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[2015] ZASCA 30
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Nedbank Limited v Steyn and Others (20085/2014) [2015] ZASCA 30; [2015] 2 All SA 671 (SCA); 2016 (2) SA 416 (SCA) (25 March 2015)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case
No: 20085/2014
In
the matter between:
NEDBANK
LIMITED
.................................................................................................
APPELLANT
and
ALETTA
PETRONELLA SUSANNA
STEYN
..........................................
FIRST
RESPONDENT
ANTOINETTE
MARTIN NO
(In
her capacity as duly appointed Executrix in
the
Estate of the Late Mr Pieter Stefanus
Steyn)
..................................
SECOND
RESPONDENT
VUSIMUZI
PHINEAS MASENYA NO
(In
his capacity as duly appointed Executor in the
Estate
of the Late Ms Lindiwe Maureen
Masenya)
.................................
THIRD
RESPONDENT
LUCAS
MLUNGISI FIGLAN NO
(In
his capacity as duly appointed Executor in
the
Estate of the Late Mr Themba David
Figlan)
................................
FOURTH
RESPONDENT
PETRUS
HENDRIK
MULLER
.................................................................
FIFTH
RESPONDENT
PETRUS
HENDRIK MULLER NO
(In
his capacity as duly appointed Executor in
the
Estate of the Late Ms Wilma Roelien
Muller)
....................................
SIXTH
RESPONDENT
TSHEPO
BETHUEL KGOPA NO
(In
his capacity as duly appointed Executor in the
Estate
of the Late Mr Malahlela Stephen
Kgopa)
..............................
SEVENTH
RESPONDENT
LINDIWE
PRINCESS
NTOMBELA
....................................................
EIGHTH
RESPONDENT
NORAH
THONNY MATHE NO
(In
her capacity as duly appointed Executrix in
the
Estate of the Late Mr Wardson Sandile
Mathe)
................................
NINTH
RESPONDENT
Neutral citation:
Nedbank Ltd v Steyn
(20085/2014)
[2015] ZASCA 30
(25 March
2015).
Coram:
Brand,
Lewis, Mbha JJA Meyer
et
Mayat AJJA
Heard:
20 March
2015
Delivered:
25 March 2015
Summary:
Administration of Estates Act 66 of 1965
– whether claims
procedure provided by the Act precludes a creditor from instituting
an action against the executor/executrix
of a deceased estate for
debt owed by the deceased – high court’s judgment that it
does set aside on appeal.
ORDER
Six
appeals from:
Gauteng Division of the High Court, Pretoria
(Mabuse J sitting as court of first instance):
1 The six appeals
are upheld with no order as to costs.
2 The order of the
court a quo in the first appeal of
Nedbank Ltd v Aletta Petronella
Susanna Steyn & another
under GPPHC case number 45338/2013 is
set aside and replaced by the following:
‘
Default
judgment is granted in favour of the applicant/plaintiff against the
first and second respondents/defendants, jointly and
severally, the
one paying the other to be absolved for:
(a) Payment of the
sum of R647 286.25;
(b) Interest on the
sum of R647 286.25 at the rate of 6.80% per annum calculated and
capitalised monthly in arrears from 19
June 2013 to date of payment,
both dates inclusive.
(c) An order
declaring:
A unit consisting of
–
(i) Section no 64 as
shown and more fully described on Sectional Plan No
SS321/2009
in the
scheme known as Elephant Mews in respect of the land and building or
buildings situated at Erf 468 Vanderbijl Park South
East 4 Township,
Local Authority: Emfuleni Local Municipality, of which section the
floor area, according to the said Sectional
Plan is 73 (Seven Three)
square metres; and
(ii) an undivided
share in the common property in the scheme apportioned to the said
section in accordance with the participation
quota as endorsed on the
said sectional plan.
Held by Deed of
Transfer No ST29384/2009.
A unit consisting of
–
(i) Section no 120
as shown and more fully described on Sectional Plan No
SS321/2009
in
the scheme known as Elephant Mews in respect of the land and building
or buildings situated at Erf 468 Vanderbijl Park South
East 4
Township, Local Authority: Emfuleni Local Municipality, of which
section the floor area, according to the said Sectional
Plan is 23
(Two Three) square metres; and
(ii) an undivided
share in the common property in the scheme apportioned to the said
section in accordance with the participation
quota as endorsed on the
said sectional plan;
Held by Deed of
Transfer No ST29384/2009.
