This Act was repealed on 2018-06-25 by Insolvency Act, 2018.
Zimbabwe
Insolvency Act
Chapter 6:04
- Commenced on 1 January 1975
- [This is the version of this document at 31 December 2016 and includes any amendments published up to 31 December 2017.]
- [Note: This version of the Act was revised and consolidated by the Law Development Commission of Zimbabwe]
- [Repealed by Insolvency Act, 2018 (Act 7 of 2018) on 25 June 2018]
Part I – Preliminary
1. Short title
This Act may be cited as the Insolvency Act [Chapter 6:04].2. Interpretation
Part II – Sequestration and attachment of estate
Voluntary surrender
3. Petition for surrender
4. Provisional acceptance of surrender and issue of rule nisi
5. Publication of rule nisi
Upon the issue of the rule nisi in terms of subsection (1) of section four the petitioner shall cause a copy thereof to be published in the Gazette and in a newspaper circulating—6. Final acceptance of surrender
On the return day of a rule nisi issued in terms of subsection (1) of section four, if the High Court is satisfied that—7. Discharge of rule nisi
Subject to section eight, where a rule nisi issued in terms of subsection (1) of section four is discharged, the estate of the debtor concerned shall be revested in him and all the rights of or against the estate shall be revived.8. Costs of attachment and control of property and administration of estate
The assets of a debtor which have been attached by a deputy sheriff or taken under the control of a trustee since the issue of a rule nisi in terms of subsection (1) of section four in respect of the estate of the debtor shall not be released from such attachment or control after the rule nisi is discharged until such costs and expenses as the Master may approve which have been incurred in connection with those assets and the administration of the debtor’s estate have been paid.9. Sale of assets if costs and expenses not paid
If the costs and expenses referred to in section eight are not paid within two months of the date of discharge of the rule nisi, the deputy sheriff or trustee, as the case may be, may, with the authority of the Master, sell sufficient of the assets which are attached by him or under his control, as the case may be, to meet such costs and expenses.10. Sale of assets not claimed
If any assets of a debtor which have been attached by a deputy sheriff or taken under the control of a trustee since the issue of a rule nisi in terms of subsection (1) of section four are not claimed in terms of section seven within two months of the discharge of the rule nisi, the deputy sheriff or trustee, as the case may be, may sell the assets by public auction and, after deduction of such costs and expenses as the Master may approve which have been incurred in connection with those assets and the administration of the debtor’s estate, shall remit the balance remaining to the Master who shall place it to the credit of the debtor in the Guardian’s Fund.Compulsory sequestration
11. Acts of insolvency
A debtor shall be deemed to have committed an act of insolvency if—12. Petition for sequestration of estate
13. Order of provisional sequestration
The High Court shall not grant an order of provisional sequestration unless it is of the opinion that, prima facie—14. Service of rule nisi
15. Final order of sequestration or discharge of provisional order
Miscellaneous
16. Sequestration of partnership estate
17. Petitioning creditor to prosecute sequestration until trustee appointed and liable for contribution
18. Malicious or vexatious petitions
Whenever the High Court is satisfied that a petition for the sequestration of the estate of a debtor is malicious or vexatious, the court may allow the debtor forthwith to prove any damage which he may have sustained by reason of the provisional sequestration of his estate and award him such compensation as it may think fit.19. Insolvent and spouse to deliver records and lodge statements
Attachment and custody of estate
20. Notice of sequestration
21. Attachment of property by deputy sheriff
22. Messenger to transmit attached property to Master
A messenger who has received an order transmitted to him in terms of subsection (2) of section twenty shall without delay transmit to the Master an inventory of all property attached by him which he knows to belong to the insolvent referred to in that order.Part III – Effects of sequestration
Effect upon insolvent, spouse of insolvent and their property
23. Immediate effect of sequestration order
24. Effect of sequestration on property of spouse of insolvent
