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n Tydskrif vir die Suid-Afrikaanse Reg - Artikel 21 van die Insolvensiewet - reg of weg?
Section 21 of the Insolvency Act - to be or not to be
Section 21 of the Insolvency Act 24 of 1936 has been under serious criticism. Many academics are in favour of the deletion of the provision. A recently popular argument is that the section is unconstitutional. It was, however, decided in Harksen v Lane 1998 1 SA 300 (CC) that the provisions of this section are not invalid for being unconstitutional. Another view is that the interests of the insolvent estate are sufficiently protected by the impeachable dispositions specified in s 26-31 of the Insolvency Act. These sections relate to dispositions without value; voidable preferences, undue preferences and collusive dispositions. A provision such as s 21 is therefore seen to be unnecessary. There is no equivalent for s 21 in the Australian bankruptcy law and reliance is, in the case of fraud between spouses, placed on the provisions regarding impeachable dispositions (the "claw back" mechanisms) only. Still, many serious problems are experienced and a number of changes and proposals for change are under discussion in Australia. It is the writer's view that there is presently an inclination in Australia towards a provision like s 21. It is also the writer's view that if s 21 is abolished, it should be replaced with a prohibitory enactment interdicting the solvent spouse to dispose of any of her assets from the moment the insolvent spouse's estate is sequestrated, without the written permission of the master or trustee.
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