In the case of Harksen v Lane NO and Others, the issue was raised under the property clause (section 28) of the interim Constitution. Jeanette Harksen argued that the transfer of her property to the trustee of her husband's insolvent estate, as outlined in section 21 of the Insolvency Act, constituted expropriation without compensation, which the interim Constitution requires. Her argument rested on the idea that section 21 effectively transferred ownership of the solvent spouse's property to the trustee. However, the court concluded that the intent and effect of section 21 was not to permanently strip the solvent spouse of her rightful property, but rather to ensure that the insolvent estate received the property it was entitled to. Therefore, the court ruled that section 21 of the Insolvency Act did not equate to expropriation (or compulsory acquisition, as termed in other countries) of the solvent spouse’s property.
paraphrse:
Harksen v Lane NO and Others,
63 was brought on the basis of the property
clause (section 28) in the interim Constitution.64 It was argued on behalf of
Jeanette Harksen that the vesting of her property in the trustee of the insolvent
estate of her husband, in terms of section 21 of the Insolvency Act, amounted to an
expropriation of her property without any provision for compensation, as required
by the interim Constitution. Her argument was based on the premise that section
21 has the e¡ect of transferring ownership of the property of the solvent spouse to
the trustee of the insolvent estate.65 The court, however, taking into account that
the purpose and e¡ect of section 21 was not to divest, save temporarily, the solvent
spouse of the ownership of property which is rightfully hers, but to ensure that the
insolvent estate is not deprived of property to which it is entitled, held that
section 21 of the Insolvency Act did not amount to expropriation (or compulsory as it is known in other jurisdictions) of the solvent spouse’s property.
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