Chifarai Sarah Masike v Master of the High Court N.O. and Others

### Preamble
1
HH 775-18
HC 11248/17
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CHIFARAI SARAH MASIKE

versus

MASTER OF THE HIGH COURT N.O

and

EXECUTOR OF ESTATE LATE STANISLAS MASIKE N.O.

and

STANISLAS MASIKE

and

TANYARADZWA C. MASIKE

HIGH COURT OF ZIMBABWE

MUREMBA J

HARARE, 23 May 2018 & 22 November 2018

Opposed application

T. Bhatasara, for the applicant

W.R. Chingeya, for the 3rd & 4th respondents

MUREMBA J: Aggrieved by the decision of the Master directing the Executor of the Estate of the late Stanislas Masike to amend the Amended First and Final Distribution Account and to distribute the surplus cash from the sale of the matrimonial home equally amongst the late Stanislas Masike’s 6 children and the applicant who is the surviving spouse, the applicant filed the present application for review in terms of s 52 (9) (1) of the Administration of Estates Act [Chapter 6:01].  She wants the Master’s decision made in terms of s 52 (9) of the Administration of Estates Act set aside. Further, she wants the surplus cash from the sale of the matrimonial home awarded to her solely as the surviving spouse.

The first respondent is the Master of the High Court. The second respondent is the Executor of the Estate of the late Stanislas Masike. The third respondent Stansilas Masike and the fourth respondent Tanyaradzwa Masike are the son and daughter of the late Stanislas Masike respectively.

The late Stanislas Masike died intestate on 9 July 2011 and is survived by the applicant and 6 children who include the third and fourth respondents. At the time of his death, these children were all minors. Some of them are now majors, but it is not indicated how many. However, these children were not born of the applicant. The late Stanislas Masike was married to the applicant under the Marriage Act [Chapter 5:11] in 2006. The two never had children together.

The late Stanislas Masike left two immovable properties: Stand 856 Glen Lorne, Harare and 6 Ettington Road, Greystone Park, Harare (the Glen Lorne property and the Greystone Park property respectively). Both properties were registered in his name. The Greystone Park property was the matrimonial home where he stayed with the applicant up to the time of his death.	Before his death, the late Masike had bound himself as surety and co-principal debtor for a debt owed to CBZ Bank. The applicant averred that she made the discovery about this loan after her husband had died. The applicant further averred that she also discovered that her late husband had secured the CBZ loan using the two immovable properties.

CBZ wrote to the Late Masike on 15 July 2011 demanding payment of US $180 500-00 in respect of the debt. In the letter it was said that a loan had been extended to him on 30 June 2010 and that he should have paid it by 31 December 2010, but he had not. Unbeknown to CBZ, the Late Masike had died 6 days before. On 13 June 2012 CBZ obtained a judgment against the executor of the estate, the second respondent, under HC 4685/12 for an amount of US$420 606, 44. It is not explained in the applicant’s papers how the debt rose to US$420 606, 44. However, the bank later lodged a claim of $185 000.00 with the estate. This amount is even shown on the executor’s first and final distribution account of 31 January 2014. It is again not clear from the applicant’s papers why the bank filed a claim with a reduced amount from the amount of $420 606, 44 which had been granted by this court on 13 June 2012 in HC 4685/12. However, what is apparent is that in HC 4685/12 there had been 6 defendants and the court order attached to this application was against the second respondent, the executor alone to pay US$420 606, 44. It is an order which was granted by a judge in chambers. The applicant averred that in a bid to save the assets of the estate so that the estate would remain with something for distribution, she discussed with the other judgment debtors and the bank. The other debtors agreed to provide alternative security for the debt and this resulted in the bank releasing the title deeds to the Glen Lorne property so that it could be sold and the proceeds thereof used to cover the estate’s obligations towards the debt. However, when the Glen Lorne property was sold by the executor in August 2013 it realised an amount of US$120 000-00 only which was not enough to clear the debt. From that amount only $76 457.00 was channelled towards the CBZ debt by the executor, the second respondent. The applicant averred that the first respondent, the Master directed that the rest of the money be used to pay other debts of the estate. She contended that the proceeds from the sale of the Glen Lorne property were not enough to pay off all the estate liabilities. On 31 January 2014, the executor, the second respondent drew up the first and final distribution account wherein she was awarded the Greystone Park property as the matrimonial property in terms of s 3A of the Deceased Estates Succession Act[Chapter 6:02]. However, the estate still had liabilities. It still had debts amounting to US$130 706, 29. This amount needed to be contributed to the estate to avoid realisation of the estate assets. The applicant averred that she was advised that she would inherit both the matrimonial home and the estate debts. The applicant averred that she then engaged the bank in protracted negotiations for the reduction of the debt from US$185 409.24. As proof, she attached a letter dated 27 April 2015 which was written to her by the bank wherein the bank eventually agreed to payment of a further US$72 000-00 in full and final settlement of the debt. The letter states that the bank agreed to waive interest, close the file and release the title deeds to the Greystone Park property. The applicant averred that since she did not have the capacity to raise the money that was needed, she opted to sell the matrimonial property that had been awarded to her to enable her to pay the debt and to buy a smaller home for herself from the proceeds of the sale. She averred that the Master granted her the authority to sell the property in December 2014. She however, did not furnish proof of the authority.

