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[2013] ZAGPPHC 309
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Standard Bank of South Africa Ltd and Others v Ndlovu and Others (33265/13) [2013] ZAGPPHC 309 (24 October 2013)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 33265/13
DATE:
24 October 2013
STANDARD
BANK OF SOUTH AFRICA LTD AND
OTHERS
..........................
APPLICANTS
v
S
NDLOVU AND OTHERS
…..........................................................................
RESPONDENTS
JUDGMENT
MABUSE
J:
1.
On 22 October 2013, I had to deal with a number of matters in which
the plaintiffs had applied for default judgments against
the
defendants. The second defendants
in
all the matters were sued in their capacities as the duly appointed
executrix or executors of the deceased estates. The causes
of action
on which the plaintiffs retied in all these matters were the loan
agreements concluded between the deceased and the banks.
The said
loans were secured by mortgage bonds registered in favour of the
banks. The mortgage bonds were registered over the deceased’s
properties. It was contended by the plaintiffs that the deceased fell
into arrears and that for that reason, the plaintiffs issued
summons
against the executrixes or executors in order to recoup the amounts
of the loans in affidavits furnished by the legal managers
of the
plaintiffs it was stated that the executors or executrixes had failed
to finalise the estate.
2.
When counsel stood up in order to address me on the matters I
requested him to direct me to a paragraph in the papers that showed
that, before launching their actions, the plaintiffs had complied
with the provisions of sec of the Administration of Estates Act
No.
66 of 1965 ("the Act"). Sec 29 of the said Act reads as
follows:
"Every
executor shall, as soon as may be after letters of executorship nave
been granted to him, caused a notice to be published
to the gazette
and in one or more newspapers circulating in the district in which
the deceased ordinarily 'c sided at the time
of his death and, if at
any time within the period of twelve months immediately preceding the
date of his death he so resided to
any other district, also in one or
more newspapers circulating in that other district, or if he was not
ordinarily so resident
in any district in the Republic, in one or
more newspapers circulating in a district where the deceased owned
property, calling
upon all persons having claims against his estate
to lodge such claims with the executor within such period (not being
less than
30 days or more than three months) from the date of the
latest publication of the notice as may be specified herein.
(2)
AH claims which would be capable of proof in the case of insolvency
of an estate may be lodged under (1). ”
He
was unable to do so. He submitted, however, that it was the
plaintiffs contention that the executors were dragging their feet,
acknowledging thereby that the plaintiffs were aware that someone had
been appointed as the executors or executrix in each of the
estates.
I was reluctant to entertain the matters unless I was satisfied that
the plaintiffs had lodged their claims with the executor
or executrix
in compliance with the provisions of the said Act and furthermore
that their claims had either been rejected by the
executrixes or
executors or their objections, if any, to the Accounts in each of
such matters had been overruled by the respective
Masters of the High
Courts.
3.
I stood the matters down and after a while counsel came back. This
time he was armed with a law report. He referred me to the
authority
of Nedbank vs. Samsodien N.O. 2012(5) S.A. 642 GSJ and, relying on
that authority, submitted that the plaintiffs in all
the matters that
were before me were entitled to issue summons against the defendants,
in particular, the second defendants in
order to recover the amounts
of loans. These matters were:
1)
Standard Bank of South Africa Ltd vs Ndlovu S Case No. 33265/13;
2)
Standard Bank of South Africa Ltd vs Modise EM Case No. 39733/13:
3)
Nedbank Limited vs Steyn APS Case No. 45338/13.
4)
Standard Bank of South Africa Ltd vs Masilela PS Case No 45692 13;
5)
Standard Bank of South Africa Ltd vs Ngema RA N O. Case No 45693/13;
6)
Standard Bank of South Africa Ltd vs Ngele HL N.O. Case No 46543 13.
7)
Nedbank Limited vs Masema VP N.O. Case No. 46886/13:
8)
Nedbank Limited vs Figlan LM N.O. Case No. 46887/13 and.