Specially
executable.
(d) An order
authorising the plaintiff to execute against the said property as
envisaged in Rule 46(1)(a)(ii) of the Supreme Court
Rules;
(e) An order
authorising the sheriff to execute the writ of execution;
(f) An order for
costs on the attorney and client scale.’
3 The orders of the
court a quo in the other five appeals are set aside and these matters
are remitted to the court a quo for reconsideration
of the
applications for default judgment in the light of this judgment.
JUDGMENT
Brand
JA
(Lewis, Mbha JJA Meyer
et
Mayat AJJA
concurring):
[1]
In October 2013, 17 applications for default judgment came before
Mabuse J in the North Gauteng High Court, Pretoria in matters
of a
similar kind. I say similar because these matters had at least the
following features in common:
(a) In all of them
the plaintiffs were commercial banks.
(b) At least one of
the defendants in every one of them was the executor/executrix in a
deceased estate.
(c) The plaintiff’s
cause of action in every case relied on a loan to the deceased,
secured by a mortgage bond.
(d) Apart from an
order for payment of the amount owing under the loan agreement, the
plaintiff in each case sought an order declaring
the properties
mortgaged executable and also applied for the issue of writs of
execution in respect of these properties.
(e) The applications
were predicated on the failure by the defendants to defend the
actions instituted by the banks.
[2]
In the event, Mabuse J ordered all these applications for default
judgments to be removed from the roll, in order to enable
the
plaintiffs to comply with the provisions of the Administration of the
Estates Act 66 of 1965 (the Act). For reasons that will
soon become
apparent, this order meant that the plaintiffs would have to start
proceedings all over again and that, in consequence,
the applications
were effectively dismissed. The appellant in this matter, Nedbank
Ltd, was the plaintiff in six of these applications.
Those are the
matters on appeal before us. Mabuse J, however, gave his judgment
with reference to all seventeen applications before
him in the case
of
Standard Bank of South Africa Ltd v Ndlovu
(case number
33265/13) on 24 October 2013. Leave to appeal against that judgment,
which also pertains to the six appeals before
us, is with the leave
of Mabuse J. As in the court a quo, there was no appearance for any
of the respondents on appeal.
[3]
In broad outline the reasons given by the court a quo for refusing to
grant the default judgments sought, was that the plaintiff
banks,
including the appellant, had instituted action against the executors
or executrixes in the deceased estates under common
law, instead of
adopting the claims procedure provided for by sections 29, 32, 33 and
35 of the Act. This decision is in direct
conflict with the
conclusion arrived at by Van Oosten J in
Nedbank Ltd v Samsodien
NO
2012 (5) SA 642
(GSJ), which Mabuse J pertinently held to have
been wrongly decided. Succinctly stated the issue arising in this
appeal is therefore
whether the provisions of the Act, in the four
sections that I have referred to, preclude a creditor from its common
law right
to institute action against the deceased estate for payment
in terms of a loan agreement. In
Samsodien
Van Oosten J held
that they do not, while Mabuse J decided that they do.
[4]
Although there are six appeals before us, only the papers in the
Steyn matter were incorporated in the record on appeal. The
papers in
the other five matters were not so included. From the papers in Steyn
it appears that the deceased, Mr Steyn, passed
away on 4 June 2012.
Although the second respondent was appointed executrix in his estate
in December 2012, she had failed to finalise
the estate. The
immovable property in the estate is fully bonded. The monthly bond
instalment is R4 925.97. At the time when
the appellant issued
summons on 24 July 2013, the arrears were R132 005.71 which
equates to 27 months arrear payments. The
court a quo found as a fact
that there had been compliance with the requirements of s 29
regarding the publication of notice
to creditors in the Government
Gazette. I have no reason to doubt the correctness of this finding.
[5]
In the main, the claims procedure prescribed by s 35, read with
sections 29, 32, 33 and 34 of the Act boils down to this:
(a) As soon as may
be after an executor or executrix (I shall from now on, for
convenience, refer only to an executor) is appointed
he must, in
terms of s 29, cause a notice to be published in the Government
Gazette and in newspapers, calling upon persons
with claims against
the deceased estate to lodge these claims within a stipulated period
which is not to be less than 30 days (or
more than three months).
