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In Ex parte Van Heerden, an important case in South African insolvency law, “It is necessary,” the court held, “to consider whether the surplus of the proceeds of the immovable property, after satisfying the mortgage bonds which have a preferential claim thereon, can be considered as ‘free residue’ within the meaning of that expression as used in the Act.” The definition of “free residue” must be taken to refer to that portion of an estate under sequestration when liquidated, which is not subject to any right of preference. In estimating the free residue in an estate, the surplus in value of immovable property over the amount of mortgage bonds thereon may be included in such estimate.
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