Court name
High Court Main Division
Case number
APPEAL 189 of 2015
Case name
Thomas Wyss v Leevi Hungamo and Others
Media neutral citation
[1970] NAHCMD 264
Judge
Angula DJP










REPUBLIC
OF NAMIBIA


HIGH
COURT OF NAMIBIA MAIN DIVISION, WINDHOEK


JUDGMENT


CASE
NO. A 189/2015


DATE:
13 SEPTEMBER 2015



REPORTABLE


In
the matter between:


THOMAS
WYSS..........................................................................................................1ST
APPLICANT


THOMAS
WYSS
N.O.................................................................................................2ND
APPLICANT


And


LEEVI
HUNGAMO................................................................................................1ST
RESPONDENT


TEREZA
HUNGAMO............................................................................................2ND
RESPONDENT


LACONIA
CC.........................................................................................................3RD
RESPONDENT


FNB
TRUST SERVICES (NAMIBIA) (PTY)
LTD.............................................4TH
RESPONDENT


THE
MINISTER OF TRADE AND INSUTRY,
NAMIBIA................................5TH
RESPONDENT


THE
ATTORNEY
GENERAL...............................................................................6TH
RESPONDNET


THE
MASTER OF THE HIGH COURT,
WINDHOEK
....................................7TH
RESPONDENT


Neutral
citation:
Thomas Wyss vs Leevi Hungamo &
6 Others
(A 189/2015) [2016] NAHCMD 264
(13 September 2016)
















CORAM:



ANGULA,
DJP



Heard:



8
June 2016




Delivered:
13 September 2016


Flynote:
Applications and motions – Constitutionality
of Section 35 of the Close Corporations Act 26 of 1988 –
Consent of remaining members required when disposing off a deceased
member’s interest in a close corporation - Not infringing upon
a person’s right enshrined in Article 16(1) of the Constitution
to acquire and dispose off property – A member during his life
time has the option to dispose of his member’s interest as he
wishes by making ‘other arrangements’ in the form of a
testamentary disposition.


Section
58 of the Agricultural (Commercial) Land Reform Act 6 of 1995 –
Prior ministerial consent required before foreign nationals may enter
into an agreement in terms of which a foreign national is acquiring a
right of occupation or possession in an agricultural land for a
period more than 10 years or an indefinite period – Failure to
obtain such consent shall result in the agreement being invalid –
Application dismissed.


Summary:
Applicant’s father, a foreign
national, was during his life time a member of a Close Corporation
which owns agricultural land. He owned 49% member’s interest. 
The members had concluded an association agreement which stipulates
how their members’ interest would be disposed e.g. through
testamentary disposition. The association agreement also granted the
applicant’s father dwelling rights and hunting rights on the
farm. No prior ministerial consent had been obtained by the parties
pursuance to the provisions of section 58 Agricultural (Commercial)
Land Reform Act, 1995, before the conclusion of the of the
agreement.  The deceased died intestate whereupon the applicant
became the sole heir
ab intestatio
to his father estate consisting of,
inter
alia
, the 49% deceased member’s
interests. The remaining members refused to agree to the transfer of
the deceased member’s interest to the applicant pointing out
that in terms of the association agreement the deceased ought to have
made provision for the disposition of his member’s interests
through testamentary disposition but failed to do so. 
Furthermore the respondents, as the remaining members, relied on the
provisions of section 35 of the Close Corporation Act, 1988 which
vests them with a pre-emptive right, for their refusal to grant
consent the applicant as executor of his father’s estate to
have the deceased member’s interest transferred to the
applicant in his capacity as heir.  Applicant then brought an
application seeking an order that as an
heir ab intestatio
he is entitled to the full and unfettered
ownership of the 49% member’s interest held
by his late father in the Close Corporation; an order directing the
executor to transfer the deceased member’s interest to the
applicant in his capacity as heir; and an order declaring that
certain portions of section 35 of the Close Corporations Act are
unconstitutional as they infringe upon the executor’s right to
dispose of the deceased estate’s property as well as the heirs’
right to receive his inheritance.


Held
that
- a deceased estate is not a legal persona and
therefore has no legal rights.


Held
further that
- the deceased’s estate, between the death of
the deceased and the appointment of the executor, enjoys statutory
protection through the provisions of the Administration of Estates
Act of 1965 and by extension constitutional protection.


Held
further that
- the association agreement which gave ‘a
dwelling right’ which was in essence an ‘a right of
occupation’, to the deceased—who was a foreign national,
to occupy an agricultural land for a period in excess of the period
prescribed by the Land Reform Act—without prior Ministerial
consent was in contravention of the provisions of Section 58 (1) (b)
and for that reason the association agreement was illegal and void ab
initio
.


Held
further
that - the applicant was entitled to
inherit all of the deceased’s member’s interest which had
vested upon him at the death of his father on 30 January 2014 which
was prior to the repeal of Section 62 of the Land Reform Act.


Held
further that
- during his lifetime the
deceased’s right to own and dispose his property was not
interfered with or limited by the provisions of Section 35 of the
Close Corporation Act, 1988; that the deceased had the right to make
other arrangements as stipulated both in the association agreements
and in Section 35: and that on the facts before court the applicant
had failed to prove in which manner Section 35 violated the
deceased’s right during his lifetime to dispose of his
property.


Held
further that
- given the nature of the
office of an executor which has been described as
sui
generis
, an executor does not
possess an unfettered and exclusive property right or beneficiary
right in respect of the property of the estate, envisaged in Article
16(1).


Held
further that
- on the facts before court, the applicant failed to
prove in what manner the provisions of section 35 interfered with,
violated and limited the executor’s constitutional right to
own, possess and dispose of estate property.


Held
further that
- upon the death of the deceased, the applicant, as
intestate heir, was not vested with the dominium of the
member’s interest held by the deceased in the Close
Corporation, but merely acquired a personal right against the
executor for the transfer of such right or equivalent of the value of
such right. The applicant’s dominium is his personal
right against the executor, represented by the residue value of the
estate. The applicant as an intestate heir has no constitutional
right to inherit a specific asset, such as the deceased member’s
interest.


Held
further that
- the fact that the differentiation between the
testamentary heir and intestate heir is not discriminatory as it
serve a rational purpose which is connected to a legitimate object.
The rational purpose found its expression or recognition in the fact
that the Legislature has made two statutes, the Wills Act 1953, and
the Intestate Succession Act, 1934 each dealing separately with each
institution of succession.


ORDER


1.
The application is dismissed.


2.
There shall be no order of costs against both the applicant in
his capacity as an heir and the third respondent,


3.
As for the applicant in his capacity as an executor and the first and
second respondents, each party shall bear their own costs.


4.
The Registrar of this court is directed to forward a copy of this
judgment to the Minister of Lands in view of the finding in this
judgment that the parties to the association agreement of Laconia CC
which owns an agricultural commercial land, namely Farm Laconia No
141 situated in Otjiwarongo district, contravened the provisions
Section 58 of the Agricultural (Commercial) Land Reform Act, 1995
(Act No 6 of 1995) and for the Minister to take action that the law
might requires him to take in the event of the contravention of the
provisions of the Land Reform Act such as in this instant matter.


JUDGMENT


ANGULA,
DJP:


Introduction


[1]
The first applicant is Thomas Wyss, a foreign national, residing in
Switzerland who brought this application in two capacities; firstly
in his personal capacity as a beneficiary and an ab intestate heir of
his late father’s estate; and secondly in his capacity as the
appointed executor of the estate of his late father. As the first and
second applicants are in fact one person acting in different
capacities, they will simply be referred to as “the applicant”
in this judgment.


