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[2018] ZAWCHC 159
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De Gouveia v Master of the High Court, Cape Town and Others (6542/2017) [2018] ZAWCHC 159 (27 November 2018)
Republic of South Africa
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case
No:6542/2017
Before: The Hon. Mr Justice Binns-Ward
Hearing: 27 November 2018
Judgment:
27 November 2018
In
the matter between:
JOAO
GONSALVES JOSEPH DE
GOUVEIA
Applicant
and
THE
MASTER OF THE HIGH COURT, CAPE
TOWN
First
Respondent
ABIGAIL
MAGEE
N.O.
Second
Respondent
(in
her capacity as executrix Estate late V.C. Coomber)
ABIGAIL
MAGEE
Third
Respondent
WENDY
RODRIGUES
Fourth
Respondent
JUDGMENT
BINNS-WARD
J:
[1]
Application has been made in these
proceedings for an order, in terms of s 35(10) of the
Administration of Estates Act 66 of
1965 (‘the Act’),
setting aside the Master's decision to refuse to sustain an objection
by the applicant to the first
and final liquidation account, dated
28 September 2016, lodged by the second respondent in the
deceased estate of the late
Valda Catherine Coomber. The
applicant also seeks orders directing the second respondent, qua
executrix of the deceased estate,
to amend the account by deleting
the reference therein to a claim
against
the applicant
in the sum of R158 774,55
and ‘
making the consequential
amendments to the L&D Account required by such deletion
’.
The ‘
consequential amendments
’
contemplated by the applicant would result in the account recognising
a claim by the applicant in a virtually equivalent
sum
against
the estate
. The contemplated
amendments would support the further order sought by the applicant
directing the second respondent to pay
him the sum of R158 865.58
together with interest thereon calculated from 22 July 2016 to
date of payment.
[2]
The founding affidavit in the application
was made by one Freddie Lottering, and not by the applicant.
Lottering purports
to have been acting in this regard in terms of a
power of attorney granted to him by the applicant. The second
respondent,
who is the only one of the respondents to have opposed
the application, took a preliminary objection based on the absence of
Lottering’s
authority to represent the applicant. The
objection was predicated on what the second respondent contends is
the proper construction
of the power of attorney. The objection
is devoid of merit. The application has been brought in the
applicant’s
name, not Lottering’s. The applicant
made a supporting affidavit. It is evident from that that he is
aware of
the application brought in his name and endorses the
evidence in support of it set forth in Lottering’s affidavit.
The power of attorney is quite irrelevant in the circumstances.
(It does seem from various indications in the annexures to
the
founding papers that the attorneys who launched the application may
well be Lottering’s attorneys, rather than those
of the
applicant, but if the second respondent had sought to challenge the
attorneys’ authority to institute the proceedings
in the
applicant’s name, she was bound to use the procedure in Uniform
Rule 7 for that purpose; see
Ganes and
Another v Telecom Namibia Ltd
[2003]
ZASCA 123
,
[2004] 2 All SA 609
(SCA),
2004 (3) SA 615
, at para. 19.
In the event, she did not.)
[3]
The issue in contention concerning the
liquidation and distribution account arises from its treatment of the
proceeds of the sale
in execution at the instance of a judgment
creditor of an immovable property that had been jointly owned in
equal undivided shares
by the applicant and the deceased. The
free residue of the proceeds of the sale, after the sheriff had
settled the judgment
creditor’s claim, was in the sum of
R317 713.16. The sheriff was bound to account to the
second respondent and
to the applicant, respectively, for one half of
the free residue. He was obliged to pay each of them the sum of
R158 856,58.
In error, however, the sheriff paid the
entire amount of R317 713.16 to the second respondent.
[4]
Upon appreciating his mistake, the sheriff
wrote to the second respondent pointing out the error and requesting
her to pay over
the amount mistakenly paid to the estate into the
sheriff’s trust account. The sheriff’s letter
concluded:
We hereby wish to inform you that you have no right
to withhold the abovementioned amount as it was paid purely in error
and this
must be paid immediately into our trust account.
We confirm that should we be held
liable by
[the applicant]
for
this amount, we will have no choice but to take further action
against you for the recovery of the monies and any damages caused
as
a result thereof, including costs.
