BILL the Insolvency Act, 1936; and to provide for ancillary … Bill.pdf · the Insolvency Act,...

BILL

To consolidate the laws relating to insolvent persons and to their estates; to repeal

the Insolvency Act, 1936; and to provide for ancillary matters.

BE IT ENACTED as passed by the Parliament and assented to by the President of the

Republic of Namibia, as follows:

ARRANGEMENT OF SECTIONS

CHAPTER 1

INTRODUCTORY PROVISIONS

1. Definitions

2. Application of Act

3. Objectives of Act

CHAPTER 2

GOVERNANCE OF THE INSOLVENCY REGIME

Part 1

The Insolvency Commissioner

4. Appointment of Insolvency Commissioner

5. Appointment of staff members to assist Commissioner

6. Functions and powers of Commissioner

7. Specialist committees

Part 2

Insolvency practitioners

8. Acting as insolvency practitioner

9. Insolvency practitioners not registered

10. Qualifications to act as insolvency practitioner

11. Recognised professional bodies

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12. Application to act as insolvency practitioner

13. Grant or refusal of application to act as insolvency practitioner

14. Revocation of registration certificate

15. Appeal against decision of Commissioner

CHAPTER 3

LIQUIDATION PROCEEDINGS

Part 1

Commencement Standards

16. Acts of insolvency

Part 2

Applications For Liquidation And Liquidation Orders

17. Application by debtor for liquidation of estate

18. Application by creditor for liquidation of debtor's estate

19. Liquidation of partnership estate or trust

20. Application for stay of proceedings from the time an application for

commencement of liquidation is made

21. Abuse of Court's procedures or malicious or vexatious application for

liquidation

22. Provisional liquidation order

23. Final liquidation order

24. Public register of rehabilitated and unrehabilitated insolvents

25. Obligations of creditor upon whose application a liquidation order is made

26. Notice of liquidation

Part 3

Effect Of Liquidation

27. Effect of commencement of liquidation on insolvent and his or her property

28. The effect of liquidation on civil proceedings by or against the insolvent

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29. Rights and obligations of debtor during insolvency

Part 4

Impeachable Dispositions

30. General

31. Alienation by insolvent of property to third party who is in good faith

32. Presumptions relating to property in possession of insolvent

33. Disposition without value

34. Antenuptial contracts

35. Voidable preferences

36. Collusive dealings for prejudicial disposition of property

37. Certain contributions to funds may be recovered for benefit of insolvent estate

38. Attachment of property in possession of associate

39. Certain rights not affected by improper disposition

40. Set-off

41. Payment of debt to insolvent after liquidation

42. Institution of proceedings on behalf of insolvent estate

Part 5

Effect Of Liquidation Upon Certain Contracts

43. Uncompleted acquisition of immovable property by debtor

44. Transactions on an exchange

45. Agreements providing for termination and netting

46. Effect of liquidation of estate of seller under reservation of ownership contract

47. Goods purchased not on credit but not paid for

48. Effect of liquidation upon lease

49. Effect of liquidation on contract of service

Part 6

Provisional Appointment, Election, Appointment And Disqualification Of

Liquidators

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50. Provisional appointment of liquidator

51. Election of liquidator

52. Commissioner may refuse to appoint elected liquidator

53. Appointment of liquidator and security

54. Joint liquidators to act jointly

55. Vacation of office of liquidator

56. Removal of liquidator from office by the Commissioner

57. Court may declare liquidator disqualified or remove liquidator

58. Election of new liquidator

Part 7

Powers And Duties Of Liquidators

59. Service of provisional liquidation order on debtor and attachment of property

belonging to insolvent estate

60. Debtor to hand over books to liquidator and submit statement of affairs to

Commissioner and liquidator

61. Liquidator may obtain search warrant

62. Registration of name and address with liquidator

63. Liquidator's report

64. Recovery of debts due to estate

65. Remuneration of liquidator

66. General duties and powers of liquidator

Part 8

Rights and Duties of Creditors

67. Realization of security

68. Attachment of property upon failure to deliver to liquidator

69. Application of proceeds of security

70. Security in respect of reserved ownership or financial lease

71. Security in respect of landlord's hypothec

72. Special notarial bond over movable property

73. Certain mortgages afford no security or preference

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Part 9

Costs Of Liquidation And Application Of Free Residue

74. Costs of liquidation

75. Application of the free residue

76. Costs incurred in respect of legal services

Part 10

Special Provisions Relating To The Sale Of Property Belonging To The

Insolvent Estate

77. Non-compliance with provisions of Act in sale of property of insolvent estate

78. Bona fide sale of property in possession of debtor

79. Persons incompetent to acquire property from insolvent estate

Part 11

Meetings And Questioning Of Insolvent And Other Persons

80. First meeting of creditors

81. Special meeting of creditors

82. Notice to creditors who have not proved claims

83. General provisions relating to meetings of creditors

84. Voting at meeting of creditors

85. Insolvent to attend meetings of creditors

86. Summons to attend meeting of creditors and notice to furnish information

87. Questioning of insolvent and other persons

88. Questioning by estate representative

89. Liquidator may put written questions or call for accounts, books, documents,

records or information

90. Questioning by or on behalf of the Commissioner

91. Enforcing summonses and giving of evidence

92. Suspected commission of offence to be reported to Commercial Branch

93. Proof of record of proceedings of meetings of creditors

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Part 12

Claims

94. Claim by partnership creditor against estate of insolvent partner

95. Claims against partnerships

96. Proof of claims

97. Liquidator to examine claims

98. Late proof of claims

99. Conditional claims

100. Arrear interest and debt due after liquidation

101. Withdrawal of claim

102. Recovery of debt from insolvent estate where creditor recovered from another

source

Part 13

Banking Accounts, Investments And Moneys Belonging To The Insolvent Estate

103. Banking accounts and investments

104. Recording of receipts by liquidator

105. Unlawful retention of moneys or use of property by liquidator

Part 14

Estate Accounts, Distribution And Contribution

106. Estate Accounts

107. Copies of liquidator's accounts to be open for inspection

108. Objections to liquidator's account

109. Confirmation of liquidator's accounts

110. Distribution of estate and collection of contributions

111. Liquidator to produce receipts for dividends or pay over unpaid dividends to

Commissioner

112. Surplus to be paid into Guardian’s Fund

113. Contribution by creditors towards cost of liquidation

114. Enforcing payment of contribution

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Part 15

Rehabilitation Of Insolvent

115. Rehabilitation

116. Opposition to rehabilitation or refusal of rehabilitation by court

117. Rehabilitation by effluxion of time

118. Effect of rehabilitation

119. Penalties for unlawful inducement to accept compromise or in connection with

rehabilitation

CHAPTER 4

REORGANIZATION PROCEEDINGS

Part 1

Definitions

120. Definitions

Part 2

Pre-Liquidation Composition

121. Pre-liquidation composition with creditors: magistrate’s court

Part 3

Voluntary Arrangements: Ordinary Proceedings In High Court

122. Voluntary arrangement not fully implemented

123. Application for interim order

124. Effect of application for interim order

125. Power of Court to make interim order

126. Provisional supervisor’s report on debtor’s proposal

127. Creditor’s meeting to consider debtor’s proposal

128. Consideration of debtor’s proposal at creditors’ meeting

129. Approval of debtor’s proposal

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130. Effect of approval of debtor’s proposal

131. Additional effect of approved debtor’s proposal on unrehabilitated insolvent

132. Right to challenge decision taken at creditors’ meeting

133. Implementation and supervision of debtor’s proposal

Part 4

Voluntary Arrangements: Expedited Procedure

134. Expedited voluntary arrangement

135. Duty of Commissioner to report to Court

136. Approval of expedited voluntary arrangement

137. Commissioner may apply to Court if debtor is unrehabilitated insolvent

138. Revocation of expedited procedure

Part 5

Summary Instalment Orders

139. Purpose of summary instalment order

140. Application for summary instalment order

141. Requirements for summary instalment order

142. Summary instalment order

143. Commissioner may make additional orders

144. Appointment of supervisor

145. Role of supervisor

146. Commissioner may require supervisor or past supervisor to provide documents

147. Termination of supervisor’s appointment

148. Period of payment of instalments

149. Variation or discharge of summary instalment orders

150. Effect of summary instalment orders

151. Restrictions on bringing proceedings against a debtor while summary

instalment order is in force

152. Supervisor to give notice of summary instalment order

153. Public register of debtors subject to summary instalment orders

154. When summary instalment order not current

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155. Claims of creditors when summary instalment order has effect

156. Payment of debtor’s earnings to supervisor

157. Default by debtor to pay instalments

158. Offence for debtor to obtain credit when summary instalment order in in force

Part 6

No-Asset Procedure

159. Debtor with no realizable assets

160. Eligibility for admission to no-asset procedure

161. Criteria for admission to no-asset procedure

162. Debtor disqualified in certain cases

163. Notification to creditors

164. Restrictions on debtor obtaining credit

165. Debtor admitted to no-asset procedure

166. Public register of persons admitted to no-asset procedure

167. Creditors may not enforce debts of debtor admitted to no-asset procedure

168. Debtor’s duties after admission to no-entry procedure

169. Offence to obtain credit while under no-asset procedure

170. Termination of debtor’s admission to no-asset procedure

171. Commissioner may cause termination of no-asset procedure

172. Commissioner may apply for preservation order

173. Effect of termination of debtor’s participation in no-access procedure

174. Creditor may apply to Commissioner for termination of debtor’s participation

in no-asset procedure

175. Automatic discharge of debtor from no-asset procedure

176. Discharge of debtor’s participation in no-asset procedure

177. Discharge does not release debtor’s business partners and others

Part 7

Post-Liquidation Composition

178. Post-liquidation composition

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Part 8

Criminal Conduct Under This Chapter

179. False declaration to obtain creditors’ approval

180. Prosecution of delinquent debtors

CHAPTER 5

CROSS-BORDER INSOLVENCIES

Part 1

Interpretation And Fundamental Principles

181. Definitions

182. Purpose and aims

183. Scope of application

184. International obligations of Namibia

185. Competent court

186. Authorization of insolvency practitioner, trustee, liquidator, judicial manager

or curator to act in foreign State

187. Public policy exception

188. Additional assistance under other laws

189. Interpretation

Part 2

Access Of Foreign Representatives And Creditors To Courts In Namibia

190. Right of direct access

191. Limited jurisdiction

192. Application by foreign representative to commence proceedings under the laws

of Namibia relating to insolvency

193. Participation of foreign representative in proceedings under the laws of

Namibia relating to insolvency

194. Access of foreign creditors to proceedings under the laws of Namibia relating

to insolvency

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195. Notification to foreign creditors of proceedings under the laws of Namibia

relating to insolvency

Part 3

Recognition Of Foreign Proceedings And Relief

196. Application for recognition of foreign proceedings

197. Presumptions concerning recognition

198. Decision to recognize foreign proceedings

199. Subsequent information

200. Relief that may be granted upon application for recognition of foreign

proceedings

201. Effect of recognition of foreign main proceedings

202. Relief that may be granted upon recognition of foreign proceedings

203. Protection of creditors and other interested persons

204. Actions to avoid acts detrimental to creditors

205. Intervention by foreign representative in proceedings in Namibia

Part 4

Cooperation With Foreign Courts And Foreign Representatives

206. Cooperation and direct communication between court of Namibia and foreign

courts or foreign representatives

207. Cooperation and direct communication between insolvency practitioner,

trustee, liquidator, judicial manager or curator of an institution and foreign


208. Forms of cooperation

Part 5

Concurrent Proceedings

209. Commencement of proceedings under the laws of Namibia relating to

insolvency after recognition of foreign main proceedings

210. Coordination of proceedings under the laws of Namibia relating to insolvency

and foreign proceedings

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211. Coordination of foreign proceedings

212. Presumption of insolvency based on recognition of foreign main proceedings

213. Rule of payment in concurrent proceedings

CHAPTER 6

OFFENCES

214. Offences

CHAPTER 7

PUBLIC REGISTERS

215. Public registers relating to insolvents and others

216. Access to public registers

217. Purposes of public registers

218. General information to be included in public registers

219. Information kept indefinitely in public registers

220. Restricted information

221. Commissioner may omit, remove, restrict access to or amend information in

public registers

222. Information in public registers may be used for statistical or research purposes

223. Government and Commissioner not liable for certain acts or omissions

CHAPTER 8

GENERAL PROVISIONS

224. Court may stay or set aside liquidation

225. Meetings to ascertain wishes of creditors and others

226. Dispositions after liquidation void

227. General provisions relating to Part 4, Chapter 3 proceedings

228. Giving of evidence after conviction for failure to testify

229. Criminal liability of partners, administrators, servants or agents

230. Jurisdiction of Court

231. Appeals

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232. Review

233. Commissioner's fees

234. Custody and destruction of documents

235. Insurer's liability in respect of indemnification of debtor

236. Non-compliance with directives

237. Regulations, policy and other powers of Minister

238. Amendment and repeal

239. Short title and commencement

SCHEDULE 1

FORM A1: STATEMENT OF DEBTOR'S AFFAIRS

FORM A2: NOMINATION FOR LIQUIDATOR BY CREDITOR

FORM A3: NOMINATION FOR LIQUIDATOR BY REGISTERED TRADE

UNION

FORM B: AFFIDAVIT FOR PROOF OF ANY CLAIM OTHER THAN A

CLAIM BASED ON A PROMISSORY NOTE OR OTHER BILL OF

EXCHANGE

FORM C: AFFIDAVIT FOR THE PROOF OF A CLAIM BASED ON A

PROMISSORY NOTE OR OTHER BILL OF EXCHANGE

FORM D : FORM AND CONTENTS OF ACCOUNTS

FORM E1: NOTICE IN TERMS OF SECTION 29(6)(a) OF THE INSOLVENCY

ACT ___ OF_____ (THE "ACT") TO ATTEND A HEARING IN

TERMS OF SECTION 28 (7)(a) OF THE ACT

FORM E2: SUMMONS IN TERMS OF SECTION 96(13) OF THE

INSOLVENCY ACT ___ OF 2____ (THE "ACT") TO ATTEND A

MEETING OF CREDITORS FOR QUESTIONING IN TERMS OF

SECTION 96(13) OF THE ACT



MEETING OF CREDITORS FOR QUESTIONING IN TERMS OF

SECTION 87 OF THE ACT

FORM E4: SUMMONS IN TERMS OF SECTION 88(3)(b) OR 88(6) OF THE


QUESTIONING IN TERMS OF SECTION 88 OF THE ACT

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INSOLVENCY ACT ____ OF 2_____ (THE “ACT”) TO ATTEND A


FORM F: STATUTORY DEMAND IN TERMS OF SECTION 16(2)(a) OF

THE INSOLVENCY ACT __ OF 2___ (“THE ACT”)

SCHEDULE 2

TARIFF A: SHERIFF'S FEES

TARIFF B: REMUNERATION OF LIQUIDATOR

TARIFF C: COMMISSIONER'S FEES OF OFFICE

SCHEDULE 3: PROVISIONS OF LAWS AMENDED OR REPEALED

SCHEDULE 4: STATEMENT IN RESPECT OF PROPOSED PRE-

LIQUIDATION COMPOSITION: MAGISTRATE’S COURT

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CHAPTER 1

INTRODUCTORY PROVISIONS

Definitions

1. In this Act, unless the context otherwise indicates-

“account”, in relation to a liquidator, means a liquidation account and distribution

account or contribution account, or any supplementary liquidation account and

distribution account or contribution account;

“Administration of Estates Act” means the Administration of Estates Act 1965 (Act

No. 66 of 1965);

“associate” -

(a) in relation to a natural person means-

(i) the spouse of such person;

(ii) any person who is by consanguinity related to such first-mentioned

person or to his or her spouse, in the first, second or third degree of

relationship as determined in accordance with the provisions of the

Intestate Succession Ordinance, 1946 (Ordinance No. 12 of 1946);

(iii) the partner of such person or the spouse of such partner or any person

who is related to such partner or spouse as is contemplated in

subparagraph (ii);

(iv) the beneficiaries of a trust, or a trust of which such person or associate

of such person is a trustee or beneficiary; or

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(v) a company of which such person is a director or a close corporation of

which such person is a member or any juristic person of whom such

person is a manager or of which he or she has control;

(b) in relation to a juristic person means -

(i) any natural person who is a director of that juristic person or a member

of a close corporation or who has control of that juristic person or close

corporation, either alone or together with his or her associate as

contemplated in sub paragraph (a); or

(ii) any other juristic person which is controlled by the same person who

controls the first-mentioned juristic person;

(c) of another person means a person who has control of an undertaking of the other

person, and that person also has control of an undertaking if the person who

manages the undertaking is or the persons who manage it are accustomed to act

in accordance with that person’s directions or instructions, unless that person

gives advice in a professional capacity only;

(d) means a natural person or juristic person who was an associate of another

natural person or juristic person at the time of any disposition or at the date of

the liquidation of an insolvent estate or liquidation of one of the parties; or

(e) means that two entities are associates of each other if the one is an associate of

the other;

“bank” means a banking institution registered in terms of the Banking Institutions Act,

1998 (Act No. 2 of 1998);

“book” or “books” in relation to bookkeeping or the recording or storage of

information, includes any electronic or mechanical device by means of which the

information concerned is recorded or stored, and in relation to the production, the

handing over or the attachment of any book or books, means the production, the

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handing over or the attachment of a print-out or other written version of the said

information produced by means of such device;

“centre of main interests” means the place where the debtor conducts the administration

of the debtor’s interests on a regular basis, ascertainable by third parties or the place

where the debtor’s registered office is, or where that the debtor’s habitual residence is;

“concurrent creditor” means a creditor who in whole or in part has a claim other than

as a secured creditor or a preferent creditor;

“commencement of liquidation” means the date of a provisional liquidation order;

“Commissioner” means the Insolvency Commissioner appointed under section 4;

“Commissioner of Inland Revenue” means Commissioner of Inland Revenue defined

in section 1 of the Income Tax Act;

“Companies Act” means the Companies Act, 2004 (Act No. 28 of 2004);

“composition” means a composition contemplated in Chapter 4;

“Court” or “the Court” means the High Court or a judge of the High Court, defined in

section 1 of the High Court Act and in section 16(1)(b); 28(1); 33, 35, 36, 213 and

227 includes a magistrate's court, which has jurisdiction in respect of the matter or

offence concerned;

“debtor” means a person, trust or entity that is able to incur debt and whose estate has

been liquidated, and includes-

(a) the estate of any such person or entity;

(b) unless inconsistent with the context or clearly inappropriate any such debtor or

debtor’s estate before liquidation,

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but excludes a debtor which can be wound up under the Companies Act, or any other

Act;

“Deeds Registries Act” means the Deeds Registries Act, 1937 (Act No. 47 of 1937);

“direct notice” means notice by facsimile, e-mail, or personal delivery;

“disposition” means any transfer or abandonment of rights to property and includes a

sale, mortgage, pledge, delivery, payment, release, compromise, donation, suretyship

or any contract therefor;

“e-mail” means a message distributed by electronic means to an e-mail address

indicated for use by the intended recipient and no report is received that the message

could not be delivered to that recipient;

“employee” means an employee as defined by section 1 of the Labour Act;

“establishment” for purposes of determining whether this Act applies to a debtor,

means any place of operations where the debtor carries out a non-transitory economic

activity with human means and goods or services;

“estate” in its functional sense refers to assets of the debtor that are controlled by an

insolvency practitioner and are subject to insolvency proceedings.

“fax” means a facsimile transmission which according to a transmission report has

been transmitted successfully;

“financial lease” means a contract whereby a lessor leases specified movable property

to a lessee at a specified rent over a specified period subject to a term of the contract

that-

(a) at the expiry of the contract the lessee may acquire ownership of the leased

property by paying an agreed or determinable sum of money to the lessor; or

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(b) the rent paid in terms of the contract must at the expiry of the contract be applied

in reduction of an agreed or determinable price at which the lessee may

purchase the leased property from the lessor; or

(c) the proceeds of the realization of the leased property at the expiry of the lease

must accrue wholly or partly to the lessee;

“free residue” in relation to an insolvent estate, means that portion of the estate which

is not subject to any claim by a secured creditor;

“good faith” in relation to the disposition of property, means the absence of any

intention to prejudice creditors in obtaining payment of their claims or to prefer one

creditor above any other;

“High Court Act” means the High Court Act, 1990 (Act No. 16 of 1990);

“immovable property” means land and every right, title and interest in and to land or

minerals which is registrable in any office in Namibia intended for the registration of

title to land or the right to mine;

“Income Tax Act” means the Income Tax Act, 1981 (Act No. 24 of 1981);

“insolvency practitioner” means a person who holds a registration certificate granted

in terms of section 13;

“insolvency proceedings” means-

(a) liquidation proceedings in terms of Chapter 3; or

(b) reorganization proceedings in terms of Chapter 4;

“insolvent” means a debtor whose estate is under liquidation, and in relation to a debtor

who at the date of the liquidation of his or her estate is married in community of

property, includes the spouse of such debtor;

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“insolvent estate” means an estate which is under liquidation and where the joint estate

of spouses married in community of property is under liquidation, it includes the

separate property of the spouses;

“Labour Act” means the Labour Act, 2007 (Act No. 11 of 2007);

“liquidation order” means an order of a Court whereby the estate of a debtor is placed

under liquidation and includes a provisional liquidation order when it has not been set

aside;

“liquidator” means an insolvency practitioner who acts as the liquidator of an insolvent

estate appointed in accordance with Part 6 of Chapter 3 as a provisional or final

liquidator of an insolvent estate;

“liquidator's notice” means-

(a) notice or delivery by the liquidator by registered mail, fax, e-mail, or personal

delivery supported by an affidavit by the liquidator with a list of the persons

given notice or delivered to and the method used by the liquidator to send or

deliver the notice; or

(b) any other form of notice approved by the Commissioner where the

Commissioner is satisfied that there are exceptional circumstances justifying

another form of notice;

“magistrate” means a magistrate as defined in section 1 of the Magistrates Act, 2003

(Act No. 3 of 2003) and includes an additional magistrate defined in that section;

“Magistrates’ Court Act” means the Magistrates’ Court Act, 1944 (Act No. 32 of

1944);

“magistrate's court” means a magistrate’s court established in terms of the Magistrates’

Court Act;

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“Master” means the Master of the High Court and includes a Deputy Master appointed

in terms of section 2 of the Administration of Estates Act;

“Minister” means the Minister responsible for the administration of justice;

“movable property” means every kind of property and every right or interest which is

not immovable property;

“prescribed” means prescribed by regulation;

“Prescribed Rate of Interest Act” means the Prescribed Rate of Interest Act, 1975 (Act

No. 55 of 1975);

“preferent creditor” means a creditor whose claim enjoys preference in terms of any

provision of this Act or a or a similar preference in terms of any other Act;

“property” means-

(a) all movable or immovable property including rights and interests in assets,

wherever located, whether in Namibia or a foreign State;

(b) all tangible and intangible assets; and

(c) a person’s rights and interests in encumbered assets and in third-party-owned

assets,

but excludes assets owned by a third party that are in the possession of the debtor at

the commencement of liquidation, including, but not limited-

(i) to trust assets; or

(ii) to assets subject to an arrangement (whether contractual or otherwise) that does

not involve a transfer of title, but rather the use of the assets and return thereof

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to the owner once the purpose for which they were in the possession of the

person has been fulfilled;

“Public Service Act” means the Public Service Act, 1995 (Act No. 13 of 1995);

“provisional liquidation order” means-

(a) a provisional order for the liquidation of the estate of a debtor; or

(b) an order for the final liquidation of the estate of the debtor if a provisional

liquidation order has not been granted;

“registration certificate” means a registration certificate issued to person in terms of

section 13 authorizing such person to practice as an insolvency practitioner;

“Rules of the Court’ means the Rules of the High Court of Namibia made in terms of

section 39 of the High Court Act;

“Registrar of the Court” means the registrar of court appointed in terms of section 30

of the High Court Act and includes a deputy registrar and assistant registrar appointed

in terms of that section;

“Registrar of Deeds” means the Registrar of Deeds defined in section 1 of the Deeds

Registries Act;

“reservation of ownership contract” means-

(a) a contract in terms of which corporeal or incorporeal movable property is sold

to a purchaser;

(b) the purchase price is payable wholly or partly in the future;

(c) the property is delivered to or placed at the disposal of the purchaser; and

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(d) the ownership in the property does not pass to the purchaser upon delivery of

the property, but remains vested in the seller until the purchase price is fully

paid or until the occurrence of some other specified event;

“secured creditor” means a creditor of an insolvent estate who holds security for his or

her claim, or a portion of a claim, against that estate;

“security” in relation to the claim of a creditor of an insolvent estate means property of

the insolvent estate over which the creditor has a preferent right by virtue of-

(a) any special bond;

(b) a landlord's legal hypothec;

(c) a pledge;

(d) a cession of rights to secure a debt;

(e) a right of retention;

(f) a reservation of ownership contract;

(g) a financial lease;

(h) any preferent right over property in terms of any other Act; or

(i) any prescribed security;

“sheriff” means the sheriff appointed in terms of section 30 of the High Court Act and

includes an additional sheriff, a deputy-sheriff or an assistant to a sheriff appointed in

terms of that section;

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“social benefit” means a pension, allowance or benefits payable to a person in terms of

the Employee’s Compensation Act, 1941 (Act No. 30 of 1941) or the Social Security

Act, 1994 (Act No 34 of 1994);

“special bond” means-

(a) a mortgage bond hypothecating any immovable property; or

(b) a notarial bond hypothecating specially described movable property in terms of

section 72;

“spouse” means a person’s-

(a) partner in a marriage;

(b) partner in a customary union or customary marriage according to customary

law; or

(c) partner in a relationship in which the parties live together in a manner

resembling a partnership contemplated in paragraphs (a) or (b);

“standard notice” means notice by registered mail, fax, e-mail or personal delivery;

“Stock Exchanges Control Act” means the Stock Exchanges Control Act, 1985 (Act

No. 1 of 1985);

“this Act” includes the regulations;

“trade union” means a trade union registered in terms of the Labour Act.

Application of Act

2. (1) This Act applies to any debtor -

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(a) whose centre of main interests is; or

(b) who has an establishment,

in Namibia.

(2) In the absence of proof to the contrary it is presumed that a natural

person’s centre of main interests is in Namibia if that person has his or her habitual

residence in Namibia.

Objectives of Act

3. (1) The objectives of this Act are-

(a) to enhance certainty in financial markets and the economy in general in

order to promote economic stability and growth;

(b) to achieve a balance of the risks allocated between debtors, creditors

and other stakeholders involved in insolvency proceedings;

(c) to promote incentives to achieve maximum value for assets of debtors,

so as to facilitate higher distributions to creditors as a whole and reduce

the burden of insolvency;

(d) to seek to achieve a balance between the liquidation of a debtor and the

reorganization of such debtor’s affairs;

(e) to ensure that creditors with similar legal rights should be treated

equitably, receiving a distribution on their claim in accordance with

their relative ranking and interests;

(f) to ensure that the insolvency of a debtor is addressed and resolved in an

orderly, quick and efficient manner, in order to avoid undue disruption

26

to the business activities of the debtor and to minimize the costs of

insolvency proceedings;

(g) to promote the goal of liquidating non-viable and inefficient debtor

businesses and the survival of efficient, potentially viable businesses;

(h) to provide easy access to insolvency proceedings by means of clear and

objective criteria which includes-

(i) an appropriate structure for supervision and administration of

insolvency proceedings;

(ii) convenient means of identifying, collecting, preserving and

recovering assets and rights that should be applied towards

payment of the debts and liabilities of the debtor;

(iii) effective participation of a debtor and his or her creditors in

insolvency proceedings with the least possible delay and

expense;

(iv) effective resolution of the debtor’s financial obligations and

liabilities;

(i) to preserve the debtor’s estate and prevent premature dismemberment

of the debtor’s assets by individual creditor actions to collect individual

debts so as to effect equitable distribution of assets to creditors;

(j) to ensure a transparent and predictable insolvency legal framework that

contains incentives for gathering and dispensing information in order to

promote stability in commercial relations and foster lending and

investment at lower risk premiums;

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(k) to facilitate clear recognition of existing creditor rights and

establishment of clear rules for ranking of priority claims so as to create

certainty in financial markets and facilitate the provision of credit; and

(l) to establish a framework for cross-border insolvency.

CHAPTER 2

GOVERNANCE OF THE INSOLVENCY REGIME

Part 1

The Insolvency Commissioner

Appointment of Insolvency Commissioner

4. (1) Notwithstanding the provisions of section 2 of the

Administration of Estates Act, the Minister must appoint on a full-time basis a person

with the prescribed qualifications and experience as a Deputy Master in the office of

the Master with the designation of Insolvency Commissioner.

(2) The Commissioner -

(a) is responsible to implement the provisions of this Act subject to the

general control and supervision of the Master;

(b) must perform the functions that are conferred on the Commissioner by

or in terms of this Act.

(3) The Commissioner may, on three months’ written notice addressed to

the Master, resign as Commissioner.

(4) The Master may remove the Commissioner from office on account of-

(a) serious misconduct;

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(b) permanent incapacity;

(c) engaging in any activity that may undermine the integrity or standing of

the public service; or

(d) any other legitimate ground that justifies the removal of the

Commissioner.

(5) A person does not qualify for appointment as Commissioner if such

person-

(a) is not a Namibian citizen or lawfully admitted to Namibia for permanent

residence;

(b) does not reside in Namibia;

(c) is an unrehabilitated insolvent or is subject to any proceeding in terms

of this Act;

(d) has been convicted of an offence involving dishonesty and sentenced to

imprisonment without the option of a fine; or

(e) is a member of a local authority council, regional council or Parliament.

(6) If the Commissioner is for any reason unable to perform the functions

assigned to them in terms of this Act, the Master may, on such conditions as the Master

may determine, appoint a suitable person as Acting Commissioner to perform the

functions of the Commissioner.

Appointment of staff members to assist Commissioner

5. (1) Subject to the Public Service Act, staff members with suitable

qualifications and experience must be appointed to assist the Commissioner in carrying

out his or her functions under this Act.

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(2) The Master may contract with any service provider to assist the

Commissioner in carrying out his or her functions.

Functions and powers of Commissioner

6. (1) The functions of the Commissioner are to-

(a) oversee and promote adherence with this Act in the interest of the

public;

(b) supervise the administration of all estates and matters to which this Act

applies;

(c) receive applications for registration as insolvency practitioners under

this Act and issue certificates to persons whose applications have been

approved;

(d) monitor whether an insolvency practitioner continues to meet the

qualifications and requirements determined under section 10 and take

the appropriate action referred to in this Act if the Commissioner

determines that the conditions no longer exist;

(e) where not otherwise provided for, require the deposit of one or more

continuing guaranty bonds or continuing suretyships as security-

(i) for the due accounting of all property received by insolvency

practitioners and for the due and faithful performance by them

of their duties in the administration of estates to which they are

appointed;

(ii) in any amount that the Commissioner may determine, which

amount may be increased or decreased as the Commissioner may

deem expedient; and

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(iii) in a form satisfactory to the Commissioner,

which the Commissioner may enforce for the benefit of the creditors;

(f) from time to time, make or cause to be made any inquiry or investigation

of estates or other matters to which this Act applies, including the

conduct of an insolvency practitioner, that the Commissioner considers

appropriate, and for the purpose of the inquiry or investigation the

Commissioner or any person appointed by the Commissioner for the

purpose must have access to and the right to examine and make copies

of all books, records, data, including data in electronic form, documents

and papers, that are relevant to such inquiry, investigation or other

matters;

(g) receive and keep a record of all complaints from any creditor or other

person interested in any estate and make such specific investigations

with regard to such complaints as the Commissioner may determine;

(h) examine insolvency practitioners’ accounts of receipts and

disbursements and final statements;

(i) investigate, either of its own initiative or in response to complaints

received, any matter concerning an insolvent estate or an insolvency

practitioner;

(j) promote advocacy and educational programs concerning insolvency;

(k) maintain public registers and other records contemplated in this Act and

particularly in Chapter 7;

(l) to exercise such other powers which are not in conflict with this Act as

may be conferred on the Commissioner in writing by the Master or the

Minister; and

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(m) inquire into and advise the Minister on-

(i) matters relating to insolvency and debt relief, whether of its own

accord or at the request of the Minister;

(ii) the application of this Act, amendments thereto and the making

of regulations; or

(iii) any power, duty or function which may or is required to be

exercised or performed in terms of this Act.

(2) A complaint contemplated in subsection (1)(i) must be -

(a) in the prescribed form; and

(b) substantiated by evidence justifying an investigation by the

Commissioner.

(3) The Commissioner must increase knowledge of the nature and

dynamics and promote public awareness of matters relating to insolvency by -

(a) implementing education and information measures to develop public

awareness of the provisions of this Act, and in particular to advance the

purposes of this Act;

(b) providing guidance to the public by -

(i) issuing explanatory notices outlining procedures and guidelines

pertaining to the Commissioner’s functions under this Act;

(ii) issuing non-binding opinions on the interpretation of any

provision of this Act; or

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(iii) applying to a Court for a declaratory order on the interpretation or

application of the provisions of this Act; and

(c) conducting research relating to the Commissioner’s mandate and

activities and, from time to time, publishing the results of that research.

(4) The Commissioner may liaise with any regulatory authority on matters

of common interest and, without limiting the generality of the foregoing, may -

(a) exchange information with and receive information from any such

regulatory authority pertaining either to matters of common interest or

to a specific complaint or investigation;

(b) participate in the proceedings of any regulatory authority; and

(c) advise, or receive advice from, any regulatory authority.

(5) The Commissioner may, with the approval of the Minister, on a temporary basis or for a particular matter which is being examined by it, employ any person with special knowledge of any matter relating to the work of the Commissioner, or obtain the cooperation of any body, to advise or assist the Commissioner in the exercise of its powers and the performance of its duties and functions under this Act, and fix the remuneration (including reimbursement for travelling, subsistence and other expenses) or other benefits, if any, of such person or body.

(6) The Commissioner may-

(a) intervene in any matter or proceeding in Court, where the

Commissioner considers it expedient to do so, as if the Commissioner

was a party thereto;

(b) issue to insolvency practitioners or persons who provide counselling

pursuant to this Act, directives with respect to the administration of

this Act and, without restricting the generality of the foregoing,

directives requiring them-

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(i) to keep such records as the Commissioner may require; and

(ii) to provide the Commissioner with such information as he or

she may require;

(c) issue such directives as may be necessary to give effect to any decision

made by the Commissioner pursuant to this Act or to facilitate the

carrying out of the purposes and provisions of this Act, including,

without limiting the generality of the foregoing, directives relating to

the powers, duties and functions of insolvency practitioners;

(d) issue directives governing the criteria to be applied by the

Commissioner in determining whether a certificate may be issued to a

person and governing the qualifications and activities of insolvency

practitioners; and

(e) issue directives determining the form of any document that is by this

Act to be prescribed and the information to be given therein;

(7) Every person to whom a directive is issued by the Commissioner under

subsection (6) must comply with the directive in the manner and within the time

specified therein.

(8) The Commissioner may engage any person that the Commissioner

considers advisable to conduct any inquiry or investigation or to take any other

necessary action, and the cost and expenses of those persons must, when certified by

the Commissioner, be payable out of the appropriation for the office of the Master.

(9) The Commissioner or any person duly authorized by the Commissioner

in writing, is entitled to have access to and to examine and make copies of the banking

accounts of an insolvency practitioner in which estate funds may have been deposited,

and, when required, all deposit slips, cancelled cheques or other documents relating

thereto in the custody of a bank or the insolvency practitioner must be produced for

examination.

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(10) The Commissioner, or any person duly authorized by the Commissioner

in writing, may with the leave of the Court granted on an ex parte application examine

the books, records, documents and deposit accounts of an insolvency practitioner or

any other person designated in the order granting that leave for the purpose of tracing

or discovering the property or funds of an estate when there are reasonable grounds to

believe or suspect that the property or funds of an estate have not been properly

disclosed or dealt with and for that purpose may under a warrant from the Court enter

on and search any premises.

(11) Where the Commissioner, on ex parte application, satisfies the Court

that it is necessary and in the public interest to do so, the Court may issue an order

directing any deposit-taking institution that holds a deposit account of an insolvency

practitioner or such other person as is designated in the order not to make payments

out of the account until such time as the Court otherwise directs.

(12) If, on information supplied by any person, the Commissioner suspects,

on reasonable grounds, that a person has, in connection with any estate or matter to

which this Act applies, committed an offence under this or any other Act, the

Commissioner may, if it appears to the Commissioner that the alleged offence might

not otherwise be investigated, make or cause to be made any inquiries or investigations

that the Commissioner considers appropriate.

(13) (a) If, on the application of the Commissioner or the

Commissioner’s authorized representative, a subpoena has been issued by the

Court, the Commissioner may, for the purpose of an inquiry or investigation

under subsection (12) examine or cause to be examined under oath before the

Registrar of the Court or other authorized person-

(i) an insolvency practitioner;

(ii) the debtor;

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(iii) any person who the Commissioner suspects, on reasonable

grounds, has knowledge of the affairs of the debtor; or

(iv) any person who is or has been an agent or a mandatary, or a

clerk, a servant, an officer, a director or an employee of the

debtor or the insolvency practitioner,

with respect to the conduct, dealings and transactions of the debtor or

insolvency practitioner, as the case may be, the causes of the

insolvency of the debtor, the disposition of the debtor’s property or the

administration of the estate.

(b) The Commissioner may order any person liable to be so examined to

produce any books, records, data, including data in electronic form,

documents or papers in the person’s possession or under the person’s

control.

(14) A person being examined pursuant to this section is bound to answer all

questions relating to the conduct, dealings and transactions of the debtor or the

insolvency practitioner, as the case may be, the causes of the debtor’s insolvency and

the disposition of the debtor’s property.

(15) Where a person being examined pursuant to this section objects to

answering any question on the ground that his or her answer may tend to criminate him

or her or may tend to establish his or her liability to a civil proceeding at the instance

of the State or of any person and if, but for this section or Article 12(1)(f) of the

Namibian Constitution, he or she would have been excused from answering that

question, the answer so given may not be used or admitted in evidence against him or

her in any proceeding, civil or criminal, thereafter taking place other than a prosecution

for perjury in the giving of that evidence.

(16) No person may hinder, molest or interfere with any person doing

anything that he or she is authorized by or pursuant to this section to do, or prevent or

attempt to prevent any person doing any such thing, and, notwithstanding any other

36

Act or law, every person must, unless he or she is unable to do so, do everything he or

she is required by or pursuant to this section to do.

(17) Where any book, record, paper or other document is examined or

produced in accordance with this section, the person by whom it is examined or to

whom it is produced or the Commissioner, may make or cause to be made one or more

copies thereof, and a document purporting to be certified by the Commissioner or a

person thereunto authorized by the Commissioner to be a copy made pursuant to this

section is admissible in evidence and has the same probative force as the original

document would have if it were proven in the ordinary way.

(18) If, after an investigation pursuant to this section or otherwise the

Commissioner has obtained evidence of an offence having been committed in

connection with an estate or matter to which this Act applies, the Commissioner must

report the alleged offence to the Prosecutor-General or to such person as is duly

designated by the Prosecutor-General for that purpose.

(19) A recovery made as the result of any inquiries or investigation made or

caused to be made pursuant to this section must be applied to the reimbursement of any

costs and expenses incurred by the Commissioner thereon, not being ordinary costs or

expenses of the office of the Commissioner, and the balance thereafter remaining in

respect of the recovery must be made available for the benefit of the creditors of the

debtor.

(20) The Master must submit to the Minister, not later than 31 March of each

year, a report on the activities of the Commissioner during the previous year.

(21) The Minister must submit the report of the Master to the National

Assembly within 30 days after receipt thereof or, if the National Assembly is not then

in session, within 30 days after commencement of its first ensuing session.

Specialist committees

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7. (1) The Commissioner, after consultation with the Master may

appoint one or more specialist committees to advise the Commissioner on the

management of its resources or the performance of his or her functions.

(2) The Commissioner may assign specific powers to the members of a

specialist committee for the purposes of performing any function contemplated in

subsection (1).

(3) A specialist committee may -

(a) be established for an indefinite term or for a period determined by the

Commissioner when the committee is established; and

(b) determine its own procedures.

(4) A specialist committee established under this section must -

(a) perform its functions impartially and without fear, favour or prejudice;

and

(b) consist of-

(i) not more than five persons who are independent from the

Commissioner and are appointed by the Minister for a term of

not more than five years; and

(ii) not more than two senior employees of the office of the Master

designated by the Master.

(5) A member of a specialist committee must-

(a) be a fit and proper person;

(b) should not have been removed involuntarily from a position of trust;

38

(c) have appropriate expertise or experience; and

(d) have the ability to perform effectively as a member of the committee.

(6) Members of a specialist committee must not-

(a) act in any way that is inconsistent with subsection (4)(a);

(b) expose themselves to any situation in which the risk of a conflict may

arise between their responsibilities and any personal financial interest;

or

(c) use their position or any information entrusted to them to enrich

themselves or improperly benefit any other person.

(7) A member of a specialist committee ceases to be a member if-

(a) the member resigns from the committee;

(b) the Commissioner terminates the person’s membership because the

member no longer complies with subsection (5) or has contravened

subsection (6); or

(c) the member’s term of office has expired.

(8) A member of a specialist committee who has any personal or financial

interest in any matter on which the committee gives advice, must disclose that interest

and withdraw from the proceedings of the specialist committee when that matter is

discussed.

(9) The Master must compensate-

39

(a) a member contemplated in subsection (4)(b)(i) for expenses incurred to

the extent determined by the Master; and

(b) a member contemplated in subsection (4)(b)(ii) for expenses incurred

only to the extent that the member’s remuneration and allowances as an

employee of the office of the Master does not extend to that person’s

services as a member of the specialist committee.

PART 2

INSOLVENCY PRACTITIONERS

Acting as insolvency practitioner

8. (1) A person acts as an insolvency practitioner in terms of this Act

if that person acts-

(a) as the permanent or interim liquidator in the liquidation of an insolvent’s

estate;

(b) as supervisor of a voluntary arrangement approved under Parts 3 and 4

of Chapter 4.

(2) No person may act as an insolvency practitioner unless that person is

issued with a registration certificate in terms of this Part.

Insolvency practitioners not registered

9. A person who does not hold a registration certificate and who purports

to act as an insolvency practitioner commits an offence and is on conviction liable to a

fine not exceeding N$100 000-00 or to imprisonment not exceeding 4 years.

Qualifications to act as insolvency practitioner

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10. (1) Subject to subsections (2) and (3), a person is qualified to act as

an insolvency practitioner only if the person-

(a) satisfies the prescribed requirements with respect to education, practical

training and experience;

(b) is a member of a professional body recognised under section 11; and

(c) satisfies the requirements, if any, of the rules pertaining to insolvency

governing that body.

(2) A person is disqualified from being or acting as an insolvency

practitioner if the person -

(a) is an unrehabilitated insolvent or subject to any proceedings under this

Act;

(b) is subject to a disqualification under the law relating to companies;

(c) is unable to perform the functions of an insolvency practitioner because

of physical or mental infirmity;

(d) does not reside in Namibia;

(e) is the spouse of a debtor subject to any proceedings under this Act;

(f) is by consanguinity related or deemed to be related in the first, second

or third degree of relationship, as determined in accordance with the

Intestate Succession Ordinance, 1946 (Ordinance No. 12 of 1946), to a

debtor referred to in paragraph (e) or to his or her spouse;

(g) is a minor or any other person under legal disability;

(h) is declared under section 57 to be disqualified;

41

(i) is removed by the Court from office of trust on account of misconduct;

(j) has been convicted, in Namibia or elsewhere, of an offence in terms of

this Act or an offence of which dishonesty is an element and who was

sentenced to imprisonment without the option of a fine or to a fine of

more than N$1000;

(k) any person who was, at any time, a party to an agreement or arrangement

with any debtor or creditor whereby he or she undertook that he or she

would, when performing the functions of an insolvency practitioner,

grant or endeavour to grant to, or obtain or endeavour to obtain for any

debtor or creditor any benefit not provided for by law;

(l) any person who has by means of any misrepresentation or any reward

or offer of any reward, whether direct or indirect, induced or attempted

to induce any person to nominate him or her as an insolvency

practitioner, to vote for him or her as an insolvency practitioner or to

effect or assist in effecting his or her election as an insolvency

practitioner of any insolvent estate;

(m) any person who at any time during a period of 12 months immediately

preceding the commencement of an insolvency proceeding in terms of

this Act acted as the bookkeeper, accountant or auditor of a debtor;

(n) any person with a proven interest opposed to the general interest of the

creditors of an insolvent estate.

(3) A body corporate is not eligible to be an insolvency practitioner, but

this subsection does not extend to an employee of a body corporate.

(4) A natural person who, during the two years immediately preceding the

commencement of this Part, was carrying on any of the activities referred to in section

8(1) is, unless disqualified under subsection (2), presumed to be qualified to be and to

42

act as an insolvency practitioner on and after that commencement, and the

Commissioner must issue a registration certificate to that person, but that person ceases

to be so qualified unless the person has, within 12 months after that commencement,

complied with the requirements of subsection (1).

Recognised professional bodies

11. (1) The Minister may, on the recommendation of the Commissioner

by notice in the Gazette declare one or more professional bodies to be recognised

professional bodies for the purposes of this Act.

(2) The Minister may declare a professional body to be a recognized

professional body only if it-

(a) regulates the practice of a profession; and

(b) maintains and enforces rules enabling its members to act as insolvency

practitioners to ensure that those members-

(i) are persons fit and proper to act as insolvency practitioners;

(ii) meet acceptable requirements relating to education, practical

training and experience.

(3) A reference to the members of a recognised professional body includes

a reference to persons who are, whether members of that body or not, governed by its

rules in the practice of the relevant profession.

(4) The Minister may revoke a notice made under subsection (1) if it

appears to the Minister that the professional body no longer meets the requirements of

subsection (2).

(5) A notice made by the Minister under this section takes effect from the

date of the notice or such other date as is specified in it.

43

(6) In this section, “profession” means a profession involving in or carrying

on any of the activities referred to in section 8(1).

Application to act as insolvency practitioner

12. (1) A person who wishes to act as an insolvency practitioner must

apply to the Commissioner for a registration certificate to act as an insolvency

practitioner.

(2) The Commissioner must refuse an application in terms of subsection (1)

that-

(a) does not comply with the prescribed requirements;

(b) does not contain or is not accompanied by such information as the

Commissioner may reasonably require for purposes of determining the

application;

(c) does not comply with subsection (3); or

(d) is not accompanied by the prescribed fee.

(3) The applicant must include in, or attach to, the application proof that-

(a) the applicant is qualified to act as an insolvency practitioner;

(b) the applicant-

(i) has a professional indemnity insurance policy or has provided

security for the proper performance of the functions of an

insolvency practitioner; and

44

(ii) that policy or security meets the prescribed requirements; and

(c) the applicant is a person fit and proper to act as an insolvency

practitioner.

(4) Information to be provided to the Commissioner under this section

must, if the Commissioner so requires, be in such form or verified in such manner as

the Commissioner may specify.

(5) An application made under subsection (1) may be withdrawn at any

time before it is granted or refused.

Grant or refusal of application to act as insolvency practitioner

13. (1) The Commissioner must as soon as practicable after receiving

an application made under section 12, grant or refuse the application.

(2) The Commissioner must grant an application made under section 12, if

satisfied that-

(a) the application complies with the requirements of that section; and

(b) the applicant is qualified to act as an insolvency practitioner and is a

person fit and proper to act as such,

whereupon the Commissioner must issue a registration certificate in the prescribed

form to the applicant.

(3) The Commissioner may not refuse an application for a registration

certificate without having given the applicant an opportunity to be heard.

(4) On granting an application under this section, the Commissioner must

notify the applicant in writing thereof and specify the date on which the registration

certificate is to take effect.

45

(5) A registration certificate granted under this section continues in force

for such period and subject to such reasonable conditions as are specified in that

certificate.

Revocation of registration certificate

14. (1) The Commissioner in consultation with the Master may revoke

a registration certificate if satisfied that the holder of such certificate–

(a) is no longer qualified to act as an insolvency practitioner;

(b) is no longer a person fit and proper to act as an insolvency practitioner;

(c) has been found guilty of an offence under this Act, or of an offence

under any other Act involving fraud, dishonesty or breach of trust;

(d) has contravened or failed to comply with, or is contravening or failing

to comply with, a condition of the registration certificate;

(e) in making the application for registration certificate, has provided the

Commissioner with false or misleading information.

(2) A registration certificate may be revoked by the Commissioner at the

request, or with the consent, of the holder thereof.

(3) Except if subsection (2) applies, the Commissioner may not revoke a

registration certificate without having given its holder an opportunity to be heard in

accordance with prescribed directives respecting the rules governing hearings for the

purposes of investigation into the conduct of an insolvency practitioner.