[2]
The first respondent is Leevi Hungamo. The second respondent is
Tereza Hungamo. No further particulars have been provided about first
and second respondents, for example whether they are related to one
another in any way, say as husband and wife or brother and sister.
The third respondent is a Close Corporation incorporated under the
laws of Namibia with its principal place of business situated at Farm
Laconia Nr 141, Otjiwarongo District (“the Close Corporation”).
The Close Corporation owns and operates Farm Laconia 141. The farming
activities conducted on the farm are said to be cattle and game
farming, as well as conservancy. The fourth respondent is FNB Trust
Services (FNB), to whom the applicant, in his capacity as an
appointed executor of his late father’s estate, entrusted the
administration thereof. The fifth respondent is the Minister of Trade
and Industry, cited herein by reason of the interest he has in
administering the Close Corporation Act, Act No 26 of 1988 (‘the
Act”).  Some portions of a section in the Act are sought
to be declared as being unconstitutional in this application. The
sixth respondent is the Attorney General, cited herein in accordance
with the rulings of this court that the Attorney General to be joined
as a party to the proceedings where the constitutionality of a
statute is being challenged.[1]
The seventh respondent is the Master of the High Court in her
capacity as such. According to the applicant, the third to seventh
respondents are cited herein purely by reason of the interest that
they might have in this matter, and as such no substantive relief is
sought against them. It is only the first and the second respondent
who are opposing this application.  Accordingly unless state
otherwise when reference is made to the “respondents” in
this judgment it is meant to refer to the first and second
respondents only.


Background


[3]
The applicant’s late father, Kurt Wyss (“the deceased”),
was during his lifetime a member of the Close Corporation. He held
49% of the members’ interests in the Close Corporation. The
respondents held the remaining 51% of members’ interests in
Laconia. An Association Agreement (“the association agreement”)
as envisaged by Section 44 of the Act, was concluded amongst the
members during 2008. 


[4]
The deceased died intestate on 30 January 2011, leaving behind an
estate, part of which inter alia consisted of his 49% of the
members’ interests in the Close Corporation. On 29 July 2014,
the applicant was appointed as an executor of the deceased’s
estate.  In the meantime, the applicant’s two sisters and
a brother renounced their inheritance in the deceased’s estate
which resulted in the applicant being the sole heir of the deceased’s
estate. The applicant then appointed First National Bank as his agent
to administer, liquidate and distribute the deceased’s estate.


[5]
After the deceased’s death, the respondents put in dispute the
applicant’s right to inherit the deceased 49% of members’
interests held in the Close Corporation. The respondents’
position was conveyed to the applicant’s agent, FNB, by letter
dated 16 December 2014 from the respondents’ legal
representative, in which it was stated that the applicant, as an
intestate heir, is not entitled to inherit his late father’s
49% of members’ interest in the Close Corporation; and secondly
that the respondents were entitled to be offered the deceased
member’s interest at the price stipulated in clause 5.1 of the
association agreement. It was further pointed out that that clause
5.3 of the association agreement, which allows for a deceased
member’s interest to be bequeathed according to the
testamentary dispositions made by a deceased member, did not apply to
the applicant because the deceased died intestate. Furthermore, that
clause 5.4 of the association agreement prohibits the transfer of a
member’s interests without the unanimous consent of the
remaining members. Finally, that Section 35 of the Act provides that
the deceased membership can only be transferred to the heir if the
remaining members consent to such a transfer. It was then recorded
that the respondents will not consent to the transfer of the deceased
member’s interests, whether in terms of the agreement or in
terms of the Act. It was further recorded that in the event that a
liquidation and distribution account of the deceased’s estate
is published whereby the deceased’s interests are to be
transferred or sold to any third person other than the respondents, a
formal objection would be filed with the Master of the High Court.
The respondents then offered to buy the deceased member’s
interests at the price stipulated in the association agreement.


[6]
As it would be expected, the applicant did not agree with the
interpretation the respondents sought to place on those relevant
clauses of the association agreement mentioned in the letter. In
addition, the applicant’s position was that Section 35 of the
Act unlawfully interferes with, limits and violates the
constitutional rights of both his father and his father’s
deceased estate which he is managing in his capacity as executor, to
own, possess and dispose of property as contemplated by Article 16
(1) of the Constitution. Furthermore that the section interferes
with, limits and violates his right to property that vests in him,
upon the death of his father, to receive and own the member’s
interests held by the deceased. The respondents’ attitude thus
prompted the applicant to launch this application.


Relief
sought


[7]
The applicant is seeking the following relief:


1.
Declaring the following portions of section 35 of the Close
Corporations Act, Act 26 of 1988 to be unconstitutional and
irreconcilable with the provisions of the Namibian Constitution of
1990, and to be invalid and unenforceable:


1.1.
The phrase in subsection 35(a) “…if the remaining member
or members of the corporation (if any) consent to the transfer of the
member’s interest to such person;”


1.2.
The entire subsection 35 (b).


2
Ordering and directing that the applicant is entitled to be the full
and unfettered owner of the 49% member’s interest in the third
respondent held by the late Mr Kurt Wyss, as heir ab intestatio in
the estate of Mr Kurt Wyss.


3
Ordering and directing the fourth respondent to transfer to the first
applicant the 49% members’ interest in the third respondent,
held by the late Mr Kurt Wyss, in winding up his deceased estate
under Estate number 1212/12, and to reflect such transfer in the
final Liquidation and Distribution Account to be presented in the
winding up of such estate.


4.
In the alternative to the above, declaring that the applicant shall
be entitled, in his capacity as duly appointed executor in the
deceased estate, shall be entitled in the deceased estate of the late
Mr Kurt Wyss, to order and direct any entity performing the duties as
estate administrator on behalf of the applicant, to transfer to the
first applicant,  the 49% member’s interest in the third
respondent, held by the late Mr Kurt Wyss, in winding up his deceased
estate under the Estate number 1213/12, and to reflect such transfer
in the final Liquidation and Distribution Account to be presented in
the winding up of such estate.


5
Granting to the applicants such further and/or alternative relief as
this Honourable Court may deem fit.


6.
Directing the first and second respondents, jointly and severally,
the one to pay the other to be absolved, to pay the costs of this
application.


7.
Directing any other respondent(s) who oppose(s) the relief sought
herein to pay the costs of the application jointly and severally with
the first and second respondents.”


The
case for applicant


[8]
Most of the facts are common cause between the parties. Essentially
the main disputes between the parties concern the interpretation of
the clauses of the association agreement and the alleged
unconstitutionality of Section 35 of the Act. As indicated above, the
applicant in essence disputes, firstly the interpretation the
respondents’ sought to place on the provisions of clauses 5.1
and 5.3 of the association agreement; and secondly raises the
question whether certain portions of Section 35 of the Act are
unconstitutional. With respect to clause 5.1 of the association
agreement, the applicant points out that the clause contemplated a
sale of a member’s interest inter vivos and thus it was
not meant to apply to intestate succession.  With regard to the
provisions of clause 5.3, he argues that upon a proper interpretation
of the said clause, the parties tacitly or impliedly intended that
upon the death of a member the consequences of either a testamentary
disposition or intestate right to inherit will prevail over the right
or demands of the remaining members.


