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[2017] ZAGPPHC 135
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Nedbank Limited v Mabena (A324/16) [2017] ZAGPPHC 135 (30 March 2017)

THE
REPUBLIC OF SOUTH AFRICA
THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
30/03/2017
CASE
NO: A324-16
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
NEDBANK
LIMITED

Appellant
and
SELLO
MABENA

Respondent
Heard:
26 October 2016
Delivered:
March 2017
JUDGMENT
Molahlehi
J
Introduction
[1]
The appellant, having successfully obtained a provisional
sequestration order of the respondent, approached the Court below for
its confirmation. The Court, per Molefe J discharged that interim
order and accordingly dismissed the appellant's application for
a
final sequestration order.
[2]
The appellant was also unsuccessful in his application for
leave to appeal the order of the Court below. Its leave to appeal
having
been refused, it then petitioned the Supreme Court of Appeal
(the SCA) for leave to appeal. The leave to appeal was granted and

thus this appeal serves before this Court with leave from the SCA.
[3]
The issue in this appeal
is limited to whether or not the appellant is a creditor of the
respondent as envisaged in section 9(1)
of the Insolvency Act (the
Act),
[1]
and if so whether it is entitled to
have the provisional liquidation confirmed. In the context of the
facts of this case section
9 (1) of the Act has to be read with
section 35 of the Administration of Estate Act (the AEA).
[2]
The
parties
[4]
The appellant, Nedbank Limited, is a registered bank,
financial services and credit provider, duly registered as such, in
terms
of the laws of South Africa.
[5]
The respondent, is a former attorney whose name has been
struck off the roll of practicing attorneys. He was appointed as an
agent
by a certain Mr Lepley, (Lepley ) the executor who had been
appointed as such in the estate late Ms Phyllis Debie Tepper (the
deceased)
by the Master of the High Court, Pretoria. It turned out
later that that appointment was fraudulently obtained. He is also the
sole director of Banchivis Property Holdings (Pty) Ltd trading as
Morua Trust and Estate Planning (Morua).
The
background facts
[6]
It is common cause that the appellant was, during October 2014,
defrauded of the amount of R1 361 454 44. The amount was part
of the
administration of the estate of the deceased, under Master's
reference T29233/2014.
[7]
The deceased passed away during 2014. At the time of her death she
had the amount of R1 361 454 44 in her account with the appellant.
[8]
The Master's office in Pretoria appointed Mr Lepley as the executor
of the deceased estate. As indicated earlier it turned out
later that
the letter of executorship, appointing Mr Lepley as executor was
fraudulently obtained.
[9]
The respondent was appointed by Mr Lepley as his agent to administer
the late estate of the deceased and this was done in terms
of the
powers of attorney issued on 15 September 2014.
[10]
Thereafter the respondent approached the appellant and provided it
with the relevant documents relating to the administration
of the
estate including proof that an account had been opened in the name of
the late estate with First National Bank. The respondent
provided the
appellant with the documents certified as true copies by him in his
capacity as a Commissioner of Oaths,
ex officio
attorney.
[11]
The respondent certified the copies of the documents provided
to the appellant purportedly in his capacity as a practicing
attorney.
This was a misrepresentation of his status as he was at
that stage already struck off the roll of attorneys. He was stuck off
the
roll of attorneys on 11 June 2007.
[12]
After confirming the death of the deceased the appellant made
payments to the account nominated by the respondent on 1 October
2014.
It turned out after the payment of the amount of R1 361 454. 44
to the deceased's late estate account that the appointment of Mr