[5]
The second respondent failed to comply with
the sheriff’s demand. She instead drew up a final
liquidation and distribution
account in the deceased estate in which
the following items were reflected as assets in the estate: (i) (Item
3) ‘
Proceeds of the sale of fixed
property sold by bond holder
’ –
R158 774.55 and (ii) (Item 4) ‘
Claim
against
[the applicant]
in
the amount of (reduced to R158 774.55
’
(
sic
) -
R158 774.55. Under liabilities, the account reflected (as
Item 15) ‘
Claim by
[the applicant]
for ½ net
proceeds of sale of house paid into estate by Sheriff (items 4 &
15 set off against one another
’ -
R158 774.55. Item 3 plainly referred to the estate’s
entitlement to half the proceeds of the sale of
the immovable
property by the sheriff and item 15 purported to reflect that the
applicant had a claim against
the estate
for the amount mistakenly paid to the estate in respect of the amount
due by the sheriff to the applicant.
[6]
The applicant, represented by the
aforementioned Lottering, lodged an objection with the Master to item
4 of the liquidation and
distribution account. The objection
was lodged in terms of s 35(7) of the Act. The Master’s
office responded
to the objection in a letter dated 15 March
2017 (apparently only received by the appointed attorneys 12 days
later) as follows:
Previous correspondence refers.
I am of the opinion that there is a dispute of facts
and I am accordingly unable to make a ruling herein, as I am not a
Court of
Law.
I hereby overrule the objection. If you are not
satisfied with my ruling, you have 30 days to make an Application to
the High
Court to set aside my decision.
(The response was somewhat self-contradictory. If
the Master was unable to make a ruling, it is difficult to follow how
she
felt able to overrule the objection.)
[7]
Although the objection
was directed, according to its tenor, only against item 4 of the
account, by necessary implication it also
engaged item 15 because of
the purported set off of the debt purportedly acknowledged in the
latter item against the claim reflected
in the former. It was
only by way of a recognition of the set off that the claim identified
in item 4 could be regarded for
the purposes of the account to have
been liquidated. If the claim identified in item 4 had not
been liquidated, the
second respondent would have been obliged to
explain the position in the manner required in terms of s 35(3)
of the Act, and
the account could not properly have been
characterised as a final account, and would have served only as an
interim account.
[1]
[8]
On the basis of the
facts described thus far, it is clear that the account was not
properly drawn, for the applicant did not have
a claim against
the
estate
for half the
net proceeds of the property that he had jointly owned with the
deceased. His claim for payment of his share
of the proceeds of
the immovable property lies against the sheriff. He does not
enjoy an unjust enrichment claim against
the estate (as suggested in
the papers
[2]
);
the sheriff does. In my view, the Master should have been able
to identify these problems with the account upon the most
superficial
enquiry. It is unfortunate that that was not undertaken.
The consequence has been expensive and unnecessary
litigation.
[9]
In the circumstances it follows that the
objection to the liquidation and distribution account must be upheld,
even if to a different
effect to that contended for by the
applicant. It will be necessary for the account to be redrawn.
[10]
If the estate has a
claim against the applicant, as alleged by the second respondent, it
is for the executrix to pursue it.
If the claim is disputed, as
it appears to be, it will be necessary for the executrix to litigate
or to cede the claim to the heirs
before she will be able to file a
final account.
[3]
It is also clear that the second respondent is, on her own version of
the facts, not yet in a position to lodge a final liquidation
and
distribution account. She will only be in a position to do so
once she has realized or disposed of the claim she says
the estate
has against the applicant.
[4]
It seems to me that, apart from the applicant, the only persons who
might have an interest in the redrawn account would be
the second
respondent herself in her personal capacity as co-heiress, the fourth
respondent (as the other co-heiress to the free
residue in the
estate) and the Sheriff, Kuilsriver North. Therefore, should
the fourth respondent and the Sheriff consent
in writing to the
amended account being acted upon, it would not be necessary for the
amended account to be advertised: see s 35(11)
of the Act.
[11]
It also follows that the applicant’s
claim for an order sounding in money against the second respondent is
misconceived.
He must look to the sheriff for payment of the
amount that is due to him.
[12]
Although the relief
sought by the applicant was misconceived in material respects,
[5]
he has nonetheless been substantially successful in these
proceedings. Had the second respondent repaid the sum
mistakenly
paid to her by the sheriff, as she should have done, the
basic cause of the current litigation would not have arisen.
Her
failure to comply with the sheriff’s demand for repayment
of the money mistakenly paid to the estate was not only wrong, but
unreasonable. She had no legally valid grounds upon which to
effectively appropriate the money paid in error by the sheriff
for
use as security for the claim she maintains that the deceased estate
enjoys against the applicant. It is also apparent
from her
description of the character of that claim (being premised on the
damages allegedly suffered by the estate as a consequence
of the
breaches by the applicant of various agreements between himself and
the deceased concerning their co-ownership of the fixed
property)
that it is not a liquidated claim, and was therefore in any event not
capable of being set off against any claim that
she might have
considered the applicant had against the estate. It is evident
that the second respondent took what she thought
was the law into her
own hands to most unfortunate effect. In my assessment,
fairness requires that she should be liable
in the circumstances for
the applicant’s costs of suit. I am not persuaded,
however, that there should, as suggested
in the applicant’s
papers, be an order that the second respondent should pay the costs
de bonis propriis
.
