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IN THE HIGH COURT OF SOUTH AFRICA

[WESTERN CAPE DIVISION, CAPE TOWN]

Case No.: 23395/2016

In the matter between:

SYBRAND SMIT N.O.                                                                                 Applicant

and

FIRSTRAND BANK LIMITED                                                     First Respondent

SHERIFF OF THE HIGH COURT BELLVILLE

NORTH & SOUTH                                                                      Second Respondent

JEROME PETER BOOYSEN                                                      Third Respondent

TINA ADELLE BOOYSEN                                                        Fourth Respondent

MINDE SHAPIRO & SMITH INC.                                               Fifth Respondent

REGISTRAR OF DEEDS, CAPE TOWN                                    Sixth Respondent

MASTER OF THE HIGH COURT, CAPE TOWN               Seventh Respondent

 

In re:

FIRSTRAND BANK LIMITED formerly known as

FIRSTRAND BANK OF SOUTH AFRICA LIMITED                                Plaintiff

and

NABAWIEYA ABRAHAMS N.O. cited in her capacity as

Executrix of the estate late Magrieta Magdalena Loeks                                 Defendant

JUDGMENT delivered 8 FEBRUARY 2018

MEER J.

 

Introduction

[1] The Applicant applies in terms of Rule 42 (1) (a) for the rescission of a default judgment granted on 17 February 2017 against Ms Abrahams N.O. as Defendant, in her capacity as Master’s Representative appointed in terms of Section 18 (3) of the Administration of the Estates Act 66 of 1965 (“the Act”) to the Estate of the late Magrieta Magdalena Loeks (“the Estate”).  The Applicant contends that the judgment was erroneously sought and erroneously granted, being the requirements for a Rule 42 (1) (a) rescission.  The judgment ordered payment of moneys due to the Plaintiff (First Rand Bank), being the First Respondent before me, and execution against a property, known as Erf 24632 Bellville in the City of Cape Town (“the property”), owned by the Estate.  

[2] The First Respondent opposes the application and applies in a counter application for the removal of the Applicant from his office as Master’s Representative in the Estate and for the appointment of a new Master’s Representative.  The Applicant does not oppose the counter application on condition that no cost order is granted against him therein.  For ease of reference I shall refer to the First Respondent as the Plaintiff and to Ms Abrahams, where required, as the Defendant, being their citations in the main action.

[3] The Applicant, an attorney who acts for himself, is the current appointee as Master’s Representative to the Estate.  He is also interested in purchasing the property.  The Applicant contends that the default judgment was erroneously sought and granted, given that at the time of the institution of the action in the main application, Ms Abrahams, the Defendant therein, had resigned as the Master’s Representative to the Estate.

[4] The Plaintiff, in its opposition to the application, contends that even though Ms Abraham’s letter of resignation as the Master’s representative bore the Master’s stamp, at the time default judgment was granted, the records of the Master did not reflect the resignation and the Master had not committed the positive act of releasing her from office, similar to that as is required for the removal of an executor in terms of Section 54 (1) (b) (vi) of the Act, which states:

“54 Removal from office of executor

(1) An executor may at any time be removed from his office-

(a) by the Court-

(i) …

(ii) …

(iii) …

(iv) …

(v) …

(b) by the Master-

(i) …

(ii) …

(iii) …

(iv) …

(v) …

(vi) If he applies in writing to the Master to be released from his office.”

 

Application for Condonation

[5] The Applicant applies for condonation for the late filing of his replying affidavit and heads of argument.  In terms of an order of this Court, granted on 29 September 2017 by agreement between the parties, the Applicant was to have filed his replying affidavit by no later than 13 November 2017 and heads of argument in accordance with the rules and practice directions.  However, when the Court file was allocated to me on Friday 1 December 2017, neither the replying affidavit nor heads of argument had been filed by the Applicant.  This caused me to telephone the Applicant’s counsel, admonish him and state that the matter was not ripe for hearing.  On 4 December 2017, a day before the matter was due to be heard the Applicant’s counsel filed both a replying affidavit and heads of argument.  The replying affidavit seeks condonation.  The explanation given for failing to comply is that this matter slipped the mind of both the Applicant and his counsel, and in addition there was non-compliance due to the Applicant’s ill health and pressures of work.

