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[2013] ZAGPPHC 99
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Oberholster NO and Others v Richter (A515/11) [2013] ZAGPPHC 99; [2013] 3 All SA 205 (GNP) (12 April 2013)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG DIVISION, PRETORIA)
Case
no.: A515/11
DATE:12/04/2013
In
the matter between:
J.
OBERHOLSTER N.O.
…....................................................................................
First
Appellant
NORTHPLAN
CHARTERED ACCOUNTANTS
INC
...........................................
Second
Appellant
CARDIO-FITNESS
PROPERTIES PTY LTD
…..................................................
Third
Appellant
HEIA
SAFARI PTY
LTD
...........................................................................................
Fourth
Appellant
and
ALEXANDER
RICHTER
.........................................................................................
Respondent
JUDGEMENT
Coram:
RABIE J
1.
This is an appeal against the judgement and order in this court by
Legodi J ordering the removal of the first appellant as the
executor
of the deceased estate of the late Alexander Franz Richter in terms
of the provisions of section 54 (1) (a)(v) of the
Administration of
Estate Act, Act 66 of 1966 ("the Act”). The appeal is also
directed against the order that the appellant
must tender his
resignation as a director of Cardio-Fitness Pty Ltd within 10 days
from the date of the order and that the Registrar
of Companies must
amend the records of the company accordingly. The court a quo
dismissed the appellant's application for leave
to appeal but same
was granted by the Supreme Court of Appeal. I shall refer to the
first appellant merely as "the appellant"
and to the other
appellants by their proper designation.
2.
The deceased passed away on 28 November 2007 leaving a will which
formed the subject of the application. The respondent is the
son of
the deceased and one of the heirs. The other heirs were Gabrielle
Burgmer ("Gabrielle") a daughter of the deceased,
Gabriella
Kunigkeit another daughter of the deceased, Nicole Burgmer a
granddaughter of the deceased, and Me Celewi Mbokazi.
3.
The relevant bequests to the heirs were the following: to the
respondent was bequeathed the shares in the third appellant,
Cardio-Fitness
Properties Pty Ltd ("Cardio"), conditional
upon him having assumed all of the deceased’s liabilities,
including
his liability on debit loan account, to Cardio. To
Gabrielle was bequeathed the shares in and claims on loan account
against the
fourth appellant, Heia Safari Pty Ltd ("Heia"),
as well as certain immovable properties, some of which were
registered
in the name of the deceased and some of which were
registered in the name of Cardio. Gabriella Kunigkeit and Nicole
Burgmer were
both bequeathed sums of money. Me Celewi Mbokazi was
bequeathed a sum of money to be administered by the appellant, in
trust, together
with certain other benefits. A testamentary trust was
also established for the benefit of such orphaned children as were in
the
care of the deceased at the time of his death.
4.
During his lifetime the deceased was the sole shareholder and
director of both Cardio and Heia. In addition the deceased traded
as
Heia Safari Ranch, a business which operated a guest lodge. Cardio
owns the business known as the Aloe Ridge Hotel. Cardio is
also the
owner of a number of immovable properties. The respondent was at all
relevant times the manager of Cardio and Gabrielle
the manager of
Heia Safari Ranch which business the deceased conducted on the
properties owned by Heia as well as the deceased
and Cardio. Heia is
also the owner of a number of immovable properties. Heia also
conducted farming operations.
5.
During his lifetime the second appellant, i.e., Northplan Chartered
Accountants Inc, was the auditor for both Cardio and Heia
and
attended to the deceased's personal finances. The appellant was at
all relevant times in the employ of the second appellant
and the
person who dealt with the deceased and his companies. In his will the
deceased appointed the appellant as the executor
and administrator of
his deceased estate. As executor the appellant was afforded extremely
wide powers and rights. So, for example,
in clause 5.1 of the will,
the following was stated:
"My
Executor and Administrator shall, in his respective capacities, have
the power to realise the whole or any part or parts
of my estate or
of any trust created hereunder, as the case may be, in such manner,
on such terms and at such time or times as
he, in his absolute
discretion, may determine and/or to retain for as long as he thinks
fit any investment or assets found in my
estate on my death; to
invest and reinvest all or any sums of money which will from time to
time form part of my estate ..., on
such terms, in such manner and at
such time or times as he may in his absolute discretion decide, ...;
to pay and discharge out
of the income and, if necessary, the capital
of my estate or any trust created thereunder, all expenses and other
liabilities which
he may in his reasonable discretion incur for the
account of my estate or any such trust, and generally to do or cause
to be done
whatsoever he may reasonably deem necessary or advisable
in the interests of my estate...".
6.
In paragraph 5.1.2 of the will the appellant was granted, inter alia,
the following specific powers:
"to
exercise all voting powers attaching to any shares, stocks,
debentures or units, in such manner as he may consider in the
best
interests of my estate
In
paragraph 5.1.7 he was granted the specific powers:
"to
carry on or terminate in such manner and upon such terms and
conditions as he may determine any business of whatsoever
nature in
which I may have been interested as at the date of my death".
In
paragraph 5.1.10 he was granted the specific powers:
"to
deal with any shares and other assets in my estate or forming part of
any trust created hereunder in such manner as if
he was the absolute
owner of the assets and/or income flowing therefrom and, in this
connection to do all such things relating
to or concerning the assets
and on behalf of the estate and/or any such trust, as he may in his
discretion deem fit, subject always
to the express provisions of this
my Will."
7.
The respondent was clearly unhappy with some of the bequests made by
the deceased in his will and the conditions attached thereto.
The
sustained and bitter animosity which had existed over a number of
years between the respondent and Gabrielle exacerbated the
position.
Matters were driven to a head, however, when the appellant, as
executor, appointed himself as director of Cardio and
Heia
respectively for purposes of administering the deceased estate. The
respondent did not take kindly to this and was of the
view that he
should have been appointed as director of Cardio. He resented the
fact that the appellant, as executor, assumed control
over the
deceased estate and the companies of the deceased. He was also of the
view that he was entitled to certain monies during
the course of the
administration of the deceased estate. As time went by, the
respondent made further claims and demands which
were also resisted
by the appellant as executor.
8.
At some point the respondent appropriated certain sums of money
belonging to Cardio to which he was not entitled. As executor
the
appellant formally obtained legal advice and, based thereon,
disciplinary proceedings were instituted against the respondent
as
employee of Cardio. The disciplinary tribunal found the respondent
guilty and proposed that his services at Cardio be terminated.
