ARRANGEMENT OF SECTIONS

PART I
Preliminary

SECTION

1.        Short title

2.        Interpretation

PART II
Sequestration and Attachment of Estate

A. Voluntary Surrender

3.        Circumstances under which an estate may be surrendered

4.        Publication of notice of surrender and lodging of debtor's schedules or statement at Master's office

5.        Making of sequestration order by the court

6.        Prohibition of sale of property of estate after publication of notice of surrender

7.        Notice of surrender not to be withdrawn without the consent of the Master

B. Compulsory Sequestration

8.        Acts of insolvency

9.        Petition for sequestration of estate

10.        Provisional sequestration

11.        Order of sequestration of estate of individual and of partnership

12.        Making of provisional order and service of rule nisi upon the debtor

13.        When provisional order may be set aside or petition dismissed

14.        Petitioning creditor to prosecute sequestration proceedings until trustee appointed

15.        Compensation to debtor if petition unfounded and vexatious

16.        Lodging by insolvent of schedules or statement with Master

C. Attachment and Custody of the Estate

17.        Transmission of sequestration order by Registrar to Master and other officers

18.        Appointment of curator bonis by Master for temporary custody of estate

19.        Mode of attachment by sheriff

PART III
Effects of Sequestration

Effect upon the Insolvent and his Property

20.        Effect of sequestration on insolvent's property

21.        Payment of debts after sequestration

22.        Powers, duties and privileges of the insolvent during sequestration

23.        Power of Master to have movable property sold when not over P400 in value

24.        Estate to remain vested in trustee until rehabilitation

Effect upon Antecedent Transactions

25.        Dispositions without value

26.        Antenuptial contracts

27.        Life insurance policies

28.        Voidable preferences

29.        Undue preferences

30.        Collusive dealings

31.        Liability of the legal representative of an estate

32.        Proceedings to set aside antecedent transactions

33.        Indemnification by trustee of creditors

34.        Sales of a business

35.        Contracts to buy immovable property

36.        Sales for cash

37.        Leases

38.        Effect of sequestration on apprenticeship agreements

PART IV
Meetings of Creditors

Meetings: How Convened and When

39.        Time and place of meetings of creditors

40.        First and second meetings

41.        When further meetings to be called and notice of the same

42.        Special meetings

Proof of Debts

43.        Proof of liquidated claims

44.        Duty of the trustee upon delivery of claims to him

45.        Mutual dealings and set-off

46.        Particulars of tacit hypothec or right of retention to be specially mentioned

47.        Proof of conditional claim

48.        Provisions in case of simultaneous sequestration of partnership estate and estate of a partner

49.        Mode in which claims to be made up

50.        Withdrawal of claim and conditions thereof

Voting at Meetings: Recording Resolutions

51.        Right to vote and reckoning of votes

52.        Questions upon which creditors may vote

Election of Trustee

53.        Time of election of trustees and number to be elected and manner of election

54.        Provisions in case no trustee elected at any meeting

Examination of the Insolvent

55.        Insolvent to attend without notice first and second meetings of creditors

56.        Examination of insolvent

57.        Steps to be taken on suspicion of an offence

PART V
Liquidation and Distribution of Estate

Appointment and Removal of Trustees and Provisional Trustees

58.        Power of court to appoint provisional trustees

59.        Persons disqualified from being elected trustees

60.        Power of court to declare a person disqualified from being a trustee

61.        Grounds for removal of trustee

62.        Circumstances under which a trustee may resign from office or absent himself from Botswana

63.        Election of new trustee on resignation or removal of a trustee

64.        Election of new trustee on death of trustee

