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IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL LOCAL DIVISION, DURBAN

 

Case No: D12149/2018

 

In the matter between:

 

JUNE THERESA ROSE PEARCE                                                                1^ST APPLICANT

MICHAEL ANTHONY PEARCE N.O.                                                         2^ND APPLICANT

 

And

 

CELESTE ARLENE PEARCE N.O.                                                              1^ST RESPONDENT

MASTER OF THE HIGH COURT                                                                 2^ND RESPONDENT

ORDER

 

It is ordered:

1.          The application is dismissed.

2.          The applicants, jointly and severally, the one paying the others to be absolved , are ordered to pay costs of the application.

 

JUDGMENT

Delivered on:

MNGADI J:

[1]          The applicants seek in terms of s 54(1)(a)(v) of the Administration of Estates Act 66 of 1965 (the Act) the removal of the first respondent as the executrix of the estate late Owen Christopher Pearce (the deceased estate). The first respondent opposes the application. The second respondent, although not participating in the litigation, in his report support the relief sought by the applicants.

[2]          The first applicant is June Theresa Rose Pearce (Mrs Pearce), an adult female and mother of the deceased in the deceased estate. The second applicant is Michael Anthony Pearce in his representative capacity as the executor of the estate late Ray John Pearce, estate number 012753/2018. The first respondent is Celeste Arlene Pearce in her representative capacity as the executrix of the deceased estate, estate number 98454/17. The second respondent is the Master of the High Court, appointed in terms of s 2 of the Act for the area of jurisdiction of KwaZulu-Natal. The first respondent was married in community of property to the deceased. The first applicant and the late Roy John Pearce were the parents of the deceased.

[3]          The first applicant deposed to the affidavit in support of the application. She states that the application to remove the first respondent as executrix is made in terms of s 36(1), alternatively s 54(1 )(a)(v) of the Act because she failed to perform her duties as set out in s 35 of the Act. She states that she and her late husband were married to each other in community of property. Their son, the deceased, was married in' community of property to the first respondent. The deceased passed away on 14 June 2017. On 10 August 2017 the last will and testament of the deceased was lodged with the second respondent. In the will, the deceased appointed the first respondent as the sole beneficiary and nominated her as the executrix. The second respondent accepted the will and appointed the first respondent as the executrix.

[4]          Mrs Pearce states that she and her late husband are creditors of the deceased estate. They have two debts owed to them by the deceased that remain unpaid. The claims relating to the debts were lodged with the first respondent. The first respondent failed to accept the claims. The first debt arose when she and her husband transferred their immovable property to the deceased to enable him to raise capital for a starter-up business by borrowing against the immovable property. The business venture was a logistics company called Rollback King CC (Rollback).The property was free hold when it was transferred to the deceased. The deceased did not pay them anything for the property, although the Deed of Transfer records that the deceased purchased the property for R485 000. The arrangement with the deceased was that once the loan raised against the property had been repaid and the bond over the property cancelled, the property should be retransferred to them. Further, it was agreed that while the deceased was staying on the property, he would pay them a monthly rental of R10 000. She states that from 2009 until his death in 2017, the deceased complied with the terms of the agreement. On the death of the deceased, they became aware that the property was still registered in the name of the deceased, and that it was subject to a bond in favour of Standard Bank with an outstanding balance of R483 129.28. She paid off the arrears on the bond out of her own funds by paying R20 000 on 23 May 2018 and R6 000 on 6 June 2018 as reflected in the attached copies of the deposit slips. The deceased and the first respondent, she states, had been estranged since 2005.

[5]          Mrs Pearce states that the second debt against the deceased estate relates to money lent and advanced by her to the deceased. On 20 September 2016, the deceased borrowed R200 000 from her which was an inheritance from her deceased brother. The deceased wanted the money to effect repairs to one of his trucks. She lent the money to him by giving him a cheque for R80 000, and giving him R120 000 cash. Mrs Pearce furnished a cashed copy of the cheque payable to O C Pearce, and dated 20 September 2016. She states that the agreement was for the deceased to pay her R1 500 per month in lieu of the interest she would have earned on her money until the loan was repaid. The deceased at the time of his death had not paid her any interest and had not made any repayments towards the loan.

[6]          Mrs Pearce states that on 23 March 2018 her attorneys wrote to the first respondent's attorneys lodging the claims against the deceased estate, namely: a claim for R200 000 for money lent and advanced by Mrs Pearce for repairs to a truck engine, and for R1 950 000, being the value of the property, alternatively the return of the property. The first respondent failed to accept both claims.

