De Wet v Master of the Eastern Cape High Court, Grahamstown and Others (3658/2011) [2013] ZAECGHC 13 (21 February 2013)

IN THE HIGH COURT OF SOUTH AFRICA (EASTERN CAPE, GRAHAMSTOWN)

CASE NO: 3658/2011

Date Heard: 29 November 2012 Date Delivered: 21 February 2013

In the matter between:

HENDRIK DE WET

Applicant

and

MASTER OF THE EASTERN CAPE HIGH COURT, GRAHAMSTOWN

SONJA DE WET NO

PIETER JACOBUS DE WET NO

1st Respondent

2nd Respondent

3rd Respondent J U D G M E N T

GOOSEN, J:

This is an application to review and set aside the first respondent’s decision to dismiss an objection to the liquidation and distribution account in the estate of the late Pieter Jacobus De Wet.

The applicant is the son of the late Pieter Jacobus De Wet. The deceased executed a will. In the will provision is made for a bequest to the applicant in the amount of R262,500.00. In the liquidation and distribution account the executor made provision for the collection, from the applicant, of an amount of R262,500.00 being the amount of a loan made to the applicant by the deceased during his lifetime. The applicant filed an objection to the liquidation and distribution account relying upon an alleged deed of donation executed by the deceased on 13 February 2003, some years prior to the execution of the deceased’s will. On 7 October 2011 the Master dismissed the objection on the ground that the deed of donation was subject to a condition that the applicant pays donation tax when demanded. Said condition was never fulfilled. The first respondent also came to the conclusion that the bequests made by the deceased, including that to the applicant, were made to cover the amounts loaned to the beneficiaries of such bequests.

This application was launched on 8 November 2011. In the original notice of motion Attorney Laing was cited, incorrectly, as the executor of the deceased estate. On 23 November 2011 a notice of withdrawal of the application against Attorney Laing was filed. An amended notice of motion was issued by the registrar on 24 May 2012 and same was served on the second and third respondents on the 14th of June 2012.

The second and third respondents oppose the application on the basis, inter alia, that it was not timeously issued in terms of section 35 (10) of the Administration of Estates Act, Act 66 of 1965. It is further

contended that even if the content of the applicant’s replying affidavit is to be construed, and treated, as an application for condonation, such condonation ought not to be granted. The second and third respondents also oppose the application upon substantive grounds, alleging that the alleged deed of donation does not amount to a donation and that the circumstances in which it was executed indicate that it was not a donation. It is also contended that the circumstances in which the deceased’s will was executed point to the bequest being made to extinguish a debt due by the applicant to the deceased.

Condonation.

It is common cause that the applicant was advised, by way of the first respondent’s decision on the objection to the liquidation and distribution account, of the period within which a review of the said decision should be initiated. The first respondent’s decision was issued on 7 October 2011. As indicated, the application was issued on 8 November 2011. It is also common cause that the application was “served” upon Attorney Laing by email and that the papers so “served” were incomplete. In a letter dated 9 November 2011 Attorney Laing informed the applicant’s attorney that he was in fact not the executor, but that the second and third respondents were. On 23 November 2011 the applicant filed a notice of withdrawal of the application against Attorney Laing (then cited as the second respondent). Subsequent hereto nothing further was heard from the applicant’s attorney. An amended notice of motion, now citing the second and third respondents, was issued by the registrar and service of the application was effected on the second and third respondents in June 2012. No formal application for condonation was filed. However, in the applicant’s replying affidavit the applicant indicated that condonation was sought.

In Reed & Others v The Master, Eastern Cape & Others [2005] 2 All SA 429 (E) Plasket J found that the mere fact that an application is launched more than 30 days after the impugned decision is communicated to the applicants, and no application for an extension of time was made before the expiry of that period, does not preclude them from applying for relief. In that matter the application was launched some 5 weeks after the expiry of the period. An application for condonation was made in which an explanation for the delay was furnished. Although the court accepted that the reasons for the delay could have been set out in greater detail it was accepted as reasonable and, in the light of the fact that the respondents could point to no prejudice, condonation was granted.