(b) Claims are then
to be submitted in the prescribed form within the period so
stipulated.
(c) On the expiry of
the period specified in the s 29 notice, the executor should
satisfy himself as to the solvency of the
estate and if it is found
to be insolvent, he is to proceed under s 34 of the Act.
(d) Otherwise the
executor is obliged to submit an account, in the prescribed form, of
the liquidation and distribution of the estate
as soon as possible
after the last day of the period specified in the s 29 notice,
but not later than six months after letters
of executorship have been
granted. This account will indicate, of course, whether or not a
particular claim had been admitted.
(e) The account lies
open for inspection in the Master of the High Court’s office
for a period not less than 21 days.
(f) Within that
period any person, including a purported creditor whose claim has
been rejected, who wants to object to the account,
must file that
objection with the master.
(g) The executor is
then afforded an opportunity to respond to the objection.
(h) Thereafter the
master decides whether the objection is well-founded or not.
(i) If the master
concludes that it is not, s 35(10) comes into play. This section
provides:
‘
Any person
aggrieved by . . . a refusal of the Master to sustain an objection so
lodged, may apply by motion to the Court within
thirty days after the
date of such . . . refusal or within such further period as the Court
may allow, for an order to set aside
the Master's decision and the
Court may make such order as it may think fit.’
[6]
The question, whether the claims procedure thus prescribed by the Act
must be understood to have taken away a creditor’s
common law
right to proceed by way of action against the deceased estate, is not
new. It also arose in a number of reported decisions
with reference
to the claims procedure stipulated by the predecessor of the Act, the
Administration of Estates Act 24 of 1913 (the
old Act). For present
purposes it can be accepted that the procedure prescribed by the old
Act had virtually been re-enacted in
terms of the new Act. The first
of these decisions under the old Act was
Estate Stanford v Kruger
1942 TPD 243
, which held that there was nothing in the old Act to
indicate that the legislature intended to deprive a creditor of his
or her
common law right to sue the deceased estate.
[7]
On this aspect
Estate Stanford
was followed in a closely
reasoned judgment by Watermeyer AJ in
Davids v Estate Hall
1956
(1) SA 774
(C). Davids had lodged a claim against the estate of Hall,
which was rejected by the executors in the estate. He then objected
to the omission of his claim from the liquidation and distribution
account, but this objection was not sustained by the master.
Thereafter he instituted action against the executors in the
magistrates’ court. In their plea the executors raised the
defence that Davids’ action was not competent in that his
exclusive remedy was to apply on motion for the setting aside of
the
master’s decision in terms of s 68(9) which was the
counterpart of s 35(10) of the Act. Davids filed an exception
to
this plea on the basis that it disclosed no defence, but this
exception was denied by the magistrate. Thereupon Davids took
the
dismissal of his exception on appeal to the Cape Provincial Division.
[8]
From the judgment of Watermeyer AJ on appeal, it appears that the
executors sought to support their defence, ie that Davids’
action was excluded by the provisions of the old Act, on the basis of
a principle recognised, for instance in
Madrassa Anjuman Islamia v
Johannesburg Municipality
1917 AD 718
, that where a statute
creates a right or an obligation and gives a special remedy for
enforcing it, the remedy provided by the
statute must be followed and
it is not competent to proceed by way of action at common law. But
Watermeyer AJ held that this principle
found no application. His
reasons for this finding appears from the following statement (at
776H-777A):
‘
The
principle as stated above has however no application to the present
case because the Administration of Estates Act did not create
the
right which the appellant seeks to enforce. That right arose from a
contract and under the Common Law appellant was entitled
to enforce
it by action. In any event, even if the principle in the
Madrassa
case,
supra
,
does extend to cases where the statute does not itself create the
right or obligation, then it must at least be clear that the
Legislature intended that the remedy provided is to be the only
remedy available.
As was stated by Tindall JA in
Mhlongo v
Macdonald
1940 AD 299
at p 310, the question is one
depending upon the construction of the particular statute and:
“
If the
Legislature's intention be to encroach on existing rights of persons
it is expected that it will manifest it plainly, if
not in express
words, at least by clear implication and beyond reasonable doubt. . .