[6] Whilst human error, ill health and pressures of work of course occur, needless to say the Court and the Plaintiff were inconvenienced by the conduct of the Applicant.  The Plaintiff understandably wanted the application heard, as it would be prejudiced by a postponement to the next available date on the semi urgent roll - being, I am informed, in May 2018.  The property has been sold in execution pursuant to the default judgment and the Plaintiff no doubt wants to effect transfer.  In the normal course, given the state of the file when it reached me, the matter would have been struck from the roll or postponed, with the Applicant having to pay the wasted costs.  However, given the prejudice to the Plaintiff were the matter to be postponed until May 2018, I decided that the hearing would go ahead.  The condonation application, which was unopposed, was also granted.

 

Background Facts

[7] Ms Abrahams resigned from her office as the Master’s Representative to the Estate by way of a letter to the Master, on 19 May 2016.  On 1 December 2016, a summons was issued by the Plaintiff in which it sought judgment against the Defendant in the sum of R148 173.45, an order declaring the immovable property hypothecated under the mortgage bond executable, and an order authorising the Plaintiff to sell the immovable property hypothecated under the bond by way of sale in execution.  Ms Abrahams was cited as Defendant in her capacity as executrix of the Estate, even though she had not been appointed as executor, but as Master’s Representative.

[8] An application for default judgment was set-down for 17 February 2017.  On 16 February 2017 the Plaintiff’s attorney was furnished with proof that Ms Abrahams had resigned as Master’s Representative on 19 May 2016.  On 15 February 2017 Plaintiff’s attorney perused the Master’s file and concluded that Ms Abrahams was still the Master’s representative.

[9] According to the Plaintiff, a copy of the letter of resignation was handed up to the judge on 17 February 2017, and this notwithstanding, default judgment was granted against the Defendant.

[10] A sale in execution was held on 15 August 2017 pursuant to default judgment and the property was sold to the Third and Fourth Respondents.  Mr Sybrand Smit, the Applicant in this rescission application, tried to negotiate with the Plaintiff’s attorney to stop the sale, but to no avail.  At this juncture I pause to deal with how the Applicant came to be involved in this matter, an exercise which is relevant to questions about his bona fides, which are dealt with later in this judgment.

[11] The Applicant’s involvement in this matter arose out of his own interest in purchasing the property through an entity, the Eureka Trust, of which he is a trustee.  In his founding affidavit the Applicant explains that as a side business, he and the other trustees of the Eureka Trust purchase properties, that are due to be sold at judicial auctions, from financially distressed owners to enable them to receive more for their properties and to stave off the auction.  On gaining knowledge of the sale in execution to be held on 15 August 2017, of the property belonging to the Estate, the Applicant established the identities of the children of the deceased, approached them, and on 10 August 2017 the Eureka Trust concluded a deed of sale with them for the purchase of the property, initially for R145000.00 and thereafter for R150 000.  The Applicant thereafter informed the Plaintiff’s attorney of the deed of sale and sent him a copy.  The Plaintiff’s attorney notified the Applicant on 14 August 2017 that the sale in execution could be stopped if there was a signed offer to purchase the property for at least R180 000.00 and if the arrear amounts owing, were paid.

[12] The Applicant had (presumably when negotiating the deed of sale), also approached the children of the deceased to nominate him to be appointed as the new Master’s Representative and he obtained their nominations on 14 August 2017.  He was appointed Master’s Representative on 24 August 2017.  In explaining what motivated his appointment, the Applicant stated that he was advised by counsel that he would not have locus standi to institute any litigation in this matter before he was appointed Master’s Representative to the Estate. 

[13] The Applicant thereafter addressed an email to the Plaintiff’s attorney, on 24 August 2017, advising of his appointment and seeking an undertaking that the property would not be transferred.  In reply on 25 August 2017 the Plaintiff’s attorney, inter alia, pointed out that Ms Abraham’s letter of resignation was not endorsed by the Master in acceptance of her resignation and referred to Section 54 of the Act in support of his submission that Ms Abrahams had not been validly absolved as executor.  On 1 September 2017 the Applicant applied on an urgent basis for an order interdicting the Second to Sixth Respondents from causing the property to be transferred to the Third and Fourth Respondents, pending the adjudication of this rescission application.  The interdict was granted on 5 September 2017.  Thereafter this application was launched.

 

Discussion

[14] Rule 42 (1) (a) states:

“The court may, in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary:

(a) An order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby;

...”