In this matter it was argued that the initial application in which Attorney Laing was wrongly cited amounted to an abortive application. The true application it was suggested was only launched in May 2012, almost 6 months after the first respondent’s decision was communicated to the applicant. Unlike the Reed matter the second and third respondents contended for significant prejudice in this matter. The prejudice, it was contended, arises because following the applicant’s withdrawal of the application against Attorney Laing on 23 November 2011 nothing further was heard from the applicant. On 8 February 2012 the first respondent addressed a letter to the applicant’s attorneys indicating that the 30 day period had elapsed, that the beneficiaries were being prejudiced by the delay in finalising the estate, and that unless the first respondent heard from the applicant’s attorneys within a period of 14 days, permission would be given to the first and second respondents to proceed with the finalisation of the estate. Nothing was heard from the applicant’s attorneys and on 27 February 2012 the first respondent gave permission to the first and second respondent’s to proceed to finalisation of the estate in accordance with the liquidation and distribution account. This occurred. In these circumstances, it was argued, significant prejudice would be caused to the first and second respondents as well as the heirs of the estate in the event that condonation is now granted because the estate has in fact been finalised in accordance with the terms of the liquidation and distribution account.

In the applicant’s supplementary affidavit dated 8 May 2012 and filed pursuant to the amended notice of motion citing the first and second respondents, the applicant states that “the information pertaining to the executors in the matter was incorrectly cited in the application. It has now come to our knowledge that the following are the executors in the estate ...” It is further alleged that the “reference to ‘executor’ in the founding affidavit refers to the executors acting through the attorney, Mr Laing”.

This allegation is patently not correct. The identity of the executors was disclosed to the applicant’s attorney on 9 November 2011 in a letter addressed to her by Attorney Laing. This disclosure resulted in the withdrawal of the application against Attorney Laing on 21 November 2011. In an effort to avoid the charge of misleading the court the applicant’s attorney states in an affidavit filed in reply that the allegation “was not meant to convey ... that it only came to applicant’s notice when he deposed to the supplementary affidavit ... it was merely meant to convey that it came to applicant’s knowledge after the founding affidavit had been made ...”

The applicant’s request for condonation, such as it is set out in the replying affidavits, is premised on the assumption that the application was only filed one day late and that this ought to be condoned because the failure to comply was as a result of the attorney, a relatively inexperienced attorney, having made an error in calculation of the time period. What confuses the issue somewhat is the repeated assertion by the attorney that the application was in fact not late since the first respondent’s decision was only brought to her attention some time after the 7th of October 2011 and that it was always her intention to issue the application within the prescribed time period provided for in the Act. What is striking, however, is the paucity of explanation for the delay between 9 November 2011 and 24 May 2012, when the proceedings against the second and third respondents were commenced.

According to the applicant this delay is explained as follows:

“After that application was withdrawn again (sic) Mr Laing there was an issue of costs and we had to make a decision to proceed with the matter or not. Eventually our son and daughter

agreed to pay those wasted costs on our behalf and then it was decided by us as a family that the Master’s decision was so

patently incorrect that we had to proceed despite the risk of further costs. This is the reason why it took so long to eventually serve the application also on the correct executors.”

On the strength of this the applicant’s attorney advances the contention that condonation ought to be granted because the delay is explained by the applicant being in impecunious circumstances. The explanation for the very substantial delay in initiating an application against the second and third respondent does not, however, bear close scrutiny. That is so because the papers disclose that the applicant’s attorney is the applicant’s daughter who has throughout been acting pro bono on behalf of the applicant. Accordingly, costs cannot properly be a consideration in respect of obtaining access to legal services. Whilst I accept that the risk of an adverse cost order may cause a litigant to hesitate initiating legal proceedings that in itself cannot explain the very lengthy delay in initiating the application against the second and third respondents. I accept that the withdrawal of the application against Attorney Laing would have carried with it certain cost implications for the applicant. Given that the application was withdrawn very shortly after it was initiated, it is highly unlikely that the cost implications would have been of such an order as to explain an almost 6 month delay before further proceeding with the matter. On the papers before me there is in fact no proper explanation for the delay in the effective launch of these proceedings. There is certainly nothing on the papers to deal with the prejudice which has manifestly been caused by the delay.

