Frequently Asked Questions

 

Get our latest articles via email

 

 

Yes, creditors can defend against attempts to set aside a disposition they received.  Valid defenses exist, such as:

  • "Ordinary Course of Business": You can argue the transaction was a normal business dealing, conducted in the ordinary course of business and not intended to gain an unfair preference.
  • "No Intention to Prefer": You can argue that, even if there was a preference, there was no intention on the debtor's part to unfairly favor you over other creditors.
  • Solvency at the Time: In some cases, you might argue that the debtor was solvent at the time of the disposition, meaning it doesn't fall under the impeachable disposition rules (depending on the specific section of the Insolvency Act being invoked).
  • Value was Given: For "dispositions without value" claims, you can argue that value was indeed given for the asset transfer.
  • If you are a creditor facing a claim that a disposition you received is impeachable, contact VDM Attorneys immediately.  We can assess the specifics of your situation, advise you on your legal position, and build a strong defense to protect your interests. The burden of proof often lies with the liquidator attempting to set aside the disposition, and strong defenses can be successful.

As a creditor, be alert to these "red flag" scenarios that may indicate an impeachable disposition:

  • Unusual Asset Transfers Just Before Insolvency: Did the debtor sell off valuable assets (property, equipment, inventory) shortly before liquidation proceedings commenced? Especially if sold at suspiciously low prices or to related parties (family, associates, other companies linked to the debtor).
  • Payments Favoring Specific Creditors: Did you notice certain creditors being paid in full or receiving large payments shortly before insolvency, while other creditors (like yourself) were ignored?
  • "Donations" or Asset Gifts: Did the debtor suddenly make substantial donations or gift valuable assets in the months leading up to insolvency?
  • Releasing Debtors from Obligations: Did the debtor release individuals or companies from debts owed to them shortly before insolvency? This reduces the estate's assets.
  • Transactions with Insiders: Be particularly suspicious of transactions between the debtor and related parties (directors, family members, associated companies) as these are often scrutinized more closely.
  • Transactions Outside the "Ordinary Course of Business": Did the debtor engage in unusual business deals or asset disposals that don't seem typical for their normal operations?
    • If you observe any of these, it's worth investigating further and contacting VDM Attorneys to assess if an impeachable disposition has occurred.

Successfully setting aside an impeachable disposition is a positive outcome for creditors. It means:

  • More Assets in the Estate: The asset (or its value) that was improperly disposed of is recovered and added back to the insolvent estate.
  • Potentially Higher Dividends: With more assets in the estate, there is a greater pool of funds available to distribute to creditors. This increases the potential dividend you and other creditors may receive.
  • Fairer Distribution: It helps ensure a fairer distribution of assets, as the debtor's attempts to unfairly favor certain parties are undone.

As a creditor, Impeachable Dispositions are crucial to you because they are your legal tool to increase the assets available for distribution in an insolvent estate. If a debtor has unfairly given away or transferred assets before insolvency, these laws allow those assets to be reclaimed and added back to the pool, directly improving your chances of recovering more of what you are owed.  It's about ensuring fairness and maximizing your returns in a difficult situation.  VDM Attorneys is here to help you identify and pursue these opportunities for recovery.
 

As a creditor in South African insolvency, you have the right to:

  • Fair Treatment: The law is designed to ensure you are treated fairly and receive a proportional share of the insolvent estate's assets.
  • Challenge Unfair Transactions: You have the right to bring potentially impeachable dispositions to the attention of the liquidator and, if necessary, the court.
  • Benefit from Asset Recovery: If an impeachable disposition is successfully set aside, the recovered assets will be added to the estate, directly benefiting all creditors, including you.
  • Legal Representation: You have the right to legal representation from attorneys like VDM Attorneys to protect your interests and navigate the complexities of insolvency law.
     

