Insolvency Act.pdf - Intax Info

Secured Claims (ss 87-89)
87. Landlord's hypothec
No tacit or legal hypothec (under which shall not be included any right of retention) shall
give any preference on the estate of the insolvent except the landlord's hypothec; and that
hypothec shall give a preference for all rent in respect of the period current with and up to the
sequestration and arrear of rent, not exceeding three months, in respect of a period immediately
prior thereto.
88. Effect of general bond and general clause; mortgages for future advances
(1) No registered general bond shall confer any preference in respect of immovable
property, and no general clause in a registered special mortgage shall confer any preference in
respect of immovable property or of movable property which was not delivered to the mortgagee
at the time of the mortgage and retained by him during the term thereof:
Provided that nothing in this section shall affect any preference conferred by a general
clause in any mortgage bond passed in favour of a Master in terms of any law for the time being
in force in Botswana relating to the administration of the estates of deceased persons.
(2) On the commencement of this Act, priority under any mortgage for future advances
shall be deemed to depend on the date of the registration of that mortgage and not on the date
of any advance made under the same.
89. Costs to which securities are subject
(1) The cost of maintaining, conserving, and realizing any property which is subject to
any special mortgage, legal hypothec, pledge or right of retention shall be paid out of the
proceeds of that property, if sufficient, and if insufficient, by those creditors pro rata who are
entitled to rank against those proceeds in priority to other persons.
(2) The trustee's remuneration in respect of that property and all rates, taxes, licences
and other payments due in respect thereof at the date of sale and necessary to be paid in order
to enable the trustee to give transfer thereof shall form part of the costs of realization.
(3) If a secured creditor, when proving his claim, states in his affidavit that he relies for
the satisfaction of his claim solely on the proceeds of the property which constitues his security,
he shall not, except as is prescribed in the first and third provisos to section 92, be liable for any
other costs of sequestration than the costs specified in this section.
(4) Interest on a secured claim for the year preceding the year current with the
sequestration and for the year current with the sequestration shall have the like preference as
the capital sum.
(5) Notwithstanding any written law prohibiting the transfer of property on which there
are unpaid rates, taxes or licences, no trustee shall be prevented from transferring any property
by reason of any unpaid rates, taxes or licences thereon which at the date of sequestration had
been in arrear for longer than the calendar year current with the sequestration and the calendar
year preceding.
Distributions (ss 90-91)
90. Distribution to creditors
(1) After payment of the costs and charges mentioned in section 89(1) and (2) the
proceeds of any property subject to a special mortgage, legal hypothec, pledge or right of
retention shall be applied in payment of the claims thereby secured in their legal order of
preference with interest from the date of sequestration to the date of payment:
Provided that whenever no claim has been proved in respect of a debt secured by a
special mortgage over immovable property of the insolvent and the trustee is not satisfied that
such debt has been discharged, the trustee shall deposit with the Master for payment into a
special account to be kept by the Master for the purpose, the proceeds of the sale of such
property, not exceeding such capital amount of the said special mortgage and such arrears of
interest as the mortgage would have had a preferent right to claim; and the amount so
deposited or any part thereof shall be paid to the mortgagee if, within a period of one year after
Copyright Government of Botswana