The applicant averred that the matrimonial property was sold in 2015 for US$200 000-00. From the proceeds, the estate debts were paid off. In March 2016, the executor filed with the Master an amended first and final distribution account- Annexure CSM8. It details all the assets of the estate, including cash realised from the sale of the two immovable properties and the total liabilities of the estate which amounted to US$ 222 505.65. It shows the claim by CBZ as US$148 457-00 from the initial claim of US$185 409, 24. Of importance are the executor’s notes which state that the surviving spouse and the deceased’s children could not agree on the redistribution agreement with regards to the surplus cash of $112 694.35 from the sale of the matrimonial home. The executor went on to award this amount to the applicant as the surviving spouse. On 5 July 2017, the Late Masike’s children filed an objection to the amended first and final distribution account which the applicant responded to. On 20 November 2017, the Master convened a meeting to deal with the objections. All the parties attended and made submissions. The Master made a determination and directed the executor to amend the account and to distribute the surplus cash from the sale of the matrimonial home equally amongst the 6 children and the applicant.

Aggrieved by this decision of the Master, the applicant filed the present application for review. The applicant raised two grounds for the review. The first is illegality. She contended that the Master made an error in law in that he disregarded the clear provisions of s 3A of the Deceased Estates Succession Act [Chapter 6:02]. She averred that the children did not object to her  being awarded the household goods and effects as specified in s 3A (b) of the Deceased Estates Succession Act and the Master did not direct that the applicant should share equally with these children, the household goods and effects. She contended that the fact that the matrimonial home was sold and is now in cash form should not have led the Master to disregard the provisions of s 3 A (a) of the Deceased Estates Succession Act which entitle her to the matrimonial home. The applicant averred that the determination by the Master that she shares the proceeds from the sale of her matrimonial home with the other beneficiaries, the children is contrary to the law and it prejudices her irreparably.