The
appellant, however, decided not to implement the proposal. These
events where, however, the proverbial last straw.
9.
Ultimately the respondent decided to launch the present application
to court in order to remove the appellant as the executor
and also to
have him removed as director of the two companies. The founding
papers consisted of 522 pages. The answering affidavit
and
accompanying documents filed on behalf of the first to the fourth
appellant’s, including a counter application, consisted
of just
over 1000 pages. The respondent did not reply to the case put up by
the appellants.
10.
The respondent's case was based on section 54(1)(a)(v) of the Act
which provides as follows:
"Removal
from office of executor
(1)
An executor may at any time be removed from his office- (a) by the
Court- (i) ...
(ii)
...
(iii)
(iv)
(iv)
if for any other reason the Court is satisfied that it is undesirable
that he should act as executor of the estate concerned;"
11.
The application of section 54(1)(a)(v) of the Act was considered in
the matter of Die Meester v Meyer en Andere 1975(2)SA 1(T).
At page
16 the court, per Margo J, approved the prior analysis in
Sackville-West v Nourse and Another
1925 AD 516
in which Acting Chief
Justice Solomon, at p 527, referred to the judgment of Lord Blackburn
in Letterstedt v Broers,
9 A. C. 371
(a matter on appeal from the old
Cape Supreme Court) and proceeded as follows:
"He
then quotes a passage from Story, Equitable Jurisprudence... as
follows:
'But
in cases of positive misconduct Courts of Equity have no difficulty
in interposing to remove trustees who have abused their
trust; it is
not indeed every mistake or neglect of duty or inaccuracy of conduct
of trustees, which will induce Courts of Equity
to adopt such a
course. But the acts or omissions must be such as endanger the trust
property or to show a want of honesty or a
want of proper capacity to
execute the duties, or a want of reasonable fidelity.'
He
then proceeds to lay down the broad principle that...
'In
exercising so delicate a jurisdiction as that of removing trustees,
their Lordships do not venture to lay down any general rule
beyond
the very broad principle above enunciated that their main guide must
be the welfare of the beneficiaries.’"
12. Margo J then proceeded as follows
on p 16 H:
"Hierdie
beginsels, wat deur SOLOMON, WN. H. R., goedgekeur is, is ook van
toepassing op ’n eksekuteur. Sommige van die
latere beslissings
van ons Howe wat hierdie beginsels illustreer is in Ex parte Hills,
1959 (4) S. A. 644
(0. K.) op bl. 647, versamel.
Op
bl. 528 van die Sackville-West saak het SOLOMON, WN. H. R., bygevoeg
dat blote wrywing of 'n vyandige verhouding tussen die administrateur
en die begunstigde nie per se 'n genoegsame rede is vir die
verwydering van die administrateur uit sy amp nie tensy dit
waarskynlik
is dat dit die bereddering van die trust sou verhoed.
Soos MURRAY, R., gese het in Volkwyn, N. O. v Clarke & Damant,
1946 W.
P. A. 456 op bl. 474:
"...
the essential test is whether such disharmony as exists imperils the
trust estate and its proper administration"."
13. Margo J, at p 17B, also referred
to the matter of Volkwyn, N. O. v Clarke & Damant, 1946 (WLD) 456
where Murray J said the
following on p 464:
"Both
the statute and the case cited (Letterstedt v Broers ) indicate that
the sufficiency of the cause for removal is to be
tested by a
consideration of the interests of the estate. It must therefore
appear, I think, that the particular circumstances
of the acts
complained of are such as to stamp the executor or administrator as a
dishonest, grossly inefficient or untrustworthy
person, whose future
conduct can be expected to be such as to expose the estate to risk of
actual loss or of administration in
a way not contemplated by the
trust instrument."
14.
Margo J in Die Meester v Meyer {supra) at p17C however noted:
"Hierdie
beginsel is deur MURRAY, R., omskryf slegs in verband met "acts
complained of', d. w. s. die doen en late van
'n eksekuteur wat horn
onbevoeg maak om sy pligte uit te voer. Die beginsel is nie
veelomvattend nie. Dus, bv. kan omstandighede
ontstaan waar 'n
eksekuteur horn in 'n onhoudbare posisie teenoor die boedei vind.
Grobbelaar v Grobbelaar,
1959 (4) SA 719
(AA) op bl. 724G. In die
geval van botsende belange, is die blote feit dat 'n eksekuteur nie
onpartydig kan wees by die beoordeling
van eise teen die boedei nie,
prima facie grond vir sy verwydering. Webster v Webster en 'n Ander,
1968 (3) SA 386
(T) op bl. 388C - D.
15.
In both the Grobbelaar and Webster matters referred to, the executor
stood to benefit financially in his personal capacity,
depending on
what actions he took as executor. In such instances his personal
interests are in conflict with the interests of the
estate and his
inability to be impartial may be a prima facie ground for his removal
as executor. Section 54(1)(a)(v) gives the
court a discretion and the
main consideration remains a consideration of the interests of the
estate and the heirs. (Cf Die Meester
v Meyer at p 17E).
16.
In the matter of Gory v Kolver NO and Others
[2006] ZAGPHC 28
;
2006 (5) SA 145
(T) in
paragraph [27] Hartzenberg J said the following:
"The
applicant has the perception that the first respondent does not want
to administer the estate to achieve his best interests.
As must be
clear, he has reason to think so. If the applicant were the heir from
the outset, he would have nominated an executor.
Section 54 of the
Administration of Estates Act deals with circumstances under which an
executor may be removed from office. In
terms of s 2(b)(i) the Master
may remove an executor who has been nominated by will after the will
has been declared void. The
first respondent was not nominated by
will but he was nominated by intestate heirs who were not heirs. In
my view, that is one
factor pointing to his removal. Because of the
way in which he treated the applicant, I am of the view that it is
desirable that
he be removed in terms of s 54(1)(a)(v)."
The
court found that the executor was, inter alia, obstructive and that
he tried his best to steamroller the administration of the
estate
through on a basis that the
applicant's
claim be negated. In this the executor was aided and abetted by the
second and the third respondents who were not nominated
as heirs in
the will. The court also found that the executor ought not to be
remunerated for his services with the administration
of the estate or
to be reimbursed for expenses.
17.
