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[2020] ZASCA 113
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Jones v Pretorius NO (281/2019) [2020] ZASCA 113; 2022 (1) SA 132 (SCA) (29 September 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 281/2019
In
the matter between:
BAREND
PETRUS
JONES APPELLANT
and
CHRISTINA
HELENA PRETORIUS
NO RESPONDENT
Neutral
citation:
Jones
v Pretorius NO
(281/2019)
[2020] ZASCA 113
(29 September 2020)
Coram:
SALDULKER,
VAN DER MERWE and DLODLO JJA and GOOSEN and MABINDLA-BOQWANA AJJA
Heard:
Matter
disposed of without oral hearing in terms of
s
19
(a)
of
the
Superior Courts
Act 10 of 2013
.
Delivered:
This
judgment was handed down electronically by circulation to the
parties' representatives by email, publication on the Supreme
Court
of Appeal website and release to SAFLII. The date and time for
hand-down is deemed to be 10h00 on 29 September 2020.
Summary:
Deceased
estate – agent appointed to administer estate on behalf of
executor – agency terminated upon death of executor
-
subsequent payments by agent from estate funds to himself – not
recoverable under
s 50
(b)
of
Administration of Estates Act 66 of 1965
– remedy under
s
50
(b)
not limited to
condictio
indebiti
–
payments constituted unlawful appropriations of estate funds –
recoverable by new executor by reason of powers and
duties attached
to office of executor.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (Mdalana-Mayisela AJ sitting as
court of first instance):
1
The
applications for condonation are granted. The applicant in each
application is directed to pay the costs thereof.
2
The appeal
is dismissed with costs.
JUDGMENT
Van
der Merwe JA (Saldulker and Dlodlo JJA and Goosen and
Mabindla-Boqwana AJJA concurring)
[1]
The respondent, Ms Christina Helena Pretorius NO, is the duly
appointed executor of the deceased estate of Mr Wilhelm Petrus
Meyer
(the estate). In that official capacity she launched an application
in the Gauteng Division of the High Court, Pretoria against
the
appellant, Mr Barend Petrus Jones, for payment of the amount of
R1 148 828.13. The court a quo (Mdalana-Mayisela
AJ)
granted the application with costs but gave leave to the appellant to
appeal to this Court. The central issue in the appeal
is whether the
respondent’s claim had a legal basis. The parties agreed that
the matter be disposed of without an oral hearing,
in terms of
s
19
(a)
of the
Superior Courts Act 10 of 2013
.
[2]
The material facts are not in dispute. The late Mr Meyer was the
father of the respondent. He passed away on 29 December 2012.
He was
survived by his spouse, Mrs Cornelia Wilhelmina Gertruida Meyer, the
mother of the respondent. In their joint will, the
survivor was
nominated to be the executor of the estate, on condition that the
appellant, who practised as a chartered accountant
under the name of
Jones & Co, was to act as the agent of the executor.
[3]
As a result, and in anticipation of her appointment as the executor
of the estate, Mrs Meyer mandated the appellant to administer
the
estate on her behalf. She did so by written power of attorney dated
25 January 2013. In terms thereof, the appellant would
be entitled to
the executor’s fee in respect of the administration of the
estate (presumably in terms of the tariff provided
for in reg 8 of
the regulations promulgated under s 103 of the Administration of
Estates Act 66 of 1965 (the Act)).
[4]
On 30 April 2013 the Master of the High Court, North Gauteng Division
(the Master) duly appointed Mrs Meyer as the executor
of the estate.
On 25 September 2013, however, Mrs Meyer also passed away.
The appellant nevertheless continued to administer
the estate.
Crucially, he caused the estate to pay the total amount of
R1 148 828.13 to himself, as follows:
‘
(a) R150,000.00 on 26 March
2014;
(b) R78,000.00 on 27 March 2014;
(c) R150,000.00 on 28 May 2014;
(d) R78,000.00 on 29 May 2014;
(e) R150,000.00 on 9 December 2014;
(f) R250,000.00 and R142 828.13
on 27 December 2014;
(g) R150,000.00 on 6 May 2015.’
