About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2017
>>
[2017] ZAGPPHC 26
|
|
Van Staden NO v Nel NO and Another (11114/2015) [2017] ZAGPPHC 26 (1 February 2017)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 11114/2015
1/2/2017
Reportable:
No
Of
interest to other judges: No
Revised.
In
the matter between:
MOLEINE
VAN STADEN
N.O Applicant
(ID
NO: …)
and
HELEN
PETRONELLA JOHANNA NEL
N.O 1
st
Respondent
(ID
NO: …)
JOHANNES
LODEWYK BOUWER N.O (ID NO: …) 2
nd
Respondent
In
their capacities as Trustees of the MC Botha trust
Registration
no. IT 11030/06
JUDGMENT
AC
BASSON. J
The
parties
[1]
This is an application for the sequestration of the MC Botha Trust
("the trust"). The applicant - Mrs Moleine van
Staden ("Van
Staden") - is the duly appointed executrix in the estate of the
late Mrs MC Botha ("the deceased").
The deceased was the
mother of Van Staden. Van Staden launched this application for the
sequestration of the trust in her capacity
as the appointed executrix
in the estate of the deceased on the basis that the trust committed
an act of insolvency as envisaged
by sections B(c) and B(d) of the
Insolvency Act
[1]
and/or on the basis that the trust is
factually insolvent.
[2]
The trust is represented by the first and second respondents in their
capacities as trustees of the trust. The first respondent
is Mrs
Helen Nel ("Nel"). Van Staden and Nel are siblings and both
are daughters of the deceased.
[3]
The second respondent is Mr Johannes Bouwer ("Bouwer") of
ACT Solutions Pretoria Incorporated ("ACT Solutions").
Bouwer is an accountant and was appointed by Nel as a co-trustee of
the trust. He was also appointed by Nel as the accounting officer
of
the trust.
[4]
Van Staden disputes the
locus standi
of Bouwer and more in
particularly questions the manner in which he was appointed as the
accountant responsible for the trust as
well as his appointment as a
trustee of the trust. Van Staden alleges that the appointment of
Bouwer as a trustee was "orchestrated"
following the
alleged inappropriate removal of Venter de Jager as the (previously)
appointed chartered accountants of the trust.
(I will return to these
allegations in more detail herein below.) Nel in turn disputes the
locus standi
of Van Staden to bring this application in her
capacity as executrix of the estate.
The
trust
[5]
The trust was formed in 2006 by the deceased with the express purpose
of providing for her personal maintenance and medical
care during her
lifetime. The purpose of the trust was confirmed by Mr Boshoff - a
chartered accounted. Boshoff was the previous
accounting officer of
the trust and also attended to the drafting of the trust deed on the
instructions of the deceased. He confirmed
that the understanding was
that the deceased would make loans and/or donations to the trust for
the purpose of funding the trust.
Boshoff can, however, not confirm
whether the payments that were made by the deceased during her
lifetime to the trust were to
be regarded as loans or whether they
were donations.
[6]
In July 2007 the deceased made a once-off payment in the amount of R
500 000.00 (five hundred thousand rand) to the trust. This
amount was
paid over to the trust from the deceased's personal funds. As already
pointed out, the (undisputed) understanding was
that the amount will
be utilized for the on-going maintenance and medical expenses of the
deceased.
[7]
It was not disputed that when the deceased paid over the said amount
to the trust, she was aware of the fact that this amount
would reduce
over time. The deceased was also aware of the fact that the trust had
no other income other than the amount paid over
by her to the trust.
[8]
The deceased passed away on 2 July 2008 and up and until her death
she was the sole income and capital beneficiary of the trust.
After
her death a letter was addressed to the various beneficiaries of the
trust informing them that an amount of R 241 127.00
was available.
The monies that therefore remained in the trust constitute the
difference between the R 500 000.00 (that was paid
over to the trust
by the deceased) and the costs of administration of the trust
together with the payments paid out during the
lifetime of the
deceased in respect of her personal maintenance and medical care.