Lepley was fraudulent and that Mr Tupper was the lawfully appointed
executor with the letter of executorship by the Master.
[13]
As the agent of Mr Lepley the respondent attended to the
affairs of the late estate under the auspices of Moruo which is a
legal
entity separate from its directors.
[14]
The appellant stated in its papers that despite the demand it
made neither the respondent nor Moruo repaid the funds in question
to
it.
[15]
On 9 June 2015, the appellant obtained an order on an urgent
basis directing the respondent and Moruo to produce proof that the
funds in question have been paid into the First National Bank account
and whether those funds were still available.
[16]
The respondent and Moruo were further ordered to provide a
liquidation and distribution account (the L & D account) in the
event
the funds were no longer available in the bank. In compliance
with the order the respondent furnished the appellant with the bank

statement confirming that the estate account was opened and that the
funds were deposited into the business account of Morua. The

respondent further indicated in the e-mail that he had not prepared
an L & D account.
[17]
The bank statement which the respondent had provided to the
appellant reflected that several payments were made out of the fund
during the period of 1 to 16 October 2014. The balance in the account
as at 17 October 2014, was R 29 777.25.
The
decision of the Court below
[18]
In its judgment the Court bellow emphasized that in acting as
he did, the respondent did so in his capacity as a representative of

Morua. It was for this reason that it found that the respondent was
not liable for what happened to the funds.
[19]
In dismissing the appellant's application to have the
respondent sequestrated the Court below held that it did not agree
with the
contention of the appellant that the respondent was
severally liable in the same way as Morua. The Court further found
that the
respondent was not a surety of Morua and also that he never
accepted liability for the funds in question. It was for this reason

that the Court found that the claim of the appellant was with Morua
and not the respondent.
[20]
The Court further reasoned that the amount claimed by the
appellant was unassessed and that the appellant failed to satisfy the
requirements of section 9(1) of the Insolvency Act, to justify the
sequestration of the respondent.
[21]
Before this Court, counsel for the respondent contended that
the appellant's claim lies against Morua and not the respondent. It

was submitted in this respect that the respondent never acted in his
personal capacity. It was further argued that:
a. The appellant's claim is not
liquidated.
b. The appellant never set out in its
founding affidavit that the particularity of the amount it is
claiming.
c. The liability of the respondent was
not established.
d. The payment made by Morua does not
create a claim against the respondent.
Evaluation/Analysis
[22]
The two key findings made by the Court below and which are
central to this appeal are the following:
a. The respondent in dealing with the
late estate of the deceased did not do so in his personal capacity
but in his capacity as
the director of Morua.
b. The claim of the appellant was not
assessed and accordingly unliquidated.
[23]
The respondent in opposing this application raised the above
as his defence and further contended that payments made by Morua did

not create a personal claim against him and that those payments could
not support the sequestration claim against him.
[24]
In relation to the amount of R14 000 which was paid from the
account of Morua on 31 October 2014 into his bond account, it was
argued
that there was no proof of what monies were utilized by Morua
and that at that stage Morua had in its bank account the amount of

R35 580.80 which means that it had sufficient funds of its own to pay
the appellant.
[25]
In terms of section 9(1)
of the Act a creditor who has a liquidated claim of not less R100 may
institute sequestration proceedings
against the debtor's estate. A
liquidated claim may exist by virtue of a judgment of the court, an
agreement or otherwise.
[3]
[26]
The court will refuse to grant a sequestration order in a case
where the creditor merely claims unassessed damages. In the present

instance it is common cause that the funds were taken from the
appellant fraudulently which means that it was in a sense stolen

and/or misappropriated.
[27]
The authorities seem to
be in agreement that a cause of action based on theft of money can
constitute a liquidated claim. In this
respect Grosskopf JA in
The
Attorneys Notary and Conveyancers and Another Fidelity Guarantee Fund
v Tony Allem (Proprietary) Limited and Another
,
[4]
in dealing with this issue had the
following to say:
"The first respondent's claim in
the present case was not an unliquidated claim. The claim was for a
specific sum of money
which was reflected in the consolidated
account, and the fact that the claim was based on a theft did not, in
my judgment, change
the position."
[5]
[28]
The SCA further said:
"In
Kleynhans v Van der
Westhuizen,
N.O,
1970 (2) SA 742
(A), where it was said that a
claim based on the theft of a specific sum of money was/a "liquidated
claim" for the purposes
of section 9(1) of Act 24 of 1936. In
the course of his judgment Wessels JA held as follows at 750 A-B:
"Dit kom my as vanselfsprekend
voor dat waar die skuldenaar vaste som geld van 'n applikant gesteel
het, die bedrag van laasgenoemde
se vordering, wat op die pleging van
die diefstal gegrond is, uiteraard met sekerheid bepaal is. Die
bedrag behoef geen bepaling
deur h hof of ooreenkoms met die dief
nie, aangesien dit met sekerheid 58 'andersins' bepaal is. Waar bewys
is dat die diefstal
geleeg is, is die bedrag van skadevergoeding
eweneens bewys, en daardie bepaalde bedrag is onmiddellik na die
diefstal opeisbaar.
Die dief is vanaf die datum van die diefstal in
mora (Wessels, Law of Contract in S.A., 2de. uitg., para 2864)."
[6]
[29]
Similarly, in
Hassan and
Another v Berrage
N.O.
[7]
,
the Court held that a claim based on misappropriation of the value of
shares by the respondent in a company constituted a liquidated
claim
in that the shares were traded on the stock exchange and therefore
the market value was easily determinable.
[30]
The funds in question in the present matter were paid by the
appellant, as per the advice of the respondent into the late estate

