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[2016] ZAKZDHC 31
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Kisten and Another v Moodley and Another (13043/2012) [2016] ZAKZDHC 31 (22 July 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
Case
No. 13043/2012
DATE:
22 JULY 2016
In
the matter between:-
SHARON
KISTEN
...........................................................................................................
First
Applicant
CHANTAL
NAIDOO
...................................................................................................
Second
Applicant
And
SUGENDREE
MOODLEY (NEE
PILLAY)
..............................................................
First
Respondent
HIMAL
TUGH
NO
...................................................................................................
Second
Respondent
ORDERS
1.
The main application and the counter application are dismissed.
2.
There will be no order as to costs in either the main application or
the counter application.
JUDGMENT
HENRIQUES
J
Introduction
[1]
This is an application in which the applicants seek both interim and
final relief in respect of the immovable property described
as
Portion 3… of Erf 8…, Chatsworth, physically situated
at 5… C…. C…., B…., C…..
(The
immovable property).
[2]
The applicants seek interim relief in terms of which inter alia:
[2.1]
the respondents are interdicted from alienating, mortgaging,
encumbering and further allowing the immovable property to fall
into
a state of disrepair;
[2.2]
the first respondent be directed to co-operate with the applicants in
restoring and upgrading the immovable property to a
habitable state
and to that end, to obtain the services of a building maintenance
contractor to attend to the repair and restoration
of the immovable
property so that a fair market value can be obtained when it is sold;
[2.3]
they gain access to the immovable property;
[2.4]
the expenses incurred in respect of restoring and repairing the
immovable property be borne by the beneficiaries of the estate
late
Subramoney Naidoo, jointly and severally, alternatively be paid from
the proceeds of the sale of the immovable property.
[3]
In respect of final relief the applicants seek orders that inter
alia:
[3.1]
on completion of the repairs, valuations be obtained from two
independent estate agents;
[3.2]
on receipt of such valuations, the applicants and the first
respondent be entitled to make offers to purchase the immovable
property, such sale being subject to the approval and consent of the
beneficiaries;
[3.3]
failing the sale of the immovable property to either of the
applicants or the first respondent, the immovable property be
sold by
public auction.
[4]
The first and second respondents have filed a counter application in
which they seek to join the Master of the High Court, KwaZulu
Natal,
Pietermaritzburg and Durban and the Registrar of Deeds for the
Province of KwaZulu Natal as the third, fourth and fifth
respondents
respectively, and, seek an order that the property be sold by way of
public auction in terms of s 47 of the Administration
of Estates
Act,
[1]
together with ancillary
relief.
[5]
In the main application and counter application the parties seek a
punitive cost order against the other on account of the alleged
conduct of the other.
Background
Facts
[6]
The following facts arise from the affidavits and annexures filed in
the main and counter application.
[6.1]
The immovable property is an asset in the estate of the late
Subramoney Naidoo, (“Subramoney”) reported at the
Master’s office, Pietermaritzburg, under Estate No. 7…../Pmb.
[6.2]
The second respondent is the executor of the estate of the late
Subramoney.
[2]
[6.3]
Clause 4 of Subramoney’s Will nominated Edwin Deveraj
Subramoney Naidoo (Edwin Naidoo), as well as the first applicant
and
the first respondent as beneficiaries of his estate.
[6.4]
Edwin Naidoo died on 19 December 2009 and the second applicant was
appointed to attend to administer and wind up his estate.
In effect
the second applicant, being a beneficiary in Edwin Naidoo’s
estate, and her siblings, would be entitled to inherit
from the
estate of Subramoney.
[6.5]
On 9 January 2008, the second respondent signed the liquidation and
distribution account in the estate of Subramoney. Subsequent
to
queries being attended to, the liquidation and distribution account
was accepted and approved by the Master in June 2008.
[6.6]
The liquidation and distribution account indicates the heirs were
required to meet the cash shortfall in the estate, failing
which, the
immovable property would be sold at a public auction to meet the cash
shortfall.
