Van Rensburg N.O and Others v Master of the High Court, Kimberly Northern Cape Province and Another (448/04) [2005] ZANCHC 105 (21 October 2005)

Reportable: Yes / No

Circulate to Judges: Yes / No

Circulate to Magistrates: Yes / No

IN THE HIGH COURT

OF SOUTH AFRICA

(Northern Cape Division)

Case no: 448\04

Date heard: 2005\09\09

Date delivered: 2005\10\21

In the matter of:

JACOBUS HENDRIKUS JANSE VAN RENSBURG N.O. 1ST

APPLICANT

in his capacity as final trustee in the Insolvent Estate of

CORNELIUS

JOHANNES BARNARD

NEVILLE CLOETE N.O. 2ND

APPLICANT

ABRAHAM JOHANNES SWANEPOEL N.O. 3RD

APPLICANT

versus

THE MASTER OF THE HIGH COURT, 1ST

RESPONDENT

KIMBERLEY NORTHERN CAPE DIVISION

MARTHINUS CHRISTOFFEL BARNARD N.O. 2ND

RESPONDENT

in his capacity as Executor in the deceased estate of

late MARIETJIE BARNARD (Master’s ref.: 87/2001)

Coram:

MAJIEDT J et

WILLIAMS

J

JUDGEMENT

MAJIEDT J:

In this matter the applicants, who are the joint trustees in the insolvent estate of Cornelius Johannes Barnard (“the insolvent”), seek the reviewing, correcting and setting aside of certain decisions and/or rulings by the first respondent, the Master of this Court.

The second respondent is cited in his capacity as the executor of the deceased estate of the insolvent’s late spouse, Ms Marietjie Barnard. The insolvent and Ms Marietjie Barnard, to whom I shall henceforth refer to as “the deceased”, were married to each other in community of property. They executed a joint last will and testament during November 1999 and the deceased passed away on 23 December 2000. Although the insolvent was initially appointed as executor in the deceased estate, this appointment was revoked due to his subsequent sequestration on 12 October 2001. In his stead, the second respondent, who is the son of the deceased and the insolvent, was appointed as executor in the deceased estate. The insolvent and the deceased lived in the Vryburg district and they had for many years carried on the business of a fuel distribution depot under the name of “Vryburg Truck Inn”. The insolvent had concluded a fuel distribution agreement with BP. He had distributed fuel and related products in terms of this agreement on behalf of BP under Vryburg Truck Inn’s business for some 10 years prior to his sequestration.

On 29 October 2001 the insolvent executed a document named and styled a “repudiasie sertifikaat”. In terms thereof the insolvent declared that he had been fully advised of his right to adiate or repudiate the benefits due to him under the joint will as well as the implications thereof and that he understood fully these aforementioned two concepts. The insolvent furthermore declared therein that he had of his own free will elected to repudiate the benefits that would have accrued to him in terms of the joint will between him and the deceased.

The aforementioned purported repudiation of the benefits accruing to the insolvent under the deceased estate of his late wife forms the crux of the dispute between the parties.

In essence, the applicants seek to have the Master’s decision of 27 February 2003, in which he directed the applicants to amend the first liquidation and distribution account in the estate of the insolvent so as to exclude therefrom the assets of the deceased estate, reviewed, corrected and set aside. They also seek to have set aside the Master’s further directive to them to prepare and submit a second liquidation and distribution account in the insolvent estate in order to deal with the assets to which the insolvent would be entitled out of the deceased estate as set forth supra. The applicants also seek a setting aside of the Master’s decision of 27 February 2003 whereby the Master had accepted the repudiation by the insolvent referred to hereinbefore. The Master has furnished a full report in this matter and he abides the decision of this Court. The second respondent opposes the application.

Before I turn to the merits of the matter there are certain preliminary aspects which require consideration. On behalf of the second respondent, Mr. Danzfuss has argued strenuously that there has firstly been a fatal non-joinder of interested parties and also that the delay in bringing this application warrants the summary dismissal of the application on that ground alone. The second respondent has also objected to inadmissible hearsay evidence in the affidavits of the applicants, as well as references to evidence and judgements in other matters. I shall deal with these matters separately in this judgement.