account of the deceased. It was thereafter paid to various third
parties by the respondent. This, the respondent did fully aware
of
the requirements of section 35 of the AEA.
[31]
The involvement of the respondent in the process which
resulted in the misappropriation of the funds of the late estate is
not in
dispute. It was, however contended, as alluded to earlier in
this judgment, that the involvement of the respondent was not in his

personal capacity but, as reflected in the powers of attorney, in his
capacity as a representative of Morua.
[32]
It was also contended on behalf of the respondent that he never
acknowledged any indebtedness to the appellant in his personal

capacity.
[33]
In my view, the respondent's defence bears no merit when regard is
had to the totality of the evidence which served before
the court
below. It is for this reason, as elaborated in more detail hereafter,
that I find that the Court below misdirected itself
in the approach
it adopted in dealing with the issue of whether the appellant had a
liquidated claim against the respondent.
[34]
It is common cause, as already mentioned above, that the amount of R1
361 454.44 was paid into the estate late account of the
deceased
consequent to the fraudulent misrepresentation which resulted in the
appointment of Mr Lephey as executor in terms of
the letter of
executorship issued by the Master's office.
[35]
I do not agree with the respondent that the appellant's claim is
unliquidated. It is important to note in this regard that
the
appellant avers at paragraph 5.1 of its founding affidavit that the
respondent is indebted to it jointly and severally with
Moruo for the
total amount which is the subject of the claim. It is not in dispute
that no portion of this amount has been recovered
by the appellant.
[36]
It was also not disputed that the respondent was appointed as the
agent of Mr Lephey, who as alluded to earlier was appointed
executor
in the late estate of the deceased. This is confirmed by the Court
below at paragraph 5 of its judgment. At paragraph
7 of the judgment
the Court below recorded, amongst others, as true facts that:
"7.4 The payments were made
without compliance with the peremptory steps prescribed by the
Administration of Estate Act and
more specifically section 35 thereof
of which includes inter alia the filing of a liquidation and
distribution account open for
inspection and supporting vouchers for
all payments made from the estate late account."
[37]
Having recorded the above as the true facts the Court below proceeded
to find that (at paragraph 15) the respondent did not
act in his
personal capacity in dealing with the funds received from the
appellant, but rather in his capacity - as stated above
- as the
representative of Moruo.
[38]
In its founding affidavit, the appellant made the following
allegations which are significant in the resolution of this dispute:
“
5.5 The fund[s] were paid into
the estate's bank account by the applicant on 1 October 2014.
5. 6 The bulk of the fund[s] ,in the
sum of R800,000-00 were transferred by Mabena into the business
account of Moruo Trust on 16
October 2014.
5.7 In the period between 01 October
2014 and 17 October 2014, Mabena made payments from the estate's
banking account to the effect
that as at 17 October 2014, only the
sum of R29,777.25 (of the original R 1,000,361 454. 44) was left in
the account.
5.8 As at 18 December 2014, the
business account of Moruo Trust reflected the balance of R42,189. 60.
5.9 Mabena paid out the fund received
from the applicant, to various third parties, as salaries and one
account in his personal
name, without any liquidation and
distribution account ever having been prepared or approved by the
Master."
[39]
The respondent did not dispute the above allegations in his answering
affidavit. It follows therefore that the allegations
stand
uncontested and thus serve as a proven facts.
[40]
I have already alluded to the fact that the respondent's defense
bears no merit. In my view the fact that the powers of attorneys

