| dc.description.abstract | Section 20 of the Insolvency Act 24 of 1936 regulates the effect of sequestration on the property of the insolvent debtor. The effect of sequestration on the insolvent estate is to divest the property of the insolvent and to vest it in the Master, and upon his appointment, the trustee. Accordingly the trustee must take charge of and control the property of the insolvent estate and realise the property for distribution to the advantage of the creditors of the insolvent estate. This section also describes what property the insolvent estate comprises of, such as all the property of the insolvent at the date of sequestration. This includes all property which the insolvent may acquire or which may accrue to him during sequestration. The trustee may claim that the inheritance of the insolvent heir forms part of the
property of the insolvent estate, if the insolvent accepts the inheritance. The question relating to this study is whether or not an inheritance forms part of the property of the insolvent estate if repudiated by an heir? In the court decision of Boland Bank Bpk v Du Plessis it was held that that the repudiation of an inheritance is a disposition in fraud of the creditors as intended by section 8(c) of the Act. Notwithstanding the provisions regarding the acts of insolvency, the Act also provides that dispositions made without value by the debtor prior to sequestration may be set aside. Section 26 of the Act states that the trustee may set aside dispositions made without value. When interpreting the definitions of the terms “disposition” and “property” together with the provisions of the Act, as well as the principles of the law of succession, it seems to be that the heir does not have the choice to repudiate an inheritance, as this too may be regarded as a disposition without value. The reason for this being is that contingent rights are included in the definition of the term “property” in the Act. Contingent rights can become vested rights on the fulfilment of a certain condition. A personal right to property will also be regarded as “property” because it vests in a person. The inheritance of the insolvent may then be regarded as “property” of the insolvent estate if the right to the inheritance qualifies as a personal right. If it is accepted that the heir obtains a right to the inheritance at the death of the testator, the repudiation thereof may be regarded as a disposition made without value. In Kellerman v Van Vuuren, Klerck and Schärges v Lee and Durandt v Pienaar the court held that a repudiation of an inheritance will not be regarded as a disposition made without value in terms of section 26 of the Act. In Wessels v De Jager the Supreme Court of Appeal held that the heir has the competence to decide whether to accept or repudiate the inheritance. The heir can not be forced to accept the inheritance and until the heir has exercised this competence, his estate has no right or interest to the property. The aforementioned judgments have been met with adverse criticism. Consequently the aim of this study is to assess whether or not and to which degree the most recent judgments pertaining to this matter interpreted and applied the basic principles of the common law, the law of succession or the insolvency law. By referring to the vesting of rights and the principles relating to adiation and repudiation within the scope of the law of succession, the conclusion is drawn that the heir obtains a competence to accept or repudiate an inheritance at the death of the testator. If the heir adiates, he will obtain a personal right against the executor of the deceased estate to claim the inheritance at a future date. Only when the heir’s claim to the inheritance becomes enforceable at dies venit, the inheritance will form part of the estate of the heir. The conclusion is drawn that the courts follow a more equitable approach whereby adiation does not commence automatically at the death of the testator. This means that the inheritance will not be regarded as “property” of the insolvent debtor, until it is adiated by the heir. It is submitted that the recommendation of authors such as Evans, that the Act has to be amended to explicitly exclude the repudiation of an inheritance by the insolvent heir, should be duly noted. | en_US |
