Nedbank Limited v Steyn and others [2015] 2 All SA 671 (SCA) 2022/09/01, 08:08
Nedbank Limited v Steyn and others
[2015] 2 All SA 671 (SCA)
Division: SUPREME COURT OF APPEAL
Date: 25 MARCH 2015
Case No: 20085/2014
Before: FDJ BRAND, CH LEWIS, BH MBHA JJA, H MAYAT AND PA MEYER AJJA
Sourced by: P ZACHIA and E THANTSA
Summarised by: DPC Harris
• Editor’s Summary • Cases Referred to • Judgment •
Administration of estates – Deceased estate – Appeal against refusal of applications by bank for default
judgment against executors of deceased estates – Whether provisions of the Administration of the Estates Act
66 of 1965 preclude a creditor from its common law right to institute action against the deceased estate for
payment in terms of a loan agreement – Claims procedure laid down in the Act does not preclude the plaintiff
from instituting an action in common law against the estate.
Editor’s Summary
In October 2013, 17 applications for default judgment came before the High Court, Pretoria, in which the
plaintiffs were all commercial banks and at least one of the defendants in each case was the executor/executrix
of a deceased estate. In each case, the cause of action relied upon was a loan to the deceased, secured by a
mortgage bond. Apart from an order for payment of the amount owing under the loan agreement, the plaintiff
in each case sought an order declaring the properties mortgaged executable and also applied for the issue of
writs of execution in respect of the properties.
The High Court ordered all the applications for default judgment to be removed from the roll, in order to
enable the plaintiffs to comply with the provisions of the Administration of the Estates Act 66 of 1965 (“the
Act”). The effect of that order was that the plaintiffs would have to start proceedings all over again and that, in
consequence, the applications were effectively dismissed. The appellant in this matter was the plaintiff in six of
the applications. Those were the matters on appeal before the present Court.
In refusing to grant default judgment, the court below held that the appellant had instituted action against the
executors or executrixes in the deceased estates under common law, instead of adopting the claims procedure
provided for by sections 29, 32, 33 and 35 of the Act. That decision was in direct conflict with the conclusion
arrived at in Nedbank Ltd v Samsodien NO [2012] JOL 29233 (2012 (5) SA 642) (GSJ), which case the court a
quo held was wrongly decided.
Held – The issue arising on appeal was therefore whether the provisions of the Act, in the four sections referred
to above, preclude a creditor from its common law right to institute action against the deceased estate for
payment in terms of a loan agreement.
The claims procedure prescribed by the relevant sections of the Act was set out by the court.
In the Samsodien case, Samsodien was also the executrix in a deceased estate. When Nedbank instituted
action against the estate by way of summons, she raised the special plea that the procedure adopted by
Nedbank was incompetent in that it should have followed the claims procedure laid down in the Act instead.
However, the court held that the claims procedure does not deprive a creditor of its common law right to enforce
a claim against the deceased by way
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Nedbank Limited v Steyn and others [2015] 2 All SA 671 (SCA) 2022/09/01, 08:08
of action against his estate, with the result that the special plea was unfounded. The present Court aligned itself
with that view, confirming that the procedure laid down in the Act does not preclude the plaintiff from instituting
an action in common law against the estate.
The six appeals were upheld and the High Court’s orders set aside.
Notes
For Wills and Succession, Administration of Deceased Estates and Trusts see:
· LAWSA Second Edition (Vol 31, paras 200–585)
· NJ Wiechers and I Vorster Administration of Estates
Cases referred to in judgment
Benade v Boedel Alexander [1967] 1 All SA 466 (1967 (1) SA 648)
675
(O) – Discussed and Distinguished
Davids v Estate Hall 1956 (1) SA 774 (C) – Confirmed 674
Estate Stanford v Kruger 1942 TPD 243 – Confirmed 674
Jones and another v Beatty NO and others 1998 (3) SA 1097 (T) –
675
Referred to
Madrassa Anjuman Islamia v Johannesburg Municipality 1917 AD 718
675
– Referred to
Nedbank Ltd v Samsodien NO [2012] JOL 29233 (2012 (5) SA 642)
673
(GSJ) – Referred to
Standard Bank of South Africa Ltd v Ndlovu, unreported, case
673
number 33265/13 – Referred to
Judgment
BRAND JA:
[1] In October 2013, 17 applications for default judgment came before Mabuse J in the North Gauteng High
Court, Pretoria in matters of a similar kind. I say similar because these matters had at least the following
features in common:
(a) In all of them the plaintiffs were commercial banks.
