1 The office of trustee is a creature of statute and he derives his powers and duties mainly from the Act.2 He occupies a position of trust towards the creditors of the insolvent estate as well as the insolvent. His main functions are to collect, preserve and realise the assets of the insolvent estate. His statutory duties and powers are summarised below. (a) To take charge of property, etc The trustee is obliged to take charge of the property of the estate3 and to furnish the Master with a valuation of the movable property thereof by an appraiser; to open a banking account4 and to open a book and record therein a statement of all moneys, goods, books, accounts and other documents received by him on behalf of the estate.5 He must proceed to recover (if necessary, by legal proceedings) all debts owing to the estate.6 The trustee may recover property claimable from the insolvent in terms of section 23 of the Act by writ of execution issued by the Registrar upon the production to him of a certificate by the Master that the property stated therein is so claimable.7 A trustee who has reason to believe that any property, books or documents to which he is entitled in terms of section 69(1) of the Act, is concealed or otherwise unlawfully withheld from him, may apply to a magistrate for a search warrant which will enable the trustee to search for and take possession of such property, books or documents.8 (b) Carrying on insolvent's business The trustee is not permitted to carry on the business of the insolvent unless authorised thereto by the creditors or, in the absence of instructions from them, the Master.9 (c) Sale of assets With the consent of the Master a trustee may sell movable assets of the estate before the second meeting of creditors.10 Subject to this, and the provisions operative in respect of movable property held by a creditor as security for his claim,11 the property in the estate is sold by the trustee after the second meeting of creditors and in accordance with the directions given at that meeting.12 A provisional trustee may not without the authority of the Master sell property of the estate.13 When an appeal has been noted against a final order of sequestration the written consent of the insolvent is required in terms of section 150(3) of the Act in order to realise any property belonging to his insolvent estate. (d) Investigation of affairs and reports to creditors The trustee must investigate the affairs and transactions of the insolvent prior to sequestration and submit a full written report thereon at the second meeting or, with the written permission of the Master obtained before the second meeting, at the adjourned second meeting.14 At least 14 days before the advertised date of the meeting at which the report is to be submitted, a copy of such report must be sent by the trustee by registered post to each creditor whose name and address is known to him, together with a copy of the inventory made by the sheriff of the movable property of the insolvent which he attached upon his receipt of the sequestration order,15 a copy of the valuation of movable property furnished by the trustee to the Master and any recommendation in respect of any resolution or direction which in the trustee's opinion ought to be passed or given at such meeting.16 At least 24 hours before the advertised time for the commencement of the meeting the trustee must submit to the officer who is to preside thereat an affidavit proving compliance with these provisions.17 It must be noted that, while creditors may, at the meeting, direct what action should be taken in respect of matters reported to them,18 if they do not do so any resolution or direction alleged in the aforesaid affidavit to have been recommended to creditors, and which they could lawfully have passed or given at the meeting, will be deemed to have been passed or given by them at such meeting if the Master so approves;19 and in any event the Master may, in the absence of directions given by creditors at the second meeting, give such directions relating to any matter reported to creditors or to the administration or realisation of the estate as he thinks fit.20 (e) Accounts The trustee must submit to the Master a liquidation account and a plan of distribution of the proceeds of the property in the estate available for payment to creditors or, if such proceeds are insufficient to cover the costs of sequestration, a plan of contribution apportioning liability for the deficiency among creditors who are liable to contribute.21 This duty must be performed within six months as from the date of the trustee's appointment, but provision exists for the grant of extensions of time.22 If the trustee has carried on any business on behalf of the estate he must also submit a trading account to the Master.23 The Act contains detailed provisions with regard to the manner of framing the liquidation account,24 the trading account,25 the plan of distribution,26 and the plan of contribution.27 Every account submitted by the trustee must be signed by him and verified by his affidavit.28 The Act also makes detailed provision for the manner in which the proceeds of realised property are to be utilised, indicating the order in which claims and charges are to be defrayed.29 Provision also exists dealing with the aspect of contribution.30 Once the trustee's account has been confirmed by the Master,31 the trustee must give notice of the confirmation in the Government Gazette, stating in such notice: "according to the circumstances, that a dividend to creditors is in course of payment or that a contribution is in course of
collection from the creditors and that every creditor liable to contribute is required to pay to the trustee the amount for which he is so liable."32 If a contribution is payable, the trustee must specify fully in the notice the address at which payment is to be made, and must deliver or post a copy of the notice to each creditor liable to contribute.33 Immediately after the confirmation of the account, the trustee must in accordance therewith effect the distribution or collect the contribution, as the case may be.34 Receipts for dividends or vouchers in respect of contributions must be lodged by the trustee with the Master.35 Any surplus in the estate, which is not required for the payment of claims, costs, charges or interest, must, immediately after confirmation of the final plan of distribution, be paid by the trustee to the Master, who must deposit it in the Guardians' Fund, and thereafter to the insolvent at his request, provided that he has been rehabilitated.36 As soon as possible after an account has been submitted by the trustee to the Master, the former must give notice in the manner prescribed for that of the second meeting of creditors37 that he has so submitted such account and that the account will lie for inspection at a place or places and during a period mentioned in the notice.38 Provision exists for transmission to magistrates' (including additional and assistant magistrates') offices of copies of accounts submitted to the Master.39 Each account and every duplicate thereof is open for inspection by creditors during a period of 14 days from the date of publication in the Government Gazette of the relevant notice.40 Any person interested in the estate, or the insolvent, may, at any time prior to confirmation thereof, submit to the Master an objection in writing to an account. Such writing must contain the reasons for the objection.41 If the Master is of the opinion that the objection is well-founded, he may direct an amendment thereof.42 A person aggrieved by any decision of the Master in this regard may apply to court, and the court may confirm the account or make such order as it thinks fit.43 The trustee may with the consent of the Master destroy all books and documents in his possession relating to the estate after six months have elapsed since the confirmation of the final trustee's account.44 (f) Transmission of correct information If the sequestration order contains incorrect information the trustee must take all reasonable steps to obtain the correct information, whereafter he is obliged to furnish the Master as well as the Registrar of Titles with the correct information by means of a certificate.45