Mr. Daniels, who appeared for the applicants, has very fairly conceded right at the outset that the record of the interrogation of the insolvent in the insolvency proceedings is inadmissible herein and so too, the judgement of Steenkamp J (as he then was) in the sequestration application in this Court which had been opposed by the insolvent. It seems to me that the latter concession automatically includes any evidence given by the insolvent on affidavit in opposing the aforementioned sequestration application.

In the light of the aforementioned concessions, I do not deem it necessary to deal with these matters any further, save to make the following succinct points:

a) In terms of the well-known rule in Hollingham v Hewthorn & Co Ltd 1943(2) ALL ER 35, the findings and judgements of another court cannot be used against a litigant in subsequent proceedings against him.

b) In terms of the common law the general rule is that evidence adduced by a person in legal proceedings cannot be used in subsequent proceedings as evidence against himself. Such evidence in earlier proceedings can only be used for cross-examination purposes.

c) Consequently the evidence of the insolvent in both the insolvency interrogation proceedings (adduced orally) and in the sequestration application given on affidavit, cannot be used as evidence in these proceedings as the applicants originally sought to do. It can not even be used to show discrepancies in his version, simply because there is no version emanating from the insolvent himself herein, since he had not been cited as a respondent.

d) In any event, the averments made on behalf of the applicants in these proceedings as to what the insolvent had testified previously amounts to hearsay and is consequently inadmissible.

There is much to be said for the contentions advanced by Mr. Danzfuss for the second respondent that certain parties with a direct and material interest in these proceedings had not been joined. So, for example, the insolvent himself as well as the intestate beneficiaries under the joint last will and testament may well have a direct and material interest and should have been cited

accordingly. Were the contentions advanced by the applicants to be upheld, namely that the insolvent has in fact through his conduct adiated to the benefits under the joint last will and testament, it would mean that the rules of intestate succession would then become applicable. The deceased’s direct descendants would consequently become intestate heirs in the circumstances. I, am however, prepared to proceed in this judgement on the basis that the matter can be heard in the absence of these potentially interested parties. I do so, in the interests of justice – I think it is imperative in this matter that the issues be fully ventilated and adjudicated. I am also mindful of the fact that, contrary to what has been contended for the applicants by Mr Daniels, the second respondent qua executor in the deceased estate, cannot in law represent the interests of any heirs, be they testate or intestate heirs. The

executor’s functions include inter alia the realisation of all the assets in order to settle all the debts and costs of the estate, to divide the assets amongst the heirs, etc. The executor most certainly does not have the right to take decisions for or to represent the heirs in any legal proceedings. I am not aware of any authority to this effect and none has been referred to by Mr. Daniels.

A matter which deserves serious consideration is the question of the delay. I am of the view that Mr. Danzfuss is correct in his submission that the applicants have completely misconstrued the Master’s decisions which are being sought to be set aside upon review. It is necessary to reproduce herein the Master’s relevant decision in full. It reads as follows:

“Die eerste rekening moet deur die kurators gewysig word om die bates van bestorwe boedel M. Barnard, daaruit weg te laat. Nadat die bestorwe boedel van M. Barnard afgehandel is en die bates wat vir CJ Barnard daaruit toekom deur die eksekuteur aan die kurators oorgedra is, moet die kurators ‘n tweede en finale likwidasie en distribusierekening in insolvente boedel CJ Barnard indien waarin daar gehandel word met die bates wat CJ Barnard uit die bestorwe boedel toekom.”

The aforementioned decision was taken by the Master in response to an objection lodged by certain objectors, namely the insolvent himself and the second respondent. This objection was lodged in terms of the provisions contained in section 111(1) of the Insolvency Act, 24 of 1936 (”the Act”), and was directed against the manner in which the assets from the deceased estate had been dealt with by the applicants in the first liquidation and distribution account in the insolvent estate. The Master’s aforementioned response (quoted in full above) consequently constitutes instructions issued in accordance with the provisions of section 111(2) of the Act. When regard is had to the provisions of section 111(2)(a) of the Act, it is clear that an application may be lodged at court whereby a decision of the Master in terms of section 111(2) may be set aside. Such application must be launched within 14 days of the date of the Master’s instructions. The Act contains no provisions whatsoever for any form of condonation or extension of time for any non-compliance with the aforementioned stipulation.

