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[1984] ZASCA 102
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Rein NO v Fleischer NO and Others (472/83) [1984] ZASCA 102; 1984 (4) SA 863 (18 September 1984)
Case No: 472/83 mp
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE
DIVISION)
In the matter between:
ADVOCATE S G REIN in his capacity as
Curator-ad-Litem
to the minor
children
CATHERINE AND ALEXANDRA GIBAUD
Appellant
and
LEONARD FAIRBANK FLEISCHER in his capacity
as Administrator of the Estate
of the
late ARTHUR LAWRENCE GIBAUD
1st Respondent
and
ARTHUR CLIFFORD FLETCHER GIBAUD
2nd
Respondent
and
ELIZABETH GRAY GIBAUD
3rd
Respondent
and
MAUREEN ANNETTE BUTCHER (born Gibaud
) 4th
Respondent
CORAM:
KOTZé, MILLER, JOUBERT, HOEXTER et HEFER,
JJA
HEARD:
21 August 1984
DELIVERED:
18 September 1984
JUDGMENT
HOEXTER, JA
The
2.
The late Arthur Lawrence Gibaud ("the testator") died at Port
Elizabeth in 1962. He was survived by his wife ("the widow"), his daughter,
and
his two sons Frank (born in 1938) and Arthur (born in 1944). The widow died in
1982 when Frank and Arthur were both more than
35 years old. Meanwhile Arthur
had married, and thereafter in 1978, had divorced Elizabeth Gray Gibaud
(formerly Turland, born Todd).
To Arthur's former wife I shall refer as
"Elizabeth". Of the marriage between Arthur and Elizabeth two daughters
(Catherine and Alexandra)
were born. Both are minors.
By his will dated 25 January 1956 the testator created a trust in respect of
the residue of his estate. The will provided that until
her death or remarriage
the widow should receive annually not less than £2000 while unmarried or
£1000 if she remarried;
and further directed that provided the annual
income from his estate exceeded £2000 (while the widow remained unmarried)
or
£1000 (in the event of her
remarriage)
3.
remarriage) there should be paid from such excess income
to each of
his two sons, upon such son reaching the age of
21 years, a monthly allowance of £30 until the capital of
his
inheritance devolved upon him in terms of clause 4 of
the will, or until the
death or insolvency of such son,
whichever should happen first.
Clause 4 of the will contained the following directions -
"4. After the death of my said wife my Executors shall -
(a) DIVIDE my residuary estate in equal shares between my two sons, provided
however that the shares of each son shall remain under
the administration and
control of my Executors IN TRUST and shall not vest in him until he reaches the
age of thirty-five years when
his inheritance shall be paid out subject to this
condition however, that in the event of any son dying or becoming insolvent
before
that date his share of inheritance shall devolve upon his lawful issue,
if any, per stirpes by representation, and if such son leaves
no issue then his
share devolve upon his brother or the lawful issue of his deceased brother per
stirpes by representation.
(b) PAY
4.
(b) PAY the whole of the income accruing
on my
sons's shares in the interim
from the date such son reaches the age
of 21
years until he,reaches the age
of 35 years or until the prior death
or
insolvency of such son, whichever
shall first happen, to him "
Clause 6 of the will contained a forfeiture stipulation. Clause 6 read -
"6. I direct that my estate shall remain vested in my said Executors IN TRUST
and shall not vest in any beneficiaries under this my
Will until the time for
distribu= tion of my said estate shall have arrived, and I further direct that
no beneficiary under my said
Will shall anticipate or encumber his interest or
inheritance under my said Will under penalty of forfeiture."
The marriage between Arthur and Elizabeth was. dissolved in the Cape
Provincial Division on 8 August 1978. Elizabeth was the plaintiff
in the action.
A written agreement ("the consent paper") was incorporated in the final order of
divorce. Paragraph 12 of the consent
paper reads -
"The Defendant undertakes to pay to the Plaintiff and the said children (i.e.
Catherine
5.
Catherine and Alexandra) one quarter each of the entire proceeds which the
Defendant is due to inherit from his late father's estate
in the event of the
death of his mother, and for this purpose he agrees that these monies shall be
paid directly to the Plaintiff
by Fidelity Bank and Trust Company Limited of
Port Elizabeth in their capacities as Executors in the said estate. Further, the
Defendant
undertakes to pay to the Plaintiff and the children one quarter each
of any monies he may inherit from his mother and from his cousin,
SYBIL GIBAUD.