[6.7]
The first applicant and first respondent have both made offers to
purchase the immovable property. Such offers appear to have
lapsed.
[6.8]
The immovable property has yet to be transferred into the names of
the beneficiaries of Subramoney’s estate and such
transfer can
only be effected on the issue of a rates clearance certificate by the
Ethekwini Municipality.
[6.9]
The immovable property was occupied by Edwin Naidoo until his death
on 19 December 2009. Since then the property has been
vacant and is
in a poor condition. It has been vandalized, is uninhabitable and
losing value.
[3]
[6.10]
The applicants allege they have attempted to maintain the immovable
property so that it does not lose further value, but
have been met
with objections and resistance from the first respondent.
[6.11]
The applicants have attempted to resolve the matter with the first
respondent and have sent numerous letters to the second
respondent,
[4]
in his capacity
as executor, for him to intercede and resolve the matter between the
beneficiaries.
[6.12]
The first and second respondents do not deny these attempts.
[6.13]
The applicants fear the longer the immovable property stands vacant
and is not sold, it will devalue to the extent that there
will be no
equity in the immovable property. There is also a real fear that the
municipality will sell the immovable property for
a negligible amount
in satisfaction of outstanding rates and municipal charges.
[6.14]
The second respondent made attempts to transfer the immovable
property in 2008, but the first applicant failed to sign the
relevant
documents in 2008 when they were forwarded to her. The first
applicant indicates that this was due to a dispute with Marsha
Pillay,
[5]
which dispute the
first and second respondents are well aware of. The first applicant
and first respondent have paid various amounts
due in respect of
municipal charges and fees due to the second respondent. The delay in
winding up the estate it is alleged has
largely been due to the
second respondent’s conduct.
[7]
The first respondent and the second respondent oppose the relief
sought by the applicants. In addition, they raise
in limine
defences to the application, namely that the applicants have not
joined the Master of the High Court, Durban and Pietermaritzburg
and
the Registrar of Deeds. The second respondent has not been cited in
his representative capacity as the executor of Subramoney’s
estate and further, there is no basis in law and in fact for the
relief sought in the applicant’s notice of motion. The crux
of
the first and second respondents’ opposition is that the
applicants do not have
locus standi
to bring this application.
Issues
for determination
[8]
The issues to be decided in these applications therefore is the
in
limine
defences, whether or not the applicants had the necessary
locus standi
to institute the application. Further, whether
the applicants and the first and second respondents are entitled to
the relief sought.
[9]
It would appear that the parties are
ad idem
that the
immovable property should be sold and the proceeds distributed to the
beneficiaries. It is the manner of sale which is
at issue if one has
regard to the affidavits and annexures filed.
The
Merits of the Application
[10]
I propose to deal firstly with the issue of non-joinder
.
It is
practice for litigants to cite the Master, Pietermaritzburg in the
application in light of the fact that he is an affected
party and
oversees the winding up of estates, specifically the estate late
Subramoney. However, as the applicants seek no direct
relief against
either Master, service of the application papers sufficed for the
relief in the main application. No direct and
substantial relief was
sought.
[11]
The papers were served on the Registrar of Deeds on 20 February 2013
and no report or any objection to the application or counter
application has been filed. Here to no direct and substantial relief
was sought and on the facts of this matter, service was sufficient.
[12]
The respondents, however in the counter application, seek direct
relief against the Master, Pietermaritzburg. Both the application
papers together with the counter application have been served on the
respective Masters and reports have been filed.
[6]
In essence, the Master in the Subramoney estate indicates that the
estate was reported on 16 October 2006 and the filing slip issued
on
18 August 2008, that the immovable property was to be transferred to
the heirs but such transfer was still outstanding. The
Master, Durban
has filed a report in respect of the estate late Edwin Deveraj
Subramoney Naidoo confirming the reporting of the
estate and that the
only asset in the estate of Edwin Naidoo is his one third share in
respect of the immovable property in estate
late Subramoney. Both
Masters abide by the decision of the court.
