n South African Law Journal - An application for debt review does not constitute an act of insolvency: : notes




The Insolvency Act 24 of 1936 ('the Insolvency Act') and the National Credit Act 34 of 2005 ('the NCA') both regulate, amongst other things, matters concerning debtors who are unable to pay their debts. Due to this overlap, there is an ever present danger that tensions may arise in the application of the two Acts in any given case. In the past few years the courts have had to resolve disputes touching on the inter-relationship between the two Acts in the context of sequestration and debt review (see the case of 2010 (1) SA 265 (GSJ) as well as 2009 (3) SA 376 (WCC); see also A Boraine & C van Heerden 'To sequestrate or not to sequestrate in view of the National Credit Act: a tale of two judgments' (2010) 13(3) 19; N Maghembe 'The Appellate Division has spoken - sequestration proceedings do not qualify as proceedings to enforce a credit agreement under the National Credit Act 34 of 2005: 2010 (4) SA 597' (2011) 14(2) 171). The High Court's decision in the case of [2012] 2 All SA 186 (ECP) is one of the latest judgments in this respect. The court had to resolve the question whether an application by a debtor to be placed under debt review in terms of s 86 of the NCA constitutes an act of insolvency in terms of s 8() of the Insolvency Act. The judgment is significant because it clarifies an important aspect of the inter-play between the NCA and the Insolvency Act.


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