The second ground for review by the applicant is irrationality and unreasonableness. The applicant averred that the Master arrived at a decision so outrageous in its defiance of logic or accepted moral standards that no sensible person who has applied his mind to the issue can arrive at such a decision. The applicant averred that when the third and fourth respondents made their initial objections to the first and final distribution account in 2015, she responded through a letter, Annexure CSMII detailing how she had contributed to the acquisition and improvements to the matrimonial property and that was never challenged. She averred that it was therefore irrational and unreasonable for the Master to direct that she shares equally with the children the surplus cash that was realised from the sale of the matrimonial property. She averred that the Master used mercy, sympathy and a strange sense of equity to make his determination without taking proper consideration of the facts and the law applicable. She contended that it was grossly unreasonable and simplistic for the Master to conclude that what was there was only “residue” without taking into account where and how the “residue” came about. In the First and Final Distribution Account of 31 January 2014, annexure CSM6, the Executor had awarded to her the matrimonial home with a proviso that she would take over the outstanding debt. The applicant averred that she then opted to sell the matrimonial property in order to be able to pay off the debt and remain with some money to buy a smaller home since she was unemployed. When the matrimonial home was sold, the children all of a sudden objected that she gets the surplus cash that remained after the debts had been paid. The applicant averred that in upholding the objections, the Master did not address his mind to the issue properly. He did not exercise his discretion judiciously and his conclusion could not have been the intention of the legislature in s 3A of the Deceased Estates Succession Act.

The only respondents who opposed the application are the third and fourth respondents, the children of the late Masike. They made the following averments. From the onset the CBZ debt was secured by the matrimonial property and not by the Glen Lorne property and for this reason, it is the matrimonial property which should have been sold first for the payment of the debt. The fact that the deceased had mortgaged the matrimonial property means that the deceased’s intention was that when he failed to pay the loan, the property would be sold in order to pay back the money. They averred that the Glen Lorne property was not mortgaged and it was free from encumbrances. They contended that the whole scheme to save the assets of the estate which the applicant talks about is questionable. It was done merely to serve her selfish and personal interests rather than the estate at large. It was not logical for her to seek to settle the CBZ debt by selling the Glen Lorne property whose value was less than the value of the debt instead of selling the matrimonial property whose value was more than the value of the debt. When negotiations for the release of the title deeds to the Glen Lorne property were made, it was already known that the debt owing to the bank  by the estate was now US$185 409,24. The two respondents averred that if the mortgaged matrimonial property whose value was US$200 000.00 had been sold right from the start, a surplus cash of $14 590.76 would have been realised after the debt to the bank had been paid. This amount would have paid the other debts as well. They averred that clearly she wanted to safeguard the matrimonial home at the expense of the 6 minor children who were supposed to benefit from the free residue of the estate. The applicant’s plan was to dispose of the other assets of the estate that would form the residue of the estate knowing that she would be able to claim and retain the Greystone Park property as the matrimonial home. This would ensure that she would benefit solely and the 6 children who were all minors then, would get nothing at all and would be destitute.

The third and fourth respondents further averred that it was irregular for the applicant to be awarded the matrimonial property in the First and Final Distribution Account of 31 January 2014 by the executor when the debts of the estate had not yet been settled. They averred that section 3A (a) of the Deceased Estates Succession Act makes it clear that the matrimonial home is awarded from the “free residue of the estate.” They averred that the award was not only irregular, but bad at law because when the award was made there was no free residue in the estate yet. The estate still had debts owing. They contended that the matrimonial property could only be distributed after all the debts had been paid off and if it formed part of the free residue of the estate.

The third and fourth respondents further contended that the applicant was calculative in her actions. She realised that if the matrimonial property was sold to pay off the CBZ debt first, there would not be a matrimonial home for her to inherit. She would only get a share of the free residue of the estate. As a result, she ensured that the Executor started by selling the Glen Lorne property which would otherwise have formed the free residue of the estate.  From the Glen Lorne property which would have formed the free residue of the estate, the deceased’s children would have benefitted too. The two respondents averred that the surplus cash realised from the sale of the matrimonial property after the CBZ debt was paid off, is the free residue of the estate. They contended that it is erroneous to extricate the Greystone Park property from the estate. The property was supposed to be sold and it was sold and there is no more matrimonial property to speak of.

