Madelung and Another v Master of the High Court, Cape Town and Others (3430/2022) [2023] ZAWCHC 282 (10 November 2023)

80 Reportability
Trusts and Estates

Brief Summary

Administration of Estates — Interim accounts — Executors' authority to prepare — Applicants challenged the validity of an interim liquidation and distribution account submitted by the executor of the deceased estate, arguing it was unlawful as it lacked a directive from the Master of the High Court. The executor contended that the absence of such a directive did not preclude the preparation of an interim account. The court found that the issue became moot following the submission of a final account, which superseded the interim account, and thus declined to rule on the validity of the interim account while addressing costs.

Comprehensive Summary

Summary of Judgment


1. Introduction


The judgment concerns motion proceedings in the Western Cape Division of the High Court, Cape Town, arising from the administration of a deceased estate. The applicants, Albrecht Jurgen Valtin Max Madelung and Hans Rudolf Christian Herrmann Madelung, brought an application against the Master of the High Court, Cape Town (first respondent), Jurgen Werner Stuhlinger N.O. in his capacity as executor of the deceased estate (second respondent), and Isabel Ingrid Gertrud Madelung (third respondent). The applicants and the third respondent are the deceased’s children and co-heirs under her will.


The matter originated in April 2022 when the applicants challenged the validity of a first interim liquidation and distribution account prepared by the executor and, alternatively, sought review-type relief against the Master’s refusal (dated 10 March 2022) to uphold their objections to that account. The executor opposed the application and delivered a counter-application seeking an order compelling the applicants to sign documents enabling him to access and control funds held in Swiss bank accounts in the deceased’s name.


Shortly before the hearing, the executor lodged a final liquidation and distribution account with the Master. This development narrowed the dispute substantially: the applicants withdrew the relief directed at the Master’s refusal decision, and the counter-application fell away after the applicants indicated they would sign the declarations required for access to the Swiss accounts. The only remaining substantive relief in the main application was a declarator that the earlier interim account was not valid under the Administration of Estates Act 66 of 1965.


2. Material Facts


The deceased, Ingrid Ilse Madelung, left an estate to be administered under a will, with her children (the applicants and the third respondent) as beneficiaries in varying degrees. The second respondent was appointed as executor of the deceased estate.


An account described as a first interim liquidation and distribution account was prepared by the executor, dated 26 October 2021, and advertised for inspection and objections on 5 November 2021. The applicants lodged objections to that account. On 10 March 2022, the Master refused to uphold those objections, although the refusal decision was brief and did not address the merits of the objections.


It was common cause that the Master did not specifically direct the executor to lodge an interim account. The Master indicated in an explanatory stance that, in her understanding, section 35(2) provides that the Master “may” direct an executor to submit an interim account, and she stated that she would abide the court’s decision.


Shortly before the hearing, the executor submitted a final liquidation and distribution account to the Master on 24 October 2023. The parties were ad idem that this final account superseded the earlier interim account, and that the applicants’ objections would now be pursued against the final account for fresh determination by the Master.


The executor’s counter-application related to the executor’s ability to gain control of the deceased’s UBS Switzerland AG and LGT Bank accounts. The executor alleged that the accounts were effectively frozen after the applicants wrote to the Swiss banks disputing his appointment, and that declarations from the heirs were required to unfreeze the accounts and enable him to take control. Shortly before the hearing, the applicants indicated they would provide the required declarations. The final account also included and dealt with the Swiss bank accounts, contributing to the practical resolution of the counter-application.


3. Legal Issues


The remaining central issue in the main application was whether the court should grant a declaratory order that the executor’s interim liquidation and distribution account was not valid because it did not comply with section 35(2) of the Administration of Estates Act 66 of 1965, in circumstances where the Master had not issued a written directive to lodge such an interim account.


Before reaching that substantive question, the court had to determine whether the declaratory relief had become moot, given that the parties accepted the final account superseded the interim account. This raised a further legal question regarding whether a High Court has a discretion to determine a moot legal issue, and if so, on what basis.


In addition, given that the substantive issues were narrowed or rendered moot shortly before the hearing, the court had to determine the proper approach to costs in relation to both the main application and the counter-application. This involved a mixed inquiry: an application of legal principles governing mootness and judicial discretion, together with an evaluative judgment on costs in light of the parties’ conduct and the litigation’s trajectory.


4. Court’s Reasoning


The court approached the matter by first determining whether the declaratory relief retained any live practical significance. The parties agreed that the final liquidation and distribution account superseded the earlier interim account. On that basis, the court reasoned that a declaration that the interim account was invalid would have no practical effect, because any objections would now be considered afresh by the Master in relation to the final account. The court also noted that the Master’s earlier refusal decision did not engage with the merits of the objections, and that any question of the Master being functus officio did not arise on the facts.


