Section 6 (1) of the Insolvency Act requires the insolvent debtor to satisfy the court that sequestration will be to the advantage of the creditors. This onus is difficult to discharge, as many insolvent debtors do not have sufficient assets to provide for the benefit of creditors.
There are many fundamental rights in the Constitution that the Insolvency Act poses a threat to, including section 9, the right to equality. One must keep in mind that even if a right is being inflicted upon, it does not automatically make that legislation constitutionally invalid. Section 36 of the Constitution, the limitation clause, allows for limitation of certain rights, if it reasonable and justifiable.
If it is proved that this right is restricted in terms of s36, then it is of the utmost importance to pay regard to requirements of s36. The limitation is supposed to be reasonable and justifiable based on human dignity, equality and freedom. Certain factors are taken into account, including if there are less restrictive means to achieve this purpose. It is apparent that the requirement in terms of voluntary surrender is too restrictive and there are other possibilities to achieve this purpose. It is submitted that the Insolvency Act should be amended to ensure that all debtors and creditors be able to obtain sequestration, regardless of whether or not they have proved advantage to creditors and that the law needs to be amended to cater for the poorest debtors and alleviate their difficulties.
Taking a critical look at voluntary surrender, the onus placed on debtor is more strenuous than compulsory surrender. South Africa’s creditor based approach to insolvency law makes it almost impossible for a debtor, who cannot fulfil this requirement, to...
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...their wealth.
In conclusion it is possible to see from the argument above that the requirement for advantage of creditors to be established, is inconsistent with s9 of Constitution. The best way to remedy is this is by enacting the Draft Insolvency Bill. If this does not occur, then other measures need to be put in place to ensure that Insolvency law is amended to ensure that equality is respected and that legislation is consistent with the Constitution, the highest law in the land.
References
Works Cited
Almeida, M.A., (n.d),’Too poor to be broke’, viewed 24 March 2014, from http://thesaur.co.za/0807.html
Kanamugire J.C., 2013,’The requirement of advantage to creditors in South African Insolvency Law- A critical appraisal’, Mediterranean Journal of Social Sciences 4(13), viewed 23 March 2014, from http://www.mcser.org/journal/index.php/mjss/article/view/1484
... 1 helps to make sure that no one takes advantage of their rights. The Notwithstanding Clause is another significant reason why it is okay to have limitations on certain rights.
The decision of the House of Lords in City of London Building Society v Flegg marks a key stage in how the balance is drawn between occupiers and creditors in priority disputes; the seeds of which were originally planted in the Law of Property Act 1925. It posed a serious challenge to the conventional understanding of overreaching and the machinery of conveyancing.Ref ?
...be added. They felt that if the rights of the people were not listed they would be infringed.Page 66R An example of a right they thought would be infringed upon was stated in Document 5 by Mercy Otis Warren, “There is no security in the system [under the proposed new U.S Constitution] either for the rights of [people with different ideas] or the liberty of the press”. This fear was directly addressed in the first amendment in which the freedom of religion, speech, press, assembly and petition are protected.Page 46R All these freedoms are used to express one’s self and express different ideas which means the first amendment prevents the government from suppressing ideas they do not agree with. The bill of right protects many basic rights and includes the 9th amendment in which it is stated that rights not listed in the Constitution are still retained by the people.
It acts as a defense from irresponsible disapproval of life, birthright, or property by the state outside the rule of law. According to the U.S Supreme Court, Clauses offer security such as the principle necessary by the constitution that a citizen to be made aware before the government performs in a way to restrict a person of a life, birthright, or assets interest. The principles that enable courts to guard specific rights perceived basic, restrictions on vague rulings and as the catalyst for steps undertaken by which United States courts have set up portions of the amendments to the American Constitution. (14Th
Equuscorp launched proceedings in the Supreme Court of Victoria against each of the respondents. Equuscorp’s claims were for “loss and damage” for breach of the loan agreements and for money had and received. The trial judge dismissed Equuscorp’s contractual claim in all eight cases and upheld the restitution claim in two cases. The respondents appealed this decision in the Supreme Court of Victoria’s Court of Appeal. In this appeal, the majority held that the trial judge erred and that Equuscorp was not entitled to restitution. Equuscorp appealed against the decision of the Court of Appeal in relation to the three respondents. Its grounds for appeal included that the Court of Appeal erred in deciding: a) that Equuscorp was not entitled to restitution for the unenforceable loan agreements; b) that it was not unjust for the respondents to keep the amounts pursuant to the unenforceable loan agreements; and c) that restitution was not assigned as a right or remedy to recover the amounts under the unenforceable loan agreements.
