MRL3701 Assignment 1 Semester 2 2026 – Due 13 August 2026

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MRL3701 ASSIGNMENT 1 2026
DUE 13 AUGUST 2026

Question 1 Naledi runs a small architectural practice in Polokwane. Owing to a
downturn in the construction industry she is struggling to pay her creditors on time,
although her assets still exceed her liabilities. In March her elderly mother, who lives in
Portugal, suffers a severe stroke. Naledi immediately flies to Lisbon to care for her,
informing her office that she will return once her mother’s condition stabilises. Six
months later, Naledi has still not returned to South Africa. Her creditors, growing
anxious, approach you as a candidate attorney for advice on whether they can rely on
her absence to apply for the sequestration of her estate. Advise the creditors whether
Naledi has committed an act of insolvency in terms of s 8(a) of the Insolvency Act. In
your answer, set out the requirements of s 8(a), discuss the intention requirement and
how it is proved, and apply the law to Naledi’s circumstances.

QUESTION 1: NALEDI’S ABSENCE AND SECTION 8(a)

Naledi’s creditors seek advice on whether her six-month absence from South Africa to
care for her mother constitutes an act of insolvency under section 8(a) of the Insolvency
Act 24 of 1936.

1.2 Requirements of Section 8(a)
Under section 8(a) , a debtor commits an act of insolvency if he leaves the Republic or
absents himself “with intent by so doing to evade or delay the payment of his debts”
(Hockly, par 3.1.2(i)(a); Study Unit 4, p 43). Two elements must be proved: physical
absence and subjective intention to evade or delay payment.