S 18(3) sales – a response

On the grounds set out later herein, I do not subscribe to the view contained in Section 18 (3) sales ("the article"), to the effect that the current Letters of Authority on form J 170, issued by a Master of the High Court in terms of section 18 (3) of the Administration of Estates Act, 1965 (Act No. 66 of 1965), as amended, "does not authorise the Master's Representative to sell immovable property."

If, on the basis of the discussion in the article, particularly the view that "to liquidate" does not mean "to realise", "the Masters and the Deeds Office are in agreement that the general letter of authority issued by the Master in terms of section 18 (3) does not authorise that Master's Representative to sell immovable property", I submit that the harsh reality of the obverse side of such agreement is that there is nothing in section 18 (3) that empowers a Master to give "a further direction" to sell any asset, including immovable property.

There is no doubt that the main object of section 18 (3) is to enable the liquidation and distribution of estates free from restrictions/requirements, such as those in section 42 (2) and section 47, which restrictions/requirements apply to an executor.

The use of the word "may" in section 18 (3) means that a Master is not compelled to dispense with the appointment of an executor in circumstances in which the value of the estate does not exceed R125, 000.00. This implies that, if a Master reckons that the aforementioned restrictions/requirements should apply to an estate, whose value does not exceed R125, 000.00, he/she must appoint an executor, and not issue Letters of Authority under section 18 (3). For a Master to issue Letters of Authority and make the aforementioned restrictions/requirements applicable thereto is a recipe for confusion and a frustration of the main object of section 18 (3).

The statement in the footnote of the Letters of Authority about the registration of transfer of immoveable property is a restatement of the law on the transfer of ownership in immovable property, and not a restriction on the authority to sell assets, particularly immoveable property.

It is crucial to note that the decision in the Craddock's Estate case ("the decision") took place about 16 years before the present Act and, therefore, before section 18 (3) came into operation. It is noteworthy, further, that, in the decision, Broome J P was considering "the normal duties of an executor" when he said, " Speaking generally, he must liquidate the estate……………", which an executor was obliged to perform .Therefore, when Broome J P said "'But 'liquidate' does not mean 'realise', but to 'reduce into possession'", he merely meant that "to realise" was not a duty that must be performed, as distinguished from a duty which the executor is entitled to perform. To clarify his statements, Broome J P said at page 59:
"In my opinion, there is no doubt that an executor is not obliged to realise the estate assets. He must, of course, do so if the will so directs him for he must always do what the will tells him. And whether the will authorises him or not, he must do so to the extent that it is necessary to pay creditors. Furthermore, it may not be possible for him to distribute the estate among the beneficiaries without a complete realisation, in which case I have no doubt that he would be entitled to realise the whole estate." You may refer to footnote 8 of paragraph 182 of the First Issue of Volume 31 of "The Law of South Africa" also.

I submit that the afore-going is a clear and valid authority for my view that an executor and a person appointed under section 18 (3) are, in proper circumstances, as a matter of law, entitled or have inherent authority to realise assets subject to any restrictions/requirements imposed by, or in terms of, the law.

I am not aware of the agreement between "the Masters and the Deeds office" referred to in the last paragraph of the article. On the contrary, I have not encountered any problem in the registration of transfer of immovable property without a section 42 (2) endorsement where the transfer documents were accompanied by the original Letters of Authority, issued under section 18 (3).

Thabo Nqhome
03 March 2010

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