[9]
The debt on which Van Staden (in her capacity as the duly appointed
executrix in the deceased estate of the late MC Botha) relies
to
establish her
locus standi
to bring the application for the
sequestration of the trust, pertains to the R 500 000.00 which was,
according to Van Staden, a
loan to the trust and therefore repayable
to the estate of the deceased.
[10]
On 11 October 2011, ACT Solutions, acting as the accounting officers
of the trust, circulated the financial statements for
the years
ending February 2008 - 2011 and the financial statements for the six
months to the end of August 2011 to all the beneficiaries
of the
trust. ACT Solutions also requested the beneficiaries to sign the
document to indicate that they are -
"tevrede is met die
bestuur en finansies van die MC Botha Trust, en dat daar geen eise,
nou en toekomstiglik, teen die MC Botha
Trust en/of die trustees,
gesamentlik en/of afsonderlik, ingestel sat word nie".
Van
Staden and the other beneficiaries refused to sign the document.
Acrimonious
relationship
[11]
Before I turn to a summary of the facts that are directly relevant to
the question before this court, I must point out that
it is patently
clear from the papers that this case exhibits all the characteristics
of an acrimonious family feud over who is
entitled to the proceeds
from the deceased's estate and her trust. The papers are replete with
accusations of maladministration
of the trust and underhandedness
regarding the appointment of Bruwer as a trustee and accounting
officer of the trust. The parties
also seem to be in dispute about
whether the deceased was in fact able to manage her own affairs prior
to her death and even seem
to disagree on the health status of the
deceased prior to her death, despite numerous medical reports that
detail and confirm the
diminished mental and physical health of the
deceased prior to her death. Van Staden even states in her affidavit
that the deceased
had changed her will to exclude Nel as a
beneficiary in light of her (Nel's) "greedy conduct".
[12]
Although Van Staden tries to tone down the extent of the strained
relationship between her and Nel, it is clear from the papers
that
the relationship is more than strained. In this regard Nel,
unequivocally confirms in her affidavit that the present application
is "the present incarnation of a long-standing and bitterly
unfortunate family feud".
[13]
As already pointed out, the papers are replete with serious
allegations of maladministration of the trust and these allegations
are squarely levelled against Nel. Van Staden accuses Nel of using
trust monies for her own personal benefit and more in particularly
that Nel had used trust funds to settle the bills of her own
attorneys (Weavind & Weavind Incorporated) as the trust was not
engaged in any legal proceedings. Van Staden even goes so far as to
suggest that soon there will be no funds left in the trust
due to the
maladministration of the trust and the conduct of the two
respondents.
[14]
Van Staden also accuses Nel of fraudulently removing the deceased as
a trustee and that she did so, on the basis that the deceased
was
mentally unfit to handle her own affairs. According to Van Staden all
of this was done in an attempt "to appoint a new
trustee and
[to] get rid of the auditors in order to plunder the trust funds".
Van Staden maintains that the deceased was
in fact capable of being a
trustee "but [that she] was swindled out of her role" by
Nel. In short, according to Van Staden
the two respondents had
effectively "hijacked" the trust.
[15]
Nel strenuously denies all these allegations and in turn accused Van
Staden of making defamatory statements against her and
her husband
regarding the administration of the trust. According to Nel these
accusation are without foundation and devoid of any
truth. Nel also
contended that this application is a flagrant abuse of court process
and devoid of any merit.
[16]
In respect of the allegations regarding the physical and mental
condition of the deceased, Nel explained that in November 2005
the
deceased had suffered a minor stroke. After her stroke the deceased
moved in with her (Nel) and her family. Nel explained that
the
deceased needed the assistance of stay-in nurses particularly after
the deceased was diagnosed with Parkinson's disease which
contributed
to the deterioration of the deceased's already diminished physical
and mental abilities. In this regard Nel referred
to numerous written
medical reports submitted by Dr De Koning and other medical doctors
who attended to the medical condition of
the deceased prior to her
death. Reference is also made to the Iago-psychiatric report prepared
by Dr De Wet who evaluated the
deceased prior to her death. Detailed
reference is also made to the two medical opinions of Dr
Guldenpfennig and Dr Colin in which
both doctors confirmed the
diminished mental capacity of the deceased. Dr De Wet concluded that
the deceased suffered from an advanced
stage of dementia, secondary
to multiple causes,
inter alia,
hypertension, heart failure
and Parkinson's disease. According to Nel, the deceased became
increasingly incapable of communication
and was completely incapable
of managing her own affairs, including the affairs of the trust.