Having concluded that the declaratory relief was moot, the court then considered whether it nevertheless had power to decide the legal issue. The applicants relied on Constitutional Court authority recognising a discretion to determine moot issues in the interests of justice. The court, however, emphasised that subsequent authority from the Supreme Court of Appeal held that this discretion to determine moot matters vests only in appeal courts, not in the High Court. The court considered itself bound by the Supreme Court of Appeal decision in Minister of Justice and Others v Estate Stransham-Ford, and by subsequent applications of that approach within the division. On this basis, the court concluded it could not decide the abstract legality question and that the declaratory relief had to be dismissed on mootness.


The judgment then turned to costs, treating them as the only remaining issues requiring determination. The court adopted, by analogy, the approach articulated in John Walker Pools v Consolidated Aone Trade & Invest 6 (Pty) Ltd (in Liq) concerning costs where proceedings become moot. The court explained that merits are not the sole consideration in such circumstances because deciding costs purely by reference to the merits risks undermining the policy against adjudicating moot or academic disputes. The court identified, in adjusted form, factors such as when mootness arose, whether the parties made sensible proposals to avoid wasting judicial resources, and the proportionality of further litigation costs once mootness became apparent.


In considering the main application’s costs, the court placed weight on the timing and circumstances of the executor’s lodgement of the final account shortly before the hearing, without explanation for why it was not filed earlier given that the interim account had stalled progress and its validity was disputed. For the limited purpose of costs, the court examined the statutory scheme of section 35. It reasoned that section 35(1) contemplates a final liquidation and distribution account as a primary duty, while section 35(2) provides a mechanism for an interim account where the Master directs it in writing in specified circumstances. The executor’s argument sought to analogise to an executor’s ability to pay debts “at risk” before confirmation of the account (as recognised in Scoin Trading (Pty) Ltd v Bernstein NO). The court distinguished that situation and expressed the view that residual common-law powers of executors do not extend to lodging an interim account outside section 35(2), particularly as the statute and regulations were treated as covering that field. The court characterised the absence of a Master’s directive as meaning a jurisdictional requirement for a section 35(2) interim account had not been satisfied and linked this to the principle of legality. On the court’s evaluation, the executor’s opposition on the core point was weak, and fairness supported a costs order against the executor in the main application, including the costs of two counsel.


Regarding the counter-application’s costs, the court held that the executor was justified in seeking relief compelling the applicants to provide declarations enabling access to the Swiss bank accounts. The court accepted that merely being told account balances by a third party was not sufficient for the executor to fulfil statutory duties. The court relied on the executor’s statutory obligation under section 26(1) of the Act to take into custody or under control all property in the estate, as well as authority emphasising an executor’s fiduciary duty to take control of and preserve estate assets and to wind up the estate speedily. The applicants’ refusal (until shortly before the hearing) to provide the declarations was treated as the cause of the counter-application, justifying a costs order against them.


5. Outcome and Relief


The court dismissed the application for declaratory relief concerning the validity of the interim liquidation and distribution account on the basis that the issue was moot and that the High Court could not determine a moot question.


The court ordered that the second respondent (the executor) pay the costs of the entire main application, including the costs of the declaratory relief component and including the costs of two counsel.


The court further ordered that the applicants pay the costs of the counter-application.


Cases Cited


JT Publishing (Pty) Ltd and Another v Minister of Safety and Security and Others [1996] ZACC 23; 1997 (3) SA 514 (CC).


Independent Electoral Commission v Langeberg Municipality [2001] ZACC 23; 2001 (3) SA 925 (CC).


Normandien Farms (Pty) Ltd v South African Agency for Promotion of Petroleum Exportation and Exploitation SOC Ltd and Another 2020 (4) SA 409 (CC).


Minister of Justice and Others v Estate Stransham-Ford 2017 (3) SA 152 (SCA).


Vinpro NPC v President of the Republic of South Africa and Others [2021] ZAWCHC 261 (3 December 2021).


Habitat Council v Cape Town City and Others 2022 (6) SA 383 (WCC).


John Walker Pools v Consolidated Aone Trade & Invest 6 (Pty) Ltd (in Liq) 2018 (4) SA 433 (SCA).


Scoin Trading (Pty) Ltd v Bernstein NO 2011 (2) SA 118 (SCA).


Minister for Justice & Constitutional Development v Chanco 2010 (4) SA 82 (CC).


Kisten and Another v Moodley and Another (13043/2012) [2016] ZAKZDHC 31 (22 July 2016).


Legislation Cited


Administration of Estates Act 66 of 1965.


Superior Courts Act 10 of 2013.


Constitution of the Republic of South Africa, 1996.


Promotion of Access to Information Act 2 of 2000.