Subject to this Act, upon the sequestration of the estate of an insolvent the property, including such property or the proceeds thereof which the Sheriff, a deputy sheriff or a messenger holds under a writ of attachment, of any spouse of the insolvent whose estate has not been sequestrated shall be vested in the Master until the appointment of a trustee to the estate of the insolvent and, upon such appointment, in that trustee, and this Act shall apply, mutatis mutandis, in respect of the property as if it were the property of the insolvent estate:Provided that, where the Sheriff has, prior to becoming aware of the sequestration order, confirmed a sale in execution of immovable property in terms of rules of court he shall proceed to do everything necessary to complete the sale, including the transfer of the property to the purchaser, and shall proceed to pay out the proceeds thereof to the creditors whose claims may be secured thereby and, notwithstanding any other writs lodged with him, the balance only, after deduction of the costs of execution, shall vest in terms of this section.25. Application to High Court to stay or exclude vesting of property of spouse temporarily
26. Trustee to give notice of intention to realize property of spouse
27. Trustee to release property
28. Application to High Court for release of property
29. Creditors of spouse may prove claims
30. Property of spouse to bear proportionate share of costs of sequestration
Subject to any order made in terms of section twenty-eight, any property of the spouse of an insolvent which has vested in the trustee in terms of section twenty-four and which has been realized by the trustee shall bear a proportionate share of the costs of sequestration of the estate of the insolvent.31. Excussion of property of spouse
32. Creditors of spouse not liable for costs of sequestration and may not vote at certain meetings
A creditor of the spouse of an insolvent who has proved a claim in terms of section twenty-nine shall not be liable to make any contribution in terms of section one hundred and seventeen or to vote at any meeting held in terms of section fifty-three, fifty-four or fifty-five, but any direction of the creditors of the insolvent estate which infringes rights of the first-mentioned creditor may be set aside by the High Court on the application of that creditor.33. Application for sequestration of estate of spouse may be postponed by Court
If an application is made for the sequestration of the estate of the spouse of an insolvent on the ground of an act of insolvency committed after the vesting of the property of that spouse in the Master or the trustee in terms of section twenty-four, the High Court may postpone the hearing of the application or make such interim order as it thinks fit if it appears to the High Court that the act of insolvency alleged in the application was due to the vesting and—34. Payment of debts after sequestration
Every satisfaction in whole or in part of any obligation the fulfilment whereof was due or the cause whereof arose before the sequestration of the estate of an insolvent shall, if made to the insolvent after the sequestration, be void unless the debtor proves that it was made in good faith and without knowledge of the sequestration.35. Powers, duties and privileges of insolvent during sequestration
36. Examination of insolvent in relation to affairs since sequestration
37. Power of Master to have movable property sold
If it appears to the Master that the value of all the movable property of an estate under sequestration vested in him does not exceed such amount as may be prescribed and that it is in the interests of the creditors that such property or any part thereof be sold forthwith, he may direct a sale thereof to take place on such conditions and in such manner as he may think fit:Provided that if the Master has notice that any such property or any portion thereof is subject to any right of preference, it shall not be sold without the consent in writing of the person in whose favour such right of preference exists.[section amended by Act 22 of 1998]38. Property acquired after sequestration and alienated by insolvent
39. Estate to remain vested in trustee until composition or rehabilitation
Effect upon antecedent transactions
40. Dispositions without value
41. Antenuptial contracts
42. Voidable preferences
43. Undue preferences
44. Collusive dealings
45. Proceedings to set aside improper disposition
46. Improper dispositions do not affect certain rights
47. Sale of business
48. Contracts to buy immovable property
49. Sales for cash
50. Property of another in possession of insolvent