[7]          In addition, as further grounds for the application, Mrs Pearce states the following. The first respondent failed to comply with the provisions of s 29 of the Act by failing to publish the prescribed notices in the district in which the deceased was resident. She failed to comply with the provisions of s 35(1) of the Act by failing to submit the liquidation and distribution account of the deceased estate. She failed to communicate with the creditors with regard to their claims. She alienated assets of Rollback without reporting to the second respondent, to wit, three vehicles, a Porsche vehicle, a VW truck and a Mercedes Powerline truck. The vehicles are valued at R1,7 million in total.

[8]          Mrs Pearce concluded by stating that the first respondent failed in her duties as executrix and such failure is prejudicing the creditors of the deceased estate. Mrs Pearce states that at her instance, a notice in terms of s 36(1) of the Act was sent to the first respondent on 20 June 2018, except for a very curt reply, a period of 30 days had elapsed and there has been no response to the issues raised in the notice. She, therefore, contends that the first respondent should be ordered to pay the costs de bonis propriis in terms of s 36(2) of the Act.

[9]          Mrs Pearce states that they have not received any response to the following, namely: a request for an update in the winding up of the estate made on 11 January 2017. On 23 March 2018 the claims were lodged. On 4 April 2018, the first respondent was advised that the bond over the property was in arrears. On 4 April 2018 the first respondent was advised that Mrs Pearce's daughter would stay in the apartment on the property, and would pay RS 000 per month, which would be used for the monthly bond repayments. Mrs Pearce states that on 28 May 2018 the first respondent accepted that her daughter may occupy the apartment but had to pay R6 000 per month. On 10 July 2018 the first respondent advised her that there were no supporting documents to her claims but that the claim documents had been forwarded to the second respondent for his instructions, and that a notice to vacate the property had been served on her daughter. Mrs Pearce contends that the correspondence shows that the first respondent is not interested in properly assessing the claims against the deceased estate.

[10]       The first respondent deposed to the answering affidavit opposing the application. She denies that there is a just cause for her removal as executrix of the deceased estate. She denies both claims lodged by Mrs Pearce. She also denies that she was ever estranged from the deceased. She states that Mrs Pearce is 75 years old. She suffers from cancer, which resulted in her undergoing a mastectomy. It has resulted in her being frail.

[11]       The first respondent states that Mrs Pearce never lent to the deceased a sum of R200 000 or any amount. She knows that the deceased did not owe Mrs Pearce any money and that Rollback did not owe Mrs Pearce R200 000. The deceased was the sole member of Rollback, the entity that conducted the towing business. Rollback owned the trucks. It was the responsibility of Rollback to effect repairs to its trucks. Mrs Pearce, except for a copy of the cheque for R80 000 belatedly produced, has produced no other documents relating the existence of the alleged debt.

[12]       The first respondent states that it is contradictory and preposterous for Mrs Pearce to say that the immovable property was unlawfully transferred into the name of the deceased. The property is divided into two three-bedroom apartments. She, the deceased, and their two children lived in one apartment. Mrs Pearce and her husband lived in the other apartment. The deceased, herself, Mrs Pearce and her late husband all agreed, relating to the purchase of the property, as follows. Her deceased husband and herself would purchase the property for R485 000 as reflected in the Deeds Registry's extract and copy of the Deed of Transfer. Mrs Pearce and her late husband be granted a life usufruct over the property. The deceased was to pay R11 000 per month towards paying off the purchase price from the date of purchase of the property on May 2007. She states that the deceased indeed commenced paying R11 000 per month until June 2017 when he passed away. The deceased secured payment of the purchase price by taking out a life cover in terms of which Mrs Pearce and her late husband were the nominated beneficiaries. The said insurance policy paid out on 4 August 2017, of which R220 857 was paid to Mrs Pearce and R220 857 to the late Mr Pearce.

[13]       The first respondent states that she has carefully investigated the claims made by Mrs Pearce. She advised Mrs Pearce that proof of the claims was required. Her children are still at school and they are dependent on her for maintenance. The property is the main asset in the estate of the deceased. She believes that her deceased husband's siblings are behind the claims lodged by Mrs Pearce. The relationship between her and them is strained since her remarriage. The animosity has caused her to move out of the property with the children. Her sister-in-law broke into the property and is staying in the property, and using their furniture and other possessions without her permission.

[14]       The first respondent states that the liquidation and distribution account of the deceased estate was prepared and lodged on 31 October 2018. The second respondent raised some queries against the account. One query relates to the outcome of these proceedings. It indicates that the second respondent would not approve the liquidation and distribution account until he had considered the outcome of these proceedings. She states that she has not been dilatory in causing the liquidation and distribution account to be finalized.

[15]       The first respondent states that the section 29 notice in terms of the Act was published in The Post newspaper on 29 November 2017, and in the Government Gazette on 1 December 2017. The relevant tear sheets are attached to the affidavit. She states that it is evident that she has not failed in her duties as executrix.