appointed the respondent in his representative capacity as a director
of Morua does not detract from the liability imputed on him
by the
law. In this respect section 1 of the Act defines an "executor"
as a person who is authorized to act under the
letters of
executorship issued by the Master. And "letters of executorship"
includes:
"any document issued or a copy of
any such document duly certified by any competent public authority in
any State by which
any person named or designated therein is
authorized to act as the personal representative of any deceased
person or as executor
of the estate of any deceased person."
[41]
Section 16 of the AEA deals with the letters of executorship and
endorsements to or in favour of corporations and provides
as follows:
"If any person referred to in
subsection (1) of section fourteen in subsection (1) of section
fifteen is a corporation, relevant
letters of executorship or
endorsement, as the case may be, shall be granted or made-
(a)
in favour of person who is an officer or director of the corporation
and has been nominated by the testator or, if the testator
has not
nominated any person, by the cooperation"
[42]
In
Metequity
Ltd Another v NWN Properties Ltd and Others,
[8]
the Court held that an official of a
company or corporation who in that capacity has been appointed
executor cannot in the exercise
of his duties be dictated to by the
company. It was further held that the executor being the nominee of
the bank was the right
person to sue which means he was not shielded
by the fact that he was a representative of the bank. The court
further held that:
"It follows that the nominated
official or the director is in fact the executor by virtue of the
issue of the letters of executorship."
[9]
[43]
In the context of the circumstances of this case the
provisions of the Act are, as mentioned above, to be read with the
provisions
of the AEA. In this respect the provisions section 35 of
the AEA, which are peremptory, provides more importantly at
subsection
(1) thereof that:
"An
executor shall, as soon as may be after the last day of the period
specified in the notice referred to in section 29 (1),
but within-
(a)
six
months after letters of executorship have been granted to him; or
(b)
such further period as the Master may in any case allow,
submit to the Master an account in the prescribed form of the
liquidation
and distribution of the estate."
[44]
The issue of whether the respondent can be exonerated from
liability because he was acting in his capacity as director of Morua
is addressed by section 50 of the AEA which provides as follows:
"Any
executor who makes a distribution otherwise than in accordance with
the provisions of section thirty-four or thirty-five,
as the case may
be, shall-
(a)
be personally liable to make good to any heir and to any
claimant whose claim was lodged within the period specified in the
notice
referred to in section twenty-nine, any loss sustained by such
heir in respect of the benefit to which he is entitled or by such

