The Need to Clarify the Sheriff’s Duties when Executing Writs of Execution that Could Indicate the Debtor’s Insolvency

• Jurisdiction: South Africa
• Author: Marumoagae, C.
• Date: 17 June 2020
• Published date: 17 June 2020
• Pages: 298-321

THE NEED TO CLARIFY THE SHERIFF’S

DUTIES WHEN EXECUTING WRITS OF

EXECUTION THAT COULD INDICATE THE

DEBTOR’S INSOLVENCY

CLEMENT MARUMOAGAE*

Senior Lecturer, School of Law, University of the Witwatersrand

KGOSI MOKGOETSI**

Associate Lecturer, School of Law, University of the Witwatersrand

Abstract

This paper examines the duties of the sheriffs when executing writs of

execution that could potentially indicate debtors’ insolvency. It

demonstrates that the law is not clear regarding the sheriff’s duty to

search for disposable property and the duty of care in relation to the

manner in which the nulla bona returns should be prepared. While

section 8(b) of the Insolvency Act clearly requires the debtor to indicate

disposable property upon being requested to do so, nonetheless, the

lengths to which the sheriff should go in order to satisfy him/herself

that there is insufficient disposable property to satisfy the judgment

debt if no disposable property has been indicated are not clear. This

paper advances the argument that there is a need to provide legislative

clarity on the duties of sheriffs when executing writs of execution that

have the potential of leading to the debtor’s insolvency.

I INTRODUCTION

The main thrust of the South African insolvency law is to ensure that the

insolvent’s collective creditors are eventually paid part of what they are

owed. This is despite the fact that ultimately insolvent persons will be

released from their debts when their estates are sequestrated. In other

words, the sequestration process is not aimed at discharging debts, but

rather at ensuring an orderly payment of prescribed portions of

creditors’ claims in accordance with their rankings. Over the years,

scholars have questioned the unapologetic approach of South African

*LLB LLM Diploma in Corporate Law (Wits) LLM (NWU) Diploma in Insolvency Law

and Practice (UP).

** BA Hons (UFS) LLB (Wits) LLM Candidate (Wits).

298

(2019) 31 SA Merc LJ 298

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insolvency law that is centered on the pecuniary benef‌it that should be

derived by a collective body of creditors. Certain commentators have

even argued that this may possibly be unconstitutional in certain

respects.

1

Most of these scholars have shown some level of sympathy for

debtors and advocate a consideration of the plight of the ‘harassed’

debtors.

2

Nonetheless, it is true that: ‘South African insolvency law aims

to provide for an equitable distribution of the debtor’s property to the

advantage of creditors. It is not expected to benef‌it the debtor.’

3

Apart from drastic sequestration proceedings, a creditor may institute

civil proceedings against the debtor to recover the amount that he or she

is owed without taking the interests of the debtor’s other creditors into

account. Should the court grant judgment in favour of the creditor and

the debtor fails to pay as ordered, such a creditor can apply for a warrant

of execution authorising the sheriff of the court to attach property of the

debtor, realise it, and raise suff‌icient amount to satisfy the judgment

debt. If the debtor fails, upon being requested by the sheriff, to satisfy the

judgment debt or indicate suff‌icient disposable property that can be sold

to satisfy the judgment debt, he or she can be ‘deemed’ to be insolvent in

terms of section 8(b) of the Insolvency Act.

4

While this provision

appears to be clear as to when debtors will be ‘deemed’ to be insolvent, it

is not clear on the precise duties and functions of sheriffs that could

potentially indicate debtors’ insolvency where debtors are unable to

either pay or indicate suff‌icient disposable property when sheriffs

1

Boraine et al, ‘The pro-creditor approach in South African Insolvency Law and Possible

Impact of the Constitution’ (2015) 3 Nottingham Insolvency and Business Law e-Journal 59;

Roestoff & Renke, ‘Debt Relief for consumers — Insolvency and Consumer Protection

Legislation (Part 2)’ (2006) 27 Obiter 99; Roestoff & Coetzee, ‘Consumer debt relief in South

Africa: Lessons from America and England and Suggestions for the Way Forward’ (2012) 24

SA Merc LJ 24; Coetzee, ‘Is the Unequal Treatment of Debtors in Natural Person Insolvency

Law Justif‌iable? A South African Exposition’ 2016 International Insolvency Review 49.

2

Boraine et al, (2015) 3 Nottingham Insolvency and Business Law e-Journal 81. See also

INSOL International ‘Consumer debt report: Report of f‌indings and recommendations

(2001)’ available at https://www.insol.org/_f‌iles/pdf/consdebt.pdf 6, where it is argued that:

‘Insolvency laws providing for a discharge of the consumer debtor will generally be regarded

as a solution for their f‌inancial diff‌iculties’.

3

Evans, ‘Waiving of Rights to Property in Insolvent Estates and Advantage to Creditors in

Sequestration Proceedings in South Africa’ (2018) 51 De Jure 298, 300. See also Ex Parte Pillay;

Mayet v Pillay 1955 (2) SA 309 (N) 311; R v Meer 1957 (3) SA 614 (N) 619; Ex Parte Ford 2009

(3) SA 376 (WCC) 383; Ex Parte Arntzen 2013 (91) SA 49 (KZP) para 13; Ex parte

Shmulker-Tshiko [2013] JOL 2999 (GSJ) para 8; and Botha v Botha (4457/2016) [2016]

ZAFSHC 194 (17 November 2016) para 10. These cases illustrate that the sequestration

process is a legislative exercise specif‌ically designed to ensure that all of the insolvent’s

realisable assets are taken from the insolvent’s control in order to be sold to enable creditors to

share the proceeds in accordance with their rankings. This procedure enables a joint debt

collection initiative by all creditors who have proved their claims, some of whom are forced to

receive only part of what they are owed.

4

24 of 1936.

THE NEED TO CLARIFY THE SHERIFF’S DUTIES 299

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