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[2015] ZAGPPHC 570
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Nedbank Limited v Valente and Others (68894/2013) [2015] ZAGPPHC 570 (11 August 2015)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE NO:
68894/2013
In
the matter between:
NEDBANK
LIMITED
Applicant
and
RICCARDO
ROSSER VALENTE
First
Respondent
RONALD
MENDELOW
N.O
Second
Respondent
LAZARUS
LEDWABA
N.O
Third
Respondent
THE
MASTER OF THE HIGH COURT,
Fourth
Respondent
PRETORIA
EVAN
ROSSER
VALENTE
Fifth
Respondent
JUDGMENT
MATOJANE
J
[1]
This matter concerns the interpretation of clause 6.3 of the Will of
the late Emily May Valente (“the deceased”)
and the
protection it may afford to heirs, First Defendant (“Riccardo”)
and Fifth Respondent (“Evan”).
Riccardo insist that his
inheritance enjoys protection against any attachment by a creditor.
[2]
The Applicant, Nedbank is the creditor of Riccardo and has attached
Ricardo’s moveable assets and intends to execute against
his
estate including the rights, which he has against the executors.
[3]
Nedbank seeks a declaratory order that Riccardo was not disinherited
in consequence of the attachment (by the Fifth Respondent)
of his
claims as against the deceased estate and that Nedbank is entitled,
notwithstanding clause 6.3 of the deceased’s will,
to satisfy
its claim against Riccardo by levying execution against any claim
vesting in him against the deceased estate.
[4]
Only the First, Second and Third Respondents filed affidavits in
opposing the relief sought.
Application
for postponement
[5]
On the eve of the trial, Riccardo launched an application for
postponement of the hearing of this matter. I refused the application
and indicated that I will provide my reasons as part of the judgment
and there are the reasons.
[6]
This Application was served on Riccardo on the 20 November 2013.
Ricardo served notice of intention to oppose the application
on
Nedbank on the 27 November 2013 and accordingly his answering
affidavit was due on 19 December 2013. Riccardo filed his answering
affidavit on 12 February 2014 two months out of time.
[7]
Riccardo did not serve his Notice to oppose and answering affidavit
on the Second and Third Respondents (“Trustees”).
The
Trustees became aware of Riccardo’s answering affidavit when
Nedbank furnished it to them.
[8]
Nedbank served a copy of the updated index on Riccardo on October
2014 and its Heads of Argument and Practice Note on 15 September
2014. The Trustee’s Heads of Argument was served on Riccardo on
15 October 2014.
[9]
The Notice of Set down was served on Riccardo on 17 December 2014. On
15 January 2015 Riccardo’s attorney addressed a
letter to
Nedbank indicating that they have not yet received the Trustees’
answering affidavit. On 16 January 2015 Nedbank
provided Riccardo
with the required documents electronically and indicated that the
Trustee’s answering affidavit is voluminous
and requested that
they tender payment of the reasonable copying costs thereof after
which same will be provided.
[10]
Riccardo now alleges that he was unaware of the Trustees’
answering affidavit and supplementary affidavit and that
he is unable
to file Heads of Argument. If Riccardo and his attorneys had read the
replying affidavit as they should have, they
would have seen that
there was an answering affidavit from second and third Respondents,
secondly, the updated index that was served
on 1 October 2014 shows
clearly the Second and Third Respondent’s answering affidavits
and thirdly, the Heads of argument
of the Applicant, Second and Third
Respondents received by Riccardo on 15 October 2014 makes it clear
that there was an answering
affidavit of the Second and Third
Respondents.
[11]
In my view, the application for postponement is mala fide as Riccardo
is seeking to delay the hearing of this matter
in an attempt to
frustrate Nedbank and the Trustees.