[17]
Regarding the allegations that Nel removed the deceased as a trustee
in an underhandedly manner, Nel explained that the deceased
lacked
the mental capacity to act as a trustee and that she did what was
expected of her and that she did so on the advice of an
attorney and
counsel.
[18]
Nel also referred to a meeting that was held at the offices of
Boshoff (who was at the time the appointed accounting officer
of the
trust). When Nel arrived for the meeting (which was also attended by
one of her siblings - Mr Herman Botha) she realised
that the purpose
of the meeting was to remove her as a trustee and to appoint the
following people as trustees of the trust: the
deceased (MC Botha).
Van Staden (the applicant}, Botha (one of the siblings) and Boshoff
(the chartered accountant).
[19]
According to Nel the trust deed did not provide for authority or any
mechanism by which such a decision could have been taken
and
accordingly she submitted that the decision was unlawful. After this
meeting and as a result of the conduct of Boshoff, Nel
reported him
to the Independent Regulatory Board for Auditors. Weavind &
Weavind attorneys were thereafter appointed to provide
an opinion on
the future administration of the trust.
[20]
Because the deceased did not have the mental capacity at the time to
take any decisions regarding the trust, Nel approached
ACT Solutions
with the aim of appointing Bouwer as a co-trustee. On 29 May 2009
Bouwer was appointed by the Master as a co-trustee
of the trust.
Bouwer was also appointed as the accounting officer of the trust
because Nel could not see her way open to have Boshoff
remain as the
accounting officer of the trust in view of the breakdown in the
relationship.
[21]
Nel confirmed that the trust has delivered all bank accounts and all
supporting documents in respect of all payments made from
the bank
account of the trust to the attorneys of record acting on behalf of
the beneficiaries. The attorneys were requested to
direct all
inquiries and/or objections to any of the documents and transactions
in writing to the trustees in order to enable them
to respond thereto
in writing to avoid any confusion and in order to keep proper record
of all correspondence. According to Nel,
despite having been afforded
more than ample opportunity to raise any concerns or object to the
expenses incurred by the trustees
on behalf of the deceased, none
have been received and instead Van Standen "maliciously"
elected to institute this application
some four years later. Nel also
referred to a resolution taken by the trustees dated 25 June 2014
which recorded that the trustees
as at that date had not received any
feedback from Van Staden or the other beneficiaries regarding any
payments made by the trust.
[22]
According to Nel the trust has served its purpose and there
accordingly exist no reason for its continuance. In this
regard
Van Staden and the other beneficiaries were informed that the
continuous payment of administrative fees was systematically
decreasing the capital amount.
Question
before the court
[23]
It is not before this court whether the trustees of the trust are in
fact guilty of maladministration of the trust. It is also
not for
this court to make a finding on the mental capabilities of the
deceased although there are strong indications having regard
to the
numerous and detailed medical reports attached to the papers, that
the deceased was indeed mentally and physically impaired
for some
time prior to her death.
[24]
The only and very limited question before the court is whether the
deceased had "donated" an amount of R 500 000.00
to the
trust and/or whether it was merely a "loan" entitling Van
Staden in her capacity as executrix to demand repayment
of the loan
(less legitimate expenses paid out towards the maintenance and care
of the deceased). If it is concluded that the estate
is entitled to
claim repayment of a loan, it then falls to be decided whether the
trust is able to repay the loan and if not whether
the trust is
insolvent. Also before the court is the question whether the trust
has committed any one or more of the various acts
which the
Insolvency Act has constituted as acts of insolvency.