Any monies due to the children in terms hereof shall be dealt with as provided
in Clause 11 hereof. The Defendant shall
be entitled to retain as his property
the remaining quarter of the inheritance referred to in this clause."
The trust company in Port Elizabeth mentioned in paragraph 12 of the consent
paper is the administrator in the testator's estate.
In February 1983 the
secretary of that company ("the applicant") filed an application on notice of
motion in the Eastern Cape Division.
Annexed to the applicant's founding
affidavit were copies of the testator's will and the consent paper in the
aforesaid divorce order
granted on 8 August 1978. Calling attention to the
forfeiture stipulation
in
6. in clause 6 of the will and the undertaking by Arthur set
forth in paragraph 12 of the consent paper the applicant
submitted that the latter amounted to an anticipation or
encumbrance by
Arthur of his interest or inheritance under
the testator's will which was hit
by the provisions of clause
6 of the will; and that in consequence Arthur had
incurred the
penalty of forfeiture.
On 22 February 1983 the Eastern Cape Division appointed Mr Advocate S G Rein
as
curator-ad-litem
to the minor children Catherine and Alexandra, and at
the same time issued a rule
nisi
calling upon interested parties to show
cause why it should not be ordered:
(a)
that Arthur had forfeited
his inheritance from the estate of the testator;
(b)
that the administrator in the testator's estate should hold such
inheritance in trust for the issue of Arthur until they respectively
attain the
age of 35 years;
(c)
that the costs of the
application be paid by the testator's estate or alternatively by any respondent
who might unsuccessfully oppose
the application.
In
7 . In due course the
curator-ad-litem
filed with the Court a
written report wherein he expressed the view that the undertaking
by
Arthur in paragraph 12 of the consent paper did constitute
an anticipation by
Arthur of his inheritance hit by the
provisions of the forfeiture clause in
the will. Pointing
out that the will does not direct on whom, in the event
of
such forfeiture, the inheritance is to devolve,
the
curator-ad-litem's
report proceeded to consider
various
possibilities in this connection and then expressed the
further
view that the relevant share of the residue devolved on
Arthur's
daughters Catherine and Alexandra, subject to the
other terms of the will.
Two written reports filed with the
Court by the Master of the Eastern Cape
Division expressed
views coinciding with those of the
cu
rator-ad-litem.
Prior to the extended return day of the rule nisi Arthur wrote to the
Registrar of the Court declaring his intention to oppose the
application in
person. In the event Arthur was unable to attend the hearing on the return
day
8.
day. He nevertheless informed the Registrar that he desired no postponement
thereof. Elizabeth appeared in person on the return day
and resisted
confirmation of the rule. Before the Court on the return day there was further a
letter addressed to it by Catherine,
aged twelve years. She informed the Court
that her own researches into the subject impelled her to the conclusion that
Arthur had
not anticipated his inheritance.
On the return day the matter came before a Pull Bench. In a jugment delivered
by Mr,Justice KANNEMEYER, MULLINS concurring, the Court
rejected the contention
that Arthur had forfeited his inheritance under the testator's will Accordingly
the rule nisi was discharged.
It was further ordered that the costs of the
application and also the costs (if any) of Elizabeth and Arthur in opposing
confirmation
of the rule be paid, as between attorney and client, out of the
testator's estate. The cur
ator-ad-litem
applied for and
obtained
9. obtained the leave of the Court below
to appeal to this Court,
costs of such application to be costs in the appeal. The
appeal is by the
curator-ad-litem
only. The applicant submits
to the judgment of this
Court.
In everyday speech the word "anticipate" is one of very wide import,
variously embracing notions such as forestalling, expecting,
foretasting,
apprehending, intercepting and forecasting - to mention a few. Some guide to the
rather more technical meaning to be
assigned to the word "anticipate" in the
contextual setting of a forfeiture clause in a will is afforded by the decision
of a Full
Bench of the Eastern Cape Division in
Ex Parte National Board of
Executors (EL) Ltd.,
1978(3) SA 445(E). That case involved the
interpretation of the will of a father who had nominated his two sons, or their
lawful descendants
by representation, as the sole heirs to the residue of his
estate, subject to the condition that such residue be paid to his trustees
(one
of whom was one of the aforesaid sons) to hold in trust pending the death of
his
widow
10.