[13]
In light of the order sought in paragraph 3 of the counter
application, it would have been necessary for the respondents to
join
the Master, Pietermaritzburg as an order is sought directing the
Master to approve the sale.
[14]
Given the conclusion, I reach, it is not necessary to deal with this
point in limine
further and issue orders for the formal
joinder of such parties.
[15]
I now turn to the issue of
locus standi
. Mr Naidoo, counsel
for the first and second respondents argued that the applicants did
not have
locus standi
to institute the application and that
the application was fatally defective. He did not however, cite any
case authority for this
proposition. He argued that in terms of the
Administration of Estates Act, any application or action in relation
to any assets
of the estate had to be instituted by the executor,
being the second respondent. He submitted that if the applicants or
any of
the beneficiaries took issue with the manner in which the
second respondent was handling the estate, their recourse was an
application
to the Master for the removal of the executor.
[16]
The counter application has been brought by both the first and second
respondents who have deposed to affidavits in support
of the relief.
The second respondent joins the first respondent in respect of the
order sought in the counter application. The
fallacy in this
submission is clear. What is ‘good for the goose must be good
for the gander’ and in submitting that
the applicants did not
have
locus standi
to bring the application, on what basis can
it possibly be argued that the first respondent has
locus standi
to bring the counter application, if one were to accept the
submission of Mr Naidoo?
[17]
The issue of
locus
standi
of beneficiaries has not been definitively decided. The case of
Angath
v Mothari, NO & Others
[7]
concerned an exception in which the defendants, one of whom was an
executor, sought to have an action stayed until the other intestate
heirs in an estate had been joined. The action had been instituted by
the plaintiff as one of the heirs in the estate of his father
for the
delivery of immovable assets and ancillary relief. The defendants,
including the executor of the estate raised a plea
in
limine
that the plaintiff had to join the other beneficiaries to the action
as they had a direct and substantial interest insofar as the
assets
in the estate were concerned. Caney AJ found that ‘each heir
has a separate and independent right to have assets belonging
to the
estate brought into it; the heirs have as yet no direct interest in
the assets themselves, but will, each of them, be entitled,
not to a
joint interest, but to have his or her share upon the distribution of
the estate by the second defendant if the action
goes against the
first defendants.’
[8]
[18]
Caney AJ was of the view that even though an executor represents the
estate and not individual beneficiaries, it was, given
the facts of
the matter, prudent to join the beneficiaries in the action and
upheld the exception.
[19]
Fakroodeen
v Fakroodeen & Others NNO
[9]
concerned an application by an heiress who applied for an order
against the executor of her late father’s estate to
liquidate
the estate assets and to sell immovable properties in the estate and
distribute the assets in terms of the Will. The
respondents took a
point
in
limine
that the other heirs and beneficiaries ought to have been joined in
the action. The court directed that the heirs had a direct
and
substantial interest in the proceedings and ought to have been
joined. It would appear having regard to the
Fakroodeen
decision that a beneficiary was entitled to bring such application
and had
locus
standi
given the circumstances. Leon J was of the view that the dispute was
‘between rival beneficiaries’
[10]
who were the real parties to the dispute and had to be joined. By
analogy then, it must follow that the applicants are ‘rival
beneficiaries’ and have
locus
standi
to bring the application.
[20]
In
Du
Toit v Vermeulen
[11]
the question was once again discussed but not resolved. It would
appear that the facts of this matter are similar to that in
Fakroodeen
,
a decision of this division. Here the applicants were seeking to
compel the executor and the first respondent to comply with and
enforce the terms of the Will and consequently had
locus
standi.
To
hold otherwise would also be to find that the first respondent could
not institute the counter application.
[21]
As a consequence of the order in paragraph 3 of the counter
application, and the fact that the Master, Pietermaritzburg elected
to file a notice to abide and the affidavits did not contain any
facts dealing with s 47, correspondence was addressed to the
respective Master’s offices and the parties’ legal
representatives.
