Insolvency Act

consolidated text (as at 2017, amended since). juris shows the text as it was consolidated; it does not confirm that this is the law in force today.

Later amending instruments held: Finance (Miscellaneous Provisions) Act 2018 (Act No 11 of 2018), Business Facilitation (Miscellaneous Provisions) Act 2019 (Act No 14 of 2019), Covid-19 (Miscellaneous Provisions) Act 2020, Finance (Miscellaneous Provisions) Act 2020, Finance (Miscellaneous Provisions) Act 2021 (Act No 15 of 2021), Finance (Miscellaneous Provisions) Act 2023 (Act No 12 of 2023).

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Sections

1 Short title
2 Interpretation
3 Application of Act
PART II: BANKRUPTCY AND ALTERNATIVES
4 Adjudication
5 Creditor’s petition
6 Bankruptcy notice
7 Overstatement in bankruptcy notice
8 Failure to comply with bankruptcy notice
9 Adjournment of petition or refusal to adjudicate
10 Judgment under appeal
11 Underlying debt not determined
12 Court’s power where more than one petition or more than one debtor
13 Order on disposition of property or proposal or summary instalment order
14 Substitution of creditor
15 Debtor’s petition
16 Order on debtor’s petition
17 Report of Insolvency Service
18 Debtors’ joint petition
19 Summary administration
20 Appointment of Official Receiver as Interim Receiver
21 Date of adjudication and disqualification of bankrupt
22 Procedure following adjudication
23 Stay of proceedings
24 Execution process after adjudication
25 Statement of affairs
26 Meeting of creditors
27 Appointment of expert and inspection of documents
28 Bankrupt’s death after adjudication
29 Bankrupt’s estate
30 Vesting in Official Receiver
31 Property acquired after adjudication
32 Transaction in good faith and for value
33 Rights under execution or attachment
34 Duties of usher as to goods seized
35 Bona fide transaction without notice
36 Immovable property
37 Transfer of shares and other securities
38 Goods on hire purchase
39 Second bankruptcy
40 General duties of bankrupt
41 Financial information
42 Contribution to payment of debts
43 Bankrupt entering business
44 Search and seizure of property
45 Vacation of property
46 Right to inspect document
47 Recovery of property or release or discharge
48 Defeating beneficial interest
49 Bank accounts
50 Allowance to bankrupt
51 Examination of bankrupt and others
52 Public examination of bankrupt
53 Documents and other records
54 Official Receiver’s powers
55 Bank account and investment
56 Official Receiver’s discretion
57 Automatic discharge
58 Application for discharge
59 Official Receiver’s report
60 Notice of opposition to discharge
61 Grant or refusal of discharge
62 Engaging in business after discharge
63 Reversal of order of discharge
64 Conditions of discharge too onerous
65 Release from debts
66 Other effects of discharge
67 Annulment
68 Effect of annulment
69 Preliminary resolution
70 Confirming resolution
71 Composition with members of partnership
72 Court to approve composition
73 Deed of composition
74 Unpaid balance of debt
75 Deadlines for steps to approve composition and execute deed
76 Procedure following entry of deed
77 Enforcement of composition
78 Interpretation of section B
79 Making of proposal
80 Filing of proposal
81 Meeting of creditors
82 Court to approve proposal
83 Enforcement steps
84 Duty of insolvent and trustee
85 Cancellation or variation of proposal
86 Application for order
87 Making of order
88 Additional order
89 Appointment of supervisor
90 Role of supervisor
91 Proceedings against debtor
92 Proof of debt
93 Payment of debtor’s earnings to supervisor
94 Distribution of money paid by debtor
95 Default by debtor
PART III: WINDING UP AND ALTERNATIVES
96 Application of Sub-Part I
97 Contributories
98 Leave of Court
99 Outstanding assets
100 Modes of winding up
101 Commencement of winding up
102 Petition for winding up
103 Preliminary costs
104 Power of Court on petition for winding up
104A Order following petition by person other than Director or Registrar of
104A Order following petition by person other than inserted by Act No 4 of 2017
PART III: WINDING UP AND ALTERNATIVES
105 Proceedings against company
106 Property of company
107 Lodging and service of order
108 Appointment of provisional liquidator
109 Qualifications of liquidator other than Official Receiver
110 Control of liquidator by Official Receiver
111 Remuneration of liquidator