65.        Confirmation of election of trustee by court or Master

Duties and Powers of Trustee in the Liquidation of the Estate

66.        Opening of banking account and books

67.        Retention of moneys or employment of assets by trustees

68.        Legal proceedings against the estate

69.        Power of trustee to take legal advice

70.        Improper advising or conduct of legal proceedings

71.        Recovery of debts due to estate

72.        Subsistence allowance for insolvent and family

73.        Sale of movable property on authorization of Master

74.        Continuation of insolvent's business

75.        Duty of trustee at second meeting to report and take instructions in certain matters

76.        What reports to be made at second meeting of creditors

77.        Sale of property after second meeting and manner of sale

78.        Realization of securities

79.        Power to compound for debts due to the estate and to submit matters in dispute to arbitration

80.        Continuance of pending legal proceedings by surviving or new trustee

81.        Remuneration of trustee or curator bonis

PART VI
Application of Assets

Costs and Preferent Claims

82.        Funeral expenses; deathbed expenses

83.        Costs of sequestration

84.        Costs of execution

85.        Servants' wages

86.        Preference in regard to taxes on income

Secured Claims

87.        Landlord's hypothec

88.        Effect of general bond and general clause; mortgages for future advances

89.        Costs to which securities are subject

Distributions

90.        Distribution to creditors

91.        Equalizing dividends in case of late proof

Contributions

92.        Contributions by creditors towards costs of sequestration when free residue insufficient

PART VII
Trustee's Accounts

Form of Accounts

93.        Liquidation account and plan of distribution

94.        Manner in which plan of distribution and plan of contribution to be prepared

95.        Power to apply to the court for an order on the trustee to lodge liquidation account

96.        Costs where Master has refused to grant trustee extension of time

Confirmation of Account: Dividends and Contributions

97.        Inspection of account: places for and period of

98.        Objections by insolvent or other interested parties to account

99.        Confirmation of account

100.        Distribution of estate and collection of contributions from creditors

101.        Trustee to produce acquittances for dividends or to pay over unpaid dividends

102.        Application to court for an order to pay dividend

103.        Surplus money to be paid to Master

104.        Enforcing payment of contributions of creditors by writ of execution

Authentication of Accounts

105.        Authentication of confirmed accounts by Master and transmission to magistrate and local inspection of same

PART VIII
Compositions and Rehabilitations

Compositions

106.        Offer of composition or security for composition by insolvent

107.        Effect of acceptance of offer of composition

108.        Payment of moneys in pursuance of offer of composition to be made through trustee

Rehabilitations

109.        Application for rehabilitation and conditions of making the same

110.        Security to be furnished prior to application for rehabilitation

111.        Facts to be averred by insolvent on application for rehabilitation

112.        Opposition to or refusal by court of rehabilitation

113.        Effect of order of rehabilitation

114.        Illegal inducements to vote for composition or not to oppose rehabilitation

115.        Proceedings to recover penalty

PART IX
Assignments

116.        Voluntary assignments not affected

117.        Meaning of assignment of estate by debtor

118.        Debtor may assign his estate

119.        Who may execute deed of assignment

120.        Effect of execution of deed of assignment

121.        Duties of debtor assigning estate to transmit schedules and give notice

122.        Effect of publication of notice of assignment

123.        When deed may be signed by creditors entitled to sign

124.        When deed not signed

125.        Duty of Master if creditors do or do not take action to set aside assignment or place estate under sequestration

