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[2012] ZAFSHC 175
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Erasmus v Jacobs and Another (5410/2011) [2012] ZAFSHC 175 (20 September 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 5410/2011
In
the matter between:-
ELAINE
ERASMUS
...................................................................
Applicant
(Identity
number: )
and
KOBUS
JACOBS
............................................................
1
st
Respondent
(Identity
number: )
THE
MASTER, FREE STATE HIGH COURT
.................
2
nd
Respondent
_____________________________________________________
JUDGMENT BY:
DAFFUE, J
_____________________________________________________
HEARD ON:
24 AUGUST 2012
_____________________________________________________
DELIVERED ON:
20 SEPTEMBER 2012
_____________________________________________________
[1] Applicant
unsuccessfully applied for an order in accordance with the provisions
of
section 54
of the
Administration of Estates Act, 66 of 1965
for
the removal of her brother, the first respondent, as executor in the
estate of their late mother, Catharina Elizabeth Jacobs.
On 7 June
2012 Mhlambi, AJ dismissed the application with costs.
[2] Applicant now seeks
leave to appeal. Several grounds of appeal are relied upon. I do not
intent to quote all grounds of appeal
which can be summarised as
follows:
1. The court
a quo
erred in not considering the conflict of interest between first
respondent as executor of the estate on the one hand and his position
as director of the private company that purchased the deceased’s
farms three years prior to her death at a purchase price
much lower
than the market value thereof and in doing so without disclosing the
purchase (herein later referred to as “the
transaction”)
to applicant.
2. Applicant’s wish
that the circumstances pertaining to the conclusion of the
transaction be considered by a newly appointed
executor was not
properly considered by the court
a quo
.
3. The court
a quo
also erred in not finding that the transaction on all probabilities
constituted an orchestrated effort by first respondent to prejudice
applicant as a beneficiary in the estate of their late mother.
4. The court
a quo
incorrectly dismissed allegations by applicant that their late mother
suffered from Alzheimer’s disease and on probabilities
was
unsound of mind at the time of the transaction and in so doing the
court erred in finding that there was a lack of evidence
or factual
basis in support of the allegations.
5. The court
a quo
erred in finding that the decisive question was whether first
respondent acted dishonestly in his capacity as executor without
considering his alleged improper action when the transaction was
concluded.
[3]
Section 54
of the
Administration of Estates Act deals
with the removal of an executor
from office. The only possible subsection that might be applicable in
casu
is
section
54(1)(a)(v):
“An executor may at any time be removed
from his office if for any other reason the court is satisfied that
it is undesirable
that he should act as executor of the estate
concerned;”
[4] In
casu
the administration of the deceased’s estate is
basically finalised. The first and final liquidation and distribution
account
has laid for inspection, but applicant objected thereto.
However, she has already received what was awarded to her as
beneficiary
in accordance with this account.
[5] The following facts
are common cause:
1. The private company of
which first respondent in his personal capacity is the sole director,
Davis Guitars (Pty) Ltd, purchased
the deceased’s farms in
terms of a written Deed of Sale dated 13 April 2006 (“the
transaction”);
2. The deceased signed
the Deed of Sale at Petrusburg on 13 April 2006 in the presence of
applicant. [First respondent signed it
on behalf of his company in
Pretoria on the same day
ex facie
the Deed of Sale, although
this is not common cause.]
3. Just over four months
prior to the transaction being entered into the deceased executed a
will in terms whereof she appointed
first respondent as executor and
applicant and first respondent’s trust as heirs in equal
shares.
4. The deceased passed
away on 22 May 2009, more than three years after the transaction was
entered into.
5. It is uncertain when
registration of transfer of the farms was effected in the name of the
purchaser, but it was apparently done
prior to the death of the
deceased.
6. The purchase price
agreed upon was R1,5 million which was payable in terms of an
interest free loan granted by the seller to
the purchaser, which loan
agreement did not form part of the written Deed of Sale.
7. The amount due and
payable by first respondent to the deceased’s estate in respect
of the loan is indicated in the first
and final liquidation and
distribution account to be R1 293 352,79. An amount of R620 194,13
was allocated to each of applicant
and first respondent’s trust
after provision was made for costs of administration and estate
liabilities.
[6] Several aspects are
in dispute,
inter alia
whether
1. applicant was aware of
the transaction;
2. first respondent was
present in Petrusburg when the Deed of Sale was signed by the
deceased;
3. the deceased suffered
from Alzheimer’s disease and if so, whether she was
doli
incapax
and could not form any intention to sell the farms to
first respondent’s company.
