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[2018] ZAGPJHC 541
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G S and Another v Vardakos NO and Others (32795/2017) [2018] ZAGPJHC 541 (20 September 2018)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 32795/2017
In
the matter between:
G S
1
ST
APPLICANT
A S
2
ND
APPLICANT
(Assisted
by her father and natural guardian)
And
VASILIOS VARDAKOS N.O.
1
ST
RESPONDENT
M S
2
ND
RESPONDENT
O S
3
RD
RESPONDENT
G S
4
TH
RESPONDENT
THE MASTER OF THE HIGH COURT:
JOHANNESBURG 5
TH
RESPONDENT
JUDGMENT
TSOKA
J
[1]
In this application, the two applicants, G S (G), the first applicant
and A S (A), the second applicant seek an order against
Vasilios
Vardakos N.O. (Vardakos), the executor of the estate of F S (F), for
the full details of the bank account/s opened in
the name of the
Estate late F S in terms of s28 of the Administration of Estates Act
66 of 1965 (the Act).
[2]
The order sought by G and A against Vardakos is for the latter to
also furnish the full details of the bank account/s into which
Vardakos deposited the sum of R3 395 759.55 previously held by F as
investment with Mercantile Bank. The full details of the account/s
must state the account number; the type of the account as well as the
percentage of interest offered by the bank into which the
said sum of
R3 395 759.55 was deposited, supported by a complete set of invoices
and vouchers for the period 3 June 2015 up to
31 August 2017.
[3]
The facts underpinning the order sought are undisputed. On 21
February 2015 F passed away. He left a Will in terms of which
Vardakos was appointed the executor. In terms of the Will, F
bequeathed his entire estate to G while the residue of his estate
was
left to his grandchildren, including A. The residue was to be held in
trust for the grandchildren.
[4] On 25 March 2015, pursuant to the
death of F, the Master of the High Court, Johannesburg, in compliance
with the terms of the
Will, appointed Varkados, a practising
attorney, as an executor of the estate. Three months after his
appointment as executor,
Vardakos on 3 June 2015 withdrew from
Mercantile Bank, the amount in the sum of R3 395 759.55 from F’
investment account
with the said bank. Soon thereafter G, his
attorneys and the Master requested Vardakos for the details and the
bank statements
of the estate and the account number into which the
said moneys were deposited. This request was in terms of s28 of the
Act which
provides that –
‘
1. An
executor –
(a)
shall, unless the Master otherwise directs,
as soon as he or she has in hand moneys in the estate in excess of
R1000, open a cheque
account in the name of the estate with a bank in
the Republic and shall deposit therein the moneys which he or she has
in hand
and such other moneys as he or she may from time to time
receive for the estate’.
[5] Instead of complying with G’
and the Master’s directive, Vardakos failed to furnish the
information so requested.
The refusal was on the basis that the
former had no locus standi to request the information. Responding to
the Master with regard
to the lodgement of the Liquidation and
Distribution account, Vardakos stated that as there were properties
outside the Republic
of South Africa, he was unable to file the
Liquidation and Distribution account which, in terms of s35 of the
Act, should have
been filed within a period of six months from 25
March 2015.
Vardakos’
refusal to comply with G’ request and the Master’s
directive.
[6]
In terms of s36 of the Act, Vardakos was obliged to lodge an account
with the Master as and when required to do so, or to lodge
any
voucher or vouchers in support of such account or any entry therein
in accordance with a provision of or a requirement imposed
under the
Act or to perform any other duty imposed upon him by the Act or to
comply with any reasonable demand of the Master for
information or
proof required by the Master in connection with the liquidation or
distribution of the estate. The obligation on
Vardakos is not only
imposed on him when required to do so by the Master but is also
imposed on him when directed to do so by “any
person having an
interest in the liquidation and distribution of the estate”.