(b) At least one of the defendants in every one of them was the executor/executrix in a deceased
estate.
(c) The plaintiff’s cause of action in every case relied on a loan to the deceased, secured by a mortgage
bond.
(d) Apart from an order for payment of the amount owing under the loan agreement, the plaintiff in
each case sought an order declaring the properties mortgaged executable and also applied for the
issue of writs of execution in respect of these properties.
(e) The applications were predicated on the failure by the defendants to defend the actions instituted
by the banks.
[2] In the event, Mabuse J ordered all these applications for default judgments to be removed from the roll,
in order to enable the plaintiffs to comply with the provisions of the Administration of the Estates Act 66
of 1965 (the “Act”). For reasons that will soon become apparent, this order meant that the plaintiffs would
have to start proceedings all over again and that, in consequence, the applications were effectively
dismissed. The appellant
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in this matter, Nedbank Ltd, was the plaintiff in six of these applications. Those are the matters on appeal
before us. Mabuse J, however, gave his judgment with reference to all seventeen applications before him
in the case of Standard Bank of South Africa Ltd v Ndlovu, case number 33265/13 on 24 October 2013.
Leave to appeal against that judgment, which also pertains to the six appeals before us, is with the leave
of Mabuse J. As in the court a quo, there was no appearance for any of the respondents on appeal.
[3] In broad outline the reasons given by the court a quo for refusing to grant the default judgments sought,
was that the plaintiff banks, including the appellant, had instituted action against the executors or
executrixes in the deceased estates under common law, instead of adopting the claims procedure
provided for by sections 29, 32, 33 and 35 of the Act. This decision is in direct conflict with the conclusion
arrived at by Van Oosten J in Nedbank Ltd v Samsodien NO 2012 (5) SA 642 (GSJ) [also reported at
[2012] JOL 29233 (GSJ) – Ed], which Mabuse J pertinently held to have been wrongly decided. Succinctly
stated the issue arising in this appeal is therefore whether the provisions of the Act, in the four sections
that I have referred to, preclude a creditor from its common law right to institute action against the
deceased estate for payment in terms of a loan agreement. In Samsodien, Van Oosten J held that they do
not, while Mabuse J decided that they do.
[4] Although there are six appeals before us, only the papers in the Steyn matter were incorporated in the
record on appeal. The papers in the other five matters were not so included. From the papers in Steyn it
appears that the deceased, Mr Steyn, passed away on 4 June 2012. Although the second respondent was
appointed executrix in his estate in December 2012, she had failed to finalise the estate. The immovable
property in the estate is fully bonded. The monthly bond instalment is R4 925,97. At the time when the
appellant issued summons on 24 July 2013, the arrears were R132 005,71 which equates to 27 months
arrear payments. The court a quo found as a fact that there had been compliance with the requirements
of section 29 regarding the publication of notice to creditors in the Government Gazette. I have no reason
to doubt the correctness of this finding.
[5] In the main, the claims procedure prescribed by section 35, read with sections 29, 32, 33 and 34 of the
Act boils down to this:
(a) As soon as may be after an executor or executrix (I shall from now on, for convenience, refer only
to an executor) is appointed he must, in terms of section 29, cause a notice to be published in the
Government Gazette and in newspapers, calling upon persons with claims against the deceased
estate to lodge these claims within a stipulated period which is not to be less than 30 days (or more
than three months).
(b) Claims are then to be submitted in the prescribed form within the period so stipulated.