widow (the mother of the aforesaid sons) to whom the testator
had
bequeathed a fixed income from the interest thereon for the rest of her life. In
clause.8(h) of the will it was further provided
that -
"No beneficiary shall cede, assign, mortgage or anticipate in any way his or
her rights under this will"....
and that upon breach of this condition
" the rights of such beneficiary shall
immediately cease "
The two sons and their mother survived the father. At the death of the father
the two sons therefore acquired a vested right to claim
their inheritance upon
the trust coming to an end in the future (at the death of their mother), subject
to the condition that a breach
of the penal clause by either son would result in
forfeiture by him. It was common cause that during the subsistence of the trust,
and subject to its terms,-the full
dominium
in the assets of the estate
vested in the trustees, to whom the will gave wide powers of administration and
control. An application
by the co-executors in the
estate
11.
estate sought a declaration by the Court that any loans made by the trust to
the two sons would not involve a breach of the forfeiture
clause. The Court
(EKSTEEN, J and HOWIE, AJ) declined to make such an Order. The judgment of the
Court was delivered by EKSTEEN,
J, who observed -
"It seems to me that the words 'anticipate in any way' in clause 8(h) import
a prohibition against the sons of the testator -or any
other beneficiaries for
that matter - obtaining any part of the benefits due to devolve upon them at a
time earlier than that provided
for in the will. Insofar as those benefits
relate to the capital of the estate the will provides that the heirs will only
be entitled
to receive it on the death of the testator's widow when the trust
comes to an end. They are therefore precluded by the provisions
of clause 8(h)
from in any way obtaining any benefit pertaining to such capital before the
time. Clearly an interest-free, unsecured
loan of part of the capital to a heir
would constitute such an anticipation and would be tantamount to a part of the
capital being
given to him before he is entitled to receive it."
The conclusion at which the learned judge arrived (at 452D/E) was -
"In
12.
"In my view, therefore, any unsecured or
inadequately secured loan, or any
interest-free
loan or loan at a rate of interest lower than
the prevailing
rate made from the capital of
the trust to either of the sons of
the
testator would amount to an anticipation of
part of their rights under
the will "
In the instant case the Court
a quo
in the course of its judgment
discussed the line of reasoning adopted in the
National Board of
Executors
case (
supra
) and thereafter commented thus on the facts of
the application before it -
"In my view what the testator intended and wished to ensure was that his sons
should receive their inheritances intact when they fell
due. He was not
interested in what they might do with the money inherited once it became theirs,
nor did he wish to control its eventual
devolution. Had he wished to do so he
could have made appropriate provisions to
achieve such an objective. Instead, what he did was to prohibit the
encumbrance or anticipation of the inheritances. By prohibiting
anticipation he
prohibited, to adapt the words of EKSTEEN, J., Arthur from obtaining any part of
the benefits due to devolve upon
him under his will earlier than at the time
stipulated therein. In my view Arthur has not done this."
A little later in his judgment KANNEMEYER, J put the matter
thus -
13. thus -
"I am satisfied that the word 'anticipate' as here used is not used in the
sense of 'look forward to' but rather as meaning 'use in
advance' or
'accelerate'. What must not be 'used in advance' or 'accelerated' is the benefit
accruing to Arthur under the testator's
will. He has not caused this to happen.
On his thirty-fifth birthday his inheritance vested in him and he has enjoyed no
benefit
therefrom before that date."
Having decided that Arthur had not 'anticipated' his inheritance the learned
Judge proceeded to consider whether Arthur had breached
the forfeiture clause by
"encumbering" his inheritance. On the authority of certain dicta by INNES, CJ,
in
Mollis v Registrar of Deed
s,
1904 TS 603
, KANNEMEYER, J concluded
-
"I do not consider that property rights can be 'encumbered' unless another
party obtains a real right therein. A contract giving a
jus in personam
which would entitle the other party to a judgment
ad solvendam
at some
future time if the contract was breached does not, in my view, constitute an
'encumbrance'".
Lastly, the learned Judge expressed the view that the reference
in
14.
in the forfeiture clause to the beneficiary's "interest" did not serve to
bring Arthur's undertaking in the consent paper within the
scope of the
prohibition. In this regard KANNEMEYER, J said -
"The 'interest', in my view is not the hope of eventual inheritance but
refers rather to (the) intermediate interest the sons have
in receiving £30
per month - if available - during their mother's lifetime and the whole income
of their share of the inheritance
after her death and for the period from their
twenty-first to their thirty-fifth birthdays."