It is common cause herein that the Master has made his decisions on 27 February 2003. The present application was launched some 14 months subsequent to the aforementioned date.

While it is so that our courts have held that the 14-day term set forth in section 111(2)(a) is not peremptory but directive, condonation of the non-compliance therewith can only be granted if there are satisfactory reasons advanced. The onus in this regard is on the applicant.

See inter alia: Swift Trailer Co (Pty) Ltd v The Master and Others NNO 1983(4) SA 718 (T) at 785 G – 786 E.

See also: Noordwestelike Korporatiewe Landboumaatskappy Beperk v Die Meester en Andere 1982(4) SA486 (NC) at 491 C-D.

As Kirk-Cohen J correctly points out in the Swift Trailer -case, supra, condonation is not granted merely for the asking thereof. Sufficient and acceptable reasons for the delay should be advanced. In the present case the applicants have not advanced a single ground in their founding papers as to why such condonation should be granted. There is merely a bald, unmotivated averment in their replying affidavit that the delay in bringing the application is not unreasonable. This is simply not good enough. It would appear that, as Mr Danzfuss has correctly submitted, the applicants had harboured under the misapprehension that the application only needed to be brought within a reasonable time. It is most certainly not the case here. The Act, in particular section 111(2)(a) thereof, contains a clear stipulation as to the time period that is applicable here.

In any event, even if the alternative approach is to be followed, namely to ascertain whether the application had been brought within a reasonable time, I am of the view that the applicants fail the test dismally. In the leading authority on this aspect, Wolgroeiers Afslaers v Munisipaliteit van Kaapstad 1978(1) SA 13 (A), the following test is laid down in considering whether the application has been brought within a reasonable time:

a) It will be in the applicant’s favour if there had been merely a minimal degree of delay: see 40 D of the aforementioned decision; and

b) The prospects of success if the application is opposed, is an important factor: see 43 H of the above judgement.

In the present matter the application was lodged 14 months after the decision had been taken. As far as the merits of the matter is concerned, I shall deal with same shortly. It is imperative, as was decided in the Wolgroeiers Afslaers-case at 41 E, that there should be finality with regard to judicial and administrative decisions. This is so in the interests of justice. In the present matter the reality is that some 5 years after the deceased’s death and some 4 years after the insolvent’s sequestration, neither the deceased estate nor the insolvent estate have been finalised.

There is a further problem which the applicants face in this regard. Quite apart from the fact that their explanation for the delay is wholly insufficient in my view (they have averred that there had been settlement negotiations and that they had first obtained the opinion of senior counsel before proceeding to launch the application), I am of the view that the applicants also fall foul of the provisions of the Promotion of Administrative Justice Act, 3 of 2000, in terms whereof this application should have been brought within six months (section 7(1) of this Act). It is now settled law that ordinary common law reviews now fall under the provisions contained in the Promotion of Administrative Justice Act and must be adjudged accordingly. This is so, since the aforementioned Act is a product of the Constitution (section 33(3) of the Constitution). Judicial review of the exercise of a public function has been held to be a constitutional matter and should be tested against the Constitution and legislation emanating therefrom.

See in this regard: Pharmaceutical Manufacturers of SA: In re ex parte President of the RSA 2000(2) SA 674 (CC) at 696 B (par 44) and at 698 F-H (par 51).

In the premises, I am of the view that, in the absence of a satisfactory explanation for the long delay in bringing this application, the application should fail on this ground alone. I do, however, deem it necessary to deal with the merits itself in the interests of justice so as to decide the real dispute between the parties.

In instances where there has been massing for joint disposition in accordance with a joint will and testament, the surviving spouse has to exercise an election – he/she may adiate by accepting the benefits (also subject to certain conditions where applicable) or he/she may repudiate such benefits.