Factual
background
[12]
On 23 March 1994 the deceased signed her Last Will and Testament in
terms whereof Riccardo and his brother Evan were
appointed sole heirs
of her estate in equal shares. The deceased nominated Evan, Riccardo
and Cronin as the co-executors and administrators
of her estate. The
deceased, Evan and Ricardo were all directors of U-Valente (Pty) Ltd.
[13]
By fraudulent means Riccardo forged the deceased signature on an
Agreement of Sale and fraudulently removed Evan as a
Director of
U-Valente. Riccardo signed a power of Attorney on behalf of U-Valente
authorising the registration of a covering bond
mortgage bond over
the property in favour of Imperial Bank, Nedbank’s predecessor,
securing a loan of R6 million. Imperial
Bank agreed to lend U-Valente
the sum of R6 million without knowledge of the existence of
winding-up proceedings.
[14]
In terms of the Order handed by the Supreme Court of Appeal the bond
registered in favour of Nedbank was set aside and
Nedbank lost all
security enjoyed in respect of the facility made available to
U-Valente of R6 million in consequence of the fraud
perpetrated by
Riccardo.
The
issue
[15]
The central issue to be determined is whether clause 6.3 of the
testator’s will has the effect of disinheriting
Ricardo.
[16]
Clause 6.3 of the Will provides that:
“
No
rights or hopes of any beneficiary under this will and no part
thereof shall be attachable by any creditor of the beneficiary
or
vest in the trustee in Insolvency and if prior to a payment being
made or asset being delivered to a beneficiary his assets
are
attached by any creditor or his estate is sequestrated (whether
provisionally or finally), the rights or hopes of that beneficiary
under this will in respect of any amounts not already paid or assets
not already delivered shall immediately and entirely
thenceforth cease and determine and those rights and hopes shall
thereupon, subject to the provisos below, devolve upon and vest
in
such other parties as would be entitled thereto if the beneficiary
had died at the time of such cessation and determination
provided
that –
6.3.1
The beneficiary shall not be obliged to repay to my estate any
amount paid or advanced to him from my estate.”
[17]
On Nedbank’s interpretation clause 6.3 provides for a
suspensive condition denying a beneficiary the right to benefit
from
a Will should that beneficiary be sequestrated on
dies
cedit.
It is common cause that Riccardo
was not sequestrated on
dies cedit
.
[18]
On the interpretation contended for by Second and Third Respondents,
clause 6.3 contains a resolutive condition which
has the effect of
disinheriting the First Respondent upon his assets being attached by
a creditor. Second and Third Respondents
submit in their heads of
argument and in court that clause 6.3 addresses the situation where “
If prior to a payment being
made or asset being delivered to a
beneficiary” his assets are attached by a creditor, in such an
event, the beneficiary
loses his inheritance and it devolves upon
other parties – under the gift over. The trigger event
contemplated, the argument
goes, is one, which arises after the death
of the testator but before distribution under the account.
[19]
First and Second Respondent argues that this interpretation is
fortified by clause 6.3.1 which provides that a beneficiary
shall not
be obliged to repay to the estate any amount previously paid to him
from the estate, therefore, according to the Respondents,
the
testator contemplated an event arising after death which gives effect
to the disinheritance. This makes the provision in clause
6.3 in such
circumstances, a resolutive condition, not a suspensive condition.
[20]
The moveable property belonging to Ricardo and his rights title and
interest in the estate and rights under the will
of the deceased were
attached in execution of a costs order in the winding up proceedings
of U-Valente. By virtue of this attachment,
respondents argue, the
provisions of clause 6.3 of the Will came into effect with the
consequence that Ricardo is divested of all
of his rights under the
will.
[21]
The Second and Third Respondent submit that the issue of the First
Respondent’s disinheritance has been determined
by this Court
in a final judgment in proceedings to which Nedbank was a party and
which were referred to by Nedbank in its founding
affidavit as “the
Executors application”. In terms of the judgment, Executors
were authorised to procure payment of
their costs by appropriating
the amount of such costs from the cash resources of the estate and
allocating such appropriation to
that portion of the estate which,
but for the provisions of clause 6 of the Will, would have vested in
and became payable to Riccardo.