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(c) On the expiry of the period specified in the section 29 notice, the executor should satisfy himself as
to the solvency of the estate and if it is found to be insolvent, he is to proceed under section 34 of
the Act.
(d) Otherwise the executor is obliged to submit an account, in the prescribed form, of the liquidation
and distribution of the estate as soon as possible after the last day of the period specified in the
section 29 notice, but not later than six months after letters of executorship have been granted.
This account will indicate, of course, whether or not a particular claim had been admitted.
(e) The account lies open for inspection in the Master of the High Court’s office for a period not less
than 21 days.
(f) Within that period any person, including a purported creditor whose claim has been rejected, who
wants to object to the account, must file that objection with the Master.
(g) The executor is then afforded an opportunity to respond to the objection.
(h) Thereafter, the Master decides whether the objection is well-founded or not.
(i) If the Master concludes that it is not, section 35(10) comes into play. This section provides:
“Any person aggrieved by . . . a refusal of the Master to sustain an objection so lodged, may apply by
motion to the Court within thirty days after the date of such . . . 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.”
[6] The question, whether the claims procedure thus prescribed by the Act must be understood to have taken
away a creditor’s common law right to proceed by way of action against the deceased estate, is not new.
It also arose in a number of reported decisions with reference to the claims procedure stipulated by the
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predecessor of the Act, the Administration of Estates Act 24 of 1913 (the “old Act”). For present
purposes, it can be accepted that the procedure prescribed by the old Act had virtually been re-enacted in
terms of the new Act. The first of these decisions under the old Act was Estate Stanford v Kruger 1942
TPD 243, which held that there was nothing in the old Act to indicate that the Legislature intended to
deprive a creditor of his or her common law right to sue the deceased estate.
[7] On this aspect Estate Stanford was followed in a closely reasoned judgment by Watermeyer AJ in Davids v
Estate Hall 1956 (1) SA 774 (C). Davids had lodged a claim against the estate of Hall, which was rejected
by the executors in the estate. He then objected to the omission of his claim from the liquidation and
distribution account, but this objection was not sustained by the Master. Thereafter, he instituted action
against the executors in the magistrates’ court. In their plea, the executors raised the defence that
Davids’ action was not competent in that his exclusive remedy was to apply on motion for the setting
aside of the Master’s decision in terms of section 68(9) which was the counterpart of section 35(10) of
the Act. Davids filed an exception to this plea on the basis that it disclosed no defence, but this exception
was denied by the magistrate. Thereupon,
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Davids took the dismissal of his exception on appeal to the Cape Provincial Division.
[8] From the judgment of Watermeyer AJ on appeal, it appears that the executors sought to support their
defence, ie that Davids’ action was excluded by the provisions of the old Act, on the basis of a principle
recognised, for instance in Madrassa Anjuman Islamia v Johannesburg Municipality 1917 AD 718, that
where a statute creates a right or an obligation and gives a special remedy for enforcing it, the remedy
provided by the statute must be followed and it is not competent to proceed by way of action at common
law. But Watermeyer AJ held that this principle found no application. His reasons for this finding appears
from the following statement (at 776H–777A):
“The principle as stated above has however no application to the present case because the Administration of
Estates Act did not create the right which the appellant seeks to enforce. That right arose from a contract and
under the Common Law appellant was entitled to enforce it by action. In any event, even if the principle in the
Madrassa case, supra, does extend to cases where the statute does not itself create the right or obligation, then
it must at least be clear that the Legislature intended that the remedy provided is to be the only remedy
available. As was stated by Tindall JA in Mhlongo v Macdonald 1940 AD 299 at p 310, the question is one
depending upon the construction of the particular statute and:
‘If the Legislature’s intention be to encroach on existing rights of persons it is expected that it will
manifest it plainly, if not in express words, at least by clear implication and beyond reasonable doubt. . .
.’
There are no express words in the Act which deprive a creditor of his Common Law right to proceed by way of
action against an executor for recovery of his debt, nor, in my opinion, are there any words from which that
conclusion must be implied.”
