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[2021] ZAWCHC 41
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Ditmar and Others v Lotter NO and Others (5296 / 2020) [2021] ZAWCHC 41 (5 March 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
Number: 5296 / 2020
In
the matter between:-
JOAKIM
PEKKA WALTER VON DITMAR
First
Applicant
ANNIKKI
VON DITMAR
Second
Applicant
MARTINA
VON
DITMAR
Third
Applicant
and
KAREN
LOTTER N O
(
In
her representative capacity as nominee of Sanlam
Trust
(Pty) Ltd, the executors of Estate Late Jan Hendrik
Adolphe
Zipes - Estate No. 018934/2019)
First
Respondent
THE
MASTER OF THE HIGH COURT, CAPE TOWN
Second
Respondent
ROUEN
HEIBERG
Third
Respondent
YUSUF
MARKS
Fourth Respondent
CRAIG
BROWN
Fifth
Respondent
Coram:
Wille, J
Heard:
24
th
February 2021
Delivered:
5
th
of
March 2021
JUDGMENT
WILLE,
J:
Introduction
[1]
This is an opposed application for security for costs at the instance
of the third
respondent. The third respondent seeks security
for costs in the sum of R500 000,00. This security is to
be posted
by the applicants by payment into the third respondent’s
attorneys’ trust account. In the alternative, an order
is
sought that the amount and the form of the security be determined by
the registrar of the court. The parties shall be
referred to as
cited in the main application.
[2]
The applicants have launched an application
[1]
to have the last two wills
[2]
of
their late uncle declared to be invalid and set aside.
[3]
The applicants all reside overseas. The deceased resided
in South Africa and his estate is accordingly located in South
Africa. Neither the first respondent
[4]
,
nor the fourth respondent
[5]
,
oppose the relief sought in the main application. Furthermore,
the applicants seek an order that the deceased’s will
dated the
14
th
of
December 2011, be revived.
[3]
The applicants have also cited the three beneficiaries connected with
the disputed
wills
[6]
, all of
whom also reside in South Africa. The main application is
opposed by the third respondent. It is so that the
applicants
are foreign litigants.
[7]
The
third respondent is a local litigant.
[8]
The applicants take the view that the third respondent is
seeking to gain an unfair advantage in his quest for security for
costs and that his application is not bona fide.
Factual
Matrix
[4]
The third respondent was previously a financial advisor employed by
Sanlam
[9]
and whilst in that
capacity, he provided financial assistance to the deceased from time
to time. To this end, the third respondent
assisted the
deceased in the drafting of the disputed wills. The third
respondent is also recorded as being the intermediary
in connection
with the wills.
[5]
The deceased executed the disputed wills during 2017. In terms
of the disputed
wills the deceased left (80%) of his shareholding in
and to Chester Surrey Investments (Pty) Limited to the third
respondent.
This represents a value of more than R8,7 million.
[6]
Curiously, the third respondent maintains that he furnished Sanlam
with information
for the drafting and content of the disputed wills,
but in the same breath, he contends that there is nothing untoward
about his
actions in this connection. He attempts to justify
his conduct by asserting that he was the deceased’s financial
adviser.
This, despite the inclusion of a provision in the
disputed wills, that benefits the third respondent in an amount of
approximately
R8,7 million.
[7]
Besides this, during this time the third respondent brought an
application for an
appointment of a curator
[10]
to the deceased. In that application the third respondent
alleges that it became evident that the deceased’s physical
and
cognitive abilities were rapidly deteriorating and his dependence on
the third respondent had accordingly become vastly increased.
[11]
The
Applicants’ Case
[8]
The applicants contend for the position that they have put up
compelling evidence
to the effect that the the deceased was
significantly cognitively impaired. This, prior to 2017. They
rely, inter alia, on
evidence from the applicants themselves, friends
of the deceased and no less than three medical practitioners.
Of equal importance,
is their reliance on certain correspondence
emanating from the third respondent himself. .
[9]
Their case is that on a conspectus of the evidence, it overwhelmingly
suggests that
the deceased was suffering from dementia as he had been
diagnosed with dementia in 2014. Accordingly he was unable to conduct
his
own affairs. The proposition is that the applicants have
established solid and good prospects of success in the main
application.