[15] Mr Jonker for the Plaintiff, submitted that I should, in deciding the rescission application, consider the bona fides of the Applicant in bringing the application.  He submitted it was apparent that the sole motive of the Applicant was not to correct an obviously wrong judgment, but to pursue a personal agenda, namely to secure the purchase of the property at a bargain price for the Eureka Trust, of which he is a trustee and presumably a beneficiary.  The property, as Mr Jonker pointed out, was sold in execution for R183000, although the Eureka Trust wanted to purchase it for R150 000.  The Plaintiff, as aforementioned, was not prepared to consent to the sale of the property and the sale in execution proceeded.  The only way to set aside the execution sale, and to secure the deal, submitted Mr Jonker, was for the Applicant to clothe himself with locus standi through his appointment as Master’s Representative.

[16] Mr Walters, for the Applicant, countered that the requirement of bona fides does not have to be considered in a rescission application brought under Rule 42 (1) (a).  He submitted moreover that the Applicant’s bona fides is displayed by his willingness, should rescission of the judgment be granted, to put the property on the market if the Plaintiff does not accept his offer of R150 000.00.

[17] It is so that in an application for rescission under Rule 42 (1) (a) it is not required to be shown that the application is made bona fide or that there is a bona fide defence, these being the requirements to illustrate good cause in rescission applications under the common law and under Rule 31 (2) (b).  As was said by Erasmus J in Bakoven Ltd v G J Howes (Pty) Ltd 1992 (2) SA 466 (E), at 471 E – I:

“Rule 42(1)(a), it seems to me, is a procedural step designed to correct expeditiously an obviously wrong judgment or order.  An order or judgment is ‘erroneously granted’ when the Court commits an ‘error’ in the sense of a ‘mistake in a matter of law (or fact) appearing on the proceedings of a Court of record’ (The Shorter Oxford Dictionary).  It follows that a Court in deciding whether a judgment was ‘erroneously granted’ is, like a Court of appeal, confined to the record of proceedings.  In contradistinction to relief in terms of Rule 31(2)(b) or under the common law, the applicant need not show ‘good cause’ in the sense of an explanation for his default and a bona fide defence (Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd (supra at 578 F – G); De Wet (2) at 777 F – G; Tshabalala and Another v Peer 1979 (4) SA 27 (T) at 30 C – D).  Once the applicant can point to an error in the proceedings, he is without further ado entitled to rescission.  It is only when he cannot rely on an ‘error’ that he has to fall back on Rule 31(2)(b) (where he was in default of delivery of a notice of intention to defend or a plea) or on the common law (in all other cases).  In both latter instances he must show ‘good cause’.”

See also Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) at paragraph 7; Promedia Drukkers & Uitgewers (Edms) Bpk v Kaimowitz and Others 1996 (4) SA 411 (C) at 417 G – I.

[18] The question of the Applicant’s bona fides does, however, arise in relation to the counter application by the First Respondent for his removal as Master’s Representative.  The objective facts plainly show that the Applicant sought appointment as Master’s Representative to the Estate so as to clothe himself with locus standi to rescind the default judgment, in order for the Eureka Trust to purchase the property for R150 000 00, in his and that trust’s own interests.  The objective facts neither illustrate that the purchase of the property was motivated by concerns for people in financial distress (the purpose of the side business as explained above by the Applicant), nor that the Applicant’s appointment was motivated by an interest in serving the Estate.  The Applicant clearly wanted the Estate to sell the property to his trust for less than the price it was sold in execution.

[19] Given the Applicant’s personal interest, there is clearly a conflict of interest between his position as Master’s Representative and his personal agenda to purchase the property through the Eureka Trust, at a bargain price.  Given this conflict of interest he cannot, in my view, exercise his powers bona fide and manage the assets of the Estate with impartiality and objectivity.  In the circumstances I find that the Applicant did not act in good faith, either in bringing this application or in the administration of the Estate.  The application for his removal must accordingly succeed with costs.  The fact that the Applicant might have been willing to facilitate his removal by approaching the Master, is not in my view a bar to the Plaintiff being able to obtain the costs of the counter application, as contended by Mr Walters.

 

The status of the resignation of Ms Abrahams as Master’s Representative

[20] If the gross value of an estate is R250 000.00 or less, the Master can either appoint an executor to administer the estate in accordance with the provisions of the Act, or appoint a Master’s Representative in terms of Section 18 (3) of the Act, with directions to finalise the estate in a fast and simple manner.  Section 18 (3) thus provides a short cut for the fast and inexpensive finalisation of small estates. 