If you suspect an impeachable disposition, act promptly:

  • Document Your Suspicions: Gather any evidence you have - dates, details of transactions, names of parties involved, any documentation you can access.
  • Contact VDM Attorneys Immediately: Time is often of the essence in insolvency matters. Contact us for a confidential consultation. We can assess your information and advise on the best course of action.
  • Inform the Liquidator/Trustee: If a liquidator or trustee has already been appointed, inform them in writing of your suspicions and provide any evidence you have gathered. Crucially, ensure you formally log your concerns.
  • Work with VDMAttorneys: We can assist you in:
    • Investigating further to gather more evidence and determine the strength of a potential impeachable disposition claim.
    • Engaging with the Liquidator/Trustee to ensure they properly investigate your concerns.
  • Bringing a Court Application (if necessary): If the liquidator doesn't act, or if further legal action is required, we can represent you in applying to the High Court to have the disposition set aside.

Yes, if you are an eligible employee as defined by COIDA, you can claim compensation for medical expenses, loss of earnings, and disability. 

Yes, a recent Constitutional Court ruling has made it possible for domestic workers in private homes to claim from the Compensation Fund.

Generally, the Compensation Fund doesn't pay for temporary disablement of three days or less, but medical expenses might still be covered.  

No, it is generally not permissible to use sick leave for injuries on duty. IOD leave or special leave should be considered.

Yes, all employers in South Africa are required to register with the Compensation Fund and pay annual assessments.
 

Report the injury to your employer, who needs to submit a WCL2 form. You'll also need medical reports. Keep copies of all documents.

You must ensure a safe working environment, report the injury to the Compensation Commissioner within seven days (using form WCL2), provide support to the injured employee, and comply with COIDA regulations.
 

Failure to comply can result in legal repercussions and financial liabilities.   

You have the right to object to the decision within 180 days by submitting form W929 to the Commissioner.   

You can still report the injury directly to the Compensation Commissioner, but it's best to try and ensure your employer fulfills their reporting duties.

It's a letter issued by the Compensation Commissioner to companies that are up-to-date with their COIDA payments, proving their compliance.

COIDA stands for the Compensation for Occupational Injuries and Diseases Act. It's the law in South Africa that governs compensation for work-related injuries and illnesses.  

The fund provides financial assistance for medical treatment and compensation to employees who suffer work-related injuries or diseases.
 

For absences of 4 days to 3 months, you must pay the employee at least 75% of their earnings from the first day of absence. For longer absences, you pay for the first three months, and then the employee claims from the Fund.

Complete and submit all relevant forms to the Compensation Commissioner and let them make the decision.

Report the incident to your employer immediately (preferably in writing), seek medical attention, and understand your rights under COIDA.

You can claim for income replacement (installments, lump sum, or pension), medical expenses, and funeral expenses (in case of death).

You can seek assistance from the Compensation Commissioner's office or consult with a labour law firm like VDM Attorneys for expert guidance.

Generally, members of the SANDF, SAPS, independent contractors, and certain workers working outside South Africa are excluded.  

Yes, an individual can be declared insolvent if their liabilities exceed their assets. The legal process for this is known as voluntary sequestration. 

Yes, while insolvent, you cannot serve as a director of a company or a member of a close corporation without special permission from the trustee. Certain positions are restricted, and legal advice is recommended to clarify which roles require permission and which are entirely excluded. For example, during sequestration, you may not hold office as a trustee of an insolvent estate, a business rescue practitioner, a member of parliament, a registered liquor distributor, or the executor of a deceased estate.

1. Apply to Court: You must apply to the court to be declared bankrupt.  
2. Surrender Your Estate: Hand over control of your assets to the court.  
3. Asset Distribution: A court-appointed trustee will sell your assets and distribute the proceeds to your creditors.  

The court will assess your statement of affairs to confirm insolvency. If approved, your legal status will be changed to "sequestrated".  

- Loss of Assets: Your assets may be sold to repay creditors.  
- Credit Record Impact: Insolvency negatively affects your credit rating.  
- Limited Credit Access: You may have restricted access to credit for up to 10 years.  

It’s important to seek legal advice to fully understand the insolvency process and its implications. Contact us at VDM Attorneys for professional guidance tailored to your situation.  
 