Where any movable property belonging to any person other than an insolvent, is in the possession of the insolvent at the time of the sequestration of his estate, the owner of such property shall lose all right to recover that property if it has in good faith been sold as part of the insolvent estate unless, before the sale, he gives notice in writing to the Master or the trustee, if one is appointed, that the property belongs to him:Provided that nothing in this section shall affect the right of the owner of any such property to recover from the trustee, before the confirmation of any trustee’s account in terms of section one hundred and twenty-eight, the net proceeds of the sale of such property where it has been sold in good faith as part of the property of the insolvent estate.51. Leases
Part IV – Meetings of creditors
Meetings: How convened and when
52. Time and place of meetings
53. First and second meetings
54. General meetings
55. Special meetings
56. Creditor may register with trustee
57. Proof of liquidated claims
58. Trustee to examine claims
59. Set-off
60. Right of retention and landlord’s legal hypothec
If a creditor of an insolvent estate who is in possession of any property belonging to that estate, to which he has a right of retention or over which he has a landlord’s legal hypothec, delivers that property to the trustee of that estate, at the latter’s request, he shall not thereby lose the security afforded him by his right of retention or lose his legal hypothec if, when delivering the property, he notifies the trustee in writing of his rights and in due course proves his claim against the estate:Provided that a right to retain any book or document of account which belongs to the insolvent estate or relates to the affairs of the insolvent shall not afford any security or preference in connection with any claim against the estate.61. Proof of conditional claims
62. Claim against partnerships
63. Arrear interest
64. Withdrawal of claim
Voting at meetings
65. Right to vote and reckoning of votes
66. Questions upon which creditors may vote
Examination of insolvent and others
67. Insolvent and others to attend meetings
68. Interrogation of insolvent and others
69. Enforcing summonses and giving of evidence
70. Steps to be taken on suspicion of offence
71. Presumption as to record of proceedings and validity of acts at meeting of creditors
Part V – Appointment and removal of trustees
72. Appointment of provisional trustee
73. Election of trustee
74. Qualifications and disqualifications for appointment or election as trustee
75. Appointment of trustee by Master
76. Where Master declines to appoint trustee
77. Vacation of office of trustee
A trustee shall vacate his office and his office shall become vacant —78. High Court may disqualify person from being trustee or remove trustee
79. Master may remove trustee
The Master may remove a trustee from his office on the ground—80. Leave of absence or resignation of trustee
At the request of a trustee, the Master may permit him to absent himself from Zimbabwe or may relieve him of his office, in either case upon such conditions as the Master may think fit to impose and subject to his giving such notice of his intention to absent himself from Zimbabwe or to resign as the Master may direct.81. Election of new trustee
82. Remuneration of trustee
Part VI – Liquidation and distribution of estate
Duties and powers of trustee in liquidation of estate
83. Trustee to take charge of property of estate
84. Opening of bank account
85. Record of all receipts
86. Unlawful retention of moneys or use of property by trustee
87. Trustee may obtain legal and other advice
88. Improper advising or conduct of legal proceedings
Where it appears to the High Court that any legal practitioner has, with intent to benefit himself, improperly advised the institution or defence or conducting of legal proceedings by or against an insolvent estate or has incurred any unnecessary expense therein, the High Court may order the whole or part of the expense thereby incurred to be borne by that legal practitioner personally.89. Legal proceedings against estate
90. Continuance of pending legal proceedings by surviving or new trustee
91. Recovery of debts due to estate
A trustee shall—92. Extension of time for payment or compounding of debts and arbitration
93. Subsistence allowance for insolvent and family
At any time before the second meeting of creditors the trustee may allow the insolvent such moderate sum of money or such moderate quantity of goods out of the estate as may appear to the trustee to be necessary for the support of the insolvent and his dependants.94. Continuation of insolvent’s business
95. Trustee’s report to creditors
96. Sale of property
97. Realization of securities
98. Cession of book debts
Costs and preferent claims
99. Funeral and death-bed expenses
100. Costs of sequestration
101. Costs of execution
102. Contributions to certain funds
103. Salary or wages
104. Income tax
105. Capital gains tax