[9] Davids was in turn followed by Smuts J in Benade v Boedel Alexander 1967 (1) SA 648 (O) [also reported
at [1967] 1 All SA 466 (O) – Ed]. In that case, Benade lodged no claim in response to the executor’s
notice in the Government Gazette. Instead, he instituted action for the recovery of his claim and obtained
judgment in the magistrates’ court. On the basis of this judgment he then sought to sequestrate the
deceased estate. In answer, the executrix in Alexander’s estate contended that the magistrates’ court
judgment was invalid since Benade was bound to follow the claims procedure laid down in the old Act. On
the basis of Stanford Estate and Davids, Smuts J held, however, that this answer could not be sustained.
Subsequently, these decisions were also approved and applied to the virtually identical provisions of
section 35 of the (new) Act in Jones and another v Beatty NO and others 1998 (3) SA 1097 (T) at
1101D–1102D.
[10] This brings me to the judgment of Van Oosten J in Nedbank Ltd v Samsodien NO 2012 (5) SA 642 (GSJ),
which Mabuse J refused to follow because, in his view, it had been wrongly decided. Samsodien was also
the executrix in a deceased estate. When Nedbank instituted action against the estate by way of
summons, she raised the special plea that the procedure adopted by Nedbank was incompetent in that it
should have followed the claims procedure laid down in the Act instead. On the authority of Estate
Stanford, Davids and Benade, Van Oosten J held, however, that this claims procedure does not deprive a
creditor of its common
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law right to enforce a claim against the deceased by way of action against his or her estate. Hence, he
held the special plea to be unfounded.
[11] Mabuse J analysed the decisions relied upon in Samsodien NO and came to the conclusion that they do
not support that judgment. In all these cases, so Mabuse J held, the plaintiffs had submitted claims
against the estates and when the executor nonetheless omitted those claims from his account, the
plaintiffs had lodged an objection against the account to the Master who in turn rejected their objections.
It is only then, so Mabuse J concluded, that the plaintiffs in those three cases instituted action. On that
basis he found these cases distinguishable from the present case on the facts. Purely with reference to
the facts of the three cases under consideration, I believe that Mabuse J’s analysis holds true of Estate
Stanford and of Davids, but not of Benade. In the latter case, the plaintiff did indeed bypass the claims
procedure of the old Act completely. He never lodged any claims against the estate. To that extent,
Benade is therefore not distinguishable from the facts in the present consideration. But be that as it may,
in my view Mabuse J’s analysis of the three cases misses the ratio decidendi of all three. That ratio
decidendi, as I see it, is in short that the procedure laid down in the Act does not preclude the plaintiff
from instituting an action in common law against the estate. Thus understood, all three judgments do
indeed lend direct support to the judgment of Van Oosten J in Samsodien NO.
[12] Moreover, I believe these cases were correctly decided. Unless it can be said that the Act must be
construed to deprive the plaintiff of the common law action against the estate, that action remains extant.
The finding by Watermeyer AJ that there is no express provision to that effect in the old Act, also holds
true of the Act. Moreover, in the same way as Watermeyer AJ, I do not find any clear implication to that
effect in the provisions of the Act. In this regard, Mabuse J seems to have found that clear implication in
the considerations that the institution of common law actions alongside the application of the statutory
claims procedure, will delay the finalisation of the estate. And that, so he said, “would also constitute an
involved and costly procedure to claim payments of the debts from the estate when the Act provides for
an inexpensive and speedy manner to do so”. I believe, however, that there is more than one answer to
these considerations. First, the claims procedure can hardly be said to be speedy if, as happened in Steyn,
the executor delays the finalisation of the estate for years. Secondly, there appears to be no factual basis
for the suggestion that the statutory claims procedure would be less expensive. It seems to lose sight of
the fact that the creditor would have to launch a review application in the High Court and, if a factual
dispute should arise, it would lead to the hearing of oral evidence, which is akin to a trial. Hence, it raises
the rhetorical question: why would an action in the magistrates’ court, for example, be more expensive
than an opposed High Court application with the concomitant risk of the proceedings being converted into
a trial? Thirdly, and in any event, even if there is some merit in these considerations, they do not
constitute sufficient grounds for a finding that by implication the common law action had been repealed.