9)
Nedoank Limited vs Muller PH Case No. 50637/2013.
I
stood the matters down to 24 October 2013 in order to enable me to
study the said authority on which counsel relied. I am indebted
to
counsel for gave me an opportunity to read and understand the said
authority. More similar matters came before me on 24 October
2013.
These matters were
1)
Standard Bank of South Africa Ltd vs Mathibela PF Case No 34943/13;
2)
Standard Bank of S.A, Ltd vs Van Der Westhuizen WC Case No 3/215/13:
3)
Nedbank vs Kgopa TB N.O. Case No. 38578/13:
4)
First Rand Bank t/a Wesbank vs Mokgoshi N.S. Case No. 45202/13
5)
Standard Bank of South Africa Ltd vs Dzimbiri M N O. Case No
45694/13:
6)
Nedbank vs Ntombela LP Case No. 46883/13;
7)
Standard Bank of South Africa Ltd vs Mikheswa M N.O Case No. 50643/13
8)
Standard Bank of South Africa Ltd vs Dipale BP Case No. 50644/13
4.
In the said authority the defendant raised a special plea that the
plaintiffs claim was premature. I understand this word “claim”
to mean the “action”. In other words the defendant’s
special plea was that the action that the plaintiff in the
said
matter had instituted against it in order to recover the amount of
the loan was premature. In my view, the defendants were
correct to
plead a special plea and it should have been upheld. It was the right
step to take. It is not clear from the facts as
set out by the Court
in the aforementioned authority whether or not the defendant had
lodged any claim following the notice referred
to in sec. 29 of the
Act or at all. I must however assume that they had done so because
they would have had to comply with the
provisions of
sections 129
and
130
of the
National Credit Act 34 of 2005
. A notice in terms of the
said sections issued by the creditor of the deceased estate to the
executor or executrix or the surviving
spouse, if the marriage was in
community of property, would in my view, be sufficient compliance by
the creditor with the provisions
of section 29 of the Act. If the
plaintiff had lodged a claim in terms of the provisions of the said
section, and the claim had
been acknowledged by the executor or
executrix and taken into account in the liquidation in the first and
final liquidation and
distribution account (“the Account”),
there was, in my view, no reason in law why the plaintiff in that
authority instituted
an action against the estate.
5.
The principal purpose of administering a deceased estate is to
preserve the assets of the estate to safeguard the interests of
the
creditors, the heirs in general and ultimately to satisfy the debts
of the deceased and to pay the heirs and the inheritances.
Accordingly, no action alongside the administration of the deceased
estate should be launched and entertained before the Account
has been
approved by the Master. This is so because any such action would
distract the executor or executrix in the due performance
of
administering the deceased’s estate; it will in that manner
delay the satisfaction of other creditor’s debts; funds
that
would ordinarily have been used to settle the claims of the creditors
would be expended on defending such litigation. This
would have the
effect of reducing the gross value of the estate to the detriment of
the estate. It would also constitute an involved
and costly procedure
to claim payments of the debts from the estate when the Act itself
provides for an inexpensive and speedy
manner of doing so.
6.
The plaintiffs in the said matter had therefore no lawful
justification to proceed with an action before the Master of the High
Court (“the Master”) had approved the Account.
Accordingly the plaintiff, if it had lodged a claim in terms of sec.
29, and the claim had been acknowledged by the executor and reflected
in the Account the plaintiff, could still object to the Account
it
did not reflect its claim or if the claim had not been properly dealt
with in the account.
7.