[25]
In order to succeed in obtaining an order for the sequestration of
the trust, Van Staden therefore has to show that the trust
is
indebted to the deceased's estate in a liquidated amount that is
actually due and payable. In addition, it must be shown that
the
trust has committed any one or more act of insolvency as provided for
in section 8 of the Insolvency Act
[2]
or that the trust is in fact
insolvent.
[26]
It is, on a plain reading of the papers, unclear what amount is being
claimed by Van Staden on behalf of the estate: In the
founding
affidavit Van Staden claims that the trust owes the estate R 500
000.00 and because only R 242 027,42 is available, the
trust is
factually and commercially insolvent. On the other hand, Van Staden
also claims in the founding affidavit that the deceased's
loan
account payable to the estate is an amount between R 427 758.00 and R
381 807.00.
[27]
As already pointed out, Van Staden does not dispute that the amount
of R 500 000.00 was paid over to the trust and that the
monies so
paid over was to be used towards the personal maintenance and medical
expenses of the deceased. Van Staden also does
not seem to dispute
that certain payments have in fact been made towards the personal
maintenance and medical care of the deceased
and that those amounts
had to be deducted from the R 500 000.00 that was initially paid over
to the trust for this very purpose.
Loan
or a donation
[28]
The only ground for factual insolvency of the estate is dependent on
the existence of a loan made by the deceased to the trust.
If the
court concludes that the money paid over to the trust was in fact a
loan (as opposed to a donation), it will follow that
the loan
constitutes an asset in the estate of the deceased. Only then will
the question arises whether the trust is factually
insolvent.
[29]
In support of Van Staden's allegation that it was a "loan"
and not a "donation", reference was made to
the fact that
the initial financial statements prepared by the trust indicated that
the loan was repayable within two years. In
later financial
statements it is recorded that the loan is only repayable when the
trustees so decide. According to Van Staden
the financial statements
are at odds with what is now contended namely that the R 500 000.00
was a "donatoin" as opposed
to a "loan". In this
regard reference was made to the decision in
De
Jager v Grunder
[3]
where it was held that there is a
presumption against donations in our law. Van Staden further
contended that the amount claimed
is liquidated in the financial
statements and even if it was not, such amount can easily be
calculated by deducting the expenses
from the initial loan amount.
According to Van Staden the trust is clearly factually insolent with
its liabilities far outweighing
its assets.
[30]
Nel, on the other hand, disputed Van Staden's claim and submitted
that no such loan existed and that the R 500 000.00 clearly
was
intended to be a "donation" to the trust and that it could
never have been the intention of the deceased that the
amount of R
500 000.00 was merely a loan from her to the trust for the following
reasons: Firstly, the deceased caused the amount
to be paid to the
trust knowing fully well that the moneys were to be utilised for her
maintenance and medical care and that the
amount would therefore
reduce over time. The deceased therefore knew that by the time of her
death, the amount would be less than
R 500 000.00. Secondly, the
deceased knew full well that the trust did not have any other income
and that the trust would therefore
never be able to repay a loan upon
her death. Thirdly, the deceased expressly made provision in the
trust deed that, in the event
of her death, her children would be the
beneficiaries of her trust.
[31]
Unfortunately the deceased - at the time she paid over the R 500
000.00 - did not convey to anyone whether the moneys paid
over to the
trust would either constitute a loan or a donation. Not even Boshoff,
who attended to the drafting of the trust deed
and who was the
accounting officer of the trust, was told whether the moneys so paid
over constituted a loan or a donation. Nel
likewise confirms in her
affidavit that the deceased also never conveyed to her whether the
moneys paid over would either constitute
a loan or a donation. This
question therefore has to be answered in light of the facts that were
placed before the court.