112 Custody and vesting of company’s property
113 Statement of company’s affairs
114 Liquidator’s report
115 Principal duty of liquidator
116 Liquidator not required to act in certain cases
117 Other duties of liquidator
118 Powers of liquidator
119 Document in possession of receiver
120 Document creating charge over property
121 Powers of Court
122 Release of liquidator and dissolution of company
123 Committee of inspection in winding up by Court
124 List of contributories
125 Liability of present and past shareholders
126 Death or bankruptcy of contributory
127 Payment of debt due by contributory
128 Special manager
129 Receiver for debenture holders or creditors
130 Creditors’ claims
131 Power of arrest
132 Foreign companies
133 Pooling of assets of related companies
134 Guidelines for orders
135 Duty to identify and deliver property
136 Refusal to supply essential service
137 Circumstances for voluntary winding up
138 Effect of voluntary winding up(cid:3)
139 Declaration of solvency(cid:3)
140 Liquidator in shareholders’ winding up(cid:3)
141 Insolvency of company(cid:3)
142 Creditors’ meeting(cid:3)
143 Liquidator in creditors’ winding up(cid:3)
144 Committee of inspection in voluntary winding up(cid:3)
145 Property and proceedings(cid:3)
146 Distribution of property(cid:3)
147 Appointment and removal of liquidator(cid:3)
148 Powers and duties of liquidator in voluntary winding up
149 Sale of company’s property
150 Annual meeting of shareholders and creditors
151 Final meeting and dissolution in voluntary winding up
152 Arrangement binding on creditors
153 Costs
154 Effect of liquidation
155 Application to Court
156 Powers of Official Receiver
157 Notice of appointment and address of liquidator
158 Payment into bank by liquidator
159 Liquidator’s accounts
160 Default by liquidator
161 Notification of liquidation
162 Books of company
163 Investment of surplus funds
164 Unclaimed assets
165 Expenses of winding up where assets insufficient
166 Resolution at adjourned meeting of creditors and contributories
167 Meetings to ascertain wishes of creditors or contributories
168 Completion of liquidation
169
170 Right of creditor to complete execution, distraint or attachment
171 Duties of usher in execution process
172 Consent to appointment and validity of act of liquidator
173 Vacancy in office of liquidator
174 Court supervision of liquidation
175 Order to enforce or relieve liquidator from compliance
176 Prohibition order
177 Meaning of “failure to comply”
178 Meaning of “inability to pay debts”
179 Evidence of inability
180 Statutory demand
181
182 Interpretation of Sub-Part III
183 Appointment of receiver
184 Qualifications of receiver
185 Appointment of receiver under instrument
186 Appointment of receiver by Court
187 Notice of appointment of receiver
188 Notice of receivership
189 Vacancy in office of receiver
190 Powers of receiver
191 Precedence among receivers
192 Power to make call on shares
193 Execution of documents(cid:3)
194 Obligations of company and directors(cid:3)
195 Validity of act of receiver(cid:3)
196 Consent of mortgagee to sale of property(cid:3)
197 General duties of receiver(cid:3)
197A Remuneration of receiver
197A Remuneration of receiver inserted by Act No 4 of 2017
PART III: WINDING UP AND ALTERNATIVES
198 First report by receiver
199 Further report by receiver
200 Extension of time for preparing reports
201 Persons entitled to receive reports
202 Duty to notify breaches of Acts
203 Notice of end of receivership
204 Preferential claims
205 Powers of receiver on liquidation
206 Liability of receiver
207 Relief from liability
208 Court supervision of receiver
209
210 Order to enforce receiver’s duties
211 Order for protection of property in receivership
212 Refusal to provide essential service
213 Scope of Sub-Part IV
213A Interpretation of Sub-Part IV
214 Administration
215 Appointment of administrator
216 Appointment of 2 or more administrators
217 Remuneration of administrator
218 Vacancy in office of administrator
219 Resignation and removal of administrator
220 New administrator to fill vacancy
221 Creditors to consider appointment of replacement administrator
222 Administrator’s role
223 Administrator’s powers
224 Effect on company officers
225 Effect on employees
226 Effect on dealing with company property
227 Effect on transfer of shares
228 Investigation of company’s affairs
229 Directors’ statement