After receiving the approved account from the Master's Office, the
executor is obliged by the provisions of sec. 35(5)(a) of
the Act to
publish a notice in the Government Gazette and another in one or more
newspapers circulating in a district in which
the deceased was
ordinarily resident at the time of his death and to indicate the
Master’s Office where the account lies
open for inspection and
the period during which such account will lie for inspection. The
period during which an account lies for
inspection is 21 days. The
plaintiffs would then, in terms of the
provision
of sec. 35(7) of the Act lodge an objection with the Master against
the account. Sec. 35(7) provides as follows:
“
Any
person interested in the estate may at any time before the expiry of
the period allowed for inspection lodge with the Master
in duplicate
any objection, give the reasons therefore, to any such account and
the Master shall deliver or transmit by registered
post to the
executor a copy of any such objection together with copies of any
documents which such person may have submitted to
the Master in
support thereof"
8.
In paragraph 3 of the authority of Nedbank vs Samsodien supra the
court stated that:
“
3.
The question for my determination, in a nutshell, therefore is
whether the claim procedure provided for in sections 29, 32, 33,
and
35 of the Act precludes the creditor from his common law rights to
enforce his claim against a deceased estate. The weight
of authority
is in favour of allowing the creditor to avail himself of the common
law enforcement procedure. ”
There
is, in my view, no magic in using the words “common law rights’
or claim. Whether it is a “common law right’
claim or not
the fact remains that such claim constitutes a claim against the
deceased estates. There is in the Act no separate
provision that
deals specifically with “common law claims” quite
distinctly from other claims. I already have referred
to sec. 29(2)
which states that all claims which would be capable of proof in the
case of insolvency of estate may be lodged under
(1). The word claim
has not been specifically described in section 1 of the Act. It
therefore carries its ordinary meaning.
9.
In my view, the plaintiffs could only sue the defendants under the
following circumstances:
(1)
If they had raised an objection against the account and the Master,
having adjudicated and considered it, dismissed it or (2)
if the
executor had rejected the plaintiffs’ claims. This is precisely
what happened in Estate Stanford vs Kruger
1942 TPD 243
which the
learned judge followed in the Nedbank vs. Samsodien, Benadie vs
Boedel Alexander 1967(1) S.A. 648(OPA); David vs Estate
Hall 1946(1)
S.A. 774 CPD. In Estated Standford vs Kruger supra the facts of the
case were as follows:
“
Shortly
after the death of Stanford the plaintiff wrote a letter to the
executor to enquire when he could take possession of the
balance of
the oxen and requesting an affidavit setting out the details. Nothing
was done by the plaintiff until after the executor's
first and final
liquidation and distribution account had lain for inspection when
confirmation of the account was objected to on
the ground that the
plaintiffs claim had been omitted. After he had investigated and
considered the objection the Master wrote
a letter to the plaintiff
in which he advised him that he was not prepared to sustain the
plaintiffs objection to the account.
In the same letter the Master
directed the plaintiffs attention to the provisions of the then sec.
58(9) (a) of Act 24 of 1913
which entitled the plaintiff to approach
the Supreme Court (as it then was known) within 30 days to have his
approval of the account
reviewed and set aside. He also warned the
applicants that they should review his approval of the account
failing which the executor
would be allowed to pay out the heirs."
What
is of paramount importance with regard to the facts of this matter :s
firstly that the plaintiff had lodged his claim against
the estate of
Stanford with the executor; and. secondly, that the executor had
omitted the plaintiffs claim from the account; thirdly,
that the
plaintiff had objected to the account after it had lain for
inspection; and, fourthly, that the Master had considered
and
rejected the objection. Under these circumstances, the plaintiffs in
this authority were entitled to enforce payment of their
claim by
approaching the Court by way of an action.
10.
This was also the same position in Benadie vs. Boedel Aiexander
1967(1) S.A. 648(OPA). In this case the applicant's attorneys
lodged
a claim with the executor on 12 January 1966. They ultimately
received the following response- "By wyse van 'n brief
gedatteer
10 Maart 1966 is die applikant se prokureurs uiteindelik in kennis
gestel dat die ex ecutriese die bestaan van die huurkontrak
tussen
die applikant en die oorledene ontken en gevotghk sy eis ook. It is
clear that in this case the executor rejected the applicant’s
claim.