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that the declaratory relief sought in relation to the validity of the interim liquidation and distribution account was moot, because the executor had filed a final liquidation and distribution account which the parties accepted superseded the interim account, and the applicants’ objections would be dealt with afresh in relation to the final account.


The court held further that, in light of binding authority, the High Court did not have a discretion to decide the moot legal issue merely because it was fully argued or potentially important, and therefore the declarator could not be granted.


On costs, the court held that the executor should bear the costs of the main application (including two counsel), while the applicants should bear the costs of the counter-application, because the counter-application was justified to secure the executor’s ability to take custody and control of estate assets, and the applicants’ conduct necessitated that litigation.


LEGAL PRINCIPLES


The judgment applied the principle that declaratory relief is discretionary, and that courts generally avoid deciding abstract, academic, or hypothetical questions, particularly where a decision will have no practical effect on the parties.


It applied the principle that, following Minister of Justice and Others v Estate Stransham-Ford 2017 (3) SA 152 (SCA) and subsequent High Court authority, the High Court is not empowered to decide moot issues on the basis of the “interests of justice” discretion recognised in certain appellate and Constitutional Court decisions; that discretion is treated as belonging to appeal courts.


In dealing with costs where proceedings become moot, the judgment applied (by analogy) the approach in John Walker Pools v Consolidated Aone Trade & Invest 6 (Pty) Ltd (in Liq) 2018 (4) SA 433 (SCA), emphasising that costs determinations in moot matters should consider timing of mootness, parties’ conduct in attempting to terminate unnecessary litigation, proportionality, and efficient use of judicial resources, and should not be decided solely by determining the merits of issues that have become academic.


For the limited purpose of deciding costs, the judgment treated the statutory framework governing liquidation and distribution accounts as significant, including that section 35(1) concerns the executor’s duty to lodge an account, and section 35(2) provides for an interim account under specified circumstances and upon a written direction by the Master, and it linked compliance with statutory authority to the principle of legality.


The judgment applied the principle that an executor has a statutory duty under section 26(1) of the Administration of Estates Act 66 of 1965 to take into custody or under control all property in the estate, and that the executor’s fiduciary obligations include taking control of, preserving, and administering estate assets, supporting the conclusion that steps to secure control of foreign bank accounts were part of proper estate administration.

