Nedbank Limited instituted six applications for default judgment against executors/executrixes in deceased estates for debts owed by deceased persons, secured by mortgage bonds. The applications sought payment orders and declarations of executable properties. In the Steyn matter specifically, Mr Steyn passed away on 4 June 2012, leaving immovable property fully bonded. The executrix was appointed in December 2012 but failed to finalise the estate. The monthly bond instalment was R4,925.97, and at the time summons was issued on 24 July 2013, arrears totaled R132,005.71 (27 months of arrear payments). Notice to creditors had been published in the Government Gazette in compliance with section 29 of the Administration of Estates Act 66 of 1965. The high court (Mabuse J) removed all 17 similar applications from the roll, effectively dismissing them, on the basis that the banks should have followed the statutory claims procedure under the Act rather than instituting common law actions.
1. The six appeals were upheld with no order as to costs. 2. In the Steyn appeal (GPPHC case number 45338/2013), the high court's order was set aside and replaced with a default judgment in favor of Nedbank Limited against the first and second respondents jointly and severally for: (a) payment of R647,286.25; (b) interest at 6.80% per annum calculated and capitalised monthly in arrears from 19 June 2013 to date of payment; (c) declarations that two sectional title units (sections 64 and 120 in the Elephant Mews scheme, Erf 468 Vanderbijl Park South East 4 Township) held by Deed of Transfer No ST29384/2009 are specially executable; (d) authorization for the plaintiff to execute against the said properties; (e) authorization for the sheriff to execute the writ of execution; and (f) costs on the attorney and client scale. 3. In the other five appeals, the high court's orders were set aside and the matters were remitted to the high court for reconsideration of the applications for default judgment in light of the judgment.
The binding legal principle established is that the claims procedure prescribed by sections 29, 32, 33 and 35 of the Administration of Estates Act 66 of 1965 does not preclude a creditor from exercising its common law right to institute action against a deceased estate for recovery of debt. The Act contains no express provision depriving a creditor of the common law right to proceed by way of action against an executor for recovery of debt, nor are there any words from which that conclusion must be clearly implied. Where a statute does not create the right being enforced (which arose from contract and common law), and where the legislature's intention to encroach on existing common law rights is not plainly manifested in express words or by clear implication beyond reasonable doubt, the common law remedy remains available. When the legislature re-enacts substantially similar provisions that have been judicially interpreted in a particular way, it is presumed to have endorsed that interpretation.
The court made several non-binding observations: (1) The statutory claims procedure cannot necessarily be characterized as speedier than common law action, particularly where executors delay finalizing estates for years. (2) There is no factual basis for the assumption that the statutory claims procedure is less expensive than common law action, especially considering that the statutory route involves a high court review application which, if factual disputes arise, may require oral evidence akin to a trial, whereas a common law action might be instituted in the magistrates' court. (3) Even if considerations of delay and expense had some merit, they would not constitute sufficient grounds for finding that the common law action had been impliedly repealed by the statute. The court also noted that it analyzed the judgment in the context of 17 similar applications involving commercial banks, executors, loan agreements and mortgage bonds, indicating the broader practical importance of the issue beyond the specific appeals before it.
This judgment is significant in South African law because it definitively clarifies that the statutory claims procedure under the Administration of Estates Act 66 of 1965 does not deprive creditors of their common law right to institute action against deceased estates. It resolves a conflict between the high court decisions in Nedbank Ltd v Samsodien NO and the court a quo's judgment. The decision provides important guidance to creditors and financial institutions on the remedies available to them when deceased estates owe debts, confirming that they have a choice between the statutory claims procedure and common law action. The judgment also reinforces important principles of statutory interpretation, particularly the presumption that the legislature is aware of judicial interpretations when re-enacting similar provisions, and the principle that clear words or implication are required before the courts will find that a statute has abolished common law rights. This case is particularly relevant in the context of mortgage bond enforcement and debt recovery against deceased estates.