Artikel 102 van die insolvensiewet en notariële verbande: van onsekerheid na sekerheid?

Abstract

In this note, the application of section 102 of the Insolvency Act 24 of 1936 is analysed. This section provides preference (and not real security) to the holder of a specific type of notarial bond. To understand the matter properly, the different types of notarial bonds and the legal position held by each in the administration of an insolvent estate are discussed. Three possibilities are distinguished, namely, notarial bonds that offer effective security during the sequestration/liquidation; notarial bonds that do not provide security but provide preference under section 102; and notarial bonds that offer no security or preference whatsoever. Following this, the interest-aspect regarding section 102 claims is examined. Section 102 refers only to section 103(2) and therefore only to interest after sequestration. Interest after sequestration is calculated in terms of section 103 but in respect of interest prior to sequestration, it is the authors’ submission that such a creditor’s claim must be dealt with in a manner similar to the claim of a concurrent creditor under section 50 of the Insolvency Act. A thought-provoking issue is whether a general bondholder, like the secured creditor, has a choice not to claim as a concurrent creditor as well. What will be the effect if he proves his claim and his claim is greater than the proceeds of the movable property concerned, or more than the limit set in the notarial bond? One may well ask whether he would automatically also qualify as a concurrent creditor. The consequent risk is to pay a contribution under section 106 of the Insolvency Act, that is, if there is insufficient free residue in the estate to pay the costs of sequestration/liquidation. The note also contains a discussion of FirstRand Bank v Land and Agricultural Development Bank with regard to the interpretation of section 102 and the matter whether the proceeds of immovable property can be regarded as “movable property”.