claimant in respect of his claim, as a result of his failure to make
a distribution in accordance with the said provisions; and
(b)
be entitled to recover from any person any amount paid or any
property delivered or transferred to him in the course of the
distribution
which would not have been paid, delivered or transferred
to him if a distribution in accordance with the said provisions had
been
made: Provided that no costs incurred under this paragraph shall
be paid out of the estate."
[45]
In
Kruger
Van Rensburg (Pty) Ltd tla Bureau Trust Insolvensie Praktisyns and
Another v Grand Palace Trading 47 (Pty) Ltd)
[10]
the Court held that:
"[2] The first and second
defendants are companies which do business as insolvency
practitioners and they administer insolvent
estates. In terms of the
provisions of the Administration of Estates Act, No. 65 of 1966, read
with the
Insolvency Act, No. 24 of 1936
, and section 339 of the
Companies Act, No. 61 van 1973, only natural persons can be appointed
by the Master of the High Court to
administer estates and a legal
entity is precluded from being appointed as such. A practice
therefore, inevitably, evolved
(Grove v Marico Board of Executors
Ltd.
1908 T.S. 11
;
Bekker v Republiek Trustees (Edms) Bpk. en
In Ander 1988(2)
SA 250 (T)), in terms whereof companies, such as
the defendants, make use of "fronts" i.e. natural persons
who are employed
by them to be formally appointed by the Master in
compliance with the various legal provisions. The companies then
administer the
estates on behalf of their employees whom the Master
appointed and later benefit from the estates through the payment of
the fees
allowed by the regulations out of the estates to the persons
appointed to administer the estates."
[46]
In
Boland
Bank Ltd v Rop, Wacks, Kaminer and Kriger ,
[11]
the plaintiff, Boland Bank Ltd,
purporting to act in its capacity as executor in a deceased estate,
instituted action for payment
by defendant of an amount allegedly due
to the deceased estate. Boland Bank then sought to amend its summons
by substituting, for
the description of plaintiff, one Jordaan as the
nominee of Boland Bank in his capacity as executor of the deceased
estate. The
application for an amendment was dismissed by the
magistrate and it was argued on appeal that the magistrate's judgment
was correct
inasmuch as Boland Bank and Jordaan were two separate and
distinct
personae;
that
this was not merely a case of misdescription; and that the amendment
sought to introduce a new plaintiff. In dealing with this
argument
the Court held that:
"I do not agree that the
amendment involves the substitution of one
persona
for another as plaintiff.
From the beginning the action was one by the executor in the estate
of the late Anne Tobias. Boland Bank
did not purport to sue in its
personal capacity: it sued in its capacity as executor in the
deceased estate. This was a misdescription
of the plaintiff; the
correct plaintiff was Jordaan who had been nominated by the bank in
terms of
s 16
of the
Administration of Estates Act 66 of 1965
, and to
whom the Master had, pursuant to such nomination, issued letters of
administration. The amendment sought to rectify the
misdescription by
substituting the name of Jordaan for that of the bank as executor. In
this respect the application for amendment
is similar to those in
Yu
Kwam v President Insurance Co
Ltd
1963 (1) SA 66
(T);
Schnellen v Randalia
Assurance_Corporation of SA Ltd
1969 (1) SA 517
(NV) and Samente v
Minister of Police and Another
1978
(4) SA 632 (E)."
[12]
[47]
I am in agreement with the proposition by the appellant that
personal liability, envisaged in
section 35
of the AEA, extends to an
agent appointed by the executor to administer an estate.
[48]
Turning to the issue of admission of liability, there is
overwhelming evidence of admission of liability by the respondent.
The
respondent has, except for the denial of perpetrating the fraud
against the appellant, acknowledged liability for the amount in

question and also acknowledged contravention of
section 35
of the
AEA. He further conceded having made payments to various parties from
the funds.
[49]
The issue of whether the respondent played any role in the
fraudulent conduct of his staff, is in my view irrelevant. What is
relevant
and significant is the fact that he acknowledged personal
liability for the amount paid into the late estate account and how it

was misappropriated by being paid out in contravention of the
provisions of the AEA.
[50]
The evidence supporting the proposition that the respondent
personally acknowledged liability can be found in both his affidavits