106. Value added tax
After payment in terms of section one hundred and five, there shall next be paid from the free residue of an insolvent estate any amount due from the insolvent in terms of the Value Added Tax Act [Chapter 23:12] in respect of any transaction made within the period of eighteen months immediately preceding the date of the sequestration of his estate, whether or not that amount has become due and payable after that date.[section as amended by section 85 of Act 12 of 2002]107. Farmers’ stop-orders
108. Notarial bonds
After payment in terms of section one hundred and seven, there shall next be paid, in their order of preference, from that part of the free residue of an insolvent estate which constitutes the proceeds of the sale or disposal of the property secured by the bonds concerned—109. Non-preferent claims
Secured claims
110. Exclusion or limitation of preference under legal hypothec
111. Mortgage bonds
112. Pledge or cession of movable property
A pledge or cession of any movable property made for the purpose of securing the payment of a debt not previously secured, the cause of which arose more than two months prior to the making of such pledge or cession, or made as security for the payment of a debt incurred innovation or substitution for the first-mentioned debt shall not confer any preference if the estate of the pledgor or cedent is sequestrated within the period of six months immediately following the making of the pledge or cession.113. Costs to which securities are subject
Distributions
114. Application of proceeds of securities
115. Late proof of claims
116. Creditor debarred from participating in certain proceeds
Contributions
117. Contributions by creditors towards costs of sequestration when free residue insufficient
Where there is no free residue in an insolvent estate or when the free residue is insufficient to meet all the expenses, costs and charges mentioned in section one hundred, all creditors who have proved claims against the estate shall be liable to make good any deficiency, the creditors having no security for their claims each in proportion to the amount of his claim and the secured creditors each in proportion to the amount for which he would have ranked upon the surplus of the free residue, if there had been any:Provided that—Trustee’s accounts
118. Liquidation account and plan of distribution or contribution
Subject to sections one hundred and nineteen and one hundred and twenty, a trustee shall—119. Extension of time for lodging trustee’s account
120. Master may direct trustee to lodge plan
If a trustee has funds in hand which, in the opinion of the Master, ought to be distributed among the creditors of the insolvent estate and the trustee has not lodged with the Master a plan for the distribution of those funds, the Master may direct him in writing to lodge a plan for the distribution of those funds although the period specified in terms of section one hundred and eighteen for the lodging of a plan of distribution has not elapsed.121. Form of liquidation account
122. Form of trading account
123. Form of plan of distribution
A plan of distribution shall show in parallel columns under separate headings—124. Form of plan of contribution
A plan of contribution which relates to an insolvent estate shall show in parallel columns—125. Trustee’s account to be verified and amplified
Confirmation of account: Dividends and contributions
126. Inspection of trustee’s accounts by creditors
127. Objections and directions to amend trustee’s account
128. Confirmation of trustee’s account
When a trustee’s account has been open to inspection by creditors as specified in this Act and—129. Distribution of estate and collection of contributions from creditors
130. Trustee to produce acquittances for dividends or to pay over unpaid dividends to Master
131. Application to High Court for order to pay dividend
If a trustee delays payment of any dividend, any creditor entitled thereto may, after notice to the trustee, apply to the High Court for an order compelling the trustee to pay him that dividend.132. Surplus to be paid into Guardian’s Fund until rehabilitation of insolvent
If, after the confirmation of a final plan of distribution, there is any surplus in an insolvent estate which is not required for the payment of claims, costs, charges or interest, the trustee shall, immediately after the confirmation of that account, pay that surplus over to the Master who shall deposit it in the Guardian’s Fund and after the rehabilitation of the insolvent shall pay it out to him at his request.133. Failure by trustee to submit account or to perform duties
134. Enforcement of order of High Court
135. Enforcing payment of contributions
Part VII – Compositions and rehabilitations