The aforesaid authorities confirm that mere disagreement between an
heir and the executor of a deceased estate, or a breakdown
in the
relationship between one of the heirs and the executor, is
insufficient for the discharge of the executor in terms of section
54(1)(a)(v) of the Act. In order to achieve that result, it must be
shown that the executor conducted himself in such a manner
that it
actually imperilled his proper administration of the estate. Bad
relations between an executor and an heir cannot lead
to the removal
of the executor unless it is probable that the administration of the
estate would be prevented as a result. But,
in my view, even in such
event, the respective actions of the heir and the executor must be
considered, for an heir cannot be allowed
to frustrate, through
unreasonable and wrong conduct, the actions of an executor which is
beyond reproach. A disgruntled heir cannot
be allowed to circumvent
the administration process by improperly pressurizing the executor to
accede to his demands. To remove
an executor in such circumstances
would not serve any purpose for the same lot would befall the next
executor as well. It is not
necessary to discuss this issue any
further since in the present matter I hold the view that the
relationship between the respondent
and the appellant is not such
that it would prevent the administration of the estate.
18.
In the founding papers the respondent made numerous allegations of
improper and wrong conduct on the part of the appellant.
In support
of his contentions the respondent filed a report of an auditor, Mr
Prakke. The report of Mr Prakke consisted of approximately
80 pages
plus numerous annexures attached to it. The report did not only
contain financial issues but adopted facts which could
only have
emanated from the respondent. Mr Prakke accused the appellant and
others in the strongest language possible of the worst
possible
conduct including incompetence, wrongful acts, financial greed, cover
up of wrongful and illegal execution of duties,
misrepresentation of
true financial affairs, the abuse and willful incorrect
interpretation and execution of accounting conventions
and statutory
obligations, and, in fact, of probably all possible wrongs and
improper conduct which a person in the appellant's
position could
have committed. The attack on the appellant not only related to his
actions as executor after the death of the deceased,
but also to his
actions as auditor over a period of many years preceding the death of
the deceased. He was also accused of accepting
the executorship in
order to advance his own financial benefit and to further his own
self-interest. He was also accused thereof
that his ultimate goal was
to earn the executor fees in addition to audit fees and director fees
to be determined by himself.
19.
In response to the respondent’s case, the applicant addressed
each and every issue in detail in his answering affidavit
and
attached thereto supporting affidavits and expert reports and
numerous annexures. One such affidavit was of Me A.J. van den
Bergh,
a chartered accountant and director of PKF Inc., the firm which
conducted the audit and the preparation of financial statements
for
the year ending 30 June 2007 in respect of Cardio and Heia and the
preparation of the financial statements for the same year
in respect
of the estate of the deceased trading as Heia Safari Ranch. The other
expert report was under the joint hand of Mr A.
Greyling and Me S.
Veale, both chartered accountants contracted to Accountants @ Law Pty
Ltd, a company specialising in the provision
of forensic accounting
services. The GreylingA/eale report which consisted of approximately
200 pages, analysed the Prakke report
and dealt with all the
contentious issues. It is not necessary to refer to the issues dealt
with in the aforesaid reports save
to say that the GreylingA/eale
report disputed and, in fact, rebutted the allegations and findings
of the Prakke report.
20.
The respondent did not file a replying affidavit and absent a
referral to oral evidence, the relief sought by the respondent
fell
to be determined on the basis of the facts stated by the appellant
together with the admitted or the undenied facts in the
respondent's
founding affidavit. Facts which are far-fetched and clearly untenable
and which can be rejected on the papers before
the court, should be
ignored. Cf Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A). Cf also National Director Of Public Prosecutions
v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) where Harms JA said the following in
paragraph [26]:
"[26]
Motion proceedings, unless concerned with interim relief, are all
about the resolution of legal issues based on common
cause facts.
Unless the circumstances are special they cannot be used to resolve
factual issues because they are not designed to
determine
probabilities. It is well established under the Plascon-Evans rule
that where in motion proceedings disputes of fact
arise on the
affidavits, a final order can be granted only if the facts averred in
the applicant's (Mr Zuma's) affidavits, which
have been admitted by
the respondent (the NDPP), together with the facts alleged by the
latter, justify such order. It may be different
if the respondent’s
version consists of bald or uncreditworthy denials, raises fictitious
disputes of fact, is palpably implausible,
far-fetched or so clearly
untenable that the court is justified in rejecting them merely on the
papers."
21.
The court a quo approached the matter as if it were an application
for an interdict. The court consequently set out to establish
whether
the requirements of a final interdict have been met. The court found
that there can be no doubt that the applicant "has
a clear right
in the estate of the deceased". What exactly this "right"
was, was not discussed. The court further
found that the next
requirement was proof of an injury actually committed or reasonably
apprehended in the sense of "some
sort of interference with the
applicant's rights". The court further found that potential
prejudice must be shown and that
this entails a reasonable
apprehension of injury which does not have to be proven on a balance
of probabilities. All that is required
to be shown is that it is
reasonable to apprehend that injury will result.
22.
In my view the court a quo misconceived the nature of the application
before it. The application was not for an interdict but
an
application requiring the court to decide whether or not it was
"undesirable" for the appellant to continue acting
as the
executor of the deceased estate as envisaged by section 54(1)(a)(v)
of the Act. For this purpose the respondent had to place
facts before
the court which would have the effect of convincing the court to come
to such a decision. Since the principles in
the Plascon-Evans matter
apply in an application of this nature, the facts which the court
should accept for purposes of arriving
at a conclusion, are those
presented by the appellant and those presented by the respondent
which the appellant cannot deny, excluding
such facts presented by
the appellant which the court is justified in rejecting merely on the
papers.
23.
The court a quo, approaching the matter as an interdict, set out to
relate the facts which it found to be common cause. I do
not intend
to repeat those facts which were
said
to be common cause save to say that many thereof were indeed not
common cause between the parties but highly contested.
24.
I shall now briefly refer to the facts and issues which were mainly
responsible for the court a quo coming to its final conclusion.
Before I do so, however, it is necessary to state that the court a
quo did not analyse the detailed financial affairs and conduct
of the
appellant relating to such affairs, as discussed in the Prakke and
the Greyling/Veale reports. The court also made no finding
in that
regard.
25.
The court a quo instead referred to certain salient features of the
case which seemed to have formed the basis of the final
conclusion.
These were, inter alia, the following: Firstly, that since the
respondent accepted the terms of the will on 10 January
2008, he
should have been considered to be the de facto shareholder of Cardio.
