A CASE NOTE:  BRIMBLE-HANNATH V HANNATH & OTHERS [2021] ZAWCHC 102

  1. The Applicant (the wife of the deceased) approached the court seeking an order removing the First and Second Respondents (the daughters of the deceased) as executors of the estate of the deceased. The Applicant submitted a claim in the range of R6.2 million against the estate for maintenance, which claim was rejected by the executors after the Applicant was requested to, and failed to, substantiate the quantum of her maintenance claim by means of an affidavit.
  2. The executors lodged their Liquidation and Distribution Account (“L&D Account”) without the inclusion of the Applicant’s claim, which effectively meant that the claim had been rejected. The Applicant lodged an objection against the L&D Account and brought the application for the removal of the executors before the objection could be upheld or denied.
  3. The Applicant brought the application for the removal of the First and Second Respondents as executors in terms of Section 54(1)(a)(v) of the Administration of Estates Act, which states that an executor may be removed from his/her position if there is a conflict of interest. The Applicant relied on the fact that the executors lodged a claim against the estate, in their capacities as trustees of a trust in which they are the beneficiaries, for a loan which the trust had made to the deceased in the range of R4.4 million. The Applicant denies the existence of such claim, and states that the executors have failed to provide her access to the trust’s records to investigate such claim.
  4. The court set out to determine whether or not the fact that the Respondents had lodged a claim, in their capacities as trustees, and accepted the same claim, in their capacities as executors, amounts to there being a conflict of interest. The court went further in stating that the fact that the Applicant failed to properly substantiate her claim, while the executors failed to make financial records of the trust available to the Applicant, is of no importance herein, as the question of who is right and who is wrong is not what is in issue.
  5. In its findings the court stated that an executor stands in a fiduciary relationship to the beneficiaries in respect of his/her administration of a deceased estate. The argument that proof of misconduct is required to remove an executor that has a conflict of interest cannot be accepted. It is the existence of the conflict of interest by itself that renders it inappropriate that anyone charged with a fiduciary duty affected by the conflict should be the person called upon to fulfil the duty.
  6. In judgment, it was stated that: once it is demonstrated that an executor finds him or herself in a conflicted situation, that will generally be sufficient on its own to render it undesirable for the executor to remain in office. The judge confirmed that the mere existence of a demonstrated conflict of interest affords prima facie sufficient ground for the removal of an executor in terms of the Administration of Estates Act.
  7. The court therefore ruled in favour of the Applicant, ordering that the Respondents be removed as executors of the deceased’s estate.
  8. This case effectively illustrates why it is of paramount importance to appoint an independent and professional executor in a will to administer your deceased estate. By doing so, you place a professionally trained person in a fiduciary capacity who will be able to fulfil his/her duties without conflict of interest and in a manner consistent with the will and the relevant laws of inheritance.

Contact our offices today for the drafting of your will or use our free self-help smart assessment to see if your estate will really devolve as you think:  https://sstlaw.n-abler.biz/Home/Selection

 

Anica Theunissen                                                      Dylan Roothman

BCom; LLB; LLM (Estate Planning)                             LLB

Director                                                                        Candidate Attorney

Fiduciary and Commercial Law                          E-mail: ca8@sstlaw.co.za 

E-mail: Anica@sstlaw.co.za                                  Phone: 012 361 9823

Phone: 012 361 9823