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Madelung and Another v Master of the High Court, Cape Town and Others (3430/2022) [2023] ZAWCHC 282 (10 November 2023)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Before:
The Hon. Mr Acting Justice De Waal
Date
of hearing: 8 November 2023
Date
of judgment: 10 November 2023
Case
No: 3430 / 2022
ALBRECHT
JURGEN VALTIN MAX MADELUNG
First
Applicant
HANS
RUDOLF
CHRISTIAN
HERRMANN
MADELUNG
Second
Applicant
And
THE
MASTER OF THE HIGH COURT, CAPE TOWN
First
Respondent
JURGEN
WERNER STUHLINGER N.O.
Second
Respondent
(in
his representative capacity as the executor
of
the deceased
estate of lngrid
Ilse Madelung,
Master's
reference no: 1[…])
ISABEL
INGRID GERTRUD MADELUNG
Third
Respondent
JUDGMENT
DE
WAAL AJ:
[1]
This matter relates to the administration
of the estate of the late Ingrid Ilse Madelung ("the deceased'}
The second respondent is the executor of
her estate ('"the executor·'). The applicants and the
third respondent are
the deceased's children and they stand to
benefit from her will in varying degrees as co-heirs.
[2]
When the application was launched m April
of 2022, the applicants sought the following relief:
2.1.
An order declaring that the first interim
liquidation and distribution ("L&D") account prepared
by the executor ("the
Disputed Account'") is not a valid
account in terms of ss 35(1) and/or 35(2) of the Administration of
Estates Act 66 of 1965
("the Act").
2.2.
To the extent that the Court finds that the
Disputed
Account
constitutes a valid account, an order:
2.2.1.
setting aside the decision of the first
respondent ("the Master”) dated 10 March 2022 to refuse to
uphold the applicants'
objections to that account; and
2.2.2.
substituting the Masters refusal with a
decision upholding the applicants' objections; directing the executor
to amend the Disputed
Account
in
line
with
the
applicants'
objections;
executing
his
obligations as the executor of the deceased estate; and preparing a
final L&D account, afresh.
[3]
An amendment was later effected which
clarified that the Disputed Account is dated 26 October 2021 and that
it was advertised for
objections on 5 November 2021.
[4]
The applicants' main contention is that the
Disputed Account is an
interim
account
which does not comply
with
the prescripts of s 35(2) of the Act in that the Master did not issue
any directive to the executor to prepare such an account.
In other words, the applicants' contention
is that the executor does not have the power nor can be unilaterally
exercise any discretion
to prepare an interim account in the absence
of a directive from the Master.
Given
that there was no direction to prepare the Disputed Account, it is
contended to be unlawful and invalid.
[5]
In the alternative, and only in the event
that it is found that the Disputed Account constitutes a valid
account, the applicants'
challenged
the Master's decision
to
refuse to uphold their objections.
[6]
The executor bas opposed the application
and the relief sought, essentially arguing that s 35 of the Act does
not preclude an executor
from preparing and lodging an interim
account, even in the absence of a directive from the Master.
The executor also brought a
counter-application in which he seeks an order that the applicants be
directed to sign documents to
allow him to access and control funds
held in the deceased's
UBS
Switzerland AG bank and LGT Bank ("the Swiss bank accounts").
The applicants have opposed the
counter-application, contending that the executor knew what the Swiss
bank accounts contained and
did not need access and control over
those accounts in order to compile a final L&D account.
[7]
The
Master
and
third
respondent
have
elected
not
to
participate
in
or
oppose
the
application.
The
Master described her attitude to the application as follows:
"6.
The First (Interim) liquidation and distribution
account was lodged by the
Second
Respondent
without
our
office specifically
requesting
the
Second Respondent to do so.
My
understanding of Section 35(2) of the Administration of Estates Act
66 of 1965 (as amended) is that the Master "may"
direct the
executor to lodge an Interim account under the circumstances as
provided for in the said section (which implies a discretion)
or
where the funds are available which ought to be distributed, direct
the executor in writing to submit such interim account.
The executor
already obtained
the Master's approval in terms of Section
42(2) for the sale of both properties in 2020 in the deceased estate
and there were therefore
funds at hand at the time.
7.
I have no further facts or information to
my disposal that may assist the Honourable Court in its discretion.
8.
I have no objection
to the application and will abide by the
decision of the Honourable Court.”
[8]
It
is
not clear from the above whether the Master supports
the applicants
or
the
executor.
[9]
Shortly
before
the
hearing
of
the
matter
there
were
two
developments
which considerably
narrowed the scope of the dispute.
[10]
The first development was that a final L&D Account ("'the
Final Account") was submitted
by the executor to the Master on
24 October 2023, 15 calendar days before the hearing. This led to the
applicants' withdrawing
the relief sought in respect of the Master's
refusal to uphold the objections. The terms of the withdrawal are of
some importance:
it is stated in the notice of withdrawal that the
Final Account "supersedes" the Disputed Account and that
the applicants'
objections will be raised in respect of the Final
Account. This much was common cause at the hearing of the matter,
i.e. the parties
agreed that the applications' objections will now be
raised in respect of the Final Account and the objections will be
decided
afresh by the Master.
[11]
The second development was that the Final
Account includes and deals with the Swiss bank accounts. The
applicants then indicated
that they will sign the declarations sought
in the counter-application which will allow the executor access and
control over the
Swiss bank accounts.
This
disposed of the counter-application.
The
executor accordingly did not persist with the relief sought in the
counter-application and there is no need to make any order
in respect
of that application other than to deal with costs.
[12]
What remains then is the relief sought by
the applicants in paragraph 1 of the notice of motion, which is a
declarator that the
Disputed Account was not a valid account as it
did not comply withs 35(2) of the Act.
This
is largely a legal question, to be determined with reference to the
provisions of the Act.
Mr
Brink, who appeared for the executor, argued that I should refrain
from considering this aspect because granting the declarator
sought
will have no practical effect.
Mr
Kantor SC, who appeared with Mr Mauritz for the applicants, contended
that the issue was not moot as the Disputed Account would
remain
alive until declared invalid.
He
further contended that the legal issue raised was in any event one of
importance and that I should, in the exercise of my discretion,