.”
There are no express
words in the Act which deprive a creditor of his Common Law right to
proceed by way of action against an executor
for recovery of his
debt, nor, in my opinion, are there any words from which that
conclusion must be implied.’
[9]
Davids
was in turn followed by Smuts J in
Benade v Boedel
Alexander
1967 (1) SA 648
(O). In that case Benade lodged no
claim in response to the executor’s notice in the Government
Gazette. Instead, he instituted
action for the recovery of his claim
and obtained judgment in the magistrates’ court. On the basis
of this judgment he then
sought to sequestrate the deceased estate.
In answer the executrix in Alexander’s estate contended that
the magistrates’
court judgment was invalid since Benade was
bound to follow the claims procedure laid down in the old Act. On the
basis of
Stanford Estate
and
Davids,
Smuts J held,
however, that this answer could not be sustained. Subsequently, these
decisions were also approved and applied to
the virtually identical
provisions of s 35 of the (new) Act in
Jones & another v
Beatty NO & others
1998 (3) SA 1097
(T) 1101D-1102D.
[10]
This brings me to the judgment of Van Oosten J in
Nedbank Ltd v
Samsodien NO
2012 (5) SA 642
(GSJ), which Mabuse J refused to
follow because, in his view, it had been wrongly decided. Samsodien
was also the executrix in
a deceased estate. When Nedbank instituted
action against the estate by way of summons, she raised the special
plea that the procedure
adopted by Nedbank was incompetent in that it
should have followed the claims procedure laid down in the Act
instead. On the authority
of
Estate Stanford
,
Davids
and
Benade
, Van Oosten J held, however, that this claims procedure
does not deprive a creditor of its common law right to enforce a
claim
against the deceased by way of action against his or her
estate. Hence he held the special plea to be unfounded.
[11]
Mabuse J analysed the decisions relied upon in
Samsodien NO
and
came to the conclusion that they do not support that judgment. In all
these cases, so Mabuse J held, the plaintiffs had submitted
claims
against the estates and when the executor nonetheless omitted those
claims from his account, the plaintiffs had lodged an
objection
against the account to the master who in turn rejected their
objections. It is only then, so Mabuse J concluded, that
the
plaintiffs in those three cases instituted action. On that basis he
found these cases distinguishable from the present case
on the facts.
Purely with reference to the facts of the three cases under
consideration, I believe that Mabuse J’s analysis
holds true of
Estate Stanford
and of
Davids
, but not of
Benade
.
In the latter case the plaintiff did indeed bypass the claims
procedure of the old Act completely. He never lodged any claims
against the estate. To that extent
Benade
is therefore not
distinguishable from the facts in the present consideration. But be
that as it may, in my view Mabuse J’s
analysis of the three
cases misses the
ratio decidendi
of all three. That
ratio
decidendi,
as I see it, is in short that the procedure laid down
in the Act does not preclude the plaintiff from instituting an action
in common
law against the estate. Thus understood, all three
judgments do indeed lend direct support to the judgment of Van Oosten
J in
Samsodien NO.
[12]
Moreover, I believe these cases were correctly decided. Unless it can
be said that the Act must be construed to deprive the
plaintiff of
the common law action against the estate, that action remains extant.
The finding by Watermeyer AJ that there is no
express provision to
that effect in the old Act, also holds true of the Act. Moreover, in
the same way as Watermeyer AJ, I do not
find any clear implication to
that effect in the provisions of the Act. In this regard Mabuse J
seems to have found that clear
implication in the considerations that
the institution of common law actions alongside the application of
the statutory claims
procedure, will delay the finalisation of the
estate. And that, so he said, ‘would also constitute an
involved and costly
procedure to claim payments of the debts from the
estate when the Act provides for an inexpensive and speedy manner to
do so’.
I believe, however, that there is more than one answer
to these considerations. First, the claims procedure can hardly be
said
to be speedy if, as happened in Steyn, the executor delays the
finalisation of the estate for years. Secondly, there appears to
be
no factual basis for the suggestion that the statutory claims
procedure would be less expensive. It seems to lose sight of the
fact
that the creditor would have to launch a review application in the
high court and, if a factual dispute should arise, it would
lead to
the hearing of oral evidence, which is akin to a trial. Hence it
raises the rhetorical question: why would an action in
the
magistrates’ court, for example, be more expensive than an
opposed high court application with the concomitant risk of
the
proceedings being converted into a trial? Thirdly, and in any event,
even if there is some merit in these considerations, they
do not
constitute sufficient grounds for a finding that by implication the
common law action had been repealed.