[12]
[22]
The applicants’ legal representative submitted in supplementary
heads of argument, that an order in terms of s 47 was
appropriate,
given that the second respondent has not acted in the best interests
of the beneficiaries. The respondents adopt the
view that the relief
in terms of paragraph 3 is competent given the dispute between the
parties and refers to a number of authorities.
[23]
In response to the requestfor a report to deal with the factual
position in this matter and the interpretation of s 47 given
those
facts, the Master, Pietermaritzburg has indicated that it does not
file heads of argument but rather a report. As it does
not oppose the
application, no papers have been filed. Insofar as the request to
address the issue of the interpretation of s 47
is concerned, the
response is to refer the court to the author Meyorowitz and his
commentary thereon insofar as the procedure is
concerned. No attempt
has been made to place the facts before the court as to whether an
approach in terms of s 47 has been made
by the second respondent.
[24]
The approach adopted by the Master is unhelpful to say the least.
Whilst I accept that the role of the Master is not to become
embroiled in family disputes, the section requires the Master to
exercise a discretion and not to simply adopt a supine approach.
I
propose to deal with this issue further.
[25]
Before doing so however, it is necessary to comment on the second
respondent’s conduct. As executor, he is required in
exercising
his fiduciary duty, to act in the best interests of the estate and
the beneficiaries. He is obliged to take control
of the assets,
preserve them and administer and wind up the estate as speedily as
possible. In the event of conflict between the
beneficiaries, he can
act in terms of s 47 of the Administration of Estates Act and must
seek direction and approval from the Master
in the event of the
beneficiaries not being in agreement.
[26]
The second respondent aligns himself with the content of the
affidavit of the first respondent. Yet annexure “KS11”
indicates that he was advised of the death of Edwin Naidoo and the
appointment of the executor. One would have expected that he
would
have known of this as he would have been liasing with all
beneficiaries in winding up the estate late Subramoney. Apart from
sending documents to be signed by the first respondent in 2008, he
has not indicated what steps he had taken when he received no
response, and why he did not get direction from the Master or compel
the first respondent to sign.
[27]
In addition, there is no indication why the offers to purchase were
allowed to lapse and why he has allowed the immovable property
to
deteriorate to such an extent that it has decreased in value. He also
does not appear to have taken any steps to have the immovable
property sold to a third party or by public auction once the offers
had lapsed and it is only this application which has resulted
in the
counter application. There is nothing placed before this court to
determine what the second respondent did to attempt to
sell the
immovable property between 2008 and the date of the application some
5 years later.
[28]
To date the transfer of the property has not taken place and the
beneficiaries have been prejudiced in the amount that they
will
obtain from the estate. The second respondent has not provided any
explanation as to why he ignored correspondence from the
applicants
and does not disclose why he himself failed to approach the Master
for directions or approval.
[29]
In essence, the executor is authorized subject to the consent of the
heirs/beneficiaries to sell the immovable property. Section
47(b)
provides for the executor to sell the property subject to conditions
as the Master may approve if the heirs are unable to
agree on the
manner and the conditions of sale. On what is contained in the
affidavits, and in the absence of the Master and the
parties’
legal representatives’ advice to the contrary, no such approach
to the Master for approval for the sale of
the immovable property by
way of public auction has been made.
[30]
One does not know what the attitude of the Master is to such a sale
nor is one advised whether such a sale will realize an
amount to the
benefit of the beneficiaries. One is not informed as to whether the
Master approves of such sale or not. The second
respondent can only
sell the immovable property subject to the consent of all the heirs
and subject to the approval of the Master.
The requirements of the
section are pre-emptory.
[13]
[31]
Davis
& another v Firman NO & others
[14]
concerned
the correct interpretation of s 47. I align myself with the views
expressed in such judgment and the reasons. The parties
had placed
before the Master the information in respect of the differing views
for the sale before an approach was made for the
approval of the sale
of shares and loan accounts in this instance.