[9]
Regarding the provisions of Section 35 of the Act, the applicant
contends that the section is unconstitutional in that it interferes
with, limits and derogates from both the deceased and his estate’s
right to own, possess, and dispose his property as enshrined in
Article 16 (1) of the Constitution. This is due to the fact that it
compels the executor to first obtain the consent of the remaining
members of the Close Corporation before the deceased member’s
interests can be transferred to the said heir; and by providing a
mechanism through which the heir can be deprived of the property to
which such heir is legally entitled. The applicant further points out
that Section 35 fails to comply with the provisions of Article 22 of
the Constitution in that it does not  state upon which Article
of the Constitution the purported entitlement to limit the
applicant’s Article’16 (1)’s property rights to
inherit his from father’s estate, whether testamentary or ab
intestatio
, is based.


The
case for the respondents


[10]
In opposition to the applicant’s case, the respondents’
main opposing affidavit is framed in response to the prayers as set
out in the notice of motion.


[11]
With respect to prayer 1 seeking for an order declaring certain
portions of Section 35 of the Act to be declared unconstitutional,
the respondents adopted the position that they will abide by the
decision of the court.


[12]
Regarding prayer 2 of the notice of motion in which the applicant is
seeking for a declaratory order that he is entitled to be the full
and unfettered owner of the deceased member’s 49% interests in
the Close Corporation, the respondents’ position is that the
property of the Close Corporation is owned by the Corporation itself
and that a member only has a personal right to claim a share of the
surplus assets of the Close Corporation upon dissolution. Furthermore
that the interests are limited by the provisions of the association
agreement. In addition, the interests would be curtailed or limited
by the provisions Section 58(1) (b) of the Agricultural (Commercial)
Land Reform Act (Act 6 of 1995) as amended, commonly referred to as
the ‘Land Reform Act’, which place certain restrictions
on the acquisition of agricultural land by foreign
nationals and further prohibit the transfer of agricultural land to
foreign nationals without the prior written consent of the Minister
responsible for the land portfolio. In this respect it is pointed out
that the applicant is a foreign national. Finally the respondents
allege that the association agreement is null and void as being in
contravention of the provisions of the Land Reform Act.


Issues
for determination


[13]
The issues for determination in this matter are:


13.1
Whether a deceased estate has constitutional rights.


13.2.
Whether the association agreement is illegal and invalid for being in
contravention of the provisions of Section 58 (1) (b) of the Land
Reform Act; and


13.3
Whether certain portions of Section 35 of the Close Corporations Act
are unconstitutional.


[14]
I will consider the issues for determination in the sequence set out
above.


Whether
a deceased estate has constitutional rights


[15]
The applicant’s first complaint is that Section 35 of the Act
is unlawful in that it interferes with, limits and violates the
constitutional rights of his deceased father’s estate. It is
argued on behalf of the respondents in that regard that the deceased
estate does not have rights; that the deceased’s estate is an
aggregate of assets and liabilities; and that it is not a legal
person as envisaged by Article 16 of the Constitution as capable of
being a holder of rights. In countering this argument, Mr Barnard for
the applicant submits that if the respondents’ argument were to
be correct it would lead to an absurd result in that the property
which is constitutionally protected under Article 16 (1) would enjoy
constitutional protection up to the point of the deceased’s
death but before such property is transferred to the heir or the
legatee, such property would not have constitutional protection and
could be ravaged at liberty by any party riding roughshod over the
rights that were so jealously protected by the Constitution during
the deceased’s life. And then when such property is transferred
to the heir or legatee the constitutional protection would be
revived.


[16]
Mr Barnard did not refer the court to any authority for his
proposition that a deceased estate has constitutional rights. Mr
Corbett for the respondents on his part, in support for his position
that an estate is not and does not have rights, referred the court to
the matter of
Clarkson
NO v Gelb
[2]
where the following was stated:


A
deceased estate is an aggregate of assets and liabilities. It has
no legal personality and, when referring to it as an entity, one must
be careful not to imply or understand thereby that one is dealing
with anything like a persona. The executor is vested with its
administration and he alone has the power to deal with this totality
of rights and obligations
. He is not merely a procurator or
agent. His primary duty is to obtain possession of the assets of the
deceased, to realise them as far as may be necessary, to make payment
of debts and expenses, to frame a liquidation and distribution
account and thereafter to effect a distribution to the heirs and
legatees. Heirs and legatees can claim whatever is due to them only
after confirmation of the liquidation and distribution account (in
terms of s 35 (12) of the Act) according to its tenor.”


[17]
Similarly in the matter of Yoonuce v Pillay NO & Another[3]
the court expressed itself on the matter as follows:


It
is convenient to consider first the question whether a deceased
estate is 'a person' capable of holding a trading licence. In
considering the juristic nature of a deceased estate the learned
CHIEF JUSTICE observed in Commissioner for Inland Revenue v Emary,
N.O., 1961 (2) SA 621 (AD) at p. 624, that a deceased estate is
an aggregate of assets and liabilities, and that, if it is a legal
persona at all, it would belong to the less common class
of
juristic persons which does not have natural persons as members.
Lower down on the same page it was held that


'whatever
the position may in particular circumstances be before the
appointment of an executor, there can be little room for the legal
personality of a deceased estate once, as is the case here, an
executor has been appointed'.


The
question whether at common law a deceased estate, before the
appointment of an executor, is a legal entity was thus left open, but
the status of a deceased estate which is being administered by an
executor was decided. It is unnecessary to decide definitely in this
case whether a deceased estate which is not so administered is a
legal persona. It appears to me the better view is that it is not. It
cannot, for example, as such sue and be sued. Cf. Estate Hughes v
Fouche, 1930 T.P.D. 41; Muter and Stone v Spangenberg, 2 Menz. 457”.


[18]
It appears from the case law referred above that the legal position
is settled namely that a deceased estate has no rights and is not a
legal
persona.
That
position has been reaffirmed and reiterated in a number of cases and
by legal writers or commentators.[4] 
Mr Barnard’s argument on this point must thus fail.


[19]
The question raised in argument by Mr Barnard as to where the
property resides immediately after the deceased’s death and
before distribution to the heir has been considered by the learned
authors in their work, Corbett
et
al

The
Law of Succession in South Africa
[5]
at page 13, where they have the following to say:


Since
individual assets do not vest in an heir or legatee until they have
been delivered, transferred or ceded to him the question arises in
whom dominium vests: (1) before an interim curator or an executor is
appointed; (2) after an interim curator but before an executor is
appointed; (3) after an executor is appointed; and (4), should this
come to pass, after administrators have taken over. The answer to (4)
is clear: since the administrators are in the position of trustees,
the ownership of assets entrusted to them vest in them, until they
hand them over to the beneficiaries.
79
The answers to questions (1), (2) and (3), on the other hand, cannot
be regarded as settled.
80
It may well be that, until the executor takes over, the estate forms
a complex of right and duties without an owner, on the analogy of the
“resting inheritance” (hereditas jacens) of Roman law
.”


[20]
I prefer Shrand’s view[6]
that during the interval between the date of death and the issuance
of letters of executorship appointing an executor, provision is made
in terms of Section 11 of the Administration of Estates Act, (Act No
66 of 1965) for the temporary custody of the estate.
The
question, however, is whether an estate enjoys legal or
constitutional protection? In my view the estate enjoys legal
protection through the provisions of the Administration of Estates
Act, which vests jurisdiction over the deceased’s estate upon
the Master of the High Court. The interval has been catered for by
Section 11(1) (b) of the Administration of Estates Act which provides
that any person who at or immediately after the death of any person
has possession or custody of any property of such deceased person at
the time of his death shall, unless the Master otherwise directs,
retain such possession or custody of such property until an executor
has been appointed. Disposal of the estate’s property by the
person in possession is not only a criminal offence, but in addition,
the person in possession will be liable for any estate duty payable
in respect of the property concerned.[7]
 It follows therefore in my view that the deceased’s
estate between the death of the deceased and the appointment of the
executor enjoys statutory protection through the provisions of the
Administration of Estates Act of 1965.  It further follows in my
view as a matter of law, that during such interval, the estate
property while in possession of any person or in custody of any
person, such estate property enjoys constitutional protection through
the provisions of the Administration of Estates Act.