4. first respondent
should be removed as executor and whether an objective and
independent executor should be appointed in order
to investigate the
transaction and to establish whether it should be set aside or not,
and/or what remedies are available to applicant.
[7] Applicant claimed
that she was unaware of the existence of the deceased’s will
dated 1 December 2005 and the Deed of Sale
entered into on 13 April
2006. Her version that she was unaware of the existence of the Deed
of Sale is denied by first respondent
and his reasons appear to be
acceptable and probable. Applicant sought to persuade the court that
the transaction was suspect insofar
as the purchase price is
significantly lower than the valuation of the farms at the time. The
fact of the matter is that first
respondent was the deceased’s
only son and at all relevant times he was the sole director and
shareholder of the company
that purchased the farms. There is nothing
strange in parents selling their assets to children below market
value and even donating
assets to them.
[8] Applicant sought to
persuade the court
a quo
that the deceased was diagnosed with
Alzheimer’s disease before her death and that it was unlikely
that she could have been
sound of mind at the time of the
transaction. However applicant confirmed that she had accompanied the
deceased to the bank during
the same period – April 2006 - in
order to open a bank account and to register for VAT purposes. Surely
it would have been
irresponsible of her to act accordingly if she
knew that her mother was not sound of mind at the time. No acceptable
evidence whatsoever
was placed before the court and applicant’s
averment is based on an unfounded hypothesis.
[9] The case law relied
upon by Mr Hefer on behalf of the applicant in the court
a
quo
, although confirming established
principles, does not support applicant’s case. In
VAN
NIEKERK v VAN NIEKERK
2011 (2) SA 145
KZP
the executrix and former spouse of the deceased resisted a claim of
the deceased’s surviving spouse. The executrix was
also the
sole heir of the estate and it would obviously be to her benefit to
ensure that the claim of the surviving spouse was
dismissed or
accepted in a much lower amount. Wallis J (as he then was) found that
the attitude of the executrix constituted good
cause for her removal
in terms of
section 54(1)(a)(v)
as
“(t)he office of
executor should not be used in order to pursue a private agenda.”
See para [12] at 150G. A similar situation arose in
GROBBELAAR v GROBBELAAR
1959
(4) SA 719
AD. The court found that an executor should be removed
from office on the ground that he filed a claim against the estate
which
was disputed by the heirs. The court found that at that stage
of the proceedings it was not necessary to establish the validity
of
the claim as the question who was right and who wrong was irrelevant.
Both judgments are distinguishable from the facts in
casu
.
There is in this instance no dispute regarding any claims filed
against the estate or the administration of the estate.
[10] No evidence was
placed before the court to show that first respondent was a
dishonest, grossly insufficient or untrustworthy
person whose future
conduct in the administration of the deceased’s estate would be
such to expose the estate to risk of
actual loss or of administration
in a way not contemplated by the will of the deceased.
[11] Although not
specifically stated the court
a quo
accepted first
respondent’s version for purposes of adjudication of the
application in line with the requirements stipulated
in
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
A
at 634-5. The court
a quo
’s evaluation of the evidence
and conclusions in that regard cannot be faulted. It was shown that
the transaction was entered
into three years prior to the deceased’s
death, that applicant, although initially denying knowledge of the
Deed of Sale,
confirmed in reply her handwriting on the Deed of Sale
in respect of the place and date of signature. In addition no medical
evidence
was placed on record indicating that the deceased was
probably unsound of mind at the time of conclusion of the
transaction. On
the assumption that first respondent is removed as
executor and a new independent executor appointed, there appears to
be no reasonable
prospect of success with the envisaged legal action
to have the Deed of Sale set aside, or with any other remedies that
might be
available.
[12] Consequently I am of
the view that there are no reasonable prospects that another court
may come to a different conclusion
and therefore the application is
doomed to fail.
[13] Therefore the
following order is issued:
1. The application for
leave to appeal is dismissed with costs.
______________
J. P. DAFFUE, J
On behalf of the
Applicant: Adv. J J F Hefer
Instructed by:
McIntyre & Van der
Post
BLOEMFONTEIN
On behalf of the
respondents: Adv M H van Twisk
Instructed by:
Klagbruns De Vries
c/o Honey Attorneys
BLOEMFONTEIN
/eb