Once the notice of intention to surrender your estate is published in the Government Gazette, you immediately stop making payments to creditors. Any garnishee orders against your salary are cancelled, and creditors are no longer allowed to approach you or demand payment. After the court finalises the sequestration order, your estate is placed under the control of a trustee. The trustee sells your assets, and the proceeds are used to pay the minimum required benefits to creditors. Up to 80% of your debt can be written off, as the law only requires repayment of 20 cents for every rand owed. The costs of sequestration, including legal fees, are also covered. Once the process is complete, you are debt-free and able to start fresh financially.

As an insolvent individual, you do not have full contractual capacity. This means you are legally required to disclose your insolvency status when asked in any agreement. Additionally, you must obtain written permission from your trustee to enter into a credit agreement. However, this does not prevent you from entering into essential credit agreements, provided the trustee approves them. Once you have been rehabilitated, you will regain full contractual capacity.

Once you are declared bankrupt, all property you owned before the date of sequestration, as well as any property acquired during the sequestration period, becomes part of the insolvent estate.

This means you will not have ownership of any immovable property, except for assets that you are legally entitled to retain in a separate estate.

For clarity on which assets may be excluded and how this process works, contact us for professional legal advice.

Compulsory liquidation is a legal process used to wind up a company or partnership due to insolvency. It begins with a winding-up order issued by the court.

A creditor typically files a winding-up petition in the High Court, claiming that the company owes money and is unable to pay. In some cases, the petition may be brought by the company itself, its directors, shareholders, or others such as an administrator, the Financial Services Authority, or the Official Receiver.

Even if the company disputes the debt or has no assets, the court can still issue a winding-up order. It is essential to resolve any debt disputes with creditors before this order is made, as the consequences of compulsory liquidation are severe and may include the forced sale of assets to settle debts.

If your company is facing financial distress or a winding-up petition, contact us for expert legal advice to protect your interests and explore your options.
 

Liquidation is the legal process of closing down a company by selling its assets to pay for the costs and expenses of the winding-up process. This can be done through private sale or public auction. Any remaining funds after covering these costs are distributed to creditors based on their legal priority and rights in the company.
To decide if a company should be liquidated, it must be determined whether the company can pay its debts as they become due (known as de facto insolvency). This decision involves input from creditors, the liquidator, the company owner, and the court.

Once a company is placed in liquidation, it stops trading, unless continued operations are necessary and in the best interest of the creditors. If you need guidance on company liquidation, contact us for professional legal advice.
 

Voluntary liquidation is often simpler than voluntary sequestration because a business does not need assets to begin the process. In contrast, individuals must have enough property or cash to pay at least ten cents to the rand to benefit creditors. By law, once a business’s liabilities exceed its assets, it must stop trading and either apply for business rescue or liquidate voluntarily. The personal assets of the business owner are generally not affected, unless the owner has signed surety for debts or managed the business finances irresponsibly.

Generally, life insurance policies with nominated beneficiaries do not form part of the deceased's insolvent estate. The proceeds from such policies belong directly to the beneficiaries and are not accessible to the deceased's creditors. However, if the estate itself was the nominated beneficiary, then the proceeds would form part of the estate and be subject to creditors' claims.

Generally, a surviving spouse or family members do not inherit the deceased's personal debts if the debts were solely in the deceased's name. However, there are exceptions:

  • Joint Debts: If debts were held jointly (e.g., a joint bond or credit card), the surviving joint owner becomes fully responsible.
  • Suretyship/Guarantee: If a family member stood as a surety or guarantor for the deceased's loan, they would be liable for that debt.
  • Marriage in Community of Property: If the deceased was married in community of property, the joint estate is generally considered insolvent, and the surviving spouse's half of the joint estate would be affected.

In an insolvent estate, debts are paid in a specific order of priority as per the Insolvency Act. While specific categories can be complex, generally, the order is:

  • Administration Costs: Expenses related to winding up the estate (e.g., executor's fees, legal costs, Master's fees).
  • Funeral Expenses: Reasonable costs associated with the deceased's funeral.
  • Secured Creditors: Creditors who hold security over specific assets (e.g., a mortgage bond over a property). They are usually paid from the proceeds of the sale of that specific asset.
  • Preferent Creditors: Certain types of creditors have a statutory preference (e.g., outstanding salaries of employees, certain taxes).
  • Concurrent/Unsecured Creditors: Creditors without any specific security (e.g., credit card debt, personal loans). If there isn't enough to pay them in full, they receive a pro-rata share.
  • Deferred Debts: Certain debts, such as those between family members, may be deferred to the last.