(4) A revocation of registration certificate is stayed until the period

determined under section 15(2)(a) within which the holder of a registration certificate

may appeal against the revocation has expired or, if that holder lodges such appeal

46

within that period, until the appeal is finally determined or is withdrawn, whichever

occurs first.

Appeal against decision of Commissioner

15. (1) A person whose-

(a) application for a registration certificate is refused; or

(b) registration certificate is revoked otherwise than at that person’s request

or with his or her consent,

may appeal to the Minister against the refusal or revocation, as the case may be in

accordance with rules prescribed for that purpose.

(2) Upon receipt of an appeal referred to in subsection (1), the Minister

must within the prescribed period convene an appeals committee comprising of

officials from the Ministry responsible for justice whom the Minister deems

appropriately qualified to adjudicate the appeal in accordance with the rules referred to

in that subsection.

(3) Appeal or a review proceedings may be instituted in any Court only

against the decision of an appeals committee referred to in subsection (2).

(4) An appeal or review referred to in subsection (3) must-

(a) be lodged with the Court within 90 days after applicant or holder of the

registration certificate is notified of the decision of the appeals

committee refusing the application or revoking the registration

certificate, or within such extended period as the Court may allow; and

(b) be in the form, and complies with any other requirements as prescribed.

47

(3) The Commissioner must be served with a copy of an appeal or review

in terms of this section.

CHAPTER 3

LIQUIDATION PROCEEDINGS

PART 1

COMMENCEMENT STANDARDS

Acts of insolvency

16. (1) A debtor commits an act of insolvency if-

(a) that debtor leaves Namibia or, being out of Namibia remains absent

therefrom, or absents himself or herself from his or her dwelling, or

regular place of business, with intent thereby to evade or delay the

payment of his or her debts;

(b) that debtor disposes or attempts to dispose of the debtor’s property or

any part thereof in a manner which appears to the Court to be likely to

prejudice creditors or to prefer one or more creditors above another,

unless the debtor satisfies the Court that such debtor was able to pay the

debtor’s debts after the disposition;

(c) that debtor removes or attempts to remove any of the debtor’s property

in a manner which appears to the Court to be likely to prejudice creditors

or to prefer one or more creditors above another, unless the debtor

satisfies the Court that such debtor was able to pay the debtor’s debts

after the removal or attempted removal;

(d) that debtor makes or offers to make any arrangement with any of the

debtor’s creditors for releasing the debtor wholly or partially from the

debtor’s debts;

48

(e) having applied in terms of section 17 for liquidation, that debtor fails to

comply with the requirements of that section or submits a statement of

affairs contemplated in that section which is substantially incorrect or

incomplete; or

(f) that debtor gives notice in writing to any of the debtor’s creditors that

the debtor is unable to pay any of the debtor’s debts;

(g) if the debtor exhibits to any meeting of the debtor’s creditors any

statement of the debtor’s assets and liabilities that shows that the debtor

is insolvent, or presents or causes to be presented to any such meeting a

written admission of the debtor’s inability to pay the debtor’s debts;

(h) if the debtor defaults in any proposal made under this Act; or

(i) the debtor is generally unable to pay debts which are due and payable,

or the debtor’s liabilities exceed the value of the debtor’s assets.

(2) For purposes of subsection (1)(i) a debtor is unable to pay that debtor’s

debts if-

(a) a creditor to whom the debtor is indebted in an amount of not less than

the amount prescribed from time to time has, by cession or otherwise,

in the manner contemplated in subsection (3) served on the debtor a

statutory demand, corresponding substantially with Form F of

Schedule 1-

(i) for payment of the amount which is due and payable;

(ii) to give security to the reasonable satisfaction of the creditor for

such amount;

(iii) to enter into a compromise therefor,

49

and the debtor has for 21 days thereafter neglected to pay the sum, or to

secure or compound for it to the reasonable satisfaction of the creditor;

or

(b) it appears from the return of the officer charged with the execution of a

judgment of any court against that debtor that the judgment has not been

satisfied after a valid execution thereof.

(3) The statutory demand referred to in subsection (2) must be served on

the debtor by the messenger of the magistrate’s court within whose jurisdiction the

debtor resides or by the creditor’s legal practitioner by delivering it -

(a) to the debtor personally;

(b) at the debtor’s main office or place of residence; or

(c) in such other manner as a magistrate’s court may direct.

(4) In determining whether a debtor is unable to pay its debts, a Court must

also take into account the contingent and prospective liabilities of the debtor.

(5) If a debtor committed any of the acts of insolvency contemplated in

subsection (1), any person entitled to do so in terms of this Chapter may commence

insolvency proceedings.

PART 2

APPLICATIONS FOR LIQUIDATION AND LIQUIDATION ORDERS

Application by debtor for liquidation of estate

17. (1) (a) The following persons may make application to a Court

in accordance with the Rules of the Court for the liquidation of the estate of a

debtor or of a deceased person:

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(i) the debtor;

(ii) a person who lawfully acts on behalf of a debtor who is

incompetent to manage his or her own affairs; or

(iii) the executor or liquidator of the estate of that deceased person.

(b) An applicant contemplated in paragraph (a) must prove that-

(i) the estate of that debtor or deceased person, as the case may be,

is or will be generally unable to pay its debts as they mature; or

(ii) the liabilities of the estate of that debtor or deceased estate

exceed the value of its assets.

(2) Subject to subsection (7), an application contemplated in subsection (1)

must, where applicable contain the following information:

(a) The full name and date of birth of the debtor or deceased person, as the

case may be and, if an identity number has been assigned to him or her,

that identity number;

(b) any other names under which the debtor traded, if applicable;

(c) the marital status of the debtor or deceased person, as the case may be

and, if he or she is married in community of property the full name and

date of birth of his or her spouse and, if an identity number has been

assigned to the spouse, that identity number.

(3) The particulars referred to in subsection (2) must appear in the heading

of the application.

(4) An application contemplated in subsection (1) must be accompanied by-

51

(a) an affidavit in support of the relief sought in the application;

(b) a statement of affairs of the debtor or deceased person, as the case may

be, corresponding substantially with Form A1 of Schedule 1 and which

must contain the particulars provided for in the said Form, which

particulars must be sworn to or confirmed as required by the said Form;

and

(c) a certificate of the Commissioner, issued not more than 14 days before

the date on which the application is to be heard by the Court, that

sufficient security has been given for-

(i) the payment of all costs in respect of the application that might

be awarded against the applicant; and

(ii) all costs of the liquidation of the estate referred to in section 74,

which are not recoverable from other creditors of the estate.

(5) The applicant must, in accordance with the Rules of the Court lodge an

application contemplated in subsection (1) no later than noon on the fifth court day

before the day on which the application is to be heard by the Court, with the Registrar

of the Court for enrolment and deliver by standard notice to the Commissioner-

(a) a copy of the application together with the supporting affidavit referred

to in subsection (4)(a); and

(b) two copies of the statement of affairs referred to in subsection (3)(b).

(6) Before the documents referred to in subsection (5) are delivered to the

Commissioner the applicant must give notice of the application with the affidavit

referred to in subsection (4)(a) attached thereto-

(a) by direct notice to the head office of every trade union that, to the

applicant's knowledge, represents employees, if any, of the debtor; and

52

(b) to the employees themselves-

(i) by affixing a copy of such notice and attached affidavit to any

notice board to which the employees have access inside the

debtor's premises; or

(ii) if there is no access to the premises by the employees, by

affixing a copy of the notice and attached affidavit to the front

gate of the premises, where applicable, failing which to the front

door of the premises from which the debtor conducted any

business immediately prior to the date of the application; and

(c) by direct notice to-

(i) the Commissioner of Inland Revenue; and

(ii) the head office of bondholders with special bonds registered

against any property of the debtor.

(7) (a) If an applicant is unable to comply with any of the requirements

of subsection (2), the Court may dispense with such requirement and dispose

of the application in the manner that it finds just.

(b) Where the Court is satisfied that there are exceptional circumstances

justifying it the Court may authorise the applicant to give notice in a

manner other than subsection (6)(b) which the Court regards as

appropriate under the circumstances to bring the matter to the notice of

any affected employees.

(8) The Commissioner may require the applicant to cause the property

enumerated in the statement of affairs to be valued by an appraiser appointed in terms

of section 6 of the Administration of Estates Act, or any other suitably qualified person

approved by the Commissioner.

53

(9) The Court may, having considered the application -

(a) make an order as contemplated in section 22;

(b) make -

(i) an order in terms of Chapter 4 as if the application was a

reorganization proceeding; or

(ii) an administration order in terms of section 74 of the Magistrates’

Courts Act;

(c) dismiss the application or postpone its hearing; or

(d) make any other order that the Court finds to be just.

Application by creditor for liquidation of debtor's estate

18. (1) The following categories of creditors may make application to a

Court in accordance with the Rules of the Court for the liquidation of a debtor's estate:

(a) A creditor who has against a debtor who committed an act of insolvency

or who is insolvent, a liquidated claim for not less than the amount

determined by the Commissioner from time to time by notice in the

Gazette; or

(b) two or more creditors who have against a debtor who committed an act

of insolvency or who is insolvent in the aggregate liquidated claims for

not less than the amount determined by the Commissioner as

contemplated in paragraph (a).

(2) A claim in respect of a liquidated debt which is payable at some

determined time in the future may be taken into account for purposes of subsection (1).

54

(3) An application contemplated in subsection (1) must-

(a) be made by direct notice to the debtor and to the debtor's spouse, where

applicable unless the Court orders that such notice may be dispensed

with where the Court is satisfied that it would be in the interest of the

debtor or of the creditors to dispense with the notice; and

(b) subject to subsection (5), contain the following information, namely-

(i) the full name and date of birth of the debtor and, if an identity

number has been assigned to him or her, that identity number;

(ii) any other names under which the debtor traded, if applicable;

(iii) the marital status of the debtor and if he or she is married in

community of property, the full name and date of birth of his or

her spouse and if an identity number has been assigned to the

spouse, such identity number;

(iv) the amount, cause and nature of such claim;

(v) whether or not security has been given for the claim and if so,

the nature and value of the security; and

(vi) the act of insolvency or ground of liquidation on which the

application is founded or otherwise an allegation that the debtor

is in fact insolvent.

(4) An application contemplated in subsection (1) must be accompanied by-

(a) an affidavit in support of the relief sought in the application;

55

(b) a certificate of the Commissioner, issued not more than 14 days before

the date on which the application is to be heard by the Court, that

sufficient security has been given-

(i) for the payment of all costs in respect of the application that

might be awarded against the applicant; and

(ii) all costs of the liquidation of the estate referred to in section 74,

which are not recoverable from creditors of the estate.

(5) The particulars referred to in subsection (3)(b)(i), (ii) and (iii) must

appear also in the heading of the application unless the Court dispenses with this

requirement if the applicant is unable to furnish all such particulars.

(6) The applicant must in accordance with the Rules of the Court-

(a) lodge an application with the Registrar of the Court for enrolment; and

(b) serve a copy of the application, supporting affidavit and all annexures

thereto on-

(i) the debtor unless notice to the debtor has been dispensed with by

the Court; and

(ii) the Commissioner.

(7) When the application is lodged with the Registrar of the Court in

accordance with subsection (6), the applicant must give notice (with the affidavit

referred to in subsection (4)(a) attached thereto) of the application -

(a) by direct notice to the head office of every trade union that, to the

applicant's knowledge, represents employees, if any, of the debtor; and

(b) to the employees themselves-

56

(i) by affixing a copy of such notice and attached affidavit to any

notice board to which the employees have access inside the

debtor's premises; or


affixing a copy of the notice and attached affidavit to the front

gate of the premises, where applicable, failing which to the front

door of the premises from which the debtor conducted any

business immediately prior to the date of the application; and

(c) by direct notice to-

(i) the Commissioner of Inland Revenue; and

(ii) the head office of bondholders with special bonds registered

against any property of the debtor.

(8) If the debtor wishes to oppose the application, that debtor in accordance

with the Rules of the Court -

(a) must file a notice of opposition and answering papers with the Registrar

of the Court and serve a copy thereof on the applicant and on the

Commissioner;

(b) may apply to the Court that the application commenced in terms of this

section be converted into any reorganization proceeding contemplated

in Chapter 4, in which event the application will be stayed until the

Court determined the debtor’s application for conversion into

reorganization proceedings.

(9) (a) If an applicant is unable to comply with any of the requirements

of subsections (3)(b), the Court may dispense with such requirement and

dispose of the application in the manner that the Court finds to be just.

57

(b) Where the Court is satisfied that there are exceptional circumstances

justifying it the Court may authorise the applicant to give notice in a

manner other than subsection (7)(b) which the Court regards as

appropriate under the circumstances to bring the matter to the notice of

any affected employees.

(10) The Court, having considered an application contemplated in

subsection (1), may-

(a) make an order as contemplated in section 22;

(b) make -




Courts Act;

(c) dismiss the application or postpone its hearing; or

(d) make any other order that the Court finds to be just.

Liquidation of partnership estate

19. (1) When application is made to a Court for the liquidation of the

estate of a partnership, whether in terms of this Act or aother Act, application must

simultaneously be made for the liquidation of the separate estate of every partner, other

than a partner who is not liable for partnership debts or a partner in respect of whom

there is a lawful bar to the liquidation of his or her estate.

(2) The provisions of-

58

(a) section 17, in so far as they are applicable, applies with the changes

necessitated by the context in respect of an application by members of

a partnership for the liquidation of the partnership estate; and

(b) section 18, in so far as they are applicable, applies with the changes

necessitated by the context in respect of an application by a creditor or

creditors of a partnership for the liquidation of the estate of the

partnership.

(3) A Court granting a provisional or a final order for the liquidation of the

estate of a partnership must simultaneously grant an order for the liquidation of the

separate estate of every partner, except a partner who is not liable for partnership debts

or a partner in respect of whom there is a lawful bar to the liquidation of his or her

estate: Provided that if a partner has undertaken to pay the debts of the partnership

within a period determined by the Court and has given security for such payment to the

satisfaction of the Registrar of the Court, the separate estate of that partner may not be

liquidated by reason only of the liquidation of the estate of the partnership.

(4) In the case where there is no partner whose estate may be liquidated as

contemplated in subsection (3), the Court may nevertheless liquidate the partnership

estate and in such event every director, officer or member of a juristic person, which

juristic person is a partner of the partnership in question and every natural person who

is a partner but whose estate may not be liquidated, is deemed, for the purpose of

performing any statutory requirement in respect of the partnership estate, to be a person

whose estate is under liquidation.

(5) Where the separate estate of a partner is unable to meet fully the costs

of the liquidation of that estate, the balance must be paid out of the partnership estate

and where the partnership estate is unable to meet fully the costs of liquidation the

balance must be paid out of the estates of the partners.

(6) If a partnership has been dissolved and the partnership estate is unable

to pay its debts, the partnership estate may, on the application of a creditor of the

partnership or a former partner, be liquidated as an insolvent estate and the provisions

59

of subsections (1) to (5) apply with the changes necessitated by the context to such

liquidation.

Application for stay of proceedings from the time application for commencement

of liquidation is made

20. (1) At any time after the making of a liquidation application, and

before the Court grants a liquidation order, a debtor, a creditor of that debtor or a third

party with an interest in that application may, to protect and preserve the value of the

assets of the debtor or the interests of creditors, apply to the Court-

(a) if legal proceedings against that debtor are pending in the Court, for the

proceedings to be stayed;

(b) if proceedings relating to a matter are pending against the debtor in

another Court, including a magistrate’s court to restrain further

proceedings in respect of that matter in that other court;

(c) to stay execution against the assets of the debtor, including actions to

make security interests effective against third parties or the enforcement

of security interests;

(d) to entrust the administration or supervision of the debtor’s business, if

any, which may include the power to use and dispose of assets in the

ordinary course of business, to an insolvency practitioner or other

person designated by the Court; or

(e) to entrust the realization of all or part of the assets of the debtor to an

insolvency practitioner or other person designated by the Court, in order

to protect and preserve the value of assets of the debtor that, by their

nature or because of other circumstances, are perishable, susceptible to

devaluation or otherwise in jeopardy.

60

(2) On the hearing of an application made in terms of subsection (1), the

Court may make an order contemplated in subsection (1) on such terms as the Court

considers appropriate, including but not limited to-

(a) requiring the applicant to provide security to the satisfaction of the

Commissioner to indemnify the debtor in the event that the liquidation

application is dismissed or a liquidation order is set aside; and

(b) where appropriate, to pay costs or fees in respect of the application and

the orders of the Court contemplated in subsection (1).

Abuse of Court's procedures or malicious or vexatious application for liquidation

21. Whenever a Court is satisfied that an application for the liquidation of

a debtor's estate is an abuse of the Court's procedures or is malicious or vexatious, the

Court may allow the debtor forthwith to prove any damages which that debtor may

have sustained by reason of the application and award the debtor such compensation

as the Court finds to be just.

Provisional liquidation order

22. (1) If a Court hearing an application for the liquidation of the estate

of a debtor as contemplated in section 17, 18 or 19 is satisfied upon initial examination

that sufficient corroborating evidence appears to exist that-

(a) the applicable requirements of section 17, 18 or 19, as the case may be,

have been complied with;

(b) the debtor has committed an act of insolvency, or that the debtor is

insolvent; and

61

(d) in the case of an application contemplated in section 18, the applicant

has a claim against the debtor as contemplated in subsection (1) of that

section,

the Court may grant a provisional order for the liquidation of the estate of the debtor.

(2) A Court granting a provisional liquidation order contemplated in

subsection (1) may simultaneously grant a rule nisi calling upon all interested parties

and the respondent, if any, to appear on a date mentioned in the rule and show cause

why the respondent’s estate should not be liquidated finally.

(3) The return day of the rule nisi may on the application of the respondent

be anticipated for the purpose of discharging the order for provisional liquidation if 24

hours’ notice is given to the applicant.

(4) If the Court does not grant a provisional liquidation order as

contemplated in subsection (1) the Court may-

(a) grant an order in terms of section 23;

(b) make -




Courts Act;

(c) dismiss the application;

(d) postpone the hearing thereof, but not indefinitely; or

(e) make any other order which the Court finds to be just.

62

(5) When a provisional liquidation order is granted the Registrar of the

Court must, where applicable ensure that the particulars required in terms of section

17(6) and 18(5) to appear in the heading of the application appear also on the order.

(6) If there are reasonable grounds to believe that an insolvent may flee the

country to avoid prosecution or to take assets out of the reach of creditors, the Court

may when granting a provisional or final liquidation order, or at any time thereafter on

an application by the liquidator, issue an order that the passport or passports of such

insolvent is handed to the liquidator for the period stated in the order.

(7) Notwithstanding time periods set out in the Rules of the Court, the Court

must hear and consider an application contemplated in subsection (1) in an expedited

manner to enable the Court to reach a decision on whether or not to issue a provisional

order or an order referred to in subsection (4) as quickly as possible.

Final liquidation order

23. (1) If at the hearing of an application as contemplated in section 17,

18 or 19 or pursuant to the rule nisi referred to in section 22(2) the Court is satisfied

that -

(a) in the case where the application for liquidation was made by a creditor,

that creditor has established a claim against the debtor in accordance

with section 18; and

(b) the debtor has committed an act of insolvency or is insolvent,

that Court may make an order for the final liquidation of the estate of the debtor.

(2) If the Court does not issue a provisional order in terms of section 22,

and is not satisfied as contemplated in subsection (1), the Court may-

(a) dismiss the application for the liquidation of the estate of the debtor and

set aside the provisional liquidation order; or

63

(b) require further proof of the allegations in the application and postpone

the hearing for a reasonable period but not indefinitely.

(3) When a final liquidation order is granted the Registrar of the Court

must, where applicable ensure that the particulars which must in terms of section 17(2)

and 18(3)(b)(i)-(iii) appear in the heading of the application also appear on the order.

Public register of rehabilitated and unrehabilitated insolvents

24. The Commissioner must in accordance with Chapter 7 establish and

maintain a public register of rehabilitated and unrehabilitated insolvents.

Obligations of creditor upon whose application a liquidation order is made

25. (1) The creditor upon whose application a liquidation order is made

must, at that creditor’s own cost, prosecute the liquidation proceedings until a

liquidator is appointed.

(2) The liquidator must pay to the creditor referred to in subsection (1) that

creditor’s costs in respect of the prosecution of the liquidation proceedings, as costs of

the liquidation and the costs so payable to the said creditor must be taxed according to

the tariff applicable in the Court that made the liquidation order.

Notice of liquidation

26. (1) The Registrar of the Court that has granted a provisional

liquidation order must without delay send by standard notice a copy of that order and

of any order amending or discharging that order on the date any such order is issued -

(a) to the Registrar of Deeds; and

(b) to the sheriff of the district in which the insolvent resides, appears to be

carrying on business or owns property.

64

(2) The Registrar of Deeds and sheriff who received a copy of an order in

accordance with subsection (1) must note thereon the date and time when he or she

received that order.

(3) The Registrar of Deeds who has received a copy of a provisional

liquidation order in terms of subsection (2) must enter a caveat against-

(a) the transfer of immovable property; or

(b) the cancellation or cession of every bond,

registered in the name of or belonging to the insolvent.

(4) If the Registrar referred to in subsection (3) receives a copy of an order

discharging a provisional liquidation order, he or she must immediately cancel every

caveat entered as a result of such provisional liquidation order.

(5) A caveat entered in terms of subsection (3) expires ten years after the

commencement of liquidation.

(6) The Registrar of the Court must without delay send by standard notice

to the Commissioner a copy of every provisional or final liquidation order and any

other order made by the Court in respect of the insolvent or the liquidator of the

insolvent estate.

(7) Upon the granting of a provisional liquidation order the applicant who

applied for the order must without delay cause a notice of the order to be published in

the Gazette and a newspaper circulated in the area where the debtor normally resides.

PART 3

EFFECT OF LIQUIDATION

Effect of commencement of liquidation on insolvent and his or her property

65

27. (1) The issue of a provisional liquidation order in respect of an

insolvent has the effect that the insolvent is divested of his or her estate and that all the

property of that insolvent is deemed to be in the custody and under the control of the

Commissioner until a liquidator is appointed, whereupon the insolvent estate is deemed

to be in the custody and control of that liquidator.

(2) The estate of the debtor remains in the custody and under the control of

the liquidator until it reverts to the insolvent in terms of a composition contemplated

in Chapter 4 of this Act, or until the liquidation order is set aside.

(3) If the liquidator vacates his or her office or dies or becomes incompetent

to exercise his or her powers and perform his or her duties, the estate vests in any

remaining liquidator or if there is none, in the Commissioner until the appointment of

a new liquidator.

(4) After the expiry of every caveat entered in terms of sections 26(3),

66(9), or 117(3) in respect of the property of an insolvent any act of registration in

respect of such property brought about by such insolvent is valid despite the fact that

the property formed part of the insolvent estate.

(5) If a person who is or was insolvent unlawfully disposes of immovable

property which forms part of his or her insolvent estate, the liquidator may recover the

value of the property so disposed of, from -

(a) the insolvent or former insolvent;

(b) any person who, knowing such property to be part of the insolvent

estate, acquired such property from the insolvent or former insolvent; or

(c) any person who acquired such property from the insolvent or former

insolvent without giving sufficient value in return, in which case the

amount so recovered is the difference between the value of the property

and any value given in return.

66

(6) (a) The execution of a judgment in respect of property of the debtor

is stayed as soon as the sheriff becomes aware of the issue of a provisional

liquidation order against the insolvent, unless the Court orders otherwise.

(b) If costs in connection with the sale in execution of assets of the insolvent

have already been incurred when the execution of a judgment is stayed

as contemplated in paragraph (a), the Commissioner may-

(i) on the application of the liquidator;

(ii) on the conditions the Commissioner finds just and subject to

confirmation of the sale price by him or her; or

(iii) by resolution of a meeting of creditors of the estate,

approve the continuation of the sale for the benefit of the insolvent

estate, in which case the costs of the sale before or after liquidation must

be deducted from the proceeds.

(c) The liquidator of an insolvent estate is entitled to recover from a creditor

of the debtor the net amount of any payment in pursuance of the

execution of any judgment made to such creditor after the granting of

the provisional liquidation order.

(7) For the purposes of this section –

(a) the following property is excluded from a person’s insolvent estate:

(i) the necessary beds, bedding and wearing apparel of the insolvent

and his or her family;

67

(ii) the necessary furniture (other than beds) and household utensils

of the insolvent in so far as they do not exceed the prescribed

amount in value;

(iii) stock, tools and agricultural implements of a farmer, in so far as

they do not exceed the prescribed amount in value;

(iv) the supply of food and drink in the house sufficient for the needs

of the insolvent and his or her family during one month;

(v) tools and implements of trade, in so far as they do not exceed the

prescribed amount in value;

(vi) professional books, documents or instruments necessarily used

by the insolvent in his or her profession, in so far as they do not

exceed the prescribed amount in value;

(vii) arms and ammunition that the insolvent is required by law to

have in his or her possession as part of his or her equipment; and

(viii) a motor vehicle not exceeding the prescribed value;

(ix) necessary medicine and medical devices; and

(b) notwithstanding the provisions of any other law, all property of the

insolvent-

(i) not included in paragraph (a), at the date of issue of the

provisional liquidation order, including property or the proceeds

thereof which are in the hands of the sheriff under a writ of

attachment or a warrant of execution; and

(ii) subject to section 29, all property acquired by or which accrued

to the insolvent during his or her insolvency,

68

form part of the insolvent’s insolvent estate.

The effect of liquidation on civil proceedings by or against the insolvent

28. (1) Subject to the provisions of section 29(8), the issue of a

provisional liquidation order in respect of an insolvent has the effect that all civil

proceedings instituted in a Court by or against the insolvent is stayed.

(2) Proceedings that are stayed in terms of subsection (1) may-

(a) with the consent of the Court or a liquidator appointed in terms of

section 53; or

(b) with three weeks’ standard notice to that liquidator,

be continued against the insolvent estate.

(3) The opposite party in the civil proceedings referred to in subsection (1)

may apply to the Registrar of the Court to substitute the liquidator appointed in terms

of section 53 for the insolvent in the proceedings referred to in subsection (2).

(4) That liquidator may, by giving a liquidator’s notice to all parties and to

the Registrar of the Court, substitute himself or herself as party for the insolvent in

proceedings by or against the insolvent, other than proceedings contemplated in

section 29(8).

(5) The Court may on application by that liquidator or a creditor who has

proved a claim against the insolvent estate, prohibit the continuation of proceedings

against that estate if the Court is of the opinion that-

(a) the institution or continuation of the proceedings was unreasonably

delayed; and

69

(b) the continuation of the proceedings will unreasonably delay the

finalisation of that estate.

(6) After the confirmation by the Commissioner of the liquidator’s first

account in terms of section 106 and no more than three months after the conclusion of

the first meeting of creditors, no person may institute legal proceedings against the

insolvent estate in respect of any liability which arose before the commencement of

liquidation: Provided that the Court may, subject to the provisions of section 109 and

subject to such conditions as the Court may impose, permit the institution of such

proceedings if the Court is of the opinion that there was a reasonable excuse for the

delay in instituting the proceedings.

Rights and obligations of debtor during insolvency

29. (1) The fact that a person entering into a contract is insolvent does

not affect the validity of that contract: Provided that if a debtor thereby-

(a) purports to dispose of any property of his or her insolvent estate; or

(b) without the consent in writing of the liquidator of his or her estate, enters

into any contract whereby any earnings which accrues to his or her

insolvent estate in terms of subsection (2) is or is likely to be adversely

affected,

the contract is in either case voidable at the option of the liquidator, but subject to the

provisions of section 31.

(2) After the issue of a provisional liquidation order, the insolvent may

follow any profession or occupation and, subject to subsection (6), may collect for his

or her own benefit any remuneration for work done or payment for professional

services rendered by him or her or someone on his or her behalf.

70

(3) Any person who, after the commencement of liquidation of an

insolvent’s estate, became a creditor of the insolvent as a result of illegal conduct on

the part of the insolvent is entitled to payment of the debt out of any assets that accrued

to the insolvent estate as a result of the said illegal conduct to the extent that such debt

cannot be recovered from the insolvent personally and after payment of all costs

attributable to such assets, subject thereto that such creditor was not at the time when

he or she became a creditor aware, and could not by exercising reasonable care have

acquired knowledge, of the illegal conduct.

(4) (a) The insolvent must-

(i) keep a detailed record of all assets and income received by him

or her from whatever source and of all expenses incurred by him

or her;

(ii) for a period of one year from the issue of the provisional

liquidation order send to the liquidator monthly during the first

week of every month a statement of his or her income and

expenses during the preceding month, confirmed by an affidavit

or a solemn declaration;

(iii) after the expiry of the period of one year referred to in

subparagraph (ii), send to the liquidator annually a return of his

or her income and expenses for the preceding year, likewise

sworn to or confirmed; and

(iv) at the written request of the liquidator within seven days after

such request, submit to the liquidator particulars of income

received and expenses incurred by him or her for the period

indicated by the liquidator.

(b) The liquidator may-

71

(i) at all reasonable times inspect the records referred to in

paragraph (a); and

(ii) require the insolvent to submit proof in support of such records

and of expenses which he or she claims to have incurred for his

or her own support or that of his or her dependants.

(5) No benefit in terms of any pension law or the rules of a fund which is

claimable by an insolvent and is paid after the commencement of liquidation of his or

her estate, and no social benefit which is so claimable and paid, forms part of the

debtor’s insolvent estate.

(6) (a) The liquidator may issue from the magistrate’s court of the

district in which the insolvent resides, carries on business or is employed a

notice calling on the insolvent to appear at a hearing before that court in

chambers on a date specified in such notice to give evidence on and supply

proof of-

(i) the earnings received by the insolvent or his or her dependants

out of the exercise of his or her profession, occupation or

employment;

(ii) all assets or income received by the insolvent or his or her

dependants from whatever source; and

(iii) his or her estimated expenses,

for his or her own support and that of his or her dependants.

(b) The notice, substantially in the form of Form E1 of Schedule 1 must

be drawn up by the liquidator, signed by the liquidator and the clerk of

that court and served in accordance with the Rules of the Court by the

messenger of the court on the insolvent at least 7 days before the date

specified in the notice for the hearing.

72

(c) That court may at any time in the presence of the insolvent postpone the

proceedings to such date as the court may determine and may order the

insolvent to produce such documents as the court may specify at the

hearing on the date determined by the court.

(d) On the appearance of the insolvent before that court in chambers, the

court must-

(i) call upon the insolvent to give evidence under oath or

affirmation on his or her earnings or estimated expenses

contemplated in paragraph (a); and

(ii) receive such further evidence as may be adduced either orally or

by affidavit or in such other manner as the court finds to be just

by or on behalf of either the insolvent or the liquidator as is

material to the determination of the said earnings or estimated

expenses.

(e) The court, after the hearing must issue a certificate indicating which

proportion of the insolvent’s future earnings, if any, is not required for

the support of the insolvent and his or her dependants and must accrue

to his or her insolvent estate.

(f) The liquidator may send a copy of a certificate contemplated in

paragraph (e) to the insolvent's employer by standard notice whereupon

the employer must transmit to the liquidator in accordance with the

certificate the amount stated therein.

(g) Any property which the debtor obtains after the issue of a provisional

liquidation order with earnings which do not in terms of a certificate

contemplated in paragraph (e) accrue to his or her insolvent estate, does

not form part of the insolvent estate.

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(7) (a) If an emoluments attachment order issued by any court in

respect of a judgment debtor prior to the commencement of liquidation of his

or her estate is in force when his or her estate is liquidated, such order remains

in force for a period of six months from the date of the provisional liquidation

order.

(b) The employer upon whom that emoluments attachment order was

served must in accordance with the order make payments to the

liquidator for the benefit of the insolvent estate.

(8) (a) An insolvent may sue or be sued in his or her own name without

reference to the liquidator of his or her estate-

(i) in any matter relating to status;

(ii) any right in so far as it does not affect his or her insolvent estate;

or

(ii) in respect of any claim due to or against him or her under this

section,

but no cession of his or her earnings after the commencement of liquidation of

his or her estate, whether made before or after the issue of the provisional

liquidation order, is of any effect so long as his or her estate is under liquidation.

(b) An insolvent may be sued in his or her own name for any delict

committed by him or her after the commencement of liquidation of his

or her estate, and his or her insolvent estate is not be liable therefor.

(c) An insolvent may for his or her own benefit recover any compensation

for any loss or damage which he or she may have suffered, whether

before or after the commencement of liquidation of his or her estate, by

reason of any defamation or personal injury: Provided that-

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(i) where such compensation recovered by that insolvent includes

medical or other expenses a creditor in respect of such expenses

is entitled to be paid out of the compensation or recover the

compensation from the insolvent even though the claim for such

expenses arose before the commencement of liquidation of the

estate; and

(ii) the insolvent may not without leave of the Court institute any

action against the liquidator of his or her estate on the ground of

malicious prosecution or defamation.

(9) Any property claimable by the liquidator from the insolvent under this

section may be recovered from the insolvent by warrant of execution to be issued by

the Registrar of the Court upon the production to him or her of a certificate by the

Commissioner that the property stated therein is so claimable.

(10) The insolvent must at the request of the liquidator assist the liquidator

to the best of his or her ability in collecting, taking charge of or realising any property

belonging to the insolvent estate and the liquidator during the period of such assistance,

must give to the insolvent out of the insolvent estate such an allowance in money or in

goods as is, in the opinion of the Commissioner, necessary to support the insolvent and

his or her dependants.

(11) The insolvent must keep the liquidator informed in writing of his or her

postal and residential address.

(12) If a notice is to be conveyed to an insolvent in terms of this Act notice

must be sent to such insolvent at the address referred to in subsection (11).

PART 4

IMPEACHABLE DISPOSITIONS

General

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30. (1) A debtor commits an offence if the debtor knowingly

participates in-

(a) transactions intended to defeat, delay or hinder the ability of creditors

to collect claims where the effect of the transaction was to put assets

beyond the reach of creditors or potential creditors or to otherwise

prejudice the interests of creditors;

(b) transactions where a transfer of an interest in property or the

undertaking of an obligation by the debtor was a gift or was made in

exchange for a nominal or less than equivalent value or for inadequate

value that occurred at a time when the debtor was insolvent or as a result

of which the debtor became insolvent (undervalued transactions).

(2) A creditor and a debtor commit an offence if they knowingly participate

in transactions where that creditor obtained, or received the benefit of, more than its

proportional share of the debtor’s assets that occurred at a time when the debtor was

insolvent.

Alienation by insolvent of property to third party who is in good faith

31. If an insolvent, without the consent of the liquidator of his or her estate,

alienates for value any property or any right to such property which he or she acquired

after the commencement of liquidation of his or her estate and which forms part of his

or her insolvent estate, to a person who proves that he or she was not aware and had no

reason to suspect that the estate of the insolvent was under liquidation, the alienation

is nevertheless valid.

Presumptions relating to property in possession of insolvent

32. (1) Whenever an insolvent has acquired the possession of property

and the liquidator of his or her estate claims that property for the benefit of the insolvent

estate that property is presumed to belong to the insolvent estate, unless the contrary is

proved.

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(2) If any person who became a creditor of the insolvent after the

commencement of liquidation of the insolvent’s estate alleges against the insolvent or

the liquidator that property acquired by the insolvent does not belong to the insolvent

estate and claims any right thereto, it is presumed that such property does not belong

to the insolvent estate, unless the contrary is proved.

Disposition without value

33. (1) The Court may set aside every disposition of property not made

for value if such disposition was made by the insolvent-

(a) within two years before the presentation of the application for

liquidation of his or her estate to the Registrar of the Court; or

(b) within three years before the presentation of the application for

liquidation to that Registrar if the disposition was made in favour of an

associate:

Provided that if it is proved by someone opposing the setting aside of the disposition

that the liabilities of the insolvent at any time after the making of the disposition

exceeded his or her assets by less than the value of the property disposed of, the

disposition may be set aside only to the extent of such excess.

(2) A disposition of property not made for value, which was set aside under

subsection (1) or which was uncompleted by the insolvent, does not give rise to any

claim in competition with the creditors of the debtor’s estate: Provided that in the case

of a disposition of property not made for value, which was uncompleted by the

insolvent, and which -

(a) was made by way of suretyship, guarantee or indemnity; and

(b) has not been set aside under subsection (1),

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the beneficiary concerned may compete with the creditors of the insolvent’s estate for

an amount not exceeding the amount by which the value of the insolvent’s assets

exceeded his or her liabilities immediately before the making of that disposition.

Antenuptial contracts

34. (1) No immediate benefit under a duly registered antenuptial

contract given in good faith by one spouse to the other or to any child to be born of the

marriage may be set aside as a disposition without value, unless the application for the

liquidation of the estate of the spouse who gave the benefit was presented to the

Registrar of the Court within two years of the registration of that antenuptial contract.

(2) In subsection (1) the expression "immediate benefit" means a benefit

given by a transfer, delivery, payment, cession, pledge, or special bond of property

completed before the expiration of a period of three months as from the date of the

marriage.

Voidable preferences

35. (1) The Court may set aside every disposition an insolvent makes

of his or her property which has the effect that any one of his or her creditors receives

a benefit to which that creditor would not have been entitled had the insolvent’s estate

been under liquidation at the time of the making of the disposition if -

(a) the insolvent’s liabilities exceeded the value of his or her assets

immediately after the making of the disposition; and

(b) the disposition was made within six months before the presentation of

the application for liquidation of the insolvent’s estate to the Registrar

of the Court or within 12 months before such presentation where that

disposition was made to an associate of the debtor,

unless the person for whose benefit the disposition was made, proves that it was made

in the ordinary course of business and that it was not intended thereby to prefer one

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creditor above the other, and if he or she is an associate of the insolvent, also proves

that he or she was not aware and had no reason to suspect that the insolvent’s liabilities

would exceed the value of his or her assets immediately after the making of the

disposition.

(2) For purposes of subsection (1) it is presumed unless the contrary is

proved, that a disposition was made not in the ordinary course of business if -

(a) it was made by way of payment of a debt that was not due and payable

or not legally enforceable;

(b) it embodied payment in an unusual form or a form not originally agreed

upon.

(3) The Court may set aside any disposition a debtor makes of his or her

property at a time when his or her liabilities exceed his or her assets, made with the

intention of preferring one of his or her creditors above another, if the application for

the liquidation of the estate of the debtor is presented to the Registrar within three years

after the making of the disposition.

(4) For purposes of this section a surety of a debtor or a person by law in a

position analogous to that of a surety is deemed to be a creditor of the debtor.

(5) Every disposition of property made under a power of attorney, whether

revocable or irrevocable, is for the purposes of this section, deemed to be made at the

time at which the transfer or delivery or mortgage of such property takes place.

Collusive dealings for prejudicial disposition of property

36. (1) Any transaction which-

(a) was entered into by a debtor before or after the liquidation of his or her

estate in collusion with another person for disposing of property

belonging to the debtor or the debtor’s estate; and

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(b) had the effect of prejudicing that debtor’s creditors or preferring one

creditor above another,

may after the liquidation of his or her estate be set aside by the Court.

(2) Any person who was a party to such collusion-

(a) is liable to make good any loss thereby incurred by the insolvent estate;

(b) must pay for the benefit of the insolvent estate, by way of penalty, such

sum as the Court may determine, which sum may not be more than the

amount by which he or she would have benefited if the disposition had

not been set aside; and

(c) if that person is a creditor he or she forfeits his or her claim against the

insolvent estate.

(3) The compensation and penalty referred to in subsection (2) may be

recovered in any proceedings for the setting aside of the transaction concerned.

Certain contributions to funds may be recovered for benefit of insolvent estate

37. (1) If a debtor at any time within two years before the presentation

to the Registrar of the Court of the application for the liquidation of that debtor’s estate

undertook new obligations in respect of a fund at a time when the debtor’s liabilities

exceeded that debtor’s assets, or as a result of which the debtor’s liabilities exceeded

the debtor’s assets, the liquidator of that debtor’s estate may recover from such fund

for the benefit of the insolvent estate any contribution in respect of such new obligation

which together with the total contributions in respect of existing obligations, exceed

the amount per annum as prescribed: Provided that-

(a) if it is proved by someone opposing the recovery of contributions that

the liabilities of the debtor at any time after the new obligation was

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undertaken exceeded that debtor’s assets by less than such prescribed

amount which the liquidator may recover the amount which may be

recovered may not be greater than the amount by which the debtor’s

liabilities exceeded the debtor’s assets;

(b) payment by one fund to another fund upon termination of service or

dissolution of a fund and contributions to a new fund in so far as they

replace contributions to another fund is not regarded as new obligations;

(c) if contributions which are recoverable have been made to more than one

fund, the amount which may be recovered from any such fund must be

proportioned according to the contributions made to each fund in respect

of such new obligations.

(2) The prescribed amount referred to in subsection (1) must be periodically

amended to take account of subsequent fluctuations in the value of money.

(3) Notwithstanding the provisions of any other law, a fund from which any

contribution is recovered as contemplated in subsection (1) may reduce the benefits to

which the debtor concerned would have been entitled in terms of the rules of the fund

in respect of such contributions, in proportion to the contributions so recovered from

the fund.

(4) No greater amount may be recovered from a fund in terms of subsection

(1) than the amount that would have been payable to the debtor if the fund had been

dissolved on the date when the amount is recovered.

(5) If the full amount in terms of subsection (1) cannot be recovered

because of the limitation in subsection (4), the liquidator may recover the deficit

proportionately from-

(a) the insolvent personally in respect of benefits which he or she received

from the said fund within three years after the commencement of

liquidation of the insolvent’s estate; and

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(b) from another beneficiary in respect of benefits which he or she received

from the said fund, within three years after the commencement of

liquidation in connection with the insolvent.

(6) If a fund had bought an annuity for a debtor from an insurer, the fund

may recover from the insurer that part of the purchase price paid out of contributions

recoverable in terms of subsection (1) and the insurer may, notwithstanding the

provisions of any other law, reduce the future benefits in respect of the annuity

accordingly: Provided that the amount so recovered may not exceed the value of the

debtor’s annuity on the date when the amount is recovered.

(7) If a debtor-

(a) conceals the payment of a contribution to a fund from his or her

creditors;

(b) partakes in the concealment thereof; or

(c) resigns himself or herself thereto,

the liquidator may recover such contribution made before creditors discovered, or

could reasonably have discovered if they had acted with due care, the payment of such

contribution, irrespective of whether such contribution was made within two years

before presentation to the Registrar of the Court of the application for the liquidation.

(8) This section does not prejudice the rights of a liquidator or creditors in

terms of the common law or this Act, if contributions were made fraudulently to the

disadvantage of creditors or if there were collusive dealings as contemplated in section

36.

(9) If the payment of premiums in respect of a life policy is a contribution

to a fund in terms of this section, the provisions of section 47 of the Long-term

Insurance Act, 1998 (Act No. 5 of 1998) does not apply.

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(10) For the purpose of this section-

(a) “contribution” in respect of a fund or annuity means a contribution made

to such fund or annuity by a debtor in respect of the debtor, less that part

of the contribution which represents commission or a premium in

respect of death or disability benefits and benefits paid to the debtor

before the commencement of liquidation;

(b) “fund” means any pension fund, provident fund or pension scheme

which is instituted in terms of any law or regulation or a fund which is

registered or provisionally registered in terms of section 4 of the Pension

Funds Act, 1956 (Act No. 24 of 1956);

Attachment of property in possession of associate

38. (1) If a liquidator believes on reasonable grounds that a disposition

of property by the debtor to an associate of the debtor may be liable to be set aside, the

liquidator may instruct the sheriff to attach such property.

(2) The sheriff must-

(a) take into his or her personal custody all cash, share certificates, bonds,

bills of exchange, promissory notes and other securities and compile a

specified list thereof;

(b) without delay deposit in a banking account as contemplated in section

103(1)(a) or (b) all cash taken into his or her custody;

(c) in so far as possible leave all other movables which the sheriff has

attached, other than animals, in a properly locked storage place or

appoint a suitable person to keep the said property in that person’s

custody, in which case the sheriff must-

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(i) hand to such person a copy of an inventory of the property left

in his or her custody; and

(ii) draw that person’s attention to the offence contemplated in

section 213(2)(f) in respect of the unauthorised disposition of

property under attachment;

(d) be entitled to fees according to Tariff A in Schedule 2.

(3) The property must be released if the liquidator instructs the sheriff to do

so.

(4) The liquidator must instruct the sheriff to release property as soon as it

is evident that attachment of the property is not required to safeguard the interests of

the estate in the setting aside of a disposition of property.

(5) An associate may apply to the Court for appropriate relief if property of

the associate is attached or held under attachment without reasonable cause.

(6) Unless the Court orders otherwise, the costs of attachment of the

property form part of the costs of liquidation.

Certain rights not affected by improper disposition

39. (1) A person who in return for any disposition which is in terms of

sections 33, 35 or 36 liable to be set aside, acting in good faith -

(a) has parted with any property or security which he or she held; or

(b) has lost any right against another person,

is not be obliged to restore any property or other benefit received under such

disposition, unless the liquidator has indemnified him or her for parting with such

property or security or for losing such right.

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(2) Sections 33, 35 or 36 do not affect the rights of any person who acquired

property in good faith and for value from any person other than a person whose estate

was subsequently liquidated.

(3) The setting aside of a disposition made by a debtor in terms of sections

33, 35 or 36 does not discharge a surety for the debtor.

Set-off

40. If-

(a) two persons have entered into a transaction the result whereof is a set-

off, wholly or in part, of debts which they owe one another and the estate

of one of them is liquidated within a period of six months after the taking

place of the set-off; or

(b) a person who had a claim against another person (in this section referred

to as the “debtor”) has ceded that claim to a third person against whom

the debtor had a claim at the time of the cession, with the result that the

one claim has been set-off, wholly or in part, against the other, and

within a period of one year after the cession the estate of the debtor is

liquidated,

the liquidator of the insolvent estate may in either case-

(i) abide by the set-off; or

(ii) if the set-off was not effected in the ordinary course of business,

disregard it and call upon the person concerned to pay to the insolvent

estate the debt which that person would owe the estate but for the set-

off, and thereupon that person is obliged to pay that debt and may prove

his or her claim against the estate as if no set-off took place:

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Provided that any set-off is effective and binding on the liquidator if it takes place

between a financial market infrastructure or a market participant as defined in section

44 and any other party in accordance with the rules of such market infrastructure, or if

it amounts to payment of a net amount in terms of section 45.

Payment of debt to insolvent after liquidation

41. If on or after the date of liquidation of an insolvent's estate a debtor of

the insolvent-

(a) pays to the insolvent a debt that was due before the date of liquidation;

or

(b) fulfils any obligation towards the insolvent the cause of which arose

before the date of liquidation,

such payment or such fulfilment is void, unless the debtor proves that it was

made or done in good faith without knowledge on his or her part of the

liquidation.

Institution of proceedings on behalf of insolvent estate

42. (1) Proceedings to set aside any disposition of property made by an

insolvent or for the recovery of any debt, asset, compensation, penalty or benefit of

whatever kind for the benefit of the insolvent estate may be instituted by the liquidator

and, if the liquidator fails to institute such proceedings they may be instituted by any

creditor on behalf of the insolvent estate upon indemnifying the liquidator against all

costs thereof to the reasonable satisfaction of the liquidator.

(2) If any creditor instituted proceedings under subsection (1) no creditor

who was not a party to the proceedings may derive any benefit from any moneys or

from the proceeds of any property recovered as a result of such proceedings before the

claim and costs of every creditor who was a party to such proceedings have been paid

in full.

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(3) In the proceedings referred to in subsection (1) an insolvent may be

compelled to give evidence on a subpoena issued on the application of any party to the

proceedings or he or she may be called upon by the Court to give evidence and the

provisions of section 87(6) apply with the changes necessitated by the context to the

giving of evidence at such proceedings.

(4) In any proceedings under sections 33, 35 or 36 it is presumed, until the

contrary has been proved, that the liabilities of a debtor exceeded his or her assets or

the value of his or her assets at any time within one year before the commencement of

liquidation of the insolvent estate.

(5) When the Court sets aside any disposition of property-

(a) the Court must declare the liquidator entitled to recover the alienated

property or in default of such property the value thereof at the date of

the disposition or at the date on which the disposition is set aside,

whichever is the higher; and

(b) interest as prescribed in section 1 of the Prescribed Rate of Interest Act

may be recovered on the value of such property and for the period

ordered by the Court.

PART 5

EFFECT OF LIQUIDATION UPON CERTAIN CONTRACTS

Uncompleted acquisition of immovable property by debtor

43. (1) If before the commencement of liquidation of his or her estate

an insolvent had entered into a contract for the acquisition of immovable property by

him or her and such property had not yet been transferred to him or her at the

commencement of liquidation, the liquidator of the insolvent estate may elect either to

abide by the contract or to abandon it.

