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2023
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[2023] ZAFSHC 110
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Linde v Mokgobo N.O. and Others (2089/2020) [2023] ZAFSHC 110 (6 April 2023)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2089/2020
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
BRICHELLE
LINDE
Applicant
and
T
MOKGOBO
N.O.
First
Respondent
THE
MASTER OF THE HIGH COURT,
BLOEMFONTEIN
Second
Respondent
J
H D BLOEM
N.O.
Third
Respondent
B
LINDE
N.O.
Fourth Respondent
C
BOTHA
N.O.
Fifth
Respondent
FAL
FINANSIELE DIENSTE INC
Sixth
Respondent
SPANGENBERG
ZIETSMAN & BLOEM INC
Seventh
Respondent
CORAM:
LOUBSER,
J
et
MPAMA, AJ
HEARD
ON:
21
NOVEMBER 2022
JUDGEMENT
BY:
MPAMA,
AJ
DELIVERED
ON:
The
judgment was handed down electronically by circulation to the
parties’ legal representatives by email and released to SAFLII
on 6 APRIL 2023. The date and time for hand-down is deemed
to be 6
APRIL 2023 at 12:00
[1]
This is an application for the review and setting aside of a decision
of the Master of the High Court, Bloemfontein,
made on 12 March 2020
in which he refused to uphold the applicant’s objection to a
liquidation and distribution account.
The objection was lodged in
terms of Section 37(7) of the Administration of Estates Act
[1]
(the Act). The applicant, Ms Brichelle Linde was married out of
community of property with the accrual system to the late mr Jacobs
Daniel Bruwer (the deceased) who passed away on 10 February 2014.
[2]
The first respondent is an Assistant Master at the
Master’s office, Bloemfontein, and is cited in his official
capacity. The second respondent is the Master of the High Court,
Bloemfontein. The third respondent is mr Johannes Hendrik Daniel
Bloem, an attorney cited in his capacity as the executor of the
deceased’s estate. The fourth and the fifth respondents are
the
trustees of the JDB Group Trust. The sixth respondent is a company in
which the deceased was a shareholder in his lifetime
and the seventh
respondent is a firm of attorneys wherein the third respondent is an
attorney.
[3]
The deceased died testate. The applicant and the JDB Group Trust are
the only heirs of the estate of the deceased.
The executor of the
deceased estate lodged a liquidation and distribution account (L&D
account). The applicant raised certain
objections to the L & D
account (to be dealt with hereinunder) with the Master. The Master
dismissed the objections in terms
of section 35(9) of the Act on the
basis that he was unable to decide the objections due to the
existence of factual disputes.
The applicant, aggrieved by this
decision of the Master, approached this court for the review of the
Master’s decision in
terms of section 35 (10) of the Act. The
section provides:
“
Any person
aggrieved by any such direction of the Master may apply by motion to
the Court within thirty days after the date of such
direction or
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 an order as it may think fit”.
[4]
The applicant in her notice of motion requests the following relief:
“
1. That
condonation be granted for the late filing of the review application
in terms of
section 35(10)
of the
Administration of Estates Act, 66
of 1965
.
2. Reviewing and setting
aside the decision by the first respondent in his capacity as the
Assistant Master of the High Court, Bloemfontein,
dated 12 March 2020
in terms of
section 35(10)
of the
Administration of Estates Act, 66
of 1965
.
3. Substituting the
decision by the first respondent with the following decision:
“
That the
applicant’s objection against the L & D account dated 21
February 2020 be upheld” and make such order as
the Honourable
Court deems fit.
4. Ordering the
respondents who oppose this application to pay the costs thereof.”
[5]
The applicant requests the court in the event that it finds in her
favour and set aside the decision of the
first respondent, to make an
order in terms of section 7 of the Promotion of Administrative
Justice Act
[2]
and to substitute the Master’s finding instead of remitting the
matter back to him.
[6]
THE OBJECTIONS:
(i)
The first objection relates to item 4 of the L & D account. The
deceased in his lifetime had shares
in a company, FAL Financial
Services (FAL). The executor obtained an evaluation of the deceased’s
shares from mr Wessel Smit
of Core Tax. The value of shares was
determined to be an amount of R447 746.00. The applicant found
this value excessive.
She then approached mr Smit and had the shares
re-evaluated without consulting the executor. Mr. Smit revised the
value of shares
to an amount to R268 647.00. No reasons were
proffered by mr Smit regarding the revised value. The applicant
furnished the
revised value of the shares to the executor before the
account of the deceased estate was submitted to the Master in terms
of section
35(1) of the Act. The executor refused to accept the new
evaluation. He drew the account and reflected the initial value of
the
shares. The applicant raised an objection to this item of the L &
D account.
