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[2019] ZAGPPHC 68
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Labuschagne v Nel and Others (319/2018) [2019] ZAGPPHC 68 (11 March 2019)
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
(1)
NOT
REPORTABLE
(2)
NOT OF INTEREST TO
OTHER JUDGES
(3)
REVISED.
CASE NO:
319/2018
11/3/2019
In
the matter between:
INGRID
LABUSCHAGNE
APPLICANT
and
ELLEN
NEL IN HER CAPACITY AS
NOMINEE
OF STANDARD TRUST LIMITED
FIRST RESPONDENT
STANDARD
TRUST
LIMITED
SECOND RESPONDENT
MASTER
OF THE SOUTH
GAUTENG
HIGH COURT JOHANNESBURG
THIRD RESPONDENT
JUDGMENT
COLLIS J:
INTRODUCTION
[1]
In the present dispute the applicant is
seeking the removal of the executor
(first
respondent)
of the deceased estate
and in addition to this, the applicant seeks damages from the first
and second respondents.
[2]
The late Robert Attilia Ladanyi
('the
deceased)
died on 23 March 2012. The
deceased bequeathed his entire estate to the applicant in terms of
his Last Will and Testament dated
22 September 2008, and amended by
him on 16 November 2011.
BACKGROUND
[3]
On 22 September 2008, the deceased
attested his last Will and Testament.
[1]
On 16 November 2011, he amended his Will, in the presence of Niel
Botes, who later married the applicant. In terms of the amendment
to
the Will the applicant is named as sole heir.
[4]
The deceased in his Will nominated the
second respondent or Standard Bank as the executors in his estate,
whoever would accept the
nomination first.
[5]
On 20 May 2012, one Mareese Lucille
Joseph and Isabel Pieterse acting in their capacities as joint
nominees of Standard Trust Limited,
were appointed by the Master of
the South Gauteng High Court, as joint executors in the deceased
estate.
[2]
[6]
On 22 November 2014, the deceased's
mother, Gizella Ladanyi applied to this court to declare the Last
Will and Testament of the
deceased null and void. The applicant
opposed the application and lodged a counterclaim to be declared sole
heir in terms of the
amended Will.
[7]
On 16 September 2016, the
counter-application succeeded and the applicant was declared the sole
heir of the deceased estate in terms
of the Will.
[3]
[8]
On 3 May 2017, the first appointees as
executors were replaced and substituted by one Louise Van Niekerk,
acting in her capacity
as Nominee of Standard Trust Limited.
[4]
[9]
On 13 July 2017 the estate was wound up
and the first and final liquidation and distribution account was
prepared and certified
by the executor.
[5]
On 24 July 2017, the Liquidation and Distribution account was lodged
with the Master and the applicant was advised accordingly.
Proceeds
of the residue were also paid out to the applicant.
[6]
[10]
On 10 October 2017, after the resignation of Ms. Van Niekerk, she was
replaced by the first respondent
in her capacity as the Nominee of
the Standard Trust Limited. Such appointment was again made by the
Master of the South Gauteng
High Court.
[7]
What followed thereafter was the lodgement of the present application
seeking the removal of the current executrix and a claim
for damages
against her and the second respondent.
THE
LAW
[11]
Section 54(1)
(a)(v) of the
Administration of Estates Act 66 of 1965
permits a court to remove an
executor from his office. It reads as follows:
"54(1) An executor may at any
time be removed from his office;
(a)
by the Court-
(b)
(i)............. .
(ii)
if he has at any time been a party to an
agreement or arrangement whereby he has undertaken that he will, in
his capacity as executor
grant or endeavour to grant to or obtain or
endeavour to obtain for any heir, debtor or creditor of the estate
any benefit to which
he is not entitled; or
(iii)
if he has by means of any
misrepresentation or any reward or offer of any reward, whether
direct or indirect induced or attempted
to induce any person to vote
for his recommendation to the Master as executor or to the effect or
to assist in affecting such recommendation;
or
(iv)
if he has accepted or expressed his
willingness to accept from any person any benefit whatsoever in
consideration of such person
being engaged to perform any work of
behalf of the estate; or
(v)
if for any other reason the court is
satisfied that it is undesirable that he should act as executor of
the estate concerned; and
…………………………………………………
.”
[12]
The test to be applied when a Court
considers the removal of an executor, is whether the continuance of
the executor in office will
prejudicially affect the future welfare
of the estate.
[13]
The primary duties of an executor are
succinctly set out by the author D. Meyerowitz in Meyerowitz,
Administration of Estates and
their Taxation, 2010 para 11.4 p 11-2
which states that:
“
The executor acts upon his
own responsibility, but he is not free to deal with the assets of the
estate in a manner he pleases.