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(2) The other party to the contract referred to in subsection (1) may call

upon the liquidator of that insolvent estate by written request to make an election as

contemplated in that subsection and if the liquidator fails to do so and to notify the

other party of his or her election by standard notice within four weeks after he or she

has received the written request, the other party may apply to the Court for an order for

the cancellation of the contract and for restoring any such immovable property which

came in possession or under the control of the insolvent or the liquidator by virtue of

the contract.

(3) The Court must, in respect of an application referred to in subsection

(2), make any order it finds to be just.

(4) The provisions of this section do not affect any right which that other

party may have to establish against the insolvent estate a concurrent claim for any loss

suffered by him or her as a result of the non-fulfilment of the contract.

Transactions on a financial market infrastructure

44. (1) In this section-

“financial market infrastructure” means-

(a) an exchange as defined in section 78 and registered in terms of Chapter 3 of the

Financial Institutions and Markets Act, 2018 (Act No. – of 2018);

(b) a central securities depository as defined in section 121 and registered in terms

of Chapter 3 of that Act;

(c) a securities clearing house as defined in section 78 and registered in terms of

Chapter 3 of that Act;

(d) any other financial market infrastructure as determined by the Minister by

notice in the Gazette;

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“rules” means-

(a) the exchange rules, the depository rules or securities clearing house rules as

defined in section 78 of the Financial Institutions and Markets Act, 2018 (Act

No. – of 2018);

(b) the rules of a financial market infrastructure referred to in paragraph (d) of the

definition of financial market infrastructure;

“market participant” means-

(a) an authorised user, a portfolio member, authorised advisor or authorised

representative registered in terms of section 91 of the Financial Institutions and

Markets Act, 2018 (Act No. – of 2018);

(b) a participant registered in terms of section 97 of that Act, a clearing member or

a client as defined in section 1 of the Financial Markets Act, 2012, or any other

party to a transaction;

“transaction” means any transaction to which the rules apply.

(2) If upon the sequestration of the estate of a market participant the

obligations of such market participant in respect of any transaction entered into prior

to sequestration have not been fulfilled, the financial market infrastructure in respect

of any obligation owed to it, or any other market participant in respect of obligations

owed to such market participant, is in accordance with the rules applicable to any such

transaction entitled to terminate transactions or revoke settlement instructions and the

trustee of the insolvent estate of the market participant is bound by such termination or

revocation.

(3) No claim as a result of the termination or revocation of any transaction

as contemplated in subsection (2) may exceed the amount due upon termination or

revocation in terms of the rules in question.

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(4) Any rules and the practices thereunder which provide for the netting of

a market participant’s position or for set-off in respect of transactions concluded by the

market participant or for the opening or closing of a market participant’s position or

for the revocation of settlement instructions is upon sequestration of the estate of the

market participant binding on the trustee in respect of any transaction or contract

concluded by the market participant prior to such sequestration, but which is, in terms

of such rules and practices, to be settled on a date occurring after the sequestration, or

settlement of which was overdue on the date of sequestration.

Agreements providing for termination and netting

45. (1) For purposes of this section-

“master agreement” means-

(a) an agreement in accordance with standard terms published by the International

Swaps and Derivatives Association, the International Securities Lenders

Association, the Bond Market Association or the International Securities

Market Association, or any similar agreement, which provides that, upon the

liquidation of one of the parties-

(i) all unperformed obligations of the parties in terms of the agreement-

(aa) terminate or may be terminated; or

(bb) become or may become due immediately; and

(ii) the values of the unperformed obligations are determined or may be

determined; and

(iii) the values are netted or may be netted, so that only a net amount

(whether in the currency of the Republic or any other currency) is

payable to or by a party,

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and which may further provide that the values of assets which have been

transferred as collateral security for obligations under that agreement

must be included in the calculation of the net amount payable upon

liquidation; or

(b) any agreement declared by the Minister, after consultation with the Minister of

Finance, by notice in the Gazette to be a master agreement for the purposes of

this section.

"unperformed obligation" includes an obligation of a party to an agreement to return

to the other party assets (whether tangible or intangible), in which ownership had been

transferred to the first-mentioned party as security for the latter party's prospective

liability under the agreement;

"market value" means a value determined without reference to the ability of the debtor

to perform;

(2) In this section “agreement” does not include -

(a) a transaction contemplated in section 44; or

(b) a netting agreement as contemplated in the Payment System

Management Act, 2003 (Act No. 18 of 2003).

(c) any agreement declared by the Minister after consultation with the

Minister responsible for finance, by notice in the Gazette not to be an

agreement for the purposes of this section.

(3) Notwithstanding any rule of the common law to the contrary, upon the

commencement of liquidation of the estate of a party to a master agreement-

(a) all unperformed obligations arising out such agreement, or obligations

arising from such agreement in respect of assets in which ownership has

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been transferred as collateral security, terminate automatically at the

commencement of liquidation;

(b) the values of those obligations must be calculated at market value as at

the commencement of liquidation;

(c) the values so calculated must be netted; and

(d) the net amount must be payable.

(4) Section 346 of the Companies Act and sections 33 and 35 of this Act

do not apply to property disposed of in terms of a master agreement.

Effect of liquidation of estate of seller under reservation of ownership contract

46. The liquidation of the estate of a seller under a reservation of ownership

contract does not give a right to the liquidator of the estate to reclaim property sold

under the contract.

Goods purchased not on credit but not paid for

47. (1) If a debtor, before the commencement of liquidation of his or

her estate, received delivery of movable property bought by him or her and the

purchase price of such property had not been paid in full at the time of the delivery

despite a term of the contract that the purchase price must be paid on delivery of the

property, the seller may after the liquidation of the debtor’s estate, reclaim the property

if within 14 days after the delivery thereof the seller gives standard notice to the debtor,

the liquidator or the Commissioner that he or she reclaims the property.

(2) If the liquidator disputes the seller's right to reclaim the property he or

she must, within 14 days after receipt of the seller’s notice of the claim, notify the seller

by standard notice that he or she disputes the claim, whereupon the seller may within

14 days after receipt of the liquidator’s notice, institute legal proceedings to enforce

the seller’s right.

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(3) For the purposes of subsection (1) a contract of purchase and sale is

deemed to provide for the payment of the purchase price upon delivery of the property

in question to the debtor, unless the seller has agreed that the purchase price or any part

thereof is not payable before or at the time of such delivery.

(4) The liquidator of a debtor’s insolvent estate is not obliged to restore any

property reclaimed by the seller in terms of subsection (1), unless the seller refunds to

the liquidator every part of the purchase price already received by the debtor or

liquidator, as the case may be.

(5) Except as provided in this section, a seller is not entitled to recover any

property which he or she sold and delivered to a purchaser whose estate was liquidated

after the sale, only by reason of the fact that the purchaser failed to pay the purchase

price.

Effect of liquidation upon lease

48. (1) This section does not apply to a financial lease.

(2) A lease of movable or immovable property does not terminate by the

liquidation of the estate of the lessee, but the liquidator of the insolvent estate may,

without prior notice, terminate the lease by standard notice to the lessor-

(a) with the approval of the Commissioner; or

(b) in terms of a resolution of creditors taken at a meeting of creditors of

the insolvent estate.

(3) The lessor may claim from the insolvent estate compensation for any

loss which the lessor may have sustained by reason of the non-performance of the terms

of the lease.

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(4) If the liquidator does not within three months of his or her appointment

notify the lessor by standard notice that he or she elects to continue the lease on behalf

of the insolvent estate, the liquidator is deemed to have terminated the lease at the end

of the three months.

(5) The rent due in terms of the lease from the commencement of

liquidation of the estate of the lessee to the termination or cession of the lease by the

liquidator, must be included in the cost of the liquidation.

(6) The termination of the lease by the liquidator in terms of this section

deprives the insolvent estate of any right to compensation for improvements, other than

improvements made in terms of an agreement with the lessor, made to the leased

property during the period of the lease.

Effect of liquidation on contract of service

49. (1) The contracts of service of employees whose employer has been

liquidated are suspended with effect from the commencement of liquidation.

(2) Without limiting subsection (1), during the period of suspension of an

employee’s contract of service referred to in subsection (1), the employee–

(a) is not required to render services;

(b) is not entitled to any remuneration; and

(c) is not entitled to any employment benefit,

in terms of that contract.

(3) An employee whose contract of service is suspended is entitled from

the date of such suspension to any unemployment benefits determined by any law.

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(4) Subject to subsections (5) and (8), a liquidator appointed in terms of

section 53 may terminate the contracts of service of employees,.

(5) A liquidator who has received proposals referred to in subsection (8) or

who intends to terminate the contracts of service of employees must consult with –

(a) any person who the insolvent employer was required to consult with

immediately before the liquidation, in terms of a collective agreement

defined in section 1 of the Labour Act;

(b) (i) a workplace representative elected in terms of section 67 of the

Labour Act; and

(ii) any trade union whose members are likely to be affected by the

termination of contract of service,

if there is no such collective agreement, that existed immediately prior

to the commencement of liquidation;

(c) the employees whose contracts of service were suspended in terms of

subsection (1) and who are likely to be affected by the termination of

the contract of service or their representatives nominated for that

purpose, if they do not belong to a trade union.

(6) The liquidator must disclose to the consulting parties all relevant

information that will allow the parties to consult effectively.

(7) The consultation referred to in subsection (5) must be aimed at reaching

consensus on appropriate measures to sell, save or rescue the whole or part of the

business of the insolvent employer in any manner authorised by law.

(8) If any party referred to in subsection (5), wishes to make proposals

concerning any matter contemplated in subsection (6), that party must lodge written

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proposals to the liquidator within 21 days after the appointment of the liquidator in

terms of section 53, unless the liquidator or such party agree otherwise.

(9) A creditor of the insolvent employer may, with the consent of the

liquidator, participate in any consultation contemplated in this section.

(10) Unless the liquidator and an employee have agreed on continued

employment of the employee in view of measures contemplated in subsection (7), all

suspended contracts of service terminates 45 days after the date of the appointment of

a liquidator in terms of section 53.

(11) An employee whose contract of service has been –

(a) suspended in terms of subsection (1); or

(b) terminated in terms of subsection (10),

is entitled to claim compensation from the insolvent estate of his or her former

employer for any loss he or she may have sustained by reason of the suspension or

termination of a contact of service prior to its expiration.

(12) An employee whose contract of service terminates or has been

terminated in terms of this section is entitled to claim severance benefits from the estate

of the insolvent employer in accordance with section 35 of the Labour Act.

PART 6

PROVISIONAL APPOINTMENT, ELECTION, APPOINTMENT AND

DISQUALIFICATION OF LIQUIDATORS

Appointment of provisional liquidator

50. (1) A creditor of an insolvent estate with a liquidated claim, the

cause of which arose before liquidation and who will after proof of the claim have the

right to vote for a liquidator at a meeting of creditors, and a trade union which

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represents employees of the insolvent may in writing nominate a person to be appointed

by the Commissioner as liquidator.

(2) The Commissioner must as soon as possible-

(a) after the granting of the provisional liquidation order; or

(b) after the time when a liquidator ceases to function as liquidator

according to the provisions of section 55,

appoint the liquidator or liquidators nominated in accordance with subsection (1):

Provided that-

(i) the Commissioner may reject a nomination or amend the amount of a

claim in a nomination if it appears from the information in a nomination

that the creditor's claim cannot be proved at a meeting of creditors or

cannot be proved for the amount reflected in the nomination;

(ii) an employee who has lodged a declaration that he or she was employed

by the debtor at the date of liquidation and who has not lodged a

nomination as a creditor, will be counted as a vote in number;

(iii) the nomination of a trade union will be counted in number for the

employees represented by the union and that the nomination by the

union prevails if the nomination by an employee conflicts with a

nomination of a union of which the worker is a member;

(3) If the Commissioner deems it necessary for the proper administration

of an insolvent estate he or she may at any time, in accordance with policy determined

by the Minister, appoint one additional liquidator by direct notice of the reasons for an

additional appointment to each liquidator appointed or to be appointed in terms of

subsection (2).

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(4) If the appointment of a liquidator is so urgent that it cannot be delayed

until the second working day after the granting of the provisional liquidation order the

Court may when granting the order simultaneously appoint a provisional liquidator for

the preservation of the estate on such conditions regarding the giving of security or

otherwise the Court finds to be just.

(5) The provisional liquidator referred to in subsection (4) must forthwith-

(a) after his or her appointment proceed to recover and take into possession

all the assets and property of the insolvent estate; and

(b) give effect to any directions by the Court.

(6) If the provisional liquidator referred to in subsection (4) is not appointed

in terms of subsection (2) or (8), the provisional liquidator must-

(a) vacate his or her office when a liquidator is appointed in terms of those

subsections; and

(b) deliver the assets, property and books of the insolvent estate to the

liquidator and render an account to the liquidator.

(7) The provisional liquidator is entitled to remuneration taxed by the

Commissioner in accordance with Tariff B in Schedule 2.

(8) Failing any valid nomination for the appointment of a liquidator in

terms of subsection (1), the Commissioner must appoint a person of his or her choice

as liquidator.

(9) If in the case of a liquidation by the Court the Commissioner is unable

to appoint a liquidator the he or she must, after the issue of a final order and after giving

direct notice to the person who applied for liquidation and notice by publication in the

Gazette, report to the Court with or without any formal application and request the

Court to set aside the liquidation order.

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(10) The Court may on receipt of the Commissioner’s report referred to in

subsection (9) –

(a) set aside the liquidation order;

(b) refer the report back to the Commissioner and direct the Commissioner

to proceed by way of formal application at the cost of the estate; or

(c) make any other order the Court finds to be just.

(11) The written nomination referred to in subsection (1) must be

substantially in the form of Form A2 of Schedule 1 for a creditor and Form A3 of

Schedule 1 for a trade union.

(12) No person may be appointed in terms of subsection (2) or (8) unless-

(a) that person has given security to the satisfaction of the Commissioner

for the proper exercise of his or her powers and performance of his or

her duties as liquidator; and

(b) has lodged an affidavit stating that he or she is not disqualified in terms

of section 10(2).

(13) A liquidator appointed in terms of subsection (2) or (8) must, before the

first meeting of creditors of the insolvent estate, give effect to any direction the

Commissioner gives to him or her.

(14) The Commissioner must keep a public record, which must be updated

at least every 30 days, of appointments in terms of subsection (3) or section 51(4)

which must reflect the name and reference number of the estate, the name and address

of the person appointed, the amount of security called for and the reasons for the

appointment.

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Election of liquidator

51. (1) Any-

(a) creditor of an insolvent estate who has proved claims against the estate

may vote for one liquidator at the first meeting of creditors or a

subsequent meeting convened to elect a liquidator; and

(b) employee who has not voted as a creditor and who has lodged a

declaration that he or she was employed by the debtor at the date of

liquidation may vote in number.

(2) (a) A liquidator is elected by the majority in number and in value of

the votes of creditors who are entitled to vote and who voted at such

meeting.

(b) If no candidate for the office of liquidator has obtained a majority in

number and in value of the votes, the candidate who has obtained a

majority of votes in number is deemed to be elected as liquidator if no

candidate has obtained a majority of votes in value, and the candidate

who has obtained a majority of votes in value is deemed to have been

so elected if no candidate has received a majority of votes in number.

(c) If one candidate obtained a majority of votes in value and another a

majority in number, both such candidates are deemed to be elected as

liquidators, and if either of them declines to share the office of liquidator

with the other, the other candidate is deemed to be the sole elected

liquidator.

(3) If no liquidator is elected at a meeting of creditors the liquidator

appointed by the Commissioner in terms of section 50 must be the liquidator of the

estate.

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(4) If the Commissioner deems it necessary for the proper administration

of an insolvent estate he or she may at any time, in accordance with policy determined

by the Minister, appoint one additional liquidator after 48 hours’ direct notice to each

liquidator appointed or to be appointed in terms of subsection (2) or (3) of the reasons

for an additional appointment.

Commissioner may refuse to appoint elected liquidator

52. (1) The Commissioner may refuse to appoint as liquidator a person

elected in terms of section 51, on any one or more of the following grounds namely,

that the person -

(a) was not properly elected;

(b) is in terms of section 10(2) disqualified from being appointed as a

liquidator or as liquidator of the insolvent estate in question;

(c) has failed to give security, within seven days after his or her election or

within such longer period as the Commissioner may allow, to the

satisfaction of the Commissioner for the proper performance of his or

her duties as liquidator.

(2) If the Commissioner refuses to appoint a person elected as as liquidator,

he or she must notify that person by direct notice of the reason for his or her refusal.

(3) (a) Any person aggrieved by the appointment of a liquidator or the

refusal of the Commissioner to appoint a person elected as liquidator,

may within a period of ten days from the date of such appointment or

refusal submit his objections to the Commissioner in writing.

(b) The Commissioner must within seven days of the receipt by him of the

objections inform the objector and the person elected, if applicable, of

his or her decision.

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(c) Any interested party may apply to the Court for a review of the

Commissioner's decision within 14 days after the Commissioner has

informed the objector and the person elected, if applicable, of his or her

decision.

(4) Whenever the Commissioner refuses to appoint as liquidator a person

elected as such, or the Court has set aside an appointment of a liquidator by the

Commissioner, the Commissioner must direct the liquidator appointed in terms of

section 53 to convene a meeting of creditors of the insolvent estate for purposes of

electing another person as liquidator in the place of such person or liquidator.

(5) The notice of the meeting referred to in subsection (4) must-

(a) state that the purpose of the meeting is to elect a liquidator;

(b) set out the reason in subsection (1) (a), (b) or (c), why the Commissioner

has refused to appoint the person elected as liquidator, or state that the

appointment of the liquidator has been set aside by the Court;

(c) be published in the Gazette not less than 14 days and not more than 21

days before the date fixed for the meeting;

(d) be sent by liquidator’s notice to every creditor who has proved a claim

against the estate.

(6) The meeting mentioned in subsection (4) must be held as if it were the

continuation of a first meeting of creditors held after an adjournment thereof.

(7) If the Commissioner refuses to appoint as liquidator a person elected at

a meeting convened in terms of subsection (4), he or she must notify such person by

direct notice and state the reason for his or her refusal, as contemplated in subsection

(2), whereupon the Commissioner may, if he or she deems it necessary for the proper

administration of the estate, in accordance with policy determined by the Minister

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appoint as liquidator any person whom he or she regards as a suitable person for

appointment.

(8) All the provisions of this Act relating to a liquidator applies to a

liquidator appointed by the Commissioner under this section.

Appointment of liquidator and security

53. (1) When-

(a) a final liquidation order has been made;

(b) a person elected as liquidator has given security to the satisfaction of

the Commissioner for the proper performance of his or her duties; and

(c) lodged an affidavit stating that he or she is not disqualified in terms of

10(2),

the Commissioner must, subject to section 52, appoint him or her as liquidator and

issue him or her with a letter of appointment, which is valid throughout Namibia.

(2) After the receipt of his or her letter of appointment the liquidator must

notify his or her appointment and his or her address by notice in the Gazette.

(3) The costs to the liquidator of giving security must, up to a maximum

amount which the Commissioner deems reasonable, be included as part of the costs of

the liquidation.


(a) for good cause at any time call for additional security; or

(b) reduce the security given by the liquidator if the liquidator has-

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(i) to the satisfaction of the Commissioner accounted for any

property in the estate; and

(ii) the Commissioner is of the opinion that the reduced security is

sufficient to indemnify the insolvent estate or its creditors

against any maladministration by the liquidator of the remaining

property in that estate.

Joint liquidators to act jointly

54. (1) When more than one liquidator has been appointed for an

insolvent estate all those liquidators-

(a) must act jointly in performing their functions as liquidators; and

(b) each of them is jointly and severally liable for every act performed by

them jointly.

(2) Whenever liquidators of an insolvent estate disagree on any matter

relating to the estate, the matter must be referred to the Commissioner to-

(a) determine the question in issue; or

(b) give directions as to the procedure to be followed for the determination

thereof.

Vacation of office of liquidator

55. (1) A liquidator vacates his or her office -

(a) if his or her estate is liquidated;

(b) if he or she is in terms of the Mental Health Act, 1973 (Act No. 18 of

1973), received and detained in an institution contemplated in the said

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Act or if he or she is declared by a competent Court to be incapable of

managing his or her own affairs;

(c) if he or she is convicted in Namibia or elsewhere of an offence of which

dishonesty is an element and is sentenced to imprisonment without the

option of a fine or to a fine of at least N$1000.

(2) Whenever a liquidator of an insolvent estate vacates his or her office for

whatever reason, any legal proceedings pending against the estate-

(a) does not lapse merely by reason of the vacating of office; and

(b) may, with the permission of the Court, be continued in the name of any

remaining or newly appointed liquidator.

Removal of liquidator from office by the Commissioner

56. (1) The Commissioner must remove a liquidator from office -

(a) if he or she was not qualified for appointment as liquidator or if his or

her appointment was unlawful;

(b) if the majority in value and the majority in number of the creditors who

have proved claims against an insolvent estate -

(i) have requested the Commissioner in writing to do so; or

(ii) have at a meeting of creditors of the estate, after notice of the

intended resolution was given, resolved, that the liquidator must

be removed from office;

(c) if he or she resigns from the office of liquidator;

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(d) if he or she is temporarily absent from Namibia for a period longer than

60 days without the permission of the Commissioner, or contrary to the

conditions, if any, set by the Commissioner when the Commissioner

gave permission;

(e) if after his or her appointment he or she becomes disqualified from being

a liquidator;

(2) The Commissioner may remove a liquidator from office on the ground

that he or she has failed to -

(a) perform satisfactorily any duty imposed upon him or her by this Act; or

(b) comply with a lawful demand of the Commissioner.


(a) when a liquidator has been formally charged with the commission of an

offence;

(b) on the strength of a complaint made to him or her on affidavit; or

(c) on evidence given at a questioning in terms of section 87, 88 or 90 or

written answers in terms of section 89; and

(d) pending an investigation by him or her into the suitability of a liquidator

to remain in office,

suspend the liquidator from office and, if necessary, appoint an interim liquidator for

the preservation of the estate: Provided that the Commissioner must in the case of a-

(i) complaint, evidence or written answers contemplated in this subsection,

without delay carry out the necessary investigation and either remove

the liquidator from office or set aside the suspension;

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(ii) liquidator charged with an offence remove the liquidator from office or

set aside the suspension as soon as the prosecution has been finalised.

(4) No person may be appointed as interim liquidator in terms of subsection

(2) unless that person has-

(a) given security to the satisfaction of the Commissioner for the proper

exercise of his or her powers and performance of his or her duties as

interim liquidator; and

(b) lodged an affidavit stating that he or she is not disqualified in terms of

section 10(2).

(5) The interim liquidator -

(a) must after his or her appointment proceed to recover and take into

possession-

(i) all the assets and property of the insolvent estate;

(ii) all books of account, invoices, vouchers, business

correspondence and any other records relating to the affairs of

the insolvent; and

(b) may apply for a search warrant in terms of section 61.

(6) The interim liquidator-

(a) must give effect to any directions by the Commissioner; and

(b) may without the authorisation of the Commissioner as contemplated in

section 66 perform any act which is necessary for the preservation of

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the estate until the suspension of the liquidator is set aside or another

liquidator is appointed.

(7) The interim liquidator is entitled to remuneration taxed by the

Commissioner in accordance with Tariff B in Schedule 2.

(8) The interim liquidator-

(a) vacates his or her office when the suspension of the liquidator is set

aside or a liquidator is appointed in the place of the removed liquidator;

and

(b) must deliver the assets, property, books, documents or records to the

liquidator and render an account to the liquidator.

Court may declare liquidator disqualified or remove liquidator

57. If in the opinion of the Court it is in the interests of the proper

administration of an insolvent estate, the Court may, on the application of the

Commissioner or any other interested party -

(a) declare any person disqualified from being a liquidator of the estate; or

(b) remove from office any person who has been appointed as liquidator;

and

(c) declare such a person incapable of being elected or appointed as

liquidator under this Act during his or her lifetime or for such other

period as determined by the Court.

Election of new liquidator

58. (1) (a) When one of two or more joint liquidators of an

insolvent estate-

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(i) has vacated his or her office;

(ii) has been removed from office by the Commissioner or the Court;

or

(iii) has resigned or died,

the Commissioner must direct the remaining liquidator or liquidators to

convene a meeting of creditors of the estate for the purpose of electing a new

liquidator in the place of the one who vacated his office.

(b) When a majority of proved creditors in value of an insolvent estate at

any time requests it the Commissioner must direct the liquidator or

liquidators to convene a meeting for the election of a further liquidator.

(2) When every liquidator or the sole liquidator of an insolvent estate-

(a) has vacated his or her office;

(b) has been removed from office by the Commissioner or the Court; or

(c) has resigned or died,

the Commissioner must direct the liquidator appointed in terms of section 50 to

convene a meeting of creditors of that estate for the purpose of electing a liquidator.

(3) The provisions of section 80(2) must with the changes necessitated by

the context apply to a meeting referred to in subsections (1) or (2).

PART 7

POWERS AND DUTIES OF LIQUIDATORS

109

Service of provisional liquidation order on debtor and attachment of property

belonging to insolvent estate

59. (1) (a) The liquidator must immediately after his or her

appointment serve a copy of the provisional liquidation order on the insolvent and if

the name of the insolvent's spouse appears on the order he or she must serve a copy of

the order also on that spouse.

(b) When a copy of a provisional liquidation order is served on an insolvent

or his or her spouse he or she must be supplied with two copies of the

form referred to in section 60(1)(b).

(2) When serving the provisional liquidation order the liquidator must

ensure in so far as it is possible, that the following particulars in respect of the insolvent

and his or her spouse, if applicable, is obtained namely -

(a) the full name, date of birth and identity number or registration number

of the insolvent;

(b) where applicable, the insolvent’s marital status and, if he or she is

married in community of property, the full name, date of birth and

identity number of his or her spouse.

(c) if the insolvent is an employer, whether his or her employees are

represented by a trade union and whether there is a notice board inside

the employer's premises for notice to employees.

(3) If-

(a) the name, date of birth or identity number of the insolvent or his or her

spouse which appears on the provisional liquidation order is incorrect;

or

(b) if any of these particulars are not stated,

110

the liquidator must -

(i) ensure that that the correct particulars are noted on the copy of the

provisional liquidation order;

(ii) send a copy of that provisional liquidation order by standard notice to

the registrar of every deeds registry in Namibia together with a copy of

his or her letter of appointment; and

(iii) send a copy of the order on which the particulars have thus been noted

by standard notice to the applicant in the liquidation proceedings, the

Commissioner and to the Registrar of the Court.

(4) Service of a copy of a liquidation order may be effected by the

liquidator's clerk or by the sheriff, if requested thereto by the liquidator, in which event

the provisions of subsections (2) and (3) relating to the particulars which must be

endorsed on the copy of the order apply to that clerk or sheriff, as the case may be.

(5) Service of a copy of a liquidation order must be carried out in

accordance with the Rules of Court: Provided that if the insolvent has been absent from

his or her usual place of residence or his or her business in Namibia during a period of

at least 21 days, the Court may be approached for directions with regard to some other

mode of service.

(6) (a) The liquidator must forthwith after his or her appointment,

attach all the movable property in the possession of the insolvent and compile

a full inventory thereof.

(b) Property in respect of which a person allegedly has a right of pledge or

a right of retention or which is under judicial attachment may not be

attached but must be shown on the inventory.

(7) The liquidator must -

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(a) take into his or her personal custody all books of account, invoices,

vouchers, business correspondence and any other records relating to the

affairs of the insolvent and make a specified list of all such books,

documents and other records;

(b) if the insolvent is present, ask him or her whether the list referred to in

paragraph (a) is a complete list of all books and records relating to his

or her affairs and note his or her reply on the list;

(c) note on the list any explanation which the insolvent gives with regard to

the books, documents and other records relating to his or her affairs or

in respect of any books, documents or other records which he or she is

unable to supply;

(d) take into his or her personal custody all cash, share certificates, bonds,

bills of exchange, promissory notes and other securities and compile a

specified list thereof;

(e) without delay deposit in a banking account as contemplated in section

103(1)(a) or (b) all cash which he or she has taken into his or her

custody;

(f) in so far as is possible-

(i) leave all other movable property which he or she has attached,

other than animals, in a properly locked storage place; or

(ii) appoint a suitable person to keep the said property in his or her

custody, in which case he or she must hand to such person a copy

of an inventory of the property left in his or her custody and he

or she must draw that person's attention to the offence

contemplated in section 213(2)(f) in respect of the unauthorised

disposition of property under attachment.

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(8) (a) The liquidator may perform the attachment himself or herself or

he or she may cause the attachment to be performed in whole or in part

by the sheriff.

(b) The sheriff is entitled to fees taxed by the Commissioner according to

Tariff A in Schedule 2 and the rules for the construction of that tariff.

(9) (a) Any person who has an interest in the insolvent estate or in any

property which is attached is entitled to be present or may authorise a

person to be present on his or her behalf when property of the insolvent

estate is attached and when an inventory in respect thereof is compiled.

(b) If the insolvent or his or her representative is present, he or she must

sign the inventory and a copy thereof must be handed to him or her and

any comment which he or she may have with regard to the inventory or

with regard to any assets, books or records of the insolvent not included

in the inventory must be attached to the inventory.

(10) The liquidator must by standard notice send a copy of the inventory to

the Commissioner.

(11) The liquidator must-

(a) cause the attached property of the insolvent to be valued by an appraiser

appointed in terms of section 6 of the Administration of Estates Act, or

a suitably qualified person approved by the Commissioner, who must

submit to the liquidator a valuation report; and

(b) by standard notice send the Commissioner a copy of the valuation

report.

Debtor to hand over books to liquidator and submit statement of affairs to

Commissioner and liquidator

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60. (1) When a liquidation order is served in accordance with section

59(1), upon an insolvent, the insolvent must -

(a) immediately hand over to the liquidator all books of account, invoices,

vouchers, business correspondence and any other records relating to that

insolvent’s affairs and obtain from the insolvent a specified receipt in

respect thereof;

(b) within 7 days after the service of the said order send by standard notice

to the Commissioner and the liquidator one copy each of a statement of

affairs as on the commencement of liquidation, compiled in a form

substantially corresponding to Form A1 of Schedule 1 containing the

particulars required in that Form, which particulars are confirmed by

affidavit.

(2) All stock in trade enumerated in the statement of affairs referred to in

subsection (1) must be valued at cost price or at the market value thereof at the time of

the making of affidavit referred in that subsection, whichever value is the smallest.

(3) If the Commissioner is satisfied that the insolvent or his or her spouse

was unable to draw up the statement of affairs referred to in subsection (1)(b) without

assistance, the person who assisted the insolvent or such spouse with the preparation

of the statement is entitled to a reasonable fee determined by the Commissioner, which

fee is deemed to be part of the costs of the liquidation.

Liquidator may obtain search warrant

61. (1) If the liquidator on reasonable grounds suspects that any book,

document or record relating to the affairs of the insolvent or any property belonging to

the insolvent is being concealed or otherwise unlawfully withheld from the liquidator,

he or she may apply to the magistrate within whose area of jurisdiction such book,

document, record or property is suspected to be or a magistrate who presided at a

questioning in terms of sections 87, 88 or 90, for a search warrant.

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(2) If it appears to a magistrate to whom an application referred to in

subsection (1) is made on the basis of facts in an affidavit, or evidence given at a

questioning in terms of sections 87, 88 or 90 or answers to questions contemplated in

section 89(3)(b) that there is substantiated reason to suspect that a book, document or

other record relating to the affairs of the debtor or property belonging to the insolvent

estate is being concealed in possession of a person or at a place or on a vehicle or vessel

or in a container of whatever nature or is otherwise unlawfully withheld from the

liquidator, within the area of jurisdiction of the said magistrate, he or she may issue a

warrant authorising the liquidator or a police officer to search a person, or place or

vehicle, vessel or container mentioned in the warrant and to take possession of such

book, document, record or property.

(3) The provisions of sections 21, 27 and 29 of the Criminal Procedure Act,

1977 (Act No. 51 of 1977) in so far as they are applicable, apply with the changes

necessitated by the context to the execution of a warrant referred to in subsection (2).

Registration of name and address with liquidator

62. (1) Any person who claims to be a creditor of an insolvent estate

may-

(a) register his or her name and address in Namibia with the liquidator of

that estate upon payment to the liquidator of the prescribed fee; and

(b) indicate property which he or she claims to hold as security for a claim.

(2) The liquidator must by liquidator’s notice send to the name and address

of a creditor registered in terms of subsection (1)-

(a) a notice of every meeting of creditors of the insolvent estate;

(b) a copy of every report contemplated in section 63(1);

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(c) a copy of every notice in terms of section 107(2) that an account will

lie open for inspection; and

(d) a notice of the date, time and place of the sale of any property which a

person claims to hold as security in terms of subsection (1).

(3) The liquidator must by standard notice send a copy of an account which

has been advertised to lie open for inspection to a creditor registered in terms of

subsection (1) upon that creditor’s request and payment of the reasonable costs of

making a copy of the account.

(4) Failure on the part of the liquidator to comply with a provision of this

section constitutes a failure to perform his or her duties but does not invalidate anything

done under this Act.

Liquidator's report

63. (1) (a) The liquidator must investigate the affairs of the

insolvent and the business transactions entered into by him or her before

the liquidation of his or her estate.

(b) At the first meeting of creditors of the insolvent estate, or in so far as he

or she is then not ready to do so, at a special meeting of creditors the

liquidator must submit-

(i) a full written report on those affairs and transactions; and

(ii) on any matter of importance relating to the insolvent or the

insolvent estate.

(2) The liquidator must in particular report on -

(a) the assets and liabilities of the insolvent estate;

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(b) whether, in his or her opinion, there is a risk of a contribution by

creditors in terms of section 113, or indicate why he or she is unable to

express an opinion on the matter;

(c) the cause of the insolvent’s insolvency;

(d) the bookkeeping relating to the insolvent’s affairs, the question whether

proper bookkeeping in respect of his or her business transactions was

carried out and if not, in what respect it is defective, insufficient or

incorrect;

(e) the question whether the insolvent -

(i) appears to have contravened any provision of this Act;

(ii) appears to have committed any other offence or contravened the

provisions of any law;

(iii) has failed to submit a statement of affairs and of his or her

income and expenses as required by this Act;

(f) where applicable, the monthly income and expenses of the insolvent,

any allowance made by the liquidator to the insolvent by way of

maintenance for the insolvent and his or her family, and the assistance

given to the liquidator during the period for which the allowance was

paid;

(g) any-

(i) legal proceedings instituted by or against the insolvent which

were suspended by the liquidation of the estate; and

(ii) other legal proceedings which are pending or may be instituted

against the insolvent estate;

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(h) any business conducted on behalf of the insolvent estate and the result

thereof;

(i) any transaction entered into by the insolvent before the liquidation of

his or her estate in respect of the acquisition of immovable property

which was not transferred to him or her or any transaction entered into

by the insolvent as lessee;

(j) the names of secured creditors with the amounts of the secured claims

and steps taken or envisaged to investigate the validity of security;

(k) whether or not further enquiry is in his or her opinion desirable in regard

to any matter relating to the insolvent or the conduct of the insolvent’s

business;

(l) any other matter relating to the administration or the realisation of the

insolvent estate requiring direction of the creditors.

(3) If the liquidator’s report is to be submitted as envisaged under

subsection (1) before a final order is made, the liquidator must further report on

whether any of the following, where applicable, are more appropriate than liquidation

of the debtor-

(a) reorganization proceedings in terms of Chapter 4; or

(b) an administration order in terms of section 74 of the Magistrates’ Courts

Act;


(a) supply the Regional Commander of the Commercial Branch of the

Namibian Police, or a similarly ranked law enforcement official with an

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affidavit containing a report relating to any offence which the insolvent

in his or her opinion committed;

(b) on request of that Commander or official supply any further particulars

as may be required; and

(c) by standard notice send a copy of that affidavit and report to the

Commissioner.

Recovery of debts due to estate

64. (1) The liquidator of an insolvent estate must, in the notification of

his or her appointment by notice in the Gazette, call on all persons indebted to that

estate to pay their debts within a period and at a place stated in the notice.

(2) If any person referred to in subsection (1) fails to pay their debts to the

estate, the liquidator must recover payment thereof from him or her, by legal process,

if necessary.

Remuneration of liquidator

65. (1) A liquidator is entitled to a reasonable remuneration for his or

her services and for expenses incurred by him or her in the administration of an

insolvent estate.

(2) The Commissioner must tax the remuneration and expenses referred to

in subsection (1) in accordance with Tariff B in Schedule 2.

(3) The liquidator may apply to the Commissioner for an increase in

remuneration after giving at least 14 days’ liquidator’s notice to creditors registered in

terms of section 62 who will be affected by such increase.

(4) The Commissioner may for good cause-

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(a) increase a liquidator's remuneration in particular to compensate him or

her for the time spent in assisting with criminal prosecutions or

investigating the affairs of a debtor; or

(b) disallow his or her remuneration, either wholly or in part, by reason of-

(i) any failure of or delay in the discharge of his or her duties; or

(ii) on account of any improper performance of his or her duties.

(5) (a) Any person who employs a liquidator, is a fellow employee of

a liquidator or is ordinarily in the employment of a liquidator, is not entitled to

any remuneration out of the insolvent estate for services rendered to the estate.

(b) A liquidator or his or her partner is not entitled to remuneration out of

the estate for services rendered to the estate, except the remuneration to

which he or she is entitled to as a liquidator in terms of this Act.

(6) A liquidator is not entitled to receive any remuneration before the

liquidation account making provision for the remuneration has been confirmed in terms

of section 109.

General duties and powers of liquidator

66. (1) The liquidator of an insolvent estate must -

(a) forthwith recover and take into his or her possession all the assets and

property of the insolvent estate;

(b) apply those assets and property, as far as they extend, in satisfaction of

the costs of the administration of the estate and the claims of creditors

of the estate; and

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(c) if any cash balance remains, deal therewith in accordance with the

provisions of section 112.

(2) The liquidator, in addition to any powers that he or she has in terms of

this Act, has the power to perform any act which is necessary for the proper

administration and distribution of the estate and, except where otherwise provided by

this Act, he or she need not obtain formal authorisation for the performance of any such

act.

(3) In particular, without detracting from the generality of subsection (2),

the liquidator has the power to -

(a) execute in the name of and on behalf of the insolvent estate all deeds,

receipts and other documents;

(b) prove a claim in the estate of any debtor of the insolvent estate and to

receive payment or a dividend in respect thereof;

(c) draw, accept, make or endorse any bill of exchange or promissory note

in the name of or on behalf of the insolvent estate: Provided that any

such act by which the estate is burdened with additional liabilities

requires the authorisation of the Commissioner or the creditors of the

estate;

(d) conduct, with the authorisation of the Commissioner or the creditors of

the estate the business of the insolvent or any part thereof, subject

thereto that the liquidator may, pending the obtaining of authorisation

thereto, only carry on the business of the insolvent in so far necessary

to pay expenses of the estate or incur necessary expenses to avoid loss;

(e) obtain credit for the payment of necessary expenses which he or she is

obliged to incur before funds for the payment thereof are available;

(f) convene a meeting of creditors of the estate;

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(g) take all necessary measures for the protection and the administration of

the estate.

(4) A liquidator, if authorised thereto by the Commissioner or by resolution

of a meeting of creditors of the estate, has the power to -

(a) institute or defend any legal steps in civil proceedings by or against the

insolvent estate and to settle such proceedings;

(b) submit to determination of arbitrators any dispute concerning the

insolvent estate;

(c) compromise or admit any claim lodged for proof at a meeting of

creditors of the insolvent estate, including any unliquidated claim,

(d) disallow or reduce a claim in terms of section 97(3);

(e) carry on the business or part of the business of the insolvent in

accordance with the authorisation and directions of the Commissioner

or the creditors of the insolvent estate;

(f) exercise his or her election in respect of contracts entered into before

liquidation, including his or her election in terms of section 43 or 48;

(g) sell or alienate property of the insolvent estate, subject to the directions

of the Commissioner or the creditors of the estate: Provided that if such

property or a portion thereof is subject to rights of a secured creditor the

secured creditor must give his or her consent in writing and provided

further that the liquidator must endeavour to sell any property as a going

concern where practical or appropriate;

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(h) engage the services of a legal practitioner or any other professional

person or employ any other person to render services on behalf of the

insolvent estate;

(i) dispose of a debt owing to the insolvent estate or to accept payment of

a reasonable part of a debt in full settlement of the debt or to give a

reasonable extension of time for payment of a debt or part thereof;

(j) draw, accept, make or endorse any bill of exchange or promissory note

by which the insolvent estate is burdened with liabilities;

(k) make available to the insolvent or his or her dependants a sum of money

or assets for his or her maintenance or that of his or her dependants;

(l) make available to the insolvent assets of the insolvent estate in excess

of the amounts prescribed in terms of section 27(7);

(m) if the liquidator determines that the continued operation of the business

of an insolvent as a going concern will benefit creditors, obtain finance

for the continuation of the business -

(i) payable as costs of liquidation; or

(ii) payable with security over the assets of the estate without

priority ahead of any existing security interest over the same

assets, unless the liquidator obtains the agreement of the existing

secured creditor that such security over the assets of the estate

will enjoy such priority.

(5) The Master must authorise the liquidator to act in accordance with

subsection (4) only if the authority is required so urgently that the liquidator cannot

obtain a resolution at a first meeting of creditors of the insolvent estate.

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(6) Before the issue of a final liquidation order, the powers set out in

subsection (4) may only be exercised with the consent of the insolvent or the Court.

(7) A liquidator or an insolvent who disagrees with the assets made

available in terms of subsection (4)(l) may refer the matter to the Commissioner for his

or her decision.

(8) A liquidator may at any time, approach the Court in regard to any matter

arising from the liquidation and the Court may give directions or grant the liquidator

all powers that in its opinion are necessary for the proper administration, liquidation

and distribution of the insolvent estate in question.

(9) Notwithstanding the provisions of any law relating to tax or duties a

liquidator of an insolvent estate is entitled to -

(a) inspect any return or other document submitted by or on behalf of an

insolvent or the spouse of an insolvent, where applicable, in connection

with tax or duties to the Commissioner of Inland Revenue;

(b) make copies of any such return;

(c) have any such copy, certified as correct by or on behalf of that

Commissioner;

(d) at his or her request be apprised in writing by or on behalf of that

Commissioner of the basis for any estimated assessment made in terms

of any such law relating to tax or duties.

(10) A liquidator may, in respect of immovable property or a bond registered

in the name of an insolvent, or his or her spouse if he or she is married in community

of property -

(a) before or after the rehabilitation of an insolvent;

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(b) with the written consent of the Commissioner; and

(c) by standard notice to the Registrar of Deeds,

cause a caveat to be entered against the transfer of the immovable property or the

cancellation or cession of the bond referred to in that notice.

(11) The notice referred to in subsection (10)(c) must-

(a) be accompanied by the written consent of the Commissioner indicating

the date the caveat referred to in that subsection remains in force; and

(b) identify sufficiently the person in respect of whom and the property or

bond in respect of which the caveat is to be registered so as to enable

the Registrar of Deeds to enter the caveat as contemplated in that

subsection.

(12) The caveat referred to in subsection (10) remains in force until the date

indicated by the Commissioner in his or her consent.

(13) If any entry in a return contemplated in subsection (9) is relevant in any

civil or criminal proceedings in which the insolvent or the insolvent estate is involved,

that return or a copy thereof, purporting to be certified as contemplated in subsection

(9)(c), is admissible in those proceedings on its mere production by any person and

such certified copy has the same evidentiary value as the original return.

(14) No provision in any contract, including the Memorandum or Articles of

Association of a company, which-

(a) purports to regulate the manner in which property belonging to a person

must be disposed of on or after his or her insolvency; or

(b) on his or her insolvency limits a person's power to dispose of his or her

rights to property as he or she wishes,

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binds the liquidator of such person’s insolvent estate.

PART 8

RIGHTS AND DUTIES OF CREDITORS

Realization of security

67. (1) A secured creditor of an insolvent estate must as soon as the

creditor becomes aware of the liquidation of the estate notify the liquidator in writing,

of the-

(a) nature and extent of that creditor’s security; and

(b) amount of that creditor’s claim.

(2) If such property consists of securities as defined in section 1 of the Stock

Exchanges Control Act the creditor may, subject to the provisions of subsection (5),

after giving the notice mentioned in subsection (1), realize the property forthwith, if

the property is of a class ordinarily sold through a stockbroker as defined in section 1

of the Stock Exchanges Control Act, subject to the provisions of the said Act and

(where applicable) the rules referred to in section 12 of that Act, by selling it through

a stockbroker, or if the creditor is a stockbroker, also to another stockbroker.

(3) A creditor who has realized property contemplated in subsection (2)

must forthwith-

(a) pay over to the liquidator the proceeds after deduction of the reasonable

costs of realization; and

(b) furnish the liquidator with vouchers in support of the realization of the

property and the costs of realization.

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(4) (a) A secured creditor with security other than property

contemplated in subsection (2) must as soon as possible after

commencement of liquidation place the liquidator in possession of the

security.

(b) A secured creditor with security contemplated in subsection (2) which

has not been realized by the creditor before the first meeting of creditors

of the insolvent estate, must within five days after the commencement

of that meeting or within such longer period as the liquidator may allow,

place the liquidator in possession of that security.

(c) The liquidator must cause the security referred to in paragraphs (a) and

(b) to be valued by an appraiser appointed in terms of section 6 of the

Administration of Estates Act, or a suitably qualified person approved

by the Commissioner, who must submit to the Commissioner a

valuation report.

(5) A creditor who has placed the liquidator in possession of property held

by that creditor as security, does not thereby lose the security the creditor is entitled to

in respect of such property.

(6) Subject to subsection (7) and section 66(4), the liquidator must realize

the property made available to him or her pursuant to subsection (5) for the benefit of

a creditor whose claim is secured by such property.

(7) If authorised thereto by the Commissioner or by resolution at a meeting

of creditors of an insolvent estate, the liquidator may sell property constituting the

security of a creditor -

(a) whose claim ranks first in preference; and

(b) who has proved the creditor’s claim against the estate,

to that creditor at a value agreed upon between the liquidator and the creditor.

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(8) After proof of his or her claim and the realisation of the security, any

secured creditor is entitled to payment of his or her secured claim if that creditor has

furnished security to the satisfaction of the liquidator for the repayment of such

payment with interest at the rate prescribed in terms of the Prescribed Rate of Interest

Act, if according to the liquidator’s confirmed account the creditor is not entitled to the

payment or a part thereof.

(9) A secured creditor may request the court to grant permission to sell

security for the claim subject to proper accounting to the liquidator for the sale on

grounds that-

(a) the security is not necessary to a prospective reorganization or sale of

the debtor’s business;

(b) the value of the security is diminishing as a result of the commencement

of insolvency proceedings; and

(c) the secured creditor is not protected against that diminution of value.

Attachment of property upon failure to deliver to liquidator

68. (1) (a) If a creditor has not in accordance with section 67(5),

placed the liquidator in possession of the property constituting that

creditor’s security the liquidator must send to that creditor a demand by

direct notice to place the liquidator in possession within seven days after

such demand.

(b) If the creditor fails to place the liquidator in possession of the property

within seven days after such demand was delivered or sent to that

creditor, the liquidator may obtain from a magistrate of the district

where the property is or is situated a warrant directing the sheriff to

attach such property and to place the liquidator in possession of the

property.

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(2) The creditor referred to in subsection (1) is liable for all costs resulting

from that creditor’s failure to place the liquidator in possession of the property and if

such costs cannot be recovered from the said creditor they form part of the costs of

realizing the security in terms of section 69(4).

Application of proceeds of security

69. (1) A secured creditor is entitled to share in the distribution of the

proceeds of that creditor’s security only if he or she has proved a claim against the

insolvent estate.

(2) Any interest due in respect of a secured claim in respect of any period

not longer than two years before the commencement of liquidation must be secured as

if that interest were part of the capital debt.

(3) If the claim of a secured creditor exceeds the sum payable to that

creditor in respect of the creditor’s security, the creditor is entitled to rank against the

insolvent estate in respect of the excess as a concurrent creditor, unless when proving

the creditor’s claim the creditor indicated that the creditor relied solely on the creditor’s

security for the fulfilment of that claim.

(4) The costs of maintaining, conserving and realizing any security must be

paid out of the proceeds of that security if sufficient and, if insufficient, the costs must

be paid by the secured creditor who would have been entitled, in priority to other

creditors, to the proceeds if it had been sufficient to cover those costs.

(5) The costs of realization of a security must include-

(a) the liquidator's remuneration in respect of any security and a

proportionate share of any excess of minimum liquidator's remuneration

over the ordinary tariff;

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(b) a proportionate share of the costs incurred by the liquidator in giving

security for his or her proper administration of the estate;

(c) a proportionate share of the Commissioner's fees, calculated on the

proceeds of the security;

(d) if the property is immovable, any assessment rates as defined in

subsection (7) which is or will become due thereon in respect of any

period not exceeding two years immediately preceding the date of the

liquidation and in respect of the period from that date to the date of the

transfer of that property by the liquidator of that estate, with any interest

or penalty which may be due on the said assessment rates in respect of

any such period.