Whether
the association agreement is contravention of Section 58 of the Land
Reform Act


[21]
I will now proceed to consider whether the provisions of the
association agreement are invalid as being in contravention of
provisions of Section 58 (1) of the Land Reform Act.


[22]
Section 58 of the Land Reform Act reads:


58
Restriction on acquisition of agricultural land by foreign nationals


(1)
Notwithstanding anything to the contrary in any other law contained,
but subject to subsection (2) and section 62, no foreign national
shall
, after the date of commencement of this Part, without
the prior written consent of the Minister,
be competent-


(a)
to acquire agricultural land through the registration of transfer of
ownership in the deeds registry; or


(b)
to enter into an agreement with any other person whereby any right
to the occupation or possession of agricultural land or a portion of
such land
is conferred upon the foreign national-


(i)
for a period exceeding 10 years; or


(ii)
for an indefinite period or for a fixed period of less than 10 years,
but which is renewable from time to time, and without it being a
condition of such agreement that the right of occupation or
possession of the land concerned shall not exceed a period of 10
years in total.


(2)
If at any time after the commencement of this Part the controlling
interest In any company or close corporation which is the owner of
agricultural land passes to any foreign national, it shall be deemed,
for the purposes of subsection (1)(a), that such company or close
corporation acquired the agricultural land in question on the date on
which the controlling interest so passed”.
(the
underlinings are mine, for emphasis)


[23]
Clauses 11 and 12.1 of the association agreement afforded the
deceased an unconditional right to dwell and hunt on the Farm. The
said clauses read as follows respectively:


11
DWELLING RIGHTS


The
parties agreed that KW [the deceased] shall have the sole,
unconditional dwelling right on Farm Laconia. LH [the first
respondent] is entitled to accommodate a farm labourer in the
existing staff quarters on Farm Laconia.


12
HUNTING RIGHT


12.1
The parties are agreed that KW shall have the sole unconditional
hunting rights on Farm Laconia.  LH may hunt predatory game if
severe damage is caused to LH’s cattle stock.”


[24]
As has been noted from the relief sought and quoted earlier in this
judgment, the applicant is seeking in prayer 2 of the notice of
motion for a declaratory order that the first applicant ‘is
entitled to be the full and unfettered owner’ of the 49% of
members’ interest previously owned by the deceased in the Close
Corporation. The respondents, took issue with the phrase ‘full
and unfettered ownership’. The respondents—correctly, in
my view—point out that such right or interests would be limited
by the provisions of the association agreement to which the deceased
was a party. Furthermore that such right or interest would be subject
to any statutory provisions pertaining to the exercise of such right.
It is clear that the statutory provisions are those contained in
Section 58 of the Land Reform Act.


[25]
In considering the provisions of Section 58 against the facts at
hand, it appears that most of the facts fall within the purview of
the provisions of Section 58. It is common cause that the Close
Corporation is the registered owner of the Farm Laconia Number 141
situated in Otjiwarongo district.  It is further common cause
that such Farm is a commercial agricultural land and the rights
attached to the Farm are subject to the provisions of the Land Reform
Act as amended. It is not further in dispute that Section 58 (1)
prohibits foreign nationals from entering into an agreement with any
other person whereby any right to the occupation or possession of
agricultural land is conferred on a foreign national, for a period
exceeding 10 years, or for an indefinite period, without the prior
written consent of the Minister in charge of the land portfolio. It
is common cause that the applicant is a Swiss national and thus for
the purpose of the Section 58, is a foreign national.  Finally,
it is not in dispute that the Minister’s prior consent had not
been obtained before the association agreement was concluded by the
parties thereto.


[26]
Regarding the terms of the association agreement referred to above,
it is submitted on behalf of the respondents that the unconditional
dwelling and hunting rights afforded to the deceased amount at the
very least, to occupation of the Farm for a period exceeding 10 years
and/or an indefinite period. In countering the argument of the
respondents’, counsel for the applicant argues that that even
though the applicant is a foreign national, he is not currently
residing in Namibia and that he does not intend to occupy the Farm
contrary to the provisions of Section 58 (1) (b). Furthermore, that
the section contemplates rights of occupation and possession of a
permanent nature, rather than a fleeting visit to a farm once or
twice per year.


[27]
I think there is substance in the respondents’ argument that
the words ‘sole and unconditional dwelling rights’ convey
a sense of permanent occupation and not a mere visit to the Farm. A
“dwelling right’ is a right of occupancy which entitles a
person to occupy a dwelling for as long as he/she wishes but such
person is not entitled to buy the dwelling house.  Clause 5.5 of
the association agreement imposes an obligation on the respondents to
take over from the deceased, at cost price, all the fixed
improvements which were solely paid for by the deceased. The fixed
improvements are described in the association agreement to include,
inter alia, the “economic buildings” and
“residential staff compound”. Having regard to the main
activities carried on at the Farm as indicated earlier in this
judgment, namely cattle and game farming as well as conservancy, it
is fair to say that these activities ordinarily require closer
monitoring and attention. It would appear to me from the wording of
the association agreement that the intention of the parties was that
the Farm would be occupied on a rather permanent basis and would not
be visited only once or twice per year, as the applicant would
appears to suggest. This view is further fortified by the fact that
the association agreement gave the right to the deceased to have
“friends and guests” on the Farm to hunt free of charge
on the Farm. Ordinarily a person can accommodate guests on his place
of residence.


[28]
It is not disputed by the applicant that the association agreement is
an agreement within the meaning of the provisions of Section 58 (1).
Neither is it disputed that it is not subject to the provisions of
Section 58 (1). Clause 8 of the association agreement provides for
the effective date of the association agreement to be 15 October
2008. Having stipulated the effective date, the agreement does not
stipulate a duration period or termination or expiry date. The
inescapable conclusion, in my considered view, is that the agreement
was concluded for an indefinite period, in contravention of the
provisions of Section 58.


[29]
The applicant does not allege that a written consent of the Minister
had been obtained or granted prior to the conclusion of the agreement
by the parties. As a matter of fact, the respondents who are party to
the agreement state that according to their knowledge no Ministerial
consent was obtained. The respondents are Namibians; they must have
been aware of the provisions of the Land Reform Act.


[30]
It has been held that an agreement whereby a foreign national
purports to acquire a member’s interest in a close corporation
owning agricultural land for the periods prohibited in Section 58
without the Minister’s consent would fall foul of the
provisions of that section.[8]
 In my considered view the conclusion is unavoidable, namely
that the association agreement which gave occupational right to the
deceased—who was a foreign national to occupy an agricultural
land for a period in excess to that prescribed by the by the Land
Reform Act—without prior Ministerial consent is in
contravention of the provisions of Section 58 and the association
agreement is therefore illegal and void
ab
initio
.