His position is a fiduciary one and
therefore he must act not only in good faith but also legally. He
must act in terms of the
law, which prescribes his duties and the
method of his administration and makes him subject to the supervision
of the Master in
regard to a number of matters.”
[14]
The learned author states further that,
an executor is 'not a mere procurator or agent for the heirs but is
legally vested with
the administration of the estate.' He adds
that..... "Immediately after Letters of Executorship have been
issued to him, the
executor must take into his custody or under his
control all the property in the estate which are not in the
possession of any
person who claims to be entitled to retain them
under any contract, rights of retention or attachment."
[15]
Having regard to the responsibilities
and duties of the executor
inter alia
set out above, the removal of an
executor is a decision which in my view should not be taken easily
and certainly just be taken
because of a mere conflict between an
executor and heirs to the estate. In the case of an executrix
testamentary, such as in the
present matter, the removal of an
executrix involves an interference with the testator's decision as to
who should be responsible
for the winding up of his estate. In the
present matter the deceased was clear in his will that his estate
should be wound up by
either a nominee of the second respondent or a
nominee of the Standard Bank of South Africa, whoever shall first
formally accept
such nomination.
[8]
[16]
An application for the removal of an
executor under
section 54(1)
(a) (v) of the Act was dealt with in the
matter of Die Meester v Meyer en Andere
1975 (2) SA 1
(T) at 16,
where the Court approved of the views expressed in Sackville West v
Nourse and Another
1925 AD 516
where Solomon ACJ at 527, referring to
the judgment of Lord Blackburn in Letterstedt v Broers
(9 AC 371):
'He then quoted a passage from
Story Equitable Jurisprudence....as follows:
"But in cases of positive
misconduct Courts of Equity have no difficulty in interposing to
remove trustees who have abused
their trust; it is not indeed every
mistake or neglect of duty or inaccuracy of conduct of trustees,
which will induce Courts of
Equity to adopt such a course. But the
acts or omissions must be such as endanger the trust property or to
show a want of honesty
or a want of proper capacity to execute the
duties, or want of reasonable fidelity."
'He then proceeded to lay down the
broad principle that:
"In exercising so delicate a
jurisdiction as that of removing trustees, their Lordships do not
venture to lay down any general
rule beyond the very broad principle
above enunciated that their main guide must be the welfare of the
beneficiaries.
[17]
The respondents in opposing the
application had raised several
points
in limine.
FIRST POINT IN LIMINE: NO CAUSE OF
ACTION AGAINST FIRST RESPONDENT AND SECOND RESPONDENT
[18]
The applicant's grounds for complaints
in relation to the first respondent are set out in paragraph 26 to
the founding affidavit,.
In summary, the applicant contends that the
first respondent and her predecessors have breached their obligations
owed to her as
sole heiress in the estate through their
maladministration of the estate in the following material respects:
18.1
She/they failed to take possession of
the estate's assets in a timely manner;
18.2
She/they failed to manage contracts
concluded by the deceased before his death for the financial benefit
of the estate;
18.3
She/they failed to ascertain the true
market value of assets on or near to the deceased's time of de th and
only did so nearly five
(5) years later;
18.4
She/they only realised assets not
encumbered by a Standard Bank loan. i.e the Norwood property and the
Nissan Sentra motor vehicle
some five years after their appointment
and only after her continued and repeated insistence;
18.5
She/they only realised the movable
assets encumbered in favour of Standard Bank at the loan settlement
value and not their market
values;
18.6
She/they turned a blind eye to and
allowed Zoltan to unlawfully occupy the main house on the Norwood
property, over the period commencing
1 February 2012 up to and
including 24 February 2017, without her consent and despite her
protestations, well knowing that Zoltan
was a third party with no
legal entitlement to occupy the said property. During the same period
she allowed Gizella to move into
the main house and stay there rent
free and against her express wishes. She further failed to monitor
Zoltan's liability for rates
and taxes, water and electricity usage,
which he only paid for up until July 2016, albeit that he only
vacated the property on
24 February 2017, thus causing a direct loss
to the estate;
18.7
She/they failed to secure the household
goods
(save for three items)
on
the Norwoord property thereby facilitating the theft thereof by
Zoltan who sold same prior to his departure from the property.
[19]
If one therefore considers how the
grounds set out in the applicant's complaints have been formulated,
each of these grounds points
to specific acts performed or neglected
to have been performed by the first respondent and or her
predecessors and to that of the
second respondent. It is apposite to
note that the complaints more often than not have all been phrased in
general terms.