[5]
The amounts in (a) to (f) above purported to be payments of
executor’s fees in respect of the estate. The appellant said
that the last payment (g) represented fees for services that he had
rendered to the Willie Meyer (Swaziland) Trust. He did not
provide
any basis for the liability of the estate for these fees, but even if
such liability is accepted, it matters not, as I
shall demonstrate. I
should add that I make no imputation of dishonesty on the part of the
appellant. I accept that in making these
payments he acted in the
bona
fide
belief
that he was entitled to do so.
[6]
A new executor was only appointed on 21 April 2016, when the Master
issued letters of executorship to the respondent. By that
date, the
Master had approved an amended first and final liquidation and
distribution account that the appellant had drawn. The
appellant had
not, however, given proper notice in terms of s 35(5) of the Act that
the account would lie for inspection. It follows
that no distribution
of the estate as provided for in s 35(12) of the Act, that is, in
terms of an account which had laid for inspection
without any or
successful objection thereto, had by then taken place. The Master
also did not approve the payment of any remuneration
to the
appellant. After the respondent had taken possession of the estate
files, she demanded repayment of the said amount from
the appellant
and his failure to do so led to the present litigation.
[7]
As I have indicated, the appellant paid estate funds to himself after
the death of Mrs Meyer. As a general rule, a contract
of agency is
terminated by the death of either the principal or the agent. See Sir
J W Wessels
The
Law of Contract of South Africa
2
ed (1951) Vol I para 1675 and
Ward
v Barrett NO and Another
[1962]
4 All SA 557
(N);
1962 (4) SA 732
(N) at 737D. The appellant
correctly accepted that the general rule is applicable to this
matter. It follows that after the death
of Mrs Meyer, the appellant
had no authority to act for the estate or to deal with its property.
He particularly could not lawfully
make any payment from estate
funds. Executor’s remuneration was in any event not payable at
the time, because of the provisions
of s 51(4) of the Act. They
provide that an executor shall not be entitled to receive any
remuneration before the estate has been
distributed as provided for
in s 35(12), unless the payment of such remuneration has been
approved in writing by the Master.
[8]
In written argument presented to this Court, the appellant correctly
conceded that these payments to the appellant constituted
unlawful
appropriations of estate funds. Surprisingly, however, he maintained
that the respondent’s claim nevertheless had
to fail on the
ground that her application did not disclose a cause of action.
[9]
In response hereto, the respondent relied on the provisions of s
50
(b)
of the Act, as she did in the court a quo. It appears that the court
a quo at least implicitly accepted that s 50
(b)
provided the respondent with a remedy against the appellant.
[10]
It is necessary to reproduce s 50 in its entirety:
’
50. Executor making wrong
distribution
Any executor who makes a distribution
otherwise than in accordance with the provisions of section
thirty-four
or
thirty-five
, as the case may be, shall-
(a)
be
personally liable to make good to any heir and to any claimant whose
claim was lodged within the period specified in the notice
referred
to in section
twenty-nine
,
any loss sustained by such heir in respect of the benefit to which he
is entitled or by such claimant in respect of his claim,
as a result
of his failure to make a distribution in accordance with the said
provisions; and
(b)
be
entitled to recover from any person any amount paid or any property
delivered or transferred to him in the course of the distribution
which would not have been paid, delivered or transferred to him if a
distribution in accordance with the said provisions had been
made:
Provided that no costs incurred under this paragraph shall be paid
out of the estate.’
[11]
Both the language and the context of s 50 indicate that it has
limited application. It deals with the position of an executor
who
made a distribution otherwise than in accordance with the provisions
of s 34 (in respect of an insolvent deceased estate) or
s 35 of the
Act. It firstly saddles an executor who made a wrong distribution
with personal liability for any resultant loss sustained
by an heir
or claimant. Secondly it affords such an executor the right to
recover what was wrongly paid, delivered or transferred.