The
Third Respondent’s Case
[10]
The third respondent raises a shield in the form of a negative
avowal. In support of this,
the third respondent relies on the
evidence of a neurosurgeon to the effect that it cannot be stated
definitively that the deceased
did not have the mental capacity to
complete the disputed wills during 2017
.
This report was compiled by the
said neurosurgeon without any prior examination of the deceased,.
The third respondent
also attempts to rely on the evidence of two
unqualified persons in this connection. By the same token, this
evidence is
unappealing and in any event appears to signal that at
least by August 2017, the deterioration in the deceased’s
mental condition
was somewhat marked.
Discussion
[11]
It is now part of our accepted and settled law that as a matter of
right, the third respondent
in circumstances akin to these, has no
claim for security from the applicants. The legal position is
that the appropriate
test involves a large measure of judicial
discretion.
[12]
It is so
that each case must be decided on its own peculiar facts having
regard to the principles of equity and fairness.
Further, when
exercising this judicial discretion, thereby invoking the principles
of equity and fairness, there are certain constitutional
imperatives
that find application.
[12]
The starting point of the constitutional inquiry is section 34
[13]
,
which provides that disputes that can be resolved by the application
of law, should be decided in a fair and public hearing before
a
court. This constitutional requirement is clearly weighted in
favour of the applicants in this case. In
Giddy
[14]
,
the court was concerned with section 13 of our now repealed previous
company legislation.
[15]
In this context, the court set out the inquiry as follows:
[16]
‘
In
my view there can be no doubt that in exercising its discretion in
terms of s 13, a court must bear in mind the provisions of
s 34 and
weigh them in the light of other factors laid before it. The
balancing exercise proposed by the Supreme Court of Appeal
in
Shepstone & Wylie's case (adopted from the English case Kearny
Developments Ltd v Tarmac Construction Ltd and Another) acknowledges
this (albeit without express reference to the Constitution). On one
side of the scale must be weighed the potential injustice to
the
plaintiff or applicant if it is prevented from pursuing a legitimate
claim. This incorporates a recognition of the importance
of the right
of access to courts. On the other side of the scale must be placed
the potential injustice to the defendant if it
succeeds in its
defence but cannot recover its costs’
[13]
The judicial discretion that I must exercise is a discretion in the
narrow sense.
[17]
This
means a judicial evaluation of the facts and circumstances before me
in this specific case. The third respondent
seeks an order that
he be awarded security for costs in an amount of R500 000,00 by
payment into the third respondent’s attorneys’
trust
account, alternatively, that the amount and form of the security be
determined by the registrar of the court. This
on the basis
that the applicants are
peregrini
and own no assets in South Africa.
[18]
[14]
It is not disputed that the applicants fall to inherit the residue in
and to the deceased estate.
The estate conservatively has a net
worth of R25 million. Whilst the estate assets are valued at
R33 million, there are liabilities
in the form of estate duty, the
legal costs of curatorship and the costs of the administration of the
estate. The applicants
are entitled together to total vested
claims in the sum of R13,4 million. Furthermore, this excludes
the value of the shares
to which the third respondent asserts his
entitlement.
[15]
The applicants accordingly collectively stand to potentially receive
an amount of approximately
R13,4 million from the estate by way of
inheritance. This, even in the event that the third respondent
is successful in the
main application. This by far exceeds any
possible award of costs in the main application.
[16]
The applicant argues that no order for security for costs should be
granted for the following
reasons: that on the third
respondent’s own version he used his position as financial
advisor to the deceased so as
to include a significant benefit for
himself: that this falls to be viewed with unease: that
on the third respondent’s
own version, a mere few months after
executing the disputed wills, the deceased was significantly
cognitively impaired and that
the applicants have established
sufficient persuasive evidence to prove that the deceased was not of
sound mind when executing
the disputed wills in 2017.
[17]
In the alternative, the applicants have offered
[19]
to have a court order put in place directing that they not be
entitled to take their aliquot share in and to the estate, until
such
time as any costs award, as the third respondent might obtain against
them, has been extinguished. The effect
of this offer, is
to provide the third respondent with the security that any costs
awarded to him will be paid. I am of the
view, that by adopting
this stance, the applicants have managed to establish the equality
threshold required between litigants
in accordance with the decided
authorities on this issue.