Despite this, so it was found, the appellant caused
himself to be
appointed as director on 28 January 2008. The court further found
that the fact that the appellant became the shareholder
in his
official capacity, it should "be seen in context". This
context was, firstly, that for many years the respondent
had been
managing Cardio and had been referred to as a "director" of
Cardio. Secondly, the deceased in his will did not
empower the
appellant to act in various capacities other than that of executor.
The court found it to be clear from the will that
the deceased wanted
the respondent to become the shareholder of Cardio once he had
accepted the terms of the will. Thirdly, the
court found that the
deceased must have had confidence in the ability of the respondent to
run and sustain Cardio and the Aloe
Ridge Hotel as ongoing
businesses. Fourthly, the court found that in appointing himself as
the sole director of Cardio, coupled
with his nomine officio
shareholder status, he made it impossible for the respondent to
exercise any right of removal of the appellant
as director in terms
of section 220 of the Companies Act. The court proceeded to state
that if the appellant should be removed
as an executor, his
directorship and shareholding "should go with it".
26.
Some of the other main findings of the court a quo7 were the
following: The court a quo was of the view that the respondent
should
have retained some control over the estate and should have been
appointed as director of Cardio. Apart from the above- mentioned
factors, the court was of the view that the terms of the will
envisaged this. The court further found that it was the failure to
appoint the respondent as director which caused the dispute between
the appellant and the respondent. The court also found that
the
appellant improperly retained his position as auditor, accountant and
secretary of both companies and charged a fee for such
work. The
court also found that the appellant sold assets in contravention of
the Act and the will of the deceased. The court further
found that
the appellant misused his powers when he took disciplinary steps
against the respondent and that those actions damaged
the
relationship between the appellant and the respondent beyond repair.
27.
In summary, the court a quo found that by his actions, which were
mostly unlawful, the appellant had caused irreparable damage
to the
relationship between himself, as executor, and the respondent and
that he should, for that reason, be removed as executor
and also as
director of the two companies.
28.
I shall now deal briefly with the main grounds referred to above.
Regarding
the appointment of the appellant as the director of Cardio and Heia:
29.
In answer to the submissions by the respondent that the appellant had
no authority to appoint himself as director of the two
companies, the
appellant explained in the answering affidavit that since the
deceased had been the sole director of both Cardio
and Heia, it
became necessary, upon his death, for a director to be appointed.
Having regard to the deceased's approach to the
conduct of the
business and affairs of both the companies, the appellant deemed it
prudent in the circumstances to appoint himself
as sole director of
both companies. In this regard it is at the outset important to note
the extremely wide authority granted to
the appellant in clause 5.1.2
and 5.1.7 of the will. Firstly, the deceased decided that the
appellant should in his absolute discretion
discharge his functions
as executor. For this purpose the appellant was, inter alia, directed
to exercise all voting powers attaching
to any shares of the
companies. He was also given the right to carry on or terminate in
such manner and upon such terms and conditions
as he may determine,
any business of whatsoever nature in which the deceased may have been
interested at the time of his death.
30.These
provisions in the will are support for the statements by the
appellant that it was indeed the deceased's wish that he should
proceed with the conduct of the business and affairs of the two
companies and not abdicate same in favour of the respondent or
any
other heir. By appointing himself as director, the appellant could
effectively exercise all the voting powers attaching to
the shares of
the companies as envisaged in the will for purposes of discharging
his functions as executor and of generally acting
in the best
interest of the companies and the deceased estate. His appointment as
director of the two companies was in fact discussed
in a meeting with
the respondent and Gabrielle on 14 December 2007. The appellant
furthermore stated that his appointment as director
had not delayed
the finalisation of the estate but had the effect of restoring some
of the financial discipline which the deceased
exerted during his
lifetime. Furthermore that his appointment as director was not and
will not be prejudicial to the heirs of the
estate.
31.
The appellant also indicated that as soon as he would be in a
position to transfer the bequeathed assets to the beneficiaries,
he
would resign as the director of both companies. That would occur once
the final liquidation and distribution account had been
lodged and
duly approved. The appointment was therefore of a temporary nature
for purposes of finalising the administration of
the estate of the
deceased and not to enhance or benefit his own position on the short
or the long-term.
32.
Regarding the allegations of acting with the purpose of enhancing his
financial benefit, the appellant stated that he has not
received any
financial benefit for acting as the director of any of the companies
and that he would not do so unless the respondent
and Gabrielle
agreed thereto. Even in that event, it would not be more than a
nominal amount.
33.
The allegation by the respondent that the appellant had extracted
large sums of money from his inheritance, was vague and
unsubstantiated,
but in any event denied by the appellant. According
to the appellant he had continuously and persistently attempted to
exert some
form of supervision over the affairs of the two companies
and if he had not done so, their businesses would have suffered
irreparably.
According to the appellant's evidence he had been
actively involved in the businesses in order to preserve them. From
the evidence
of the appellant it appears that his activities were in
fact necessary for this purpose and that these activities were indeed
substantial.
34.
In my view the court a quo did not correctly appreciate the position
of the respondent pending the finalisation of the administration
of
the deceased estate. The respondent was not the de facto shareholder
of Cardio. It was the appellant, as executor, who took
control of the
estate and proverbially entered into the shoes of the deceased
pending the finalisation of the deceased estate.
This happened as a
matter of law and was also in line with what the deceased intended in
his will by affording the appellant the
powers to exercise all voting
powers attaching to the shares and by otherwise acting according to
his own discretion. Only at the
end of the administration process,
and depending on how many of the shares, if any, were available for
transfer to the respondent,
the respondent would be entitled to
receive same and do with it what he wants to.
35.
Regarding the findings to the effect that the respondent should have
some control over the estate, I also respectfully disagree
with the
findings of the court a quo. From the evidence it is clear that the
deceased most definitely did not want the respondent
to be the
executor and to take the relevant decisions relating to the execution
of the will. He entrusted these powers to the appellant
in the widest
of terms in his will. Furthermore, the evidence of the appellant,
which this court has to accept, was that respondent
is not and would
not be a shareholder until the administration of the estate had been
completed.
36.
I thus respectfully disagree with the findings of the court a quo
regarding the position of director. Firstly, the appointment
of a
director was necessary to ensure that the companies could continue as
going concerns pending the administration of the deceased
estate.
Secondly, the terms of the will did in fact envisage this and
entrusted the appellant to use his official shareholding
to do what
was necessary in the interest of the estate and the businesses in
which the deceased had an interest. Furthermore, insofar
as it may
have been considered to appoint the respondent as the director of
Cardio, the terms of the will and the acrimony which
existed between
the respondent and Gabrielle, must be taken into consideration.
