The recent judgment of the Supreme Court of Appeal in Jones V Pretorius NO 2022 (1) SA 132 (SCA) remedied the unlawful distribution of estate assets by a person who lacked the authority to do so. The Appellant, Jones, was a former agent of an executor who continued to deal with estate assets long after his mandate’s termination, making payment to himself for “executor’s fees”. The SCA considered the suitability of section 50(b) of the Administration of Estates Act in providing a remedy to the estate to recover the funds, holding that it was not in fact this section which provided relief but the common law of deceased estates.

The estate in question was that of a Mr and Mrs Meyer, who held a joint will. In terms of their will, Mr Meyer conditionally appointed Mrs Meyer as executor of their estate. The condition was that Mrs Meyer appoint Mr Jones (the Appellant or “Jones”) as her agent. Mrs Meyer duly appointed Jones by a written power of attorney, and he continued with his mandate until its termination when Mrs Meyer passed away on 25 September 2013. However, after that Jones , amongst other things, caused the estate to pay a total of R1 148 828,13 to himself as ‘executor’s fees’ between March 2014 and May 2015, without the Master’s approval or the requisite authority.

Later, Mr and Mrs Meyer’s daughter (the Respondent on appeal) was appointed executrix of their estate. As the newly appointed executrix, and after appointing an agent to administer the estate, the Respondent demanded repayment of the R1 148 828,13 from Jones. When Jones failed to respond to her demand, the Respondent instituted proceedings against him to repay the amount, alleging that the payments made by Jones were irregular and illegal.

The Respondent relied on section 50(b) of the Act for her authority to bring the claim. This section entitles an executor to recover payments made from an estate which were erroneously made by an executor. The High Court (the court a quo­­, or of first instance) implicitly accepted the application of section 50(b) of the Act and considered whether Jones had any legitimate basis to receive the above payments. Jones did not dispute that his authority to administer the estate lapsed upon Mrs Meyer’s death. On this point, the court a quo held that the acts performed after the termination of Jones’ mandate were unlawful and invalid. Thus, the High Court ordered Jones to return the R1 148 828,13 to the estate. The High Court gave Jones leave to appeal to the SCA, which he did thereafter.

Setting out the agency principles applicable to this matter, the SCA reiterated that Mrs Meyer’s passing terminated the Appellant’s mandate in law and that, contrary to the general rules of agency contracts, the Appellant had continued to administer the estate. As the Appellant had no authority to act for the estate or deal with its property, he could not lawfully make any payment from the estate’s funds. Further, the provisions of s51(4) of the Act prevented the Appellant’s remuneration for rendering his services (purportedly as an executor) as the Appellant had not distributed the estate in terms of s35(12) of the Act and the Master had not otherwise approved this remuneration.

However, the central issue on appeal was a legal question of whether the Respondent’s claim had a legal basis. The Appellant maintained that s50(b) could not be relied upon as it described the recovery of funds unlawfully made by an executor.

In examining whether the Respondent’s reliance on section 50(b) of the Act was correct, the SCA considered the scope of its application. In this regard, it interpreted section 50(b) of the Act as permitting recovery of what an executor (including an authorised agent) had wrongly distributed. The SCA found that upon the Appellant’s mandate lapsing on Mrs Meyer’s death, that he was no longer an executor (or an authorised agent thereof). Thus, the Appellant did not make payments in his capacity as executor or agent. Therefore, the Respondent’s claim could not be brought in terms of section 50(b), these circumstances falling outside of its scope.

The Act therefore did not provide a remedy for the circumstances in Jones V Pretorius NO 2022 . However, the SCA held that the estate was not without remedy against unlawful appropriations of its funds, despite the lack of statutory remedy. In further examination of the Respondent’s claim, the SCA focused on the powers and duties of an executor grounded in the common law.

In this regard, the SCA affirmed that only the executor has the power and duties to deal with the estate. As the Appellant had no authority to administer the estate, those payments he made were unlawful. Given that the Respondent was a lawful executor, she bore common law duties to recover what is due to the estate, and was empowered to institute legal proceedings to do so.

As a result, the Respondent was entitled to recover the unlawfully appropriated assets from Jones and could do so in terms of the common law, without reliance on s50(b) of the Act. The SCA therefore dismissed the appeal, and accordingly, the Appellant was found liable for the R1 148 828,13.

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About the author

Kyle joined Dunsters from Rhodes University in 2021 (B.COM Economics, LLB). He has a multicultural background, growing up between Bahrain, England and South Africa.

Kyle is a strong-minded individual who is passionate about litigation and effectively guiding clients through the legal process.

On weekends you can find Kyle hiking in the mountains or tearing it up on a sports field – his forte being competitive rugby and cricket.

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