It follows that there is considerable force in the submissions made by counsel for second and third respondents that the applicant has not made out a proper case for condonation of the delay in prosecuting this application against the second and third respondents. Having said this I do not consider that the issues in this matter are to be resolved on the basis of non-compliance with the time limits provided by section 35 (10) of the Act. That is so because I accept that the launching of the application on 8 November 2011 is, on anyone’s version, only one day outside of the prescribed time period provided for in section 35 (10). Although that application incorrectly cited Attorney Laing as the second respondent and as the executor of the estate, it must be accepted that the launch of the application, even if considered as putative, reflected an intention on the part of the applicant to exercise his rights to seek judicial review of the first respondent’s decision. It must also be accepted that the applicant’s attorney’s handling of the matter was tainted by an apparent lack of experience. Not only does she admit to a misreading of the Act, she also made the fatal error of citing a wrong party as the executor of the deceased estate when even a cursory reading of the deceased’s will would have established the identity of the executors. Similarly a reading of the liquidation and distribution account, against which objection had been lodged, reflects a certificate signed by the second and third respondents as executors of the deceased estate. The unfortunate handling of the matter ought not to prejudice the applicant in advancing his case before this court.

Section 35 (10) provides that:

“Any person aggrieved by any such direction of the Master or by a refusal of the Master to sustain an objection so lodged, may apply by motion to the court within 30 days after the date of such direction or refusal or within such further period as the court may allow, for an order to set aside the Master’s decision and the court may make such order as it may think fit.”

The application contemplated in the section is one commenced on notice and which seeks to have the decision of the Master set aside. Such an application was commenced on 8 November 2011. It was not withdrawn. It is this application, with the second and third respondents effectively joined, which now serves before me. In my view although the second and third respondents only became parties to the application in May 2012 by way of filing an amended notice of motion, the fact remains that the original application, albeit in some respects defective, was launched in November 2011. I shall accordingly treat the matter as one launched then and to the extent necessary condone the non-compliance with section 35 (10). Insofar as the prejudice arising from the delay in the proper prosecution of the application is concerned, that is an issue which may have a bearing upon the relief, if any, which may be granted. For reasons which will become apparent, it is, however, unnecessary to deal with this aspect.

That brings me to the merits of the application. The applicant’s challenge to the first respondent’s decision is founded on an alleged deed of donation entered into by the deceased in 2003. The document provides as follows:

“Hiermee sertifiseer ek dat my seun, Hendrik Nicolaas De Wet, a bedrag van R262,500.00 (TWEE HONDERD TWEE EN SESTIG DUISEND, FYF HONDERD RAND) aan my verskuldig is ingevolge verbandakte nommer B83839/94 wat hy in my guns gepaseer het.

Ek sertifiseer verder dat ek bereid is om hierdie skuld aan hom te skenk mits hy skriftlik onderneem om alle en enige skenkings belastings wat uit so daan geskenking betaalbaar mag wees, op aanvraag te betaal.”

It is apparent from the document that the applicant was, at the time, indebted to the deceased in an amount of R262,500.00. It is also apparent that the deceased then recorded an intention to donate the said sum to the applicant subject to the condition that the applicant would undertake in writing to pay any donations taxed arising from a donation.

It is common cause that the applicant did not, during the lifetime of the deceased, fulfil the condition stipulated and it is also common cause that the deceased did not execute any further deed of donation in this respect.

An agreement to donate must, as with all contracts, comply with the requirements for the formation of a contract. This requires therefore, that the beneficiary must accept the promise. In the event that there is no acceptance, no contract comes into existence. (See Wille’s Principles of South African Law, 9th Ed, pg 1032).

A donation, however, lapses upon the death of the donor. In De Kock v Executors of Van De Wall & Others 1899 SC 463, the court, dealing with the issue of an alleged donation by way of deposit made during the deceased’s lifetime, said the following:

Per De Villiers C.J. (at 469):

“One of the necessary ingredients of a valid donation is acceptance by the donee or some one duly authorised on his behalf. According to Voet (39, 5, 13 in fine) an unauthorised acceptance by a notary or other similar official would bind the donor upon such acceptance being subsequently ratified by the donee. It is not quite clear whether such ratification would, in Voet’s opinion, be sufficient if effected after the death of the donor. In a previous passage of the same section he had explained that it was necessary that the acceptance should take place during the lifetime of the donor. This is clearly laid down in the Digest (39, 5, 2, sect. 6), where it is said that if a person, with the intention of making a donation to me, gives money to another to bring to me and dies before the messenger reaches me, the money does not become my property because the donation has not been completed.”