[18]
The response to this offer by the third respondent bears scrutiny.
The first respondent
has produced a draft estate account
[20]
,
which confirms the value of the estate. This exhibits that
there is no risk on this score, to the third respondent.
The
suggestion that there may be unknown creditors who have significant
claims which would neutralise the R25 million net value
in the estate
is simply far-fetched.
[19]
I say this because the third respondent was the deceased’s
financial advisor and the deceased
was entirely reliant on the third
respondent. Besides, herein lies the rub! The third
respondent also launched an application
for the deceased’s
curatorship. The ostensible fears that there may be creditors
waiting in the wings, is simply not
sustainable.
[20]
The offer at the instance of the applicants, also features in it an
element directing that any
costs awarded in the third respondent’s
favour, be paid by the executrix from the residue of the estate due
to the applicants,
as a primary obligation. This in the form of
a ranking in preference. Furthermore, in a belt and braces
approach, the
applicants propose that should the estate residue
appear to be insufficient to meet any costs award in favour of the
third respondent,
then in that event, the third respondent shall be
entitled to revisit his security application.
Costs
[21]
One of the fundamental principles of costs is to indemnify a
successful litigant
for the expense put through in unjustly having to
initiate or defend litigation. The successful party should be
awarded costs.
[21]
The last thing that our already congested court rolls require is
further congestion by an unwarranted proliferation of litigation.
[22]
[22]
It is so that when awarding costs, a court has a discretion, which it
must exercise after a due
consideration of the salient facts of each
case at that moment. The decision a court takes is a matter of
fairness to both
sides. The court is expected to take into
consideration the peculiar circumstances of each case, carefully
weighing the issues
in each case, the conduct of the parties as well
as any other circumstances which may have a bearing on the issue of
costs and
then make such order as to costs as would be fair in the
discretion of the court.
[23]
No hard and fast rules have been set for compliance and conformity by
the court unless there
are special circumstances.
[23]
Costs follow the event in that the successful party should be awarded
costs.
[24]
This rule should be departed from only where good grounds for doing
so exist.
[25]
[24]
Regrettably, the
disputed
wills of the deceased did not receive any mention in the curatorship
application at the instance of the third respondent.
The third
respondent’s rejection of the reasonable and practical offer by
the applicants, is also unfortunate. A successful
litigant
falls to be indemnified for the expense put through in unjustly
having to defend litigation.
The
applicants submit that the current application has no merit and
amounts to an abuse of the court process.
[26]
This, submit the applicants, calls for a punitive cost order.
On this I agree, albeit to a limited extent.
[25]
I have formed this view for, inter alia, the following reasons:
that by the time the deceased
executed his disputed wills he was (87)
years old: that the third respondent was the deceased’s
financial adviser while
he was an employee with Sanlam: that
the third respondent assisted the deceased in the drafting of the
disputed wills:
that in the deceased’s previous wills the
vast majority of his estate was left to the applicants and nothing
was left to
the third respondent: that notably, a small bequest
was made to a friend who had already passed away during August 2016
and
that the deceased was first diagnosed with dementia during 2014.
[26]
Of equal importance is: that prior to the execution of the
disputed wills, the third respondent
openly discussed the deceased’s
then last will with the applicants and confirmed that they were the
major beneficiaries:
that having previously openly discussed
the deceased’s will with the applicants, after the execution of
the disputed wills,
the third respondent adopts a convenient bulwark
to the effect that he is no longer sanctioned to discuss these issues
with the
applicants.
[27]
This is exacerbated by the fact that when the third respondent
launched an application for the
appointment of a curator to the
deceased, he failed to disclose the fact that he assisted in
providing certain information in connection
with the disputed wills.
These are the very wills in which the deceased left the bulk of his
estate to the third respondent.
[28]
To an extent, the respondents own version euthanizes the suggestion
that the deceased may have,
in the last years of his life, racked up
such large debts as to negate any equity in his estate. In
short, the third respondent’s
rejection of the offer was
unjustified.
