The executor is not obliged to male payment to a creditor until the account in which the claim is reflected has lain for inspection and any objections thereto have been disposed of. The executor is, however, not obliged to withhold payment until then and may make an earlier payment if he is prepared to run the risk that it might happen, because of some objection or other reason that the payment should not have been made in whole or in part.
If the Master of the High Court considers that the executor has sufficient funds in hand to make a distribution, in whole or in part, the Master can direct the executor to lodge an interim account instead of waiting for one final account. Creditors who feel that the executor is unduly delaying the liquidation of the estate or that he can make an interim distribution should consult the Master.
When once the executor has lodged his account and has shown an award to the creditor therein, the payment should be made as soon as the account has lain for inspection and has not successfully been objected to. If after this the executor unreasonably delays payment the creditor may sue the executor for payment in terms of the account.
Unless the claim carries interest, the creditor will not be entitled to interest between the date of death and payment of the claim, except for the period after the executor becomes obliged to pay and the creditor has demanded payment, i.e. the executor is put in mora.
The Act provides that the executor must give notice, by way of advertisement in the Gazette and one or more newspapers, to creditors to lodge their claims within the period specified in the notice. A creditor’s claim is not required to be lodged in any particular form, but it is advisable for the creditor to set out his or her claim with reasonable particularity to enable the executor to give it proper consideration.
If a creditor does not lodge his claim within the period specified in the notice he or she does not hereby lose the right to claim but:
- If he or she lodges his claim thereafter and does not satisfy the Master that he or she has a reasonable excuse for the delay, he or she will be liable for any costs payable out of the estate, in connection with the reframing of any account or otherwise, as a result of the delay; and
- Whether or not he or she lodges his claim thereafter, he or she is not entitled in respect of his claim to demand restitution from any claimant of any moneys paid to such other claimant at any time or before he or she lodges his or her, as the case may be, in pursuance of a valid claim against the estate.
Under (a) the only disadvantage in lodging a late claim is the liability to pay any additional costs which may be occasioned thereby. Such costs are hardly likely to arise before the executor has framed the liquidation and distribution account. If the claim is lodged at any time before the executor has distributed the assets dealt with under an account lodged by him, and the claim is a valid one, it will be the executor’s duty to reframe his account to include the claim. Any costs entailed in doing so, re-advertising the account etc. will have to be borne by the creditor unless the Master considers the creditor has a reasonable excuse for the delay, e.g. he was out of the country at the time of the notice to creditors.
If, however, the executor has made a distribution under an account before the creditor has lodged his or her claim, the creditor will not be able to recover anything from any claimant against the estate who has been paid out on a valid claim by the executor.
Where a creditor has lodged his or her claim late and after the distribution of assets by the executor, although he or she cannot recover from other creditors of the executor he or she is not remediless. In the first instance he or she will still be entitled to participate in the distribution of any further assets of the estate which have not yet been distributed or which may later be discovered. Secondly, he or she can recover from the heirs and legatees to the extent of their inheritances and legacies.
The action of recovery against heirs and legatees is based on the condictio indebiti, namely, on the ground that because of the non-payment of creditors claim they have received more than they are entitled to. This action prescribes in three years. The prescription begins to run from the date of payment to the legatee or heir. But in order to claim from the heirs and legatees the creditor must allege and prove an enforceable claim against the deceased. If, at the time the creditor sues the heirs or legatees, his or her claim against the deceased has become prescribed, he or she cannot succeed even though the period of three years from the time of heirs and legatees received payment from the executor has not yet expired.
If the executor disputes any claim against the estate he may, by notice in writing;
- Require the claimant to lodge, within a period specified in the notice, an affidavit in support of his or her claim, the affidavit to set forth such details of the claim as the executor may indicate in the notice; and
- With the consent of the Master, require the claimant or any other person who may in the opinion of the Master be able to give material information in connection with the claim, to appear before the Master or any magistrate or Master nominated by the Master, at a time and place stated in the notice, to be examined under oath in connection with the claim.
If the executor rejects a creditor’s claim he must forthwith notify the claimant in writing by registered post and state in the notice his reasons for rejecting the claim. The creditor can adopt either of two courses. He or she can take legal proceedings to establish his or her claim, or he or she can wait until the executor has lodged his account and then avail himself or herself of the procedure of objecting to the account. Unless his or her claim is really indisputable the Master is unlikely to uphold his or her objection but will leave the creditor to establish his or her claim in court.
If the court finds in favour of the creditor, it may decline or refuse to grant him or her his or her costs against the estate if it is satisfied that the information given by him or her to the executor was insufficient or that the executor was justified in rejecting the claim as a result of the claimant’s attitude at an examination.
Written by : Richard Mokhele (LL.B)