"
16.8 If the executor rejects a creditor's claim he must forthwith
notify the claimant in writing by registered post and shall
state in
the notice his reasons for rejecting the claim." See in this
regard sec. 33 of the Act.
"The
creditor can adopt either of two causes. He can take legal
proceedings to establish his claim or he can wait until the
executor
has lodged his account and then avail himself of the procedure
objecting to the count "
See
paragraph 16.8 page 16-7 Meyerowitz on Administration Of Estates And
The Taxation 2010 Edition. Where the claim has been rejected
the
claimant may, only at this stage, establish his claim by way of
taking action against the deceased’s estate. In David
vs.
Estate Hall 1956(1) S.A. 774 CPD the same approach was adopted. The
court stated that:
“
A
creditor of a deceased estate who has lodged an objection to an
account with the Master and whose objection has been overruled
is not
precluded from instituting an action against the estate” .
Accordingly it is clear that the approach adopted by Van
Oosten J. is
that a creditor has a right to sue the executor without resorting to
the provisions of the Act. I respectfully dissent
from that view.
Secondly, it is clear that the authorities that he relied on did not
support his approach that a court may grant
judgment in a matter like
this without enquiring whether the provisions of the Act have been
complied with. This proposition is
in conflict with the law and to
grant default judgment without taking into account the provisions of
the Act is to emasculate the
provisions of the Act and render them
nugatory. That proposition will cause unnecessary confusion as it is
done. Statutes are intended
to be effective. There is in common law a
presumption that statutes do not contain invalid or purposeless
provisions. In Commissioner
for Inland Revenue v Golden Dumps (Pty)
Ltd 1993(4) SA 110 AD the court approved of the following passage
from the authority of
Attorney General, Transvaal v Additional
Magistrate for Johannesburg
1924 AD 421
where Cockburn stated as
follows:
“
A
statute' says Cockburn CJ, ‘should be so construed that, if it
can be prevented, no clause, sentence or word shall be superfluous,
void or insignificant. The Queen v Bishop of Oxford (4 QBD at 261).
To hold certain words occurring in a section to an Act of Parliament
as insensible, and as having been inserted through inadvertence or
error, is only permissible as a last resort. It is in the language
of
Erie CJ: 'the ultima ratio, when an absurdity would follow from
giving effect to the words as they stand.' R v St John (2 B
and S
706). in the Exchequet Chamber affirming the judgment of the Queen's
Bench."
This
common law principle has been dealt with aptly in Re-Interpretation
of Statutes by Lourens du Plessis at p. 188 paragraph (b):
“
The
following are examples of situations in which the presumption has
been invoked almost, it seems, as a matter of course:
(ii)
The presumption operates against any construction frustrating the
objectives of a statutory provision which, on the face of
it, is
ostensibly susceptible to being rendered nugatory.
(iii)
Where uncertainty, confusion and conflict are likely to arise, the
presumption operates in favour of a construction eliminating
these.
(iv)
When the validity of a provision of a delegated enactment is at stake
for some reason, [t]he Court leans towards an interpretation
...
which renders it valid, rather than giving it a meaning which is so
extravagant of wide as to render it invalid.
(v)
An interpretation favouring or permitting acts or transactions in
fraudem legis should be avoided, but the provisions of an
enactment
may well be lawfully evaded if. for instance, a transaction is
genuinely and honestly arranged so as to fall outside
their scope of
operation. In pursuance of the maxim plus alet quod agitur quam quod
simulate concipitur ('the real intention carries
more weight than a
fraudulent simulation') an act or a transaction is said to be in
fraudem Iegis 'when it is designedly disguised
so as to escape the
provisions of the law but falls in truth within these provisions'.
The presumption is therefore applied in
this specific way, in a quest
to avoid fraud.
(vi)
If reasonably possible, a casus omissus should be avoided.