230 Right to obtain documents and information
231 Report by administrator
232 Administrator to call creditors’ meetings
233 Power of Court regarding creditors’ meeting
234 First creditors’ meeting
235 Function of creditors’ committee
236 Membership of creditors’ committee
237 Watershed meeting
237A Power of Court to cram down inserted by Act No 7 of 2020
PART III: WINDING UP AND ALTERNATIVES
238 Pooled property owners
239 Adjournment of watershed meeting
240 Decisions at watershed meeting
241 Proposed deed not fully approved
242 Charge unenforceable
243 Recovery of property
244 Proceedings in Court
245 Refusal of administrator’s consent
246 Enforcement process
247 Duties of Court Officer in relation to company’s property
248 Lis pendens taken to exist
249 Liability of director or relative
250 Interpretation of Section E
251 Leave to enforce security
252 Recovery of property before administration
253 Appointment of liquidator to company in administration
254 Act of administrator
255 Deed administrator
256 Vacancy of office, resignation or removal
257 Remuneration of deed administrator
258
259 Application of Section G
260 Preparation and contents of deed
261 Execution of deed
262 Procedure if deed not fully approved
263 Act of creditor
264 Company’s failure to execute deed
265
266 Extent to which deed binds creditors
267 Prohibited acts
268 Enforcement of charge or recovery of property
269 Effect of deed on company’s debts
270
271 Variation of deed by creditors
272 Termination of deed
273 Termination by Court
274 Termination by creditors
275 Creditors’ meeting to consider proposed variation or termination of
276 Liability for debt
277 Non-use notice
278 Administrator’s indemnity
279 Court’s general power
280 Order to protect creditor during administration
281
282
283
284 Order to remedy default
285 Court’s power when office of administrator or deed administrator vacant
286 Prohibition order
287 Notice of appointment
288 Notice of execution of deed of company arrangement
289 Notice of failure to execute deed of company arrangement
290 Notice of termination by creditors of deed of company arrangement
291 Notice of fact of administration
292 Notice of change of name
293 Effect of contravention of Section I
294 Interpretation of Sub-Part V
295 Companies Supervisory Committee
296 Objects and conduct of Companies Supervisory Committee
297 Notice to prescribed company
298 Obligation to consult with Director
299
300
301
302 Advice and assistance
303
PART IV: PROVISIONS APPLICABLE TO BANKRUPTCY AND WINDING UP
304 Interpretation of Part IV
305 Provable debt and proof of debt
306 Procedure for proving debts
307 Uncertain proof
308 Proof of debt payable 6 months or more after adjudication or winding
309 Mutual credit and set-off
310 Interest on claims
311 Power to disclaim onerous property
312 Requirement to elect whether to disclaim
313 Voidable preference
314 Voidable charge
315 Charge or security for new consideration
316 Presumption that debtor unable to pay due debts
317 Security for unpaid purchase price given after sale of property
318 Appropriation of payment by debtor to charge holder
319 Alienation of property with intent to defraud a creditor
320 Voidable gift
321 Procedure for setting aside voidable transaction
322
323 Limits on recovery
324 Transaction with debtor for inadequate or excessive consideration
325
326 Court’s power in relation to debtor’s contribution
327 Use of repayment of debtor’s contribution to property
328 Priority of payments for distribution of debtor’s assets
329 Payment of remaining money to general creditors
330 Payment of surplus to debtor
331 Declaration of dividends
332 Right of personal creditors of partners
333
334 Final dividend
335 Definition of undistributed money
336 Undistributed money
337 Application of general fund
PART V: NETTING ARRANGEMENTS IN FINANCIAL CONTRACTS
338 Interpretation of Part V
339 General rule
340 Limitation on obligation to make payment or delivery
341 Limitation on right to receive payment or delivery
342 Limitation on power of liquidator
343 Limitation of insolvency law prohibiting set-off
344 Preference and fraudulent transfer
345 Pre-emption
346 Realisation and liquidation of collateral
347 Scope of Sub-Part II
348 Limitation on non-insolvent party’s right to receive payment
349 Limitation on foreign party’s right to receive payment
350 Limitation on multi-branch netting agreement relating to collateral arrangement