(ii)
The second objection deals with a debit loan account in FAL of which
the deceased was a director with a mr
Simkin and a mr van Jaarsveld.
FAL lodged a claim against the estate of the deceased for an amount
of R117 475.63 being an
amount paid by FAL for the deceased’s
personal expenses. At the heart of this claim are monthly premiums
paid by FAL for
the deceased’s life cover totalling
R126 321.02, premiums for the deceased’s contribution to
Discovery Medical
Scheme totalling R32 054.32 and monthly
donations of R250.00 paid on behalf of the deceased to Boys Town. The
applicant objected
to this claim and requested the executor to
conduct an enquiry in terms of section 32 (1) (a) of the Act. Such an
enquiry was held
on 14 May 2019. This claim was upheld after the
enquiry. The applicant, dissatisfied with the outcome of the enquiry
lodged an
objection to the Master regarding this claim.
(iii)
The third objection relates to the legal costs due to the firm of
attorneys of which the executor is an
attorney. The executor is an
attorney at Messrs Spangenberg, Zietsman and Bloem Attorneys (the
seventh respondent). The firm of
attorneys claimed an amount of
R47 768.50 for services rendered to the deceased’s estate.
This claim was allowed by
the executor. The applicant objected to
this claim on the basis that the executor cannot be an executor of
the estate and at the
same time become an attorney rendering services
to the estate and claim legal fees for services rendered as an
attorney. The applicant
averred that the executor is conflicted. If
the estate needs the services of an attorney, an independent firm of
attorneys ought
to be appointed and not the executor’s firm, it
is contended.
(iv) The
fourth objection lies in the payment of the executor’s fees.
The applicant contended that the executor
is not entitled to
remuneration for the executor at a rate of 3.5 % amounting to R
129 297.66. The applicant contends that
the “inordinate
and inacceptable delays” in the finalisation of the
administration of the deceased’s estate and
the actions of the
executor which resulted in the estate paying penalties for late
payment of the estate duty warrants that the
remuneration or a
portion thereof be disallowed by the Master.
(v) The
fifth objection is based on an alleged miscalculation of the cash
fall by the executor. The applicant
contends that the amount of cash
fall reflected in the account as R368 083.95 is incorrect. The
correct amount is R 304 977.88.
[7]
The crisp issue to be decided is whether the Master was correct when
he ruled that he is unable to make a
decision on objections raised by
the applicant due to a factual dispute.
[8]
As for the application for condonation: The review
application must be brought within 30 days or within such a
longer
period as the court may allow. See section 35(10) of the Act. The
application for condonation is not opposed by the respondents.
The
decision under review was taken on 12 March 2020 and the review
proceedings were commenced on 23 June 2020. The applicant explains
in
her affidavit that the delays were occasioned by the lockdown due to
COVID 19. I find no reason not to grant the indulgence.
The
application for condonation should succeed.
[9]
Without overburdening the judgment, I now turn to deal
with each objection as raised by the applicant.
9.1
Objection 1: It is undisputed that the applicant without consulting
the executor approached the evaluator
of the deceased’s shares
at FAL. The value of the shares was altered. Section 13 of the Act
places a duty on the executor
to liquidate and distribute the assets
in the deceased’s estate. The duties include selling property,
realising its proceeds,
settling debt and paying out the proceeds of
the estate to the heirs. The applicant usurped the powers of the
executor by approaching
Core Tax. It is inexplicable how the new
value was arrived at as there is no explanation from mr Smit
regarding the two values
of the shares. I am satisfied that there is
no factual dispute here, and the Master ought to have dismissed the
objection.
9.2
Objection 2: The deceased was a shareholder in FAL with mr Simkin and
mr van Jaarsveld. The applicant
has raised a number of issues
regarding this claim. First she makes allegations that mr Simkin and
mr van Jaarsveld were not entitled
to any profits made by this entity
as they were not auditors and by operation of law are not allowed to
share profits as they are
not auditors. She went further and
explained that the entity, FAL, was intended to benefit from the life
insurance taken by the
deceased, the company rightly paid the
premiums. The applicant went on and on explaining how this money was
on a monthly basis
reconciled by the company hence the deceased had a
credit balance at the time of his demise. On her affidavit an
impression is
created that payment of these amounts by the estate
will result in double payments. The executor gave a valid explanation
as to
why this amount is payable and due by the estate. The
applicant’s objection in this respect stands to be rejected.
9.3
Objection 3 & 4: An executor in the performance of his duties
must draw a L& D account showing
the assets and claims against
the estate of the deceased. This account must be placed before the
Master for examination. The assets
must be distributed and
transferred to the heirs and claims against the estate must be paid.
These duties entitles an executor
to remuneration at the prescribed
tariff of 3.5 % of the deceased’s estate.