decide the issue even if moot.
[13]
This makes it necessary to determine,
first, whether the declaratory
relief
in respect of the Disputed Account is moot and if so whether I should
nevertheless decide the issue of whether an executor
may submit an
interim account outside the parameters of s 35(2) of the Act.
Mootness
[14]
The parties are
ad
idem
that the Final Account
supersedes
the Disputed Account.
[15]
This means that a declaration that the
latter was invalid can have no practical effect.
It is so that the lodgement of the Disputed
Account caused the applicants to submit objections and the Master to
consider these.
But
the objections will now be considered afresh
when
the
Final
Account
is processed.
In
any event, in her refusal
decision
of 10 March 2022, comprising of ½ a
page and six brief points, the Master did not deal with the merits of
the objections.
In
the circumstances, on the facts of the present matter, the issue of
whether the Master was
functus officio
in respect of validity of the
objections cannot arise.
[16]
For these reasons, the declaratory relief
sought, which is that the Disputed Account did not comply
withs 35(2) of the Act, is indeed moot.
[17]
This bring me to the next question, which is whether I should
nevertheless decide the legal issue.
The issue was fully addressed in
the parties· heads of argument and during oral argument.
[18)
In
JT Publishing
(Pty) Ltd and Another v Minister of Safety and Security and Others
[1996] ZACC 23
;
1997 (3) SA 514
(CC), the
Constitutional Court held that:
"[15] ... a
declaratory order is a discretionary remedy, in the sense that the
claim lodged by an interested party for such
an order does not in
itself oblige the Court handling the matter to respond to the
question which it poses, even when that looks
like being capable of a
ready answer. A corollary is the judicial policy governing the
discretion thus vested in the Courts, a
well-established and
uniformly observed policy which directs them not to exercise it in
favour of deciding points that are merely
abstract, academic or
hypothetical ones.
[19]
In
subsequent cases, such as
Independent
Electoral Commission v Langeberg Municipality.
[2001] ZACC 23
;
2001
(3) SA 925
(CC) para 11 and. more recently,
Normandien
Farms (Pty) Ltd v South African Agency for Promotion of Petroleum
Exportation and Exploitation SOC Ltd and Another
2020
(4) SA 409
(CC) paras 46 -
50,
the Constitutional Court held that it had a discretion to decide a
matter, even though it was moot.
The
discretion must be exercised according to the interests of justice.
Relevant
factors in the exercise of its discretion may include the practical
effect that any possible order may have, the impo1tance
of the issue,
its complexity, and the fullness or otherwise of the argument
advanced.
[1]
[20]
I think it
is
fair to say
that,
for some time, it
was
believed
that the
High
Court had
a similar discretion
to decide a legal
point, even if a matter was moot between
the parties. That belief was quashed in
Minister
of Justice and Others v Estate Stransham-Ford
2017
(3) SA 152
(SCA) where the SCA held that the discretion to decide a
moot matter vests only in the appeal courts:
"[25] ... The appeal
court's jurisdiction was exercised because 'a discrete legal issue of
public importance arose that would
affect matters in the future and
on which the adjudication of this court was required·. The
High Court is not vested with
similar powers. Its function is to
determine cases that present live issues for determination.''
[21]
Stransham-Ford
has
been applied by the Full Bench of this Court in
Vinpro
NPC v President
of
the
Republic
of
South
Africa
and
Others
[2021]
ZAWCHC
261
(3 December
2021) and thereafter also in
Habitat
Council v Cape Town City and Others
2022
(6) SA 383
(WCC).
[22]
I am bound by those decisions and
accordingly cannot determine the legal issue raised in the
application for declaratory relief.
This
part of the application had not been withdrawn and accordingly falls
to be dismissed on the basis of mootness.
[23]
In the result, the only issues to be
decided
are the
costs of the main application and the costs of the
counter-application.
Costs
[24]
How
does a court decide the issue of costs in respect of a matter that
became moot?
I
could find no directly applicable guidance on this issue in reported
judgments of the High Court.
[2]
[25]
There is a helpful decision of the SCA.
In terms of s l 6(2)(a) of the
Superior
Courts Act 10 of 2013
, an appeal may be dismissed solely on the basis
that a decision would have no practical effect or result.
Whether this is so, is determined, save in
exceptional circumstances, without
reference to any consideration
of costs.
In
John Walker
Pools v Consolidated
Aone Trade & Invest 6 (Pty) Ltd
(in Liq)
2018 (4) SA 433
(SCA), the SCA
(per Rogers AJA, as he then was) held that the costs referred to in
s
16(2)(a)
are the costs in the
court a
quo
and not the appellate court.
Given that the matter became moot and there
were no exceptional
circumstances,
leave to appeal
was
refused.
The
SCA
nevertheless went on to consider what to do about the costs of the
application to the SCA.
The
SCA held as follows in respect of these costs:
"[10] ... Where an
appeal or proposed appeal has become moot by the time leave to appeal
is first sought, it will generally
be appropriate to order the
appellant or would-be appellant to pay costs, since the proposed
appeal was stillborn from the outset.
Different considerations apply
where the appeal or proposed appeal becomes moot at a later time. The
appellant or would-be appellant
may consider that the appeal had good
merits and that it should not be mulcted in costs for the period up
to the date on which
the appeal became moot. The other party may hold
a different view. As a general rule, litigants and their legal
representatives
are under a duty, where an appeal or proposed appeal
becomes moot during the pendency of appellate proceedings, to
contribute to
the efficient use of judicial resources by making
sensible proposals so that an appellate court's intervention is not
needed. If
a reasonable proposal by one of the litigants is rejected
by the other, this would play an important part in the appropriate
costs
order. Apart from taking a realistic view on prospects of
success, litigants should take into account, among other factors, the