37.
I also disagree with the court a quo relating to the reference to the
Companies Act and the position of minority shareholders.
I regard
those references as not relevant or appropriate. The issues in
respect of which the respondent raised complaints arose
from the
appellant's position as executor and nothing else. Furthermore,
therespondent is not and would not be a shareholder until
the
administration of the estate had been completed.
38.
The court a quo also found that the first appellant proceeded to
appoint himself as a director without seeking the views of
the
beneficiaries when there was nothing that stood in the way of the
respondent to be appointed as such. It was further found
that it
would have been proper and convenient to do so taking into account
the many years that the respondent had been playing
a managerial role
in Cardio.
39.
This statement of the facts is not correct. Firstly, the appellant
did discuss his appointment with the respondent and Gabrielle.
Secondly, there was indeed something standing in the way of the
respondent's appointment as director of Cardio. It was the fact
that
the deceased wanted the appellant to finalise all his affairs upon
his death and not any of his children. It is clear from
the evidence
that the deceased most definitely did not want the respondent to be
involved in the administration of the deceased
estate. These facts
were known to the appellant and he also knew that it had been the
wish of the deceased that he should finalise
the administration of
the deceased estate before the respondent could proceed on his own in
respect of Cardio. Furthermore, and
this was also known to the
appellant, the deceased had never over the years appointed the
respondent as a director of any of the
companies. In fact, the
respondent had not even been given the authority to sign on any of
the accounts of the company Cardio,
despite the fact that he managed
the hotel business of that company.
40.
The court a quo found that the appointment of the appellant as the
director of Cardio sparked off the dispute between the appellant
and
the respondent and that it "was bound to have serious
implications and friction". After mentioning that the respondent
and Gabrielle had managed the two businesses during the lifetime of
the deceased, the court found as follows: "Their father
died
without any suggestion that he was not happy in the manner in which
they were operating. For example, the applicant (the present
respondent) was seen as director. Getting into the management of the
business as a newcomer, that is, as director and taking decisions
without consulting with the applicant and fifth respondent was and is
going to continue to be a recipe for a disaster."
41.
I have indicated before that these factual findings are not correct.
The deceased never appointed the respondent as a director
and he
never regarded the respondent as a director. Secondly, the decisions
which the appellant had to take, were taken with reference
to the
fact that he was also the executor who had to take decisions in the
best interest of the estate as a whole. He was not "getting
into
the management of the business as a newcomer", as found by the
court a quo. He discussed his appointment as director
with the
respondent and Gabrielle. He thereafter took the necessary decisions
to preserve the estate and the interests of the estate
and did so
solely for purposes of executing his functions and obligations as
executor.
Earlier
actions by the Appellant
42.The
court a quo referred to the appellant's alleged conduct and actions
which he said was being questioned and then referred
to factors which
he suggested had a
serious
effect on the appellant’s ability to function properly as an
executor and which had in them, an apprehension of harm
or potential
harm to the respondent's right. In this regard the court a quo
referred to the fact that the first appellant had participated
in the
drafting of the will but had then continued to retain his position as
the auditor, accountant and secretary of Cardio and
Heia. Also that
the appellant continued to audit the books of the deceased estate and
to levy a fee on the work so done. The court
found this to be
improper and also contrary to the ethical conduct required of the
first appellant's profession as auditor.
43.
I again cannot concur with the findings of the court a quo. The
allegations by the respondent in this regard were not only denied
by
the appellant but in fact factually disproved by the appellant and
the expert evidence presented by the appellant Furthermore,
the
appellant did not participate in the drafting of the deceased's will.
The deceased was assisted by an independent attorney.
The appellant
furthermore explained his auditing functions up and until the death
of the deceased and the fact that the auditing
of the books of the
companies for the tax year ending June 2007, i.e., prior to the death
of the deceased, was eventually redone
by the firm of auditors who
eventually took over as auditors. These auditors also performed the
audit for the period which followed.
The appellant appreciated that
given the provisions of section 275 of the Companies Act, his firm,
the second appellant, would
have to resign as auditor of both the
companies. In the light of the potential conflict of interest, the
appellant decided that
the second appellant should resign as auditor
forthwith and that the entire audit should be redone by an
independent firm of auditors.
These decisions were discussed with and
agreed to by both the respondent and Gabrielle. It must also be
considered that the first
firm of auditors suggested and appointed by
the appellant did not accept the appointment and another firm had to
be appointed.
I refer to these issues again below. It is also not
correct to say that the appellant and his firm continued to be the
auditors
and had audited the books of the deceased estate until 23
April 2008 when the resignation was effected. The appointment of the
second set of new auditors may have been effected on this date, but
the fact remains that the relevant audit for the period prior
to the
death of the deceased had been redone by the new auditors. And for
the period after his death, they alone were responsible.
Consequently
nothing turns on the fact that the appellant and his firm only
formally resigned when they did.
Regarding
the position as Director and Auditor:
44.
The respondent accused the appellant of unlawfully being the auditor
as well as the director of the two companies. Also that
by holding
these two appointments, the appellant was in breach of the code of
professional conduct of the Independent Regulatory
Board for
Auditors. It was also submitted that by doing so, the appellant had a
conflict of interest. The appellant was also accused
thereof that he
did not inform the respondent or Gabrielle of the fact that he was
going to appoint himself as director. The respondent
stated that the
appellant consequently compromised his position as a consequence of
which he "became engaged in an unwarranted
and bitter conflict
with the heirs in general and with (the respondent) in particular".
45.
The court a quo accepted these allegations as fact and also found
that the appellant, as a prudent auditor, should have foreseen
a
conflict of interest and should have
avoided
acting contrary to his own ethical and professional standards and
should not have waited for the respondent to raise an
objection to
the fact that the appellant and his firm were still the auditors. It
was further found that this was seen by the respondent
as an abuse as
the first appellant sought to earn a fee as an auditor and also as an
executor and as a director.
46.
In my view the court a quo was not correct in accepting these
allegations as fact and in coming to its findings in this regard.
The
appellant denied the allegations on which these findings were based
and explained the position in detail. The appointment of
the
appellant as director was discussed with the respondent and Gabrielle
during December 2007. The appellant also advised the
respondent and
Gabrielle on 24 July 2008 that on his appointment as director on 28
January 2008, all accounting functions performed
by him and the
second appellant had ceased. On that same day discussions commenced
with BDO Spencer Steward to be appointed as
the auditor of the
companies. Eventually, after much had been done, BDO did not accept
the appointment. At that point PFK, one
of the larger auditing firms,
was approached and eventually appointed as auditor of the companies.