(6) Notwithstanding the provisions of any law which prohibits the transfer

of any immovable property unless any assessment rates as defined in subsection (7) or

other amounts due thereon have been paid, that law does not debar the liquidator of an

insolvent estate from transferring any immovable property in that estate for the purpose

of liquidating the estate, if the liquidator has paid or offered reasonable security for

payment of the assessment rates which may have been due on that property in respect

of the periods mentioned in subsection (5) and no preference, either as costs of

liquidation or otherwise, may be accorded to any claim for such assessment rates or

such other amounts.

(7) For the purposes of subsections (5) and (6) "assessment rates" in

relation to immovable property means any amount payable periodically in respect of

that property to-

(a) the State; or

(b) a body established by or under the authority of any law in discharge of

a liability to make such periodical payments, if that liability is an

incidence of the ownership of that property,

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but excludes any payment for services rendered in respect of such property.

(8) After payment of the costs referred to in subsection (4), the balance of

the proceeds of the security must be applied in satisfying, in order of preference of

secured creditors-

(a) first the capital sums of claims secured by the said security; and

(b) thereafter simple interest on those capital sums at the rate prescribed in

terms of the Prescribed Rate of Interest Act, or a higher rate of interest

by virtue of a lawful stipulation in writing, from commencement of

liquidation to the date of payment.

(9) Any balance of the proceeds of the security remaining must be added to

the free residue of the insolvent estate.

(10) (a) If a creditor (herein and in subsection (10) referred to as the

“mortgagee”) whose claim is secured by a special mortgage over

immovable property belonging to the insolvent estate has not proved

that creditor’s claim and the liquidator is not satisfied that the debt in

question has been discharged or abandoned, the liquidator must deposit

with the Master for payment into the Guardian’s Fund the proceeds of

the sale of the former mortgagee's security.

(b) The amount which the liquidator must deposit in terms of paragraph (a)

must not exceed the capital amount of the special mortgage and such

arrears of interest for which the mortgagee would have been a secured

creditor, after deduction of an amount equal to the costs which the

mortgagee would have had to pay if the mortgagee had proved a claim

and had stated in the affidavit lodged in support of that claim that the

mortgagee relied for the satisfaction of that claim solely on the proceeds

of the sale of the said property.

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(c) The amount so deposited or the part thereof to which the mortgagee may

be entitled must be paid to that mortgagee if, within a period of one year

after confirmation in terms of section 109 of the distribution account

under which the money is distributed, the mortgagee applies therefor to

the Commissioner and the Commissioner is satisfied after proof of the

mortgagee's claim, that the mortgagee is entitled to the amount or part

thereof.

(11) Any amount deposited into the Guardian’s Fund in terms of subsection

(10) which has not been paid out to the mortgagee, as in that subsection provided, must

after the expiry of the year mentioned in that subsection be distributed among the

creditors who have proved claims against the insolvent estate prior to the confirmation

of the said distribution account, as if the amount had, at the time of such confirmation,

been available for distribution among them.

(12) Any creditor claiming to be entitled to share in the said distribution must

apply in writing to the Commissioner for payment of that creditor’s share, and the

Commissioner may-

(a) cause the payment to such creditor or hand the money to the liquidator,

if any, for distribution among the creditors entitled thereto; or

(b) if there is no liquidator, appoint a liquidator on such conditions as the

Commissioner may think fit to impose for the purpose of making such

distribution.

(13) Any liquidator charged with the duty of making a distribution

contemplated in subsection (12) must lodge with the Commissioner a supplementary

account in respect thereof and the provisions of this Act relating to an account apply to

such supplementary account.

Security in respect of reserved ownership or financial lease

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70. (1) If a creditor could immediately before the commencement of

liquidation assert that creditor’s ownership to property delivered to an insolvent under

a reservation of ownership contract or a financial lease the property is, subject to the

rights of other secured creditors, upon the liquidation of the insolvent estate deemed to

be held by that creditor or that creditor’s successor in title (herein referred to as “the

creditor”) as security for the amount outstanding in respect of the purchase price of the

property or the balance owing on the financial lease.

(2) If property referred to in subsection (1) was returned by the debtor to

the creditor within three months before the commencement of liquidation of that

debtor’s estate, the liquidator may demand from the creditor that the creditor deliver to

the liquidator the property or its value at the date when it was returned to the creditor,

subject to payment to the creditor by the liquidator or to deduction from the value, as

the case may be of the difference between the total amount payable under the

transaction and the total amount actually paid.

Security in respect of landlord's hypothec

71. (1) A landlord's hypothec confers a preference with regard to the

property which is subject to the hypothec, for rent due in respect of the period

immediately prior to the commencement of liquidation, but not exceeding rent for a

period of -

(a) three months, if the rent is payable monthly or at shorter intervals than

one month; or

(b) six months, if the rent is payable at intervals exceeding one month but

not exceeding three months; or

(c) nine months, if the rent is payable at intervals exceeding three months

but not exceeding six months; or

(d) fifteen months, if the rent is payable at intervals exceeding six months.

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(2) A tacit or legal hypothec other than a landlord’s hypothec in subsection

(1) does not confer any preference against an insolvent estate.

Special notarial bond over movable property

72. (1) If a notarial bond hypothecating corporeal movable property

specified and described in the bond in a manner which renders it readily recognizable,

is registered after the commencement of this Act in accordance with the Deeds

Registries Act such property is –

(a) subject to any encumbrance resting upon it on the date of registration of

the bond; and

(b) notwithstanding the fact that it has not been delivered to the mortgagee,

deemed to have been pledged to the mortgagee as effectually as if it had expressly been

pledged and delivered to the mortgagee.

(2) Upon the discharge of the debt secured by a bond mentioned in

subsection (1) the mortgagee must, at the request of the mortgagor, furnish to the

mortgagor, free of charge, proof of such discharge in the form required for the

cancellation of the bond.

(3) Subject to the provisions of subsection (4) a notarial bond contemplated

in subsection (1), which was registered before the commencement of this Act, upon the

insolvency of the mortgagor before or after such commencement, confers on the

mortgagee the same preference in respect of the entire free residue of the insolvent

estate as that conferred on a mortgagee by a general bond in terms of section 75(12).

(4) The provisions of subsection (3) does not apply if any part of such free

residue was, before the commencement of this Act, paid out to concurrent creditors in

terms of a confirmed account.

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(5) If, at the commencement of this Act, an account has been confirmed but

dividends have not yet been paid out as contemplated in subsection (4), such account

must be reopened so as to give effect to the provisions of subsection (3) without

requiring the permission of the Court contemplated in section 109.

(6) Notwithstanding anything to the contrary in the common law or in any

other law, movable property-

(a) which, while hypothecated by a notarial bond mentioned in subsection

(1), is in the possession of a person other than the mortgagee; or

(b) to which an instalment agreement as defined in section 1 of the Credit

Agreements Act, 1980 (Act No. 75 of 1980) relates,

may not be subject to a landlord's tacit hypothec.

(7) The provisions of subsection (6) in respect of movable property

hypothecated by a notarial bond mentioned in subsection (1) does not apply if such

bond is registered after the landlord's hypothec has been perfected.

(8) Nothing in this section affect any mortgage, hypothecation, pledge, tacit

hypothec, preference, lien or right of retention acquired by or in accordance with any

law by the State or by-

(a) any body corporate; or

(b) any association of persons,

constituted or established by or under any law and supported wholly or partly

by public funds.

Certain mortgages afford no security or preference

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73. With the exception of a kustingsbrief, no special bond or a general bond

over movables, or a general clause in a special bond over movables passed for the

purpose of-

(a) (i) securing the payment of an existing unsecured debt; or

(ii) obtaining a preference for an existing concurrent debt,

which was incurred more than two months prior to the lodging of the

bond with the Registrar of Deeds for registration; or

(b) securing the payment of a debt or obtaining a preference for a debt

incurred in novation of or substitution for that first-mentioned debt,

confers any security or preference if the application for the liquidation of the estate of

the debtor is lodged with the Registrar of the Court within nine months after the lodging

of that bond with the Registrar of Deeds: Provided that a bond is deemed not to have

been lodged if it was at any stage withdrawn from registration.

PART 9

COSTS OF LIQUIDATION AND APPLICATION OF FREE RESIDUE

Costs of liquidation

74. (1) The costs of liquidation in respect of an insolvent estate include-

(a) the sheriff's charges incurred since the commencement of liquidation;

(b) fees payable to the Commissioner in connection with the liquidation;

(c) the costs, as taxed by the Registrar of the Court, incurred in connection

with the application by a debtor or of a creditor for the liquidation of

that debtor’s estate, excluding the costs of opposition to such

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application, unless the Court has ordered that such costs must be

included in the costs of liquidation;

(d) the amount determined by the Commissioner for the preparation of a

statement of a debtor’s affairs by the debtor in accordance with section

60;

(e) the remuneration of an interim liquidator appointed in terms of section

50 and of the liquidator, including the costs incurred by the liquidator in

giving security for the proper administration of the estate;

(f) any expenses incurred by the Commissioner or by a presiding officer in

carrying out the provisions of this Act, unless otherwise ordered by the

Commissioner or the Court and subject to the provisions of section

90(3)(b);

(g) the salary, wages or fees of any person who was engaged or appointed

by the liquidator in connection with the administration of the estate;

(h) costs incurred in the administration of a deceased estate before the

liquidation of the estate as the Commissioner may allow;

(i) all other costs of the administration and the liquidation of an insolvent

estate.

(2) The taxed fees of the sheriff in connection with proceedings stayed in

terms of section 28 must be regarded as costs of liquidation of the estate;

(3) The costs of liquidation referred to in subsections (1) and (2) rank on

equal footing and abate in equal proportion, if necessary.

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Application of the free residue

75. (1) The free residue of an insolvent estate must be applied in the

first place in defraying the costs of liquidation contemplated in section 74, but

excluding the costs referred to in section 69(4).

(2) In the second place the balance of the free residue must, subject to

subsection (4) be applied in paying-

(a) to an employee who was employed by the insolvent-

(i) any salary or wages, for a period not exceeding four months, due

to an employee;

(ii) any payment in respect of any period of leave or holiday due to

the employee which has accrued as a result of his or her

employment by the insolvent in the year in which liquidation

occurred and the preceding year, whether or not payment thereof

is due at the commencement of liquidation;

(iii) any payment due in respect of any other form of paid absence

for a period not exceeding three months immediately prior to the

commencement of liquidation of the estate;

(iv) any severance or retrenchment pay due to the employee in terms

of any law, agreement, contract, wage-regulating measure or as

a result of termination in terms of section 49; and

(b) any contributions which were payable by the insolvent, including

contributions which were payable in respect of any of his or her

employees, and which were, immediately prior to the liquidation of the

estate, owing by the insolvent, in his or her capacity as employer, to any

pension, provident, medical aid, sick pay, holiday, unemployment or

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training scheme or fund, or any similar scheme or fund under the

provisions of any law.

(3) For the purposes of subsection (2) –

“salary and wages” includes all cash earnings which the employee is entitled to receive

from the employer, but excludes other benefits.

(4) (a) The claims in subsection (2) may not exceed the amounts

prescribed in respect of each category of payment contemplated in that subsection.

(b) The Minister-

(i) may after consultation with the Minister responsible for Labour

amend an amount mentioned in subsection (2) by notice in the

Gazette;

(ii) must consider amendments to the amounts at least once in every

three years after the commencement of this Act in order to take

account of the fluctuation in the value of money and other

changed circumstances.

(5) (a) The claims referred to in subsection (2)(a)(i) enjoy preference

above the claims referred to in subsections (2)(a)(ii), (iii) and (iv) and (2)(b)

and must rank equally and abate in equal proportions, if necessary.

(b) The claims referred to in subsection (2)(a)(iv) must be preferred to the

claims referred to in subsections (2)(a)(ii), (iii) and (2)(b) and must rank

equally and abate in equal proportions, if necessary.

(c) The claims referred to in subsection (2)(a)(ii), (iii) and (iv) enjoy

preference above the claims referred to in subsection (2)(b) and rank

equally and abate in equal proportions, if necessary.

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(c) The claims referred to in subsection (2)(b) rank equally and abate in

equal proportions, if necessary.

(6) The Minister may after consultation with the Minister responsible for

Labour by notice in the Gazette exclude from the operation of the provisions of this

section a category of employees, schemes or funds specified in the notice by reason of

the fact that there exists any other type of guarantee which affords the employees,

schemes or funds protection which is equivalent to the protection as provided in this

section.

(7) A director of a liquidated company employed by the company or a

member of a liquidated close corporation employed by the corporation is not entitled

to payment in terms of this section.

(8) (a) In the third place after the free residue has been applied as set

out in subsections (1) and (2), any balance of the free residue must be applied in paying

maintenance due by the insolvent in terms of a court order including maintenance in

arrears at the commencement of liquidation of the estate, for a period not exceeding

three months subject to the maximum amount as prescribed.

(b) The Minister-

(i) may after consultation with the Minister responsible for Labour

amend an amount mentioned in subsection (2) by notice in the

Gazette;

(ii) must consider amendments to the amounts at least once in every

three years after the commencement of this Act in order to take

account of the fluctuation in the value of money and other

changed circumstances.

(9) In the fourth place any balance of the free residue must be applied in

paying simple interest from the commencement of liquidation to the date of payment

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on the claims paid in terms of subsections (1) to (8) in their order of preference at the

rate of interest prescribed in terms of the Prescribed Rate of Interest Act.

(10) In the fifth place any balance of the free residue must be applied in

paying-

(a) any amount which in terms of the Employee’s Compensation Act, 1941

(Act No. 30 of 1941), was, immediately prior to the commencement of

liquidation due to the Social Security Commission defined by section 1

of that Act by the insolvent in his or her capacity as an employer, in

respect of any assessment, penalty or fine, or the compensation then due

in respect of any employee, including in the case of a continuing

liability, also the capitalized value, as determined by that Commission,

of the pension (irrespective of whether a lump sum is at any time paid

in lieu of the whole or a portion of such pension in terms of section 49

of that Act), periodical payment or allowance, as the case may be, which

constitutes the liability;

(b) any amount which the insolvent-

(i) has under the provisions of section 35 of the Income Tax Act,

deducted or withheld as a withholding tax on royalties from any

amount referred to in that section;

(ii) is under the provisions of the Income Act required to pay in

respect of any tax due by any other person and has deducted or

withheld from any moneys, including pensions, salary, wages,

remuneration and amounts of any other nature, held by him for

or due by him to such person; or

(iii) has under the provisions of the Second Schedule to that Act

deducted or withheld by way of employees' tax from

remuneration or any other amount paid or payable by him or her

to any other person prior to the commencement of liquidation,

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but did not pay to the Commissioner of Inland Revenue prior to the

commencement of liquidation, and any interest or penalty payable under

that Act in respect of such amount for any period prior to the

commencement of liquidation;

(c) the amount of any customs or excise duty, forfeiture, interest, fine or

penalty which in terms of the Customs and Excise Act, 1998 (Act No.

20 of 1998), was, immediately prior to the commencement of

liquidation, due by the insolvent; and

(d) the amount of value-added tax, additional tax, interest, fine or penalty

which in terms of the Value-Added Tax Act, 2000 (Act No. 10 of 2000),

was due by the insolvent immediately prior to the commencement of

liquidation.

(11) The claims referred to in subsection (10) rank equally and abate in equal

proportions, if necessary.

(12) In the sixth place, after the free residue has been applied as set out in

subsections (10) and (11) the balance thereof must be applied in paying –

(a) any tax on persons or the incomes or profits of persons for which the

insolvent was liable under any Act of Parliament in respect of any period

prior to the commencement of liquidation, whether or not that tax has

become payable after that date;

(b) any amount payable by the insolvent under any Act of Parliament by

way of interest, in respect of any period prior to the commencement of

liquidation, in respect of any tax referred to in paragraph (a);

(c) in the case of an insolvent partnership, so much of any tax due and

payable by any partner as is referable to the taxable income derived by

him or her from the partnership, the amount so referable being deemed

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to be a sum which bears to the total amount due by him as tax the same

ratio as his or her taxable income derived from the partnership bears to

his total taxable income.

(13) In the seventh place the balance of the free residue must, subject to any

maximum amount in terms of a bond, be applied in payment of the proved claims of

creditors who are holders of a general bond over movables or a special bond over

movables with a general clause, registered by Registrar of Deeds, in their order of

preference with simple interest from the commencement of liquidation to the date of

payment at the rate of interest prescribed in the Prescribed Rate of Interest Act, or a

higher rate of interest by virtue of a lawful stipulation agreed upon in writing.

(14) In the eighth place any balance of the free residue must be applied in

payment of the concurrent claims of creditors proved against the estate, in proportion

to the amount of each claim.

(15) When the concurrent claims have been paid in full, any balance of the

free residue must be applied in payment of simple interest on such claims from the

commencement of liquidation to the date of payment, in proportion to the amount of

each such claim.

(16) The interest referred to in subsection (14) must be calculated at the rate

of interest prescribed in terms of the Prescribed Rate of Interest Act, unless the amount

of the claim bears interest at a higher rate of interest by virtue of a lawful stipulation

agreed upon in writing.

(17) An employee of the debtor is entitled to payment in terms of subsection

(2)(a) even though he or she has not proved a claim against the insolvent estate in

respect thereof, but the liquidator may require the employee to submit an affidavit

indicating the amount due to him or her.

Costs incurred in respect of legal services

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76. (1) Subject to the provisions of subsection (2), costs incurred to

engage the services of legal practitioners to perform legal work on behalf of the estate

except costs awarded against the estate in legal proceedings, is not subject to taxation

by the Taxing Master of the Court if the liquidator has entered into any written

agreement in terms of which the fees of any legal practitioner will be determined in

accordance with a specific tariff.

(2) Notwithstanding subsection (1), if –

(a) the liquidator has not entered into an agreement under subsection (1); or

(b) there is any dispute as to the fees payable in terms of such an agreement,

the costs must be taxed by the Taxing Master of the Court or, where the costs are not

subject to taxation by that Taxing Master, such costs must be assessed by the Council

of the Law Society defined in section 1 of the Legal Practitioners Act, 1995 (Act No.

15 of 1995).

(3) No bill of costs based upon an agreement entered into under subsection

(1) may be accepted as cost of liquidation of the estate, unless such bill is accompanied

by a declaration under oath or affirmation by the liquidator stating that–

(a) he or she had been duly authorized by either the creditors or the

Commissioner, as the case may be, to enter into such an agreement;

(b) any legal work specified in such bill has been performed to the best of

his or her knowledge and belief;

(c) any disbursements specified in such bill have been made to the best of

his or her knowledge and belief; and

(d) to the best of his or her knowledge and belief, the legal practitioner

concerned has not overreached him or her.

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(4) Notwithstanding anything to the contrary contained in this Act, the

Commissioner may disallow any costs incurred under this section if the Commissioner

is of the opinion that any such costs are excessive, unnecessary, incorrect or improper

or that the liquidator acted in bad faith, negligently or unreasonably in incurring any

such costs.

(5) If it appears to the Court that a legal representative or legal adviser has,

with intent to benefit himself or herself, improperly given legal advice or acted with

intent to benefit himself or herself, whether for or against an insolvent estate, or has

caused any unnecessary expense in that regard, the Court may order that such expense

or any part thereof must be borne by that legal representative or legal adviser

personally.

PART 10

SPECIAL PROVISIONS RELATING TO THE SALE OF PROPERTY

BELONGING TO THE INSOLVENT ESTATE

Non-compliance with provisions of Act in sale of property of insolvent estate

77. (1) If property of an insolvent estate is sold without the provisions

of this Act having been complied with, the sale is void unless the purchaser proves that

he or she acquired the property in good faith and for value and, where applicable, that

a court order authorising the sale was not a prerequisite.

(2) Any person who disposes of property of an insolvent estate contrary to

the provisions of this Act is liable to make good to the estate twice the amount of the

loss which the estate might have sustained as a result of any such disposition.

Bona fide sale of property in possession of debtor

78. (1) Subject to the provisions of section 70, the owner of movable

property which was in the possession or custody of a debtor at the commencement of

liquidation of that debtor’s estate is not entitled to recover that property if it has, in

good faith, been sold as part of that debtor’s insolvent estate, unless the owner has, by

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standard notice given to the liquidator or the Commissioner before the sale, demanded

the return of that property.

(2) If property contemplated in subsection (1) has been sold as part of the

insolvent estate, the former owner of the property may recover from the liquidator,

before the confirmation of the liquidator's account as contemplated in section 109 the

net proceeds of the sale of that property, unless he or she has recovered that property

from the purchaser, and thereupon he or she loses any right to reclaim the property as

contemplated in subsection (1).

Persons incompetent to acquire property from insolvent estate

79. The liquidator or an auctioneer employed to sell property of the

insolvent estate or an employer, employee or associate of such liquidator or auctioneer

may not acquire any property of the insolvent estate unless the acquisition is authorised

by an order of the Court.

PART 11

MEETINGS AND QUESTIONING OF INSOLVENT AND OTHER PERSONS

First meeting of creditors

80. (1) A liquidator of an insolvent estate appointed in terms of section

50 must convene by notice in the Gazette a first meeting of creditors of that estate to

be held within 60 days of his or her appointment.

(2) (a) The notice referred to in subsection (1) must-

(i) state the date, time and place of the meeting;

(ii) state the matters that will be dealt with; and

(iii) be published in the Gazette not less than 14 days before the date

fixed for the meeting.

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(3) The liquidator must, at least 14 days before the date fixed in the Gazette

for the holding of the first meeting of creditors of the insolvent estate-

(a) give notice of the first meeting of creditors to the employees, if any of

the debtor-

(i) by affixing a copy of the notice to any notice board to which the

employees have access inside the debtor's premises; or


affixing a copy to the front gate of the premises, where

applicable, failing which to the front door of the premises from

which the debtor conducted any business immediately prior to

the date of the application;

(b) send by liquidator’s notice to the insolvent, to every creditor of the

debtor whose name and address is known to the liquidator or which he

or she can reasonably obtain and to the head office of every trade union

which has notified the liquidator that it represents employees of the

debtor-

(i) a copy of the inventory contemplated in section 59(6);

(ii) a copy of the valuation contemplated in section 59(11);

(iii) a copy of the report contemplated in section 63(1);

(iv) a written draft of any resolution or direction which in his or her

opinion should be taken or given at that meeting;

(v) a copy of the notice contemplated in subsection (1);

(vi) any composition which is to be considered.

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(4) The liquidator must on or before the second working day before the date

determined for the meeting of creditors lodge with the Commissioner or a magistrate

who is to preside at the meeting -

(a) a copy of the report contemplated in section 63(1);

(b) a copy of the documents referred to in subsection (3); and

(c) an affidavit containing a list of the names and addresses of the creditors

to whom the documents referred to in subsection (3) have been sent.

(5) The first meeting of creditors may deal with any one or more of the

following -

(a) proof of claims against the estate;

(b) questioning of any person in terms of the Act;

(c) considering of the report of the liquidator;

(d) nomination and appointment of one or more co-liquidators;

(e) considering of a composition;

(f) the giving of directives to the liquidator with regard to any matter

affecting the liquidation of the estate.

(6) If the liquidator is unable to convene a meeting in the manner

contemplated in subsection (1) he or she must obtain the Commissioner's permission

to convene the meeting within the time determined by the Commissioner.

(7) If the liquidator fails to convene a meeting as contemplated in

subsections (1) or (6), the Commissioner may take any steps he or she deems necessary

to force the liquidator to convene a meeting of creditors of the insolvent estate.

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(8) If the majority in value or number of creditors voting at the meeting

rejects the liquidator's report the liquidator must submit a report to an adjourned or

subsequent meeting or refer the report to the Commissioner who may give such

directions with regard to the report as he or she deems appropriate.

Special meeting of creditors

81. (1) The liquidator may at any time but must convene a special

meeting of creditors of the insolvent estate-

(a) if requested thereto by not less than one fourth in value of creditors who

have proved claims against the estate;

(b) on request of the Commissioner;

(c) whenever a composition has to be considered; or

(d) for the proof of claims if requested to do so by a creditor who tenders

payment of the costs occasioned by the meeting.

(2) Any one or more of the following matters may be dealt with at a special

meeting of creditors:

(a) The proof of claims against the insolvent estate;

(b) the questioning of any person in terms of the Act;

(c) considering of a composition;

(d) the giving of directives to the liquidator with regard to any matter

affecting the liquidation of the insolvent estate.

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(3) The liquidator must not less than 14 days before the date set for the

meeting referred to in subsection (1) publish in the Gazette a notice of the date, time

and place of the meeting and the matters to be dealt with.

(4) The liquidator must at least 14 days before the date determined in the

Gazette for the holding of the meeting-

(a) give notice of the first meeting of creditors to the employees, if any of

the debtor-

(i) by affixing a copy of the notice to any notice board to which the

employees have access inside the debtor's premises; or


affixing a copy to the front gate of the premises, where

applicable, failing which to the front door of the premises from

which the debtor conducted any business immediately prior to

the date of the application;

(b) send by liquidator’s notice to every creditor whose name and address

are known to him or her or which he or she can reasonably obtain and

to the head office of every trade union which has notified the liquidator

that it represents employees of the debtor, the following documents,

namely-

(i) a copy of any composition which is to be considered;

(ii) a copy of any report contemplated in section 63(1) to be

considered at the meeting;

(iii) a written draft of any resolution or direction which in his of her

opinion should be taken or given at that meeting;

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(iv) a copy of the notice contemplated in subsection (3).

(5) The liquidator must on or before the second working day before the date

set for the meeting lodge with the person who is to preside at the meeting copies of the

documents sent to creditors in terms of subsection (4) together with a list of the names

and addresses of the persons to whom they were sent.

Notice to creditors who have not proved claims

82. (1) The liquidator may at any time after his or her report in terms of

section 63(1) has been accepted by creditors or the Commissioner by notice in the

Gazette and in any newspaper with national circulation fix a date after which creditors

who have not proved claims against the estate will be excluded from participation in

any distribution in terms of an account which will be submitted to the Commissioner

within two weeks after that date.

(2) The notice referred to in subsection (1) must be published not less than

four weeks before the date so fixed and before such publication a copy thereof must be

sent by liquidation’s notice to each unproved creditor whose name and address are

known to the liquidator or which he or she can reasonably obtain.

General provisions relating to meetings of creditors

83. (1) A meeting of creditors must, subject to subsection (9), be

convened-

(a) in the magisterial district where the insolvent had the insolvent’s main

place of business at the time of liquidation, or

(b) if the insolvent did not carry on a business or if it is unclear where the

insolvent’s main business was situated, in the magisterial district where

the insolvent had his ordinary residence at the commencement of

liquidation; or

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(c) if the debtor did not have his ordinary residence within Namibia or it is

unclear where he had his ordinary residence, within the magisterial

district of the court which issued the liquidation order.

(2) The Commissioner or an officer of his or her office appointed by him

or her must, subject to subsection (4), preside at a meeting of creditors convened within

a magisterial district in which the Commissioner has an office.

(3) If a meeting of creditors is to take place in a magisterial district where

the Commissioner has no office, the magistrate of the district concerned or a person

appointed by him or her must, subject to subsection (4), preside at the meeting.

(4) The Minister must ensure that sufficient magistrates who may hold

court under the Magistrates' Courts Act, are available to preside over creditors'

meetings to be held before the Commissioner or a magistrate, where such a magistrate

is required to consider the incarceration of recalcitrant witnesses.

(5) (a) A liquidator may convene any meeting to be held before himself

or herself at any place within the magisterial district contemplated in subsection

(2).

(b) No questioning may take place at such a meeting and if a questioning

must be held or if any person who avers that he or she is a creditor of

the insolvent estate demands, before or during the meeting, that the

meeting must be held or continued before the Commissioner or a

magistrate, the meeting must be held or continued before the

Commissioner or the magistrate contemplated in subsection (1).

(c) The liquidator must announce at the meeting when and where the

meeting will be continued or convene the meeting to be held before the

Commissioner or the magistrate.

(6) The presiding officer at a meeting of creditors must-

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(a) keep a record of the proceedings, which he or she must certify at the

conclusion of the meeting; and

(b) if he or she is not the Commissioner, send the record by standard notice

to the Commissioner.

(7) A meeting of creditors may, if necessary, be adjourned from time to

time.

(8) A meeting may after an adjournment be presided over by a different

presiding officer and a meeting before the Commissioner may be adjourned to take

place before a magistrate.

(9) With the consent of the Commissioner-

(a) a meeting may be convened in a magisterial district other than the

district contemplated in subsection (1); and

(b) a meeting may after an adjournment take place at a different place,

including a place in another magisterial district.

(10) The place where a meeting of creditors is held must, subject to section

87(4), be accessible to the public.

(11) The publication of any statement made by any person or any evidence

given at a meeting of creditors is privileged to the same extent as the publication of

evidence given in a court of law.

(12) A meeting of creditors, if duly convened in terms of this Act is deemed

to be a meeting of creditors although no creditor or only one creditor or his or her

representative attended the meeting personally.

Voting at meeting of creditors

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84. (1) Every creditor of an insolvent estate who has proved a claim

against the estate is, subject to subsection (3), entitled to vote at a meeting of creditors

of the estate.

(2) A creditor may vote on all matters relating to the administration of the

estate, but not on matters relating to the distribution of the assets of the estate or the

payment of costs of liquidation.

(3) A creditor may not vote -

(a) in respect of any claim which was ceded to that creditor after

commencement of the proceedings for the liquidation of the insolvent

estate; or

(b) on the question as to whether steps should be taken to contest the

creditor’s claim or preference.

(4) (a) Voting by creditors takes place according to value except where

this Act provides that voting must take place according to

number and value.

(b) (i) In the case of voting according to number the number of votes

brought out in favour of a resolution and those brought out

against the resolution are determined, without taking into

account the value represented by the votes.

(ii) In the case of voting according to value the aggregate value of

votes brought out in favour of a resolution and the aggregate

value of votes brought out against the resolution are determined,

without taking into account the number of votes for or against

the resolution.

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(5) (a) A secured creditor is entitled to vote on the full value of his or

her claim in respect of any matter affecting his or her security or

on the election of a liquidator.

(b) On a matter other than those mentioned in paragraph (a)-

(i) a secured creditor may vote only if that creditor had placed a

monetary value on his or her security when the creditor proved

the creditor’s claim or the liquidator has obtained a valuation of

the security or the security has been realised.

(ii) a secured creditor may vote on the amount (if any) by which the

creditor’s claim exceeds the proceeds of the realization of the

security if that creditor's security has been realized.

(iii) if a secured creditor’ security has not been realized, that creditor

may vote on the amount (if any) by which the creditor’s claim

exceeds-

(aa) the value placed by that creditor on the security; or

(bb) the valuation of the security obtained by the liquidator,

whichever is the greater.

(6) A creditor may vote personally or through an agent appointed thereto

by that creditor by power of attorney.

(7) No person may vote as an agent of a creditor, unless that person submits

proof of his or her mandate.

(8) Every resolution taken at a meeting of creditors and the result of the

voting on any matter must be recorded in the minutes of the meeting and in so far as a

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resolution contains a directive to a liquidator, the resolution is binding upon the

liquidator.

(9) The Court may set aside any directive of creditors which infringes the

rights of any creditor on application by that creditor, or the liquidator with the consent

of the Commissioner, within 90 days of the date of the resolution or such further period

as the Court upon good cause shown may allow.

(10) No resolution of creditors that a specific legal practitioner, auctioneer

or any other person be employed in connection with the administration of an insolvent

estate is binding upon the liquidator, but creditors may by resolution recommend the

employment of any such person and if the liquidator does not accept the

recommendation the Commissioner's decision in respect of such employment is final.

Insolvent to attend meetings of creditors

85. An insolvent must attend all meetings of creditors of his or her insolvent

estate of which he or she is notified in writing by the liquidator by standard notice or

an adjourned meeting which he or she is directed by the presiding officer to attend,

unless he or she is excused in writing by the liquidator, the Commissioner or the person

who is to preside at such meeting from attending such meeting or the resumption of

such adjourned meeting.

Summons to attend meeting of creditors and notice to produce document

86. (1) If the officer who presides or is to preside at a meeting of

creditors of an insolvent estate or the Commissioner or magistrate has reasonable

ground for believing that a person -

(a) has or had in his or her possession or custody property belonging to that

estate;

(b) is indebted to that estate;

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(c) is able to give material information on any matter relating to the

insolvent or his or her business or affairs, whether before or after the

liquidation of his or her estate, or concerning any property which at any

time belonged to that estate; or

(d) has in his or her possession or custody any book, document, or record

relating to the insolvent’s affairs or his or her property,

he or she may summon that person to appear at a meeting of creditors of the insolvent

estate at a time stated in the summons, in order to be questioned in terms of section 87

and, where applicable, to produce the books, documents, or records specified in the

summons.

(2) A summons referred to in subsection (1) must be substantially in the

form of Form E3 of Schedule 1.

Questioning of insolvent and other persons

87. (1) (a) The presiding officer at a meeting of creditors of an

insolvent estate may call upon the insolvent or any person

summoned for questioning or the production of any book,

document or record in terms of section 86, or any other person

who is present and who possesses relevant information, to-

(i) appear before him or her and give evidence;

(ii) be questioned on all matters relating to the insolvent or his or her

business or affairs, whether before or after the liquidation of the

estate, and concerning any property which at any time belonged

to the insolvent estate; or

(iii) to produce a book, document or record.

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(b) That presiding officer must administer to such person the oath or an

affirmation to speak the truth.

(2) (a) The presiding officer referred to in subsection (1), the liquidator

of that estate or a proved creditor on whose request a person was

summoned or called upon to testify, or the representative of any of them

may question a person who, in terms of subsection (1), is called upon to

testify or to produce a book, document, or record.

(b) The presiding officer in his or her discretion may allow any other

creditor to put questions to that person through the presiding officer.

(3) A person called upon in terms of subsection (1) to testify may be

assisted by a representative and that representative may question that person only in so

far as it is necessary to clarify answers given by him or her.

(4) The place where proceedings under this section takes place must be

accessible to the public: Provided that if in the opinion of the presiding officer it is

necessary for the effective questioning of a person or for the maintenance of good order

or the protection of the public interest, the presiding officer may order that-

(a) the proceedings or any part thereof takes place behind closed doors;

(b) any particular person or persons may not be present during any stage of

the proceedings; or

(c) the proceedings or any part thereof may not be published.

(5) If a banker is summoned in terms of section 86 or ordered in terms of

section 89 to produce documents, books or statements or give information, such banker

must, notwithstanding the law relating to privilege or confidentiality, produce such

documents, books or statements or give such information.

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(6) Notwithstanding the provisions of any other law or the common law,

but subject to the Court’s power to avoid questioning being conducted in an oppressive,

vexatious or unfair manner, no person questioned in terms of this section may-

(a) refuse to answer a question because the answer may prejudice him or

her in any criminal or disciplinary proceedings which have been or may

be instituted against him or her; or

(b) apply for a postponement of the questioning until the criminal or

disciplinary proceedings have been finalised:

Provided that evidence given by a person in terms of this section is not admissible

against him or her in criminal or disciplinary proceedings, except in criminal

proceedings where such person is charged in connection with evidence given during

the questioning -

(i) with perjury;

(ii) the giving of false evidence under oath or affirmation; or

(iii) a contravention of section 91(3) for refusal or failure to answer lawful

questions fully and satisfactorily.

(7) The insolvent must at a questioning under this section be required to

declare that he or she has disclosed all his or her affairs fully and correctly.

(8) The presiding officer at proceedings in terms of this section must-

(a) disallow all questions that are irrelevant and may disallow questions that

would prolong the proceedings unnecessarily;

(b) record the proceedings or cause them to be recorded.

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(9) A person who in answer to a summons issued in terms of section 86

attends a meeting of creditors or a person called upon in terms of this section to testify

at such meeting or to produce books, documents, or records including the insolvent, is

entitled to the witness fees to which he or she would have been entitled if he or she

were a witness in civil proceedings before a court of law.

(10) Subject to the proviso to subsection (6), any evidence given under this

section is admissible in any proceedings instituted against the person who gave such

evidence and any record of a questioning introduced in such proceedings forms part of

the record of the proceedings.

(11) (a) The liquidator may in terms of an agreement with a creditor

repay the creditor's costs and expenses in connection with questioning

conducted by the creditor if sufficient money is recovered as a result of

the investigation.

(b) In the absence of such an agreement the Court or the Commissioner may

order that the whole or any part of such costs or expenses form part of

the costs of liquidation.

Questioning by estate representative

88. (1) The liquidator or any creditor of an insolvent estate may at any

time after the liquidation of the debtor’s estate apply to the Court or the Commissioner-

(a) that a person known or suspected to-

(i) have in his or her possession any property belonging to the

insolvent estate; or

(ii) be indebted to the insolvent estate; or

(iii) be able to give material information regarding the affairs of the

insolvent or of his or her property,

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be summoned to appear before an estate representative for questioning; and

(b) that a suitable person be appointed as estate representative to carry out

the questioning contemplated in paragraph (a).

(2) A creditor who makes an application contemplated in subsection (1)

must furnish security to the satisfaction of the Court or the Commissioner for all costs

in connection with the questioning.

(3) If the Court or the Commissioner grants an application referred to in

subsection (1) the Court or the Commissioner-

(a) must appoint a magistrate or any other person the Court or the

Commissioner deems suitable, as estate representative with the

assignment to carry out the questioning in terms of this section; and

(b) may summon a person referred to in subsection (1)(a) to appear at a

date, time and a place stated in the summons before that estate

representative and to produce any books, documents or records in his or

her custody or under his or her control relating to the insolvent in order

to be questioned with regard to the affairs of the debtor.

(4) A summons referred to in subsection (3) must be substantially in the

form of Form E4 of Schedule 1.

(5) An estate representative appointed in terms of subsection (3) must

administer the oath an affirmation to speak the truth to the person who appears before

him or her for questioning.

(6) An estate representative has the power to summons witnesses and to

question them and to require the production of documents.

(7) If an estate representative -

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(a) has been appointed by the Commissioner, that representative must, in

such manner as the Commissioner may direct, report to the

Commissioner; or

(b) has been appointed by the Court, that representative must, in such

manner as the Court may direct, report to the Commissioner and the

Court,

on any questioning referred to him or her.

(8) The provisions of subsections (2), (3), (5), (6), (7), (8) and (9) of

section 87 apply with the changes necessitated by the context with regard to the giving

of evidence and the production of documents in terms of this section.

(9) A witness who gave evidence in terms of this section is at his or her

own cost entitled to a copy of the record of his or her evidence.

(10) A creditor at whose request a questioning is carried out in terms of this

section is liable for all costs and expenses incurred in connection with the questioning:

Provided that the Court or the Commissioner may order that the whole or any part of

such costs or expenses must be reckoned as costs of the liquidation.

(11) A questioning in terms of this section and any application therefor is

private and confidential, unless the Court or the Commissioner, either generally or in

respect of any particular person, directs otherwise.

Liquidator may put written questions or call for accounts, books, documents,

records or information

89. (1) If in the opinion of a liquidator it would be convenient to obtain

information concerning the affairs of the insolvent by means of written questions and

answers instead of oral evidence given at a meeting of creditors of the insolvent estate

contemplated in section 86 or a questioning in terms of section 87 or section 88, as the

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case may be, the liquidator may by standard notice send such written questions to the

insolvent or a creditor of the insolvent estate or to any other person to be answered by

him or her.

(2) (a) Questions contemplated in subsection (1) may be put to the

insolvent with regard to all matters relating to his or her business or

affairs, whether before or after the liquidation of the insolvent’s estate,

and with regard to any property which at any time belonged to the

insolvent estate.

(b) Questions may be put to a creditor of an insolvent estate with regard to

a claim proved by that creditor against the estate or a claim offered for

proof.

(c) Questions may be put to any other person with regard to -

(i) any transaction which that person had with the insolvent, or

(ii) any property, books, documents or records of the insolvent

which such person had in his or her possession within 36 months

before the commencement of liquidation of the estate of the

insolvent.

(3) (a) Standard notice of the questions contemplated in subsection (1)

must be given to the person to whom they are put.

(b) The written answers to the questions must be sworn to or affirmed and

sent to the liquidator by standard notice within 14 days after receipt of

the questions.

(4) The provisions of subsections (5) and (6) of section 87 are with the

changes necessitated by the context applicable with regard to the written answers to

questions referred to in this section.

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(5) The answers to questions referred to in this section are regarded as

evidence given in terms of section 87.

(6) The giving of answers to questions referred to in this section or a refusal

to give such answers does not prevent a person from being summoned in terms of

section 86 or from being questioned in terms of section 87, 88 or 90 and does not

absolve a person from the obligation to give evidence when called upon to do so.

(7) A liquidator of an insolvent estate may by standard notice order any

person with whom the insolvent or his or her spouse had an account or transactions

within 12 months before the date of the liquidation of that insolvent’s estate to furnish

the liquidator within seven days or such longer period as the liquidator may allow with

a statement reflecting-

(a) the state of the said account; or

(b) the debits, credits and balance due in respect of the transactions,

during that period of 12 months.

(8) A liquidator may by standard notice order any person whom he or she

has reason to believe to be in possession or control of -

(a) any book, document, record or material information relating to the

affairs of the insolvent or his or her spouse, before or after the

liquidation of the insolvent’s estate; or

(b) property which belong or had belonged to the insolvent or his or her

spouse,

to make the book, document, record information or property specified in the said notice

available to the liquidator within seven days of the date of that notice or within such

longer time as the liquidator may allow and that person must allow the liquidator or

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someone on behalf of the liquidator to make copies of or extracts from any such book,

document or record.

Questioning by or on behalf of the Commissioner

90. (1) If at any time after the liquidation of an insolvent’s estate and

before his or her rehabilitation, the Commissioner is of the opinion that the insolvent

or a liquidator or any other person -

(a) is able to give information; or

(b) is in possession of books, documents or records which the

Commissioner considers desirable to obtain,

concerning-

(i) the insolvent or his or her estate;

(ii) the administration of that estate; or

(iii) any demand made against that estate,

the Commissioner may by notice in writing delivered to the insolvent or the liquidator

or such other person, summon him or her to appear before the Commissioner or before

a magistrate at a place and on a date and time stated in the notice, and to-

(aa) furnish all the information within his or her knowledge concerning the

insolvent or his or her estate; or

(bb) the administration of that estate; and

(cc) produce the books, documents or records specified in the notice.

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(2) The notice referred to in subsection (1) must be substantially in the form

of Form E5 of Schedule 1.

(3) (a) The Commissioner may at any time-

(i) appoint a person to investigate the books, documents,

records and vouchers of the liquidator; and

(ii) direct the liquidator to deliver to that person or to the

Commissioner any book, document, or record relating to

or property belonging to the insolvent estate of which he

or she is the liquidator.

(b) The reasonable costs incurred in performing such an investigation are,

unless the Court otherwise orders, regarded as part of the costs of

liquidation.

(c) If the liquidator is removed from office consequent upon such an

investigation, those costs must be paid by the liquidator in his or her

personal capacity.

(4) After having questioned a person summoned in terms of subsection (1),

the Commissioner or the magistrate may deliver to that person a notice to-

(a) appear again before the Commissioner or the magistrate at a place and

time stated in that notice; and

(b) furnish such further information or to produce any book, document or

record specified in that notice.

(5) (a) A person summoned in terms of subsection (1) may be

questioned by the Commissioner or the magistrate presiding at the

proceedings.

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(b) If a person other than the liquidator is summoned in terms of that

subsection, the liquidator or his or her representative may cross-examine

that person in regard to evidence given by that person.

(c) To the extent that the presiding officer allows any person having an

interest in the insolvent estate or its administration or his or her

representative may question the person summoned.

(d) The reasonable costs of such questioning are, unless the Court otherwise

orders, regarded as part of the costs of liquidation.

(e) If the liquidator is removed from office consequent upon such a

questioning, those costs must be paid by the liquidator in his or her

personal capacity.

(6) The provisions of section 87(3), (5), (6), (7), (8) and (9) with the

changes necessitated by the context apply to a questioning in terms of this section

subject thereto that the liquidator of the insolvent estate is not be entitled to witness

fees.

(7) Proceedings under this section are private and confidential and without

the permission of the presiding officer at the proceedings-

(a) no person whose attendance thereat is not necessary may be present at

the proceedings; and

(b) no publication of the proceedings may take place.

Enforcing summonses and giving of evidence

91. (1) If-

(a) a person summoned under section 86, 87, 88 or 90 fails to appear at a

meeting of creditors or questioning in answer to the summons; or

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(b) an insolvent fails to attend a hearing in terms of section 29(6)(a) or a

meeting of creditors in terms of section 85; or

(c) that person or insolvent fails to remain in attendance at that meeting,

questioning or hearing,

any magistrate for the district where the meeting, questioning or hearing was scheduled

to be held who may hold a court under the Magistrates' Courts Act, may issue a warrant,

authorizing any member of the Namibian police to apprehend the person summoned or

the insolvent, as the case may be, and to bring him or her before that magistrate.

(2) (a) Unless the person summoned or the insolvent, as the case may

be, satisfies the magistrate referred to in subsection (1) that he or she

had a reasonable excuse for his or her failure to appear at or attend the

meeting, questioning or hearing, or for absenting himself from the

meeting, hearing or questioning, referred to in that subsection, that

magistrate may commit him or her to prison to be detained there until

such time as the magistrate may determine.

(b) The officer in charge of the prison to which that person or insolvent was

committed, must detain him or her and produce him or her at the date,

time and place determined by that magistrate for his or her production.

(3) If-

(a) a person summoned in terms of this section, appears in answer to the

summons but fails to produce any book, document or record which he

or she was summoned to produce;

(b) any person who may be questioned at a meeting of creditors in terms of

section 87 or during a questioning in terms of section 88 or 90 or a

hearing in terms of section 29(6)(a) refuses to be administered the oath

or make an affirmation to speak the truth at a meeting of creditors,

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questioning or hearing at which he or she is called upon to give

evidence;

(c) refuses to answer any question lawfully put to him or her under those

sections; or

(d) does not answer the question fully and satisfactorily,

the magistrate referred to in subsection (1) may issue a warrant committing that person

to prison, where he or she must be detained, subject to the provisions of subsection (5),

until he or she has undertaken to do what is required of him or her.

(4) If a person who has been released from prison after having undertaken

in terms of subsection (3) to do what is required of him or her, fails to fulfil his or her

undertaking, the magistrate referred to in subsection (1) may commit the person to

prison as often as may be necessary to compel him or her to do what is required of him

or her.

(5) Any person committed to prison under this section may apply in

accordance with the Rules of Court on an urgent basis to the Court for his or her

discharge from custody and the Court must order the discharge if the Court finds that

the person was wrongfully committed to prison or is being wrongfully detained.

(6) In connection with the apprehension of a person or with the committal

of a person to prison under this section, the magistrate who issued the warrant of

apprehension or committal to prison enjoys the same immunity which is enjoyed by a

judicial officer in connection with any act performed by him or her in the exercise of

his or her functions.

(7) The magistrate referred to in subsection (1) may upon the request of a

liquidator, the Commissioner, an estate representative or a proved creditor and after

giving the witness or the insolvent the opportunity to be heard, order the witness or the

insolvent to pay-

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(a) the costs in the amount determined by the magistrate occasioned by any

failure contemplated in that subsection; and

(b) the costs to have him or her brought before the magistrate.

Suspected commission of offence to be reported to Commercial Branch

92. (1) If it appears from an answer or statement given by a person who

is questioned in terms of section 87, 88, 89 or 90, that there are reasonable grounds for

a suspicion that any person has committed an offence, the presiding officer at the

proceedings, or the liquidator in the case of proceedings in terms of section 89, must-

(a) report such suspicion and submit the answer or statement or a certified

copy thereof with supporting documents, if any, to the Regional

Commander of the Commercial Branch of the Namibian Police; and

(b) set out the grounds on which the suspicion rests.

(2) If the presiding officer referred to in subsection (1) is not the

Commissioner, a copy of the answer or statement and supporting documents, if any,

and the report to the Regional Commander referred in that subsection must be sent by

standard notice to the Commissioner.

(3) The Regional Commander referred in subsection (1) must cause the

Commercial Branch with due consideration to the provisions of section 87(6) to

investigate whether criminal proceedings should be instituted in the matter.

Proof of record of proceedings of meetings of creditors

93. (1) Any record purporting to be a record of the proceedings at a

meeting of the creditors of an insolvent estate or a questioning held under this Act and

purporting to have been signed by a person describing himself or herself as

Commissioner or magistrate or other presiding officer or estate representative is, upon

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its mere production in judicial proceedings, prima facie proof of the proceedings

recorded therein.

(2) Unless the contrary is proved, it is presumed that any meeting of

creditors or any questioning referred to in subsection (1) was duly convened and held

and that all acts performed thereat were validly performed.