In his argument before this Court the c
urator-ad-litem
urged that the
particular meaning of "anticipate" selected by the Court in the
National
Board of Executors
case (
supra
) had reference to the peculiar facts
of that case, and was not intended to be an exhaustive definition of the word.
This is no doubt
so. It would hardly be possible, I think, to hit upon any
general formula applicable to all will cases involving forfeiture clauses
designed to discourage "anticipation" of an inheritance by a beneficiary.
Nevertheless ...........
15. Nevertheless the line of reasoning followed by EKSTEEN, J
in the
National Board of Exec
ut
ors
case
(supra)
seems
to
me to be helpful to a consideration of the facts and the
probable
intention of the testator in the present case.
The points which arise in the present case are somewhat narrow and in my
judgment they do not admit of much elaboration. Mr
Rein
has pressed upon
us that "anticipate" is wide enough to comprehend the concept of a "dealing with
in advance"; and, so the argument
proceeds, Arthur's undertaking in the consent
paper represented a dealing in advance with his inheritance. I am unable to
accept
that argument. To my mind it seeks to put upon the words of Arthur's
undertaking to Elizabeth an entirely forced construction. In
that undertaking,
so it seems to me, Arthur did no more than to promise to pay to Elizabeth and
their daughters three-quarters of
what he hoped he would inherit in terms of the
testator's will. The fact that in
the
16. the undertaking Arthur went so far as to bind
himself
contractually so to deal with his inheritance, after it
should become due to him,did not involve any "dealing in
advance" with the
inheritance before it did in fact become
due to him.
The position may be tested from two different angles. One asks, first,
whether Arthur's undertaking in paragraph 12 of the consent
paper resulted in
any benefit to Arthur from his inheritance before it actually fell due to him.
Benefit from a patrimony necessarily
connotes, I think, the gaining by the
beneficiary of some tangible advantage expressible in financial terms. This
question must be
answered in the negative. Despite his contractual obligation to
Elizabeth and his daughters Arthur obtained no financial advantage
therefrom
before the inheritance fell due; and no benefit flowing to Arthur from the
inheritance was in consequence of the undertaking
in any way accelerated.
Next,
17. Next, one inquires whether as a result of Arthur's under=
taking, and until his inheritance fell due, such inheritance
was in any
way diminished, prejudiced, or put at risk.
Again the answer is no. I should
add that in my opinion
no significance attaches to the feature that in
paragraph 12
of the consent paper Arthur agreed that Elizabeth and
his
daughters would be paid directly by the executors in the
estate of the
testator. If a promise to pay over to
another some (or indeed all) of one's
future inheritance
does not by itself involve "anticipation" of the
inheritance,
mere administrative arrangements to lend business efficacy
to
the carrying out of the promise cannot, I consider, alter
the juristic
quality of the transaction. In this connection
it is necessary to refer briefly to the following passage in
the judgment
of the Court
a quo
. In dealing with the first
limb of the inquiry (whether Arthur had anticipated his
inheritance) KANNEMEYER, J said of the applicant:
"He
18.
"He was not bound by the provision in clause 12 of the consent paper to the
effect that the money should be paid directly to Mrs
Elizabeth Gibaud as neither
he nor the Fidelity Bank were parties to the consent paper. Thus Arthur has not
precluded himself from
getting his entire inheritance on due date nor has he
obtained any part or benefit of it in anticipation of that
date."
It seems to me, with respect, that whether or
not the applicant was a party to the consent paper is irrelevant to the inquiry.
Even
if the applicant had so been party to Arthur's undertaking no legal duty
would have rested upon the applicant to do anything in connection
with Arthur's
inheritance unless and until the inheritance fell due in terms of the will.
I turn to consider whether by his undertaking in the consent paper Arthur
"encumbered" his inheritance. Reference has already been
made to the fact that
on this part of the case the Court
a quo
relied upon the decision in
Mollis v Registrar of Deeds
(
supra
). Dealing with the
provisions
19. provisions of sec. 3(i) of Transvaal Proclamation
No.10
of 1902, INNES, CJ (in whose judgment in that case WESSELS
and MASON, JJ concurred) observed at p 607:
"'Encumbrance' means a real burden on the land, a portion of the
dominium
parted with by the owner. It does not mean any reference to the
land in a contract, giving a mere action
in personam
to the contracting
party."