Getting ahead in school work is something that most people want to do. Whether it be just taking AP courses, skipping a grade, or taking dual credit classes. If you want to take AP classes at Legacy, sorry, you’re out of luck. However, there is an alternative way to earn college credit at Legacy. This is by taking dual credit classes. Taking a dual credit class means that you will be taking a college course that is given by a college for both college credit and high school credit. Yes, you read that right. If you do dual credit, you will be taking college level courses, and BE in college while you are in high school.
INTRODUCTION In Palgo Holdings v Gowans , the High Court considered the distinction between a security in the form of a pawn or pledge and a security in the form of a chattel mortgage. The question was whether section 6 of the Pawnbrokers and Second-hand Dealers Act 1996 (NSW) (‘the 1996 Pawnbrokers Act’) extended to a business that structured its loan agreements as chattel mortgages. In a four to one majority (Kirby J dissenting) the High Court found that chattel mortgages fell outside the ambit of section 6 of the 1996 Pawnbrokers Act. However, beyond the apparent simplicity of this decision, the reasoning of the majority raises a number of questions.
...me a director of the third company within five years after the liquidation of the two companies. The third company was funded by a creditor, Mr. Silverleaf. When the third company was wound up, Mr. Silverleaf then had knowledge of the previous two companies’ failures and claimed a debt of close to ₤135,000 . Mr. Silverleaf was successful in bringing proceedings under sections 216 and 217 of Insolvency Act 1986 even there’s no evidence of any asset transfer between the companies.
Timeline of this case should be clearly organized in order to better understanding this case. In 2009, Poor Son transferred Rich Grandson to Parent. In 2010, Poor Son filed a voluntary petition for reorganization under Chapter 11 of the US bankruptcy code, and Parent deconsolidated Poor Son from statements. In 2011, Poor Son filed an action against Parent seeking to void the transfer of Rich Grandson. In May 2012, the bankruptcy court held a selection meeting in which it considered competing plans of reorganization submitted by four bidders. In June 2012, OtherCo, an unrelated party, became the wining plan sponsor. In July 2012, OtherCo rescind its offer because the bad evonomic condition. In December 2014, the bankruptcy court recommended
In conclusion it is clear the pari passu principal in practice is rarely achieved and is quite frankly easy to refer to as a glorified theoretical doctrine as it has been severely eroded. This being said it is impossible to discount the pari passu theory as a fundamental principle in corporate insolvency law as although not overly effective in the capacity it was created, the principle spreads all across insolvency law promoting fairness and efficiency in the distribution of assets in insolvency proceedings from the hierarchy and classes of claims to other rules for proportionality. It is a principle which advocates creditor protection which is a pillar of corporate insolvency law.
Is College worth the debt? You and I can both agree that education is vital in this day and age. But is it smart to take the risk and not go to college? College is worth the debt because after everything is done, you will have something to show for it. In the end you will make more money, you would have gotten a higher education and you will end up being happy with what you have and are going to accomplish.
The legal issue of constitution of trusts is very important, judicial decisions over the years on cases where trusts were not properly constituted indicates that constitution of trusts could be quite complex and must be very cautiously done by a property owner as a simple factor could make his trust void. An express trust is completely constituted either by effectively transferring property to trustees or by effectively declaring a trust. In case of personal property, the declaration of the trust may be put in writing; however, equity will not perfect an imperfect gift. It is only when the trust is constituted that it is binding on the settlor. The long-standing idea that equity will not perfect an imperfect gift can be traced back to the 19th century cases of Ellison v Ellison and Milroy v Lord , and was further emphasized in the 20th century in the case of Re Fry .
Among the study’s findings were that the deciding factor of the predictor of bankruptcy should not be only a few ratios, as the measure of a company’s financial solvency may differ as the firm’s situations differ. The important question is to which ratios are to be used and of those ratios chosen, which ratios are given priority weight.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
A creditor who is not a party to the bankruptcy proceedings, but who has an interest in the proceedings, may file an ex parte application with the bankruptcy court. An insolvent debtor may file a debtor’s petition for voluntary bankruptcy. The insolvent debtor must provide to the court a summary of the debts and assets. An agreement between a debtor and creditor that the amount stated as being owed to the creditor is accurate is an account statement. However, an account that is open and unsettled is an account that is current.