PART 12

CLAIMS

Claim by partnership creditor against estate of insolvent partner

94. When the estate of a partner in a partnership is liquidated without the

partnership being placed under liquidation-

(a) the partnership is dissolved; and

(b) until the debts of the partnership have been settled in terms of the

dissolution of the partnership, any claim by a creditor of the partnership

against the estate of the insolvent partner must be tendered as an

unliquidated claim in terms of section 96(11).

Claims against partnerships

95. When the estate of a partnership and the estates of the partners in that

partnership are under liquidation-

(a) any claim for a partnership debt must be proved against the partnership

estate, despite liability of a partner for such debt;

(b) a shortfall on the claim against the partnership is admitted without

formal proof as a claim against each of the estates of the partners which

is liable for the debt; and

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(c) any balance in the partnership estate after payment of the debts is

distributed amongst the estates of the partners in so far as the partner

would have been entitled to such a balance upon the dissolution of the

partnership.

Proof of claims

96. (1) Any person who has a liquidated claim against an insolvent

estate, the cause of which arose on or before the commencement of liquidation of the

estate, or the authorised agent of that person, may at any time before the final

distribution of the estate, but subject to the provisions of section 98, prove that claim

against the estate.

(2) A claim against an insolvent estate must be admitted at a meeting of

creditors of the estate if the claim has been proved to the satisfaction of the presiding

officer on-

(a) the face of the claim form;

(b) documents in connection with the claim submitted by the creditor or

another person, if any; and

(c) the evidence, if any, by the creditor.

(3) If the claim has not been proved in in accordance with subsection (2),

the presiding officer must reject it.

(4) A creditor who holds security for the creditor’s claim must place a

monetary value on his or her security, or have his or her voting rights limited in terms

of section 84(5).

(5) Subject to section 28, the rejection of a claim does not debar the

claimant from proving the claim at a later meeting of creditors or by an action at law.

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(6) Every claim must be proved by an affidavit in a form corresponding

substantially with Form B or C of Schedule 1 and, subject to subsections (11) and

(12) no oral evidence may be received in support of any claim.

(7) The affidavit contemplated in subsection (6) and all documents

submitted in support of the claim or a copy thereof must be lodged before the time of

day advertised for the commencement of the meeting of creditors on or before the

second working day before the date of the meeting, with the presiding officer of that

meeting, failing which the claim may not be admitted at that meeting unless the

presiding officer is of the opinion that the creditor had a reasonable excuse for the

creditor’s failure to lodge the claim with the presiding officer within the said time.

(8) Where appropriate the amount of a claim may be expressed in a foreign

currency, but all claims in a foreign currency must be paid in its equivalent in Namibian

dollar and the date of commencement of liquidation is the conversion date of Namibian

dollar to a foreign currency.

(9) A claimant who has proved a claim which is deficient in any respect

may at a subsequent meeting of creditors prove a corrected claim.

(10) (a) The documents referred to in subsection (7) may be perused free

of charge by the liquidator, the insolvent and any creditor of the insolvent estate

or the representative of any of them during office hours at the office of the

presiding officer of the meeting of creditors.

(b) The liquidator, insolvent, or creditor may submit motivated objections

to prove a claim at the meeting where the claim is lodged for proof or

with the presiding officer before that meeting.

(11) (a) Any person who has an unliquidated claim against an insolvent

estate may tender such claim for proof at a meeting of creditors, but such claim

may not be admitted to proof until the claim-

(i) has been accepted by the liquidator by way of compromise; or

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(ii) is proved in an action at law.

(b) When such claim is compromised or proved in an action at law the claim

is deemed to have been proved and admitted against the insolvent estate

at the meeting where it was lodged for proof, unless the creditor informs

the liquidator by standard notice within seven days of the compromise

or judgment that the creditor abandons the claim.

(12) (a) The presiding officer at the meeting of creditors of an insolvent

estate may-

(i) of his or her own motion;

(ii) at the request of the liquidator or his or her representative; or

(iii) at the request of any creditor who has proved a claim at a meeting

of creditors or the representative of such creditor,

call upon any person present at the meeting who wishes to prove a claim

or who has proved a claim against the estate to submit to questioning by

the presiding officer, the liquidator or his or her representative or any

such creditor or his or her representative in regard to such claim.

(b) For purposes of such questioning the presiding officer must administer

to that person an oath or affirmation to speak the truth.

(c) Notwithstanding paragraph (a), a creditor who has proved a claim at a

meeting of creditors may not be permitted to question a creditor who

wishes to prove a claim at the same meeting before the claim of such

creditor has been admitted or rejected.

(13) (a) Any person who wishes to prove or who has at any time proved

a claim against an insolvent estate and who is absent from a meeting of creditors

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may be summoned in writing by the presiding officer in a summons

substantially in the form of Form E2 of Schedule 1 to appear before him or her

at a place and time stated in the summons for the purpose of being questioned

by the presiding officer, the liquidator or a creditor who has proved a claim

against the estate, or the representative of the liquidator or such creditor in

regard to such claim.

(b) The provisions of subsection (12) with regard to the administering of

the oath or the taking of a solemn declaration apply with the changes

necessitated by the context with regard to the giving of evidence by such

person.

(14) The claim of a person who wishes to prove such claim and is called

upon to be questioned as contemplated in subsection (12) and who-

(a) fails without reasonable excuse to appear;

(b) refuses to take the oath or make an affirmation;

(c) refuses to submit to questioning; or

(d) refuses to answer fully and satisfactorily any lawful question put to him

or her,

may be rejected.

Liquidator to examine claims

97. (1) The person who presided at a meeting of creditors of an

insolvent estate must, if he or she is not the liquidator, after the meeting deliver to the

liquidator every claim proved against the insolvent estate at that meeting and every

document submitted in support of any claim.

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(2) (a) The liquidator must examine the claims and supporting

documents referred to in subsection (1) and all available books, documents or

records relating to the insolvent estate for the purpose of ascertaining whether

the estate in fact owes the claimant the amount claimed.

(b) The liquidator may require the claimant to submit additional supporting

proof of his or her claim and, in the case where the claim is based on an

estimate, the basis on which the estimate was arrived at.

(3) (a) If the liquidator disputes a claim after it has been proved at a

meeting of creditors, he or she may, with the authority of the Commissioner or

creditors in terms of section 66(4) and after having afforded the claimant the

opportunity of substantiating the claimant’s claim or any part thereof, reduce or

disallow the claim.

(b) The liquidator must forthwith by standard notice notify the claimant and

the Commissioner in writing of such reduction or disallowance of the

claim.

(4) Subject to the provisions of section 28(5), the reduction or disallowance

of a claim as contemplated in subsection (3) does not debar a claimant from

establishing his or her claim by means of an action at law.

Late proof of claims

98. (1) Subject to the provisions of section 75(8) and subsection (2), a

creditor of an insolvent estate who has not proved his or her claim against the estate

before a date fixed in terms of section 82 is not entitled to share in the distribution of

the assets reflected in an account lodged with the Commissioner within two weeks after

that date.

(2) Notwithstanding subsection (1), if the Commissioner is satisfied that a

creditor referred to in subsection (1) has a reasonable excuse for the delay in proving

his or her claim, the Commissioner may-

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(a) permit that creditor to prove the creditor’s claim before the confirmation

of the account contemplated in subsection (1); and

(b) order the liquidator to draw up a new account in which provision is made

for the claim so proved, provided that the creditor tenders all costs in

connection with the drawing-up of the new account, including wasted

advertisement costs, if any.

(3) A creditor of an insolvent estate who has proved a claim against the

estate and who was not in terms of subsection (1) permitted to share in the assets

reflected in an account, is, in so far as available funds allow, entitled to be awarded out

of any subsequent distribution account the amount to which that creditor would have

been entitled under the earlier distribution account if the creditor had proved the

creditor’s claim in time.

(4) A creditor who delayed proving that creditor’s claim pending-

(a) the outcome of proceedings for the setting aside of any disposition of

property made by an insolvent; or

(b) the recovery of any debt, asset, compensation, penalty or benefit of

whatever kind for the benefit of an insolvent estate,

is not entitled to share in the distribution of any money or the proceeds of property

recovered as a result of such proceedings.

Conditional claims

99. (1) A creditor who has a claim against an insolvent estate which is

dependent upon the fulfilment of a condition, may request the liquidator to place a

value on the claim.

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(2) If a liquidator places a value on a claim referred to in subsection (1), he

or she must in writing indicate the grounds on which he or she arrived at the valuation.

(3) The valuation of a conditional claim by a liquidator is subject to review

by the Court on application of the creditor concerned.

(4) After a conditional claim has been valuated as contemplated in this

section, the claim may be proved by the creditor for the amount of the valuation.

(5) (a) If the condition upon which a claim is dependent is fulfilled

before the inclusion of the amount referred to in subsection (4) in a proposed

distribution account, the claim may be proved in full.

(b) If that condition is fulfilled after provision had already been made in a

distribution account for the claim contemplated in subsection (4), the

balance of the claim may be proved, subject to the provisions relating to

the late proof of claims.

(6) A claim for severance pay or retrenchment pay which is subject to a

condition that the contract of service has been terminated may be proved for the full

amount of the claim, but until the contract of service has been terminated-

(a) no award is paid on the claim; and

(b) the creditor has no vote on the claim.

Arrear interest and debt due after liquidation

100. (1) A creditor may prove a claim against an insolvent estate in

respect of a capital debt and interest thereon which has accrued at the commencement

of liquidation.

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(2) No claim may be proved for interest which accrues after the

commencement of liquidation, but such interest is payable in the circumstances set out

in sections 69(8) and 75(15).

(3) The capital amount of a debt which becomes payable after the

commencement of liquidation must be reduced by the prescribed percentage of that

amount per annum compounded monthly on completed months from the

commencement of liquidation to the date on which the debt becomes payable.

Withdrawal of claim

101. (1) A creditor who has proved a claim against an insolvent estate

may withdraw his or her claim by standard notice to the liquidator.

(2) A liquidator who receives a notice of withdrawal of a claim must give

standard notice to the Commissioner of the withdrawal.

(3) A creditor who has withdrawn his or her claim remains liable for his or

her proportional share of the costs of liquidation up to the date when the notice of

withdrawal was received by the liquidator.

(4) A creditor who has withdrawn that creditor’s claim may by standard

notice to the liquidator cancel such withdrawal, in which event that creditor is not be

entitled to payment of the creditor’s claim out of the estate until all other creditors who

have proved claims have been paid in full.

(5) If a creditor cancels the withdrawal of a claim as contemplated in

subsection (4), that creditor is not liable for liquidation costs for which that creditor

was not liable at the time of the cancellation of the withdrawal of that claim.

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Recovery of debt from insolvent estate where creditor recovered from another

source

102. (1) A creditor who has proved a claim against an insolvent estate

and who, after the commencement of liquidation of the insolvent estate, has received

payment of that debt in whole or in part, from a source other than the insolvent estate,

must notify the liquidator by standard notice of such payment within 60 days from

receiving payment.

(2) If the creditor fails to act as set out in subsection (1), double the amount

to which that creditor was not entitled to and which was paid to that creditor out of the

insolvent estate, may be recovered from the creditor.

PART 13

BANKING ACCOUNTS, INVESTMENTS AND MONEYS BELONGING TO

THE INSOLVENT ESTATE

Banking accounts and investments

103. (1) The liquidator of an insolvent estate -

(a) must open a cheque account in the name of the estate with a bank within

Namibia and deposit therein all moneys received by him or her on behalf

of the estate;

(b) may open a savings account in the name of the estate with a bank within

Namibia and may transfer thereto from the account referred to in

paragraph (a) moneys not immediately required for the payment of any

claim against the estate;

(c) may place moneys deposited in an account referred to in paragraph (a)

and not immediately required for the payment of any claim against the

estate, on an interest-bearing deposit account with a bank within

Namibia.

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(2) Whenever required by the Commissioner to do so, the liquidator must-

(a) notify the Commissioner by standard notice of the bank and the office,

branch office or agency thereof with which he or she has opened an

account or placed a deposit referred to in subsection (1); and

(b) furnish the Commissioner with a bank statement or other sufficient

evidence of the status of the account.

(3) The liquidator must as far possible transfer any payments from any

account referred to in subsection (1) electronically to the intended beneficiary provided

that all payment instructions drawn upon such account must-

(a) contain the name of the payee and the cause of payment;

(b) be drawn to order; and

(c) be authorised in writing by every liquidator or his or her authorised

agent.

(4) The Commissioner and any surety for the liquidator, or any person

authorised by such surety, have the same right to information in regard to an account

referred to in subsection (1) as the liquidator himself or herself has, and may examine

all vouchers relating thereto, whether in the hands of the bank or the liquidator.

(5) The Commissioner may, after direct notice to the liquidator, direct the

manager of any office, branch office or agency with which an account referred to in

subsection (1) has been opened, by standard notice to pay over into the Guardian's

Fund-

(a) all moneys standing to the credit of that account at the time that manager

receives that direction; and

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(b) all moneys which may thereafter be paid into that account,

and that manager must carry out that direction.

Recording of receipts by liquidator

104. (1) The liquidator of an insolvent estate must immediately after his

or her appointment open a record in which all moneys, goods, accounts and other

documents received by him or her on behalf of the estate are recorded.

(2) The Commissioner may at any time direct the liquidator in writing to

produce the said record for inspection and every creditor who has proved a claim

against the estate and, if the Commissioner so orders, every person claiming to be a

creditor or surety for the liquidator, may inspect the said record at all reasonable times.

Unlawful retention of moneys or use of property by liquidator

105. (1) A liquidator who-

(a) without lawful cause, retains any money exceeding N$100 belonging to

the insolvent estate of which he or she is liquidator;

(b) knowingly permits his or her co-liquidator to retain such a sum of

money longer than the earliest day after its receipt on which it was

possible for him or her or his or her co-liquidator to pay that money into

a bank; or

(c) who uses or knowingly permits his or her co-liquidator to use any

property of the insolvent estate, except for the benefit of the estate,

is, in addition to any other penalty to which he or she may be liable, liable to pay into

that estate an amount equal to double the amount so retained or double the value of the

property so used.

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(2) The amount which a liquidator is liable to pay in terms of subsection

(1) may -

(a) be deducted from any remuneration to which he or she is entitled out of

the insolvent estate; or

(b) may be recovered from him or her by action in a court of law at the

instance of his or her co-liquidator or the Commissioner or any creditor

who has proved a claim against the estate.

PART 14

ESTATE ACCOUNTS, DISTRIBUTION AND CONTRIBUTION

Estate Accounts

106. (1) Subject to subsections (5), (7) and (8), a liquidator must within

a period of six months from the date of his or her appointment as final liquidator in

terms of section 53(1)-

(a) lodge with the Commissioner a liquidation account and a distribution

account of the proceeds of the property in the insolvent estate available

for payment to creditors; or

(b) if all realisable property in the insolvent estate has been realised and

brought into account and the proceeds are insufficient to cover the costs

and charges referred to in section 74 a contribution account

apportioning the liability for the deficiency among creditors who are

liable to contribute.

(2) The accounts referred to in subsection (1) must be substantially in the

form set out in Form D of Schedule 1: Provided that the Commissioner may insist on

strict compliance with any item of that Form.

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(3) If a liquidation account is not a final account, the liquidator must from

time to time as the Commissioner may direct, but at least every six months unless he

or she has received an extension of time as contemplated in subsections (5), (7) or (8),

lodge with the Commissioner periodical accounts in the form and in all other respects

similar to the accounts mentioned in subsection (2).

(4) If the estate of a partnership is under liquidation, separate accounts must

be lodged in respect of the partnership and the estate of each partner whose estate is

under liquidation.

(5) If a liquidator is unable to lodge an account with the Commissioner

within the period of six months as required by subsection (1) or (3), he or she must

before the expiration of such period or within the further period that the Commissioner

may allow, send to the Commissioner by standard notice an affidavit in which he or

she must state -

(a) the reasons for his or her inability to lodge the account concerned;

(b) those affairs, transactions or matters relating to the insolvent or the

insolvent estate as the Commissioner may require; and

(c) the amount of money available for payment to creditors or, if there is no

free residue or the free residue is insufficient to meet all costs referred

to in section 74, the deficiency the creditors are liable to make good,

and the Commissioner may thereupon extend such period to a date determined by him

or her.

(6) If the Commissioner extends the period in terms of subsection (5) the

liquidator must inform proved creditors of the extension by liquidator’s notice and

enclose a copy of the affidavit in terms of that subsection.

(7) Subject to subsection (8), if a liquidator fails to lodge an account within

the period required by subsection (1) or before the date determined by the

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Commissioner in terms of subsection (5), the Commissioner may send a standard

notice to the liquidator in which he or she is required to lodge-

(a) the account concerned with the Commissioner; or

(b) if he or she is unable to lodge such account, send an affidavit as

contemplated in subsection (5) to the Commissioner,

within a period of 14 days from the date of the notice and the Commissioner may, if

the account concerned or the said affidavit is not lodged with him or her after the

expiration of the 14 days extend such period to a date determined by him or her.

(8) If the Commissioner refuses to extend the period as contemplated in

subsection (7), the liquidator may apply by motion to the Court, after having given the

Commissioner direct notice of his or her intention to make the application, for an order

extending the said period and the Court may thereupon make such order as it deems

just.

(9) If before the expiration of the period contemplated in subsection (1) or

(3) a liquidator has funds in hand which in the opinion of the Commissioner ought to

be distributed and the liquidator has not lodged with the Commissioner a plan for the

distribution of those funds, the Commissioner may direct him or her by standard notice

to lodge to the Commissioner a plan for the distribution of those funds.

(10) If any liquidator fails-

(a) to lodge any account to the Commissioner as and when required by or

under this Act;

(b) to lodge any vouchers in support of such account upon the request of

the Commissioner;

(c) to perform any other duty imposed upon him by this Act; or

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(d) to comply with any reasonable demand of the Commissioner for

information or proof required by him in connection with the liquidation

or distribution of an estate,

the Commissioner or any person having an interest in the liquidation or distribution of

an insolvent estate may, after giving the liquidator not less than 14 days’ standard

notice, apply to the Court for an order directing the liquidator to lodge such account or

any vouchers in support thereof or to perform such duty or to comply with such

demand.

(11) Any costs awarded to the Commissioner or to such person as a result of

an application referred to in subsection (10) must, unless otherwise ordered by the

Court, be payable by the liquidator in his her personal capacity.

Copies of liquidator's accounts to be open for inspection

107. (1) (a) The liquidator must as soon as possible after he or she

has lodged an account with the Commissioner as contemplated in section 106

lodge a copy of the account with a magistrate of the district in which the

insolvent resided or carried on business before his or her liquidation if the

Commissioner does not have an office in that district.

(b) If the insolvent resided or carried on business in a portion of a district

in respect of which an additional magistrate or assistant magistrate

permanently carries out the functions of the magistrate of the district at

a place other than the seat of the magistracy of that district, the liquidator

must lodge a copy of the account with that additional magistrate or

assistant magistrate.


(a) give notice in the Gazette that the account will lie open for inspection

by any person having an interest in an insolvent estate at the place and

during the period stated in the notice; and

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(b) give liquidator’s notice to each creditor who has proved a claim against

that estate.

(3) Every such account and every copy thereof lodged with a magistrate

must be open for inspection by any person having an interest in the insolvent estate at

the office of the Commissioner and of such magistrate during a period of 14 days as

from the date of the publication of the notice in the Gazette.

(4) A magistrate who has received a liquidator's account must cause a

notice to be affixed in a public place in or about his or her office notifying that the

account will lie open for inspection at his or her office during the period stated in the

notice.

(5) After the expiration of the period referred to in subsection (4) the

magistrate must-

(a) endorse upon the account a certificate that the account was open for

inspection at his or her office as provided in this section; and

(b) send the account by standard notice to the Commissioner.

Objections to liquidator's account

108. (1) The insolvent or any person having an interest in the estate may

at any time after the commencement of the period contemplated in section 107 until

the liquidator's account is confirmed in terms of section 109 lodge with the

Commissioner in writing any objection to that account, stating the reasons for such

objection.

(2) If the Commissioner is of the opinion-

(a) that any such objection is well founded;

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(b) apart from any objection, that the account is in any respect incorrect;

(c) that the account contains any improper charge; or

(d) that the liquidator acted in bad faith, negligently or unreasonably in

incurring any costs included in the account and that the account should

be amended,

he or she may direct the liquidator to amend the account or may give such other

direction in connection therewith as he or she may think fit.

(3) Any person, including the liquidator, who feels aggrieved by any

direction of the Commissioner or by the Commissioner's refusal to sustain an objection

so lodged, may within 14 days as from the date of the Commissioner's direction apply

to the Court for relief and the Court has the power to consider the merits of any such

matter, to hear evidence and to make any order it deems just.

(4) When any direction by the Court affects the interests of a person who

has not lodged an objection the account so amended must again lie open for inspection

by creditors in the manner and with the notice stipulated by section 107, unless the

person affected as aforesaid consents in writing to the immediate confirmation of the

account.

Confirmation of liquidator's accounts

109. (1) The Commissioner must confirm a liquidator's account which

has been open to inspection as stipulated by this Act, if-

(a) no objection has been lodged; or

(b) an objection has been lodged and the account has been amended in

accordance with the direction of the Commissioner and has again been

open for inspection, if necessary, and no application for relief has been

made to the Court in terms of section 108(3); or

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(c) an objection has been lodged but withdrawn or has not been sustained

and the objector has not applied to Court for relief.

(2) The Commissioner’s confirmation is final notwithstanding mistakes in

the account, except against a person who may have been permitted to reopen it by the

Court before any dividend has been paid under the account.

Distribution of estate and collection of contributions

110. (1) Immediately after the confirmation of a liquidator's account the

liquidator must-

(a) give notice of that confirmation in the Gazette; and

(b) state in that notice that-

(i) a dividend to creditors, is being processed for payment; or

(ii) a contribution is in the course of collection from creditors, and

that every creditor liable to contribute is required to pay to the

liquidator the amount for which that creditor is liable.

(2) If any contribution is payable the liquidator must-

(a) specify fully in that notice the address at which payment of the

contribution is to be made; and

(b) send a copy of the notice by liquidator’s notice to every creditor who is

liable to contribute.

(3) Immediately after the confirmation of a liquidator's account but not later

than two months after such confirmation the liquidator must in accordance therewith-

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(a) distribute the insolvent estate; or

(b) collect from each creditor who is liable to contribute, the amount for

which he or she is liable.

Liquidator to produce receipts for dividends or pay over unpaid dividends to

Commissioner

111. (1) The liquidator must within three months after the confirmation

of the account lodge with the Commissioner the receipts for dividends paid to creditors

or other persons and if there is a contribution account, the vouchers necessary to

complete the account: Provided that-

(a) a cheque purporting to be drawn payable to a creditor or other person in

respect of a dividend due to him or her and paid by the banker on whom

it is drawn; or

(b) a statement by a bank that the bank of the creditor has credited or has

been instructed to credit the account of the creditor with the amount of

the dividend,

must be accepted by the Commissioner in lieu of any such receipt.

(2) If any dividend has at the expiration of a period of two months from the

confirmation of the account under which it was payable, not been paid to the creditor

or other person who is entitled thereto, the liquidator must within three months after

confirmation of the account pay the dividend over to the Master who must deposit it in

the Guardian's Fund on account of the creditor or other person.

Surplus to be paid into Guardian’s Fund

112. (1) Subject to subsection (2), if after the confirmation of a final

account there is any surplus in an insolvent estate which is not required for the payment

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of claims, costs, charges or interest, the liquidator must after the confirmation of that

account pay the surplus over to the Master who must-

(a) deposit that surplus in the Guardian’s Fund; and

(b) after the rehabilitation of the insolvent must at the insolvent's request

pay that surplus to the insolvent.

(2) Where the insolvent estate is that of a partnership, section 95 applies.

Contribution by creditors towards cost of liquidation

113. Where there is no free residue in an insolvent estate or where the free

residue is insufficient to meet all the costs mentioned in section 74 the following rules

apply with regard to the liability of creditors to pay contributions towards defraying

any such deficiency:

(a) The creditor upon whose application the liquidation order was made,

whether or not he or she has proved a claim against the estate, is liable

to contribute not less than the amount he or she would have had to

contribute if he or she had proved a claim for the amount stated in his

or her application for liquidation and where he or she is a secured

creditor, without reliance on his or her security;

(b) each concurrent creditor is be liable to pay a contribution in proportion

to that creditor’s concurrent claim;

(c) if a creditor has withdrawn his or her claim, that creditor is liable to pay

a contribution only so far as is provided in section 101 and if a creditor

withdraws his or her claim within 5 days after the date of any resolution

of creditors, that creditor is be deemed to have withdrawn the claim

before anything was done in pursuance of that resolution;

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(d) if a claim has been reduced or disallowed by a liquidator in terms of

section 97(3) the creditor is, unless the claim is subsequently admitted

by means of compromise or proved in action at law, liable to pay-

(i) a contribution in respect of costs incurred before the date of

notice referred to in the said subsection on the amount of the

claim before the claim was reduced or disallowed; and

(ii) in the case of a reduced claim in respect of costs incurred after

the date of the said notice, on the amount to which the claim was

reduced by the liquidator.

Enforcing payment of contribution

114. (1) If a creditor who is liable to contribute under an account has

failed to pay the amount of his or her liability within a period of 30 days after the date

of the sending or delivery to that creditor of a notice referred to in section 110(1) the

liquidator may take out a writ of execution for the amount of the creditor's liability in

the magistrate's court in which the creditor could be sued for the contribution in

question.

(2) Whenever-

(a) a creditor who is liable to contribute under an account is in the opinion

of the Commissioner and of the liquidator unable to pay the contribution

for which that creditor is liable; or

(b) the liquidator has incurred expenses in connection with the recovery of

any contribution, which expenses are in the opinion of the

Commissioner and the liquidator irrecoverable,

the liquidator must as soon as practicable and in any event within such period as the

Commissioner may determine therefor, frame and lodge with the Commissioner a

supplementary contribution account wherein he or she must apportion the share of the

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creditor who is unable to pay or the expenses in question among the other creditors

who are in the opinion of the Commissioner and the liquidator able to pay.

(3) The provisions of subsection (2) with the changes necessitated by the

context apply-

(a) whenever a creditor who is liable to contribute under a first or further

supplementary account is, in the opinion of the Commissioner and the

liquidator, unable to pay the contribution for which he or she is liable;

or

(a) whenever the liquidator has incurred expenses in connection with the

recovery of a contribution under a first or further supplementary account

which are, in the opinion of the Commissioner and the liquidator,

irrecoverable by the liquidator.

(4) The liquidator may in lieu of complying with the requirements of

section 107 in connection with any supplementary contribution account, furnish a copy

of that account to every creditor who is liable to contribute thereunder and thereupon

the provisions of subsection (1) apply with the changes necessitated by the context.

PART 15

REHABILITATION OF INSOLVENT

Rehabilitation

115. (1) An insolvent may, subject to the provisions of subsection (2),

apply to the Court for an order for his or her rehabilitation -

(a) at any time after the confirmation by the Commissioner of a distribution

account providing for the full payment of all claims proved against that

insolvent’s estate, with interest thereon from the commencement of

liquidation, calculated in terms of section 75(14) and (15) and all costs

of liquidation; or

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(b) at any time after the Commissioner has issued a certificate of acceptance

of a composition as contemplated in section 177; or

(c) in any other case, but subject to subsection (2), after the expiration of

four years from the date of the confirmation by the Commissioner of the

provisional liquidation account in the estate.

(2) If an insolvent has been convicted in respect of the existing or any prior

insolvency for an offence referred to in section 213(1)(a), (b), (d), (e) or (g) or (2)(e)

or (f) or for any other fraudulent act, the insolvent may not apply to the Court for an

order for his or her rehabilitation before a period of five years has elapsed from the

date of the conviction concerned.

(3) The Commissioner may on the request of the insolvent recommend to

the Court that an application referred to in subsection (1)(c) may be made before the

expiration of the period of four years referred to in that subsection but no such

application may be made-

(a) within a period of 12 months; or

(b) in the case where the insolvent’s estate was liquidated prior to the

liquidation in respect of which he or she applies for rehabilitation,

within a period of three years,

from the date referred to in that subsection.

(4) An insolvent who wishes to apply for a rehabilitation order must send a

standard notice of his or her intended application-

(a) not less than four weeks before the date of the intended application in

the case of an application contemplated in subsection (1)(a), to the

Commissioner and the liquidator (if there is one); or

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(b) in the case of an application contemplated in subsections (1)(b), (c) or

(2)-

(i) not less than six weeks before the date of the intended

application to the Commissioner, the liquidator (if there is one)

and to every creditor of the insolvent estate whose name and

address is known to him or her or which he or she can readily

obtain; and

(ii) notify such application by notice in the Gazette.

(c) furnish security to the Registrar of the Court in the amount of or to the

value of the prescribed amount in respect of the costs of any person who

may oppose the application for rehabilitation and who may be awarded

costs by the Court.

(5) The Minister may amend the amount mentioned in subsection (4)(c) by

notice in the Gazette so as to take account of subsequent fluctuations in the value of

money.

(6) The notice referred to in subsection (4)(a) or (b) must state the estimated

value and reflect full details of the assets of the insolvent at the time of the application.

(7) (a) An insolvent must in support of his or her application for

rehabilitation-

(i) submit an affidavit that he or she has made a complete surrender

of his or her estate;

(ii) that he or she has not granted or promised any benefit to any

person or entered into any secret agreement with intent to induce

the liquidator of the estate or any creditor not to oppose the

application for rehabilitation.

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(b) That affidavit must contain a statement of-

(i) the insolvent’s assets and liabilities;

(ii) his or her earnings; and

(iii) his or her own as well as his or her spouse's contribution to his

household,

on the date of the application.

(c) The Court must be apprised of-

(i) the dividend (if any) paid to that insolvent’s creditors;

(ii) what further assets in the insolvent estate are available for

realisation and the estimated value thereof;

(iii) the total amount of all claims proved against the estate; and

(iv) the total amount of his or her liabilities at the commencement of

liquidation of his or her estate.

(d) If application is made for rehabilitation pursuant to subsection (1)(b),

the insolvent must-

(i) set out the particulars of the composition;

(ii) state whether there are or are not creditors whose claims against

the estate have not been proved, and if there are such creditors,

state their names and addresses and particulars of their claims.

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(8) A liquidator who has received a notice contemplated in subsection

(4)(a) or (b) must report to the Commissioner any facts which in his or her opinion

would warrant the court to refuse, postpone or qualify the insolvent’s rehabilitation.

(9) A partnership whose estate has been sequestrated may not be

rehabilitated.

Opposition to rehabilitation or refusal of rehabilitation by court

116. (1) (a) The Commissioner must report to the Court on the

merits of the application and furnish a copy of the report to the applicant or the

applicant's legal practitioner.

(b) The Commissioner, the liquidator or any other person having an interest

in the insolvent estate may appear in person or through a legal

representative to oppose the application.

(2) If the Court is satisfied on the strength of a certificate by the

Commissioner or on any other evidence that the insolvent has intentionally impeded,

obstructed or delayed the administration of his or her insolvent estate -

(a) through failure to submit a statement of affairs in accordance with the

requirements of the Act; or

(b) through failure to make available to the liquidator of the estate in

accordance with written directives by the liquidator or the

Commissioner property belonging to the insolvent estate which was in

his or her possession or custody or under his or her control or any book,

document or record relating to his or her affairs which was in his or her

possession or custody or under his or her control; or

(c) through failure to notify the liquidator of the estate of the existence of

any book, document, or record relating to his or her affairs which was

not in his or her possession or custody or under his or her control, and

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as to where such book, document, or record could be found, or of any

property belonging to his or her insolvent estate which was not

mentioned in his or her statement of affairs, and as to where such

property could be found; or

(d) through failure to keep the liquidator of the estate informed of any

change of his or her address during the period of three years after the

liquidation of his or her estate; or

(e) through failure to comply with section 29(4); or

(f) through any other act or omission,

the Court must refuse to grant a rehabilitation order until the expiry of a period of 10

years after the commencement of liquidation that insolvent’s estate.

(3) (a) The Court may refuse the application or postpone the hearing of

the application or grant the application for rehabilitation subject to any

condition the Court finds to be just.

(b) The Court may order the insolvent to consent to judgment against him

or her for the unpaid portion of a debt proved against the estate or which

could have been proved against the estate, or for such lesser amount that

the Court may determine.

(c) If the Court made a judgment contemplated in paragraph (b) no

execution may take place in terms of the judgment save with permission

of the Court and after proof that the insolvent has since the

commencement of liquidation of the estate acquired property or income

which is available for the payment of his or her debts.

(c) Apart from such judgment the Court may impose any other condition

with regard to any property or income which may in future accrue to the

insolvent, the Court may order the insolvent to pay the costs of any

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opposition to the application for rehabilitation, unless the Court is

satisfied that the opposition is vexatious.

(4) When granting an order for rehabilitation in respect of an application

made in terms of section 115(1)(b), the Court may order that any obligation incurred

by the applicant on or before the date that applicant’s estate was liquidated and which,

but for the order, would be discharged as a result of the rehabilitation, remains of full

force and effect notwithstanding the rehabilitation.

(5) The Registrar of the Court must forthwith give standard notice to the

Commissioner of every order for rehabilitation which is granted by the Court.

Rehabilitation by effluxion of time

117. (1) Any insolvent not rehabilitated by the Court within a period of

ten years from the commencement of liquidation of his or her estate, is deemed to be

rehabilitated after the expiry of that period unless a Court upon application by an

interested person after standard notice to the insolvent orders otherwise prior to the

expiration of the said period of ten years.

(2) If a Court makes an order under subsection (1), the Registrar of the

Court must by standard notice send a copy of the order to the Commissioner and to the

Registrar of Deeds and the Commissioner must send a copy of the order by standard

notice to the liquidator.

(3) Whenever the Registrar of Deeds receives such order he or she must

enter a caveat against the transfer of all immovable property and the cancellation of

every bond registered in the name of the insolvent or which belongs to the insolvent.

(4) The caveat referred to in subsection (3) remains in force until the date

on which the insolvent is rehabilitated.

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Effect of rehabilitation

118. (1) Subject to the provisions of subsection (2) and any conditions

which the Court may have imposed when granting an order for rehabilitation, the

rehabilitation of an insolvent has the effect of-

(a) putting an end to the liquidation;

(b) discharging all debts of the insolvent which were due, or the cause of

which had arisen, on or before the commencement of liquidation, and

which did not arise out of any fraud on his or her part or the commission

by him or her of any offence referred to in section 213(1)(e) or section

213(1)(c) in respect of a previous liquidation; and

(c) relieving the debtor of every disability resulting from the liquidation.

(2) The rehabilitation of an insolvent does not affect -

(a) the rights of a liquidator or of creditors under a composition;

(b) the power or duties of the Commissioner or the duties of the liquidator

in connection with a composition;

(c) the right of the liquidator or of creditors to any part of the insolvent’s

estate which is vested in the liquidator but as yet not distributed by him

or her;

(d) the liability of a surety for the insolvent;

(e) the liability of any person to pay any penalty or suffer any punishment

under any provision of this Act.

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(3) Evidence of a conviction on any offence contemplated in subsection

(1)(b) is admissible in subsequent civil proceedings as prima facie evidence that the

insolvent committed the offence in question.

Penalties for unlawful inducement to accept compromise or in connection with

rehabilitation

119. (1) (a) It is unlawful for any person to offer or promise to any

other person any benefit in order to-

(i) induce that person to accept an offer of composition;

(ii) agree to or refrain from opposing an application for the

rehabilitation of an insolvent;

(iii) as a consideration for his or her acceptance of an offer of

composition; or

(iv) for supporting or refraining from opposing an application for the

rehabilitation of a debtor.

(b) Any person who has accepted or agreed to accept any such benefit,

whether for that person or for any other person, is liable to pay, by way

of penalty, for the benefit of the other creditors of the insolvent estate -

(i) a sum equal to the amount of any claim proved by that person

against the estate; and

(ii) the amount or value of the benefit promised or given; and

(iii) in the case of a composition, the amount paid or to be paid to

that person under the composition.

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(2) The liquidator is competent to enforce the penalty referred to in

subsection (1) and if he or she fails to do so any creditor of the estate may enforce the

penalty in the name of the liquidator, if that creditor indemnifies the liquidator against

all costs in connection with such action.

CHAPTER 4

REORGANIZATION PROCEEDINGS

PART 1

DEFINITIONS

Definitions

120. (1) For purposes of this Chapter-

"interim order" means an order made under section 125;

"proposal" means a proposal made by a debtor to the debtor's creditors for a

composition in satisfaction of the debtor's debts or a scheme of arrangement of the

debtor's financial affairs;

"provisional supervisor", in relation to a proposal, means the person designated as

referred to in section 125(1)(d);

“statement” means the prescribed sworn statement referred to in section 121 which a

debtor must submit to the court together with his or her offer of a composition;

"supervisor", in relation to a voluntary arrangement, means the person who is for the

time being performing the functions imposed as a result of the approval of the

arrangement by the creditors of the debtor under the arrangement;

“the court”, for purposes of section 121 means the Magistrate’s Court of the district

where a debtor normally resides, carries on business or is employed;

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"voluntary arrangement", in relation to a debtor, means a proposal that has taken effect

in accordance with section 130(1).

PART 2

PRE-LIQUIDATION COMPOSITION

Pre-liquidation composition with creditors: magistrate’s court

121. (1) Any debtor who cannot pay his or her debts less than the

prescribed amount and who wants to offer his or her creditors a composition, may lodge

a signed copy of the offer of composition and a sworn statement with the court in the

form set out in Schedule 4.

(2) If the offer of composition provides for the immediate payment of a

cash amount for distribution among creditors, the amount must, pending the outcome

of the offer of composition, be invested in an interest-bearing savings account in trust

with a legal practitioner or someone else whom the court approves, whereupon the

debtor must offer proof that the cash amount has been invested in this manner.

(3) (a) If a debtor incurs debt during the period from lodging the offer

of composition with the court until creditors have voted on the offer, the debtor

must inform the creditor who offers him or her credit of the pending offer of

composition and at the first appearance before the court in connection with the

offer of composition, the debtor must provide full particulars concerning any

such debt incurred by him or her.

(b) During the period contemplated in paragraph (a) or after an offer of

composition has been accepted, a debtor may not alienate, encumber or

voluntarily dispose of any property which must be made available to

creditors in terms of the offer of composition or do anything which can

impede compliance with that offer.

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(c) A debtor who contravenes these provisions is guilty of an offence and

upon conviction is liable to a fine or to imprisonment not exceeding six

months or to both such fine and such imprisonment.

(4) (a) On receipt of the offer of composition and the statement, the

court must determine a date of hearing for the questioning of the debtor and the

consideration by the creditors of the offer of composition of the debtor, if it

appears to the court that no such date has been determined during the preceding

six months.

(b) The date determined by the court must give the debtor sufficient time to

notify creditors of the hearing, in accordance with subsection (5).

(5) (a) The debtor must at least 14 days before the date determined for

the hearing send by standard notice to each of his or her creditors a copy of the

offer of composition and of the sworn statement and a prescribed notice with

the case number and the place and date of the hearing.

(b) The debtor must before the date of the hearing offer proof to the court

that he or she gave notice in the manner contemplated in paragraph (a).

(6) At the hearing -

(a) a creditor may, whether the creditor has received notice or not, prove

the debt and object to a debt listed in the statement by the debtor;

(b) every debt listed by the debtor in the statement must, subject to any

amendments to it by the court, be deemed to be proved, unless a creditor

objects to it or the court rejects it or requires that it be corroborated by

evidence;

(c) a creditor whose debt is being objected to by the debtor or another

creditor or who is required by the court to corroborate that debt with

evidence, must prove such debt;

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(d) the court may defer the proving of a debt and the consideration of the

offer of composition, or allow the other creditors to vote on the

composition, and if an offer of composition is accepted, an unproven

debt is added to the listed debts at the stage when it is proved;

(e) the debtor may be questioned by the court and by any creditor whose

debt has been acknowledged or proved, or by any other interested party

with the permission of the court, about -

(i) his or her assets and liabilities;

(ii) his or her present and future income and that of his or her spouse

living in with him or her;

(iii) his or her standard of living and the possibility of living more

frugally; and

(iv) any other matter which the court considers to be relevant.

(7) If it appears to the court at the hearing that a debt, other than a debt

which is based upon or derives from a judgment debt, is disputed between the debtor

and the creditor or between the creditor and another creditor of the debtor, the court

may, after it has investigated the objection, admit or disallow the debt or part thereof.

(8) Any person whose debt has been disallowed in terms of subsection (7)

may institute an action or continue with an action which has already been instituted in

respect of such debt.

(9) If a person contemplated in subsection (8) obtains judgment in respect

of a debt contemplated in that subsection, the amount of the judgment is added to the

list of proved debts referred to in subsection (6).

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(10) A creditor may by written power of attorney authorise any person to

appear at a hearing on that creditor’s behalf and to do everything at such hearing which

the creditor would have been entitled to do.

(11) The hearing may be deferred by the court and the proposed offer of

composition may be amended or revoked with the permission of the debtor.

(12) A composition may not be accepted if a creditor demonstrates to the

satisfaction of the court that it accords a benefit to one creditor over another creditor to

which he or she would not have been entitled on liquidation of the debtor’s estate.

(13) If the composition is accepted by the majority in number and two-thirds

in value of the concurrent creditors who vote on the composition, the court must certify

that the composition is accepted as such and thereafter the composition is binding on

all creditors who have been informed of the hearing or appeared at the hearing, but the

right of a secured or otherwise preferent creditor may not be prejudiced by the

composition, unless that creditor consents to the composition in writing.

(14) (a) If the composition provides for payments by the debtor in

determined instalments or otherwise, the acceptance of the offer of composition

has the effect of a judgment in terms of section 65 of the Magistrates’ Courts

Act in respect of the payments.

(b) Any person who in terms of the composition may receive the payments

on behalf of creditors, or if there is no such person, any creditor who is

in terms of the composition is entitled to a benefit out of the payments,

has the rights which a judgment creditor would have in terms of the

section.

(c) If any person is appointed in terms of the composition to execute the

composition, that person is entitled to the remuneration which is payable

in terms of the composition.

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(15) (a) The court may at any time on application of the debtor or an

interested person direct the debtor to appear for any further questioning as the

court may deem necessary, after at least 14 days’ standard notice to creditors

by the debtor or the interested person, as the case may be.

(b) The court may -

(i) revoke the composition for cogent reasons; and

(ii) authorise a debtor who on reasonable grounds is not able to

comply with his or her obligations in terms of the composition

to lodge an amended offer of composition to creditors in the

manner and with the consequences contemplated in subsection

(1).

(c) Without limiting the phrase “cogent reasons” in paragraph (b)(i), it

includes the following:

(i) the debtor does not comply with his or her obligations in terms

of the composition;

(ii) the debtor renders false information in his or her statement or in

the course of the questioning; or

(iii) the debtor gives a benefit in respect of a claim which falls under

the composition to a creditor on whom the composition is

binding and who is not entitled to the benefit in terms of the

composition.

(16) (a) Any creditor who is entitled to a benefit in terms of the

composition can, notwithstanding subsection (15), after 14 days’ standard

notice to the debtor apply to the court to revoke the composition if the debtor

does not comply with his or her obligations in terms of the composition.

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(b) The creditor must lodge an affidavit in support of his or her application.

(c) The court must order that the composition be revoked if the debtor did

not substantially comply with his or her obligations.

(17) If the composition is revoked, or if the estate of a debtor has been

liquidated in terms of this Act before he or she complied with his or her obligations in

terms of the composition, the claim of a creditor is restored to the extent that the claim

has not been satisfied in terms of the composition.

(18) If a composition is not accepted by the required majority, and the court

is of the opinion that the debtor is unable to make available to creditors substantially

more than that which he or she offered in the proposed composition, the court may

either:

(a) declare that the proceedings in terms of this section have ceased and that

the debtor is once again in the position he or she was prior to the

commencement thereof; or

(b) determine whether or not section 74 of the Magistrates Court Act, 1944

(Act No. 32 of 1944 can be applied to the debtor in question and, if so,

apply that section accordingly and within the discretion of the court.

(19) Between the determination of a date for a hearing and the conclusion of

the hearing in terms of this section no creditor with a claim the cause of which arose

before the determination of the date, may without the permission of the court institute

any action against the debtor or apply for the liquidation of the estate of the debtor.

PART 3

VOLUNTARY ARRANGEMENTS: ORDINARY PROCEEDINGS IN HIGH

COURT

Voluntary arrangement not fully implemented

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122. For the purposes of this Part, a voluntary arrangement approved by a

creditors' meeting convened under section 127 ends prematurely if, when it ceases to

have effect, it has not been fully implemented in respect of all persons bound by the

arrangement because of section 130(2)(b).

Application for interim order

123. (1) An application to the Court for an interim order may be made if

the debtor intends to make a proposal to the debtor’s creditors under this Part for a

composition in satisfaction of the debtor’s debts or a scheme of arrangement of the

debtor's financial affairs.

(2) The debtor must ensure that the proposal provides for a person to act as

supervisor of the voluntary arrangement to which the proposal relates.

(3) Only an insolvency practitioner registered under this Act is eligible to

act as supervisor of a voluntary arrangement.

(4) Subject to subsection (2), the application referred to in subsection (1)

may be made –

(a) by the debtor, the liquidator of an insolvent estate or the Commissioner

if the debtor is an unrehabilitated insolvent; or

(b) by the debtor in every other case.

(5) An application may be made by a debtor who is an unrehabilitated

insolvent only if the debtor has given notice of the proposal to the Commissioner and

the liquidator, if any, of the debtor's estate.

Effect of application for interim order

124. (1) While an application under section 123 for an interim order is

pending, the following provisions apply:

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(a) a landlord or other person to whom rent is payable by the debtor may

exercise a right of forfeiture in relation to premises let to the debtor for a

failure of the debtor to comply with a term of the tenancy –

(i) only with the approval of the Court; and

(ii) if in giving approval the Court has imposed conditions, only if

those conditions are complied with;

(b) the Court –

(i) may prohibit any claim from being executed on the debtor's

property or its subsequent sale, or both; and

(ii) may stay any action, execution or other legal process against the

property or person of the debtor.

(2) Any Court, including a magistrate’s court in which proceedings are

pending against a debtor may, on proof that an application has been made under section

123 in respect of the debtor, either stay the proceedings or allow them to continue on

such terms as the Court considers appropriate.

Power of Court to make interim order

125. (1) On the hearing of an application made under section 123, the

Court may make an interim order if satisfied -

(a) that the debtor intends to make a proposal under this Chapter;

(b) that on the day of the making of the application the debtor was an

unrehabilitated insolvent or was able to make an application for the

liquidation of the debtor's estate;

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(c) that no previous application has been made by the debtor for an interim

order during the 12 months immediately preceding the day of the

making of the application; and

(d) that the supervisor designated under the debtor's proposal is willing to

act in relation to the proposal.

(2) The Court must make an interim order if satisfied that it would

facilitate the consideration and implementation of the debtor's proposal.

(3) If the debtor is an unrehabilitated insolvent, the interim order may

contain provisions as to the conduct of the insolvency, and the administration of the

insolvent's estate, during the period for which the order is to have effect.

(4) An interim order may, in relation to a debtor who is an unrehabilitated

insolvent, include a provision relaxing or removing a requirement of Chapter 3 or of

this Part, or of any prescribed requirement, only if the Court is satisfied that the

inclusion of the provision would be unlikely to result in a significant diminution in, or

in the value of, the debtor's estate in relation to the conduct of the insolvency.

(5) Except as otherwise provided by this Part, an interim order as a result

of an application made under section 123 ceases to have effect at the end of 30 days or

any longer prescribed period from the date on which the order was made.

(6) On the making of an interim order, the designated supervisor referred

to in subsection (1)(d) becomes the provisional supervisor.

(7) While an interim order has effect in respect of a debtor –

(a) an application for the liquidation of that debtor’s estate may not be made

or proceeded with;

(b) a landlord or other person to whom rent is payable may exercise a right

of forfeiture by peaceable re-entry in relation to premises let to the

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debtor if the debtor failed to comply with a term or condition of the

debtor's tenancy of the premises only with the approval of the Court;

and

(c) any other proceedings (including execution or other legal process) may

be begun or continued, and distress may be levied, against the debtor or

the debtor's property only with the approval of the Court.

Provisional supervisor’s report on debtor’s proposal

126. (1) As soon as practicable after the making of an interim order, the

provisional supervisor must, before the order ceases to have effect, submit a report to

the Court stating -

(a) whether, in that supervisor's opinion, the proposal has a reasonable

prospect of being approved and implemented;

(b) whether, in that supervisor's opinion, a meeting of the debtor's creditors

should be convened to consider the proposal; and

(c) if that supervisor's opinion is that a meeting referred to in paragraph (b)

should be convened, the proposed date, time and place to hold the

meeting.