Compositions
136. Offer of composition
137. Effect of composition
138. Composition by separate partner
139. Effect of composition on spouse of insolvent
An offer of composition by an insolvent which has been accepted in terms of section one hundred and thirty-six shall not be binding on the separate creditors of the spouse of the insolvent but upon the acceptance of the offer of composition the property or, if it has been realized, the proceeds of the property of that spouse shall be restored to her or him without prejudice to the claims of the creditors of that spouse or to any right of preference of any of them at the time when the property was vested in the trustee:Provided that—140. Functions of trustee under composition
Any moneys to be paid and anything to be done for the benefit of creditors in pursuance of an offer of composition which has been accepted in terms of section one hundred and thirty-six shall be paid and shall be done as far as practicable through the trustee, and the provisions of this Act relating to trustees’ accounts, the confirmation thereof and the distribution of dividends thereunder shall, as far as they may be applicable, continue to apply after the acceptance of the offer of composition.Rehabilitations
141. Application for rehabilitation
142. Security to be furnished prior to application for rehabilitation
Not less than three weeks before applying to the High Court for his rehabilitation an insolvent shall furnish to the registrar security of such amount or value as may be prescribed for the payment of the costs of any person who may oppose the rehabilitation and be awarded costs by the High Court.[section amended by Act 22 of 1998]143. Facts to be averred on application for rehabilitation
An insolvent in support of an application for his rehabilitation shall submit to the High Court—144. Opposition to or refusal by High Court of rehabilitation
145. Partnership cannot be rehabilitated
A partnership whose estate has been sequestrated shall not be rehabilitated.146. Effect of rehabilitation
147. Illegal inducements to vote for composition or not to oppose rehabilitation
148. Recovery of penalty
A trustee may enforce and recover any penalty referred to in section one hundred and forty-seven and, if he fails to do so, any creditor may do so in the name of the trustee, upon his indemnifying the trustee against all costs in connection with such action.Part VIII – Assignment
149. Interpretation and application of this Part
150. Deed of assignment and statement of affairs
151. Effect of execution of deed of assignment
152. Notice of assignment
Where a deed of assignment has been lodged with the Master, the debtor or the person who executed the deed on his behalf shall publish a notice in the prescribed form of the assignment of the estate concerned—153. Lodging of copies of deed for inspection
154. Effect of publication of notice of assignment
155. When deed may be signed
156. Deed not signed
157. Registration of deed
158. Effect of registration of deed
159. Notice of assignment to be given to spouse of debtor
160. Effect of assignment on property of spouse of debtor
161. Supervision of assignment by Master
The estate of a debtor whose estate has been assigned in terms of this Part shall be administered and distributed under the supervision of the Master and all proceedings in relation thereto shall as far as possible be had and taken in the same manner as if the debtor were an insolvent and the date of the assignment were the date of the sequestration.162. Powers of assignee
Upon and after the date of assignment of an estate in terms of this Part, the assignee shall have—163. Law of insolvency applicable
Every question of preference or priority and all other questions relating to an assignment in terms of this Part shall be determined according to the law and practice relating to insolvency as far as they may be practicable.164. Powers of High Court
Except as to property acquired by the debtor after the date of the assignment, the High Court shall have power to make all such orders relating to the assignment as it would have power to make if the debtor were an insolvent and his estate had been under sequestration from the date of assignment.165. Costs of assignment
Part VIII – Offences and penalties
[Please note: numbering as in the original.]166. Concealing or destroying books or assets
167. Concealment of liabilities
168. Failure to keep proper records
169. Making undue preferences
170. Contracting debts without expectation of ability to pay
171. Unreasonable diminution of assets
Any person who—172. Alienation of business without notice
Any person, being a trader, who—173. Failure to give information or to deliver assets, books, etc.