extent of the costs already incurred; the additional costs that will
be incurred if the appellate proceedings are not promptly
terminated;
the size of the appeal record; and the likely time it would take an
appellate court to form a view on the merits of
the moot appeal.
There must be a proper sense of proportion when incurring costs and
calling upon judicial resources."
[26]
In my view this approach can be fruitfully
employed in deciding the issue of costs in matters which become moot
in the High Court
as well.
As
adjusted, the considerations would be the following:
26.1.
When
did
the
matter
become
moot?
If
already
moot
when
the
matter
was launched, it will generally be
appropriate to order the applicant to pay
the costs.
26.2.
Where
the
application
becomes
moot
at
a
later
time
different
considerations
apply.
The parties are under a duty to make
sensible proposals so as to obviate the need for the Court's
intervention.
If
a reasonable proposal is rejected by the other, this would play an
important part in determining costs.
26.3.
Apart from the prospects of success,
litigants and ultimately the Court, should take into account, among
other factors, the extent
of the costs already incurred; the
additional costs that will be incurred if the proceedings are not
promptly terminated; the size
of the record; and the likely time it
would take a Court to form a view on the merits of the moot
application.
[27]
It is apparent from the above that the
merits are not the only consideration to apply.
If costs in moot cases had to be decided
with reference to the merits only, the policy considerations which
militate against Courts
deciding moot or academic matters would be
undermined.
[28]
As stated above, in the present instance, both the main application
and the counter­ application
became moot shortly before the
hearing. The main application was only rendered moot when the Final
Account was lodged by the executor
and it was agreed that the Final
Account would supersede the Disputed Account. This occurred shortly
before the hearing. The counter-application
was rendered moot when
the declarations were provided which enabled the executor to gain
access and control over the Swiss bank
accounts. Again, this was done
shortly before the hearing.
[29]
Both parties acted sensibly thereafter. The applicants withdrew their
challenge to the Master's
decision to refuse to uphold their
objections and the executor did not pursue the relief sought in the
counter-application.
[30]
It is so that the applicants persisted with
the application for declaratory relief regarding the validity of the
Disputed Account.
That
application however remained alive until it became apparent that the
Final Account
superseded
the
Disputed Account, which was 2 days before the hearing of the matter.
By then the vast majority of the costs
would have been incurred.
The
applicants also persisted with what was largely a legal point which
limited preparation and argument.
The
applicants also believed that this Court had a discretion to decide
the point, even though it was moot.
The
applicants were not alerted by the executor to the
Stransham-Ford
line of cases, which found that no such
discretion exists.
[31]
None of the above factors are in my view
decisive.
[32]
There is however another factor which is of
importance.
ln
both the main and the counter-application it was the conduct of a
party shortly before the hearing, essentially complying with
the
demand of the other, which rendered the applications moot.
This will often be the case in the
run-of-the-mill case in the High Court, for example, the occupier
leaves before the eviction
application is heard; the requested
record is provided before the hearing in
terms of the
Promotion of Access to Information Act 2 of 2000
and so
on.
In such
instances, an analysis of the reasons for that conduct, combined with
a cursory analysis of the merits would generally suffice
to enable
one to make a decision on costs.
[33]
Against this background, I now tum to deal
separately
with
the costs in respect of the main application and
the cow1ter-application.
To the extent that I deal with the merits,
I do so solely for the purpose of arriving at an appropriate order as
to costs.
Main
application
[34]
The Final Account was filed under cover of a short affidavit on 25
October 2023. This was 14
days before the hearing. No explanation was
given as to why the Final Account was not filed earlier and
particularly why it was
not filed when it became apparent that
Disputed Account was not moving matters forward because the
applicants were disputing the
validity of that account on the basis
that it contravenes s 35(2) of the Act. It is merely stated in the
affidavit supporting the
admission of the Final Account that the
applicants had been advised at the outset that the Disputed Account
would be replaced with
a Final Account.
[35]
In addition, even a cursory examination reveal that the grounds on
which the main application
were opposed were weak.
[36]
Section 35(1) of the Act provides for and governs one of the primary