(2) For the purpose of enabling the provisional supervisor to prepare that

supervisor's report, the debtor must submit to that supervisor -

(a) a document setting out the terms of the proposal; and

(b) a statement of the debtor's financial affairs containing -

(i) particulars of the debtor's creditors and of the debtor's debts and

other liabilities and of the debtor's assets as may be prescribed;

and

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(ii) any other information as may be prescribed.

(3) If the provisional supervisor has failed to submit the report required by

this section or has died, the Court may, on an application made by the debtor, make an

order directing that supervisor to be replaced by another insolvency practitioner.

(4) If it is impracticable or inappropriate for the provisional supervisor to

continue to act as such, the Court may, on an application made by the debtor or that

supervisor, make an order directing that supervisor to be replaced by another

insolvency practitioner.

(5) If the provisional supervisor has failed to submit the report as required

by this section, the Court may, on an application made by debtor, make an order

directing the interim order to continue, or for the interim order to be renewed if it has

ceased to have effect, for such further period as the Court may specify in the order.

(6) On the hearing of an application made by the provisional supervisor,

the Court may make an order extending the period for which the interim order has

effect so as to enable that supervisor to have more time to prepare his or her report.

(7) If, on receiving the provisional supervisor's report, the Court is satisfied

that a meeting of the debtor's creditors should be convened to consider the debtor's

proposal, the Court must make an order directing the extension of the period for which

the interim order has effect for such further period as the Court may specify in the order

so as to enable the debtor's proposal to be considered by the debtor's creditors in

accordance with this Part.

(8) The Court may discharge the interim order if it is satisfied, on the

application of the provisional supervisor -

(a) that the debtor has failed to comply with the debtor's obligations under

subsection (2); or

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(b) that for any other reason it would be inappropriate for a meeting of the

debtor's creditors to be convened to consider the debtor's proposal.

Creditor’s meeting to consider debtor’s proposal

127. (1) If it has been reported to the Court under section 126 that a

meeting of the debtor's creditors should be convened, the provisional supervisor must,

unless the Court otherwise directs, by personal notice to every creditor whose name

and address are known to that supervisor or which he or she can reasonably obtain send

a copy thereof together with his or her report thereon and notice of the date, time and

the place of the meeting at which the proposal will be considered.

(2) For the purpose of this section, the creditors of a debtor who is an

unrehabilitated insolvent include -

(a) each person who is a creditor of the debtor; and

(b) each person who would be such a creditor if the liquidation had

commenced on the date on which notice of the meeting referred to in

subsection (1) was given.

Consideration of debtor’s proposal at creditors’ meeting

128. (1) The main purpose of a creditors' meeting convened under

section 127 is to decide whether to approve the debtor's proposal, with or without

modifications.

(2) At the beginning of the meeting, the creditors present must elect one of

their number to be the chairperson of the meeting.

(3) The chairperson must then divide the meeting into three groups for

voting purposes, with the first group comprising secured creditors (if any), the second

group comprising preferential creditors (if any) and the third group comprising

unsecured creditors.

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(4) Subject to subsection (6), a modification to the debtor's proposal may

be approved only if the debtor consents to it.

(5) A modification to the debtor's proposal may be one that provides for

the provisional supervisor to be replaced by another insolvency practitioner to

perform the functions of supervisor of that proposal if it is approved and takes effect

as a voluntary arrangement.

(6) Notwithstanding subsection (4), a modification to the debtor's proposal

may not have the result that the proposal no longer qualifies as a proposal as defined

in section 120.

(7) If the proposal or a modification to it affects the right of a secured

creditor of the debtor to enforce the creditor's security, the proposal or modification

may not be approved unless -

(a) that secured creditor consents to the proposal; or

(b) if that secured creditor does not consent to the proposal, the creditor -

(i) would be in a position no worse than if the debtor’s estate were

liquidated;

(ii) would receive no less from the assets to which that creditor's

security relates, or from their proceeds of sale, than any other

secured creditor having a security interest in those assets that has

the same priority as the creditor's; and

(iii) would be paid in full from those assets, or their proceeds of sale,

before any payment from them or their proceeds is made to any other

creditor whose security interest in them is ranked below that of the

creditor, or who has no security interest in them.

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(8) Subject to this section, the meeting referred to in subsection (1)-

(a) must be conducted in accordance with rules (if any) as prescribed.

(b) may at any time resolve that it be adjourned, or further adjourned.

(9) As soon as practicable after the conclusion of that meeting, the

provisional supervisor -

(a) must report the result of the meeting to the Court; and

(b) immediately after doing so, must give notice of the result of the meeting

to all persons to whom the notice convening the meeting was sent.

(10) If the report is to the effect that the meeting has decided not to approve the

debtor's proposal, the Court must discharge any interim order that has effect in relation to the

debtor.

Approval of debtor’s proposal

129. (1) A debtor's proposal, including any modifications is deemed to

be approved if that proposal is supported by a majority in number and value of the

creditors of each group of creditors present at the meeting of creditors, either in person

or by proxy.

(2) For the purposes only of deciding whether the requisite majority by

value has voted in favour of a resolution to approve the debtor's proposal, the following

provisions apply:

(a) the chairperson of the meeting of creditors referred to in subsection (1)

may -

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(i) admit or reject proof of any claim against the debtor’s estate and

the provisions of section 96 apply with the changes necessitated

by the context to any proof of claims at that meeting; and

(ii) adjourn the meeting in order to admit or reject proof of a claim;

(b) a person whose claim is admitted is a creditor.

(4) At any time before the deadline for making an application under this

subsection, the debtor or any of the debtor's creditors who attended or was entitled to

attend the meeting may make an application to the Court for an order under subsection

(8).

(5) The deadline for making an application under subsection (4) is -

(a) the expiry of 30 days after the date on which the meeting of creditors

was held; or

(b) if the Court extends that period, the expiry of the extended period.

(6) The debtor and any creditor who attended or was entitled to attend the

meeting of creditors is entitled to appear and be heard at the hearing of the application

even if not the applicant.

(7) The right conferred by subsection (6) may be exercised by such a

creditor irrespective of whether the creditor supports or has an interest in the

implementation of the proposal.

(8) On the hearing of an application made under subsection (4), the Court

may -

(a) make an order approving the proposal, with or without the

modifications, put to the meeting of creditors in accordance with section

128; or

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(b) make such other order as the Court finds to be just,

but only if the Court considers that it would be in the best interests of both the debtor

and the debtor's creditors to so.

(9) The Court may make an order under subsection (8)(a) even if the

debtor's proposal (or a modification to it) was not approved at the creditors' meeting

by a majority in number and value of the preferential creditors' group or the unsecured

creditors' group, but may do so only if the proposal (or modification)-

(a) has been approved by a majority of the secured creditors' group;

(b) does not discriminate among the members of the dissenting group or

groups of creditors and ensures that they will be no worse off than they

would have been if the debtor’s estate had been liquidated; and

(c) respects the priorities of preferential creditors over unsecured creditors.

(10) If a provisional supervisor or creditor alleges that a resolution of the

creditors made in terms of this section-

(a) conflicts with this or any other Act or any rule of law; or

(b) is unfair,

that supervisor or creditor may apply to the Court for an order under subsection (11).

(11) If, on the hearing of an application made under subsection (10), the

Court finds that the allegation is substantiated, the Court may make such order, and

give such directions, as the Court considers appropriate to address the conflict or

unfairness.

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Effect of approval of debtor’s proposal

130. (1) A debtor's proposal, with or without modifications, takes effect

as a voluntary arrangement by the debtor on the day after the date on which it is

approved by the Court by order made under section 129(8)(a) or on such later date as

may be specified in the order.

(2) On taking effect as a voluntary arrangement, the approved proposal

binds every person (including a secured creditor and a preferential creditor) who -

(a) was entitled to vote at the meeting (whether present or represented at

the meeting or not); or

(b) would have been so entitled to vote if the person had received notice of

the meeting,

as if the person were a party to the arrangement.

(3) On the approved proposal taking effect as a voluntary arrangement, the

provisional supervisor becomes the supervisor of the arrangement unless that supervisor

has been replaced in accordance with section 128(5).

(4) If -

(a) the voluntary arrangement ends and any amount payable under that

arrangement to a person bound because of subsection (2)(b) has not been paid;

and

(b) that arrangement did not come to an end prematurely,

the debtor must pay to that person the amount payable under that arrangement.

(5) An interim order having effect in relation to the debtor immediately before

the expiry of 30 days from and including the date on which the report with respect to the

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creditors' meeting was made to the Court in accordance with section 128(9) ceases to have

effect at the end of that period.

(6) Subsection (5) applies except to the extent that the Court may direct for

the purposes of any application made under section 132.

(7) If proceedings in respect of a liquidation application have been stayed

by an interim order that has ceased to have effect, the application is, unless the Court

otherwise orders, deemed to have been dismissed.

Additional effect of approved debtor’s proposal on unrehabilitated insolvent

131. (1) If the Court has approved a debtor's proposal in accordance with

section 129(8)(a) and the debtor is an unrehabilitated insolvent -

(a) the insolvent; or

(b) if the insolvent has not made an application within the period prescribed

for the purposes of this section, the Commissioner,

may make an application to the Court for an order under subsection (3).

(2) The application referred to in subsection (1) may not be made -

(a) during the period within which the decision of the creditors' meeting can

be challenged by an application made under section 132(1);

(b) while an application under section 132(1) is pending;

(c) while an appeal in respect of an order made under section 230 is

pending; or

(d) during the period within which such an appeal may be made.

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(3) On the hearing of an application made under subsection (1), the Court

must, subject to subsection (2), set aside the liquidation order, unless the Court is of

the opinion that there are compelling reasons not to do so.

(4) In making an order under subsection (3), the Court may give such

directions about the conduct of the liquidation and the administration of the insolvent's

estate as it considers appropriate for facilitating the implementation of the approved

proposal.

Right to challenge decision taken at creditors’ meeting

132. (1) Subject to subsection (3), any of the persons specified in

subsection (2) may make an application to the Court-

(a) that a debtor's proposal approved by a meeting of creditors held in

accordance with section 127 unfairly affects the interests of a creditor of the

debtor; or

(b) that a material irregularity occurred at or in relation to a meeting of

creditors.

(2) The persons who may make an application referred to in subsection (1)

are -

(a) the debtor;

(b) a person who-

(i) was entitled to vote at the meeting of creditors; or

(ii) would have been so entitled if the person had notice of it;

(c) the provisional supervisor or, if the proposal has taken effect as a

voluntary arrangement, the supervisor of the arrangement; and

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(d) if the debtor is an unrehabilitated insolvent, the liquidator of that

debtor's estate; or

(e) the Commissioner.

(3) An application referred to in subsection (1) may not be made -

(a) after the end of 30 days from and including the date on which the result

of the meeting of creditors was reported to the Court in accordance with

section 128(9); or

(b) in the case of a person who was not given notice of the meeting of

creditors, after the end of 30 days from and including the date on which

the person first became aware that the meeting had taken place:

Provided that such application made by a person referred to in subsection (2)(b)(ii) on

the ground that the voluntary arrangement unfairly affects that person's interests may

be made even after that arrangement has ended, unless it has ended prematurely.

(4) If, on the hearing of an application referred to in subsection (1), the

Court is satisfied as to either of the grounds referred to in that subsection, the Court

may-

(a) make an order revoking or suspending an approval given by the meeting

of creditors in question;

(b) give a direction to any person for the convening of a further meeting of

the debtor's creditors to consider any revised proposal the person may

make; or

(c) in a case to which subsection (1)(b) applies direct that meeting of

creditors to reconsider the debtor's original proposal.

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(5) If, at any time after giving a direction under subsection (4)(b) for

convening a meeting to consider a revised proposal, the Court is satisfied that the

debtor does not intend to submit such a proposal, the Court must revoke the direction

and revoke or suspend any approval given at the previous meeting.

(6) If the Court gives a direction under subsection (4)(b) or (c), the Court

may also give a direction continuing or, as the case requires, renewing, for such period

as may be specified in the direction, the effect in relation to the debtor of any interim

order made under this Part.

(7) If, on the hearing of an application referred to in subsection (1) with

respect to a meeting of creditors, the Court gives a direction under subsection (4)(b) or

(c) or revokes or suspends an approval under subsection (4)(a) or (5), the Court may

give such ancillary directions as the Court considers appropriate and, in particular,

directions with respect to -

(a) action taken since that meeting under any voluntary arrangement

approved by the meeting; and

(b) action taken since the meeting as could not have been taken if an interim

order had effect in relation to the debtor when it was taken.

(8) Except as otherwise provided by this section, an approval given at a

meeting of creditors held in accordance with section 127 is not invalidated by any

minor irregularity occurring at or in relation to the meeting.

Implementation and supervision of debtor’s proposal

133. (1) The supervisor is responsible for implementing and

supervising a voluntary arrangement that has taken effect in terms of section 130 or

137 and has such powers as are necessary to enable that responsibility to be carried

out.

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(2) If a voluntary arrangement has effect in terms of section 130 or 137, a

debtor or a creditor of the debtor or any other person who is dissatisfied by any act,

omission or decision of the supervisor may apply to the Court for an order under

subsection (3).

(3) On the hearing of an application made under subsection (2), the Court-

(a) must -

(i) if the Court finds the action or decision of the supervisor to have

been unfair or unjustified, make an order quashing or modifying

the act or decision; or

(ii) if it does not so find, make an order confirming the act or

decision; and

(b) if the Court makes an order under paragraph (a)(i), may -

(i) give such directions to the supervisor as it considers appropriate;

and

(ii) make such ancillary order as the Court considers appropriate.

(4) On the application of the supervisor to the Court for directions in

relation to any particular matter arising under the voluntary arrangement, the Court

may give such directions in relation to the matter as it considers appropriate.

(5) Whenever -

(a) it is desirable to appoint a person to perform the functions of the

supervisor; and

(b) it is difficult or impracticable for an appointment to be made without

the assistance of the Court,

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the Court may make an order appointing an insolvency practitioner to act as supervisor

in relation to the voluntary arrangement, either in substitution for the existing

supervisor or to fill a vacancy.

(6) The power conferred by subsection (5) is exercisable so as to increase

the number of persons performing the functions of supervisor or, if there is more than

one person performing those functions, so as to replace one or more of those persons.

PART 4

VOLUNTARY ARRANGEMENTS: EXPEDITED PROCEDURE

Expedited voluntary arrangement

134. (1) This section applies if a debtor intends to make a proposal to the

debtor's creditors for a voluntary arrangement and -

(a) the Commissioner is specified in the proposal as the provisional

supervisor in relation to the proposal; and

(b) no application for an interim order has been made under section 123.

(2) If this section applies, the debtor may submit to the Commissioner -

(a) a document setting out the terms of the debtor's proposal; and

(b) a statement of the debtor's financial affairs containing -

(i) particulars of the debtor's creditors, debts, other liabilities and

assets as may be prescribed for the purposes of this section; and

(ii) any other prescribed information.

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(3) If satisfied that the proposal has a reasonable prospect of being

approved and implemented, the Commissioner may make arrangements to secure the

attendance at a meeting of the debtor’s creditors to decide whether to approve such

proposal.

(4) For the purposes of subsection (3), a person is a creditor only if -

(a) the person is a creditor of the debtor in respect of a insolvency debt; and

(b) the Commissioner is aware of the person's claim and the person's

address.

(5) In making arrangements under subsection (3), the Commissioner must

ensure that -

(a) each creditor is provided with a copy of the debtor's proposal; and

(b) each creditor is provided with information about the criteria by

reference to which the Commissioner will determine whether the

creditors approve or reject that proposal.

(6) If a debtor submits documents to the Commissioner in accordance with

subsection (2), an application under section 123 for an interim order may not be made

in respect of the debtor unless the Commissioner -

(a) has made the arrangements referred to in subsection (3); or

(b) has informed the debtor that the Commissioner does not intend to make

such arrangements because the Commissioner is not satisfied that the

proposal has a reasonable prospect of being approved and implemented

or for any other reason.

(7) If a meeting of creditors is convened for the purpose of subsection (3),

the provisions of section 128 apply to the holding and conduct of the meeting.

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Duty of Commissioner to report to Court

135. As soon reasonably practicable after the arrangements under section

134 have been implemented, the Commissioner must report to the Court whether the

proposed voluntary arrangement has been approved or rejected.

Approval of expedited voluntary arrangement

136. (1) If the Commissioner reports to the Court that the debtor's

proposal has been approved, the proposal takes effect as a voluntary arrangement.

(2) On taking effect as a voluntary arrangement, the proposal binds -

(a) the debtor; and

(b) binds every person including a secured creditor and a preferential

creditor who was entitled to participate in the arrangements made in

accordance with section 134(3),

as if each of them were a party to the arrangement.

(3) In addition to submitting the report, the Commissioner may make an

application to the Court to make an order under subsection (5).

(4) An application referred to in subsection (3) may not be made -

(a) during the period within which the voluntary arrangement can be

challenged by an application under section 132;

(b) while an application made under that section is pending;

(c) while an appeal in respect of an application made under that section is

pending; or

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(d) during the period within which such an appeal may be made.

(5) On considering an application made under subsection (2), the Court

must, subject to subsection (4) set aside a liquidation order in respect of the debtor

unless the Court is of the opinion that there are compelling reasons not to do so.

(6) The Court may give such directions about the conduct of the liquidation

and the administration of the insolvent's estate as the Court considers will facilitate the

implementation of the approved voluntary arrangement.

Commissioner may apply to Court if debtor is unrehabilitated insolvent

137. (1) In addition to making the arrangements under section 134(3),

the Commissioner may, if the debtor is an unrehabilitated insolvent, make an

application to the Court to make an order under subsection (3).

(2) Such an application may not be made -

(a) while an application for an order under section 129(7) is pending;

(b) during the period within which a voluntary arrangement can be

challenged by an application made under section 132;

(c) while an application made under section 132 is pending; or

(d) while an appeal in respect of an order made under that section is

pending; or

(e) during the period within which such an appeal may be made.

(3) On considering an application made in terms of subsection (1), the

Court must set aside the liquidation order in respect of the debtor unless the Court is of

the opinion that there are compelling reasons not to do so.

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(4) The Court may give such directions about the conduct of the liquidation

and the administration of the insolvent's estate as the Court considers will facilitate the

implementation of the voluntary arrangement.

Revocation of expedited procedure

138. (1) The Court may make an order revoking a voluntary arrangement

that has effect because of section 136(1) if -

(i) that order unfairly affects the interests of a creditor of the debtor;

or

(ii) a material irregularity occurred in relation to the arrangements

made under section 134(3).

(2) An order in terms of subsection (1) may be made only on the application

of-

(a) the debtor;

(b) a person who was entitled to participate in the arrangements made under

section 134(3);

(c) the liquidator of an insolvent estate (if any); or

(d) the Commissioner.

(3) (a) An application under subsection (2) may not be made after the

expiry of 30 days from and including the date on which the

Commissioner has reported to the Court as required by section 135.

(b) Notwithstanding paragraph (a), a creditor who was not made aware of

the arrangements under section 134(3) at the time when they were

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made may make an application under subsection (2) during the 30 days

from and including the date on which the creditor first became aware

of the voluntary arrangement.

PART 5

SUMMARY INSTALMENT ORDERS

Purpose of summary instalment order

139. A summary instalment order is an order made by the Commissioner

directing the debtor to pay the debtor's debts -

(a) in instalments or in some other way; and

(b) in full or to the extent that the Commissioner considers practicable in

the particular circumstances of the case.

Application for summary instalment order

140. (1) The Commissioner may make a summary instalment order on

the application of-

(a) a debtor; or

(b) a creditor with the debtor's consent.

Requirements for summary instalment order

141. (1) The Commissioner may refuse an application for a summary

instalment order if the application does not comply with subsection (2).

(2) An application does not comply with this subsection unless it -

(a) is in the prescribed form for the purposes of this section;

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(b) states-

(i) that the debtor proposes to pay the creditors in full; or

(ii) the proportion of the outstanding debt that the debtor proposes

to pay;

(c) states the total amount of the weekly or other instalments that the debtor

proposes to pay;

(d) states-

(i) the name and address of the debtor's proposed supervisor and

annex the written consent of that person to be supervisor; or

(ii) if the debtor claims that a supervisor is not necessary, the

debtor's reasons for making that claim; and

(e) includes the following information-

(i) the debtor's full name and address;

(ii) details of the debtor's property;

(iii) the names and addresses of each of the debtor’s creditors;

(iv) the amount and nature of each of the creditors' debts;

(v) whether any of the debts are secured and the value of the charge;

(vi) whether any of the debts are guaranteed by any person;

(vii) the amount of the debtor's earnings;

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(viii) the name and address of the debtor's employer (if any);

(ix) any other matter that may be prescribed for the purposes of this

subsection.

Summary instalment order

142. (1) The Commissioner may make a summary instalment order if

satisfied that -

(a) the debtor's total unsecured debts that would be provable in the debtor's

liquidation do not exceed the amount prescribed for the purpose of this

section; and

(b) the debtor is unable immediately to pay those debts.

(2) The Commissioner may not make such an order without having given

the debtor and the creditors an opportunity to make representations with respect to

whether or not to grant such order.

(3) A summary instalment order is not invalid merely because the total

amount of the debts proved exceeds the amount specified in subsection (1)(a), but if it

does, the supervisor appointed under section 144 must refer the matter to the

Commissioner, in which case the Commissioner must cancel that order.

Commissioner may make additional orders

143. In addition to an order for the payment of the debts in instalments, the

Commissioner may make all or any of the following orders:

(a) an order regarding the debtor's future earnings or income;

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(b) an order regarding the disposal of goods that the debtor owns or

possesses;

(c) an order giving the supervisor appointed under section 144 power-

(i) to direct the debtor's employer to pay such part of the debtor's

earnings to the supervisor as prescribed; and

(ii) to supervise payment, out of the debtor's earnings or income, of

the reasonable living expenses of the debtor and the debtor's

relatives and dependants.

Appointment of supervisor

144. (1) Except as provided by subsection (2), a summary instalment

order is ineffective if it does not provide for the appointment of a suitable and

willing person to supervise compliance by the debtor with the terms of the order.

(2) The Commissioner may dispense with the appointment of a supervisor

if the Commissioner considers it appropriate to do so.

(3) If the Commissioner dispenses with the appointment of a supervisor

-

(a) the provisions of this Part apply as if the debtor was the supervisor,

except for section 145; and

(b) that section applies as if the Commissioner was the supervisor.

(4) The Commissioner may require a supervisor to provide a security

acceptable to the Commissioner to secure the supervisor's performance of the

supervisor's obligations under this Act.

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(5) In imposing a requirement referred to in subsection (4), the

Commissioner must specify the amount of the security and the person to whom it

is to be given.

Role of supervisor

145. (1) The supervisor is responsible for supervising the debtor's

compliance with the terms of the summary instalment order and any other

orders made under section 143.

(2) The supervisor may charge the debtor remuneration for carrying out

the supervisor's responsibilities as supervisor at the amount or rates not exceeding

the prescribed amount or rates.

Commissioner may require supervisor or past supervisor to provide documents

146. (1) The Commissioner may, by notice, require a supervisor or a

past supervisor to provide the Commissioner, within not less than seven days from

the date of the notice, with any specified documents, or any documents of a

specified class, that relate to the debtor's property, conduct or dealings during the

tenure of that supervisor or past supervisor, as the case may be.

(2) A supervisor or past supervisor who fails to comply with a notice

given to him or her under subsection (1) commits an offence and on conviction is

liable to a fine not exceeding N$75,000 or to imprisonment for a term not exceeding

six months, or to both such fine and such imprisonment.

Termination of supervisor’s appointment

147. (1) If the Commissioner is of the opinion that the supervisor has

failed to supervise the debtor's compliance adequately, the Commissioner must

terminate the supervisor's appointment and appoint a replacement supervisor.

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(2) The Commissioner may only act in accordance with subsection (1) if

the Commissioner has given that supervisor an opportunity to be heard.

Period of payment of instalments

148. The payment of instalments under a summary instalment order can

be spread over a period not exceeding -

(a) three years; or

(b) if justified by special circumstances acceptable to the supervisor, five

years.

Variation or discharge of summary instalment orders

149. (1) The debtor, any creditor or the supervisor may at any time apply

in writing to the Commissioner to vary or discharge a summary instalment order.

(2) After considering an application made under subsection (1), the

Commissioner must vary or discharge the order as the Commissioner considers

appropriate.

Effect of summary instalment orders

150. (1) The debtor must pay all instalments payable under a summary

instalment order in the prescribed manner.

(2) The Commissioner must cancel a summary instalment order on being

satisfied on reasonable grounds that the debtor has failed to comply with subsection

(1).

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Restrictions on bringing proceedings against a debtor while summary

instalment order is in force

151. (1) In this section, "proceedings", in relation to a debtor in

respect of whom a summary instalment order has been made, means proceedings

brought against the person or property of the debtor in respect of a debt that has

been -

(a) shown in the debtor's application for the summary instalment order;

(b) included in the summary instalment order; or

(c) notified to the supervisor.

(2) While a summary instalment order has effect, a person may not begin

or continue proceedings against the debtor unless -

(a) the Commissioner has given prior written approval for a creditor to

begin or continue the proceedings; or

(b) the debtor is in default under the order.

(3) In giving any such approval, the Commissioner may impose such

conditions as appear to the Commissioner to be fair and reasonable.

(4) In the case of proceedings that are pending before a court at the time

when the summary instalment order is made, the Court, unless the conditions specified

in subsection (2)(a) or (b) apply —

(a) must stay the proceedings on receiving notice of the order; and

(b) may award all or part of the creditor's costs incurred up to the time of

the Court's notification, and may certify accordingly for the purpose

of the creditor proving the debt under this Part.

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Supervisor to give notice of summary instalment order

152. (1) The supervisor must send a notice of the summary instalment

order to every creditor -

(a) who is known to the supervisor;

(b) whose name is shown on the debtor's application for the order; or

(c) who has proved a debt under section 156.

(2) A supervisor who, without reasonable excuse, fails to comply with

subsection (1) commits an offence and on conviction is liable to a fine not exceeding

N$75,000 or to imprisonment for a term not exceeding six months, or to both such fine

and such imprisonment.

Public register of debtors subject to summary instalment orders

153. (1) The Commissioner must establish and maintain a public register

of persons who are subject to current summary instalment orders.

(2) The Commissioner must maintain the register in accordance with

Chapter 7.

When summary instalment order not current

154. A summary instalment order is not current if it has been discharged or

all the instalments required to be paid under the order have been paid in accordance

with the order.

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Claims of creditors when summary instalment order has effect

155. (1) A creditor who has proved the creditor's claim to the

satisfaction of the supervisor is entitled to be included as a creditor in the

administration of the debtor's estate under the summary instalment order for the

amount of the debt.

(2) A creditor may object to the supervisor's acceptance or rejection of any

creditor's claim by applying to the Commissioner.

(3) If a creditor objects under subsection (2), the Commissioner may give

any directions that the Commissioner considers appropriate regarding the acceptance

or rejection of the claim.

Payment of debtor’s earnings to supervisor

156. (1) This section applies if the supervisor, under a power conferred

by a summary instalment order made by the Commissioner, directs the debtor's

employer to pay part of the debtor's earnings to the supervisor.

(2) The amounts that the employer must pay to the supervisor are

recoverable as a debt from the employer, and the supervisor's receipt is a complete

discharge to the employer for the debt.

(3) Payment by the employer in contravention of the supervisor's direction

to pay the supervisor discharges the liability of the employer to the supervisor for the

amount of the payment only if the payment is made -

(a) with the consent of the supervisor or the Commissioner; or

(b) to a person who is not the debtor and who has a better legal claim to it

than the debtor.

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Default by debtor to pay instalments

157. (1) A debtor who fails to pay an amount due under a summary

instalment order is presumed, unless the contrary is proved -

(a) to have been able to pay the amount from the date of the order; and

(b) to have refused or neglected to pay it.

(2) Subject to subsection (3), if the debtor fails to make a payment in

accordance with the order -

(a) proceedings that have been stayed under section 151 may begin or

continue;

(b) any period during which a proceeding was stayed under that section are

to be added to any period of limitation that applies to the proceeding in

terms of the Prescription Act, 1969 (Act No. 68 of 1969) or any similar

Act.

(3) Subsection (2) is subject to any order of the Court to the contrary.

(4) As soon as practicable after a debtor fails to make a payment in

accordance with a summary instalment order, the supervisor must give notice of the

failure to the Commissioner.

Offence for debtor to obtain credit when summary instalment order in in force

158. (1) A debtor in respect of whom a summary instalment order is in

effect commits an offence if, before all creditors have been paid the amounts to which

they are entitled under the order, the debtor-

(a) alone or jointly with another person, obtains credit of N$20,000 or more;

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(b) incurs a liability to another person for N$20,000 or more for the purpose

of obtaining credit for another person; or

(c) enters into a credit purchase transaction under which the debtor is liable

to pay N$20,000 or more.

(2) In proceedings for an offence under subsection (1), it is a defence to

prove -

(a) in a case to which subsection (1)(a) applies, that, before obtaining the

relevant credit, the debtor informed the credit provider that the debtor was

subject to a summary instalment order;

(b) in a case to which subsection (1)(b) applies, that, before the defendant

incurred the relevant liability, the credit provider was informed that the

defendant was subject to a summary instalment order; or

(c) in a case to which subsection (1)(c) applies, that, before the defendant

entered into the relevant agreement, the other parties to the agreement

were informed that the defendant was subject to a summary instalment

order.

(3) A person who is found guilty of an offence under this section is liable

on conviction to a fine not exceeding N$150,000 or to imprisonment for a term not

exceeding twelve months, or to both such fine and such imprisonment.

PART 6

NO-ASSET PROCEDURE

Debtor with no realizable assets

159. This Part applies to a debtor who has no realisable assets.

Eligibility for admission to no-asset procedure

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160. (1) A debtor who meets the criteria set out in section 161 may

apply to the Commissioner for admission to the no-asset procedure.

(2) A debtor can apply to the Commissioner for admission to the no-

asset procedure by completing-

(a) an application in the prescribed form for the purpose of this section;

(b) a statement in the prescribed form setting out the debtor's financial

position;

(3) The Commissioner may require the debtor to furnish the Commissioner

with any other information, documents, books, records or statements, which the

Commissioner may require to assess the debtor’s application in terms of subsection

(1).

(4) The Commissioner may reject the debtor's application if the application

or statement of the debtor's financial position is, in the Commissioner's opinion,

incorrect or incomplete.

Criteria for admission to no-asset procedure

161. (1) Subject to subsection (3), the Commissioner must admit a

debtor to the no-asset procedure if satisfied on reasonable grounds that -

(a) the debtor has no realisable assets;

(b) the debtor has not previously been admitted to the no-asset procedure;

(c) the debtor’s estate has not previously been liquidated;

(d) the debtor has total debts that are not more and not less than the

prescribed amount; and

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(e) the debtor does not have the means to repay any amount towards those

debts.

(2) In this section, "realisable assets" excludes any assets that an insolvent

is allowed to retain under section 27(7), but includes assets including gifted assets that

might be recoverable by the Commissioner -

(a) if the liquidation of a debtor’s estate was to commence on the date of

application for admission to the no-asset procedure; and

(b) if Part 4 of Chapter 3 applied.

(3) The admission of a debtor to the no-asset procedure does not take

effect unless approved by the Court upon application by the Commissioner or the

debtor.

Debtor disqualified in certain cases

162. The Commissioner may not admit a debtor to the no-asset procedure

if satisfied, on reasonable grounds, that -

(a) the debtor has concealed assets with the intention of defrauding the

debtor's creditors (such as by transferring property to a trust);

(b) the debtor has engaged in conduct that would, if the debtor were

declared insolvent, constitute an offence under this Act;

(c) the debtor has incurred a debt or debts knowing that the debtor does

not have the means to repay them; or

(d) a creditor intends to apply for the debtor to be declared insolvent and

it is likely that, if the debtor were to be declared insolvent, the

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outcome for the creditor would be materially better than if the debtor

were admitted to the no-asset procedure.

Notification to creditors

163. As soon as practicable after receiving an application from a debtor

for admission to the no-asset procedure, the Commissioner must send a summary

of the debtor's assets and liabilities to each known creditor of the debtor.

Restrictions on debtor obtaining credit

164. (1) A debtor who has applied for admission to the no-asset

procedure may not obtain credit, including credit under a credit purchase

transaction, either alone or jointly with another person, of more than N$5,000

without first informing the credit provider that the debtor has applied for admission

to the no-asset procedure.

(2) A debtor who contravenes subsection (1) commits an offence and

on conviction is liable to a fine not exceeding N$75,000 or to imprisonment for a

term not exceeding six months, or to both such fine and such imprisonment.

Debtor admitted to no-asset procedure

165. (1) A debtor is admitted to the no-asset procedure when the

Commissioner sends the debtor a notice in the form prescribed for the purposes

of this section.

(2) As soon as practicable after a debtor is admitted to the no-asset

procedure, the Commissioner must -

(a) notify that fact to each creditor of the debtor of whom the Commissioner

is aware; and

(b) publish notice thereof in a publication and in the prescribed manner.

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Public register of persons admitted to no-asset procedure

166. (1) The Commissioner must establish and maintain a public

register of persons admitted to the no-asset procedure and persons discharged from

that procedure in terms of section 174.

(2) The Commissioner must maintain the register in accordance with

Chapter 7.

Creditors may not enforce debts of debtor admitted to no-asset procedure

167. (1) A creditor of a debtor may not, after the debtor has been

admitted to the no-asset procedure, begin or continue any step to recover or

enforce a debt -

(a) that the debtor owes to the creditor at the time when the debtor applies

for entry to the no-asset procedure; and

(b) that would be provable in the debtor's insolvency if the debtor were to

be declared insolvent.

(2) Despite subsection (1), the following debts remain enforceable-

(a) amounts payable under a court order made under the Maintenance Act,

2003 (Act No. 3 of 2003);

(b) amounts payable under the Combating of Domestic Violence Act,

2003 (Act No. 4 of 2003);

(c) amounts payable under a divorce order by the Court;

(d) amounts owed in respect of a loan to secure the education of a dependent

child or step-child of the debtor.

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Debtor’s duties after admission to no-entry procedure

168. (1) On being required by the Commissioner to do so, the debtor

must provide the Commissioner with such assistance, documents and information as

are reasonably necessary in order to apply the no-asset procedure to the debtor.

(2) As soon as practicable after any change occurs in the debtor's

circumstances that would allow the debtor to repay an amount towards the debts

referred to in section 166(1), the debtor must give written notification of such

change to the Commissioner.

(3) The debtor may not obtain any credit, either alone or jointly with

another person, of more than N$ 20 000 without first informing the credit provider that

the debtor is subject to the no-asset procedure.

Offence to obtain credit while under no-asset procedure

169. (1) A person commits an offence who, while admitted to the no-

asset procedure -

(a) alone or jointly with another person, obtains credit of one N$20,000 or

more;

(b) incurs liability to a credit provider for N$20,000 or more for the

purpose of obtaining credit for another person; or

(c) enters into a credit purchase transaction under which the person is liable

to pay N$20,000 or more.

(2) In criminal proceedings under subsection (1), it is a defence to prove -

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(a) in a case to which subsection (1)(a) applies, that, before obtaining the

relevant credit that the credit provider was informed that the defendant

was admitted to the no-asset procedure;

(b) in a case to which subsection (1)(b) applies that, before the defendant

incurred the relevant liability, the credit provider was informed that

the defendant was admitted to the no-asset procedure; or

(c) in a case to which subsection (1)(c) applies that, before the defendant

entered into the relevant agreement, the other parties to the agreement

were informed that the defendant was admitted to the no-asset

procedure.

(3) A person who is found guilty of an offence under this section is on

conviction liable to a fine not exceeding N$150,000 or to imprisonment for a term not

exceeding twelve months, or to both such fine and such imprisonment.

Termination of debtor’s admission to no-asset procedure

170. A debtor's participation in the no-asset procedure terminates when -

(a) the Commissioner causes such termination in terms of section 171;

(b) the debtor is discharged under section 175;

(c) the debtor applies for his or her liquidation; or

(d) a creditor who is entitled to do so applies for the debtor's liquidation

and the debtor is declared insolvent.

Commissioner may cause termination of no-asset procedure

171. (1) The Commissioner must serve in accordance with

subsection (2) on a debtor a notice of intention to cancel that debtor's

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participation in the no-asset procedure if the Commissioner is satisfied on

reasonable grounds -

(a) that the debtor was wrongly admitted to the no-asset procedure or

misled the Commissioner; or

(b) that the debtor's financial circumstances have changed sufficiently to

enable the debtor to repay an amount towards the debtor's debts.

(2) The Commissioner must serve on the debtor, in accordance with the

Rules of the Court the notice referred to in subsection (1) containing the reasons

relied upon by the Commissioner for issuing such notice.

(3) A debtor’s termination in the no-asset procedure comes into effect

when the Court upon application by the Commissioner sets aside the order granted

in terms of section 161(3).

(4) As soon as practicable after the termination of a debtor's participation

in the no-asset procedure, the Commissioner must send a notice of the termination to

each creditor of the debtor known to the Commissioner.

Commissioner may apply for preservation order

172. (1) If the Commissioner, in accordance with section 171 cause the

termination of a debtor's participation in the no-asset procedure on the ground that the

debtor has concealed assets or misled the Commissioner, the Court may, on the

application of the Commissioner, make an order for the preservation of the debtor's

assets pending an application for the debtor's estate to be liquidated.

(2) The Court may make an order under subsection (1) on the terms that the

Court considers appropriate.

Effect of termination of debtor’s participation in no-access procedure

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173. (1) On termination of the debtor's participation in the no-asset

procedure -

(a) the debtor's debts that became unenforceable on the debtor's entry to the

no-asset procedure become enforceable; and

(b) the debtor becomes liable to pay any penalties and interest that may have

accrued.

(2) Subsection (1) does not apply if the debtor's admission to the no-asset

procedure is terminated by discharge under section 174.

Creditor may apply to Commissioner for termination of debtor’s participation in

no-asset procedure

174. A creditor may apply to the Commissioner for termination of the

debtor's participation in the no-asset procedure on the ground –

(a) that the debtor did not meet the criteria for admission to the no-asset

procedure; or

(b) that there are reasonable grounds for the Commissioner to conclude that

the debtor was disqualified under section 162.

Automatic discharge of debtor from no-asset procedure

175. (1) A debtor who is participating in the no-asset procedure is

automatically discharged from that procedure at the end of 12 months after the date

when the debtor was admitted to it.

(2) Subsection (1) does not apply if the Commissioner -

(a) upon application by the debtor or at the Commissioner’s volition is

satisfied that the 12-month period should be extended for the purpose of

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properly considering whether the debtor's participation in the no-asset

procedure should be terminated; and

(b) serves a written deferral notice in accordance with the Rules of the Court

at the debtor's last known address before the end of that period.

(3) The Commissioner must specify in the deferral notice an alternative

date for automatic discharge, which may be not later than 60 days after the end of the

12-month period.

(4) As soon as practicable after sending a deferral notice to a debtor, the

Commissioner must send a copy of that notice to each creditor of the debtor known to

the Commissioner.

(5) The debtor is automatically discharged from the no-asset procedure

on the date specified in the deferral notice.

(6) The Commissioner may revoke a deferral notice in the same way

in which it was sent, in which case, the debtor is automatically discharged from

the no-asset procedure –

(a) if the notice is revoked on or before the end of the 12-month period

specified in subsection (1), at the end of that period; or

(b) if it is revoked after the end of that period, on the date of revocation.

Discharge of debtor’s participation in no-asset procedure

176. (1) On discharge under section 175-

(a) the debtor's debts that became unenforceable on the debtor's admission

to the no-asset procedure are cancelled; and

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(b) the debtor is no longer liable to pay any part of the debts, including any

penalties and interest that may have accrued.

(2) Subsection (1) does not apply -

(a) to any debt or liability incurred by fraud or fraudulent breach of trust to

which the debtor was a party; or

(b) any debt or liability for which the debtor has obtained leniency through

fraud to which the debtor was a party.

(3) The debts and liabilities referred to in subsection (2) again become

enforceable on discharge under section 175, and the debtor is liable to pay any penalty

or interest that may have accrued.

Discharge does not release debtor’s business partners and others

177. A discharge under section 175 does not release a person who, at the

date of discharge, was –

(a) a business partner of the discharged debtor;

(b) a co-trustee with the discharged debtor;

(c) jointly bound or had made any contract with the discharged debtor; or

(d) a guarantor or in the nature of a guarantor of the discharged debtor.

PART 7

POST-LIQUIDATION COMPOSITION

Post-liquidation composition

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178. (1) Any debtor, may at any time after the issuing of the provisional

liquidation order but after he or she has sent his or her statement of affairs by standard

notice as required by section 17(3), lodge with the liquidator of his or her estate a

written offer of composition.

(2) (a) If the liquidator is of the opinion that there is a likelihood that

the creditors of the estate will accept the offer of composition, he or she must

as soon as possible after the receipt of the offer sent a copy thereof together

with his or her report and notice of the date, time and the place of the meeting

at which the offer of composition will be considered by standard notice to every

creditor whose name and address are known to the liquidator or which he or she

can reasonably obtain.

(b) If a special meeting is convened to consider an offer of composition a

notice in the Gazette must be published not less than 14 days and not

more than 21 days before the date fixed for the meeting.

(3) (a) If the liquidator is of the opinion that there is no likelihood that

creditors will accept the offer of composition, he or she must inform the debtor

that the offer is unacceptable and that he or she does not propose to send a copy

thereof to the creditors.

(b) The debtor may thereupon require the Commissioner to review the

liquidator's decision and the Commissioner may, after having

considered the offer and the liquidator's report thereon, direct the

liquidator to submit the offer to the creditors of the estate in the manner

provided in subsection (2).

(4) If the offer is accepted by a majority in number and two-thirds in value

of the concurrent creditors who have voted on the offer and payment under the

composition has been made or security for such payment has been given as specified

in the composition, the debtor is, subject to subsection (5), (6) and (7), entitled to a

certificate under the hand of the Commissioner of the acceptance of the offer.

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(5) An offer of composition is invalid if it contains any condition under

which any creditor would obtain as against another creditor any benefit to which he or

she would not have been entitled upon the distribution of the estate in the ordinary

manner.

(6) Subject to subsection (5), a condition providing for the discharge of a

provisional liquidation order or the setting aside of a final liquidation order upon the

acceptance of an offer of composition is valid.

(7) If the composition provides for the giving of security, the nature of the

security must be fully specified and if it consists of a surety bond or guarantee, every

surety must be named.

(8) Despite the absence of a resolution of creditors authorising him or her

to do so, the liquidator may approach the Court for-

(a) the cancellation of a composition;

(b) the setting aside of an order providing for the discharge of a provisional

liquidation order;

(c) an order setting aside a final liquidation order; or

(d) for other relief,

if-

(i) the debtor or any other person has failed to give effect to the terms of

the composition or to comply with the provisions of this section; or

(iii) the offer of composition contained incorrect information which caused

a majority of of creditors voting in favour of its acceptance.

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(9) An offer of composition which has been accepted as aforesaid is binding

upon the debtor and upon all creditors of the insolvent estate in so far as their claims

are not secured or preferent but the right of any secured or preferent creditor may not

be prejudiced thereby, except in so far as the secured or preferent creditor waived such

preference or security in writing.

(10) If the composition is subject to the condition that any property in the

insolvent estate must be restored to the debtor, the acceptance of the composition

divests the liquidator of such property and vests such property in the debtor as from the

date on which such property is in pursuance of the composition to be restored to the

debtor, but subject to any condition provided for in the composition.

(11) A composition does not affect the liability of a surety for the debtor or

any liability regarding transactions that are invalid or liable to be set aside.

(12) (a) When the estate of a partnership and the estate of a partner in

that partnership are simultaneously under liquidation, the acceptance of an offer

of composition by the separate creditors of the partner does not take effect until

the expiration of a period of six weeks as from the date of a standard notice in

writing of that acceptance given by the liquidator of the partner's separate estate

to the liquidator of the partnership estate, or if the liquidator of the partner's

estate is also the liquidator of the partnership estate, as from the date of the

acceptance of the composition.

(b) The notice referred to in paragraph (a) must be accompanied by a copy

of the deed embodying the composition.

(13) At any time during the period of six weeks referred to in subsection (12)

the liquidator of the partnership estate may take over the assets of the estate of the

insolvent partner if he or she fulfils the obligations of the insolvent partner in terms of

the composition, other than obligations to render any service or obligations which only

the insolvent partner can fulfil: Provided that if the composition provides for the giving

of any specific security, the Commissioner must determine what other security the

liquidator of the partnership estate may give in lieu thereof.

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(14) Subject to subsection (15), any moneys to be paid and anything to be

done for the benefit of creditors in pursuance of a composition must be paid and must

be done, as far as practicable, through the liquidator:

(15) Notwithstanding the provisions of subsection (14), any creditor who has

failed to prove that creditor’s claim before the liquidator has made a final distribution

among those creditors who have proved their claims, is entitled within six months from

the confirmation by the Commissioner of the account under which the distribution was

made, to recover directly from the debtor any payments to which that creditor may be

entitled under the composition and the liquidator has no duty in regard thereto.

(16) After the liquidator has made a final distribution as contemplated in

subsection (15), the creditor referred to in that subsection has no claim against the

insolvent estate.

(17) (a) When a composition has been entered into between a debtor and

the creditors of his or her estate and the liquidation order has not been

discharged or set aside, the liquidator of that estate must frame a liquidation

account and distribution account of the assets which are or will become

available for distribution among the creditors in terms of the composition.

(b) All the provisions of this Act which relate to a liquidation account and

distribution account of assets among creditors apply in connection with

the liquidation account and distribution account referred to in paragraph

(a).

PART 8

CRIMINAL CONDUCT UNDER THIS CHAPTER

False declaration to obtain creditors’ approval

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179. (1) A debtor commits an offence, if for the purpose of obtaining

approval to a proposal for a composition in terms of Part 2 or a voluntary arrangement

in terms of Part 3 or 4 (hereafter jointly referred to as “a proposal”), the debtor -

(a) makes a representation knowing it to be false or misleading; or

(b) fraudulently does, or omits to do, any act.

(2) In subsection (1), the reference to obtaining approval to a proposal

relates to obtaining -

(a) the approval of a proposal for an offer of pre-liquidation composition

held in accordance with section 121;

(b) the approval of a proposal for an offer of post-liquidation composition

held in accordance with section 177;

(c) the approval of a proposal for a voluntary arrangement presented to a

meeting of the debtor's creditors held in accordance with section 128;

or

(d) the approval of a proposal for a voluntary arrangement submitted to the

Commissioner in accordance with section 134.

(3) Subsection (1) applies even if the proposal is not approved.

(4) A person found guilty of an offence under subsection (1) is liable on

conviction to a fine not exceeding N$250,000 or to imprisonment for a term not

exceeding five years, or to both such fine and such imprisonment.

Prosecution of delinquent debtors

180. (1) This section applies to a proposal that has taken effect in

accordance with section 121, 177, 130(1) or 137(1).

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(2) As soon as practicable after forming a reasonable suspicion that a debtor

has committed an offence in connection with a proposal to which this section applies,

the court referred to in section 121, the liquidator referred to in section 177 or a

supervisor of a voluntary arrangement must report the matter to the Prosecutor

General.

(3) On receiving the report contemplated in subsection (2), the Prosecutor

General may request the person who made the report to provide -

(a) such information as is specified in the request; and

(b) access to, and facilities for inspecting and taking copies of, such

documents as are so specified.

(4) The person who made the report must comply with such a request to the

extent that the information or documents are under the debtor's control and relate to the

matter concerned.

(5) If the Prosecutor General takes criminal proceedings following a

report made under subsection (2), the person who made the report must provide the

Prosecutor General with all assistance in connection with the prosecution that that

person is reasonably able to provide.

(6) If the person who made the report fails to comply with subsections

(3), (4) or (5) the Prosecutor General may apply to the Court for an order under

subsection (7).

(7) On the hearing of an application made under subsection (6), the

Court may make an order directing the person who made the report to comply with

subsection (3) or (4), as appropriate.

CHAPTER 5

CROSS-BORDER INSOLVENCIES

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PART 1

INTERPRETATION AND FUNDAMENTAL PRINCIPLES

Definitions

181. For the purposes of this Chapter -

(a) “debtor” means-

(i) a natural person or the estate of such natural person;

(ii) a partnership or the estate of a partnership;

(iii) a trust;

(iv) a company incorporated in terms of the Companies Act,

including an external company;

(v) a co-operative incorporated in terms of the Co-operatives Act,

1996 (Act No. 23 of 1996) and includes a co-operative

agricultural society, co-operative agricultural company, farmers'

special co-operative company and co-operative trading society

deemed to be registered as a cooperative in terms of section 110

of that Act;

(vi) a corporation incorporated in terms of the Close Corporations

Act, 1988 (Act No. 26 of 1988);

(vii) any other person or entity which is a debtor in the usual sense of

the word;

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(b) “curator of an institution” means a curator appointed in terms of section

6 of the Financial Institutions (Investment of Funds) Act, 1984 (Act No.