Section
51 of the Act deals with the remuneration of the executor. It
provides:
“
51(1)
Every executor (including an executor liquidating and distributing an
estate under subsection
(4) of section 24) shall, subject to the
provisions of subsections (3) and (4), be entitled to receive out of
the assets of the
estate-
(a)
such remuneration as maybe fixed by the deceased by the will; or
(b)
if no such remuneration is being fixed, a remuneration shall be
assessed according
to a prescribed tariff and shall be taxed by the
Master.
(2)……………
(3) The
Master may:
(a) if there are in any
particular case special reasons for doing so, reduce or increase any
such remuneration;
(b) disallow any such
remuneration, either wholly or in part, if the executor or interim
curator has failed to discharge his duties
or has discharged them in
an unsatisfactory manner; and
(c) ………”
There
is no doubt that an executor receives his remuneration from the
assets of the estate. The only issue is whether the firm of
attorneys
of which an executor is a director of is entitled to receive fees
more that the amount allowed in the Act (the 3.5%).
The applicant’s
contention with the amount claimed by the executor’s firm of
attorneys is that there is a conflict
of interest, another firm ought
to have been appointed to offer the legal services to the estate. It
is not the applicant’s
contention that the firm did not offer
the services to the estate or in the claimed amount. In the case of
ESTATE
FAUCUS v VON BOESCHOTEN and LOVENTZ
[3]
it was said:
“
An executor who is
an attorney and acts in his professional capacity on behalf of the
estate in a lawsuit is not entitled to remuneration
as an attorney,
notwithstanding that his co-executor approves of him so acting.”
The
court went further and said:
“
This is based on
the principle that the court will not allow a man to place himself in
a position to which his duty and interest
maybe in conflict”.
The
applicant’s affidavit is not helpful as to when the firm of
attorneys started acting on behalf of the deceased. The executor
explained that the firm was approached by the deceased in his
lifetime and despite the fact that an executor was appointed from
the
firm, the firm continued acting on behalf of the deceased’s
estate. The applicant went further to make a bald statement
of
conflicting interest between the executor and the firm of attorneys.
This statement has not been substantiated by the applicant.
My
considered view is that the principle enunciated in the case of
Faucus (supra) does not find application in this case. The firm
of
attorneys acted on behalf of the deceased before his demise and
continued after his demise. It does not appear that the applicant
raised her concerns in this respect until the L& D account was
laid for inspection.
Regards
the remuneration of the executor, the applicant only mentions the
delays by the executor in finalising the estate of the
deceased and
the estate duty that he failed to pay resulting in the estate being
penalised for late payment. Her affidavit does
not mention what
occasioned the delays. The executor in his affidavit singled out the
applicant for the delays and mentions that
there were no funds
available to pay the estate duty. He conceded that he failed to
approach the applicant with regard to the payment
of the estate duty.
The executor went further and provided a reason for not approaching
the applicant, being that he never was
in a position to calculate the
estate duty since he had many problems in receiving information
pertaining to monies the deceased
was entitled to. Because of these
problems he was also not in a position to approach the Commissioner
for an extension of time
to pay the estate duty, more so since he was
accused of an omission in failing to pay estate duty. It is my view
that the circumstances
listed in section 51(3) of the Act have not
been established.
9.4 Objection
5: The parties are in agreement that this objection can be upheld. It
related to wrong amounts being reflected
in the L & D account.
[10]
A review court has powers to scrutinise and set aside the
administrative decisions if found to be irrational, or taken without
authority or where the decision maker made an error in law. The
Master exercising his administrative powers made a ruling. The
Master
failed to rule on the objections on the basis that there were factual
disputes. It is this finding that the court is requested
to review
and set aside. I am satisfied that the ruling made by the Master was
wrong in law and ought to be set aside. The parties
have requested
that the court should make its own order instead of remitting the
matter back to the Master.
[11]
In the result the following orders are made:
1.
Condonation is granted for the late filing of the review application.
2. The
decision of the First Respondent not to decide the applicant’s
objections against the L & D account
dated 21 February 2020 is
hereby reviewed and set aside.
3. The
applicant’s objections no 1 to 4 to the L & D account are
dismissed.
4. The
applicant’s objection no.5 is upheld, and the cash shortfall in
the L & D account is amended to reflect
the amount of
R304 977.88.
5. No cost
order is made.
L.
MPAMA, AJ
I
concur:
P.
J. LOUBSER, J
For
the Applicant: Adv.
M. P. van der Merwe SC
Instructed
by: c/o
Madri Du Preez Attorneys
Bloemfontein
For
the Respondents: Mr.
J. H. D. Bloem
Instructed
by: Messrs
Spangenberg,
Zietsman
& Bloem Attorneys
Bloemfontein
[1]
Act 66
of 1965
[2]
Act
3 of 2000
[3]
1934
TPD 94