[12]
In
Els
NO v Jacobs
1989
(4) SA 622
(SWA) at 629-630, the court held that the application of s
50
(b)
is limited to circumstances in which the
condictio
indebiti
would be available. On behalf of the respondent it was contended that
this case had been wrongly decided on this point. I agree.
There is
no indication of such a limitation in the text or context of s 50. On
the contrary, if that was intended, there would
be no need for the
provision. In my opinion s 50
(b)
provides a self-standing statutory remedy and the decision to the
contrary in
Els
NO v Jacobs
should not be followed.
[13]
Thus, s 50
(b)
permits recovery of what an executor wrongly distributed. The Act
defines an executor as a person ‘who is authorized to act
under
letters of executorship granted or signed and sealed by a Master, or
under an endorsement made under section fifteen.’
(Section 15
of the Act is not applicable to the matter.) This recovery may no
doubt be made by the legal successor of such executor.
An executor
may also, of course, act through an agent. The acts of a duly
authorised agent are in law those of the executor. But
a payment from
estate funds by a person who is neither an executor as defined nor
his or her duly authorised agent, falls outside
the scope of s 50.
And an unlawful appropriation of estate funds by a person who has no
authority whatsoever to deal with the estate,
can hardly be said to
be a distribution within the meaning thereof in s 50.
[14]
It follows that the respondent’s claim did not fall within the
ambit of s 50
(b)
.
Does this mean that even though the appellant admitted that these
payments constituted unlawful appropriations of estate funds
to him,
the estate was remediless? Certainly not. As I shall show, the answer
lies in the powers and duties attached to the office
of an executor.
[15]
A deceased estate is an aggregate of assets and liabilities. Rights
of action that vest in an estate, naturally form part of
the assets
thereof. See
Lockhat’s Estate v North British &
Mercantile Insurance Co. Ltd
1959 (3) SA 295
at 302F-G. Upon his
or her appointment, only the executor has powers and duties to deal
with the estate. His or her rights and
obligations are derived from
the common law and statutory provisions. One of the main obligations
of an executor is to recover
what is due to the estate. And only the
executor may institute legal proceedings to do so. The position is
summarised in D Meyerowitz
The Law and Practice of Administration
of Estates and Their Taxation
2010 ed at 12-23 – 12-24,
para 12.26:
‘
Upon his appointment the
executor becomes entitled to deal with all the assets of the estate
and it is his duty to recover all assets,
in whatever form they may
be, whether immovable, movable, corporeal or incorporeal, which
belong to the estate but which are in
the hands of, or may be owed
by, third parties. It is for him to decide whether the estate has any
claim against a third party
and the advisability of instituting
action to recover.’
[16]
In the result the respondent was not only entitled but obliged to
recover the estate funds that had unlawfully been appropriated
by the
appellant. That the office of executor of the estate entitled the
respondent to recover the unlawful appropriations from
the appellant,
was adequately raised in the founding affidavit. It follows that the
appeal must fail.
[17]
The appellant applied for condonation of the late filing of his
notice of appeal and the respondent, in turn, applied for condonation
of the late filing of heads of argument. The respective applications
were not opposed and should be granted. Each applicant for
condonation should bear the costs of the application.
[18]
The following order is issued:
1
The
applications for condonation are granted. The applicant in each
application is directed to pay the costs thereof.
2
The appeal
is dismissed with costs.
_______________________
C
H G VAN DER MERWE
JUDGE
OF APPEAL
APPEARANCES
For
appellant: J Truter
Instructed
by: Surita Marais Attorneys, Pretoria
E
C Cooper Majiedt Incorporated, Bloemfontein
For
respondent: P J Vermeulen SC
Instructed
by: W F Bouwer Attorneys, Pretoria
Wessels
& Smith Attorneys, Bloemfontein.