The second appellant had prior
to the deceased's death substantially
completed the audits for the financial year ending 30 June 2007. That
was some five months
prior to the death of the deceased. However, a
complete re-audit of that financial year was eventually done.
Regarding the earning
of fees in different capacities, the appellant
also denied the allegations upon which these findings were based.
47.
There can be no doubt that there can be no suggestion of any
impropriety on behalf of the appellant in respect of the appellant's
position as auditor and the appointment of a new auditor's firm upon
him becoming the director of the companies. Any delay was
mainly
caused by the fact that BDO at a later stage decided not to accept
the appointment. From the evidence it is clear that there
was no loss
or disadvantage to the estate in respect of this issue and that no
conflict of interest existed. All the allegations
by the respondent
were comprehensively rebutted by the appellant in the evidence which
he placed before the court.
48.
As far as remuneration as auditor is concerned, the appellant
rebutted all the allegations of the respondent. The second appellant
only received payment for what they had done prior to the death of
the deceased. PFK, who eventually took over from the second
appellant, used the draft financial statements and working papers
that had been prepared prior to their appointment but was responsible
for the audit for the financial year 2008.
49.
Regarding the respondent's accusations of double and even triple
compensation, it is thus clear that the appellant would only
be
recovering his executor's fees and nothing else. The appellant
effectively rebutted all suggestions and allegations that he
acted
improperly, unlawfully or unethically.
The
sale by public auction:
50.
The respondent also accused the appellant that the sale by way of
public auction on 17 March 2008, whereat certain of the assets
of the
estate as well as assets belonging to the individual companies had
been sold, was illegal since section 47 of the Act had
not been
complied with as neither the approval of the Master of the High Court
nor the written consent of the heirs had been obtained.
51.
However, the following appears from the evidence: Firstly, the assets
sold on public auction were not assets which belonged
to the estate
but belonged to the companies concerned. In this regard it would be
recalled that the deceased, in his will, empowered
the appellant, as
executor, to, inter alia, continue or terminate in such manner and
upon such terms and conditions as he may determine,
any business of
whatsoever nature in which the deceased may have had an interest at
the date of his death.
52.
But even if these assets should be regarded as assets of the estate,
the deceased, in his will, similarly empowered the appellant
to deal
with his assets in such a manner as if he was the absolute owner of
such assets.
53.
But furthermore, the appellant had shown that both the respondent and
Gabrielle had consented that the farming operations of
Heia be
discontinued and that the assets used in those farming operations, be
sold by public auction on the 17 March 2008. There
was written
confirmation of these aspects by both the respondent and Gabrielle.
Furthermore, the issue of which assets were to
be sold and the right
of the heirs to exclude any asset from the auction, even on the day
of the auction, were recorded between
the parties. Both the
respondent and Gabrielle were present on the day of the auction and
there was no objection in respect of
any of the assets sold.
Consequently, no finding can be made that the appellant in any way
whatsoever acted improperly or unlawfully
in respect of the selling
of the assets sold on auction.
54.
The respondent also accused the appellant of enriching himself
through the sale of certain other assets. These allegations were
also
rebutted by the appellant. According to the appellant he did not
derive any fees from the sale of the assets referred to.
The only
fees that he would be able to charge would be those fees regulated by
the Act and such fees are calculated with reference
to the value of
the assets owned by the estate as at the time of the death of the
deceased. The sale of land or other items does
not increase the value
of the total assets and would not result in additional executor's
fees. In any event, the only purpose of
the sale was to ensure
compliance with the agreement reached between the respondent and
Gabrielle to the effect that Heia would
cease trading in respect of
farming operations.
Disciplinary
Enquiry
55.
During the course of the administration of the estate the appellant
subjected the respondent, as employee of Cardio, to a disciplinary
hearing. The court a quo found that the appellant used his powers as
a director of Cardio to charge the applicant with misconduct
for
alleged misappropriation of funds and that these proceedings had a
bearing on the relationship between the appellant as executor
and the
respondent as beneficiary and also had a bearing on the costs
implications for the estate.
56.
The respondent accused the appellant that the appellant attempted to
show his disgust with the respondent's "interference"
in
the exercise of the appellant's functions by arranging the
disciplinary enquiry against him.
57.
The court a quo found that whether or not such proceedings were
justified, it had unhealthy consequences for the relationship
between
the executor and the beneficiaries. The court found that in complying
with all the obligations of an executor, the executor
would need to
consult with and examine the wishes of the beneficiaries. In this
regard the court found, with reference to the disciplinary
proceedings, as follows: "Bending on and wasting time
considering the dispute between the executor and beneficiaries as it
happened in the present case is likely to abort accomplishment of the
executor's obligations and the wishes of the deceased, but
even most
importantly damaging their relationship to the extent of no repair."
58.
I respectfully disagree with the aforesaid findings by the court a
quo. In the present matter the role of the executor was extensive.
The estate consisted of a personal estate and also involved at least
two operating companies. The administration of the estate
would
necessarily have taken some time to conclude. In the meantime the
whole estate, including the companies as running concerns,
had to be
preserved and maintained. For that purpose operational decisions had
to be taken. The first appellant was entitled and,
in fact, obliged
to protect the estate against improper actions and to prevent same
from occurring. Generally speaking it is of
course in the best
interests of all concerned and in the best interest of the
administration of a deceased estate, that good relationships
between
the executor and the beneficiaries should exist. However, this can
never mean that the executor, in the exercise of his
obligations in
terms of the Act, must overlook or accept improper conduct on the
part of beneficiaries if such conduct were to
be detrimental to the
estate.
59.
The appellant gave a full and comprehensive explanation of this
issue. The situation with which the appellant was confronted
was the
misappropriation by the respondent of funds belonging to Cardio. The
appellant did not rush into things. He obtained independent
expert
legal advice. He tried to convince the respondent of the error of his
ways, but to no avail. Different options were considered
and it was
eventually decided that the more appropriate route would be to follow
the provisions of the Labour Relations Act.
60.
The entire purpose of proceeding with disciplinary charges against
the respondent was to ensure that further misappropriation
of the
funds of Cardio by the respondent did not take place. An independent
advocate conducted the disciplinary proceedings. The
respondent was
found guilty by the disciplinary tribunal and it was recommended that
he and another official, be dismissed from
service. The appellant,
however, decided not to implement the recommendation to dismiss the
respondent.
