been convicted of an offence under this Act or under the Insolvency Act, 1916 or under the Insolvency Ordinance, 1928 (Ordinance No. 7 of 1928 of the Territory), and in view of the circumstances of the offence the Minister of Justice deems him to be an undesirable inhabitant of the Republic, the said Minister may, by warrant under his hand cause him to be removed from the Republic and pending his removal, to be arrested and detained in custody.[section 148 amended by Act 16 of 1943]149. Jurisdiction of the Court
150. Appeal
151. Review
Subject to the provisions of section fifty-seven any person aggrieved by any decision, ruling, order or taxation of the Master or by a decision, ruling or order of an officer presiding at a meeting of creditors may bring it under review by the Court and to that end may apply to the Court by motion, after notice to the Master or to the presiding officer, as the case may be, and to any person whose interests are affected: Provided that if all or most of the creditors are affected, notice to the trustee shall be deemed to be notice to all such creditors; and provided further that the Court shall not re-open any duly confirmed trustee’s account otherwise than as is provided in section one hundred and twelve.[section 151 amended by Act 99 of 1965]151bis. Costs of review
If the court reviewing any matter referred to in section one hundred and fifty-one confirms any decision, ruling, order or taxation of the Master or officer referred to in that section the costs of the applicant for the review of that matter shall not be paid out of the assets of the estate concerned unless the Court otherwise directs.[section 151bis inserted by Act 99 of 1965]152. Master may direct trustee to deliver documents or property or call upon any person to furnish certain information
153. Fees of office and certain costs
154. Custody of documents. Admissibility of copies or certificates.
[The punctuation of the heading is reproduced as it appears in the Government Gazette.]155. Destruction of Documents
[The word “Documents” should not be capitalised.]156. Insurer obliged to pay third party’s claim against insolvent
Whenever any person (hereinafter called the insurer) is obliged to indemnify another person (hereinafter called the insured) in respect of any liability incurred by the insured towards a third party, the latter shall, on the sequestration of the estate of the insured, be entitled to recover from the insurer the amount of the insured’s liability towards the third party but not exceeding the maximum amount for which the insurer has bound himself to indemnify the insured.157. Formal defects
158. Regulations
The State President may from time to time make regulations not inconsistent with the provisions of this Act, prescribing -158bis. State President may amend First Schedule
The State President may by proclamation in the Gazette amend the First Schedule.[section 158bis inserted by Act 50 of 1956]158ter. Application of Act to South-West Africa
This Act and any amendment thereof shall apply also in the Territory, including that portion of the Territory known as the Eastern Caprivi Zipfel and referred to in sub-section (3) of section three of the South-West Africa Affairs Amendment Act, 1951 (Act No. 55 of 1951).[Section 158ter is inserted by Act 99 of 1965, with this insertion deemed to have come into force on 1 July 1943 (section 47(2) of Act 99 of 1965).]159. Short title and date of commencement
This Act shall be called the Insolvency Act, 1936, and shall come into operation on the first day of July, 1936.[Transitional provisions regarding the impact of amendments to the Act on estates sequestrated provisionally or finally before the date of such amendments have not been recorded here.]History of this document
15 March 2023 this version
Amended by
Abolition of Payment by Cheque Act, 2022
15 February 2023
23 February 1999
01 April 1986
09 October 1985
Amended by
Insolvency Amendment Act, 1985
25 June 1980
Amended by
Insolvency Amendment Act, 1980
29 June 1978
Amended by
Sales Tax Proclamation, 1978
28 June 1978
Amended by
Sales Tax Act, 1978
29 November 1974
Amended by
Income Tax Act, 1974
15 March 1974
Amended by
General Law Amendment Act, 1974
27 June 1973
Amended by
General Law Amendment Act, 1973
01 April 1973
01 December 1972
28 June 1972
Amended by
Income Tax Act, 1972
08 March 1972
Amended by
Insolvency Amendment Act, 1972
01 August 1971
07 July 1965
Amended by
Insolvency Amendment Act, 1965
20 February 1963
Amended by
Income Tax Amendment Act, 1963
15 December 1961
07 July 1961
Amended by
Income Tax Act, 1961
01 July 1960
01 June 1960
Amended by
Finance Act, 1960
01 April 1960
Amended by
Farmers' Assistance Amendment Act, 1960
01 January 1960
Amended by
Merchant Shipping Act, 1951
19 October 1956
22 June 1956
Amended by
General Law Amendment Act, 1956
06 July 1955
Amended by
General Law Amendment Act, 1955
04 June 1952
Amended by
General Law Amendment Act, 1952
01 April 1944
Amended by
Insurance Act, 1943
01 July 1943
Amended by
Insolvency Law Amendment Act, 1943
Commenced
01 May 1942
Amended by
Hire-Purchase Act, 1942
01 July 1941
Amended by
Income Tax Act, 1941
20 May 1940
Amended by
Income Tax Act, 1940
30 September 1938
Amended by
Finance Act, 1938
24 June 1936
Cited documents 5
Act 5
1. | Public Accountants’ and Auditors’ Act, 1951 | 200 citations |
2. | Employees’ Compensation Act, 1941 | 101 citations |
3. | Income Tax Amendment Act, 1963 | 3 citations |
4. | Workmen’s Compensation Amendment Act, 1945 | 3 citations |
5. | Workmen’s Compensation Amendment Act, 1956 | 2 citations |
Documents citing this one 729
Gazette 658
Judgment 39
Act 22
1. | Administration of Estates Act, 1965 | 1828 citations |
2. | Local Authorities Act, 1992 | 1329 citations |
3. | Close Corporations Act, 1988 | 546 citations |
4. | Companies Act, 2004 | 445 citations |
5. | Prevention of Organised Crime Act, 2004 | 360 citations |
6. | Banking Institutions Act, 1998 | 224 citations |
7. | Social Security Act, 1994 | 88 citations |
8. | Merchant Shipping Act, 1951 | 58 citations |
9. | Value-Added Tax Act, 2000 | 56 citations |
10. | Usury Act, 1968 | 42 citations |
Law Reform Report 7
Government Notice 1
1. | Tender Board Regulations, 1996 |
Ordinance 1
1. | Atmospheric Pollution Prevention Ordinance, 1976 |
Proclamation 1
1. | Executive Powers (Justice) Transfer Proclamation, 1979 |