[7]
G states that, as the legatee in terms of the Will of F, he is an
interested party in the liquidation and distribution of the
estate of
F. As such an interested party, he was thus entitled in terms of s36
of the Act to request the information from Vardakos.
That it is
indeed so that G has interest in the liquidation and distribution of
the estate, is apparent from the clear wording
of the provisions of
s36 of the Act. The inevitable conclusion is that, G’ request
being reasonable, Vardakos was obliged
to comply with the request.
The fact that there were assets outside the jurisdiction of the
Republic of South Africa that had not
been accounted for, is
irrelevant and of no consequence as G’ request was only with
regard to the amount of R3 395 759.55
that should have been deposited
into the Estate late Account F. A detailed and full settlement of
account supported by vouchers
from Mercantile Bank was all that was
required. Anything else is irrelevant and a red herring.
[8]
Having failed to comply with G’ request and the Master’s
directive, on 31 August 2017, G and A launched the present
application for Vardakos to comply with the provisions of s35 of the
Act, namely to file the Liquidation and Distribution account
together
with the necessary vouchers explaining whether an account in the name
of the estate was opened; the account no; interest
earned by the
capital withdrawn from Mercantile Bank and whether any disbursements
were made on behalf of the estate supported
by documentary evidence.
[9]
In an attempt to comply with the Master’s directive, Vardakos
on 31 August 2016 attempted to furnish the Master with a
draft
Liquidation and Distribution Account. The Liquidation and
Distribution account furnished is unsupported by any vouchers or
bank
statements. What however emerges from the said account is that the
amount of R3 395 759.55, instead of having increased by
interest
earned, has dropped. No explanation for the drop is explained other
than that he, Vardakos, utilized some of the moneys
withdrawn from
Mercantile Bank to comply with Folios’ oral wish to pay for the
other grandchildren’s medical, school
expenses and day to day
living expenses of the said grandchildren.
[10]
It appears that the applicants’ and the Master’s concern
with regard to the proper administration of the estate
of F is not
misplaced. There appears to be something that Vardakos is not open
about with regard to the money withdrawn from Mercantile
Bank.
Instead of an estate account being opened, the moneys were deposited
into his trust account contrary to the provisions of
s28 of the Act.
If indeed the difference between the money withdrawn from Mercantile
Bank was utilized for the benefit of the grandchildren,
one would
have expected Vardakos to have complied with the provisions of
s26(1A) of the Act which provides that such expenses were
only to be
incurred with the consent of the Master. Such consent was however,
not sought and obtained from the Master. The explanation
is that some
moneys were utilized for the support of the grandchildren, is
contrary to the terms of the Will and the express provisions
of s26A
of the Act. The utilization is thus unlawful.
[11]
It is apt to restate the duties of executors of deceased estates. In
Lockhat’s
Estate v North British & Mercantile Insurance Co Limited
[1]
at page 302E-F, the Appellate Division, as it then was, had this to
say –
‘
The duty of
an executor who has been appointed to administer the estate of a
deceased person is to obtain possession of the assets
of that person,
… to realise such of the assets as may be necessary for the
payment of the debts of the deceased, taxes,
and the costs of
administering and winding-up the estate, to make those payments, and
to distribute the assets and money that remain
after the debts and
expenses have been paid among the legatees under the will …’
[12]
Clause 8 of the Will of F is of crucial importance. It bears
repetition. It provides –
‘
As soon as
possible following the winding-up of my estate to the satisfaction of
the Master of the High Court the residue of my
estate consisting of
the immovable property situate at SE3 and SE4, Vanderbijlpark, all my
bank accounts that I have with Mercantile
Bank of Lisbon that have
been opened by me, my 50% (fifty percent) members interest in Corpus
Properties CC and my shares in Liberty
Life and Standard Bank shall
devolve upon our trustee in trust for the benefit of my grandchildren
or their issue per stirpes still
under the age of 25 (twenty five)
years, subject to the terms, conditions and powers more fully set out
hereafter’.
