The deceased, Mr Steyn, passed away still owing money to the Applicant in terms of a loan agreement based on a fully bonded immovable property. The Second Respondent was the executrix of Mr Steyn’s estate. The Applicant claimed the money from the estate in terms of the common law.
The Respondents’ argued that the Applicant had failed to adopt the procedure provided for in the Administration of Estates Act 66 of 1965 (the “Act”) in which the Claimant/Applicant would need to first lodge a claim against the deceased’s estate and follow the due procedure in executing its claim against the estate. The Respondents’ argued further that the court must order the application to be removed from the roll in order to enable the Applicant to comply with the Act. This meant that the Applicant would have to start proceedings afresh and in consequence the application would be dismissed. Leave to appeal was subsequently granted.
The Supreme Court of Appeal (“SCA”) stated that the issue in question was whether the procedure provided for in the Act precluded 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 section 35, read with subsections 29, 32, 33 and 34 of the Act is as follows:
“(a) as soon as possible after the appointment of an executor or executrix he/she must, in terms of section 29, cause a notice to be published in the Government Gazette and in one or more newspapers, calling upon persons with claims against the deceased estate to lodge these claims with the executor/executrix within a stipulated period which is not to be less than 30 days (or more than three months);
(b) the creditors shall then lay claims in the prescribed form and within the prescribed period;
(c) on the expiry of the period specified in the section 29 notice, the executor determine the solvency of the estate and, if the estate 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 6 (six) months after the letters of executorship have been granted. The account will indicate 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 and if the deceased was ordinarily resident in any district other than that in which the office of the Master is situated, a duplicate thereof shall lie open at the office of the magistrate of such other district for a period not less than 21 (twenty one) days;
(f) within the 21 (twenty one) day period any person who wants to object to the account (including a creditor whose claim has been rejected), 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 and the executor may apply to court within 30 (thirty) days to set aside the Master’s decision.”
The SCA held that there is no express provision in the Act which can be construed as depriving an Applicant of its common-law right against a deceased estate and accordingly the common-law right in effect remains extant (over and above the creditor’s right to lodge a claim against the deceased estate in terms of the Act).
In light of the above, the SCA upheld the appeal and granted default judgment in favour of the Applicant.
A creditor is not precluded from instituting action in terms of its common law right against a deceased estate for recovery of a debt owed by the deceased but may lodge a claim against the deceased estate in terms of the Act and institute action against the deceased estate.