If in the present case, for example, Arthur had ceded his incorporeal right
to his inheritance in security for a debt incurred by
him or for advances made
to him, then the cessionary would have stood in relation to such incorporeal
right in the same position
as a pledgee of movables accompanied by delivery (cf.
Sandilands v Sandilands' Trustee & Paul
,
1913 CPD 632
at 636.) But on
the strength of the undertaking in the consent paper Elizabeth obtained no real
rights whatever in respect of Arthur's
inheritance. I agree with the judgment of
the Court below that Elizabeth thereby acquired no more than a personal right
against Arthur
to
demand
20. demand performance of his obligation after the date of
its performance had fallen due; and that as far as Arthur's
inheritance was concerned the acquisition of such a personal
right did not
represent an "encumbrance."
It is a canon of construction that if in regard to the scope of a forfeiture
clause in a will doubt or uncertainty exists as to the
intention of the
testator, the forfeiture clause should be restrictively interpreted. See:
Ex
Parte Administrators Estate Sandler,
1976(4) SA 930.(C), where the relevant
decisions are collected at 934E/H. In my view it cannot be fairly collected from
the testator's
will as a whole that an undertaking such as is contained in
paragraph 12 of the consent paper is hit by the forfeiture clause in
the
will.
The
21. The interpretation for which the c
urator-ad-litem
contends
seems to me to involve a construction contrary to what the
plain words of
the forfeiture clause import. The sense of
those words, in the context of the
will, seem to me to be
clear enough to dispel any real doubt or uncertainty
as to
the intention of the testator. I am accordingly of the
opinion that
the Court
a quo
came to the correct conclusion
upon the application
and that the appeal fails.
There remains the question of costs. At the hearing of the appeal the only
respondent represented was the third respondent (Elizabeth).
In matters
affecting the interpretation of wills costs of suit are generally, but not
invariably, ordered to come out of the estate.
Mr Di
son
, who argued the
appeal on behalf of the third respondent, submitted that in the event of the
appeal being dismissed this Court should
order the third respondent's costs of
appeal to come out of the estate; but that there was no good reason why the
curator-ad-
l
item
's costs of appeal should
be
22
should be borne by the estate. Counsel for Elizabeth urged that when
the
curator-ad-litem
prosecuted the appeal he ought to have appreciated
that he was thereby incurring the risk of having to bear the costs of an
unsuccessful
appeal. Mr
Dison
reminded us that whereas courts of first
instance in will cases frequently in the exercise of their discretion order the
costs of
all parties to be borne by the estate, different considerations may
apply on appeal. In
Abraham-Kriel Kinderhuis v Adendorff, N O
1957 (3) SA
653(A)
the position was stated thus (at 657 A/B) by SCHREINER, ACJ -
"It may be reasonable to seek the decision of one Court, even if one's view
is wrong, but unreasonable to persist in one's wrong view
to the extent of
appealing. Other parties interested in the estate should not be made to suffer
for one's persistence."
Counsel for Elizabeth contended that in the present case the
curator-ad-litem
should have been content with the judgment of the Full
Court, and that the estate should not be made to suffer for his refractoriness.
I am unable to accede to
that
23. that argument. It is true that the problem was not an intricate
one; and that it was convincingly resolved by the Full Court.
It should not be
overlooked, nevertheless, that the cur
ator-ad-litem
was not the party who
initiated the proceedings in the Court below. The
curator-ad-lit
em was
appointed by that Court to protect the interests of two minor children. Though
the problem was not one of particular difficulty
there was, as the Court
a
quo
pointed out, a dearth of authority on the points raised. Leave to appeal
to this Court was granted by a Full Court in a reasoned judgment.
In these
circumstances it can hardly be said, I think, that in prosecuting the appeal the
curator-ad-litem
has not fairly used his discretion or that he has in any
way acted unreasonably. It is accordingly necessary to protect his position
in
the matter of his costs on appeal. To leave him to bear his own costs would be
not only inequitable but injurious in
tendency
24. tendency to that vigilant protection of the rights of
minors which our system of law seeks to promote by the appointment, in an
appropriate case, of a
curator-ad-litem.
The appeal is dismissed. The costs of appeal of the third respondent and of
the
curator-ad-litem
are to be paid, as between attorney and client, out
of the estate of the late Arthur Lawrence Gibaud.
G G HOEXTER, JA
KOTZé, JA)
MILLER, JA) Concur JOUBERT, JA) HEFER, JA)