duties of the executor.
This duty is to publish a liquidation and
distribution account. The section provides as follows:
"(1)
An
executor
shall,
as
soon
as
may
be
after
the
last
day
of
the
period specified in the notice referred to
in section 29 (1), but within-
(a)
six months after letters of executorship
have been granted to him; or
(b)
such further period as the Master may in
any case allow,
submit to the Master an
account in the prescribed form of the liquidation and distribution of
the estate.·,
[37]
Interpreted in context, the above "account" (singular) is
the final account which is
to lay open for inspection and which is
ultimately to be used to pay the creditors and distribute the estate
among the heirs.
[38]
Section 35(2) of the Act then deals with a qualification to the above
and makes provision for
the submission of an "interim account".
Section 35(2) provides as follows:
"The Master may at
any time in any case in which he has exercised his powers under
paragraph (b) of subsection (1) [to grant
an extension of the six
months period) or in which an executor has funds in hand which ought,
in the opinion of the Master, to
be distributed or applied towards
the payment of debts, direct the executor in writing to submit to him
an interim account in the
prescribed form within a period
specified.·,
[39]
The purpose is two-fold: the interim account may be a progress report
in cases where an extension
had been granted and the Master is
concerned about delay; or it may provide the Master with the
necessary facts to authorise interim
payments of debts or make
interim distributions.
[40]
The executor contends that it is not necessary for the Master to call
for an interim account,
in order that one be lodged. In this regard,
reference was made to the payment of debts by the executor outside
the provisions
of the Act and without the consent of the Master.
Th.is was sanctioned in
Scoin Trading (Pty)
Ltd v
Bernstein NO
2011 (2) SA 118
(SCA) where the SCA held as follows:
"[23]
Section 35(12)
of the
Administration of Estates Act 66 of 1965
obliges an executor to pay creditors and distribute the estate to its
heirs only once a Liquidation
and
Distribution
Account
has
lain
for
inspection
and
has
been
confirmed by the master. Except for the risk of personal liability
ifhe overpays, it is not unlawful for an executor to pay
a creditor's
claim before the confirmation of such account."
[3]
[41]
The
argument
was that
if
the
executor
can
pay
a creditor's
claim
without
statutory authority to do so under the Act
he can also lodge an interim account without statutory authority.
[42]
It
is indeed so that the Act itself does not confer a general power to
pay debts (at risk of personal liability).
In
terms of the Act, even the release of money and property to provide
for the subsistence of the deceased's family can only
be
done with the consent of the Master.
[4]
[43]
Hofmeyr
and
Paleker
in
the
work
The
Law
of
Succession
in
South
Africa
(2023)
[5]
at p. 14 describes executorship as a
sui
generis
office,
a "special office".
The
learned authors explain further that the functions, duties and
liabilities of an executor is derived from the common law or
as set
out in the Act.
[6]
Thus,
despite the Act, the executor has residual common law powers to
exercise his fiduciary duties to act in the best interests
of the
estate and the beneficiaries.
For
instance, it cannot be expected of the executor to obtain a directive
from the Master to ensure that payment is made to insure
properties
or to pay other undisputed claims where it is clearly in the best
interests of the estate to do so.
[44]
But
such residual common law powers would not in my view extend to the
lodgement of an interim account outside of the provisions
of s 35(2)
read with Regulation 5(4)
[7]
.
The Act, in my view, "covers the field" on the issue of
interim accounts.
[45]
The Act itself does not empower the
executor to lodge an interim account unless s 35(2) applies.
As was contended by Mr Kantor:
45.1.
Section 35(2) of the Act confers a
discretionary power ("may") upon the Master to direct the
executor to prepare an interim
account, it does not empower the
executor in any respect in the absence of such directive.
45.2.
When it comes to interim payments and
distributions, the Master must exercise this power when it is in her
"opinion" that
an interim account is necessary. Plainly,
the qualification that the power falls within the "opinion"
of the Master must
be construed to confer a discretion to the Master
and not to the executor. No wording ins 35(2) of Act suggests that a
broad power
has been conferred on an executor to prepare an interim
account on her own accord.
[46]
On
the facts of this case, a jurisdictional fact had not been satisfied
by the executor.
He
did not obtain a directive from the Master to file the Disputed
(interim) Account. Accordingly, the Disputed Account did not
comply
with the Act.
To
the extent that a legal label needs to be found for finding the
Disputed Account invalid, it would be the principle of legality,