[31]
It is clear from provisions of the association agreement, coupled
with the clear admission by the respondents that no Ministerial
consent had been obtained prior to entering into the association
agreements. The association agreement dealt in part with issues
related to agricultural land and for that reason it is reasonable to
infer that the parties knew or were aware of, or alternatively ought
to have known of the provisions of the Land Reform Act but chose to
deliberately ignore it.  For that reason I will make an order at
the end of this judgment directing the Registrar of this Court to
forward a copy of this judgment to the Minister of Lands and to draw
the attention of the Minister to the finding of this court in the
preceding paragraphs, and for the Minister to take action that the
law might require him, to take in the event of the contravention of
the provisions of the Land Reform Act such as in this instant matter.


[32]
In a bid to avoid the consequences of the invalidity of the
association agreement, counsel for the applicant sought to rely on
the exemption which was contained in Section 62 of the Land Reform
Act.


[33]
Section 62 stipulated as follows;


62.
Exemptions under this part-


(1)
The provisions under this part shall not apply to the
acquisition of agricultural land by a foreign national-


(a)
by virtue of any succession ab intestatio or testamentary
disposition


[34]
I agree with counsel for the applicant’s submission that the
words “this Part” referred to Part VI of the Land Reform
Act encompassed Section 58. In other words, the effect of Section 62
was to exempt the applicability of the provisions of Section 58 on
the acquisition of agricultural land by a foreign national by virtue
of ab intestate succession or testamentary disposition.
Counsel was under the impression that although there was an amendment
that provided for the repeal of Section 62, such amendment was never
implemented. Mr Corbett for the respondents then produced before
court the Government Gazette of 17 March 2014 through which the
amendment was brought into operation. It appeared from the Gazette
that Section 62 (1) (a) was deleted form the principal Act by the
Agricultural (Commercial) Land Reform Amendment Act, Act No 1 of
2014. The exemption thus no longer exists.


[35]
A question then arises whether any of the applicant’s rights to
inherit the deceased’s member interest had survived the
consequence of the repeal of Section 62 of Land Reform Act. This
question emerges as a result of the well-known principle of our law
that the legislature would not deprive a person of his/her vested
right through an amendment of a statute; and that there is a strong
presumption against retrospective application of an enactment.[9]
 Mr Corbett submits that the applicant’s right as a sole
intestate heir of the deceased member’s interest only vested
after the Land Reform Amendment Act, 2014, came into operation.
Alternatively, only a quarter of the applicant’s inheritance
right vested at the death of the deceased and the other three
quarters only vested in the applicant when his siblings renounced
their intestate inheritance on 4 May 2014. In support of his
submission Mr Corbett referred this court to the matter of
Harris
v Assumed Administrator, Estate Macgregor
[10]
where the court stated the following at page 575;


The
position according to our common law regarding the vesting of an
intestate estate and the determination of the intestate heirs may
therefore be summarised as follows:


1.
Where a deceased dies without having made a valid will at all, or
without leaving a valid will, his intestate estate vests on the date
of his death when his intestate heirs have to be determined
.”


[36]
Furthermore the court in the matter of
Elliot
v Spheris NO and Another
[11]
expounded the principle as follows:


Although
the heirs acquire a vested claim against the executor for payment, or
delivery or transfer of the property comprising his or her share,
this claim is enforceable only after the liquidation and distribution
account has been confirmed. But the heir becomes the owner of
immovable property comprising his share only upon registration of
transfer: Estate Smith v Estate Follett, 1942 AD 364 at p. 383. The
result is that the heir has only a personal right, a jus in personam
ad rem acquirendam, against the executor (Estate Smith case, supra;
Ex parte Craig, 1946 W.L.D. 475) and obtains ownership only on
transfer in pursuance of a distribution ab intestatio.”


[37]
Applying the above principle to the facts, it is common cause that
the deceased died intestate on 30 January 2011; and that the
applicant has two sisters and a brother. The deceased estate vested
upon the applicant on the date of his father’s death. It is
further common cause that the applicant’s three siblings
renounced their shares of the inheritance in favour of the applicant


[38]
Mr Corbett’s submission that only one quarter of the deceased’s
estate vested upon the applicant lost sight of the legal effect of
the renunciation or repudiation. The legal position appears to be
that renunciation or repudiation operates retrospectively to the date
of vesting. In the matter of
Kellerman
NO v Van Vuuren and Others
[12]
the question before the court was whether or not the heir’s
repudiation constituted a disposition of the insolvent's right to
acquire property which could be set aside as a voidable disposition
in terms of s 26 of the Insolvency Act 24 of 1936. The court held
amongst others that:


[A]diation
or repudiation are the two options that are available to a legatee.
If he adiates, then, with retrospective effect, the right to the
legacy becomes an asset in his estate. If, prior to adiating, he
repudiates, or waives his right to the legacy, then, as was stated by
Voet, the legacy is retrospectively rejected and never belonged to
him and accordingly the right did not form part of his insolvent
estate
.”


[39]
The legal position is therefore that if an heir elects to repudiate
the inheritance or benefit, it is taken in law that the right has
never vested upon such an heir. The inheritance is retrospectively
rejected and never belonged to the said heir.


[40]
From the principles outlined above and taking into account Mr
Corbett’s argument in this regard, it would therefore appear
that the three quarters of the deceased’s estate which was
renounced by the sisters and the brother in the applicant’s
favour is considered, in law, to have never vested in the said
sisters and the brother. It was retrospectively rejected to the date
of death of the deceased on 30 January 2011. Consequently the
deceased’s estate vested upon the applicant as a sole heir at
the date of the deceased’s death. Such vesting took place long
before the repeal of Section 62 by the Land Reform Amendment Act,
2014 which only came into operation on 17 March 2014. It follows
therefore, in my view, that the applicant is entitled to inherit all
of the deceased’s member’s interests which had vested
upon him at the death of his  father on 30 January 2014 which
was prior to the repeal of Section 62 of the Land Reform Act.



[41] It is to be
recalled that in prayer 3 the applicant is seeking an order that his
agent, FNB, be ordered and directed to transfer to the applicant, in
his capacity as heir, the deceased member’s interests held in
the Close Corporation. The respondents oppose that order on two
grounds: firstly that during the deceased’s life time his right
to own and dispose of property was limited by the provisions of
Section 35, which grants the respondents the pre-emptive right to buy
the deceased’s members interest; and secondly, that the
deceased was a party to the association agreement in terms of which
the deceased had the right to make ‘other arrangements’,
in particular, the arrangement to dispose his member’s interest
through testamentary disposition.


[42]
I have, earlier in this judgment, found the association agreement to
be in contravention of Section 58 of the Land reform Act and declared
it to be invalid and void
ab initio.
The respondents’ basis for the second objection to having the
deceased member’s interest inherited by the applicant has thus
fallen away. I do not understand the Land Reform Act to prohibit a
foreign national to hold a minority interest in a Close Corporation
which owns a commercial agricultural land without such foreign
national owning any specific right of occupation or possession
granted to such foreign national.
 As was pointed out by
the Supreme Court in the Marot and Others matter supra at
para 21, a foreign national may occupy or possess agricultural land
for those periods not prohibited by Section 58 (1) (b) of the Act and
provided that the minister's consent has been obtained: and that the
legislature chose to regulate and not to prohibit agricultural land
ownership by foreign nationals.


[43]
The applicant is an ‘heir’ within the meaning of the
Section 35 of the Act. I have also found earlier in this judgment
that the applicant became the sole heir of the deceased’s
estate following the repudiation by the sisters and the brother of
their inheritance; and that such inheritance vested upon him prior to
the repeal of Section 62 of the Land Reform Act. Finally, the
applicant is a natural person as required by Section 29 of the Close
Corporation and thus qualifies to be a member of a Close
Corporation.  The applicant thus qualifies to have the
deceased’s 49% member’s interest in the Close Corporation
transferred to him, except that he needs the consent of the remaining
members.