And per Maasdorp J. (at 472):

“It was also contended that there had been some sort of acceptance by the minors themselves, but there was no evidence of that either, or that the minors knew their grandfather intended to make a gift to them. It is necessary to have a concurrence of intention on the party of the donor and donee, and certainly after the death of the donor there was no longer an opportunity of such consensus.”

As already indicated, there was no acceptance of the donation during the deceased’s lifetime and certainly no fulfilment of the stipulated condition. It was sought to be suggested that the applicant’s tender of payment of the donations tax, made in the papers, somehow constitutes acceptance and that the donation is therefore enforceable against the executors of the deceased’s estate. On the strength of the authority cited that cannot be so.

In dealing with the objection, the first respondent came to the conclusion that it was clear from the document that there was a condition attached to the so-called donation and that the condition was never fulfilled. In respect of the further contention, namely that it was the intention of the testator to bequeath the amounts which are set out in clauses 4 – 7 of the Will (which included the bequest of an amount of R262,500.00 to the applicant) the first respondent came to the conclusion that the deceased made the bequest to cover the amount of the loan due to the beneficiaries of such bequests.

The first respondent’s treatment of the “donation” cannot be faulted. The plain wording of the document upon which the applicant relies does not reflect a donation. It reflects an expressed intention to make a donation provided that certain stipulated conditions are met. The applicant sought to suggest that the deed of donation was in fact an outright donation. In this regard he stated that it had arisen in the context of the purchase by the deceased of a farm which the applicant had previously purchased from the deceased. The donation, it was alleged, was to extinguish a bond liability in respect of the farm.

In dealing with these allegations Attorney Laing deposed to an affidavit setting out the history of the transaction relating to the purchase of the farm, having been involved then as the deceased’s attorney. Laing pointed out that the farm was not purchased by the deceased but that it was purchased by a close corporation. The “deed of donation” represented no more than the deceased indicating his intention to resolve any outstanding indebtedness of the applicant to him by way of a testamentary disposition. The “deed of donation” was entered into in order to give the applicant the assurance that the deceased would honour his testamentary intention. It is however unnecessary to make findings as to these background facts.

I am satisfied that the first respondent was correct in construing the deed of donation in the manner in which he did and there is nothing on the papers to suggest that he was wrong in this regard. The first respondent then gave effect to the terms of the Will. In this regard it is apposite to note that clause 16.1 of the Will provides as follows:

“Die bogemelde bemakings is egter onderhewig aan die volgende spesiaale voorwardes:

16.6 Ek bepaal hiermee uitdruklik dat enige bedrag wat ten tye van my afsterwe aan my verskuldig is deur enige van my voormelde kinders of enige van die voormelde trusts of die voormelde beslote korporasie, deur die betrokke kind of trust of beslote korporasie aan my boedel terug betaal moet word.”

Having accepted, quite correctly, that the applicant was indebted to the deceased in a sum of R262,500.00 the first respondent construed the bequest made by the deceased to the applicant of R262,500.00 as a bequest intended to extinguish the applicant’s indebtedness to the deceased at the time of his death.

I need not go as far as that, nor need I comment on the particular interpretation of the deceased’s testamentary disposition. The fact of the matter is that the first respondent accepted, on the evidence before him, that the liquidation and distribution account was correctly drawn to reflect an indebtedness due to the deceased’s estate. In that respect the first respondent’s decision cannot be faulted. In the circumstances the first respondent, quite correctly, dismissed the applicant’s objection to the liquidation and distribution account. It follows therefore that the application cannot succeed.

I make the following order:

The application is dismissed with costs.

__________________________

G GOOSEN

JUDGE OF THE HIGH COURT

APPEARANCES:

FOR THE APPLICANT: Adv. N Schoeman, instructed by Coltman Hilpert & Associates

FOR THE 2ND & 3RD RESPONDENTS: Adv. R Brooks, instructed by Wheeldon Rushmere & Cole