Kenene NO v Invela Financial Corporation (Pty) Ltd

• Jurisdiction: South Africa
• Judge: E Revelas J and NG Beshe J
• Judgment Date: 01 June 2017
• Docket Number: CA27/2016
• Court: Eastern Cape Division
• Hearing Date: 10 February 2017
• Citation: 2017 JDR 1153 (ECG)

Revelas J:

[1]

The appellant, represented by Mr Friedman, litigates in forma pauperis in these proceedings. The appellant appeals against the dismissal of an application she had brought in her capacity as the executor in the estate of the late Dudu Tryphina Kenene ("the deceased"), in the Magistrates' Court where she sought orders:

(a)

Rescinding the Default Judgment granted in favour of the first respondent in the Magistrates' Court on the 25th of August 2009;

(b)

Rescinding the Order of the Magistrates' Court dated the 10th of November 2010 declaring the property owned by the deceased, to be executable;

(c)

Setting aside the Warrant of Execution issued by the Clerk of the Magistrates' Court dated the 11th of November 2010 and the Sale in Execution of the 4th of March 2011 held by the Ninth Respondent during which the property was sold in execution;

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Revelas J

(d)

Setting aside the Sale in Execution of the 4th of March 2011;

(e)

Directing the Sixth Respondent to retransfer the property to the Applicant (the appellant) in her representative capacity as Master's Representative in the Estate Late D T Kenene;

(f)

Cost of suit, to be paid by such of the Respondents as may oppose this Application;

(g)

Ordering the Respondents responsible for the transfer (the first and sixth respondents) to pay the costs, jointly and severally, of the retransfer;

(h)

That wasted costs of the first action brought by the First Respondent against the Second Respondent, be paid by the First Respondent.

[2]

The appellant also sought other ancillary orders not listed above, which were abandoned in the appeal and therefore not relevant for purposes of this judgment.

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Revelas J

[3]

The appellant is the granddaughter of the deceased who died intestate on 7 December 2004. The second respondent is one of the deceased's daughters and the mother of the appellant.

[4]

The following events gave rise to the present appeal: The litigation which preceded this appeal, which is not opposed, has a fairly protracted history and centers around the house owned by the deceased in her lifetime, namely erf 15505, also known as 51 Sakwatsha Street, Motherwell, Port Elizabeth ("the property"). The deceased lived there until her death with the appellant and the second to fifth respondents, some of whom are still living in the house on the property. The property was first sold in execution on 4 March 2011 to the tenth respondent and subsequently sold on the open market to the eleventh, twelfth and sixth respondents respectively. The appellant challenged the validity of the sale in execution, the transactions which gave rise thereto, as well as all subsequent sales thereof.

[5]

When the deceased's died, one of her daughters, the second respondent, was appointed as the Master's Representative of her estate in terms of section 18(3) of the Administration of Estate's Act, 66 of 1965 ("the Act"). The appellant was appointed as Executor in 2010.

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Revelas J

[6]

In October 2008, the second respondent concluded an agreement of sale of the property with a Mr and Mrs Moli for R158,000.00. The transfer of the property was to be effected by the seventh respondent. The second respondent wished to carry out certain renovations to the property, which still formed part of the deceased's estate. To that end the second respondent, in her capacity as Master's Representative borrowed money from Invela, in the form of bridging finance in the sum of R30,000.00. The loan was arranged through the seventh respondent, as agent. The Moli's cancelled the agreement of sale. The bridging finance advanced by Invela however, remained due and payable to it.

[7]

Since the loan for the bridging finance was not repaid, Invela issued summons in the Magistrates' Court against the second respondent in her capacity as Master's Representative of the deceased's estate, claiming repayment of the amount lent (R30,000.00), plus interest thereon and costs. The second respondent did not enter an appearance to defend the action and on 25 August 2009 default judgment was granted against the second respondent in her representative capacity.

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Revelas J

[8]

When in May 2010, Invela applied to have the property declared executable, the second respondent and Invela concluded a settlement agreement in terms whereof the second respondent agreed to repay the loan by way of monthly installments in the amount of R1, 000.00. The second respondent concluded the aforesaid settlement agreement of 24 June 2010, also in her purported capacity as the Representative of the Master in the deceased's estate. The second respondent did not honour her obligations in terms of the settlement agreement. In concluding the transactions in question the second respondent also acted in her capacity as Master's Representative.

[9]

At that stage (June 2010) the appellant had been substituted by the Master as executor in the deceased's estate pursuant to a family meeting and agreement amongst the deceased's daughters to that effect. The "Letters of Authority" from the Master, appointing the appellant as executor are dated 10 July 2009, five years after the death of the deceased. Therefore, according to the appellant, when the second respondent concluded the settlement agreement, she had no authority to bind the deceased's estate.

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Revelas J

[10]

Since no payments were made in terms of the agreement of settlement, Invela successfully applied in the Magistrates' Court for default judgment and later for the property to be declared executable. The appellant alleged she was not made aware of these applications and therefore did not oppose it. A warrant of execution was subsequently issued in the Magistrates' Court for the amount of R42,861.30 and the property was sold on auction on 4 March 2011 to the tenth respondent, who thereafter sold it to the eleventh respondent, who in turn, sold it to the sixth respondent. At present, the property is still in the possession of the appellant, her mother, uncle and aunts (the second to fifth respondents). An application to evict them has been brought by the sixth respondent who is the current holder of a title deed in respect of the property. The eviction application was held in abeyance pending the outcome of the rescission application.

[11]

The crux of the magistrate's reasoning in the court a quo, in dismissing the rescission application, is evident from the following passages in his judgment:

"[10] The second respondent has been granted authority by her siblings to administer the estate with the powers to liquidate and distribute the assets with the express endorsement by the Master as

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provided for in Section 18(3) and 11(1) of the Administration of Estates Act 66 of 1965 (as per annexure "CDL 1"). None of the dependents of the deceased opposed the actions of second respondent whilst acting as the representative of the Master, instead benefitted from her actions. When the agreements binding the estate with the first and seventh respondent were entered into, the second respondent was still acting in the said capacity. The applicant, second, third, fourth and the fifth respondent reside in the said property and as alleged by the second respondent that she was raised by the deceased in the said property where all the legal documents were served. The said summons were properly served, hence the application for a default judgment was granted.

[11] It is still unclear as to how all these legal proceedings (default judgment, notice to declare the immovable property executable and sale on auction) would bypass the second respondent including the initial sale of the property dated 14 October 2008, which did not materialise. It is also inconceivable that the applicant when she was so appointed on the 10 July 2009 to administer the said estate as it appears in the inventory, was not informed by the Master and the dependents of the deceased, that the said asset has since been endorsed to be transferred with their permission."

[12]

The appellant appeals against the judgment on the grounds that the magistrate ought to have found that:

[15.1]

good cause was shown for rescinding the judgments in question;

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[15.2]

the second respondent, who was not issued with Letters of Authority or Executorship from the Master, did not have the necessary authority in terms of section 18(3) of the Act (read with section 13 of the Act), [1] to burden the estate in question with debt or to dispose of property and accordingly, the appellant had a valid bona fide defence;

[15.3]

the lack of authority on the part of the second respondent resulted in all subsequent agreements being void ab initio;

[15.4]

the order declaring the property owned by the deceased estate to be executable, was not made in terms of section 30 (a) and (b) of the Act and any sale in contravention thereof was a nullity and the

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Revelas J

order thus erroneously made. All subsequent transfers...