[32]
The court considered the interpretation of the section in the context
of the role of an executor in the winding up of an estate.
Levinsohn
J quotes from the decision of Innes CJ in the decision of
Ex
parte Eckard
[15]
where the court reiterated that executors are responsible to realize
assets, such is not an unfettered discretion and that he acts
under
supervision of the Master.
[33]
In
Davis
,
the court was of the view that assets must be sold for the best
possible price and a sale by public auction is not the norm. Where
as
in this instance, the heirs do not agree with the each other or the
executor regarding the manner of realization of the assets,
then the
executor can only sell the property ‘in such manner and subject
to such conditions as the Master may approve’.
[16]
[34]
The Master performs the function of considering the options placed by
the non-consenting heirs as to the best manner to realize
the
property, and approves thereof. This is clear having regard to pages
15 and 16 of the
Davis
judgment where the court held
‘
.
. . and it is only in the event of these heirs being unable to agree
inter se
that the Master’s jurisdiction to consider
whether to approve the sale would arise.’
[35]
The Master in my view not only performs a supervisory role but a
specialized role. The court should defer to the Master’s
view
unless same is clearly wrong or it can be shown on review that it was
an improper exercise of such discretion. I agree with
the sentiments
expressed that courts should not ‘interfere with the exercise
of discretion by a specialised official’
[17]
and should be hesitant to substitute its own ruling for that of the
Master.
[18]
[36]
On the facts of this matter, the approach to court for orders in the
counter application, specifically paragraphs 2, 2
[19]
and 3 is made without the differing views of the heirs being placed
before the Master, and the executor’s views of the manner
of
realization of the property, ie by private treaty, public auction or
by the heirs themselves. In addition, in the absence of
the executor
approaching the Master for him/her to exercise a discretion and make
a decision to approve or otherwise the manner
of realization
proposed, this Court cannot make a decision for the Master and cannot
usurp the role or function of the Master in
s 47.
[37]
Prior to approaching the court the second respondent ought to have
approached the Master in terms of s 47 for a decision. Absent
such
approach, this Court cannot make a decision for the Master. It can
only deal with a decision once made, on review.
[38]
I now turn to the relief sought in the main application. In essence,
the first and second applicants appear to have instituted
the
application out of sheer desperation. The manner in which the papers
were drafted and the relief sought in the notice of motion
can be
described as clumsy, overreaching and lacking foundation. The crux of
their complaint relates to the manner in which the
second respondent
is winding up the estate. An approach ought to have been made to the
Master for the removal of the second respondent
in terms of s 54 of
the Act.
[20]
[39]
As part of his duties in preserving the assets of the estate one
would have expected the second respondent to have taken the
necessary
steps to maintain the property and ensure that the highest possible
price is obtained for it when sold. In the absence
of more being said
in the founding affidavits and why an approach to have him removed
was not pursued, this Court cannot issue
the orders sought. I accept
that a number of attempts were made to resolve the issues and the
disputes which came to naught but,
nowhere in the affidavits is an
approach to the Master dealt with. Whilst it may be cold comfort that
the beneficiaries may have
a claim against the second respondent
should it be found he was negligent or remiss in preserving the
assets to ensure the property
was sold for the best possible price,
this Court cannot issue the orders absent a request to the Master.
Costs
[40]
I now turn to the question of costs. It would appear that neither
party is completely innocent in their conduct. The applicants
were
forced to resort to this application to force the second respondent
to dispose of the immovable property in the estate to
enable them to
obtain their inheritance.
[41]
It is only after the applicants instituted this application that the
second respondent now joins the first respondent in bringing
a
counter application for the immovable property to be sold by public
auction. The adage no good turn goes unpunished comes to
mind.
[42]
I am inclined to believe that both sets of parties are to blame for
the mess that has resulted and an equitable course would
be for the
costs of the application and counter application to be paid by each
party.