[20]
In response to the above allegations the
first respondent sets out, that the applicant discloses no cause of
action for the relief
prayed for her removal. Furthermore, that she
fails to differentiate between the current executrix being herself,
her predecessors
and Standard Trust Limited. In addition, she sets
out that Letters of Executorship are only issued to individuals, not
a company
and although a person may be an executrix by virtue only of
her office in a company, that fact does not render her as executrix
subservient to her employer in regard to the administration of the
estate. Her duties as executrix override her duties to her employer
if they conflict and the interest of the estate she administers come
before those of her employ.er The first respondent further
contends
that she has done nothing wrong and that the applicant has furnished
no reason for her removal.
[9]
[21]
In this regard, Mr. Porteous on behalf
of the first and second respondents had submitted, that the applicant
has failed to disclose
what act committed by the first respondent
personally would render her unfit to continue to act as executor.
Furthermore, that
the acts or omissions of her predecessors are
irrelevant and neither has the applicant attacked the character of
the first respondent
or her professional ability which might render
her unsuitable to act as executor of the estate.
[22]
In her replying affidavit, and more
specifically paragraph 42 thereof, the applicant sets out, that the
removal of the previous
executors are irrelevant for purposes of the
present application and that the removal of the first respondent is
sought.
[10]
[23]
Importantly, in paragraph 43 she
conceded that the first respondent has inherited a mess, but alleges
that she stepped into the
shoes of the previous executrixes and as
such she cannot contend that because her appointment took place more
recently that she
cannot be tarred and feathered with the same brush
as her predecessors. Furthermore, that since the service of the
founding affidavit
on the first respondent, she has been incapable of
winding up the estate and went on to credit her account without
explaining where
and why these funds have been credited to her.
[24]
Counsel appearing on behalf of the
applicant, echoed the sentiments expressed by the applicant that the
first and second respondents,
including the first respondent's
predecessors, breached their obligations owed to the applicant as the
sole heiress in the deceased
estate, through their maladministration
of the estate. Differently put, counsel contended that any acts of
maladministration committed
by the predecessors of the executrix can
be revisited upon the current executrix.
[25]
The prevailing circumstances of the
present matter which is common cause between the parties, is that the
first respondent was only
appointed as executrix on 10 October 2017,
this approximately a month after the first and final liquidation and
distribution account
had been advertised in terms of
section 35
of
the
Administration of Estates Act.
[11
]
[26]
In addition
section 35(5)
(a) provides
as follows:
"5 (a) The executor shall
give notice that the account will be so open for inspection by
advertisement in the Gazette and in
one or more newspapers
circulating in the district in which the deceased was ordinarily
resident at the time of his death and,
if at any time within the
period of twelve months immediately preceding the date of his death
he was so resident in any other district,
also in one or more
newspapers circulating in that other district, and shall state in the
notice the period during which and the
place at which the account
will lie open for inspection."
[27]
Furthermore,
section 35
(7) provides
that:
"Any
person interested in the estate may at any time before the expiry of
the period allowed for inspection lodge with the
Master in duplicate
an objection, with reasons therefor, to any such account and the
Master shall deliver or transmit by registered
post to the executor a
copy of any such objection together with copies of any such documents
which such person may have submitted
to the Master in support
thereof."
[28]
Section 35(12
) provides as follows:
"When
an account has lain open for inspection as hereinbefore provided and
(a)
no objection has been lodged; or
(b)
. .. .. . ... ... ... .. . ... ... .... . .. .. . .... .
(c)
...... ............ ... ... ..... .... .......
the executor shall forthwith pay
the creditors and distribute the estate among the heirs in accordance
with the account..... ..
... ... .... ..... .. ... .. .. .... ...
......................................."
[29]
Significantly, the applicant makes no
reference in her founding affidavit that any of her complaints
directed against the first
respondent were brought to the attention
of the Master upon the Liquidation and Distribution account having
lain open for inspection
thereby exercising her rights in terms of
section 35
(7) of the
Administration of Estates Act. In
the absence
thereof, and in terms of the provisions of
section 35(12)
the
executor in the absence of an objection shall forthwith, pay to the
creditors and distribute to the heirs what is due to them.
[30]
The applicant's failure to raise an
objection with the Master on the liquidation and distribution account
in terms of
section 35(7
), to my mind is confirmation of no cause of
action having been made out against the current executrix which
warrants her removal.
In addition to this, there simply exists no
basis in law, to hold the current executrix liable for acts or
omissions performed
by any of her predecessors.
[31]
Consequently, I conclude that the first
point in limine
has
merit.
SECOND POINT IN LIMINE: REMOVAL OF
EXECUTOR WILL SERVE NO PURPOSE NEITHER HAS A DAMAGES CLAIM BEEN
ESTABLISHED
[32]
In addition to this, the provisions of
section 56(1)
of the Administration of the Estates Act provides that
upon completion to the satisfaction of the Master of the liquidation
and
distribution account of a deceased estate, the executor shall be
entitled to obtain his discharge from the Master. Furthermore,
section 56(2) of the Act, prohibits the institution by any person of
legal proceedings against any other person who has been discharged
as
executor in respect of any claim against the deceased estate or any
benefit out of that estate save for any fraudulent dealing
in
connection with the estate or the liquidation or distribution
thereof. In
casu,
and
by virtue of section 56(1) the first respondent would be entitled to
her discharge from the Master.