126.        Attestation of signatures to deed of assignment

127.        Effect of registration of deed of assignment

128.        Supervision of assigned estate by Master

129.        Costs of assignment

PART X
Search Warrants and Examinations

Concealed Property

130.        Search warrants

Examination of Insolvent and other Persons by Order of Court

131.        Examination of insolvent and other persons and production of books and documents

132.        Expenses of person examined

133.        Apprehension of persons failing to appear to undergo examination

134.        Committal to prison of persons refusing to answer questions or produce documents, etc. and bankers' evidence

135.        Appeal to court against such order of committal

136.        Limited protection of magistrate for warrant illegally issued by him

PART XI
Offences

Offences prior to Sequestration or Assignment

137.        Concealing, etc. books, assets, or destruction or disposition of same

138.        Concealment of liabilities or pretence to existence of assets

139.        Failure to keep proper records

140.        Undue preferences, contracting debts without expectation of ability to pay, etc.

Offences after Sequestration or Assignment

141.        Failure to give information as to or delivery of assets, books, etc.

142.        Obtaining credit during insolvency, offering inducements, etc.

143.        Failure to attend meetings or give explanation of insolvency

144.        False answers on oath while under examination

145.        Failure to appear before meeting of creditors or before the court or a magistrate

146.        Failure of debtor or spouse to appear to give evidence in proceedings

147.        Inducement by consideration or promise to do or omit certain acts in relation to insolvent estate

148.        Removing or concealing property to defeat an attachment or failure to give information

149.        Liability of partners or administrators

150.        Liability of agents and managers and evidence of liability or date thereof

PART XII
Judicial

151.        Jurisdiction of the court

152.        Review by and appeal to the court

153.        Power of the President to make rules

PART XIII
Miscellaneous

154.        Duty of trustee to assist in relation to prosecution of insolvent

155.        Evidence

156.        Formal defects

157.        Notices

158.        Proceedings against the trustee or assignee

159.        Fees

160.        Custody of documents and admissibility of copies

161.        Destruction of documents

162.        Saving of law as to land settlement

163.        Special provision in case of sale of goods under a suspensive condition

164.        Rights of purchaser of immovable property who has paid part of purchase price

165.        Deceased estates placed under sequestration

166.        Power of President to make regulations

First Schedule - Forms

Second Schedule

Third Schedule - Fees

Proc. 25, 1929,
Proc. 21, 1930,
Cap. 69, 1948,
Cap. 82, 1959,
Proc. 4, 1959,
Proc. 29, 1961,
Law 27, 1962,
HMC Order 1, 1963,
Law 23, 1964,
L.N. 55, 1965,
L.N. 84, 1966,
L.N. 94, 1966,
Act 41, 1972,
Act 3, 1981,
Act 14, 2005.

An Act to make provision for the administration of insolvent and assigned estates and for matters incidental thereto.

[Date of Commencement: 23rd August, 1929]

1.       Short title

            This Act may be cited as the Insolvency Act.

2.       Interpretation

            In this Act, unless the context otherwise requires-

            "account" means liquidation account and plan of distribution or of contribution, or of distribution and contribution, as the case may require;

            "bailiff" means any bailiff of a magistrate's court, or any official lawfully acting as such, and includes any duly appointed deputy bailiff;

            "court" means the High Court of Botswana but, in sections 25, 28, 29, 30 and 32 includes a magistrate's court acting within its jurisdiction, and in relation to any offence against this Act the term "court" or "the court" means a magistrate's court having jurisdiction in respect of that offence within Botswana;

            "creditor" includes any person who or any estate of a person which, is a creditor in the usual sense of the word;

            "debtor", when used in connection with an estate which is about to be sequestrated or assigned, includes any person who, or any estate of a person which, is a debtor in the usual sense of the word, except a body corporate or a company or other association of persons which may be placed in liquidation under the law for the time being in force relating to the winding up of companies;

            "disposition" means any transfer or abandonment of rights to property and includes sale, lease, mortgage, pledge, conveyance, delivery, payment, release, compromise, donation or any contract therefor, but does not include a disposition in compliance with an order of the court;

            "free residue", in relation to an estate, means that portion of the estate under sequestration which is not subject to any right of preference by reason of any special mortgage, legal hypothec, pledge or right of retention;

            "good faith", when used in connection with dispositions of property, means the absence of any intention to prejudice creditors in obtaining payment of their debts or to prefer one above another;

            "immovable property" means land and every right or interest in land or minerals which is registrable under the Laws of Botswana in any deeds or other registration office wherein title to immovable property or mining title may be registered;

            "insolvent" means a debtor whose estate is under sequestration;

            "marketable security" means any stock, debenture, share or any other interest whatever capable of being sold in a share market or exchange and includes also the scrip, certificate, warrant or other instrument by which the title to such stock, debenture, share or other interest is represented;

            "Master" means the Master of the High Court and includes, to the extent to which he is empowered to act, any Assistant Master;

            "movable property" means every kind of property and every right or interest which is not immovable property;

            "preference", in regard to any claim in an estate under sequestration, means the right to have assets of the estate applied in satisfaction of that claim in preference to other claims;

            "property" includes movable or immovable property wherever situate within Botswana and includes contingent interests in property;

            "provisional order" means an order whereby an estate is placed under sequestration provisionally;

            "qualified accountant" means an accountant holding such qualifications as may be prescribed;

            "Registrar" means the Registrar of the High Court;

            "security" as distinguished from "marketable security", in relation to the claim of a creditor, means property of the insolvent over which the creditor has a preference right by virtue of any special mortgage, legal hypothec, pledge or right of retention, but does not include property over which the creditor has, or purports to have, a preferent right by reason of a mortgage or pledge of the general assets of the estate or of the general assets of any business belonging to the estate;

            "sequestration order" means any order whereby an estate is placed under sequestration or under provisional sequestration, when such order for provisional sequestration has not been set aside;

            "sheriff" means any person appointed in that capacity by the Minister or any person lawfully acting as such and includes any duly appointed deputy sheriff;

            "special mortgage" does not include any document which, having been executed after the coming into effect of this Act, purports to pledge as security for a debt movable property which has not been delivered to and retained by the pledgee;

            "trader" means any person who carries on any trade, business, industry, or undertaking in which goods are sold, bought, exchanged, or manufactured for the purpose of sale or exchange;

            "trustee" means the trustee in any estate under sequestration, and includes a provisional trustee;

            "unliquidated claim" means a claim the amount of which has not been determined by agreement or by a judgment of a court or otherwise and includes a claim for damages or for an interdict.