See in this regard: Corbett, Hofmeyr and Kahn: THE LAW OF SUCCESSION IN SOUTH AFRICA, 2nd Edition at 17-18.

Adiation as well as repudiation can be express or implied. Repudiation is however not readily inferred from conduct and the Master has a standing rule in his office that repudiation should be in writing. It must be emphasized, however, that this is merely an administrative rule without any binding legal authority.

See generally: Corbett, Hofmeyr & Kahn, op cit at 19.

It has been decided in Wessels No v De Jager en ‘n ander NNO 2000(4) SA 924 (HHA) at 928 F-G that the election to adiate is not a right but a competence which accrues to an insolvent only once he has accepted the benefits. Consequently such competence cannot be exercised by a trustee, since he does not acquire any right to accept benefits on behalf of an heir.

In the present matter therefore the nub of the issue to be decided is whether the insolvent has in fact adiated, because if he has, the applicants would be entitled to include the half undivided share which he had inherited from the deceased in the insolvent estate for distribution amongst the insolvent’s creditors. If, on the other hand, the second respondent’s contentions are upheld, namely that there has in fact been no adiation but a repudiation in terms of the so-called “repudiasie sertifikaat”, then the deceased’s estate as regards her half undivided share of the joint estate must be dealt with in terms of the laws of intestate succession. It is clear that the insolvent’s one half undivided share of the joint estate would vest in the insolvent estate anyway, regardless of whether he had adiated or repudiated. The question therefore merely concerns whether the one half undivided share of the deceased in terms of the joint will and testament must accrue to the insolvent (save for certain jewellery which was bequeathed to the insolvent and deceased’s daughter) or not.

On behalf of the applicants Mr Daniels has contended that the insolvent had in fact adiated to the benefits under the joint will, which adiation is to be inferred from the following:

a) The fact that the insolvent had continued to conduct the business of Vryburg Truck Inn as he had before the deceased’s death;

b) That the business of Vryburg Truck Inn was carried on precisely as before through the fuel distribution agreement with BP;

c) The insolvent had carried on the aforementioned business as if he was the sole proprietor thereof;

d) That the business, in particular the assets thereof, were obviously assets that had previously been assets in the joint estate;

e) During the course of the application for the insolvent’s sequestration, the insolvent had tendered as security for the existing debt which he owed to BP, assets which has previously formed part of the joint estate and which, subsequent to the deceased’s passing away, had formed part of the insolvent’s estate.

f) That the aforementioned tender had not been made by the insolvent in his capacity as the executor of the deceased’s estate and that the tender had included assets which also appeared in the inventory of assets in the deceased estate which had been prepared by the insolvent in his capacity as executor prior to his sequestration.

Mr. Danzfuss has met the aforementioned contentions as follows:

a) He has submitted that the business of Vryburg Truck Inn had always, i.e. even before the death of the deceased, been conducted on behalf of a close corporation known as the Vryburg Truck Inn CC. In this regard he has pointed out that in terms of the opposing affidavit of the second respondent, the deceased and the insolvent had sold the business on 1 April 1998 to the aforementioned close corporation. There is a written agreement of sale dated 12 April 1998 attached to the papers to this effect. The purchase price of R2 435 000.00 has been noted as a loan account which the close corporation owes to the insolvent. This has also been confirmed in a supporting affidavit by an auditor, Mr. Putter. Mr Danzfuss has also pointed to the fact that the inventory in the estate of the deceased shows the members’ interest in Vryburg Trucking CC as an asset in the joint estate. That inventory was signed on 9 January 2001 and, so he contends, is in accordance with the factual situation that the close corporation was running the business and not the insolvent.

b) There is some support to be found for the contentions by Mr Danzfuss ex facie the financial statements of the close corporation which shows the purchase price as a loan by the insolvent to the close corporation.

Even the invoices issued at the time to BP South Africa was issued by the close corporation.

c) Mr. Danzfuss has also submitted that it is overwhelmingly clear that the insolvent could only have made the tender in respect of the assets of the estate in his capacity as executor of the deceased estate.