[43]
Having said that, however, the second respondent ought not to be
rewarded for his inactiveness and his failure to take satisfactory
steps to wind up the estate and seek approval of the Master in terms
of s 47. To hold otherwise would be to reward him for unsatisfactory
conduct.
[44]
The remuneration of executors and interim curators is dealt with in
terms of s 51 of the Administration of Estates Act. In
terms of
sub-sec 3 the Master may:‘(a) if there are in any particular
case special reason for doing so, reduce or increase
any such
remuneration;
due to an executor
(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 a unsatisfactory manner;. . . .’(My
emphasis)
[45]
Given the information placed before the court, I am not in a position
to determine whether or not the remuneration of the second
respondent
ought to be disallowed in total, or in part. The Master is best
placed to deal with this in light of the fact that the
Master has
been overseeing the conduct of the second respondent. I believe that
so as not to unduly burden the estate and further
reduce any amount
which the beneficiaries will receive from the sale of the immovable
property, it would be prudent to direct the
Master to enquire into
the remuneration due to the second respondent and act in terms of the
provisions of s 51(3) if the Master
deems fit.
Conclusion
[46]
For reasons mentioned, it will not be necessary to issue orders for
joinder of the parties requested by the respondents. Absent
any
approach to the Master, this Court cannot issue orders either in the
main application or the counter application.
[47]
Consequently the orders I grant are the following:
[47.1]
the main application and the counter application are dismissed.
[47.2]
there is no order as to costs.
HENRIQUES
J
APPEARANCES
COUNSEL
FOR THE APPLICANTS: Veeran Kisten
INSTRUCTED
BY: Allen Kisten & Associates
24
Henwood Road
Morningside,
4001
Ref:
AK/KS/ESTDIS//12
COUNSEL
FOR THE RESPONDENTS: K Naidu
INSTRUCTED
BY: Himal Tugh & Co Attorneys
346
Florence Nightingale Drive
Westcliff,
Chatsworth
DATE
OF HEARING: 31 October 2013
DATE
OF JUDGMENT: 22 July 2016
[1]
Act
66
of 1965.
[2]
An application to the Master to have the second respondent replaced
as executor by the first respondent was submitted –
the date
is not reflected on the letter. The applicants indicate that this
was in 2010. The first respondent was not substituted
as executor.
It is apparent from the annexures filed, that the second respondent
is familiar with the family members who are
parties to this dispute
and has acted as a legal representative for some of them in some
instances.
[3]
This is common cause.
[4]
Correspondence annexed to the papers spans a two year period. The
first and second respondents do not deal with the correspondence
in
their affidavits nor does the second respondent indicate if he ever
responded to the applicants’ attorneys and if so
what the
response was.
[5]
Marsha
Pillay is the first respondent’s mother and the daughter of
Subramoney Naidoo.
[6]
The Master, Pietermaritzburg’s report is at 120 of the
Indexed papers.
[7]
1954 (4) SA 285 (N).
[8]
At
289 C-D.
[9]
1971 (3) SA 395 (D).
[10]
At
398.
[11]
1972 (3) SA 848 (A).
[12]
The
letter refers to heads of argument being filed by the parties’
representatives and for the Master to address the issue
by way of a
report. There was a considerable delay in obtaining a response from
the Master, Pietermaritzburg.
[13]
Scholfield
& others v Bontekoning & another
[2011]
JOL 27906
(GSJ) para 5.
[14]
[2010]
JOL 24849 (N).
[15]
1902
TS 169.
[16]
At 3.
[17]
Foil
Laminators CC & others v Master of the High Court & another
[2013]
JOL 30787
(FB) para 33.
[18]
Van
Zyl NO v The Master
2000
(3) SA 602
(C) para 20.
[19]
There
were two paragraphs 2 in the notice of motion in the counter
application.
[20]
Reichman
v Reichman & others
2012
(4) SA 432
(GSJ).