[33]
The provisions of
section 16
of the
Administration of Estates Act also
bears greater scrutiny. In terms
of this section letters of executorship are only issued to
individuals so that where an executor
appointed in a will is a
corporation, (such as the second respondent
in
casu)
the letters are not issued to
the corporation itself, but to some officer or employee of the
corporation nominated by it and for
whose acts the corporation
accepts liability.
[12]
Where the applicant contends that she has suffered economic loss as a
result of a wrongful act or delict on the part of the first
and/ or
second respondent, it was incumbent upon the applicant to plead the
nature and extent of any duty of care owed to her by
the respondents
as well as the alleged conduct in breach thereof in order to found
her claim in delict. In this regard the decision
of Fourway Haulage
SA (Pty) Ltd v SA National Roads Agency Ltd
[2008] ZASCA 134
;
2009 (2) SA 150
(SCA) at
156F-I, where Brand JA remarked as follows gives direction:
'[12] Recognition that we are
dealing with a claim for pure economic loss brings in its wake a
different approach to the element
of wrongfulness. This results in
the principles which have been formulated by this court so many times
in the recent past that
I believe that they can by now be regarded as
trite. These principles proceed from the premise that negligent
conduct which manifests
itself in the form of a positive act causing
physical damage to the property or person of another is
prima
facie
wrongful. By contrast, negligent causation of pure economic
loss is not regarded as
prima facie
wrongful. Its wrongfulness
depends on the existence of a legal duty. The imposition of this
legal duty is a matter for judicial
determination involving criteria
of public or legal policy consistent with constitutional norms. In
the result, conduct causing
pure economic loss will only be regarded
as wrongful and therefore, actionable if public or legal policy
considerations require
that such conduct if negligent, should attract
legal liability for the resulting damages. See e.g. Minister of
Safety and Security
v Duivenboden
2002 (6) SA 431(SCA).'
[34]
Having regard to the above, the
applicant can only succeed with her damages claim, if she is able to
prove that employees of the
second respondent carried our acts or
omitted to carry out certain acts which resulted in damages suffered
by her. By virtue of
the executors having been nominees in the employ
of the second respondent at all material times, the second respondent
could potentially
be held vicariously liable for the actions or
omissions of its employees. The applicant however would have been
required to identify
each specific act or omission as well as the
specific executor responsible for such act or omission and as argued
by counsel for
the respondents she has failed to do. This conclusion
I am in agreement with.
[35]
Given the advance stage that the
administration of the estate has progressed, and the failure on the
part of the applicant to allege
the specific acts or omissions
attributable to the current executor, I am not persuaded that any
merit exits warranting her removal
and by extension that the
applicant has proved any damages she has suffered as a result of the
actions of the executrix.
[36]
Consequently, I find that the second
point in limine
also
has merit.
[37]
To my mind the two
points
in limine
referred to above are
dispositive of the entire application. In the circumstances it is not
necessary to consider the remaining
points..
ORDER
[38]
In the result, the following order is
made:
38.1 The application is
dismissed with costs on an Attorney and Client scale.
C.
J. COLLIS
JUDGE
GAUTENG LOCAL DIVISION: JOHANNESBURG
APPEARANCES:
FOR
APPLICANT:
Adv. J.K. BERLOWITZ
INSTRUCTED
BY:
SALANT ATIORNEYS
FOR
FIRST AND SECOND RESPONDENTS: Adv. G.F. PORTEOUS
INSTRUCTED
BY:
SAVAGE JOOSTE & ADAMS INC.
DATE
OF JUDGMENT:
11 MARCH 2019
[1]
Founding Affidavit annexure 'FA2' pages 53-55
[2]
Founding Affidavit annexure 'FA3' page 56
[3]
Founding Affidavit annexure 'FAS' pg 58-71
[4]
Founding Affidavit annexure 'FA4' pg 56
[5]
Founding Affidavit pages 81-91
[6]
Answering Affidavit para 10.1 & 10.2 pg 227-228
[7]
Founding Affidavit para 12-15 and Answering Affidavit para 28
pg 183
[8]
Founding Affidavit annexure "FA 2" pg 53
[9]
Answering Affidavit para 8-12 pg 178-179
[10]
Replying Affidavit para 42 pg 322
[11]
Answering Affidavit para 5.2 annexure "AA1" page 172
[12]
Bekker v Republiek Trustees ( Edms) Bpk en 'n Ander 1988 (2) SA
250 (T) at 253B-D