[13]
There was an application to strike out
various passages in the second respondent’s answering
affidavit. That application
was not argued at hearing, and I
find it unnecessary to enter into it. Even were it to have been
sustained in full, it would
have made no difference to the
substantive outcome of the case. It was one of several red
herrings in the matter. There
shall be no order in the striking
out application.
[14]
The following order is made:
a.
The
decision of the Master to overrule the objection by the applicant to
the first and final liquidation account, dated 28 September
2016, is set aside and substituted by a decision upholding the
objection and directing the second respondent to amend the account
as
provided below in paragraph (b) of this order.
b.
The
second respondent is directed to amend the aforementioned account
within 15 days of the date of this order by –
i.
deleting
the words ‘
First and Final
’
in its heading and substituting them with the words ‘
First
Interim
’;
ii.
deleting the description of item 15 in the
account and replacing it with ‘
Claim
by the Sheriff, Kuilsriver North, for repayment of monies erroneously
paid to the estate in respect of half of the net proceeds
of fixed
property sold by the bondholder actually accrued to J.G.J. De
Gouveia
’;
iii.
setting forth in the amended account, in a
manner compliant with
s 35(3)
of the
Administration of Estates
Act 66 of 1965
, the reasons why the claim described in item 4 of the
account has not been collected or realized;
iv.
consequently to sub-paragraphs (ii) and
(iii) hereof, appropriately amending the ‘Recapitulation
Statement’ and ‘Distribution
Account’.
c.
The
account as so amended shall, unless the fourth respondent and the
Sheriff, Kuilsriver North, within 10 days of having been so
requested
to do, consent in writing to it being acted upon, again lie open for
inspection in the manner and with the notice and
subject to the
remedies provided in terms of
s 35
of the
Administration of
Estates Act 66 of 1965
.
d.
The
second respondent shall pay the applicant’s costs of suit.
A.G. BINNS-WARD
Judge
of the High Court
APPEARANCES
Applicant’s
counsel: J.B. Engelbrecht
Applicant’s attorneys: Bisset Boehmke McBlain
Cape
Town
Second
respondent’s legal representative: M.A. Oosthuizen (Attorney)
Second respondent’s attorneys: Shalene
Schreuder Attorneys
Durbanville
Van
der Spuy Attorneys
Cape
Town
[1]
Section 35(3)
provides:
The
executor shall set forth in any interim account all debts due to the
estate and still outstanding and all property still unrealized,
and
the reasons why such debts or property, as the case may be, have not
been collected or realized.
[2]
The applicant’s counsel sought in argument to support the
notion that the applicant had an unjust enrichment claim against
the
estate. He called in aid of his argument the judgment in
Nissan South Africa (Pty) Ltd. v Marnitz NO
and Others (Stand 186 Aeroport (Pty) Ltd. Intervening)
[2004] ZASCA 98
,
[2006] 4 All SA 120
(SCA). That judgment is,
however, entirely distinguishable both on the facts and in principle
from the current matter.
That case concerned the liability of
a bank on grounds of unjust enrichment to a person who had paid
monies mistakenly into the
account of a customer of a bank in
circumstances in which the bank was not bound to its customer to
account for the proceeds
of the incorrectly paid deposit. In
the current matter it was the sheriff who made an incorrect payment
by mistake.
The mistaken payment would give rise to a
condictio indebiti
at
the instance of the sheriff against the estate that had been unduly
enriched thereby. The sheriff would have been impoverished
because he remained accountable to the applicant for the mistakenly
paid amount. The applicant, on the other hand, was
not
impoverished by the incorrectly made payment by the sheriff, for he
was not deprived thereby of his claim against the sheriff.
His
patrimony was therefore in no way diminished by reason of the
erroneous payment.
[3]
The parties traversed the merits of the disputed claim by the estate
against the applicant at some length in the answering and
replying
papers. This was wholly inappropriate as this court is not
concerned with that in these proceedings.
[4]
The second respondent has averred in her answering papers that she
has ‘
already commenced with instructing
[her]
attorneys of record to prepare a
Summons to commence the action proceedings for recovery of this debt
and believe
[s]
that
the prospects of the claim succeeding is
(sic)
very good
’.
She had requested the applicant to suspend the current application
pending the determination of the contemplated
action. Nothing
about that proposal would remedy the defective nature of the
liquidation and distribution account that
is in issue.
[5]
See note 2 above.