39 of 1984);

(c) “establishment” means any place of operations where the debtor carries

out a non-transitory economic activity with human means and goods or

services;

(d) “foreign court” means a judicial or other authority competent to control

or supervise foreign proceedings;

(e) “foreign main proceedings” means foreign proceedings taking place in

the State where the debtor has the centre of its main interests;

(f) “foreign non-main proceedings” means foreign proceedings, other than

foreign main proceedings, taking place in a State where the debtor has

an establishment within the meaning of paragraph (c) of this section;

(g) “foreign proceedings” means collective judicial or administrative

proceedings in a foreign State, including interim proceedings, pursuant

to a law relating to insolvency in which proceedings the assets and

affairs of the debtor are subject to control or supervision by a foreign

court, for the purpose of reorganization or liquidation;

(h) “foreign representative"” means a person or body, including one

appointed on an interim basis, authorized in foreign proceedings to

administer the reorganization or the liquidation of the debtor's assets or

affairs or to act as a representative of the foreign proceedings;

(i) “foreign State” means a State designated under section 183(2);

(j) “judicial manager” means a judicial manager defined in section 1 of the

Companies Act and includes a provisional judicial manager;

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(k) “liquidator”, in relation to a company, means a liquidator defined in

section 1 of the Companies Act;

(l) “trustee” means a trustee as defined in section 1 of the Trust Monies

Protection Act, 1934 (Act No. 34 of 1934).

Purpose and aims

182. The purpose of this Chapter is to provide effective mechanisms for

dealing with cases of cross-border insolvency so as to promote the objectives of -

(a) co-operation between the courts and other competent authorities of

Namibia and those of foreign States involved in cases of cross-border

insolvency;

(b) greater legal certainty for trade and investment;

(c) fair and efficient administration of cross-border insolvencies that

protects the interests of all creditors and other interested persons,

including the debtor;

(d) protection and maximization of the value of the debtor's assets; and

(e) facilitation of the rescue of financially troubled businesses, thereby

protecting investment and preserving employment.

Scope of application

183. (1) This Chapter applies where-

(a) assistance is sought in Namibia by a foreign court or a foreign

representative in connection with a foreign proceeding;

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(b) assistance is sought in a foreign State in connection with a proceeding

under the laws of Namibia relating to insolvency;

(c) a foreign proceeding and a proceeding under the laws of Namibia

relating to insolvency in respect of the same debtor are taking place

concurrently; or

(d) creditors or other interested persons in a foreign State have an interest

in requesting the commencement of, or participating in, a proceeding

under the laws of Namibia relating to insolvency.

(2) (a) Subject to paragraph (b), this Chapter applies in respect of any

foreign State not designated by the Minister by notice in the Gazette.

(b) The Minister may designate a foreign State by notice in the Gazette if

the Minister is satisfied that the recognition accorded by the law of such

a State to proceedings under the laws of Namibia relating to insolvency

does not justify the application of this Chapter to foreign proceedings in

such State.

(3) The Minister may at any time by subsequent notice in the Gazette

withdraw any notice in terms of subsection (2)(b), and thereupon any State referred to

in such last-mentioned notice is to be a foreign State for the purposes of this Chapter.

(4) Any notice referred to in subsection (2)(b) or (3) must, before

publication in the Gazette, be approved by Parliament.

(5) Where the Minister issues a notice in terms of subsection (2)(b) or (3),

such notice does not affect any pending legal proceedings and such proceedings must

continue as if the notice had not been issued.

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International obligations of Namibia

184. To the extent that this Chapter conflicts with an obligation of Namibia

arising out of any treaty or other form of agreement to which Namibia is a party with

one or more other States and which treaty or agreement has been ratified or acceded to

in terms of Article 62(2)(c) of the Namibian Constitution or is binding upon Namibia

in terms of Article 143 or 144 of that Constitution, the requirements of the treaty or

agreement prevail.

Competent court

185. The functions referred to in this Chapter relating to recognition of

foreign proceedings and cooperation with foreign courts must be performed by the

Court.

Authorization of insolvency practitioner, trustee, liquidator, judicial manager or

curator to act in foreign State

186. An insolvency practitioner, trustee, liquidator, judicial manager or

curator of an institution is authorized to act in a foreign State in respect of proceedings

under the laws of Namibia relating to insolvency, as permitted by the applicable foreign

law.

Public policy exception

187. Nothing in this Chapter prevents the Court from refusing to take an

action governed by this Chapter if the action would be manifestly contrary to the public

policy of Namibia.

Additional assistance under other laws

188. Nothing in this Chapter limits the power of a Court or an insolvency

practitioner, a trustee, liquidator, judicial manager or curator of an institution to provide

additional assistance to a foreign representative under other laws of Namibia.

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Interpretation

189. In the interpretation of this Chapter, regard must be had to its

international origin and to the need to promote uniformity in its application and the

observance of good faith.

PART 2

ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO

COURTS IN REPUBLIC

Right of direct access

190. A foreign representative is entitled to apply directly to a Court in

Namibia for relief.

Limited jurisdiction

191. The sole fact that an application pursuant to this Chapter is made to a

Court in Namibia by a foreign representative does not subject the foreign representative

or the foreign assets and affairs of the debtor to the jurisdiction of the Courts of

Namibia for any purpose other than the application.

Application by foreign representative to commence proceedings under the laws of

Namibia relating to insolvency

192. A foreign representative may apply to commence proceedings under the

laws of Namibia relating to insolvency if the conditions for commencing such

proceedings are otherwise met.

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Participation of foreign representative in proceedings under the laws of Namibia

relating to insolvency

193. Upon recognition of foreign proceedings, the foreign representative

may participate in proceedings regarding the debtor under the laws of Namibia relating

to insolvency.

Access of foreign creditors to proceedings under the laws of Namibia relating to

insolvency

194. (1) Subject to subsection (2), foreign creditors have the same rights

regarding the commencement of, and participation in, proceedings under the laws of

Namibia relating to insolvency as creditors in Namibia.

(2) Subsection (1) of this section does not affect the ranking of claims in a

proceeding under the laws of Namibia relating to insolvency, except that the claims of

foreign creditors may not be ranked lower than non-preferent claims.

(3) Without derogating from the application of the law and practice of

Namibia generally, the ranking of claims in respect of assets in Namibia is regulated

by the law and practice of Namibia on the ranking of claims.

Notification to foreign creditors of proceedings under the laws of Namibia relating

to insolvency

195. (1) (a) Whenever under the laws of Namibia relating to

insolvency notification is to be given to creditors in Namibia, such

notification must also be given to the known creditors that do not have

addresses in Namibia.

(b) The Court may order that appropriate steps be taken with a view to

notifying any creditor whose address is not yet known.

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(2) (a) Such notification must be made to the foreign creditors

individually, unless the Court considers that, under the circumstances,

some other form of notification would be more appropriate.

(b) For purposes of paragraph (a), no letters rogatory or other, similar

formality is required.

(3) When a notification of commencement of proceedings is to be given to

foreign creditors, the notification must -

(a) indicate a reasonable time period for filing claims and specify the place

for their filing;

(b) indicate whether secured creditors need to file their secured claims; and

(c) contain any other information required to be included in such a

notification to creditors pursuant to the law of Namibia and the orders

of the Court.

PART 3

RECOGNITION OF FOREIGN PROCEEDINGS AND RELIEF

Application for recognition of foreign proceedings

196. (1) A foreign representative may apply to the Court for recognition

of the foreign proceeding in which the foreign representative has been appointed.

(2) An application for recognition in terms of subsection (1) must be

accompanied by -

(a) a certified copy of the decision commencing the foreign proceeding and

appointing the foreign representative;

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(b) a certificate from the foreign court affirming the existence of the foreign

proceeding and of the appointment of the foreign representative; or

(c) in the absence of evidence referred to in paragraphs (a) and (b), any

other evidence acceptable to the Court of the existence of the foreign

proceeding and of the appointment of the foreign representative.

(3) An application for recognition must also be accompanied by a statement

identifying all foreign proceedings in respect of the debtor that are known to the foreign

representative.

(4) The Court may require a translation of documents supplied in support

of the application for recognition into the official language of Namibia.

Presumptions concerning recognition

197. (1) If the decision or certificate referred to in section 196(2)

indicates that the foreign proceedings are proceedings within the meaning of section

181(g) and that the foreign representative is a person or body within the meaning of

section 181(h), the Court may so presume.

(2) The Court may presume that documents submitted in support of the

application for recognition are authentic, whether or not they have been legalized.

(3) In the absence of proof to the contrary, the debtor's registered office, or

habitual residence in the case of an individual, is presumed to be the centre of the

debtor's main interests.

Decision to recognize foreign proceedings

198. (1) Subject to section 187, foreign proceedings must be recognized

if -

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(a) the foreign proceedings are proceedings within the meaning of section

181(g);

(b) the foreign representative applying for recognition is a person or body

within the meaning of section 181(h);

(c) the application meets the requirements of section 196(2); and

(d) the application has been submitted to a Court.

(2) The foreign proceedings must be recognized -

(a) as foreign main proceedings if they are taking place in the State where

the debtor has the centre of his or her or its main interests; or

(b) as foreign non-main proceedings if the debtor has an establishment

within the meaning of section 181(c) in the foreign State.

(3) An application for recognition of foreign proceedings must be decided

upon at the earliest possible time.

(4) The provisions of sections 196, 197, this section and section 199 do

not prevent modification or termination of recognition if it is shown that the grounds

for granting it were fully or partially lacking or have ceased to exist.

Subsequent information

199. From the time of filing the application for recognition of the foreign

proceeding, the foreign representative must inform the Court promptly of -

(a) any change in the status of the recognized foreign proceedings or the

status of the foreign representative's appointment; and

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(b) any other foreign proceedings regarding the same debtor that become

known to the foreign representative.

Relief that may be granted upon application for recognition of foreign

proceedings

200. (1) From the time of filing an application for recognition until the

application is decided upon, the Court may, at the request of the foreign representative,

where relief is urgently needed to protect the assets of the debtor or the interests of the

creditors, grant relief of a provisional nature, including -

(a) staying execution against the debtor's assets;

(b) entrusting the administration or realization of all or part of the debtor's

assets located in Namibia to the foreign representative or another person

designated by the court, in order to protect and preserve the value of

assets that, by their nature or because of other circumstances, are

perishable, susceptible to devaluation or otherwise in jeopardy;

(c) any relief mentioned in section 202(1)(c), (d) and (g).

(2) An order issued in terms of subsection (1) must be dealt with as

contemplated in section 26 of this Act.

(3) Unless extended under section 202(1)(f), the relief granted under this

section terminates when the application for recognition is decided upon.

(4) The Court may refuse to grant relief under this section if such relief

would interfere with the administration of foreign main proceedings.

Effect of recognition of foreign main proceedings

201. (1) Upon recognition of foreign proceedings that are foreign main

proceedings -

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(a) commencement or continuation of individual legal actions or individual

legal proceedings concerning the debtor's assets, rights, obligations or

liabilities is stayed;

(b) execution against the debtor's assets is stayed; and

(c) the right to transfer, encumber or otherwise dispose of any assets of the

debtor is suspended.

(2) The scope, and the modification or termination, of the stay and

suspension referred to in subsection (1) of this section are subject to the provisions of

sections 20 and 28 of this Act, and the Court may, at the request of the foreign

representative or a person affected by subsection (1), modify or terminate the scope of

the stay and suspension.

(3) Subsection (1)(a) does not affect the right to commence individual

actions or proceedings to the extent necessary to preserve a claim against the debtor.

(4) Subsection (1) does not affect the right to request the commencement

of proceedings under the laws of Namibia relating to insolvency or the right to file

claims in such proceedings.

Relief that may be granted upon recognition of foreign proceedings

202. (1) Upon recognition of foreign proceedings, whether foreign main

or non-main proceedings, where necessary to protect the assets of the debtor or the

interests of the creditors, the Court may, at the request of the foreign representative,

grant any appropriate relief, including -

(a) staying the commencement or continuation of individual legal actions

or individual legal proceedings concerning the debtor's assets, rights,

obligations or liabilities, to the extent they have not been stayed under

section 201(1)(a);

268

(b) staying execution against the debtor's assets to the extent it has not been

stayed under section 201(1)(b);

(c) suspending the right to transfer, encumber or otherwise dispose of any

assets of the debtor to the extent this right has not been suspended under

section 201(1)(c);

(d) providing for the examination of witnesses, the taking of evidence or

the delivery of information concerning the debtor's assets, affairs, rights,

obligations or liabilities;

(e) entrusting the administration or realization of all or part of the debtor's

assets located in Namibia to the foreign representative or another person

designated by the Court;

(f) extending relief granted under section 200(1);

(g) granting any additional relief that may be available to an insolvency

practitioner, a trustee, liquidator, judicial manager or curator of an

institution under the laws of Namibia.

(2) Upon recognition of foreign proceedings, whether foreign main or non-

main proceedings, the Court may, at the request of the foreign representative, entrust

the distribution of all or part of the debtor's assets located in Namibia to the foreign

representative or another person designated by the Court, provided that the Court is

satisfied that the interests of creditors in Namibia are adequately protected.

(3) In granting relief under this section to a representative of foreign non-

main proceedings, the Court must be satisfied that the relief relates to assets that, under

the law of Namibia, should be administered in the foreign non-main proceeding or

concerns information required in those proceedings.

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(4) Without derogating from the application of laws of Namibia generally,

in granting relief under this section the Court must indicate the laws of Namibia relating

to the administration, realization or distribution of a debtor's estate in Namibia that will

apply.

Protection of creditors and other interested persons

203. (1) In granting or denying relief under section 200 or 202, or in

modifying or terminating relief under subsection (3), the Court must be satisfied that

the interests of the creditors and other interested persons, including the debtor, are

adequately protected.

(2) The Court may subject relief granted under sections 200 or 202 to

conditions it considers appropriate.

(3) The Court may, at the request of the foreign representative or a person

affected by relief granted under sections 200 or 202, or of its own motion, modify or

terminate such relief.

Actions to avoid acts detrimental to creditors

204. (1) Upon recognition of foreign proceedings, the foreign

representative has standing to initiate any legal action to set aside a disposition that is

available to a trustee or liquidator under the laws of Namibia relating to insolvency.

(2) When the foreign proceedings are foreign non-main proceedings, the

Court must be satisfied that the legal action relates to assets that, under the law of

Namibia, should be administered in the foreign non-main proceeding.

Intervention by foreign representative in proceedings in Namibia

205. Upon recognition of foreign proceedings, the foreign representative

may, provided the requirements of the law of Namibia are met, intervene in any

proceedings in which the debtor is a party.

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PART 4

COOPERATION WITH FOREIGN COURTS AND FOREIGN

REPRESENTATIVES

Cooperation and direct communication between court of Namibia and foreign


206. (1) In matters referred to in section 183(1), the Court must

cooperate to the maximum extent possible with foreign courts or foreign

representatives, either directly or through an insolvency practitioner, a trustee,

liquidator, judicial manager or curator of an institution.

(2) The Court may communicate directly with, or request information or

assistance directly from, foreign courts or foreign representatives.

Cooperation and direct communication between insolvency practitioner, trustee,

liquidator, judicial manager or curator of an institution and foreign courts or

foreign representatives

207. (1) In matters referred to in section 183(1), an insolvency

practitioner, a trustee, liquidator, judicial manager or curator of an institution must, in

the performance of his or her or its functions and subject to the supervision of the court,

cooperate to the maximum extent possible with foreign courts or foreign

representatives.

(2) The insolvency practitioner, trustee, liquidator, judicial manager or

curator of an institution may, in the exercise of his or her or its functions and subject

to the supervision of the Court, communicate directly with foreign courts or foreign

representatives.

Forms of cooperation

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208. Cooperation referred to in sections 206 and 207 may be implemented

by any appropriate means, including -

(a) appointment of a person or body to act at the direction of the Court;

(b) communication of information by any means considered appropriate by

the Court;

(c) coordination of the administration and supervision of the debtor's assets

and affairs;

(d) approval or implementation by courts of agreements concerning the

coordination of proceedings;

(e) coordination of concurrent proceedings regarding the same debtor.

PART 5

CONCURRENT PROCEEDINGS

Commencement of proceedings under the laws of Namibia relating to insolvency

after recognition of foreign main proceedings

209. (1) After recognition of foreign main proceedings, proceedings

under the laws of Namibia relating to insolvency may be commenced only if the debtor

has assets in Namibia.

(2) The effects of such proceedings are restricted to the assets of the debtor

that are located in Namibia and, to the extent necessary to implement cooperation and

coordination under sections 206, 207 and 208, to other assets of the debtor that, under

the law of Namibia, should be administered in those proceedings.

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Coordination of proceedings under the laws of Namibia relating to insolvency and

foreign proceedings

210. Where foreign proceedings and proceedings under the laws of Namibia

relating to insolvency are taking place concurrently regarding the same debtor, the

Court must seek cooperation and coordination under sections 206, 207 and 208, and-

(a) when the proceedings in Namibia are taking place at the time that the

application for recognition of the foreign proceeding is filed,

(i) any relief granted under sections 200 or 202 must be consistent

with the proceedings in Namibia; and

(ii) if the foreign proceedings are recognized in Namibia as foreign

main proceedings, section 201 does not apply;

(b) when the proceedings in Namibia commence after recognition, or after

the filing of the application for recognition, of the foreign proceedings:

(i) any relief in effect under sections 200 or 202 must be reviewed

by the Court and must be modified or terminated if inconsistent

with the proceedings in Namibia; and

(ii) if the foreign proceedings are foreign main proceedings, the stay

and suspension referred to in section 201(1) must be modified

or terminated pursuant to section 201(2) if inconsistent with the

proceedings in Namibia;

(c) in granting relief or in extending or modifying relief granted to a

representative of foreign non-main proceedings, the Court must be

satisfied that the relief relates to assets that, under the law of Namibia,

should be administered in the foreign non-main proceedings or concerns

information required in those proceedings.

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Coordination of foreign proceedings

211. In matters referred to in section 183(1), in respect of more than one set

of foreign proceedings regarding the same debtor, the court must seek cooperation and

coordination under sections 206, 207 and 208, and -

(a) any relief granted under sections 200 or 202 to a representative of

foreign non-main proceedings after recognition of foreign main

proceedings must be consistent with the foreign main proceedings;

(b) if foreign main proceedings are recognized after recognition, or after the

filing of an application for recognition, of foreign non-main

proceedings, any relief in effect under sections 200 or 202 must be

reviewed by the Court and must be modified or terminated if

inconsistent with the foreign main proceedings;

(c) if, after recognition of foreign non-main proceedings, other foreign non-

main proceedings are recognized, the Court must grant, modify or

terminate relief for the purpose of facilitating coordination of the

proceedings.

Presumption of insolvency based on recognition of foreign main proceedings

212. In the absence of proof to the contrary, recognition of foreign main

proceedings is, for the purpose of commencing proceedings under the laws of Namibia

relating to insolvency, proof that the debtor is insolvent.

Rule of payment in concurrent proceedings

213. Without prejudice to secured claims or rights in rem, a creditor who has

received part payment in respect of its claim in proceedings pursuant to a law relating

to insolvency in a foreign State may not receive a payment for the same claim in

proceedings under the laws of Namibia relating to insolvency regarding the same

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debtor, so long as the payment to the other creditors of the same class is proportionately

less than the payment the creditor has already received.

CHAPTER 6

OFFENCES

Offences

214. (1) A debtor is guilty of an offence if he or she-

(a) before or after the liquidation of his or her estate conceals or parts with

or intentionally destroys any book or accounting record relating to his

or her affairs or if he or she intentionally erases the information

contained therein or makes it illegible or permits any other person to

perform any such act in regard to any such book or accounting record;

(c) before or after the liquidation of his or her estate, alienates property,

obtained by him or her on credit and not paid for, otherwise than in the

ordinary course of business;

(c) despite having been expressly asked about his or her financial standing

and credit worthiness, falsely conceals his or her insolvent status and as

a result thereof obtains credit for more than the prescribed amount;

(d) offers or promises to any person any reward in order to procure the

acceptance by a creditor of his or her estate of an offer of compromise

or to induce a creditor not to oppose an application for rehabilitation or

to give up any investigation in regard to the estate or to conceal any

information in connection therewith;

(e) any time within two years before the commencement of liquidation of

his or her estate with intent to obtain credit or the extension of credit,

intentionally gave false information or concealed any material fact in

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connection with his or her assets and liabilities to a creditor or to anyone

who became his or her creditor;

(f) at any time before the date of liquidation of his or her estate deducted

an amount from salary paid to an employee for payment to someone

other than the debtor and failed to pay the amount to the person entitled

thereto when required or, if payment is not required within a specified

period, within 14 days after payment of the salary;

(g) before the liquidation of his or her estate carried on any business or for

his or her own account practised any profession or occupation and failed

to keep proper accounting records of all business transactions, income,

expenditure, assets and liabilities and to retain the accounting records

for a period of at least three years;

(g) at any time when his or her liabilities exceeded his or her assets or at

any time within six months immediately prior to the commencement of

liquidation of his or her estate, reduced his or her assets through

gambling, betting or risky speculation or contracted debts which were

not reasonably necessary in connection with business or occupation or

for his or her own maintenance or that of his or her dependants;

(h) contracted any debt of N$500 or more or debts to the aggregate of

N$1000 or more, without any reasonable expectation of being able to

discharge such debt or debts;

(i) without good cause fails to submit a statement of his or her affairs as

required by section 60(1)(b);

(j) without lawful cause fails to attend any meeting or continuation of a

meeting of creditors of his or her estate of which he or she has been

notified in writing or the continuation of such meeting which he or she

has been directed by the presiding officer of the meeting to attend at the

date, time and place determined by the presiding officer; or

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(k) at any time during the liquidation of his or her estate, knows or suspects

that any person has lodged or intends to lodge a nomination

contemplated in section 50 which is false or has proved or intends to

prove a false claim against his or her estate and fails to inform the

Commissioner in the case of a nomination and the Commissioner and

the liquidator of his estate in the case of a claim in writing of that

knowledge or suspicion within 14 days as from the date upon which he

or she acquired that knowledge or upon which his or her suspicion was

aroused.

(2) A person commits an offence if that person -

(a) evades the service of a summons on or a notice to him or her as

contemplated in sections 29(6)(a), 86, 87, 88, or 90 or who without

lawful cause fails to attend at the date, time and place determined in the

summons or notice or having appeared, without lawful cause fails to

remain in attendance until he or she is excused from further attendance

by the presiding officer of the meeting concerned;

(b) has been called up for questioning in terms of sections 29(6)(a), 86, 87,

88 or 90 and who refuses to be sworn as a witness or to take an

affirmation or who without lawful cause refuses or fails to answer any

question lawfully put to him or her or who without lawful cause refuses

or fails to produce any book, document, or record which is in his or her

possession or custody and which he or she is in terms of the summons

or a direction of the presiding officer of the meeting obliged to produce;

(c) without lawful cause fails to comply with a written order of a liquidator

contemplated in section 89(7) or (8);

(d) without lawful cause fails to answer fully and correctly any written

questions put to him or her by the liquidator of an insolvent estate in

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terms of section 89 or to send the said answers within the time and in

the manner contemplated in section 89(3);

(e) receives any benefit or accepts any promise of a benefit as a reward for

having kept in abeyance or stopped any action for the liquidation of the

estate of a debtor or for having undertaken to keep such action in

abeyance or to stop it or for having agreed to a composition or

rehabilitation or for not opposing it or for having undertaken to agree to

such composition or rehabilitation or not to oppose it or for having kept

any inquiry in connection with any matter relating to the insolvent estate

in abeyance or for having undertaken to hold it in abeyance or for having

concealed particulars of a debtor or an insolvent estate or for having

undertaken to conceal such information;

(f) before or after the liquidation of the estate of an insolvent, conceals,

parts with, damages, destroys, alienates or otherwise disposes of

property attached in terms of section 38 or property belonging to the

insolvent or his or her estate with intent to frustrate the attachment of

such property by virtue of a liquidation order, in terms of that section,

or with intent to prejudice creditors of the insolvent estate;

(g) has in his or her possession or custody or under his or her control

property belonging to an insolvent estate and who intentionally fails to

notify the liquidator of the insolvent estate as soon as possible of the

existence and whereabouts of such property and to make it available to

the liquidator;

(h) intentionally impedes or hinders a liquidator appointed in terms of

section 51 or a liquidator appointed in terms of this Act or any person

acting under his or her command, in the execution of his or her duties;

or

(i) makes or causes to be made or allows to be made a false nomination in

terms of section 50 or who signs such a nomination without reasonable

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grounds for believing it to be correct, or who knowingly submits a false

nomination to the Commissioner.

(3) A liquidator of an insolvent estate who intentionally or negligently fails

to lodge with the Commissioner an account or to pay over a sum of money within 30

days from the date on which he or she became obliged to submit such account or pay

over such sum of money, or fails to comply with the duties in section 59 within 30

days from the commencement of liquidation is guilty of an offence and liable on

conviction to a fine or imprisonment for a period not exceeding six months or to both

such fine and such imprisonment.

(4) (a) Any person who is convicted of an offence contemplated in

subsection (1)(a) or (b) or subsection (2)(f), (g) or (h) is liable to a fine or to

imprisonment for a period not exceeding three years or to both such fine and

such imprisonment.

(b) Any person who is convicted of an offence contemplated in subsection

(1)(c), (d), (e), (f), (g), (h), (i), (j) or (k) or subsection (2)(e) is liable to

a fine or imprisonment for a period not exceeding 12 months or to both

such fine and such imprisonment.

(c) Any person who is convicted of an offence contemplated in subsection

(1)(h) or subsection (2)(a), (b), (c), (d) or (h) is liable to a fine or to

imprisonment not exceeding six months or to both such fine and such

imprisonment.

CHAPTER 7

PUBLIC REGISTERS

Public registers relating to insolvents and others

215. This Chapter applies to a public register established under sections 24,

153 and 165.

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Access to public registers

216. (1) The Commissioner must ensure that all public registers are

available for access and inspection by members of the public during the

Commissioner's ordinary business hours.

(2) However, the Commissioner may refuse access to a public register or

suspend the operation of a public register, wholly or partly -

(a) if the Commissioner considers that it is not practical to provide access

to the register; or

(b) for any other reason as may be prescribed for the purposes of this

section.

Purposes of public registers

217. (1) The public register kept under section 24 has -

(a) the purpose of providing information about unrehabilitated and

rehabilitated insolvents; and

(b) the further purposes specified in subsection (4).

(2) The public register kept under section 153 has -

(a) the purpose of providing information about persons subject to a current

summary instalment order; and

(b) the further purposes set out in subsection (4).

(3) The public register kept under section 165 has -

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(a) the purpose of providing information about persons currently admitted

to the no-asset procedure and persons discharged from that procedure

under section 174; and

(b) the further purposes set out in subsection (4).

(4) The further purposes of the public registers are -

(a) to facilitate the compliance, audit, and other supporting and

administrative functions of the Commissioner, the Minister, the Court

or any other person under this Act or any other law;

(b) to facilitate the enforcement functions and the exercise of the powers of

the Commissioner, Minister, the Court, or any other person under this Act

or any other law; and

(c) to provide statistical information and information for research purposes

in relation to insolvency, summary instalment orders and the no-asset

procedure.

General information to be included in public registers

218. (1) The Commissioner must ensure that the public registers contain

the required information in respect of the following persons-

(a) a person who is or has been an insolvent;

(b) a person who is subject to a current summary instalment order;

(c) a person who is currently admitted to the no-asset procedure, or who

has been discharged from that procedure under section 174.

(2) The required information for the purposes of subsection (1) is the

following:

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(a) the person’s full name;

(b) whether the person-

(i) is currently insolvent, or has been discharged from insolvency;

(ii) is subject to a current summary instalment order; or

(iii) is currently admitted to the no asset procedure, or has been

discharged from the no-asset procedure under section 174;

(c) the liquidation, summary instalment order, or no-asset procedure

number (if any);

(d) the person’s address as contained in -

(i) a statement of the person's financial position;

(ii) an application for a bankruptcy order in respect of the person;

(iii) an application for a summary instalment order in respect of the

person; or

(iv) an application by the person for admission to the no-asset

procedure;

(e) if the person has notified the Commissioner of a change of address, that

address;

(f) if the person has been declared insolvent on a creditor's application, the

person's address as contained in the application;

(g) the person's occupation and current employment status, if known;

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(h) if a liquidation order has been made in respect of the person, the time

and date of the on which the order was made;

(i) if the person is admitted to the no-asset procedure, the date of that

admission;

(j) if the person is discharged from the no-asset procedure under section

174, the date when the person was so discharged;

(k) if the person is a rehabilitated insolvent, the date, type, and conditions

(if any) of the rehabilitation;

(1) if the liquidation order has been set aside, the provision of this Act

under which it was set aside;

(m) if the Court has refused to rehabilitate an insolvent, the details of the

refusal;

(n) if the Court has suspended an insolvent’s rehabilitation, the details of

the suspension;

(o) in the case of a person subject to a current summary instalment order,

the full name and business postal address of the supervisor;

(p) any other information or documents prescribed for the purposes of this

section.

(3) The Commissioner must ensure that a public register does not contain

information relating to a person in respect of whom a liquidation order has been set

aside.

(4) The Commissioner must ensure that all information relating to a person

who has been declared an insolvent and who was rehabilitated from insolvency is

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removed from the public register kept under section 24 as soon as practicable after the

expiry of four years after the date of discharge.

(5) The Commissioner must ensure that all information relating to a person

who has been admitted to the no-asset procedure is removed from the public register

kept under section 165 as soon as practicable after -

(a) the expiry of four years after the date of discharge under section 174; or

(b) the person's participation in the procedure is terminated in accordance

with section 169(a), (c) or (d).

Information kept indefinitely in public registers

219. (1) This section applies to a person who -

(a) is or has been declared an insolvent on two or more occasions; or

(b) is or has been both declared an insolvent and discharged from the no-

asset procedure under section 174.

(2) The Commissioner must ensure that information about a person referred

to in subsection (1) is not removed from a public register kept under this Act.

(3) Subsections (4), (5) and (6) of section 217 do not apply to a person

referred to in subsection (1).

(4) The Commissioner must ensure that the relevant public register contains

all of the information required by this Act about such a person and each insolvency

event.

(5) A person declared insolvent under the repealed Insolvency Act, 1936

(Act No. 24 of 1936) counts for the purposes of subsections (2) and (4).

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Restricted information

220. The Commissioner must ensure that a person only has access to the

documents contained in a public register which are not private and confidential.

Commissioner may omit, remove, restrict access to or amend information in

public registers

221. (1) The Commissioner may omit, remove, or restrict access to

information contained in a public register in respect of a person if the Commissioner

considers that the disclosure of the information via the public register would be

prejudicial to the person's safety or welfare or the safety or welfare of the person's

family.

(2) The Commissioner may amend the information contained in a public

register in order to update the information or correct any error in, or omission from, the

information.

(3) The Commissioner may refuse to provide access to any information in

a public register if, in the Commissioner's opinion, it is impractical to provide the

volume of information requested.

Information in public registers may be used for statistical or research purposes

222. Nothing in this Chapter prevents the use of information contained in the

public registers for statistical or research purposes if the information -

(a) does not identify anyone; and

(b) is not published in any form that could reasonably be expected to

identify anyone.

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Government and Commissioner not liable for certain acts or omissions

223. Neither the Government nor the Commissioner is liable for any act or

omission in relation to the maintenance of a public register under this Division done

or omitted to be done in good faith and with reasonable care.

CHAPTER 8

GENERAL PROVISIONS

Court may stay or set aside liquidation

224. (1) The Court may at any time after the commencement of the

liquidation of an insolvent on the application of a liquidator or creditor and on proof to

the satisfaction of the Court that all proceedings in relation to the liquidation ought to

be stayed or set aside, make an order staying or setting aside the proceedings or for the

continuance of any voluntary liquidation on such terms and conditions as the Court

may deem fit.

(2) The Court may, as to all matters relating to a liquidation, have regard to

the wishes of the creditors as proved to the Court by sufficient evidence.

(3) Notice of an application to set aside liquidation proceedings must be

furnished to-

(a) the head office of every registered trade union that, as far as the

applicant can reasonably ascertain, represents a debtor’s employees, if

any at the commencement of liquidation;

(b) all employees whose addresses can be obtained from the liquidator.

(4) An order setting aside liquidation proceedings must detail the effect of

the order on-

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(a) the assets of the debtor immediately before the commencement of

liquidation;

(b) actions taken by the liquidator during the liquidation; and

(c) contracts of service terminated during the liquidation.

Meetings to ascertain wishes of creditors and others

225. Where by this Act the Court is authorised, in relation to a liquidation,

to have regard to the wishes of creditors -

(a) the value of the respective creditors' claims must also be taken into

consideration; and

(b) the court may, if it thinks fit, for the purpose of ascertaining the wishes

of such creditors direct meetings of the creditors to be called, held and

conducted in such manner as the Court directs, and may appoint a person

to act as chairperson of any such meeting and to report the result thereof

to the Court.

Dispositions after liquidation void

226. (1) Every transfer of an interest in a trust, shares of a company,

members’ interest in a close corporation or other right conferred by agreement effected

after the commencement of the liquidation of an insolvent estate without the sanction

of the liquidator, is void.

(2) Every disposition of its property (including rights of action) by any

debtor being liquidated made after the commencement of the liquidation, is void unless

the Court otherwise orders.

General provisions relating to Part 4, Chapter 3 proceedings

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227. (1) Subject to the provisions of this section and any resolution of

creditors passed at a meeting of creditors, a liquidator has the power, in his or her own

name but on behalf of creditors of an insolvent estate-

(a) to commence any proceedings contemplated in Part 4 of Chapter 3;

(b) to settle or compromise any such proceedings or claims relating thereto;

and

(c) to receive any amounts pursuant to any such proceedings or settlement

or compromise.

(2) Prior to commencing any proceedings referred to in subsection (1), the

liquidator must advise all proved creditors by liquidator’s notice of the steps he or she

proposes to take, with reasons and an explanation of this section and its effect.

(3) Any creditor who does not within two weeks object in writing to the

proposed steps will be deemed to have approved such steps and will, for purposes of

such proceedings and claims, be regarded as a participating creditor.

(4) If any creditor does object-

(a) the objecting creditor will, for purposes of the proceedings and claims

in question, be regarded as an excluded creditor;

(b) the liquidator may not exercise any of the powers referred to in

subsection (1)(b) on behalf of such creditor.

(5) All receipts and expenditure in connection with the proceedings and

claims in question must be accounted for in a special account in such a way that only

participating creditors will benefit from any proceeds and contribute to any

expenditure, and further subject to any directions which the Court may give.

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(6) The liquidator will not be required to give security for the costs of any

such proceedings, unless the Court on application of the defendant or respondent is

satisfied that the proceedings are frivolous or vexatious.

(7) Any amounts received by the liquidator arising from any such

proceedings or claims is, for purposes of remuneration and distribution of proceeds,

treated as if they were proceeds of estate assets.

(8) The proceedings referred to in subsection (1) may be brought by a

liquidator on behalf of creditors who extended credit to the insolvent while the

insolvent was engaged in insolvent trading or, if the liquidator refuses or fails to obtain

the necessary authority or directions from creditors in terms of section 66 of this Act,

by such a creditor or group of creditors.

(9) If any creditor has taken proceedings under subsection (1) no creditor

who was not a party to the proceedings may derive any benefit from any moneys or

from the proceeds of any property recovered as a result of such proceedings before the

claim and costs of every creditor who was a party to such proceedings have been paid

in full.

(10) (a) Proceedings in terms of subsection (1) may be launched by way

of notice of motion.

(b) If the Court is unable to decide the case by way of application procedure

disputes of fact must be referred to oral evidence as may be necessary.

(11) In any proceedings in terms of subsection (1), the Court may give such

further directions, whether in regard to limitation, quantification, procedure,

distribution of proceeds or otherwise as the Court thinks proper for the purpose of

giving effect to any order it may make.

(12) In particular the Court may declare that a person is liable for the costs

of investigating the liability of such person or the costs of administration in the

insolvent estate or such part thereof as the Court may direct.

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(13) Where the Court makes a declaration contemplated in subsection (12),

the Court may give such further directions as the Court thinks proper for the purpose

of giving effect to the declaration, and in particular may-

(a) make the liability of any such person under the declaration a charge on

any debt or obligation due from the insolvent to the person referred to

in that subsection, or on any mortgage or charge or any interest in any

mortgage or charge on any assets of the insolvent held by or vested in-

(i) that person;

(ii) any company or person on the person’s behalf;

(iii) any person claiming as assignee from or through that person; or

(iv) any company or person acting on the assignee’s behalf.

(b) from time to time make such further orders as may be necessary for the

purpose of enforcing any charge imposed under this subsection.

(14) For the purposes of subsection (13), the expression “assignee” includes

any person to whom or in whose favour, by the direction of the person liable, the debt,

obligation, mortgage or charge was created, issued or transferred or the interest was

created, but does not include an assignee for valuable consideration given in good faith

and without notice of any of the matters on the ground of which the declaration is made.

(15) Without prejudice to any other criminal liability incurred, where any

business of an insolvent is carried on recklessly or with such intent or for such purpose

as is mentioned in subsection (1), every person who was knowingly a party to the

carrying on of the business in the manner aforesaid, is guilty of an offence.

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(16) The claim of a creditor against the debtor in respect of the debt which

gave rise to a declaration in terms of Part 4 of Chapter 3, will be reduced by the

amount received by the creditor in terms of the declaration.

Giving of evidence after conviction for failure to testify

228. (1) Any person who is serving a term of imprisonment for the

offence contemplated in section 213(2)(c) and who declares himself or herself willing

to give the required evidence or to produce the required books, documents, or records

may, on the written application of the Commissioner or another person who is to

preside at a meeting or to chair a commission, made to the head of the institution where

that person is being held in custody, be brought before the Commissioner or other

person for the hearing of such evidence or the production of the required books,

documents, or records.

(2) A person contemplated in subsection (1) who has given the required

evidence or produced the required books, documents, or records may on his or her own

application be brought before the Court which imposed the sentence and that Court

may, irrespective of whether or not the Court is composed as it was when the sentence

was imposed, suspend the remaining portion of the sentence or any portion thereof

upon the conditions that the Court deems just, if the Court is satisfied that the said

person has answered fully and correctly all questions put to him or her or produced all

books, documents, or records required of him or her, in so far as it was possible for

him or her to do so.

(3) In order to satisfy itself concerning the facts contemplated in subsection

(2), the Court may accept as conclusive proof of those facts a certificate given by the

presiding officer referred to in subsection (1) to the effect that the said person had

appeared before him or her and had answered fully and correctly all questions put to

him or her and produced all books, documents, or records required of him or her.

Criminal liability of partners, administrators, servants or agents

229. (1) Any person who -

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(a) is or was a member of a partnership and who does or omits to do in

relation to any property or to the affairs of that partnership or debtor or

of the insolvent estate of that partnership or debtor;

(b) is or was charged with the administration of an estate and who does or

omits to do in relation to any property or to the affairs of that estate; or

(c) as a servant or agent has had the sole or practical control of any property

or of the affairs of his or her employer or principal and who does or

omits to do in relation to that property or the affairs of his or her

employer or principal or of the insolvent estate or his or her former

employer or principal,

any act which, if done or omitted by him or her in like circumstances in

relation to his or her own property or affairs or to any property belonging

to, or the affairs of his or her insolvent estate, would have constituted an

offence under this Act, is deemed to have committed that offence.

(2) The liability under subsection (1) of a partner, servant or agent does not

affect the liability under that subsection or under any other provision of this Act, of

another partner or of a servant or agent of the same partnership, or of the employer or

principal of the employee or agent who is so liable.

Jurisdiction of Court

230. (1) The Court has jurisdiction in respect of an application for the

liquidation of the estate of any debtor who -

(a) on the date of the application -

(i) is domiciled within the court's area of jurisdiction;

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(ii) owns or is entitled to property situate within the Court's area of

jurisdiction; or

(b) at any time within 12 months immediately before the date of the

application ordinarily resided or carried on business within the Court's

area of jurisdiction.

(2) If the Court has jurisdiction over a debtor or the insolvent estate of a

debtor by virtue of subsection (1), the Court also has jurisdiction in respect of any

matter regulated by this Act arising out of the liquidation of the estate of the said debtor.

(3) Foreign representatives and foreign creditors have access to the Court

as provided in Chapter 5 of this Act, and liquidation of the estate of a debtor must be

limited as provided in that Chapter.

(4) The Court may rescind or vary any order made by the Court under the

provisions of this Act.

Appeals

231. (1) Any person aggrieved by-

(a) a final liquidation order;

(b) by a refusal to grant a provisional order or a final liquidation order

without a provisional liquidation order;

(c) an order setting aside a provisional liquidation order; or

(d) any other appealable order made in terms of this Act,

may, subject to the provisions of section 18 of the High Court Act, appeal against such

order.

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(2) The Rules of the Court applicable to appeals from judgments or orders

given in civil matters by the Court apply, subject to subsection (3), with the changes

necessitated by the context to appeals contemplated in subsection (1).

(3) Notwithstanding the provisions of any other law, the noting of an appeal

against a final liquidation order does not have the effect of suspending the operation of

any provision of this Act: Provided that pending judgment on appeal no property

belonging to the insolvent estate may be realised without the written consent of the

debtor or, failing such consent, permission granted by order of Court on an application

by an interested person who has furnished security to the satisfaction of the Court for

restitution in the event of the appeal being successful.

(4) If an appeal against a final liquidation order is allowed, the respondent

may be ordered to pay all liquidation costs.

Review

232. (1) Any person aggrieved by any decision, order or taxation of the

Commissioner or by a decision by the liquidator or by a decision or order of an officer

presiding at a meeting of creditors of an insolvent estate, including the liquidator, may,

within 90 days or such further period as the Court may allow for good cause shown,

bring such decision, order or taxation under review by the Court upon notice to the

Commissioner or the presiding officer, as the case may be, and to any other person

whose interests are affected.

(2) If all or most of the creditors are affected by an application referred to

in subsection (1), notice need to be given to the liquidator only.

(3) The Court reviewing any decision, order or taxation has the power to

consider the merits of any such matter, to hear evidence and to make any order it deems

just: Provided that the Court may not re-open any confirmed liquidator's account

otherwise than as is provided in section 109.

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(4) If the Court on review confirms any decision, order or taxation of the

Commissioner or officer referred to in subsection (1) the applicant's costs may not be

paid out of the estate concerned unless the Court otherwise directs.

Commissioner's fees

233. The Commissioner must in respect of the matters mentioned in

Schedule 3, ensure that the fees specified therein are recovered in the manner stipulated

in that Schedule.

Custody and destruction of documents

234. (1) The Commissioner has custody of all documents relating to an

insolvent estate.

(2) The liquidator of an insolvent estate may after three years elapsed as

from the confirmation by the Commissioner of the final liquidation account destroy all

books, documents and records in his or her possession relating to the insolvent estate,

unless the Commissioner consents to the earlier destruction of such book, documents

or records or directs that they be retained for a longer period determined by him or her.

(3) The Commissioner may destroy all records in his or her office relating

to an insolvent estate after five years have elapsed from the rehabilitation of the

insolvent.

Insurer's liability in respect of indemnification of debtor

235. Whenever any person (herein referred to as the insurer) is obliged to

indemnify another person (herein referred to as the insured) in respect of any liability

incurred by the insured towards a third party, such third party is, on the liquidation of

the estate of the insured, entitled to recover from the insurer the amount of the insured's

liability towards the third party, but not exceeding the maximum amount for which the

insurer is bound in terms of the indemnity.

295

Non-compliance with directives

236. (1) Nothing done under this Act is invalid merely by reason of the

non-compliance with any directive prescribed by or in terms of this Act, unless in the

opinion of the Court, or if the Court is not involved, in the opinion of the Commissioner

or the presiding officer, a substantial injustice has thereby been caused which cannot

be remedied by an appropriate order of the Court, the Commissioner or the presiding

officer.

(2) No defect or irregularity in the election or appointment of a liquidator

vitiates anything done by him or her in good faith.

Regulations, policy and other powers of Minister

237. (1) The Minister may make regulations prescribing -

(a) the procedure to be observed in Commissioners' offices in connection

with insolvent estates;

(b) the form, and manner of conducting proceedings under this Act;

(c) the manner in which fees payable under this Act must be paid and

brought to account;

(d) rights of members of the public to inspect public registers;

(e) any matter which in terms of this Act is required or permitted to be

prescribed; and

(f) any matter in respect of which the Minister considers it necessary or

expedient to prescribe in order to achieve the objects of this Act.

(2) A regulation made under subsection (1) may provide for the creation of

offences and imposition of penalties which may not exceed a fine of N$ 500 000 or

296

imprisonment for a period not exceeding two years, or both such fine and such

imprisonment.

(3) The Minister may by notice in the Gazette amend Schedule 2.

(4) Where this Act provides that an amount must be determined from time

to time so as to reflect any subsequent fluctuation in the value of money, the Minister

must before 31 March of each year adjust the amount by notice in the Gazette in

accordance with the fluctuation of the weighted average of the consumer price index

for the preceding period from January to December rounded to the nearest N$100.

(5) The Minister may determine policy for the appointment of a liquidator

or judicial manager by the Commissioner in order to promote consistency, fairness,

transparency and the achievement of equality for persons previously disadvantaged by

unfair discrimination.

(6) Any policy determined in accordance with the provisions of subsection

(5) must be published in the Gazette and tabled in Parliament.

Amendment and repeal

238. (1) The laws mentioned in Schedule 3 are hereby amended or

repealed to the extent indicated in the third column of that Schedule.

(2) Anything done under any provision of any law repealed by subsection

(1) which may be done under a corresponding provision of this Act is deemed to have

been done under that corresponding provision.

Short title and commencement

239. (1) This Act is called the Insolvency Act, 2018, and comes into

operation on a date determined by the Minister by notice in the Gazette.

297

(2) Different dates may be determined under subsection (1) for different

provisions of this Act.

298

SCHEDULE 1

FORM A1

STATEMENT OF DEBTOR'S AFFAIRS

FAILURE TO SUBMIT THIS FORM TO THE COMMISSIONER AND THE

LIQUIDATOR WITHIN 7 DAYS IS A CRIMINAL OFFENCE AND MAY DELAY

REHABILITATION, WHERE APPLICABLE

PART 1

BALANCE SHEET

OF______________________________________________________*

* Here insert the name in full of the debtor

Liabilities N$ Assets N$

Debts due as per

Part 5

Immovable property as per Part 2

Movable property as per Part 2

Outstanding claims, etc, as per Part 3

Deficiency/surplus

Total Total

PART 2

IMMOVABLE PROPERTY

Description of

property

Situation and

extent

Mortgages and other

secured claims

Estimated

values in N$

Property situate

in Namibia

Property

situate elsewhere

Total

299

PART 3

ANY MOVABLE PROPERTY WHATSOEVER WHICH IS NOT INCLUDED

IN PART 4 OR PART 5

Description of

property

Estimated

value

Property situate in Namibia . . . . Property situate

elsewhere . . . . . . . . Rc

Total

Note: Movable property includes assets such as insurance policies and credit balances

in accounts with banks or other institutions or persons. Any merchandise mentioned in

this part must be valued at its cost price or at its market value at the time of the making

of this statement, whichever is the lower, and the statement must be supported by

detailed stock sheets relating to such merchandise.

PART 4

OUTSTANDING CLAIMS, BILLS, BONDS AND OTHER SECURITIES

Names and

residential and

postal address

of the debtor

Particulars of

claim

Estimated

amount good

in N$

Estimated

amount bad or

doubtful in N$

In Namibia

Outside

Namibia

Total

N$

N$

300

PART 5

LIST OF CREDITORS

Name and address of

creditor

Nature and value of security for

claim

Nature of

claim

Amount of

claim in N$

Total

PART 6

MOVABLE ASSETS PLEDGED, HYPOTHECATED, SUBJECT TO A

RIGHT OF RETENTION OR UNDER ATTACHMENT IN EXECUTION OF

A JUDGMENT

Description of

asset

Estimated

value of asset

Nature of

charge on

asset

Amount of

debt to which

charge relates

Name of

creditor in

whose favour

charge is

301

PART 7

ENUMERATION AND DESCRIPTION OF EVERY BOOK OR

DOCUMENTING RECORD IN USE BY THE DEBTOR AT TIME OF THE

LIQUIDATION OR AT TIME WHEN THE DEBTOR CEASED CARRYING

ON BUSINESS

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

PART 8

DETAILED STATEMENT OF CAUSES OF DEBTOR'S INSOLVENCY

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

302

PART 9

PERSONAL INFORMATION

State whether the debtor is married, widowed or divorced:

_______________________

If the debtor is or was married, state -

(a) name or names of spouse or spouses (a 'spouse' means not only a wife or

husband in the legal sense, but also a person who in terms of any legal system

or recognised custom is recognised as such a person’s spouse and also any

person with whom such person is cohabitating in a marriage relationship,

irrespective of whether or not he or she is lawfully married to any other person).