61.
The fact of the matter is that, according to the findings of the
disciplinary tribunal, the respondent used money of the company
for
personal purposes to which he was not entitled. By doing so the
respondent acted unlawfully and caused Cardio to suffer enormous
financial prejudice from which it is has not recovered and will
probably not recover in the short term.
62.
The appellant had shown that as executor and therefore the person who
was obliged to preserve and protect the assets of the
estate, he had
no other option but to follow the course which he did. The appellant
could not simply turn a blind eye to the respondent's
conduct and
allow him to use the assets and income of Cardio for his
own
benefit and without accountability. The fact that the respondent may
eventually receive most or even all of the shares in Cardio,
is, as a
general proposition, irrelevant during the process of the
administration of the deceased estate. The appellant was responsible
for the proper administration of the deceased estate and that
included the protection and preservation of the shareholding and
interests in Cardio and the assets thereof. The respondent's
allegation that the appellant's actions were prompted by an ulterior
motive, was not supported by any of the evidence before the court.
63.lt
is clear that if the appellant had not followed the course
which he did, the respondent would in all probability have continued
to misappropriate funds for his personal use. It is clear that the
respondent steadfastly believed that since he would one day be
in
control of Cardio, he could utilise the assets of Cardio already
during the process of the administration of the estate. In
this
regard the respondent was mistaken.
64.
In my view the court a quo also erred by finding that the unhealthy
consequences to the relationship between the executor and
the
beneficiary which resulted from the disciplinary proceedings, are
paramount in deciding whether to discharge the first appellant
as
executor, despite the fact that the disciplinary proceedings might
have been justified. After all, a beneficiary cannot act
improperly
or illegally and then, when being taken to task by the executor, say
that his relationship with the executor had been
damaged or even
destroyed, and that the executor should, for that reason, be
discharged from his position.
Influence
over the Deceased:
65.
The respondent also accused the appellant of improperly influencing
the deceased, during his lifetime, in respect of numerous
matters
relating to the companies and his personal estate. The respondent
also contended that as a result the appellant had a conflict
of
interest, inter alia, because the appellant needed to hide his
previous improper conduct. The respondent based his allegations
of
improper conduct on the part of the appellant, and of the appellant
thus being confronted with a conflict of interest, on the
assumption
that the earlier services rendered to Cardio, Heia and the deceased,
were inappropriate and are subject to criticism.
66.
These accusations were denied and decisively dealt with by the
appellant. The alleged facts and the assumptions which the respondent
referred to, were incorrect as was reflected in the Greyling/Veale
report and the answering affidavit of the appellant.
67.
Furthermore, according to the appellant the deceased was at all times
mentally alert and in possession of all his faculties
and was in fact
an astute businessman and a strong and fierce negotiator. The manner
in which the deceased had built up his empire
and the fact that he
had retained sole control thereof through the years, is support for
these propositions. The appellant also
denied the respondent's
allegation that he, the respondent, had been exclusively responsible
for the management of Cardio. The
appellant stated that during the
years of his association with the deceased and the business of
Cardio, the deceased exerted strict
control over the finances of that
business and all his other businesses.
68.
It is not without significance that over the years the deceased only
allowed the respondent to manage Cardio but refused to
appoint him as
the director of Cardio which would have enabled him to take decisions
on behalf of Cardio. In fact, the deceased
never even furnished the
respondent with any signing authority on the company's bank accounts.
The deceased was clearly not prepared
to afford the respondent the
sole or even a degree of control over the business affairs of Cardio.
Through the years the deceased
also retained all the shares in the
two companies and only bequeathed them to his children in his will.
According to the appellant,
he witnessed on several occasions
arguments between the deceased and the respondent regarding the
deceased's refusal to appoint
the respondent as a director of Cardio.
This was an ongoing bone of contention between the two of them and
the deceased maintained
his attitude in this regard, despite the
respondent's protestations.
69.
Regarding the allegation by the respondent that he was regarded as
the de facto director of Cardio, the appellant stated that
he had
never been aware of the respondent being described as anything else
but the manager of Cardio. He further stated that he
was aware that
the deceased did not wish to relinquish any control over the company
to the respondent. The letterhead which reflects
the respondent to be
a director is not the letterhead of Cardio and does not contain its
registration number. The business card
to which the respondent
referred, is likewise not a business card of Cardio. The respondent
further referred to the acrimony between
the respondent and Gabrielle
which was such that during the deceased's lifetime, the respondent on
several occasions refused to
attend a meeting with the deceased and
Gabrielle and the appellant, when Gabrielle was present. The
relationship between the respondent
and the deceased was also so
strained that the respondent failed to attend the deceased's 80th
birthday celebration, which took
place only a few weeks before his
death. According to the appellant, the deceased was very upset by the
respondent's absence.
70.
The relationship between the respondent and Gabrielle was also
acrimonious. They had bitter arguments about many things and
the
respondent even accused her of criminal conduct. The appellant
referred to an e-mail which he described as hatred being shown
by the
respondent towards Gabrielle.
71.
Consequently, on the evidence before this court, the appellant never
acted improperly towards the deceased or in respect of
his business
affairs and he had nothing to cover up as executor. In fact, the
history of the matter and the relationship between
the deceased and
the respondent, and the relationship between the respondent and his
sister, Gabrielle, explain why the deceased
trusted the appellant to
be the executor and administrator of his estate to the exclusion of
his children. It also explains in
some way why the respondent wanted
to be in complete and full control of Cardio immediately upon his
father's death.
The
relationship between the appellant and the respondent:
72.
The respondent described the relationship between himself and the
appellant as being hostile. The court a quo clearly accepted
this
allegation and blamed the appellant for this state of affairs. This
was then also the main reason why the court a quo removed
the
appellant as executor and as director.
73.1
unfortunately disagree with the court a quo in respect of the
aforesaid. A striking feature of the whole application, especially
as
emanating from the huge number of correspondence from the appellant's
side, is that the appellant had at all times dealt with
the
respondent in a most courteous and co-operative way. The
correspondence further shows that the appellant had gone out of his
way to provide the respondent with relevant formation and providing
full and unfettered access to the accounts of the companies
and the
underlying documentation. All accounting processing were reported to
the respondent and Gabrielle. The respondent had throughout
communicated extensively about the steps he had taken and intended to
take in the administration of the deceased estate. On the
other hand,
the respondent had on many occasions deliberately frustrated the
appellant in the performance of his duties, especially
in respect of
the appellant's attempts to obtain assistance from the respondent in
his management of the hotel and in obtaining
cash flow forecasts from
the respondent.