[21] Section 54 (1) (b) (vi) of the Act only prescribes the procedure for an executor to be removed from office.  The section, quoted above, states that the Master may remove an executor if he applies in writing to the Master to be released from his office.  It does not deal with the removal from office of a Master’s Representative, nor is this to be found elsewhere in the Act.  The Act indeed is silent on the removal of a Master’s Representative.

[22] At the hearing of the rescission application on 5 December 2017 I granted an order directing the Master to explain the procedure regarding the resignation and removal of a section 18 (3) Master’s Representative.  The report from the Master was filed on 19 January 2018 and states as follows:

1. Copies of the Notice of Motion, the Affidavit by the Applicant and annexures thereto have been served on me.

2. This Court Report is done on the basis of the Order received by the Honourable Court dated 05 December 2017 wherein the procedure regarding the removal and resignation of a Master’s Representative is to be explained.

3. A Master’s Representative is appointed in terms of section 18(3) of the Administration of Estates Act 66 of 1965, as amended.

4. Once the appointed person has resigned or has been removed by our office, the removal is also done in terms of section 18(3) of the abovementioned Act as there is no prescribed procedure for removal as in the case of the appointment of an Executor in terms of section 54 of the Administration of Estates Act 66 of 1965, as amended.

5. Our office does however follow the procedure set out in section 54, as above, applying it to section 18(3) of the same Act.

6. Once an appointed individual has resigned or is removed, our office should issue the individual with a registered letter informing the person, who has so resigned or been removed, that s/he has been formally removed as the Master’s Representative.

7. The individual is also then directed to return the original appointment letter (Letter of Authority) to our office immediately.

8. The process to appoint a new Master’s Representative is then initiated once again.

9. I have nothing further to add to the application and abide by the decision of the Honourable Court.”

[23] Paragraphs 4 to 7 of the Master’s report are instructive.  Paragraph 5 makes clear that the Master’s office follows the procedure set out in section 54 of the Act in dealing with the resignation of a Master’s representative appointed in terms of section 18 (3).  Paragraph 6 of the report indicates that a Master’s Representative too is released from his office in a registered letter from the Master, informing the Representative that s/he has been formally removed as the Master’s Representative.  This is similar, if not identical, to the positive act of releasing an executor from office at Section 54 of the Act, on which the Plaintiff has relied, in opposing the rescission application. 

[24] For all intents and purposes therefore, relying on the Master’s report, Ms Abrahams should have been issued with a registered letter informing her that she had been formally removed as the Master’s Representative.  There is no evidence that she had been formally so removed and absent such evidence of her release, a finding cannot be made in favour of the Applicant that she was not  Master’s Representative at the time of default judgment.  This being so, she was the Representative of the Estate at the time and was correctly cited as Defendant in the application for default judgment.  Such judgment was thus not erroneously sought or granted and an order for its rescission in terms of Rule 42 (1) (a) cannot succeed.  The application for rescission of judgment accordingly stands to be dismissed with costs.  Flowing from this the interdict granted by this Court on 5 September 2017, interdicting the Second to Sixth Respondents from causing the property to be transferred to the Third and Fourth Respondents, must be uplifted.

 

Costs

[25] Given my finding, of the lack of bona fides on the part of the Applicant in obtaining an appointment as Master’s Representative to the Estate, I am of the view that he and not the Estate, ought to bear the costs of both the unsuccessful rescission application and the counter application, and that the Applicant ought not to be permitted to recover from the Estate the costs expended in both these applications.  The order I intend to make shall reflect this.

[26] I grant the following order:

 

Rescission Application

1. The application for rescission of judgment is dismissed with costs.

2. The Applicant shall pay the costs of the application and shall not be entitled to recover same from the Estate of the late Magrieta Magdalena Loeks.

3. The interdict granted by this Court on 5 September 2017, interdicting the Second to Sixth Respondents from causing the property known as Erf 24632 Bellville in the City of Cape Town to be transferred to the Third and Fourth Respondents, is uplifted.

 

Counter Application

1. The Applicant is removed from his office as Master’s Representative in the Estate of the late Magrieta Magdalena Loeks (“the Estate”);

2. The Master is directed to appoint a new Master’s Representative in the Estate in terms of Section 18 (3) of the Administration of Estates Act 66 of 1965;

3. The Applicant shall pay the costs of the counter application.  He shall not be entitled to recover same from the Estate.

 

____________________

Y S MEER

Judge of the High Court

 

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