The late Mr Meyer passed away on 29 December 2012, survived by his spouse Mrs Meyer. In their joint will, the survivor was nominated as executor, with the appellant (a chartered accountant) to act as the agent. On 25 January 2013, Mrs Meyer mandated the appellant to administer the estate via power of attorney, entitling him to executor's fees. Mrs Meyer was appointed executor on 30 April 2013 but died on 25 September 2013. Despite her death, the appellant continued administering the estate and paid himself R1,148,828.13 from estate funds between March 2014 and May 2015, comprising executor's fees and other claimed services. The respondent was only appointed as new executor on 21 April 2016. After taking possession of estate files, the respondent demanded repayment from the appellant. The Master had not approved any remuneration to the appellant, and proper distribution procedures under section 35(12) of the Administration of Estates Act had not been followed.
1. The applications for condonation were granted, with each applicant directed to pay the costs thereof. 2. The appeal was dismissed with costs.
The binding legal principles established are: (1) A contract of agency is terminated by the death of either the principal or the agent, and this general rule applies to agency relationships in estate administration; (2) After termination of agency by death of the principal (executor), an agent has no authority to act for the estate or deal with its property, and payments made thereafter constitute unlawful appropriations; (3) Section 50(b) of the Administration of Estates Act 66 of 1965 provides a self-standing statutory remedy that is not limited to circumstances where condictio indebiti would be available, thereby overruling Els NO v Jacobs on this point; (4) Section 50(b) applies only to distributions made by an executor as defined in the Act (a person authorized under letters of executorship) or their duly authorized agent; (5) Unlawful appropriations of estate funds by a person who has no authority to deal with the estate do not constitute 'distribution' within the meaning of section 50; (6) An executor has inherent powers and duties derived from common law and statute to recover all assets belonging to the estate, including rights of action against third parties who have unlawfully appropriated estate funds; (7) Only an executor may institute legal proceedings to recover what is due to the estate.
The court made no imputation of dishonesty against the appellant, accepting that in making the payments he acted in the bona fide belief that he was entitled to do so. The court also noted without detailed analysis that the appellant provided no basis for the liability of the estate for fees related to the Willie Meyer (Swaziland) Trust, but stated this did not ultimately matter given the court's reasoning. The court observed that the Master had approved an amended first and final liquidation and distribution account drawn by the appellant, but proper notice had not been given under section 35(5) of the Act, meaning no distribution under section 35(12) had taken place. Additionally, the court noted that executor's remuneration was not payable at the time of the payments because of section 51(4) of the Act, which prohibits an executor from receiving remuneration before estate distribution unless approved in writing by the Master.
This case is significant for clarifying several important principles in South African law regarding the administration of deceased estates: (1) It reaffirms that the general rule of termination of agency upon death of the principal applies to estate administration contexts; (2) It clarifies the scope and limits of section 50(b) of the Administration of Estates Act 66 of 1965, holding that it provides a self-standing statutory remedy not limited to condictio indebiti, but applies only to distributions by persons who qualify as executors or their duly authorized agents; (3) It establishes that section 50(b) does not apply to unlawful appropriations by persons who have no authority whatsoever to deal with the estate; (4) Most importantly, it confirms that an executor's inherent powers and duties include the right and obligation to recover assets and funds unlawfully appropriated from the estate, independent of section 50(b); (5) It provides clarity on when executor's remuneration is payable under section 51(4) of the Act. The judgment reinforces the protective framework for deceased estates and confirms executors' broad remedial powers in recovering estate assets.