and the correspondence between the parties. In this respect he stated
at paragraph 6 of his second answering affidavit that:
"6.1 I offered to repay the
monies if given time and again offer to do so, but not admitting that
I was the party to the fraud
and transgressions as set out in the
Affidavit of Appellant."
[51]
In the email he addressed to the appellant on July 2015 he
stated the following:
"Dear Mr Mohamed
I refer to the above matter and to our
consultation on the 2nd July 2015 at your offices.
I am once again asking you and your
client to afford me an opportunity to have this matter resolved
without going to Court, at least
on urgent basis.
I have sold the property in Winchester
for R1 750 000.00.
I am willing to pay the proceeds of
the purchase price of the property situated at 846 Winchester as soon
as it is registered. I
therefore request that you consider removing
the matter on the urgent Court Roll while we explore the ways and
means of paying
off your client's claim.
I am willing to sign an
acknowledgement of debt for the balance of your client's claim, which
would be liquidated with be sure (sic)
a period of time…”
[52]
In the supplementary answering affidavit he stated that
although his "Opposing Affidavit" was late he honestly
believed
that the offer he had made would have been accepted by the
appellant. This is the offer in which the respondent undertook to
utilize
the proceeds of the sale of his immovable property at
Winchester Hills Extension 3 to settle the appellant's debt.
[53]
A further confirmation of acceptance of liability by the
respondent can be construed from the letter dated 7 July 2015 wherein
the
conveyancing attorneys who were involved in the sale of the
property at Winchester Hills extension 3 stated the following:
"4. We note the cession of equity
to you by the Seller (on an out -and-out session basis), entered into
between and by the
Seller and your good self. Accordingly we
irrevocable undertake and bind ourselves to pay your client the
equity surplus, an amount
of R 630 486.22 excluding any bridging
deductions, deriving from the aforesaid transaction on the date of
registration of same.
We further confirm that we hold such equity in
trust on behalf of SI & NL MABENA.
We undertake to pay the ceded equity
surplus into the banking furnished to us by yourselves as soon as
reasonably possible after
registration."
[54]
As alluded to earlier, the amount claimed by the appellant is
R1 361 454.44. The sale amount in the above property was indicated
as
R1 750 000. On a simple calculation taking into account, the
commission on the purchase price, the outstanding debt on the
property, the proceeds of the sale could be estimated at R377 375.
This is the amount that would have been available to distribute
to
the appellant which would have obviously been insufficient to settle
the indebtedness of the respondent to the appellant.
[55]
There can be no dispute in light of the above that the
respondent unlawfully distributed and misappropriated the funds from
the
late estate account of the deceased. In this respect he stated
the following in his answering affidavit that:
"The respondent complied with the
instructions (referring to payments made) without obtaining the
Master's consent to do so.
I therefore conceded that the respondent
did not comply with the provisions of section 35 of the
Administration of Estate Act."
[56]
There is thus no doubt that the respondent acted with the full
knowledge that his conduct was unlawful and did so wilfully. He did

this, even on his own version, in his personal capacity and not as
the director of Morua.
[57]
In light of the above the Court below erred and incorrectly
concluded, as it did, that the respondent was not personally liable
for the distribution and misappropriation of the funds because he
acted in his representative capacity. The Court also erroneously

concluded that the claim of the appellant was not liquidated as
envisaged in section 9(1) of the Act.
[58]
In my view, based on the above analysis, the appellant has
successfully made out a case for the confirmation of the provisional
sequestration order. I see no reason in the circumstances of this
case why costs should not follow the results.
Order
[59]
In the premises the following order is made:
1. The appeal is upheld with costs.
2. The order of the court below is
replaced with the following order:
2.1 The provisional sequestration of
the respondent is confirmed and accordingly the respondent is finally
sequestrated.
E
Molahlehi
Judge
of the High Court
of
South Africa, Pretoria
I
agree
SP
Mathie
Judge
of the High Court
of
South Africa, Pretoria
I
agree
N
D
avis
Acting
Judge of the High Court
of
South Africa, Pretoria
[1]
Act 24 of 1936 (the Act). Section
9(1) provides:
"(1)
A creditor (or his agent) who has a liquidated claim for not less
than fifty pounds, or two or more creditors (or their
agent) who in
the aggregate have liquidated claims for not less than one hundred
pounds against a debtor who has committed an
act of insolvency, or
is insolvent, may petition the court for the sequestration of the
estate of the debtor."
[2]
66 of 1965 (AEA).
[3]
See
Stephane v Khan
1917
CPD 24
and
Kleynhans v Van
der Westhuizen
NO
1970 (2)
SA 742
(AD) at 750 A-B.
[4]
[1990]
ZASCA 5; 1990 (2) SA 665 (AD).
[5]
Id
at para 57.
[6]
Google
translation:
“
It
seems to me as obvious that where the debtor stole fixed sum of
money from an applicant, the amount of the latter's progress,
based
on the commission of the theft, of course, is determined with
certainty. The amount situation requires of nothing by h
court or
deal with the thief, since it determines otherwise safely 58. Where
evidence that the theft geleeg, the amount of damages
is also
evidence, and that certain amount immediately after the theft due.
The thief is from the date of the theft in mora (Wessels,
Law of
Contract in SA, 2nd. Ed., Para 2864)".
[7]
2012 (6) SA 329
at para 35.
[8]
1998
(2) SA 554
(T) at 557.
[9]
Id.
[10]
[2007]
ZAGPHC 97.
[11]
1989
(3) SA 912 (C).
[12]
Id at 914.