[44]
As indicated earlier in this judgment the respondents, as remaining
members, have adopted the stance that they will not grant their
consent that the applicant’s portion of the deceased member’s
interest be transferred to the applicant. The respondents’
position is premised on the provisions of Section 35 (1) (a) which
vests them with a pre-emptive right to purchase the deceased member’s
interests. The applicant is driven by the respondents’ stance
to the conclusion that certain provisions of Section 35 (1) (a) and
the entire subsection (b) are unconstitutional.


Whether
certain specific provisions of Section 35 are unconstitutional


[45]
The applicant has specified the provisions of Section 35 which he
contends are unconstitutional, namely the following words “if
the remaining member or members of the corporation (if any) consent
to transfer of the member’s interests to such person

and the entire sub-section (b). The applicant is advancing three
grounds why he contends that those provisions are unconstitutional.
The first ground is that Section 35 (a) is unconstitutional in that
it interferes with, limits and violates the constitutional rights of
both the deceased and his estate represented by the executor to own,
possess and dispose of property as contemplated by Article 16 of the
Constitution. Secondly, that the section interferes with, limits and
violates his right to property that vested in him upon the death of
the deceased, to inherit, receive and own the member’s
interests formerly held by the deceased. Thirdly, that the section
interferes with his constitutional right under Article 10 to be
treated equally as any other testamentary heirs standing to inherit
from a deceased’s estate. He is accordingly seeking an order
declaring those specific parts of Section 35 to be unconstitutional.


[46]
Counsel for the applicant argues that Article 16 (1) of the
Constitution expressly protects the rights of the “heirs or
legatees” and further protects the right of an owner of
property to dispose of his property to such heirs or legatees; that
such protection includes both testamentary as well as intestate
succession and thus applies to both legatees and heirs. Counsel then
proceeds to pit the provisions of Section 35 against the provisions
of Article 16 (1) and submits that the section interferes with the
fundamental right to property insofar as it compels the executor to
first obtain the consent of the remaining members before the
deceased’s members interest could be transferred to the heir
and by providing a mechanism through which the heir can be deprived
of the property that he/she is legally is entitled to. It is further
argued that the Close Corporation Act fails to comply with the
provisions of Article 22 by not stating upon which Article of the
Constitution the purported entitlement to limit the Article 16 (1)
property right of the legatees or heirs is based. Counsel points out
that even though the Close Corporation Act bears the year 1988, it
only came into operation on 25 July 1994 and thus long after the
coming into operation of the Namibian Constitution. With regard to
equality before the law, counsel submits that there should be no
differentiation between intestate and testamentary heirs; that if a
testamentary heir would be entitled to inherit the deceased member’s
interest in a close corporation, there can be no constitutional basis
upon which the section can discriminate against an intestate heir by
depriving him/her of such right to inherit.


[47]
The respondents have indicated that they will abide by the decision
of the court with respect to the constitutionality or otherwise of
Section 35.


[48]
It is would be apposite to quote the provisions section 35 parts of
which are sought to be impugned as well as the relevant Articles of
the Constitution which are being relied upon, in determining the
constitutionality or otherwise of Section 35.


[49]
Section 35 of the Close Corporations Act reads:


35
“Subject to any other arrangement in an association agreement,
an executor of the estate of a member of a corporation who is
deceased shall, in the performance of his or her duties-


(a)
Cause the deceased member’s interest in the
corporation to be transferred to a person who qualifies for
membership of a corporation in terms of section 29 and is entitled
thereto as legatee or heir or under a redistribution agreement, if
the remaining member or members of the corporation (if any) consent
to the transfer of the member’s interest to such person
;
or


(b)
If any consent referred to in paragraph (a) is not given
within 28 days after it was requested by the executor, sell the
deceased member’s interest-


(i)
To the corporation, if there is any other member or members
than the deceased member;


(ii)
To any other remaining member or members of the corporation in
proportion to the interests of those members in the corporation or as
they may otherwise agree upon; or


(iii)
To any other person who qualifies for membership of a
corporation in terms of section 29 in which case the provisions of
subsection (2) of section 34 shall mutatis mutandis apply in respect
of any such sale.”



[50] Article 16 (1)
reads as follows:


All
persons shall have the right in any part of Namibia to acquire, own
and dispose of all forms of immovable and movable property
individually or in association with others and to bequeath their
property to their heirs or legatees: provided that Parliament may by
legislation prohibit or regulate as it deems expedient the right to
acquire property by persons who are not Namibian citizens’


[51]
Article 22 reads as follows:


Limitation
upon Fundamental Rights and Freedoms


Whenever
or wherever in terms of this Constitution the limitation of any
fundamental rights or freedoms contemplated by this Chapter is
authorised any law providing for such limitation shall:


(a)
be of general application, shall not negate the essential content
thereof, and shall not be aimed at a particular individual;


(b)
specify the ascertainable extent of such limitation and identify the
Article or Articles hereof on which authority to enact such
limitation is claimed to rest”


The
deceased constitutional right to bequeath his property


[52]
In this context, counsel for the applicant submits that Article 16
(1) protects and enshrines the right of an owner of property to
dispose of his property to such heirs or legatees; and that such
protection applies to both the intentional disposition of property by
testament as well as to the disposition thereof to intestate heirs
through deliberate decision not to have a testament with the
knowledge and the intention that, in the absence of a will the
intestate heirs will inherit ab intestate. As a general
statement of law, I agree with counsel’s statement.  There
is no doubt that a person’s right to bequeath his or her
property is constitutionally protected by Article 16 (1). Furthermore
a person’s right to acquire all forms property is also
constitutionally protected. It is stating the
obvious to say that in this matter, during his lifetime the
deceased’s right to own and dispose his property was not
limited by the provisions of Section 35. Indeed the deceased had the
right to make other arrangements as stipulated both in the
association agreements and by Section 35. As a matter of fact the
deceased was a party to the association agreement which obliged him
to make provision for the disposition of his member’s interest
through testamentary arrangement. It is common cause that the
deceased failed to make a testamentary disposition of his member’s
interests.  No facts have been placed before court to support
the allegation that Section 35 interfered with the deceased’s
constitutional right during his life to bequeath his property. 
On the facts before court the applicant has failed to prove in which
manner Section 35 violated the deceased’s right during his
lifetime to dispose of his property.



The executor’s
constitutional right to own, possess and dispose of the estate’s
property


[53]
I will proceed to consider counsel’s second leg of argument,
namely that Section 35 interferes with, violates and limits the
executor’s constitutional right to own, possess and dispose of
property as contemplated by Article 16 of the Constitution. As I
understand the legal position of an executor, he/she does not receive
unfettered ownership of the property of the estate upon assuming
office; the ownership vests in him or her only for the purpose of
winding up and distributing the assets in the of the estate to
beneficiaries, The estate of the deceased remains separate from the
executor’s personal estate. It would seem to me that the
executor’s right in respect of the estate’s properties is
merely possessory and temporary. He cannot for instance dispose of
the estate’s property for his own benefit. It is said that the
executor acquires naked ownership and not the beneficiary ownership
of the assets of the estate.[13]
The executor acts as intermediary between the deceased and the heir
or legatee. According to Corbett
et
al The law of Succession in South Africa
,
the executorship is
sui
generis,

a special office; an executor merely represents the estate.[14]
An executor is legally vested with the administration of the
deceased’s estate.  An executor is not a principal and
represents neither the heirs nor the creditors.  Furthermore the
executor does not succeed to the
persona
of the deceased; the executor and the deceased are distinct and
separate persons.[15]  It
would appear therefore from the authorities referred above that an
executor does not possess an unfettered and exclusive property right
in respect of the property of the estate envisaged in Article 16.