No, debts do not automatically disappear upon death. Any debts solely in the name of the deceased must be paid from their estate's assets. If the estate's liabilities surpass its assets, it is declared insolvent.

As a creditor, you must submit a claim against the estate within the specified notice period (usually 30 days) advertised by the executor. The executor will then assess your claim and, if valid, include it in the liquidation and distribution account for payment according to the legal order of preference.

An insolvent deceased estate is one where the deceased person's liabilities (debts) exceed the total value of their assets. In simpler terms, there isn't enough money or property in the estate to pay off all the outstanding debts.

The process generally involves:

  • Reporting the Estate: The estate must be reported to the Master of the High Court within 14 days of death.
  • Appointing an Executor/Administrator: The Master formally appoints the executor/administrator.
  • Identifying Assets and Liabilities: The executor must identify and value all the deceased's assets (property, bank accounts, investments, etc.) and liabilities (debts, outstanding obligations).
  • Notifying Creditors: All creditors of the deceased must be notified and given a specified period (usually 30 days) to submit their claims against the estate by publishing notices in the Government Gazette and a local newspaper.
  • Declaring Insolvency: If the executor determines that the liabilities exceed the assets, they must inform the Master of the High Court, the creditors, and SARS (South African Revenue Service) that the estate is insolvent, usually in accordance with Section 34 of the Administration of Estates Act.
  • Applying the Insolvency Act: The administration of an insolvent deceased estate then follows the provisions of the Insolvency Act 24 of 1936, which dictates the order of preference for paying creditors.
  • Realizing Assets: If there are not enough liquid assets, the executor may need to sell some of the deceased's assets to generate funds.
  • Drafting the Liquidation and Distribution (L&D) Account: This account details all assets, liabilities, and the proposed plan for distributing the proceeds to creditors.
  • Master's Approval and Distribution: Once the Master approves the L&D account and the inspection period (21 days) has passed without valid objections, the executor distributes the available funds to creditors according to the legal order of preference.
  • Finalizing the Estate: After all payments are made and assets distributed, the Master issues a filing slip, and the executor's duties are discharged.

The Master of the High Court plays a crucial supervisory role. They oversee the administration of deceased estates, including insolvent ones, to ensure that the process is followed correctly and that the financial interests of all parties (creditors, heirs, etc.) are protected. The Master approves the appointment of the executor, monitors the administration process, and ultimately approves the liquidation and distribution account.

It is highly advisable to seek legal assistance from an attorney specializing in deceased estates and insolvency as soon as possible if you suspect an estate might be insolvent, or if you are the appointed executor. The process is complex and requires a thorough understanding of the law to ensure compliance and protect all interests. An attorney can guide you through the reporting, administration, and legal requirements, minimizing stress and potential personal liability for the executor

The responsibility typically falls to the executor (if there's a will) or an administrator (if there's no will or the estate value is below a certain threshold). The executor/administrator is appointed by the Master of the High Court and oversees the management and winding up of the estate.

Unfortunately, in most cases, if an estate is truly insolvent, there will be nothing left for heirs or beneficiaries after all the debts and administration costs have been paid. Creditors are paid first, and only if there's a surplus would anything be distributed to heirs.

Yes, South African law recognizes various types of Trade Marks.  The most common is an "ordinary" Trade Mark, but you can also register "collective" Trade Marks (used by associations) and "certification" Trade Marks (certifying standards).  Additionally, "non-traditional" Trade Marks, such as sound marks, are also registrable if they are distinctive.
 

Yes, you can sell or assign your patent application rights even before the patent is officially granted. To ensure the new owner is legally recognized, it's essential to record this change of ownership with the South African Patents Office within six months of the transfer.