[22]
The relief that was in issue in the Executors application had to do
with the fraudulent transfer of the property by Riccardo
and had
nothing to do with the disinheritance of Riccardo. The question of
disinheritance was never raised nor considered by the
court. The
court merely ruled that they could procure payment of their costs
from the estate.
Discussion
[23]
It is not permissible for a testator to include a clause or a
condition in a Will, which will have the effect of preventing
creditors from pursuing an inheritance in the estate of the
beneficiary once that beneficiary has acquired rights to the
inheritance.
In
Badenhost v Bekker NO en
Andere
[1]
the court stated:
“
Ek
oorweeg eerstens die effek van daardie gedeelte van die testament wat
bepaal sat die applikantedie uitgeslote bates erf ‘vry
van die
skulde van Badenhost. Dit is duidelik dat n erflater nie regsgeldig
kan bepaal nie dat n eftlating nie vir beslaglegging
vatbaar sal wees
nie of dat dit, indien die begunstigde se boedel gesekwerstreer word,
nie deel sal vorm van sy insolvente
boedel nie”.
[24]
On
dies cedit,
the
rights to investment vests in and form part of the estate of the
bebeficiary.
Mars: The Law of Insolvency
in South Africa
.
[2]
States:
“
A
testator cannot prevent an inheritance from forming part of the
insolvent estate of his heir by a provision in the will that the
bequest remain unenforceable during the period of sequestration. This
can only be achieved by the testator if he has created
a gift over.
For example, the testator may include a provision in his will stating
that if the heir is an unrehabilitated insolvent
at the time of the
testator’s death, the bequest must accrue to another person, or
the testator must allow the executors
of the estate discretion to
divert the inheritance to another person. In such cases the insolvent
heir’s trustee will have
no rights regarding that inheritance.
Where an insolvent’s father bequeathed his estate to his son,
subject to a proviso
that if, at the time of the testator’s
death, the son happened to be insolvent, the proceeds of the estate
should go into
a trust until the son is rehabilitated, the court held
that the inheritance could not be placed beyond the reach of the
insolvent’s
creditors and that the provision in the will was a
nudum
praeceptum.
The
inheritance accordingly vested in the insolvent estate in terms of s
20 (2). Assets bequeathed exclusively to one of two spouses
in a
marriage in community of property will vest in the joint insolvent
estate. If an heir repudiates an inheritance either before
or during
the insolvency of that heir, the inheritance will be excluded from
that insolvent estate”
[25]
It follows therefore that Second and Third Respondent’s
contention that Riccardo has been disinherited because
some of his
assets had been attached prior to his inheritance being delivered to
him is not correct.
[26]
Nedbank is according entitled, notwithstanding clause 6.3 of the
deceased Will to satisfy its claim against Riccardo
by levying
execution against any claim vesting in him against the deceased
estate.
[27]
In the alternative, and in my view, it cannot be said that the
testatrix could have contemplated that the fulfilment of her
directions will be rendered so utterly unreasonable by the fraudulent
conduct of Riccardo. Accordingly, necessity justify the variation
of
the deceased Will not to disinherit him.
[28]
In the result the following order shall issue: It is declared that:
27.1 The First Respondent was not
disinherited in consequence of the attachment (by Fifth
Respondent) of his
claims as against the deceased estate;
27.2 Nedbank is entitled, notwithstanding
clause 6.3 of the deceased Will, to satisfy its
claim against
the First Respondent by
levying execution against any claim vesting in him against the
deceased estate.
27.3 The First Respondent is ordered to pay
the costs for the application for postponement.
27.4 The Respondents are to pay the costs of
the action.
______________________
K E MATOJANE
JUDGE OF THE HIGH COURT
[1]
1994 (2) SA 155
[2]
9
th
ed, p 188.