[54]
Counsel did not specify in which way the right of the executor to
possess the estate’s property in this matter has been violated.
On the facts of this matter as I understand it, after the executor
was appointed, he took possession of the estate’s properties.
Through his agent, FNB, the executor is in legal possession and
control of the estate property.


[55]
I do not agree with the argument by the applicant’s counsel
that Section 35 interferes with the fundamental right to property in
so far as it compels the executor to first obtain the consent of the
remaining members before the deceased member’s interest can be
transferred to the heir. The executor has no obligation or legal
right to transfer a specific property to an ab intestatio heir
like the applicant in the instant matter. The situation would have
been different if the applicant was a legatee to whom the member’s
interest had been bequeathed. The obligation or duty of the executor
is to realise the estate and thereafter to distribute the residue to
the heirs. In my view the executors’ right to realise the
estate’s property in the form of the member’s interest
has not been interfered with. The executor has a right to sell the
member’s interest to the remaining members. It is one method of
realizing the estate.


Violation
of applicant’s constitutional property right to inherit the
deceased member’s interest


[56]
I now move to consider the argument that Section 35 interferes with,
limits and violates the applicant’s Article 16 right to
property that vested upon him in his capacity as heir upon the death
of the deceased, to inherit, receive and own the member’s
interests formerly held by the deceased.


[57]
It is trite that one

mode of acquiring property is through inheritance, either as a
legatee or as an heir. The difference between the legal position of a
legatee and an heir is that: a legatee acquires a vested right to a
specific thing, say a sum of money; whereas an heir acquires a vested
right to what is left of the estate after debts and legacies have
been paid.[16]


[58]
Upon the death of the deceased the dominium of the deceased’s
estate in not vested in the heirs. The heirs are not vested with the
ownership of specific assets in the estate. An heir or a legatee
acquires a personal right against the executor for the delivery or
transfer of the property comprising his or her share of the
estate.[17]  A personal
right is an incorporeal property.[18] 
Shares in a company have been recognized in South African law as
incorporeal moveable property over which usufruct can be established,
thereby making it easier to recognize shares as a constitutionally
protected property right.[19]
By parity of argument, I feel persuaded by the reasoning in
Cooper’s
matter
to hold that the same position prevails in Namibia, namely that an
incorporeal right such as shares or membership interest enjoys
protection under the Constitution.


[59]
Applying the legal principles outlined above, it would appear to me
that upon the death of the deceased, the applicant as an intestate
heir, was not vested with the dominium of the member’s
interest held by the deceased in the Close Corporation, but merely
acquired a personal right against the executor for the transfer of
such right or equivalent of the value of such right. The applicant’s
dominium is his personal right against the executor
represented by the residue value of the estate.  In my view, the
applicant as an intestate heir has no constitutional right to inherit
a specific asset, such as the deceased’s member’s
interest in the instant matter. The applicant’s personal right
to claim from the executor the transfer of the value of the right
represented by the member’s interest have not in any manner
been interfered with or violated by the provisions of Section 35. It
follows therefore, in my considered view, that Section 35 does not
interfere with, limit or violate the applicant’s Article 16
right to property.



Equality before
law for the intestate and testamentary heirs


[60]
Counsel for the applicant submits that there should not be any
differentiation between intestate and testamentary heirs, both of
whose rights are protected by the Constitution. If a testamentary
heir would be fully protected to inherit the member’s interests
in a Close Corporation, then there can be no constitutional basis
upon which Section 35 can discriminate against an intestate heir by
depriving him/her such right to inherit. In support of his
submission, counsel cited the judgment in the matter of
Frans
v Paschke and Others
[20]
where the court had an occasion to consider whether certain common
law rules were discriminatory in that they prohibited a certain class
of intestate heirs from deriving a benefit from a deceased’s
estate from which they would otherwise have been entitled to inherit.
Applying the judgment in
Muller
v

President
of the Republic of Namibia
[21]
the court held that there should be no differentiation between
legitimate and illegitimate children in determining whether children
from any categories could inherit intestate from their parents.

Counsel then submits that by the same token there should be no
differentiation between intestate and testamentary heirs. 


[61]
The way I read and understand Article 16, is that it vests the right
in a person to bequeath his/her property to his/her heirs or
legatees. It recognizes and embraces the right to testamentary
freedom. If counsel’s argument were to be accepted as correct,
it would throw overboard the whole institution or system of intestate
succession as applied today. In my view, the argument also undermines
the testator’s constitutional right to dispose his property to
whom he chooses.  Furthermore if the differentiation between
testate and intestate heir were to be done away with it might result
in a situation where the intestate heir may demand to inherit
specific property which the deceased did not bequeath to or intend
that such intestate heir should inherit such property.


[62]
The approach of a court to Article 10 (1) right, was first set out in
the matter of
Mwellie
v Minister of Works
,
Transport
and Communication and Another
[22]
which was confirmed by the Supreme Court in the matter of Muller
supra. 
The court reasoned as follows:


article
10 (1) … is not absolute…. It permits reasonable
classifications which are rationally connected to legitimate object
and that the content of the right to equal protection takes
cognizance of “intelligible differencia” and allows
provisions therefore’


[63]
The Supreme Court confirmed the reasoning in the Mwellie matter
as follows:


The
questioned legislation would be unconstitutional if it allows for
differentiation between people or categories of people and that
differentiation is not based on a rational connection to a legitimate
purpose
”.


[64]
In my view the differentiation between an intestate heir and a
legatee is not discriminatory as it serves a rational purpose
connected to a legitimate purpose. The law of testate succession is
to be found in the Wills Act No 7 of 1953 and the common law. The
common law of testate succession is based on the principle of freedom
of testation which guarantees that the testators’
constitutional right to dispose of his property to whomever he or she
wants, is respected and implemented after his or her death. According
to the principle, testators are free to dispose of their assets
regardless of the interests of intestate heirs. [23]
The law of intestate succession is to be found in the Intestate
Succession Act, 1934, (Act No 13 of 1934) and the common law. The
fact that the differentiation between the testamentary heir and
intestate heir serves a rational purpose found its expression or
recognition in the fact that the Legislature has made two statutes,
the Wills Act and the Intestate Succession Act dealing with each
institution.  In my view, if the differentiation were to be done
away with, not only would it violate the testator’s
constitutionally protected right of freedom of testation but it would
also have the undesirable consequence in that the entire system of
succession as known and applied today will be in turmoil.