[32]
I have considered the papers and I am in agreement with the
submission made on behalf of Nel that the R 500 000.00 paid over
to
the trust could not have been a loan and that it therefore could not
have been the intention of the deceased that whatever was
paid over
by her to the trust (minus expenses) had to be re-paid by her trust
to her estate upon her death. In this regard I have
already referred
to the fact that it was common cause that the amount that was paid
over to the trust was to benefit the deceased
during her lifetime and
that she therefore must have known that the amount would diminish
over time. Regard must also be had to
the fact that the trust deed
provides that the deceased's children would be the beneficiaries of
the trust after her death. If
it was the intention of the deceased
that the R 500 000.00 was a loan that had to be repaid to her estate
why then was provision
made that her children would be the
beneficiaries of the trust? Beneficiaries of what? The trust had no
other income except for
what was paid over to the trust by the
deceased. Lastly, I have already referred to the common cause fact
that the R 500 000.00
was paid over to the trust with the sole
purpose of paying for the maintenance and medical expenses of the
deceased during her
lifetime. If this was the purpose of the payment,
the question arises why would the deceased loan this amount to the
trust and
not merely pay for her maintenance and medical expenses
from her own personal bank account?
[33]
I am therefore in agreement with the submission that the only
reasonable inference that could be made from these facts is that
the
deceased had paid over this amount to her trust for the sole purpose
of providing her with care and that upon her death - whatever
amount
remained in her trust - had to be paid over to her beneficiaries. The
payment of the amount of R 500 000.00 (less expenses)
could not
therefore have constituted a loan from her estate to the trust. See
in general:
Avis v
Verseput
[4]
where the court held as follows:
"In my opinion the question
whether a donation promised verbally arose from sheer liberality or
not is one of, fact which can
be proved by a balance of probabilities
of course the Court cannot profess to be able to divine what was in
the donor's mind. But
the proved facts may in a particular case be
strong enough to justify an inference 'as to the donor's' real
motive. I use the word
motive in its ordinary sense – that
which moves or induces a person to act in a certain way, a reason
which influences a
person's volition; see Shorter Oxford Dictionary.
In my opinion the Roman-Dutch authorities, in saying that a genuine
donation
is one made out of pure liberality, mean a donation in which
the donor's motive (using the word in the above sense) is liberality,
that liberality is the reason which influences him to make the gift.
The language used supports this view, for instance,
ac propter
nullam aliam causam facit quam ut liberalitatem et munificentiam
exerceat
(Voet, following the Digest,
quod quis ex mera
liberalitate, nu/lo jure cogente, in alium confert
(van Leeuwen,
Cenf. For.),
simplex quae sit ex absoluta liberalitate
(Huber,
Praelect. ad Inst., 2.6.4),
uit
loutere liberaelheyt ende
goedwilligheyt nevens den donataris
(Huber, Hed. Rechts.)."
[34]
In light of the aforegoing I am therefore of the view that the
balance of the amount of R 500 000.00 does not constitute a
loan by
the deceased's estate to the trust. Consequently the trust does not
have a single creditor. It therefore follows that the
application for
the sequestration of the trust should be dismissed with costs.
Costs
[35]
In respect of costs it was submitted that the court should grant
costs on a punitive scale and that because the proceedings
constitute
a flagrant abuse of court process, Van Staden should pay the costs in
her personal capacity. I agree. If regard is had
to the papers and
the serious allegations that were levelled against Nel, there is, in
my view, sufficient justification for an
order on a punitive scale.
Iam further persuaded that Van Staden should pay the costs in her
personal capacity and that the estate
of the deceased should not pay
for an application that clearly constitutes an abuse of court
process.
Order
[36]
In the event the following order is made:
1. The application for the
sequestration of the MC Botha Trust (IT 11030/06) is dismissed.
2. The application, Mrs Moleine van
Staden N.O is directed to pay the costs of this application in her
personal capacity on the
scale as between attorney and client.
_____________________
AC
BASSON
JUDGE
OF THE HIGH COURT
Appearances:
On
behalf of the applicant
Adv
JGC Hamman
Instructed
by: Romanos Attorneys
On
behalf of the respondents
Adv
PG Cillliers SC
Instructed
by: Weavind & Weavind
[1]
Act 24 of 1936.
[2]
Act 24 of 1936.
[3]
1964 (1) SA 446
(A) at 463.
[4]
1943 AD 331
at 366.