Copyright doesn't protect ideas in their abstract form.  To obtain copyright protection, you need to express your original idea in a tangible format. This could be writing it down in a book or script, recording music, creating artwork, filming a movie, or developing computer software. Copyright protection arises automatically for original works once they are put into a material form.
 

A patent offers significant benefits for inventors. It grants you the exclusive right in South Africa to prevent others from manufacturing, using, or selling your patented invention without your permission for up to 20 years. This exclusivity allows you to:

  • Control the market for your invention and potentially gain a competitive advantage.
  • License your patent to others for commercialization, generating revenue.
  • Take legal action against those who infringe your patent rights.

Ultimately, patents encourage innovation, investment in research and development, and the transfer of technology, benefiting both individual inventors and the South African economy

Any individual or business that is the owner of a Trade Mark can apply for registration. You don't need to be a South African citizen, but you must genuinely intend to use or already be using the Trade Mark within South Africa.  While you need a South African business address for the application, representation by a South African practicing attorney is permitted and often advisable. Note that representation by non-attorneys like auditors or accountants is not permitted for Trade Mark applications.

A Trade Mark is essential for branding your goods or services. It acts as your unique identifier in the marketplace, helping customers recognize and remember your offerings.  By distinguishing you from competitors, a Trade Mark builds brand recognition, customer loyalty, and ultimately, business value, whether you offer products (like clothing or food) or services (like restaurants or consulting).
 

Before investing in Trade Mark registration, a thorough search is crucial.  It helps determine if any identical or confusingly similar Trade Marks already exist on the South African Trade Marks Register.  This prevents your application from being rejected and avoids potential future conflicts or infringement issues with existing Trade Mark holders.

While it is possible to represent yourself, navigating the legal procedures and preparing the necessary documentation for a Rule 43/58 application can be complex. Engaging an experienced family law attorney, like the team at VDM Attorneys, can significantly increase your chances of a successful application and ensure your rights are protected throughout the process. We can provide expert guidance and support to help you secure the financial assistance you need during this challenging time.

The court will assess your financial needs and your spouse's ability to pay. You will need to provide detailed information about your income, expenses, and assets in your application. The court aims to ensure that you and your children can maintain a reasonable standard of living during the divorce process, without causing undue financial hardship to the other spouse. 

Compared to the full divorce proceedings, the process for obtaining an interim maintenance order through a Rule 43/58 application is generally quicker. While timelines can vary depending on the court's workload and whether the application is opposed, a decision can often be reached within a few weeks to a couple of months from the date of application.   

Yes, you can apply for a contribution towards your legal costs as part of a Rule 43/58 application. The court recognises the importance of both parties having equal access to legal representation and may order your spouse to contribute towards your legal fees to ensure you can present your case effectively.   

Interim maintenance, also known as "maintenance pendente lite," is a temporary financial support order granted by the court during divorce proceedings. It helps a financially dependent spouse and/or children cover their essential living expenses until the divorce is finalised and a final maintenance order is issued. Think of it as a financial bridge during a period of uncertainty.   

If your spouse fails to comply with an interim maintenance order, you have legal recourse. You can approach the court to enforce the order, which may involve various legal actions to compel payment.   

Interim maintenance is a temporary measure that is in place only until the divorce is finalised. The final maintenance order, which forms part of the divorce decree, will be based on a more thorough investigation of both parties' financial circumstances and will determine the long-term maintenance obligations, if any.

Interim maintenance can cover a range of essential living expenses, including but not limited to:   

  • Basic living costs (food, clothing, etc.)   
  • Accommodation (bond payments, rent)   
  • School fees and related educational expenses   
  • Medical aid contributions and medical costs   
  • Transport costs
  • Childcare expenses

The court will consider what is reasonable and necessary based on the parties' previous standard of living.

You can apply for interim maintenance at various stages of the divorce process: before the divorce summons is issued, at the same time as issuing the summons, or even after your spouse has indicated their intention to defend the divorce. The timing will depend on your specific circumstances and when the need for financial support becomes critical.   
 

Generally, the financially weaker spouse in a divorce can apply for interim maintenance for themselves and/or their dependent children. The applicant needs to demonstrate a need for financial support and that the other spouse has the means to provide it.