[65]
In support of the submission that Section 35 is unconstitutional, Mr
Barnard referred the court to the critic of the provisions of Section
35 by the learned authors of Henochsberg on Close Corporation
(Electronic Version) at page 79 where the following is stated:


The
intention of the Legislature is not clear. It is provided that the
executor is obliged to transfer the interest to the legatee or heir
“entitled thereto” if the remaining member or members
(assuming his or their existence) “consent to the transfer of
the member’s interest to such person”; and it is further
provided that this is “Subject to any other arrangement in an
association agreement”.
Does
this mean, first, that, assuming there is no “other
arrangement”, a refusal of consent by the remaining member or
members may effectively prevent the enforcement of the right of the
legatee or heir to the transfer even though derived ab intestate or
under a will or a redistribution agreement
?
If this is the meaning, it is submitted that the situation created is
quite extraordinary:
it entails
that such member (members) has (have) the power to prevent the
executor distributing the interest otherwise according to law and, in
the case of a right derived from a will or a redistribution
agreement, to frustrate the intentions of the testator or the parties
to such agreement
. Assuming,
second, that there is another “arrangement”, ex hypothesi
the deceased would have been a party to it (s 44 (1)). If it provides
for a devolution of the interest otherwise than in accordance with
the entitlement of the heir or legatee derived ab intestate or under
a will or a redistribution agreement, is it intended that it is to
override such entitlement? If it is, is it also intended that,
notwithstanding its terms, the remaining member or members (assuming
his or their existence), who ex hypothesi also was a party, or were
parties, to it, can effectively prevent its implementation by
refusing to consent to the relevant transfer? It is submitted that,
if it is the case, this is also an extraordinary situation: it
entails that, in this context, one may breach a contract with
impunity. If it is not intended that the “other arrangement”
is to override such entitlement, it is difficult to understand what
purpose the reference to it is supposed to serve.” (emphasis
supplied)


[66]
The learned authors continued (at page 80):


Accordingly,
how in practice is one to apply these provisions (assuming they are
not open to attack as being constitutionally invalid
)?
If there is another “arrangement”, and it creates a right
in A to transfer of the interest, it is respectfully considered that,
on the basis that the Legislature does not intend to authorise breach
of contract, the executor must transfer the interest to A if he is
qualified for membership and the remaining member or members
(assuming his or their existence) cannot prevent the transfer by
purporting to withhold his or their consent; in other words, the part
of the section reading “Subject to any other arrangement in an
association agreement” controls also the words “if-*- the
remaining member or members of the corporation (if any) consent to
the transfer of the member’s interest to such person”.
Thus, A is entitled to the interest even if he is not, entitled
thereto qua legatee or heir or under a redistribution agreement; and
further, if another is entitled thereto qua legatee or heir or under
a redistribution agreement, such entitlement must yield to A’s
entitlement. If there is no “other arrangement”, it is
respectfully submitted that, giving language its ordinary meaning,
the conclusion is inescapable that the Legislature intends to empower
the remaining member or members, if any, to veto a transfer of the
interest even to one who is entitled thereto qua legatee or heir or
under a redistribution agreement; and he or they may exercise this
power for any reason whatsoever and even if their object is
ultimately to exercise the right of pre-emption under para (b) (iii).
The legislature thus intends that
inter alia a member’s interest is not property necessarily
capable of unrestricted districted disposition by will
.”
(emphasis supplied)”


[67]
I agree with the learned author’s conclusion that
the Legislature intends to empower the remaining member or members,
if any, with the right to veto a transfer of the interest even to one
who is entitled thereto
qua
legatee or heir or under a redistribution agreement; and he/she or
they may exercise this power for any reason whatsoever, even if their
object is ultimately to exercise the right of pre-emption under Para
(b) (iii). The learned author’s conclusion appears to be well
founded when the veto to transfer the deceased member’s
interests involves a legatee or under a redistribution agreement.
That is not my concern in the present matter. I am not called upon to
decide the right of a legatee to inherit a member’s interests.
The issue before me relates to an intestate heir. I have already
concluded that the remaining members’ veto does not impugn or
violate the personal right of the intestate heir because such heir
has no right to inherit a specific property, such as a member’s
interest.


Costs


[68]
There remains the issue of costs.  Counsel for the respondents
submits that no order of costs should be made against the first,
second and third respondents. On the other hand counsel for the
applicant submits that it would be unreasonable to allocate any part
of the costs order to the third respondent and therefore no cost
order should be allocated to the third respondent. I agree.  In
my view, the third respondent was neutral on the issues in dispute
between the applicant and the respondents. For that reason I cannot
see any basis why it should be saddled with costs.


[69]
The applicant in his capacity as heir has tried to assert what he
perceived as his constitutional right, which he thought or was
advised to have been violated. Citizens should not, in deserving
cases, be discouraged or punished by adverse costs orders, to
approach the court to assert what they perceived to be or had been
advised to consider that their constitutional rights had been
violated. In my considered view this was one of those deserving
cases. Accordingly there shall be no order of cost against the
applicant in his capacity as heir.


[70]
I have found that the respondents and the deceased were parties to an
unlawful and illegal transaction. The deceased’s estate is
represented by the executor in this matter. I consider it to be
appropriate and as measure of disapproval of the conduct of the
parties to an illegal transaction that there should be no order of
costs. Accordingly, the applicant as an executor and the first and
second respondents, each party shall bear their own costs.


[71]
In the result, I make the following order:


1.
The application is dismissed.


2.
There shall be no order of costs against both the applicant in his
capacity as an heir and the third respondent,


3.
As for the applicant in his capacity as an executor and the first and
second respondents, each party shall bear their own costs.


4.The
Registrar of this court is directed to forward a copy of this
judgment to the Minister of Lands in view of the finding in this
judgment that the parties to the association agreement of Laconia CC
which owns an agricultural commercial land, namely Farm Laconia No
141 situated in Otjiwarongo district, contravened the provisions
Section 58 of the Agricultural (Commercial) Land Reform Act, 1995
(Act No 6 of 1995 and for the Minister to take action which the law
 might requires him to take in the event of the contravention of
the provisions of the Land Reform Act such as in this instant matter.


H
Angula


Deputy
Judge President


APPEARANCES


APPLICANTS:
Mr Barnard


Instructed
by Mueller Legal Practitioners


1st,
2nd & 3rd RESPONDENTS: Mr Corbett


Instructed
by Ellis Shilengudwa Inc.


5th,
6th & 7th RESPONDENTS: Ms Van der Byl


Instructed by
Government Attorney



[1]
Kavendja v Kaunazondunge N.O and Others 2005 NR 450 page 465




[2]
1981 (1) SA 288 (W) at 293




[3]
1964 (2) SA 286 (D) at 289




[4]
See: Meyerowitz: The Law and Practice of Administration of Estate
4
th
edition  at page 106




[5]
Corbett, Hofmeyer G,and Kahn E: The Law of Succession in South
Africa, 2
nd
edition.




[6]
The Administration of Estates in South Africa, 3
rd
edition at page 61.




[7]
See also Meyerowitz on Administration of Estates, 4
th
edition pages 58 -59.




[8]
See: Marot and Others v Cotterell 2014 (2) NR 340 (SC) at par 20




[9]
E.A Kellaway: Principles of Legal Interpretation  at pages 326
-327




[10]
1987 (3) SA 563 (A) at 575




[11]
1977 (1) SA 190 at 194




[12]
1994 (4) SA 336 at page 338 H-I; See also Meyerowitz: The Law 
and practice of Administration of Estates 4
th
Edition at pages 224-225




[13]
Willes’s: The Principles of the South African Law, 8
th
edition at page 354.




[14]
At
p
age
6.




[15]
Meyerowitz page 106




[16]
See Corbett at page 12.




[17]
Commissioner for Inland Revenue v Estate Crew 1943 AD 656 at page
692




[18]
Silberberg and Schoeman’s The law of Property p 40-41, 4
th
edition




[19]
Cooper v Boyes NO and Another 1994 (4) SA 521




[20]
2009 (1) SA 527 HC




[21]
1999 NR 190 (SC)




[22]
1995 (9) BCLR 1118 (NmH).




[23]
Corbett et al Succession at page 33-34