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Court case: Rights vest immediately on death of fiduciary

Douglasdale Dairy & others v Bragge & another [2018] ZASCA 68
Douglasdale Diary (Pty) Ltd (Douglasdale) was operated from a piece of land which first belonged to BM, and upon BM’s death and under his will was transferred to EM (EB after re-marriage) as fiduciary for life subject to a fideicommissum with RM and MM as fideicommissaries.  Douglasdale rented the land from BM and after his death from EM (later EB).  After the expiry of the last lease in 2014, EB obtained an eviction order against Douglasdale, the shares of which was then held by a holding company in which RM and MM each held 50% of the shares.  The order was granted and Douglasdale and RM appealed to the Supreme Court of Appeals (SCA) with the leave of that court.  While the appeal was pending the fiduciary, EB, died.

The SCA instructed counsel for both sides to include argument on the influence of EB’s death on the status of the eviction order.  Counsel for EB’s executor attempted to argue

1) that the lease was the cause of action, but this was rejected as the papers revealed that EB based her case for the eviction order on her ownership of the property as fiduciary;

2) that the land cannot be held jointly by RM and MM because of the provisions of the Subdivision of Agricultural Land Act, 70 of 1970, but the Department of Agriculture indicated in an affidavit that the land was not classified as agricultural land, and

3) that the executor could not give RM and MM vacua possessio of the land due to Douglasdale’s illegal occupation of the land.  Because of the fact that RM and MM were effectively the owners of Douglasdale (albeit through holding companies), the court held:

“In summary, after the death of first respondent ownership of the property passed to second appellant and second respondent in undivided shares of 60% and 40% respectively.  This had the consequence that the order obtained in the court a quo by the first respondent is unenforceable and cannot have any practical effect.  The evictee had become an owner of the property.  The executor, being the representative of the estate of the first respondent, no longer had any entitlement to the property. There was not even a lease in existence which the executor could enforce.”

 

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