The
ratio underlying the application of this common-law presumption of
validity in the sets of circumstances (i)-(vi) above, is
that
legislation must be construed so that it best serves its purpose. The
presumption is, in other words, consonant with and indeed
conducive
to purposive interpretation and therefore holds its own in the new
constitutional dispensation."
11.
Section 30 does not, in my view, authorise a plaintiff to issue
summons It merely means that, if at the time of the deceased’s
death the plaintiff is already in possession of a writ of execution,
no such person "shall before the expiry of a period specified
in
the notice referred to in section 29 or (b) thereafter unless, in the
case of property of a value not exceeding R5 000.00, the
Master or.
in the case of any other property, the court otherwise directs, sell
any property to the estate of any property of any
deceased person
which has been attached whether before or after his death and with
such writ or process: Provided that the foregoing
provisions of this
section shall not apply of if such person could not have known of the
death of the deceased person."
12.
In my view, the passage that the court had relied on in Scoin Trading
(Pty) Ltd vs Berdenstein N.O. 2001(2) S.A. 118 SCA paragraph
23 which
states that:
“
Except
for the risk of personal liability if he overpays, it is not unlawful
for an executor to pay a creditor's claim before the
confirmation of
such account "does not support the Judge’s approach that a
creditor may issue summons against the defendant
regardless of the
provisions of the Act. It is consequently not sufficient for the
plaintiff to allege in the summons that the
executor or executrix
delays or drags his feet in the administration of the estate and that
it is unable to obtain satisfaction
of the debt or claim. In such a
case the plaintiff’s remedy lies in sec. 36 of the Act which
provides as follows:
“
36(
1) If any executor fails to lodge any account with the Master as and
when required by his act or to lodge any voucher or vouchers
in
support of such an account or an entry bearing in accordance with the
provisions of or a requirement imposed under this Act
or to perform
any other duty imposed on him by this Act or to comply with any
reasonable demand of the Master for information or
proof required by
him in connection with the liquidation or distribution of an estate,
the Master or any person having interest
in the liquidation and
distribution of the estate may, after giving the executor not less
than one month's notice, apply to the
Court for an order directing
the executor to lodge such account or voucher or vouchers in support
thereof or an entry therein or
to perform such duty or to comply with
such demand.
(2)
The costs adjudged to the Master or to such person shall, unless
otherwise ordered by the Court, be payable by the executor,
de bonis
propius. ”
13.
In order to succeed with their claims against the estates, the
plaintiffs must satisfy the court that:
1)
they lodged their claims against the deceased estates with the;
executors whether or not in terms of section 29:
2)
that the executor has rejected it; or
3)
that they have lodged their claims with the executors;
4)
that the executors have omitted their claims from the Accounts or
have not dealt with their claims to their satisfaction;
5)
that they have lodged an objection against the Master s approval of
the said account and that the Master has overruled their
objections.
14.
In my view, the other circumstances under which a creditor may-be
entitled to sue the deceased estate in order to enforce payment
of
its claim would be where there is an unreasonable and unexplained
delay in reporting the deceased estate to the office of the
Master or
where the provisions of sec. 36 of the Act have been exhausted but
there is no progress in the matter.
15.
The Act serves, in respect of the deceaseds’ estates, the same
purpose as the
Insolvency Act 24 of 1936
does to insolvent estates
and the
Companies Act No. 71 of 2008
does to liquidated companies and
closed corporations.
16.
I am satisfied though that in all the above matters the plaintiffs
have complied with the provisions of sec. 29 of the Act.
That is
however not sufficient "'his Court may not. on that basis alone,
grant default judgments against the defendants, in
the result I make
the following order:
All
the above applications for default judgments are removed from the
roll to enable the plaintiffs to comply with the provisions
of the
Administrator of Estate's Act No. 66 of 1965.
PM
MABUSE
JUDGE
OF THE HIGH COURT