[13]
Finally, in the light of the legislative history there is in my view
another consideration why the ultimate conclusion by Mabuse
J cannot
be sustained. It is this. We know that prior to the Act (ie Act 66 of
1965) there was a line of decisions in which the
courts attributed a
particular meaning to the pertinent provisions of the old Act (ie Act
24 of 1913). According to established
authority, the legislature is
presumed to have known of these decisions. When it subsequently
introduced virtually the same provisions
in the new Act, it must be
taken to have endorsed the meaning attributed to those provisions by
the courts.
[14]
It follows that, in my view, the six appeals before us should be
upheld and the orders of the high court be set aside. Since
the
appeal was not opposed by any of the respondents, I think the
appellant should bear its own costs on appeal, which translates
into
no order as to costs. With reference to the facts, counsel for the
appellant submitted that in the Steyn appeal a good case
had been
made out for default judgment in the terms it was sought. Since I can
find no reason to believe otherwise, that is the
order I propose to
make. But with regard to the other five matters on appeal, counsel
for the appellant conceded, rightly in my
view, that there is
insufficient evidence before us to consider these applications for
default judgment on their merits. In consequence
I believe they
should be remitted to the high court for reconsideration in the light
of this judgment.
[15]
In the result:
1 The six appeals
are upheld with no order as to costs.
2 The order of the
court a quo in the first appeal of
Nedbank Ltd v Aletta Petronella
Susanna Steyn & another
under GPPHC case number 45338/2013 is
set aside and replaced by the following:
‘
Default
judgment is granted in favour of the applicant/plaintiff against the
first and second respondents/defendants, jointly and
severally, the
one paying the other to be absolved for:
(a) Payment of the
sum of R647 286.25;
(b) Interest on the
sum of R647 286.25 at the rate of 6.80% per annum calculated and
capitalised monthly in arrears from 19
June 2013 to date of payment,
both dates inclusive.
(c) An order
declaring:
A unit consisting of
–
(i) Section no 64 as
shown and more fully described on Sectional Plan No SS321/2009 in the
scheme known as Elephant Mews in respect
of the land and building or
buildings situated at Erf 468 Vanderbijl Park South East 4 Township,
Local Authority: Emfuleni Local
Municipality, of which section the
floor area, according to the said Sectional Plan is 73 (Seven Three)
square metres; and
(ii) an undivided
share in the common property in the scheme apportioned to the said
section in accordance with the participation
quota as endorsed on the
said sectional plan.
Held by Deed of
Transfer No ST29384/2009.
A unit consisting of
–
(i) Section no 120
as shown and more fully described on Sectional Plan No SS321/2009 in
the scheme known as Elephant Mews in respect
of the land and building
or buildings situated at Erf 468 Vanderbijl Park South East 4
Township, Local Authority: Emfuleni Local
Municipality, of which
section the floor area, according to the said Sectional Plan is 23
(Two Three) square metres; and
(ii) an undivided
share in the common property in the scheme apportioned to the said
section in accordance with the participation
quota as endorsed on the
said sectional plan;
Held by Deed of
Transfer No ST29384/2009.
Specially
executable.
(d) An order
authorising the plaintiff to execute against the said property as
envisaged in Rule 46(1)(a)(ii) of the Supreme Court
Rules;
(e) An order
authorising the sheriff to execute the writ of execution;
(f) An order for
costs on the attorney and client scale.’
3 The orders of the
court a quo in the other five appeals are set aside and these matters
are remitted to the court a quo for reconsideration
of the
applications for default judgment in the light of this judgment.
F
D J Brand
Judge
of Appeal
APPEARANCES:
For
the Appellant: A C Ferreira SC; C G v O Sevenster
Instructed by: Vezi
& De Beer Attorneys
Pretoria
c/o Symington &
De Kok, Bloemfontein
For
the Respondents: No appearance for the respondents