351 Sub-Part IV and applicable law
352 Primary rule
353 Fall-back rules
354
355 Protection of rights on change of applicable law
356 Insolvency
357 General applicability of Part V
358 Public policy and internationally mandatory rules
359 Determination of applicable law for multi-unit States
360 Uniform interpretation
361 Priority between interests in respect of securities held with intermediary
362 Account agreements and securities accounts
363 Force of this Part
PART VI: CROSS-BORDER INSOLVENCY
364 Interpretation of Part VI
365 Further provision relating to interpretation
366 Application of Model Law
367 Power to make rules
368 Power to make regulations
PART VII: INSOLVENCY SERVICE
369 Insolvency Service
370 Director of Insolvency Service
371 Official Receiver and Deputy Official Receivers
372 Office and name of Official Receiver
373 Vacation of office of Official Receiver
374 Register of Insolvency Practitioners
375 Conduct and performance of Insolvency Practitioners
376
376A Sanction against Insolvency Practitioner by Director
376A Sanction against Insolvency Practitioner by Director inserted by Act No 4 of 2017
PART VII: INSOLVENCY SERVICE
377 Disclosure to, and consultation with, Director
378
PART VIII: OFFENCES
379 Offences in relation to debts
380 Offences involving fraud
381 Failure to keep proper record
382 Other offences
383 Offences relating to winding up
384
385 Interference with documents
386 Phoenix company
387 Exception to section 386
388 Acting in breach of prohibition order
389 False or misleading statement
390 Creditor’s fraudulent act
391 Offence of obtaining credit
392 Dealing with company property
393 Failure to comply with section 298, 299 or 300
394 Disclosure of notice
395 Failure to give notice under section 374
396 False proof by creditor
397 Contravention of Act
398 General penalty
399 Jurisdiction
400 Liability after discharge or composition
PART IX: MISCELLANEOUS
401 Power of Court
402 Irregularity in proceedings
403 Power to grant relief
403A Appeals inserted by Act No 14 of 2019
PART IX: MISCELLANEOUS
404 Duty and liability of agent
405 Costs and fees of Official Receiver
406 Confidentiality
407 Protection from liability
408 Service of documents
409 Deposition as evidence
410 Time of payment in insolvency
411 Regulations
412 Fees payable to Director
413 Repeals
415 Transitional provisions
FIRST SCHEDULE
1 Methods of holding meetings
2 Notice of meeting
3 Chairman
4 Quorum
5 Voting
6 Proxies
7 Official Receiver or liquidator to report to meeting
8 Attending a creditors’ meeting
9
10 Attendance by non-creditors
11 Minutes
12
13 Other proceedings
SECOND SCHEDULE
1
2
3
4
5
6
7
8
9
10
11
12 (1) This section applies if a secured creditor values the property subject to
13 Where a secured creditor does not either realise or surrender his security, he
14
15
16 Where a creditor after having valued his security subsequently realises it,
17
18
19
20 Where a debtor was at the date of adjudication or on the commencement of
21
22 On any debt or sum certain, payable at a certain time or otherwise, whereon
23
24 (1) The Official Receiver in the case of a bankruptcy or liquidator in the
25
26
27
28
29
30
31
32 On an application under paragraph 27 or paragraph 28 or paragraph 29 or
33
34
35
36
37
THIRD SCHEDULE
1 Notice of examination
2 Time for holding examination
3
4 Conduct of examination
5 Record of examination
6 When examination ends
7 Bankrupt’s failure to attend examination
8 Bankrupt’s expenses in attending examination
9
10 Meaning of associate
11 No privilege against self-incrimination
12 Statement made by person examined or questioned not generally admissible
13 Representation
FOURTH SCHEDULE
1 Priority of payments to preferential creditors
2 Conditions to priority of payments to preferential creditors
3 Provisions concerning preferential payments to employees
4
5 Priority given to person who distrains on goods
6 Duty of receiver of floating charge and meaning of “floating charge”
7
8 Provisions of this Schedule to prevail where conflict with the Code Civil
SEVENTH SCHEDULE
1 Frequency of meetings
2 Majorities
3 Resignation
4 Office becoming vacant
5 Removal of a member
6 Vacancy filled
7
EIGHTH SCHEDULE
1
2 Without limiting the generality of paragraph 1, but subject to any provision of
3
4
TENTH SCHEDULE
1
2
3
4
5 Search of public registers
6
7 Insolvency Service and Official Receiver not liable for act or omission