[13]
Vardakos’ contention that he paid school and medical fees and
the day to day living expenses of the grandchildren is
at odds with
the clear wording of F’ Will. These expenses, in terms of
clause 8 quoted above, were only to be utilized for
the benefit of
the grandchildren only after the winding-up and from the residue of
the estate. The estate not having been wound
up, there cannot be any
utilization of the residue for the grandchildren. The contended
utilization of part of the investment at
Mercantile Bank is a
diversion. Vardakos is obliged to account to both the Master and the
applicants as to how the investment withdrawn
from Mercantile Bank
was utilized.
[14]
In argument, counsel for Vardakos submitted that as Vardakos was not
given a months’ notice prior to the launching of
the
application, the application deserves to be dismissed with costs.
[15]
The submission is without merit. On 2 June 2017 and 14 July 2017 the
Master directed Vardakos to lodge the Liquidation and
Distribution
account of the Estate late F on or before 28 July 2017. The
Liquidation and Distribution Account was not lodged. It
was only on
31 August 2017 that the present application was launched. That
Vardakos was granted more than a month’s notice
to comply with
the directive, is clear. The submission that the application is
premature is therefore incorrect. In any event,
on several occasions
prior to the directive, both the applicants and the Master demanded
of Vardakos to comply with the provisions
of s35 of the Act, i.e. to
lodge the Liquidation and Distribution Account within a period of 6
months from his date of appointment.
The 6 months having come and
gone, he was again directed to comply by 28 July 2017, a period of 2
(two) years after his appointment.
The result is that the application
is therefore not premature.
[16]
In the event that Vardakos was not afforded a month’s notice
prior to the application, I find that there has been substantial
compliance with the provisions of s36(1) of the Act. Sight should not
be lost that Vardakos does not complain of any prejudice
in this
matter. In any event, in
Robinson
v Randfontein Estates GM Co. Ltd
[2]
,
the Appellate Division, at p198 stated that the purpose of pleadings
is to define the issues between the parties and that as long
as the
issues are defined, in the absence of prejudice, one must remember
that “… pleadings are made for the court,
not the court
for pleadings”.
[17]
The complaint of both the applicants and the Master having been
properly defined and there being no prejudice to Vardakos,
any short
notice, if any, is of no moment. The application, having regard to
evidence in this matter, is not premature. Vardakos
was granted more
than enough time to comply with both the applicants’ and
Master’s request. He having failed to comply,
the applicants as
interested parties in the administration of the estate of F were
entitled to approach this court for the relief
sought.
[18]
In the result the following order is made –
18.1 Vardakos is
ordered to forthwith furnish the applicants with full details of the
bank accounts he has opened for the estate
of the Late F S;
18.2 Vardakos is
further ordered to furnish full details of the bank accounts into
which he deposited the amount of R3 395 759.55
withdrawn from
Mercantile Bank Account No. […] together with the type of
account into which the moneys were deposited and
the interest earned
by the said deposit;
18.3 Vardakos is
further ordered to furnish the applicants and the Master with
complete Bank statements from 3 June 2015 to date,
supported by
vouchers for any moneys distributed on behalf of the estate.
18.4 It is ordered that Vardakos bears
the costs of this application in his personal capacity on the
attorney and client scale.
__________________
M. TSOKA
JUDGE
OF THE HIGH COURT
Date of
hearing:
11 September 2018
Date
of judgment:
20 September 2018
Appearances:
Counsel for the
Applicants:
Adv H van der Vyver
Instructed
by:
Ayoob Kaka Attorneys
Counsel for the
Respondent:
Adv Peter (SC)
Instructed
by:
Vardakos Attorneys
[1]
Lockhat’s
Estate v North British & Mercantile Insurance Co Limited
1959
(3) SA 295
(A)
[2]
Robinson v
Randfontein Estates G.M Co. Ltd 1925 Part II SA Law Reports (1925),
AD