which form part of the Rule of law (s 1 of the Constitution of the
Republic of South Africa).
The
exercise of power must comply with the law and be sourced in the
law.
[8]
[47]
For these
reasons
the costs of
the
main
application
should
be
borne by the executor.
The costs of two
counsel is justified.
The
counter-claim
[48]
The applicants opposed the
counterapplication and filed an answer to it.
Essentially, they denied that the executor
needed to access the bank accounts in Switzerland to prepare the
Final Account because
a certain Mr Zimmerman had advised the executor
what the balances in the accounts were, and he could therefore
account for them.
[49]
The executor filed a brief reply
in the counterapplication.
He made the point that simply being told
what the accounts' balances were does not enable him to comply with
his duties as executor.
[50]
In my view executor's decision to bring the
counter-application was justified.
As
he explained, the applicants wrote to the Swiss banks disputing his
appointment as executor.
The
result was that the accounts held at those Swiss banks in the name of
the deceased were frozen, and he was unable to take any
further steps
with regard to the accounts.
The
executor explained further that he has received advice to the effect
that in order to unfreeze the accounts, the applicants
(and third respondent)
would need to
sign
declarations.
The
applicants did not deny any of this.
Their
point was that the executor did not need control over the Swiss
accounts to finalise the L&D account.
[51]
Whether
or not access was necessary to finalise the L&D account cannot
be
decisive. In terms of the Act, the executor
must
obtain
custody and control of
all
the
property in the estate.
[9]
He
or she is obliged to take control of the assets, preserve them and
administer and wind-up the estate as speedily as possible.
[10]
That
being so, the executor" was duty-bound
to
take control of the Swiss bank accounts.
It
is not satisfactory for him to be told that he can rely on a
statement by a third party with respect to the balances of the
accounts.
He
is duty-bound
to
take control of the assets, and has the right
to
do so.
[52]
The applicants' refusal to provide the
declarations prevented the executor from taking control of the Swiss
bank accounts.
This
necessitated the counter-application and the costs must accordingly
follow.
[53]
Again, it is significant that the
applicants provided the necessary declarations very shortly before
the hearing.
There
was no proper explanation as to why this was not done earlier.
[54]
For these reasons the
costs of the
counter-application should be borne by the
applicants.
Order
[55]
In the result, I make the following orders:
55.1.
The application for the declaratory
relief sought in paragraph 1 of the notice
of motion is dismissed.
55.2.
The second respondent shall pay the costs
of the entire main application, including the application for the
relief sought in paragraph
1 of the notice of motion and including
the costs of two counsel.
55.3.
The applicants shall pay the costs of the
counter-application.
H
J DE WAAL AJ
Acting
Judge of the High Court
Cape
Town
10
November 2023
APPEARANCES
Applicant's
counsel:
A
Kantor SC and N Mauritz.
Applicant's
attorneys:
Cliffe
Dekker Hofmeyr lnc.
Second
Respondent's counsel:
Unknown.
The other respondents have not opposed.
Second
Respondent's attorneys:
Bisset
Boehmke McBlain
[1]
Normandien
at
para 50:
"[50] Moreover,
this court bas proffered further factors that ought to be considered
when determining whether it is in the
interests of justice to hear a
moot matter. These include -"'
(a)
whether any order which it may make will
have some practical effect either on the parties or on others;
(b)
the nature and extent of the practical
effect that any possible order might have;
(c)
the importance of the issue;
(d)
the complexity of the issue;
(e)
the fullness or otherwise of the arguments
advanced; and
(f)
resolving the disputes between different
courts
(g)
[2]
In
Vinpro,
the
Biowatch
principle
was applied to the fundamental
rights
challenge which became moot.
That
principle is not applicable in the present matter as it is
litigation between private parties.
[3]
See,
also, LA Kemick
Administration
of Estates and Drafting of Wills
(4
ed) (2006) at 46:
"normal
procedure is for the executor to pay claims as soon as he has
sufficient funds".
[4]
See
section 26(1A) of the Act.
[5]
A
revision of Corbett, Hofmeyr and Kahn
The
Law of Succession in South Africa
(2001).
[6]
This
would include payments and distributions "at
risk".
See
p.18 of Hofmeyr and Paleker.
[7]
Administration
of Estates: Regulations, GN R473 of 1972 published in GG 3425 of 24
March 1972.
This
regulation draws a distinction between the contents of final and
interim accounts.
It
provides that the account referred to in s 35(2) of the Act shall,
in so far as it is appropriate, contain the particulars
referred to
in subregulation (1)
and
(2).
No
provision
is
made for interim account falling outside of s 35(2).
[8]
Minister
for Justice & Constitutional Development
v
Chanco
20
10
(4) SA 82
(CC) para 27.
[9]
See
section 26(1) of the Act:
"Immediately
after letters of executorship have been granted to him an executor
shall take into his custody or
under
bis control
all
the property, books and
documents in
the
estate and
not
in
the
possession of any person who claims to
be
entitled to
retain
it under any contract, right of retention or attachment: ·
[10]
Kisten
and Another v Moodley and Another
(13043/2012)
[2016] ZAKZDHC 3
1
(22
July 2016) para 25:
·'As executor, be
is required in exercising his fiduciary duty, to act in the best
interests of the estate and the beneficiaries.
He is obliged to take
control of the assets, preserve them and administer and wind up the
estate as speedily as possible. 1n
the event of conflict between the
beneficiaries, he can act in terms of
s 47
of the
Administration of
Estates Act and
must seek direction and approval from the Master in
the event of the beneficiaries not being in agreement.