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

(b) whether the debtor is or was married in or without community of property and

whether the accrual system applies

____________________________________________________________________

____________________________________________________________________

(c) date of marriage

____________________________________________________________________

(d) whether the matrimonial property system has been changed since entering into

the marriage and, if so, the nature of the change

____________________________________________________________________

____________________________________________________________________

(e) full names and date of birth of the spouse and, if an identity number has been

assigned, the identity number of the spouse

303

____________________________________________________________________

____________________________________________________________________

State the debtor's nationality

____________________________________________________________________

State the debtor's place of birth, date of birth and, if an identity number has been

assigned, the identity number

____________________________________________________________________

____________________________________________________________________

Was the debtor's estate or the estate of a partnership in which the debtor is or was a

partner previously liquidated or placed in bankruptcy, whether in Namibia or

elsewhere?

____________________________________________________________________

If the preceding answer is in the affirmative, state -

(a) whether debtor's own estate or his partnership's estate was (i) liquidated; or (ii)

placed in bankruptcy

____________________________________________________________________

____________________________________________________________________

(b) the place where and the date when that estate was liquidated or placed in

bankruptcy

____________________________________________________________________

____________________________________________________________________

(c) whether the debtor has been rehabilitated or his estate released; if so, when

____________________________________________________________________

____________________________________________________________________

PART 10

AFFIDAVIT/SOLEMN DECLARATION

304

I, .......................................... declare under oath/solemnly and sincerely declare* that

to the best of my knowledge and belief the statements contained in this Schedule are

true and complete, and that every estimated amount therein contained is fairly and

correctly estimated.

Signature of declarant: ____________________

Sworn/solemnly declared before me on the _____ day of _____________________ at

__________________

____________________

Commissioner of Oaths

____________________

Full names

____________________

Business address

____________________

Designation and area or office

305

SCHEDULE 1

FORM A2

NOMINATION FOR LIQUIDATOR BY CREDITOR

Section 50

RE:______________________________________________________("the Debtor")

1. I understand that application has been/is to be made to the High Court for an

order for the placing of the Debtor in liquidation.

2. I declare that _________________________________________________

("the Creditor") is a creditor of the Debtor.

3. I hereby nominate _______________________________________________

of ________________________ telephone number ____________________ for

appointment as liquidator and request you to make the necessary appointment. The

Creditor intends proving a claim and voting for the final appointment of the

aforementioned person at the first meeting of creditors in this estate.

4. I declare that the Creditor is not a person disqualified, in terms of the provisions

of sections 42 of the Insolvency Act from voting for the appointment of the aforesaid

person as liquidator. As far as I am aware the nominated person is not disqualified from

the aforesaid appointment by virtue of the provisions of section 89 of the Insolvency

Act.

5. I further declare that I have satisfied myself that the amount reflected herein as

owing by the Debtor to the Creditor is, to the best of my knowledge and belief, true

and correct.

6. Creditor Details:

6.1 Name of creditor:________________________________________________

6.2 Address of creditor

306

____________________________________________________________________

6.3 Telephone number of creditor:

_________________________________________

6.4 Fax number of creditor (if any)

_________________________________________

6.5 E-mail address of creditor (if any)

_________________________________________

7. Amount of claim:

_________________________________________________________ (amount in

words)

8. Cause of action: the amount owing by the debtor to the creditor is owed in

respect of:

____________________________________________________________________

9. If the claim is by an employee who is a member of a registered trade union,

state the name of the union:

_________________________________________________________________

____________________

SIGNATURE

_______________________

PRINTED NAME

______________________

DATE

______________________

CAPACITY

307

SCHEDULE 1

FORM A3

NOMINATION FOR LIQUIDATOR BY REGISTERED UNION

(Section 50)

RE:

__________________________________________________________________

("the Debtor")

1. I understand that application has been/is to be made to the High Court for an

order for the placing of the Debtor in liquidation.

2. I declare that _________________________________________________(the

"Union") is a registered trade union which -

(a) represents the employees of the debtor listed in the annexure to this form

signed by me, who were employed by the debtor at the time of

liquidation; or

(b) represents the following number of employees employed by the debtor

at the time of the liquidation, which number is calculated as indicated in

the annexure to this form signed by me.

3. I hereby nominate

__________________________________of________________________

telephone number ____________________ for appointment as liquidator and

request you to make the necessary appointment.

4.1 NAME OF UNION:

_______________________________________________________

4.2 ADDRESS OF UNION:

____________________________________________________

4.3 TELEPHONE NUMBER OF UNION:

_________________________________________

308

4.4 FAX NUMBER OF UNION (IF ANY)

_________________________________________

4.5 E-MAIL ADDRESS OF UNION (IF ANY)

______________________________________

Official Stamp of Registered Union

_______________________ ______________________

SIGNATURE DATE

_______________________ ______________________

PRINTED NAME CAPACITY

309

SCHEDULE 1

FORM B

AFFIDAVIT FOR PROOF OF ANY CLAIM OTHER THAN A CLAIM

BASED ON A PROMISSORY NOTE OR OTHER BILL OF EXCHANGE

(Section 96)

Strike out inapplicable words where * occurs.

In the insolvent estate of: ________________________________________________

Date of liquidation: ____________________________________________________

Name of creditor: ______________________________________________________

Address of creditor: ____________________________________________________

E-mail address of creditor: ______________________________________________

Fax number of creditor: _______________________________________________

Amount of claim at date of liquidation: ____________________________________

I, ________________________________________________ declare *under

oath/solemnly as follows:

(1) *I am the creditor/I am the .................................(capacity) of the creditor and have

authority to make this declaration and submit the claim for proof as appears from the

attached documentation.

(2) *I have personal knowledge of the nature and particulars of the claim/I have

satisfied myself as to the nature and particulars of the claim.

(3) *The claim was not obtained by cession after the commencement of liquidation

proceedings/The claim was obtained by cession on _______________(date).

(4) The nature of the claim (for instance money advanced, goods delivered, salary due)

is ________________________________________________ as appears from the

attached documentation or declaration.

(In respect of debts which accrued over a period or in respect of which payments were

made a statement must be submitted with a brief description of all debits and credits

310

over the period of 12 months immediately preceding the commencement of

liquidation.)

(5) The debt arose on or since ______________(date). *The debt was due to me on the

commencement of liquidation/The debt or part thereof became due to me or will

become due to me after liquidation as set out on the attached statement.

(6) *I hold no security in respect of the debt/The particulars of security held by me for

payment of the debt and the value placed be me on the security (if a value is placed on

the security) are as follows:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

* I do not rely on my security for the payment of my claim./I rely solely on my

security for the payment of my claim.

(7) *To the best of my knowledge no one except the insolvent estate is liable for the

debt or a part thereof/The particulars of others who are to my knowledge liable for the

debt and the security held in respect thereof are as follows:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

(8) *I authorize the liquidator to have any dividend due to me transferred electronically

to my banking account (supply name of account, branch number and account number)

____________________________________________________________________

____________________________________________________________________

__________________

Signature of declarant

*Sworn to/ solemnly declared before me on: ____________________________(date)

at _____________________________________ (place)

311

____________________

Commissioner of oaths

____________________

Full names

____________________

Business address

____________________


312

SCHEDULE 1

FORM C

AFFIDAVIT FOR THE PROOF OF A CLAIM BASED ON A PROMISSORY

NOTE OR OTHER BILL OF EXCHANGE

(Section 96)

Strike out inapplicable words where * occurs.

In the insolvent estate of: ________________________________________________

Date of liquidation: ____________________________________________________

Name of creditor: ______________________________________________________

Address of creditor: ____________________________________________________

E-mail address of creditor: ______________________________________________

Fax number of creditor: _______________________________________________

Amount of claim at date of liquidation: ____________________________________

I, ________________________________________________ declare *under

oath/solemnly as follows:

(1) *I am the creditor/I am the ___________________________________(capacity)

of the creditor and have authority to make this declaration and submit the claim for

proof as appears from the attached documentation.

(2) *I have personal knowledge of the nature and particulars of the claim/I have

satisfied myself as to the nature and particulars of the claim.

(3) *The claim was not obtained by cession after the commencement of liquidation

proceedings/The claim was obtained by cession on ______________________(date).

(4) The debtor was on the commencement of liquidation and still is indebted to

me by virtue of the following *promissory note/bill of exchange:

Date of

note or bill

Name of maker

or drawer

Name of

acceptor

Name of person to

whom payable

Date when

payable

Name of

endorser

Amount

in N$

313

(5) The nature of the claim (for instance money advanced, goods delivered, salary due)

is ______________________________________________________________ as

appears from the attached documentation or declaration.

(In respect of debts which accrued over a period or in respect of which payments were

made a statement must be submitted with a brief description of all debits and credits

over the period of 12 months immediately preceding the commencement of

liquidation.)

(6) That the said *note/bill is in all respects genuine and valid.

(7) *I hold no security in respect of the debt / The particulars of security held by me

for payment of the debt and the value placed be me on the security (if a value is placed

on the security) are as follows:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

* I do not rely on my security for the payment of my claim./I rely solely on my security

for the payment of my claim.

(8) *To the best of my knowledge no one except the insolvent estate is liable for the

debt or a part thereof / The particulars of others who are to my knowledge liable for

the debt and the security held in respect thereof are as follows

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

*(9) I authorize the liquidator to have any dividend due to me transferred electronically

to my banking account (supply name of account, branch number and account number)

____________________________________________________________________

____________________________________________________________________

314

__________________


*Sworn to/ solemnly declared before me on: ____________________________(date)

at _____________________________________ (place)

____________________

Commissioner of oaths

____________________

Full names

____________________

Business address

____________________


315

SCHEDULE 1

FORM D

FORM AND CONTENTS OF ACCOUNTS

(Section 106)

1. The accounts must be lodged on A4 standard paper and totals must be added up

separately at the foot of each sheet with a total at the end of each account.

2. Heading:

The heading of the account must contain the following information:

(a) The name of the debtor;

(b) the address of the debtor;

(c) the identity number or date of birth or registration number of the debtor;

(d) the commencement of liquidation;

(e) the ordinal number of the account or supplementary account;

(f) the nature of the account (eg liquidation account);

(g) where applicable, whether it is a final or supplementary account;

(h) whether it is a distribution account or a contribution account or both;

(i) the Commissioner's reference number.

3. Liquidation account

3.1 A liquidation account must contain a record of all receipts derived from the

realisation of assets and disbursements made or to be made in defraying the costs of

liquidation, except receipts and disbursements reflected in a trading account.

3.2 The record of receipts and disbursements must reflect full particulars explaining

their nature and state the amount thereof in a money column.

3.3 The gross proceeds of assets must be reflected and the disbursements incidental to

the realisation must be entered as disbursements.

316

3.4 Receipts and disbursements must upon the request of the Commissioner be

supported by satisfactory vouchers numbered consecutively in the top right-hand

corner by reference to the number appearing in the account opposite the relative item.

3.5 The account must reflect separately the distribution to be made (if any) to secured

claims, preferent claims and concurrent claims and the contribution to be levied (if

any).

3.6 If security has been realised, the liquidation account must contain a free residue

account dealing with receipts not subject to security and consecutively numbered

encumbered asset accounts dealing with receipts subject to security.

3.7 If disbursements or income are apportioned amongst the free residue and

encumbered asset accounts the liquidation account must indicate how the

apportionment has been calculated.

3.8 An encumbered asset account must be drawn to indicate the proceeds of the

realization of security, the disbursements payable out of the proceeds of the security

and the amount payable to a creditor or creditors with the period for and rate at which

interest before and after liquidation (if any) has been calculated.

4. Trading account

When the liquidator carried on business by either purchasing stock or entering into new

transactions for the purpose of trading, a separate trading account including the

following items only, must be submitted:

(a) The value of the stock on hand at the commencement of liquidation shown on

the credit side;

(b) the receipts and disbursement on the trading account;

(c) the value of stock on hand at the date on which the accounts were made up shown

on the debit side with a note of the items in the liquidation account reflecting the

proceeds of the stock that has been realised (if any).

317

5. Bank reconciliation

5.1 The liquidator must lodge complete statements up to the date on which the accounts

were made up of all accounts opened in terms of section 75.

5.2 The account must contain a bank reconciliation statement with the following

information:

(a) The balance in the cheque account and the date at which the bank statement

reflected that balance;

(b) the amount of the contribution provided for in the contribution account (if any);

(c) the amount (if any) of each outstanding deposit with sufficient particulars to

explain its nature or a reference to the item in the liquidation account which

together with the even numbered voucher (if any) explain its nature;

(d) the amount of each disbursement in the liquidation account that must still be paid

with sufficient particulars to explain its nature or a reference to the item in the

liquidation account which together with the even numbered voucher, if any,

explain its nature;

(e) the amount of the payment (if any) still to be made to each secured creditor with

an explanation if this amount does not agree with the amount reflected in the

distribution account;

(f) the total amounts to be paid to preferent creditors and concurrent creditors (if

any) with an explanation if these amounts do not agree with the totals reflected

in the distribution account;

(g) the amount (if any) to be transferred to a next account.

6. Distribution account, contribution account or contribution and distribution account

6.1 The liquidator , upon the request of the Commissioner, lodge all proved claims and

unproved claims admitted or compromised by the liquidator or proved in an action at

law.

318

6.2 The account must indicate the basis for contribution if this is not the amount of the

concurrent claim and contain the following columns that are applicable to the account:

(a) claim reference number;

(b) creditor's name and if dividends are to be transferred electronically the account

name, branch number and account number of the creditor's account;

(c) total claim;

(d) concurrent claim;

(e) secured claim;

(f) award in previous accounts;

(g) concurrent award with a separate column for interest after liquidation (if any)

and an explanation in the account of the rate at and period for which interest has

been calculated;

(h) secured or preferent award;

(i) amount of contribution;

(j) shortfall.

7. Certificate

7.1 Each liquidator must sign the certificate under oath or affirmation.

7.2 The certificate must state that the account contains a true account of the

administration of the estate.

7.3 If it is a final account, the certificate must state that so far as the liquidator is aware

all the assets of the insolvent estate have been disclosed in the accounts.

7.4 If it is not a final account, the certificate must reflect a list of all unrealised assets

of which the liquidator is aware with the reason why the assets have not been realised

and an estimate of the value of the assets.

319

SCHEDULE 1

FORM E1

NOTICE IN TERMS OF SECTION 29(6)(a) OF THE INSOLVENCY ACT ___

OF_____ (THE "ACT") TO ATTEND A HEARING IN TERMS OF SECTION

28 (7)(a) OF THE ACT

In re

INSOLVENT ESTATE OF

____________________________________________________________________

COMMISSIONER'S REFERENCE NO.: __________________________________

To: ________________________________________________________________

You are hereby notified in terms of section 28(7)(a) to appear at a hearing to be held

at ______________________________________________________________

(details of venue) on the ______ day of _______________ 2_____, at ___h___ to give

evidence and supply proof of earnings received by you or your dependants out of the

exercise of your profession, occupation or employment and all assets or income

received by you or your dependants from whatever source and the estimated expenses

for your own support and that of your dependants.

Dated at _________________________________this _______ day

of_________________ 2_______

__________________

Magistrate

____________________________________________________________________

____________________________________________________________________

320

(Here insert details of the name, address, telephone number, fax number and e-mail

of the liquidator or the legal practitioner acting for the liquidator)

NOTE:

Your attention is specifically drawn to the provisions of sections 91 and 213(2)(a) and

(b) of the Act which sections are printed on the reverse side hereof.

321

SCHEDULE 1

FORM E2

SUMMONS IN TERMS OF SECTION 96(13) OF THE INSOLVENCY ACT

___ OF 2____ (THE "ACT") TO ATTEND A MEETING OF CREDITORS

FOR QUESTIONING IN TERMS OF SECTION 96(13) OF THE ACT

In re:

INSOLVENT ESTATE OF

____________________________________________________________________


To: ________________________________________________________________

You are hereby summonsed in terms of section 96(13) to appear in person at a meeting

of creditors in the above estate to be held at

______________________________________________________(details of venue)

on the ______ day of _______ 2___, at ___h___ to be questioned by the presiding

officer, the liquidator or a creditor who has proved a claim against the estate, or the

representative of the liquidator or such creditor in regard to your claim against the

insolvent estate. You are summonsed to bring with you all books, documents or records

in support of your claim.

Dated at _________________________________this _______ day

of_________________ 2_______

__________________

Presiding Officer

____________________________________________________________________

322

____________________________________________________________________

(Here insert details of the name, address telephone number, fax number and e-mail of

the liquidator or the legal practitioner acting for the liquidator)

NOTE:

In terms of section 96(14), if a person who wishes to prove a claim is called upon to

be questioned as contemplated in subsection (12) of that section and fails without

reasonable excuse to appear or refuses to take the oath or make a solemn declaration

or to submit to questioning or to answer fully and satisfactorily any lawful question put

to him or her, his or her claim, may be rejected.

323

SCHEDULE 1

FORM E3

SUMMONS IN TERMS OF SECTION 86(1) OF THE INSOLVENCY ACT ___

OF 2____ (THE "ACT") TO ATTEND A MEETING OF CREDITORS FOR


In re:

INSOLVENT ESTATE OF

____________________________________________________________________


To: ________________________________________________________________

You are hereby summonsed in terms of section 86(1) to appear in person at a meeting

of creditors in the above estate to be held at

______________________________________________________(details of venue)

on the ______ day of _______ 2___, at ___h___ to give evidence and to be questioned

on all matters relating to the insolvent or his or her business or affairs, whether before

or after the liquidation of the estate, and concerning any property which at any time

belonged to the insolvent estate and to produce to the presiding officer at the meeting

all the books, papers and documents specified hereunder:

LIST OF BOOKS, PAPERS OR DOCUMENTS TO BE PRODUCED

Description of book,

paper or document

Date (if any) Copy or original required

324

Dated at _________________________________this _______ day

of_________________ 2_______

__________________

Presiding Officer

____________________________________________________________________

____________________________________________________________________

(Here insert details of the name, address

telephone number, fax number and e-mail of the liquidator or the legal practitioner

acting for the liquidator)

NOTES:

1. A cheque for witness fees in the form of appearance money and travelling

allowances in the sum of N$ _____

(__________________________________________, N$) is attached to your

copy of the summons. You are entitled to make representations to the Presiding

Officer of the meeting for additional necessary witness fees.

2. Your attention is specifically drawn to the provisions of sections 87(3), 87(6),

87(9), 91 and 92(10) of the Act which sections are printed on the reverse side

hereof.

325

SCHEDULE 1

FORM E4

SUMMONS IN TERMS OF SECTION 88(3)(b) OR 88(6) OF THE



In re:

INSOLVENT ESTATE OF

____________________________________________________________________


To: ________________________________________________________________

You are hereby summonsed in terms of section 88(3)(b) or 88(5) to appear in person

at a questioning in the above estate to be held at

______________________________________________________(details of venue)

on the ______ day of _______ 2___, at ___h___ to be questioned on property in your

possession belonging to the insolvent estate, amounts due by you to the insolvent estate

and all matters relating to the affairs of the insolvent and his or her property and to

produce to the presiding officer at the questioning all the books, documents or records

specified hereunder:

LIST OF BOOKS, PAPERS OR DOCUMENTS TO BE PRODUCED


paper or document


326

Dated at _________________________________this _______ day

of_________________ 2_______

__________________

Commissioner/Court/ Presiding Officer

____________________________________________________________________

____________________________________________________________________




NOTES:

1. A cheque for witness fees in the form of appearance money and travelling

allowances in the sum of N$ _____

(__________________________________________, N$) is attached to your

copy of the summons. You are entitled to make representations to the Presiding

Officer of the meeting for additional necessary witness fees.

2. Your attention is specifically drawn to the provisions of sections 87(3), (6), (9),

(10), 87(7), (8) and (10), 91 and 213(2)(a) and (b) of the Act which sections

are printed on the reverse side hereof.

327

SCHEDULE 1

FORM E5

SUMMONS IN TERMS OF SECTION 90(1) OF THE INSOLVENCY ACT

____ OF 2_____ (THE "ACT") TO ATTEND A QUESTIONING IN TERMS

OF SECTION 90 OF THE ACT

In re:

INSOLVENT ESTATE OF

____________________________________________________________________


To: ________________________________________________________________

You are hereby summonsed in terms of section 90(1) to appear in person at a

questioning in the above estate to be held at

______________________________________________________(details of venue)

on the ______ day of _______ 2___, at ___h___ to furnish information and to be

questioned on all information within your knowledge concerning the insolvent or his

or her estate or the administration of the estate and to produce to the presiding officer

at the meeting all the books, documents and records specified hereunder:

LIST OF BOOKS, DOCUMENTS OR RECORDS TO BE PRODUCED


paper or document


Dated at _________________________________this _______ day

of_________________ 2_______

328

__________________

Commissioner

____________________________________________________________________

____________________________________________________________________




NOTES:

Your attention is specifically drawn to the provisions of sections 87(3), 87(6), 87(9),

87(10), 90(5), 90(6), 91 and 213(2)(a) and (b) of the Act which sections are printed

on the reverse side hereof.

329

FORM F

STATUTORY DEMAND IN TERMS OF SECTION 16(2)(a) OF THE

INSOLVENCY ACT (ACT NO_ OF 2___)

WARNING

This is an important document. If you should fail to respond to the document within

21 days after service thereof your estate may be liquidated and your assets taken

away from you.

DEMAND

To: ______________________________________________________________

Address: _________________________________________________________

________________________________________________________

The creditor claims that you are indebted to him or her for the following amount which

is now due and payable and that he holds no security for the amount claimed.

When incurred

Type of debt

(cause of action)

Amount due as at

the date of the

demand

The creditor demands that you pay the amount due within three weeks after the service

of this demand or give security to the reasonable satisfaction of the creditor therefor,

or enter into a compromise in respect thereof.

330

Should you fail to comply with this demand, this does not preclude you from opposing

an application for the liquidation of your estate. If you deny indebtedness wholly or in

part, you should contact the creditor without delay.

SIGNATURE: ___________________________________________________

NAME OF CREDITOR: ________________________________________________

(PRINT)

DATE: ___________________________________________________

CAPACITY: ___________________________________________________

(IF NOT CREDITOR PERSONALLY)

ADDRESS:

____________________________________________________________________

____________________________________________________________________

TEL NO: ________________________________________________________

PERSON YOU MAY CONTACT IF NOT CREDITOR PERSONALLY:

NAME: ____________________________________________________________

ADDRESS:

____________________________________________________________________

____________________________________________________________________

If debt obtained by cession or otherwise:

Name

Date of cession or other act

331

Original creditor

Cessionaries

332

SCHEDULE 2

TARIFF A

SHERIFF'S FEES

(SECTION 59)

In this Tariff a reference to the tariff in an item refers to the items in the tariff applicable

according to Part 14 of Rules of the High Court of Namibia made under section 39 of

the High Court Act, 1990 (Act No. 16 of 1990), as amended from time to time.

1. For service or attempted service of documents the tariff in item 2 of Annexure

C.

2. For each separate attachment of property the tariff in item 5 of Annexure C.

3. For making an inventory and the list of books and records referred to in section

59(7) of the Insolvency Act the tariff in item 7 of Annexure C.

4. For reporting on the attachment of assets the tariff in item 7 of Annexure C.

5. For making of all necessary copies of documents the tariff in item 10 of

Annexure C.

6. Travelling allowance, per kilometre or fraction thereof according to the tariff

in item 3 of Annexure C.

7. For each necessary letter, excluding formal letters accompanying attachment or

service of documents the tariff in item 15 of Annexure C.

8. For each necessary attendance by telephone (in addition to prescribed trunk

charges) the tariff in item 16 of Annexure C.

9. For sending and receiving of each necessary facsimile per A4 size page (in

addition to telephone charges) the tariff in item 16 of Annexure C.

333

10. Bank charges: Actual costs incurred regarding bank charges and cheque forms.

11. For any work necessarily done by or on behalf of the sheriff in performing the

duties under section 59 of the Insolvency Act, for which no provision is made

in this tariff: An amount to be determined by the Commissioner.

RULES FOR THE CONSTRUCTION OF THE TARIFF AND THE GUIDANCE OF

THE SHERIFF

(1) Where there are more ways than one of doing any particular act, the least

expensive way must be adopted unless there is some reasonable objection

thereto, or unless the party at whose instance process is executed desires any

particular way to be adopted at his or her expense.

(2) Where any dispute arises as to the validity or amount of any fees or charges the

matter must be determined by the Commissioner.

(3) The sheriff may pay rent, if necessary for premises required for the storage of

goods attached, for a period of one month or such longer period as the

Commissioner or the liquidator may authorize.

334

SCHEDULE 2

TARIFF B

REMUNERATION OF LIQUIDATOR

(SECTION 65)

1. On the gross proceeds of any immovable property sold by the liquidator or the

value at which property constituting security has been disposed of to a creditor

in settlement of his or her claim or the gross proceeds of any sales by the

liquidator in carrying on the business of the debtor, or any part thereof, in terms

of section 45(3)(d): 5 per cent

2. On the gross proceeds of any other movable property sold by the liquidator or

other gross amounts collected by the liquidator: 10 per cent

Provided that the total remuneration of a liquidator in terms of this tariff may not be

less than N$ 5 000.

REMUNERATION OF INTERIM LIQUIDATOR (SECTION 56)

A reasonable remuneration to be determined by the Commissioner, not to exceed the

rate of remuneration of a liquidator under this tariff.

335

SCHEDULE 2

TARIFF C

COMMISSIONER'S FEES OF OFFICE

(SECTION 74(1)(b))

1. On all insolvent estates under final liquidation in which the total gross value of

the assets according to the liquidator’s account for each complete N$5 000

……N$25

subject to a minimum fee of N$500 and a maximum fee of N$25 000.

2. (a) For a copy of or an extract from any document preserved in the office

of a Commissioner, when made in such office (including the

certification of such copy or extract), a fee of N$5,00 must be paid.

(b) For the certification of such copy or extract not made in such office a

fee of N$10,00 must be paid.

3. (a) The fees referred to in item 1 must be assessed by the Commissioner

and is payable on or before a date determined by the Commissioner to

any receiver of revenue. Proof of such payment must be submitted by

the liquidator to the Commissioner.

(b) The payment of the fees referred to in item 2 must be denoted-

(i) by affixing adhesive revenue stamps to; or

(ii) by impressing stamps by means of a franking machine approved

by the Commissioner of Inland Revenue on, the written request

for the rendering by the Commissioner of the service in question.

336

SCHEDULE 3

PROVISIONS OF LAWS AMENDED OR REPEALED

[ ] Words in bold type in square brackets indicate omissions from existing enactments.

Words underlined with solid line indicate insertions in existing

enactments.

No and year of

law

Short title

Extent of amendment or repeal

Act No. 32 of

1944

Magistrates’ Courts Act,

1944

1. The amendment of section 65A by the

addition of the following subsection:

“(6) If it appears to the court during

proceedings in terms of subsection (1) that

there are reasonable grounds for

suspecting that any person has committed

an offence, the court shall transmit the

relevant information and certified copies

of relevant documents to the Regional

Commander of the Commercial Branch of

the Namibian Police, or a similarly ranked

law enforcement official in whose area of

jurisdiction the proceedings was held or

the offence is suspected of having been

committed to enable the Commercial

Branch to determine whether criminal

proceedings should be instituted in the

matter.”.

337

No and year of

law

Short title


2. The amendment of section 67 by the

addition of the following paragraph:

“(h) necessary medicine and medical

devices.”.


substitution for paragraph (b) of subsection

(1) of the following paragraph:

“(b) states that the total amount of all

his or her unsecured debts does

not exceed the amount prescribed

by the Minister from time to time

by notice in the Gazette.”.

3. The amendment of section 74B by the

addition of the following subsection:

“(6) If it appears to the court during a

hearing in terms of subsection (1)

that there are reasonable grounds

for suspecting that any person has

committed an offence, the court

shall transmit the relevant

information and certified copies of

relevant documents to the

Regional Commander of the

Commercial Branch of the

Namibian Police, or a similarly

338

No and year of

law

Short title


ranked law enforcement official in

whose area of jurisdiction the

proceedings was held or the

offence is suspected of having

been committed to enable the

Branch to determine whether

criminal proceedings should be

instituted in the matter.".

Act No. 57 of

1951

Merchant Shipping Act,

1951

The amendment of section 51 by the

substitution for subsection (2) of the

following:

“(2) The provisions of subsection (1)

shall be subject to the provisions of

sections 33, 34, 35, 36 and 73 [twenty-

six, twenty-seven, twenty-nine, thirty,

thirty-one and eighty-eight] of the

Insolvency Act, __ (Act No. __ of___

[1936 (Act No. 24 of 1936)]; and in the

application of the said section 73 [eighty-

eight] to the mortgage of a ship or share

the references in that section to the

registrar of deeds and a mortgage bond

shall be construed as references to the

proper officer and a deed of mortgage,

respectively.”.

Act No. 73 of

1968

Usury Act, 1968 The amendment of section 5 by the

substitution for the phrase “Insolvency Act,

339

No and year of

law

Short title


1936 (Act No. 24 of 1936)” of the phrase

“Insolvency Act, __ (Act No. _ of ___).”.

Ordinance No.

11 of 1976

Atmospheric Pollution

Prevention Ordinance,

1976


substitution for subsection (6)(b) of the

following:

“(b) Any amount recoverable under

paragraph (a), together with

interest thereon calculated at the

rate of six percent per annum with

effect from the date upon which

such amount became due, shall,

notwithstanding anything to the

contrary contained in any

ordinance made by Parliament

[the Legislative Assembly] or

any proclamation issued by the

President [Administrator] or any

regulations made under any such

ordinance or proclamation, form a

first charge against the land upon

which the premises concerned are

situated, and shall rank in priority

to all other debts whatsoever other

than expenses, costs, fees and

charges referred to in section 74

[89] of the Insolvency Act, _ (Act

No. _ of ___) [1936 (Act 24 of

1936)], or any other Act. [of the

Parliament of the Republic of

340

No and year of

law

Short title


South Africa which applies in

the Territory]”.

Act No. 112 of

1976

Estate Agents Act, 1976 The amendment of section 30 by the

substitution for paragraph (f) of subsection

(1) of the following:

“(f) commits any deed of insolvency

referred to in section 16 [8] of

the of the Insolvency Act, _

(Act No. _ of ___) [1936 (Act

24 of 1936)];”

Act No. 66 of

1965

Administration of

Estates Act, 1965


substitution for the definition of “act of

insolvency” of the following definition:

“act of insolvency” means an act of

insolvency in terms of section 16 [8] of

the of the Insolvency Act, _ (Act No. _

of ___) [1936 (Act 24 of 1936)]”



following subsection:

“(1) Subject to the provisions of

subsections (2) and (3), interest calculated

on a monthly basis at the rate per annum

341

No and year of

law

Short title


determined from time to time by the

Minister of Finance, [Cabinet] and

compounded annually at the thirty-first

day of March, shall be allowed on each

dollar [rand] of the principal of every sum

of money received by the Master for

account of any minor, lunatic, unborn heir

or any person having an interest therein of

a usufructuary, fiduciary or

fideicommissary nature, or for an

insolvent in terms of section 112 of the

Insolvency Act, __ (Act No__ of ___).”


substitution for -

(a) subsection (4) before the proviso of

the following:

“(4) On the receipt of the notification

under subsection (3), the executor

shall, without delay, by notice in

writing (a copy of which he or she

shall lodge with the Master) report

the position of the estate to the

creditors, informing them that

unless a majority in number and

value of all the creditors instruct

him or her in writing, within a

period (not being less than

342

No and year of

law

Short title


fourteen days) specified in the

notice, to surrender the estate

under the Insolvency Act, __ (Act

No. __ of ___) [Insolvency Act,

1936 (Act No. 24 of 1936)], he or

she will proceed to realize the

assets in the estate and distribute

the proceeds in accordance with

the provisions of subsection (5):”

(b) subsection (5)(b) of the following:

“(b) frame a distribution account

providing for the

distribution of the proceeds

in the order of preference

prescribed under the said

Insolvency Act, ____,

[1936] in the case of a

[sequestrated] liquidated

estate:”.

(c) subsection (7) of the following:

“If any creditor has under

paragraph (b) of the proviso to

subsection (4) placed a value on

any security, the executor may at

any time within six weeks

thereafter deal therewith with the

343

No and year of

law

Short title


changes necessitated by the

context [mutatis mutandis] in the

manner provided in

section 67 [eighty-three] of the

said Insolvency Act __, [1936].”.

(b) subsection (9) of the following

“The provisions of this section

shall not prevent the sequestration

of any estate under the said

Insolvency Act __ [1936].”.

Act No. 26 of

1988

Close Corporations Act,

1988

1. The substitution for the phrase

“Insolvency Act, 1936 (Act No. 24 of

1936)” of the phrase “Insolvency Act,

__ (Act No. _ of ___) ” wherever it

occurs in the Close Corporations Act.


substitution for subsection (2)(a) of the

following:

“(2)(a) The provisions of Chapter

4 [sections 119, 120, 123 and

124(1) and (5)] of the

Insolvency Act, ___ (Act No. __ of

__ [1936 (Act 24 of 1936)], relating

to compositions shall with the

344

No and year of

law

Short title


changes necessitated by the

context [mutatis mutandis] apply

in respect of the procedure and

effect of any such compositions,

and the [the liquidator's] functions

of any insolvency practitioner

thereunder.”.

4. The substitution for section 74 of the

following section:

“Appointment of liquidator

74. Sections 53 and 51 to 58 of

the Insolvency Act __ (Act No. _ of

___) apply with the necessary

changes to the appointment of a

liquidator in the case of a corporation

being wound up as a voluntary

winding-up by members: Provided

that the Insolvency Commissioner as

defined by section 1 of that Act must

take into consideration any resolution

or further resolution passed at a

meeting of members nominating a

person as liquidator.”.

Act, No. 16 of

1990

High Court Act, 1990


substitution for paragraph (b) of subsection


345

No and year of

law

Short title


“(b) thereafter the claims of other

creditors whose writs have been

lodged with the deputy-sheriff in

the order of preference

appearing in Part 9 of Chapter 2

[section 96 and sections 99 to

103] of the Insolvency Act, ___

(Act No. __ of __ [1936 (Act 24

of 1936)].”.

Act No. 23 of

1992

Local Authorities Act,

1992


substitution for item (ii) of paragraph

(a) of the definition of “owner” for the

following:

“(ii) is a person whose estate has been [sequestrated] liquidated, means the [trustee] liquidator in the insolvent estate of such person;”.


substitution for the preamble of the

following:

“78. Subject to the provisions of

section 69(4) [89(4)] of

the Insolvency Act, ___ (Act No.

__ of __ [1936 (Act 24 of 1936)]the

registrar of deeds shall not register

a transfer of any immovable

property situated within a local

346

No and year of

law

Short title


authority area, unless there is

produced to him or her-”.

Act No. 34 of

1994

Social Security Act,

1994



following:

“(6) Subject to the Insolvency Act,

___ (Act No. __ of __ [1936 (Act 24

of 1936)] and the Companies Act, 28

of 2004 [1973 (Act 61 of 1973)], the

executive officer may institute

proceedings for the [sequestration]

liquidation of the estate or the

winding-up, as the case may be, of any

employer in respect of whom a

statement has been filed in terms of

subsection (2), and for such purpose

the executive officer shall be deemed

to be the creditor in respect of any

contributions or interest due or payable

by that employer.”.

Act No. 2 of

1995

Foreign Courts Evidence

Act, 1995


substitution for subsection (1)(c) of the

following:

“(1)(c) at any meeting of creditors to

be held in terms of a law of any such

347

No and year of

law

Short title


country similar to section 80 and 81

[40] of the Insolvency Act, ___ (Act

No. __ of __ [1936 (Act No. 24 of

1936)];”.

Act No. 23 of

1996

Cooperative Societies

Act, 1996





occurs in the Cooperative Societies Act.


substitution for the postamble of that

section of the following:

“have a preferent claim against

any balance of the free residue of

such member's insolvent estate

after the expenditure referred to in

Part 9 of Chapter 2 [sections 96 to

102, inclusive,] of that Act have

been provided for as contemplated

in those sections.”.

Act No. 2 of

1998

Banking Institutions

Act, 1998





occurs in the Banking Institutions Act.

348

No and year of

law

Short title




following:

“(2) Any person referred to in

subsection (1) who refuses or fails to

comply with a direction under that

subsection, shall, for the purposes of

section 345 of the Companies Act, be

deemed to be unable to pay its debts,

or for the purposes of section 16 [8] of

the Insolvency Act, ___ (Act No. __

of __ [1936 (Act No. 24 of 1936)], be

deemed to have committed an act of

insolvency, as the case may be, and

the Bank may apply to the High Court

for the winding-up, or for the

liquidation [sequestration] of the

estate, of such person, as the case may

be.

Act No. 18 of

2003

Payment System

Management Act, 2003

The substitution for the phrase “Insolvency

Act, 1936 (Act No. 24 of 1936)” of the

phrase “Insolvency Act, __ (Act No. _ of

___) ” wherever it occurs in the Payment

System Management Act.

349

No and year of

law

Short title


Act No. 28 of

2004

Companies Act, 2004





occurs in the Companies Act.



following:

“(1) The cost of giving security by a

person appointed as liquidator to an

amount which the Master considers

reasonable must, subject to section

69(4) [89(1)] of the Insolvency Act,

___ (Act No. __ of __ [1936 (Act No.

24 of 1936)], be paid out of the assets

of the company concerned as part of

the costs of the liquidation.


substitution for subsection (6)(g) of

the following:

“(g) with the necessary changes,

to exercise the same powers as are by

sections 43 and 48 [35 and 37] of


of __ [1936 (Act No. 24 of 1936)],

350

No and year of

law

Short title


conferred on a liquidator [trustee]

under that Act, on the like terms and

conditions as are mentioned in those

sections, but, the powers conferred

by section 43 [35] of that Act, must

not be exercised unless the company

is unable to pay its debts;

4. Section 418 is amended by the


following:

“(2) Section 84 [52] of


of __ [1936 (Act No. 24 of 1936)],

does, with the necessary changes,

apply to the right of any creditor to

vote at a meeting of creditors in a

winding-up of a company.

5. The amendment of section 422 by-

(a) the substitution for subsection (1)

of the following:

“(1) Sections 91, 92 and 93 [66,

67 and 68] of


__ of __ [1936 (Act No. 24 of

1936)], do, in so far as they can be

351

No and year of

law

Short title


applied and are not inconsistent

with this Act, with the necessary

changes, apply in relation to-

(a) any person who is, in terms of

section 420(1) of this Act,

required to attend any

meeting of a company being

wound up and which is

unable to pay its debts, as if

that person were an insolvent

required to attend any

meeting referred to in section

85 [64] of

the Insolvency Act, ___

(Act No. __ of __ [1936 (Act

No. 24 of 1936)]; and

(b) any person summoned,

in terms of section 420(2) of

this Act, to attend any

meeting of the creditors of

that company or to produce

any book or document at that

meeting, and section 87 [65]

of the Insolvency Act, ___

(Act No. __ of __ [1936 (Act

No. 24 of 1936)], does, in so

far as it can be applied and is

not inconsistent with this Act,

352

No and year of

law

Short title


with the necessary changes,

apply in relation to the

production of any book or

document or the questioning

of any person under section

421 of this Act, as if that

person had been summoned

to produce any book or

document or were being

questioned under section 87

[65] of the Insolvency Act,

___ (Act No. __ of __ [1936

(Act No. 24 of 1936)].”.

(b) by the substitution for subsection


“(2) In applying sections 91, 92

and 93 [66, 67 and 68] of


__ of __ [1936 (Act No. 24 of

1936)], as contemplated in

subsection (1), any reference in

any of those sections or in section

85 and 87 [64 or 65] of that Act-

(a) to the estate of an

insolvent, must be

construed as a reference to

353

No and year of

law

Short title


the estate of the company

concerned;

(b) to the liquidator

[trustee] of an insolvent

estate, must be construed

as a reference to the

liquidator of that

company;

(c) to a meeting of the

creditors of an insolvent,

must be construed as a

reference to a meeting of

the creditors of that

company;

(d) to a creditor who has

proved a claim against an

insolvent estate, must be

construed as a reference

to a person who has

proved a claim against

that company;

(e) to the business or affairs or

property of an insolvent,

must be construed as a

reference to the business

354

No and year of

law

Short title


or affairs or property of

that company;

(f) to any person indebted to

an insolvent estate, must

be construed as a

reference to a person

indebted to that

company;

(g) to the liquidation

[sequestration] of an

insolvent estate, must be

construed as a reference

to the commencement of

the winding-up of that

company.



following:

(3) [Sections 151 and 151bis] Section

232 of the Insolvency Act, ___ (Act

No. __ of __ [1936 (Act No. 24 of

1936)], apply with reference to any

fixing of remuneration by the Master

under this section.

355

No and year of

law

Short title




following:

“(4) The notice in a newspaper as

contemplated in subsection (3) must

comply with section 82 [40(3)(c)] of


of __ [1936 (Act No. 24 of 1936)], and

must appear at least 10 days before the

date of the meeting.

8. The substitution for section 444 of the

following:

“Period of judicial management to

be discounted in determining

preference under mortgage bond

444. The time during which any

company being a mortgage debtor in

respect of any mortgage bond, is

subject to a judicial management

order, must be excluded in the

calculation of any period of time for

the purpose of determining whether

that mortgage bond confers any

preference in terms of section 73 [88]

of the Insolvency Act, ___ (Act No.

__ of __ [1936 (Act No. 24 of 1936)],

356

No and year of

law

Short title


as applied to the winding-up of

companies by this Act.

Act No. 29 of

2004

Prevention of Organised

Crime Act, 2004





occurs in the Prevention of Organized

Crime Act.

2. The amendment of section 48-

(a) by the substitution for subsection

(2)(a) of the following:

“(2) When the estate of a defendant

who has directly or indirectly made an

affected gift to any other person is

liquidated [sequestrated]-

(a) a court must not set aside the

disposition of that gift under

section 35 and 36 [29, 30 or 31]

of the Insolvency Act, ___ (Act

No. __ of __ [1936 (Act No. 24

of 1936)]”.

(b) the substitution for subsection

(3)(b) of the following:

357

No and year of

law

Short title


“(b) in respect of any property

that the liquidator [trustee]

concerned is entitled to claim from

the insolvent under section 29 [23]

of the Insolvency Act, ___ (Act

No. __ of __ [1936 (Act No. 24 of

1936)].”.

Act No. 11 of

2007

Labour Act, 2007

The substitution for the phrase “Insolvency

Act, 1936 (Act No. 24 of 1936)” of the phrase

“Insolvency Act, __ (Act No. _ of ___) ”

wherever it occurs in the Labour Act.

Act no. 14 of

2015

Deeds Registries Act,

2015


substitution for subsection (1)(e) of the

following:

“(e) destroy or otherwise dispose of, in

the prescribed manner, any

prescribed record cancelled in

terms of this Act or any record in

connection with a caveat that has

expired in terms of section 26

[17(3)] of the Insolvency Act, ___

(Act No. __ of __ [1936 (Act No.

24 of 1936)].

358

SCHEDULE 4

STATEMENT IN RESPECT OF PROPOSED PRE-LIQUIDATION

COMPOSITION: MAGISTRATE’S COURT

(SECTION 121)

PART A

PERSONAL PARTICULARS OF DEBTOR

Full names and surname ________________________________________________

____________________________________________________________________

Address _____________________________________________________________

____________________________________________________________________.

(Documents in connection with the composition may be delivered to the debtor at this

address until such time as he or she has notified the magistrate of a change of address)

Date of birth_________________________________________________________

Identity number, if one has been assigned ________________________

Marital status _________________________________________________________

If married, state—

• full names of spouse (“spouse” means a spouse in the legal sense, and even if

there is such a spouse, also a spouse according to any law or custom or a person

living with another as a spouse)

__________________________________________

• date of birth of spouse ____________________________________________

• identity number of spouse, if one has been assigned _____________________

359

• whether the debtor is or was married in or without community of property and

whether the accrual system applies

_____________________________________________________________

• date of marriage __________________________________________

• whether the matrimonial property system has changed since entering into the

marriage and, if so, the nature of the change

_____________________________________________________________

Whether the debtor’s estate has been placed under administration during the last five

years or whether it is under administration at present and, if so, the date of the

administration order and whether it has been concluded

____________________________________________________________________

Whether the debtor has during the last six months lodged a composition with a

magistrate for submission to creditors

____________________________________________________________________

Whether the debtor’s estate has been liquidated during the last ten years and, if so, the

commencement of liquidation and the High Court that issued the liquidation order

____________________________________________________________________

PART B

APPLICABLE STATUTORY PROVISIONS

The debtor declares that he or she is aware of the following statutory provisions in

connection with his or her application:

1. If the composition provides for the payment of a cash amount for distribution

among creditors, the amount must, pending the outcome of the offer of

composition, be invested with a legal practitioner or someone else whom the

court approves in an interest-bearing savings account in trust. The debtor must

offer proof that the cash amount has been invested in this manner.

360

2. If a debtor incurs debt during the period from lodging the composition with the

magistrate until creditors have voted on the composition, he or she must notify

the creditor who offers him or her credit of the pending composition and at the

first appearance before a magistrate in connection with the composition, he or

she must provide full particulars concerning the said debt incurred by him or

her. During the said period or after a composition has been accepted, a debtor

may not alienate, encumber or voluntarily dispose of any property which must

be made available to creditors in terms of the composition or do anything which

can impede compliance with the composition. A debtor who contravenes these

provisions is guilty of an offence.

3. If the composition provides for payments by the debtor in determined

instalments or otherwise, the acceptance of the composition has the effect of a

judgment in terms of section 65 of the Magistrates’ Courts Act, 1944 (Act No.

32 of 1944) in respect of the payments. Any person who in terms of the

composition must receive the payments on behalf of creditors, or if there is no

such person, any creditor who is in terms of the composition entitled to a benefit

out of the payments, has the rights which a judgment creditor would have in

terms of the section.

4. The magistrate may revoke the composition for cogent reasons. “Cogent

reason” includes the following:

(a) If the debtor does not comply with his or her obligations in terms of the

composition; or

(b) If the debtor renders false information in his or her statement or in the

course of the questioning; or

(c) If the debtor gives a benefit in respect of a claim which falls under the

composition to a creditor on whom the composition is binding and who

is not entitled to the benefit in terms of the composition.

PART C

361

INCOME AND EXPENDITURE

The name and business address of the debtor’s employer or, if the debtor is not

employed, the reason why he or she is not employed:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

The debtor’s trade or vocation and his or her gross weekly or monthly income as well

as the income of his or her spouse living in with him or her, and particulars of all

deductions therefrom by way of debit order or otherwise, supported as far as possible

by written statements by the employer of the debtor or his or her spouse:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

A detailed list of the debtor’s weekly or monthly necessary expenses and the expenses

of persons who are dependent on him or her, including the travelling expenses of the

debtor or his or her spouse to and from work and such expenses of his or her children

to and from school, and expenses required to retain assets that are subject to the

composition:

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

The number and ages of persons who are dependent on the debtor or his or her spouse

and their relationship to the debtor or his or her spouse

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

PART D

362

ASSETS

(1) Assets not subject to the composition

Description of asset: Value in N$: Whether subject to

secured claim? (Bond,

property tax, pledge,

cession, hire- purchase,

instalment

contract, etc.)

(2) Assets subject to the composition

Description of asset: Value in N$: Whether subject to

secured claim? (Bond,

property tax, pledge,

cession, hire- purchase,

instalment contract, etc)

363

(3) The debtor affirms that assets which are subject to the composition are in safe

custody, that obligations in respect of the assets are included in “necessary

expenses” in Part C above, and that such obligations will be fulfilled until

conclusion of the composition.

PART E

LIABILITIES

(1) Liabilities not subject to security:

Name and address of

creditor

Amount in N$ Particulars if the debt is

not immediately claimable

(2) Debts subject to security:

Name and address of

creditor

Amount

in N$

Nature of security and

identification of asset

subject to security (Part D

above)

Particulars if the debt is not

immediately claimable

(3) Name and address of any other person who is apart from the debtor liable for

any of the abovementioned debts:

____________________________________________________________________

____________________________________________________________________

364

AFFIDAVIT/SOLEMN DECLARATION

I,___________________________________________________________________

declare under oath/solemnly and sincerely declare* that to the best of my knowledge

and belief the statements contained in this form are true and complete, and that every

estimated amount therein contained is fairly and correctly estimated.

___________________


Sworn/solemnly declared before me on the _____ day of _________________at

_______________________.

* Delete which is not applicable.

__________________________________

Commissioner of Oaths

__________________________________

Full names

__________________________________

Business address

__________________________________

Designation and area of office

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