[29]
In all the circumstances of the matter, I hold the view that a
punitive costs order in this matter
is warranted for some of the
reasons set out in my judgment. I am not persuaded that any
costs order should now be granted
for the costs incurred by the third
respondent until he received the reasonable and practical offer from
the applicants legal representatives.
[30]
That having been said, it must have dawned on the third respondent
shortly after the filing of
the applicants’ offer, that the
arguments that the third respondent had propounded in support of his
security application
were doomed to failure. It is for this
precise reason that a portion of the costs awarded in this matter
will be on the scale
as between attorney and client.
Order
[31]
In the result, the following order is granted:
1.
That the applicants shall not be
entitled to receive any benefit from the estate of the late
Jan
Hendrik Adolphe Zipes
(Estate Number
018934/2019), until such time as any and all costs award(s), (if
any), granted in favour of the third respondent
in the course of the
main application, as taxed or agreed, have been paid on the
applicants’ behalf by the executrix, being
the first respondent
herein.
2.
That the first respondent is directed
not to distribute any benefit from the said estate to the applicants
until such time as any
and all costs award(s), (if any), granted in
favour of the third respondent in the course of the main application,
as taxed or
agreed, have been paid on the applicants’ behalf
and the first respondent is directed to pay any such costs award as a
first
charge against any benefit due to the applicants.
3.
That the first respondent shall proceed
to advertise the estate in order to ascertain if any other creditors
seek to lodge claims
against the estate but shall otherwise desist
from finally winding up the estate pending the outcome of the main
application.
4.
That in the
event of it appearing to the third respondent that creditors have
lodged claims against the estate that will have the
effect of
diminishing the net value of the estate to such a degree that the
share of the residue due to the applicants will be
insufficient to
cover any costs award that may be granted in his favour, the third
respondent shall be entitled to set this application
down afresh,
duly supplemented as far as may be necessary.
5.
That the third respondent shall be
liable for the costs of this application for security for costs, on
the scale as between attorney
and client, as from the 1
st
of September 2020, including the costs of and incidental to the
opposed hearing on the 24
th
of February 2021.
6.
That the costs of and incidental to the
application for security for costs, on a scale as between party and
party, from the inception
of the application, until the last day of
August 2020, shall stand over for determination in the main
application.
7.
That the
application for security for costs is postponed
sine
die
.
8.
That a copy of
this order shall be served on the first respondent forthwith.
________________
E.
D. WILLE
(Judge
of the High Court)
[1]
The
main application
[2]
Dated
the 27
th
of January 2017 and the 2
nd
of June 2017
[3]
The
disputed wills.
[4]
The
executrix
[5]
The
Master of the High Court
[6]
None
of whom are family members
[7]
The
applicants are ‘peregrini’ litigants
[8]
The
third respondent is an ‘in cola’ litigant
[9]
The
executrix is a
nominee
of Sanlam Trust (Pty) Ltd in her representative capacity
[10]
For
the appointment of a
curator
bonis
to the deceased
[11]
Towards
the latter part of 2017
[12]
Barker
v Bishops Diocesan College and others
2019
(4) SA 1
(WCC) at [26]
[13]
The
Constitution of the Republic of South Africa
[14]
Giddey
NO v J C Barnard and Partners
2007
(5) SA 525 (CC)
[15]
The
Companies Act No 61 of 1973
[16]
Giddey
NO v J C Barnard and Partners
[2006] ZACC 13
;
2007
(5) SA 525
(CC) at para
[30]
[17]
A
‘strict’ discretion
[18]
Further,
if they do own assets, they may be readily liquidated and the
proceeds removed from the country
[19]
The
‘offer’ - (This offer was essentially in the same terms
as the order granted in this judgment)
[20]
Liquidation
and Distribution Account
[21]
Union
Government v Gass
1959
4 SA 401 (A) 413
[22]
Socratous
v Grindstone Investments
(149/10)
[2011] ZASCA 8
(10 March 2011) at [16]
[23]
Fripp
v Gibbon & Co
1913
AD 354
at 364
[24]
Union
Government v Gass
1959
4 SA 401
(A) 413
[25]
Gamlan
Investments (Pty) Ltd v Trilion Cape (Pty) Ltd
1996 3 SA 692 (C)
[26]
Particularly
in view of the offer