[13] Finally, in the light of the legislative history there is in my view another consideration why the ultimate
conclusion by Mabuse J cannot be
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sustained. It is this. We know that prior to the Act (ie Act 66 of 1965) there was a line of decisions in
which the courts attributed a particular meaning to the pertinent provisions of the old Act (ie Act 24 of
1913). According to established authority, the Legislature is presumed to have known of these decisions.
When it subsequently introduced virtually the same provisions in the new Act, it must be taken to have
endorsed the meaning attributed to those provisions by the courts.
[14] It follows that, in my view, the six appeals before us should be upheld and the orders of the High Court be
set aside. Since the appeal was not opposed by any of the respondents, I think the appellant should bear
its own costs on appeal, which translates into no order as to costs. With reference to the facts, Counsel
for the appellant submitted that in the Steyn appeal a good case had been made out for default judgment
in the terms it was sought. Since I can find no reason to believe otherwise, that is the order I propose to
make. But with regard to the other five matters on appeal, Counsel for the appellant conceded, rightly in
my view, that there is insufficient evidence before us to consider these applications for default judgment
on their merits. In consequence, I believe they should be remitted to the High Court for reconsideration in
the light of this judgment.
[15] In the result:
1. The six appeals are upheld with no order as to costs.
2. The order of the court a quo in the first appeal of Nedbank Ltd v Aletta Petronella Susanna Steyn
and another under GPPHC case number 45338/2013 is set aside and replaced by the following:
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“Default judgment is granted in favour of the applicant/plaintiff against the first and second
respondents/defendants, jointly and severally, the one paying the other to be absolved for:
(a) Payment of the sum of R647 286,25;
(b) Interest on the sum of R647 286,25 at the rate of 6.80% per annum calculated and capitalised
monthly in arrears from 19 June 2013 to date of payment, both dates inclusive.
(c) An order declaring:
A unit consisting of –
(i) Section no 64 as shown and more fully described on Sectional Plan No SS321/2009 in the scheme
known as Elephant Mews in respect of the land and building or buildings situated at Erf 468
Vanderbijl Park South East 4 Township, Local Authority: Emfuleni Local Municipality, of which
section the floor area, according to the said Sectional Plan is 73 (Seven Three) square metres; and
(ii) an undivided share in the common property in the scheme apportioned to the said section in
accordance with the participation quota as endorsed on the said sectional plan.
Held by Deed of Transfer No ST29384/2009.
A unit consisting of –
(i) Section no 120 as shown and more fully described on Sectional Plan No SS321/2009 in the
scheme known as Elephant Mews in respect of the land and building or buildings situated at Erf
468 Vanderbijl Park South East 4 Township, Local Authority: Emfuleni Local Municipality, of which
section the floor area, according to the said Sectional Plan is 23 (Two Three) square metres; and
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(ii) an undivided share in the common property in the scheme apportioned to the said section in
accordance with the participation quota as endorsed on the said sectional plan;
Held by Deed of Transfer No ST29384/2009.
Specially executable.
(d) An order authorising the plaintiff to execute against the said property as envisaged in Rule 46(1)
(a)(ii) of the Supreme Court Rules;
(e) An order authorising the sheriff to execute the writ of execution;
(f) An order for costs on the attorney and client scale.”
3. The orders of the court a quo in the other five appeals are set aside and these matters are remitted
to the court a quo for reconsideration of the applications for default judgment in the light of this
judgment.
(Lewis, Mbha JJA, Meyer and Mayat AJJA concurred in the judgment of Brand JA.)
For the appellant:
AC Ferreira SC and CGVO Sevenster instructed by Vezi & De Beer Attorneys, Pretoria and Symington & De Kok,
Bloemfontein
For the respondents:
No appearance
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