[16]       The first respondent in the answering affidavit denies that the applicants are creditors of the deceased estate. She states that she tried to operate Rollback to generate income for herself and her children. The debtors did not pay their debts, where after his business experienced cash flow shortage and closed down. The paying off of debts of the business and selling its assets to pay its debts had nothing to do with the administration of the deceased estate.

[17]       The first respondent states that it was never agreed that the property would be returned to the applicants. No such agreement was reduced into writing. She was married to the deceased in community of property, and she would have had to be part of such an agreement. If the arrangement was to return the property to the applicants, there would have been no need for a life usufruct to be registered against the Deed of Transfer of the property in favour of the applicants. She states that the applicants transferred the property to her and the deceased in terms of a purchase and sale agreement. The claim by the applicants that they only found out after the death of the deceased that the property had not been retransferred to them is outrageous because they knew that they had not signed any transfer documents. She states that the bond on the property fell into arrears since she had no income and the deceased estate has not been finalized. Mrs Pearce's daughter failed to pay rental for staying on the property, and that she claimed the rent. She states that there is no proof of the withdrawal of cash in the sum of R120 000 by the first applicant. The deceased purchased for the first applicant a Hyundai 110 motor vehicle as set off for the cashed cheque of R80 000. There was no agreement to pay R1 500 per month in lieu of interest, and the deceased accordingly never paid any amount.

[18]       The first respondent states that she could not have been requested to give an update on the winding up the estate on 11 January 2017 , as the deceased had died on 6 June 2017 . She states that some annexures referred to in the founding affidavit were not attached or something else was attached in their place. The first applicant intercepted her mail and she had the audacity to attach to her founding affidavit some of the intercepted mail. The first applicant's children, in the presence of the first applicant whilst the deceased was dying and soon after he died, screamed at her demanding the monthly payments of R11 000.

[19]       In the replying affidavit the first applicant points out that in the liquidation and distribution account , the immovable property is allocated a market value of R495 000 whereas a valuation done for her by an estate agent gives a valuation of R1 950 000. Further, she states that the first respondent has in the liquidation and distribution account not accounted for the sale of motor vehicles, and the assets of Rollback. In argument, the applicants' counsel submits that there is no evidence of deliberate wrongdoing by the first respondent. However, the issue relating to the valuation of the immovable property, the non-accounting for the deceased's interest in Rollback in the liquidation and distribution account, together with the Master's support for the relief, justify the granting of the order removing the first respondent as the executrix of the deceased estate. Firstly, it is correct that the second respondent in his report dated 2 January 2019, attached to the founding affidavit, states that the removal of the first respondent as the executrix of the deceased estate is supported by the Master as the estate has not been finalized to date. In my view, it is clear that the endorsement is based on one specified reason, namely: that the administration of the deceased has not been finalized. However, the report is dated 2 January 2019, and it is admitted that the liquidation and distribution account was lodged during October 2018. The Master raised, as one of the queries, the outcome of these proceedings. The first respondent was not in a position to speed up the process of litigation. As a result, the Master blames the first respondent for a delay in the process for which the first respondent is not responsible. In my view, the Master's view is irrational and falls not to be taken into consideration.

[20]       Counsel's other submission is based on issues that do not form part of the applicants' averments in the founding affidavit. It is incumbent on an applicant, except in exceptional circumstances, to make out a case for relief in the founding affidavit. It is improper to attempt to do so in the replying affidavit without leave of the court or without supplementing the founding affidavit. See Poseidon Ships Agencies (Ply ) Ltd v African Coaling and Exporting Co (Durban) (Pty) Ltd & another 1980 (1) SA 313 (D) at 316A; Bayat & others v Hansa & another 1955 (3) SA 547 (N) at 553D. The first respondent did not in her answering affidavit deal with the issues because they were not raised in the founding affidavit. It is unfair and prejudicial in considering grounds for the relief against her, issues that were not raised in the founding affidavit.

[21]       Section 14(1) of the Act provides that:

'The Master shall, subject to subsection (2) and sections 16 and 22, on the written application of any person who-

(a) has been nominated as executor by any deceased person by a will which has been registered and accepted in the office of the Master; and

….

grant letters of executorship to such person.'

Section 32 of the Act regulates the procedure to prove disputed claims. It provides that the claimant may be required by the executor to lodge in support of his claim an affidavit setting out the details of the claim. The executor then, with consent of the Master, may require the claimant or any person with material information of the claim to appear before the Master or magistrate to be examined under oath in connection with the claim. At such examination, the person/claimant may be questioned by the magistrate or the Master or by the executor or any heir or any legal representative on behalf of the executor or heir. The applicants have not indicated why they did not request to be given an opportunity to prove their claims in terms of the provisions of s 32 of the Act. Even if the first respondent was reluctant to follow the provisions of s 32 of the Act, the applicants could have requested the Master that the said process be followed to enable them to prove their claims. The s 32 process provides for the determination of the validity of the claims in a fair process before an impartial arbiter.