174. Obtaining credit during insolvency
Any person who, during the sequestration of his estate, obtains credit to an amount exceeding such amount as may be prescribed without informing the person from whom he obtains credit that he is an insolvent or unless he proves that such person had knowledge of that fact shall be guilty of an offence and liable to imprisonment for a period not exceeding one year.[section as amended by Act 22 of 1998 and by section 4 of Act 22 of 2001]175. Offering inducements
Any person who grants, promises or offers any consideration whatsoever in order to procure the consent of any creditor to an assignment or offer of composition or to prevent opposition to a rehabilitation or during the sequestration or after the assignment of his estate to induce any person to refrain from the investigation of his affairs or from the prosecution of a criminal charge of himself or any person with whom he may have had business relations shall be guilty of an offence and liable to imprisonment for a period not exceeding two years.[section as amended by section 4 of Act 22 of 2001]176. Failure to lodge statements
Any person who, without reasonable excuse, the proof whereof lies on him, contravenes paragraph (b) of subsection (2) or subsection (3) of section nineteen or subsection (2) of section one hundred and fifty-nine shall be guilty of an offence and liable to imprisonment for a period not exceeding two years.[section as amended by section 4 of Act 22 of 2001]177. Failure to carry out duties
Any person who, without reasonable excuse, the proof whereof lies on him, contravenes subsection (3), (6), (8) or (16) of section thirty-five shall be guilty of an offence and liable to imprisonment for a period not exceeding two years.[section as amended by section 4 of Act 22 of 2001]178. Making false statement in statement of affairs
Any person who makes any statement in a statement of affairs referred to in section three, nineteen, one hundred and fifty or one hundred and fifty-nine or in a record or statement referred to in subsection (6) of section thirty-five which he knows to be false or which he does not reasonably believe to be true shall be guilty of an offence and liable to imprisonment for a period not exceeding two years.[section as amended by section 4 of Act 22 of 2001]179. Failure to attend meetings, etc.
180. Making false answers on oath while under examination or making false affidavit
Every person who—181. Failure to appear or give evidence
Any person who—182. Failure to appear or give evidence against trustee or assignee
183. Acceptance of inducements
Every person who accepts any benefit or the promise or offer of any benefit as a consideration—184. Removal of property
185. Criminal liability of partners, administrators, employees or agents
186. Criminal liability of trustee and assignee
A trustee or assignee who, when required to do so in terms of this Act or in terms of any direction made in terms of this Act, fails within two months to lodge an account or plan with the Master or to pay a sum of money to the Master or a creditor shall be guilty of an offence and liable to a fine not exceeding level five or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.[section as amended by section 4 of Act 22 of 2001]187. Obstructing trustee, curator bonis or assignee
Any person who obstructs or hinders a curator bonis appointed in terms of this Act or a trustee or assignee or the representative of any of them in the performance of his functions in terms of this Act shall be guilty of an offence and liable to a fine not exceeding level five or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.[section as amended by section 4 of Act 22 of 2001]188. Evidence of liabilities incurred by insolvent
Whenever in any criminal proceedings in terms of this Act any liability incurred by an insolvent or a person who has assigned his estate or the date or time when the liability was incurred is in issue or relevant to the issue, proof that a claim in respect of that liability has been admitted against the estate of the insolvent or person who assigned his estate in accordance with any provision of this Act shall be sufficient evidence of the existence of the liability and such liability shall be deemed to have been incurred upon the date or at the time alleged in any document submitted in accordance with any provision of this Act in support of that claim:Provided that any party in those proceedings may prove that no such liability or that a lesser or greater liability was incurred or that it was incurred on a date or at a time other than the date or time so alleged.189. ***
[section repealed by section 4 of Act 22 of 2001]Part X – Judicial
[Please note: numbering as in original.]190. Jurisdiction of High Court
191. Appeal
192. Review
Part XI – Miscellaneous
193. Master may direct trustee and assignee to deliver books, documents or property or call upon any person to furnish certain information
194. Master may direct payment of small amounts
195. Fees of office and expenses
196. Custody of documents and documentary evidence
197. Destruction of documents
198. Insurer obliged to pay third party’s claim against insolvent
Whenever any person (hereinafter called “the insurer”) is obliged to indemnify another person (hereinafter called “the insured”) in respect of any liability incurred by the insured towards a third party, the latter shall, on the sequestration or assignment of the estate of the insured, be entitled to recover from the insurer the amount of the insured’s liability towards the third party but not exceeding the maximum amount for which the insurer has bound himself to indemnify the insured.199. Formal defects
200. Regulations
History of this document
25 June 2018
Repealed by
Insolvency Act, 2018
31 December 2016 this version
Consolidation
01 January 1975
Commenced