QUESTION 2[18 marks]

Rian and Elsabe got married to each other in community of property on 8 April 2008. Prior to their marriage Rian signed an ante-nuptial contract in terms of which he undertook to transfer his R5 million house situated in Camps Bay, Cape Town, to Elsabe. Rian only fulfilled his promise years later when he transferred his Camps Bay house to Elsabe on 16 September 2015. Immediately after the transfer Rian's liabilities exceeded his assets and he began to experience problems repaying his creditors. Rian has fallen behind with his rental payments for the apartment that he rents from Mr Saccor. He has also not paid Max, whom he employs as a gardener, for a period two months now. Fearing that one of his creditors would apply for the sequestration of his estate, Rian moved some of his property to his grandfather's farm in the Karoo where he hoped his creditors would never find it.

Rian owes money to several people including Aleck to whom he owes R500000 being the purchase price for a car that Aleck sold to him in terms of an agreement of sale. Aleck has come to you for advice as he would like to apply for the sequestration of Rian's estate.

Answer the following questions based on the above facts

2.1Advise Aleck in detail concerning the burden of proof, that is, what he would be required to prove in order to succeed in an application to sequestrate Rian's estate. Your answer must relate to the facts given above and you must show whether or not Aleck would be able to discharge the burden of proof based on the facts (5)

2.2Assume that Aleck succeeds in having Rian's estate declared insolvent and that Mr Smith has been appointed as the trustee of Rian's insolvent estate. Discuss in detail whether there is any basis upon which Mr Smith could recover the Camps Bay house given to Elsabe by Rian and, if so, what requirements would Mr Smith have to prove. In your answer you must also discuss any defence that could possibly be raised by Elsabe and whether Mr Smith would succeed in reclaiming the house (6).

2.3Assuming that the court declares Rian insolvent discuss what effect this would have on Max's employment contract with Rian (2).

2.4Giving reasons for your answer explain what type of creditor Mr Saccor would be in relation to Rian's insolvent estate (3).

2.6As a debtor who was struggling to pay off his debts what other legal options were available to Rian other than applying for the voluntary surrender of his estate to be sequestrated? (2).