[22]       The applicants have based the relief they seek in terms of s 54(1) of the Act, which provides:

 

'Removal from office of executor. - (1) An executor may at any time be removed from his office-

(a) by the Court­

(i)         ...

(ii)          if he has at any time been a party to an agreement or arrangement whereby he has undertaken that he will, in his capacity as executor, grant or endeavour to grant to, or obtain or endeavour to obtain for any heir, debtor or creditor of the estate, any benefit to which he is not entitled; or

(iii)         if he has by means of any misrepresentation or any reward or offer of any reward, whether direct or indirect, induced or attempted to induce any person to vote for his recommendation to the Master as executor or to effect or to assist in effecting such recommendation; or

(iv)         if he has accepted or expressed his willingness to accept from any person any benefit whatsoever in consideration of such person being engaged to perform any work on behalf of the estate; or

(v)          if for any other reason the Court is satisfied that it is undesirable that he should act as executor of the estate concerned '

The applicants seeks relief in terms of the provisions of s 54(1)(a)(v). The Act does not indicate what is meant by 'any other reason'. Further, it does not indicate what would render a person appointed as an executor undesirable to act as an executor. The other grounds give an indication of what may fall under 'any other reason' rendering it undesirable for one to act as executor. The applicants' counsel in oral argument submitted that the first respondent, being a sole beneficiary in the deceased estate, placed her in a conflict situation in having to decide whether to accept or reject claims against the deceased estate. The Act does not disqualify a person nominated as the beneficiary from being appointed as an executor. Therefore, in my view, such executor can only be removed if it is demonstrated that he/she was unable to carry out his/her duties as executor and that his/her removal as executor is in the interest of the estate and of the beneficiaries of the deceased estate.

[23]      In my view, where the applicants have a specific remedy in the Act for their complaint against the executor but, for no reason, have not sought that remedy, their complaint is unlikely to be seen as 'any other reason' as stated in s 54(1)(a)(v). The following is trite, namely: a court shall not readily remove the executor. It is not every mistake of fact or law or neglect of duty or inaccuracy that will result in the removal of the executor. It is acts or omissions of a serious nature that endanger the trust property or show want of honesty or proper capacity to execute duties or want of reasonable fidelity that are taken into consideration. See Port Elizabeth Assurance Agency & Trust Co Ltd v Estate Richardson 1965 (2) SA 936 (C) at 940A-E; Reichman v Reichman & others 2012 (4) SA 432 (GSJ) paras 14-19; Van Niekerk v Van Niekerk & another 2011(2) SA 145 (KZP) para 11-12.

[24]      The first respondent is responsible to ensure that the affairs of the deceased estate are properly handled and that the estate is efficiently administered. She carries out her duties under the supervision of the second respondent. Persons having an interest in the deceased estate, both creditors and beneficiaries, expect the executor to safeguard their interest. The applicants cannot avoid proving their alleged claims against the deceased estate by seeking the removal of the first respondent. It is the responsibility of the first respondent and her duty to accept claims against the deceased estate that have been proved. She was entitled to call upon the applicants to furnish documentary proof in support of their alleged claims.

[25]      In terms of the principles set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984) ZASCA 51; [1984) 2 All SA 366 (A) the applicants are only entitled to the relief sought if the averments made by the applicants taken together with those made by the first respondent or not denied by the first respondent justify the granting of the relief. There is a factual dispute relating to the claims between the applicants and the first respondent. The dispute cannot be resolved on the papers. Therefore, there is no indication that the first respondent, out of ulterior motives, refused to accept claims lodged against the deceased estate. In addition, as stated above, the applicants in the absence of other grounds should have pursued the proof of their claims in terms s 14 of the Act.

[26]       In conclusion, the applicants have failed to establish grounds for the relief sought, and the application falls to be refused.

[27]       I, accordingly , make the following order:

1.        The application is dismissed.

2.        The applicants, jointly and severally the one paying the others to be absolved, are ordered to pay costs of the application.

 

 

 

MNGADI J

 

 

 

APPEARANCES

Case Number                                              :           12149/20180

For the Applicants                                       :           Adv. R Grunder

Instructed by                                               :           Felix Attorneys.

Durban

For the first respondents                            :           Adv. J.M. Gates

Instructed by                                              :           Bilaal Bashir Attorneys.

Durban

Matter argued on                                        :           29 July 2020

Judgement delivered on                             :           18 August 2020

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