I am of the view that on the papers before me and on the general probabilities of the case, there is no indication that the insolvent had traded as a sole proprietorship subsequent to his wife’s death. On the contrary, the documentary evidence produced by the second respondent shows that in fact the business had been conducted as Vryburg Truck Inn CC in accordance with the sale agreement of April 1998. Furthermore, in terms of the well established rule contained in Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 (A), in an opposed application as the present one, in case of a genuine dispute of fact the version of the respondent should be accepted, unless it can be said to be palpably false. In the premises, it is clear to me that the applicants’ contentions in this regard cannot be upheld.

It has been emphasized in our law many a time that waiver which is sought to be inferred from conduct must be unequivocal. It must also be clear that such waiver is effected in the full knowledge of one’s rights.

See in this regard: Borstlap v Spangenberg en andere 1974(3) SA 695 (A) at 704 F-H;

Moyce v Estate Taylor 1948(3) SA 22 (A) at 829;

Consol Ltd v Tweejongegezellen (Pty) Ltd 2002(2) SA 580 (C) at 586 C and following.

I am of the view that the position is the same where adiation by conduct is sought to be inferred, as is the case here.

There is nothing in the applicant’s papers, be it in the founding papers or in the replying affidavit, to gainsay the averments by the second respondent that the insolvent had not been aware of his rights until he had been explained during October 2001 by his attorney, Mr Schoon, as to the content and import of those rights. There is consequently in my view no evidence contrary to that of the second respondent which show that the insolvent did in fact know prior to October 2001 that he had an election as to whether to adiate or repudiate regarding the benefits accruing to him under the joint will and testament.

Another important aspect to bear in mind is that the second respondent avers that BP South Africa was not amenable to having the fuel distribution contract transferred into the name of the close corporation. Consequently the business was conducted as before, i.e. that the fuel distribution agreement remained in the name of the insolvent, although it was clear that it was in fact the close corporation doing business. Again there is nothing to gainsay this and on the probabilities I find that this has indeed been the case.

The applicants’ case with regard to this central question of adiation/repudiation is based exclusively on inferences to be drawn from certain facts. On the other hand, the second respondent has made positive averments to support his case that the insolvent had in fact never adiated. Certain of these aspects emanating from the second respondent’s answering affidavit are of considerable importance. I refer inter alia to the following:

a) I have already referred to the fact that a close corporation was established and that the business was sold to the close corporation during April 1998. That was long before the deceased’s death and before the insolvent began encountering financial problems in the business.

b) I have also made reference to the fact that invoices for the business that were issued to BP South Africa were done so in the name of the close corporation.

c) Even invoices that were issued after the sequestration of the insolvent’s estate were made by the applicants themselves (as trustees in the insolvent estate) in the name of the close corporation.

d) The applicants even went as far as to appoint the second respondent as an employee of the Vryburg Truck Inn CC. The inference is inescapable that they had also adopted the attitude that it was in fact the close corporation which was conducting the business.

e) Electronic transfers in respect of payments of creditors of the business were done from the account of the Vryburg Truck Inn CC. This happened at a time when the insolvent still had his own cheque account from which creditors could have been paid if it was in fact he who was conducting the business of the Truck Inn.

From the aforegoing it is in my view abundantly clear that in adopting the approach in the Plascon Evans-case supra, the probabilities favour the version propounded by the second respondent. I consequently find with regard to the central issue for determination on the main merits of this matter, that the second respondent’s version that the insolvent has in fact never adiated is to be preferred to that of the applicants, for the reasons set forth hereinabove.

In the premises the applicants’ application is dismissed with costs.

___

SA MAJIEDT

JUDGE

I concur:

_____

CC

WILLIAMS

ADVOCATE FOR APPLICANTS : ADV AJ DANIELS

ADVOCATE FOR SECOND RESPONDENT : ADV FWA DANZFUSS SC

ATTORNEY FOR APPLICANTS : ELLIOT MARIS WILMANS & HAY

ATTORNEY FOR SECOND RESPONDENT : DUNCAN & ROTHMAN