74.
Another striking feature of the correspondence between the parties
and of the affidavits filed in the application is the harsh
and
unfounded allegations made by the respondent against the appellant in
insulting and rude terms, attacking not only the appellant's
capability but also his honesty and integrity, whilst the appellant's
responses had always been courteous and reserved. None of
the conduct
of the appellant reflected any animosity towards the respondent. It
is clear that the poor relationship between the
respondent and the
appellant was caused by the views and actions of the respondent.
Furthermore, that that situation cannot be
justified by anything
which the appellant had said or done. In this regard I consequently
respectfully also disagree with the findings
of the court a quo.
75.lt
is clear from the evidence that the respondent took exception
to the fact that he could not immediately take control of his
inheritance
the moment the deceased passed away. He was clearly of
the view that he would eventually be the owner of all the shares in
Cardio
and thus have full control of Cardio. For that reason he
thought that he was entitled to be placed in the immediate control of
Cardio upon the death of the deceased. When that did not happen,
i.e., when the appellant appointed himself as director pending
the
finalisation of the estate, the respondent began his vendetta against
the appellant. The situation became worse from the side
of the
respondent when the appellant stood firm against him in relation to
his management of the Aloe Ridge Hotel.
76.
The view of the respondent was wrong. He misconceived his position as
heir. Firstly, he could not legally possess any asset
which had been
bequeathed to him unless and until the liquidation and distribution
of the deceased estate had been finalised. Secondly,
the fact that
certain assets had been bequeathed to him in the will, did not mean
that he would necessarily receive the full bequest.
It would depend
on whether there are sufficient other assets to meet the obligations
and liabilities of the estate. Thirdly, the
appellant, as executor,
had the legal obligation to maintain and preserve the estate pending
the finalisation of the process, despite
the respondent's right to
his inheritance. This legal obligation of the executor was
furthermore specifically underlined by the
provisions of the will of
the deceased.
77.
The appellant also knew that to appoint the respondent as the
director of Cardio, would probably cause insurmountable problems
in
the finalisation of the estate. A mere reading of the allegations
made by the respondent in his founding affidavit proves that
the
applicant’s view was correct. In the first place, the
respondent clearly could not accept the wishes of the deceased
as
expressed in his will. He accused, for example, the appellant of
influencing the deceased against him and in making the bequests
as
set out in the will. He also attempted to show that Cardio, or
himself, has large claims against the other company or businesses
because of what had allegedly happened in the past. That all related
to the fact that the deceased had on certain occasions used
some
parts of his empire to finance the development of other parts
thereof. In this regard the respondent made assumptions which
were
wrong in law and in fact. At some point it even appeared as if the
respondent was placing the validity of the will in dispute.
78.
The acrimony between the respondent and Gabrielle would have been
another complicating factor. These and other factors leave
no doubt
that it would have been to the detriment of the deceased estate if
the respondent had been appointed as the director of
Cardio pending
the finalisation of the estate. It is therefore also not without
significance that none of the other heirs supported
the respondent in
the relief which he sought in his application. In fact, the
respondent's allegations of the level of animosity
between the
appellant and Gabrielle and his alleged disdain of her position as
heir, was completely rebutted by the appellant.
According to him
there exists a good and functional relationship between them and he
finds it to be co-operative and pleasant and
as far as he was
concerned she is rendering the assistance necessary for the proper
administration of the business of Heia. According
to the appellant
Gabrielle has the best interests of Heia at heart and does not
hesitate to approach him for assistance.
79.
Although it may be so that in many cases an executor would appoint
the legatee to which shares in a company had been bequeathed,
as
director of the company pending the administration of the estate, the
appellant in this case cannot be faulted for deciding
that it would
not be in the interest of the estate to do so.
80.
There can be no doubt that it was necessary for the two companies to
proceed doing business and for decisions to be taken on
their behalf
in the normal course of business. As such it was necessary to appoint
a director. As stated before, the respondent
had no right to insist
on being appointed as director of Cardio pending the finalisation of
the estate. At best for him, the shares
in Cardio would in future be
transferred to him. At that point, if he is the sole or majority
shareholder, he would be entitled
to appoint himself as director.
Until that time has arrived, he has no right to insist on being
appointed the director.
81.
The respondent's view of the matter is probably best described in
paragraph 27.6 of his affidavit where he said the following:
"His
(the appellant's) attitude of independently running a business
through the businesses that we have inherited, displays
an attitude
of non-adherence to the will of the testator, the deceased. In the
premises I have decided to direct this application
to the Honourable
Court for the removal of the First Respondent as executor and
ancillary relief as set out hereunder." It
is clear that the
respondent's animosity towards the appellant arose from this
misapprehension of his rights as heir and the obligations
of an
executor.
82.
The sole question to be answered therefore is whether the decision by
the appellant not to appoint the respondent as director,
was such
that it can be said that it is undesirable that he should continue in
the position of executive of the deceased estate.
83.
In my view there can be no doubt that retaining the appellant as
executor would not detrimentally affect the finalisation of
the
estate. If anything, it would be to the advantage of the estate and
would ensure the quickest possible finalisation thereof.
According to
the evidence placed before the court by the appellant, he has
administered the estate meticulously in accordance with
the
provisions of the Act and the wishes of the deceased, and there is no
reason to believe that he would not do so until the end.
He has also
not improperly benefited from his administration of the estate and
none of his conduct had caused the respondent or
the deceased estate
financial prejudice.
84.
Consequently the appeal should succeed and the application of the
respondent be dismissed. The appellant also launched a counterclaim.
It was submitted on behalf of the appellant that should the appeal
succeed, the necessity of making a finding in respect of the
counter
application, falls away.
85.
As far as costs are concerned, there is no reason why costs should
not follow the event.
86.
In the result the following order is made:
1.
The appeal is upheld with costs which costs shall include the costs
of senior
counsel.
2.
The order of the court a quo is set aside and replaced with the
following order:
"1.
The application is dismissed.
2.
The applicant is ordered to pay the costs of the application which
costs shall include the costs consequent upon the employment
of two
counsel, except for the second day of the hearing in respect of which
costs of only one counsel shall be paid".
C.P RABIE
JUDGE
OF THE HIGH COURT
I
agree:
H.J. DEVOS
JUDGE
OF THE HIGH COURT
I
agree:
H-L.
ALBERTS
Acting
judge of the high court