The two respondents averred that the Constitution of Zimbabwe provides for the protection of the rights of the children. The applicant cannot violate the Constitution because she believes that she is entitled to everything as a result of an erroneous reading and interpretation of the law. The applicant’s interpretation of the law violates the Constitutional rights of the children. She is labouring under a grave error of interpretation of s 3A (a) of the Deceased Estates Succession Act which provides that entitlement of the matrimonial home is from “the free residue of the estate”. The two respondents contended that the provision simply means that she was entitled to be awarded the matrimonial home if and after all the debts of the estate had been liquidated. In the circumstances of this case, the matrimonial home secured a debt. As such it had to be sold to liquidate the debt. Therefore it did not form part of the “free residue of the estate”. It having been sold, there was no longer a matrimonial home for the applicant to benefit from. Consequently, the Master cannot be faulted for his decision. He fully appreciates the provisions of s 3 A of the Deceased Estates Succession Act.

The averments that the applicant made in her answering affidavit made it clear that in her founding affidavit she had been evasive with the truth. This explains why her averments in the founding affidavit were confusing. She had not made it clear that the deceased had only mortgaged the matrimonial property over the CBZ loan and had not mortgaged the Glen Lorne property. It was only in the answering affidavit that she clarified that although the bank held title deeds to the Glen Lorne property, it had not registered a mortgage bond over it. Whilst the applicant went on to admit that a mortgage bond had been registered over the matrimonial property, she however went on to contend that the property that is offered for security of a debt is to be sold if the debtor fails to pay the debt from other sources. In this case the debt was paid from another of the debtor’s property. She went on to aver that there is no law which says that the mortgaged property has to be sold first. She averred that in any event the mortgaged house was eventually sold. She averred that despite all this, one should not lose sight of the fact that the house was matrimonial property. The applicant contended that she had negotiated with the bank for the reduction of the debt amount so that she could be left with somewhere to stay. The applicant contended that the third and fourth respondents had nothing to lose since they had roofs over their heads as they stay with their mothers. She averred that she stood to lose a house she had toiled for since 2002. She maintained that she is the only one entitled to the surplus cash from the sale of the matrimonial property.

To determine whether or not the Master made an erroneous decision in ordering that the surplus cash from the sale of the matrimonial property be shared amongst the applicant and the deceased’s 6 children there is need to examine the provisions of s 3A of the Deceased Estates Succession Act. The section reads,

“3A Inheritance of matrimonial home and household effects

The surviving spouse of every person who, on or after the 1st November, 1997, dies wholly or 	partly intestate shall be entitled to receive from the free residue of the estate

(a) the house or other domestic premises in which the spouses or the surviving spouse, as the case 	may be, lived immediately before the person’s death; and

(b) the household goods and effects which, immediately before the person’s death, were used in 	relation to the house or domestic premises referred to in paragraph (a);

where such house, premises, goods and effects form part of the deceased person’s estate.”

When a person dies, all assets and liabilities they owned on the date they passed away are called his or her estate. These assets include legal rights, interests and entitlements to property of any kind. The liabilities or debts of the deceased person become the debts of the estate and they must be paid before awards may be disbursed to the beneficiaries of the estate. If the debts outweigh the value of the estate, then the beneficiaries do not get anything from the estate. What is meant by “the free residue of the estate” is the part of the estate that is left over after payment of debts, funerals expenses, executor’s fees, taxes, legal and other expenses incurred in the administration of the estate have been done. This free residue is what is left for distribution to the beneficiaries by the executor after all liabilities have been met.

The executor being the person who is seized with the administration of the estate, he is responsible for looking after the assets of the estate, paying the estate debts using the money in the estate and distributing the remainder of the assets of the estate in accordance with the law. He is therefore responsible for sorting out the finances of the deceased person and making sure that the debts and taxes are paid and what remains which constitutes “free residue of the estate” is properly distributed to the beneficiaries..

In terms of s 3A of the Deceased Estates Succession Act, the surviving spouse is entitled to receive the matrimonial home, or other domestic premises, household goods and effects from the free residue of the estate. What it means is that for the surviving spouse to be awarded these properties, they should still be in existence and forming part of the free residue after all the liabilities or debts of the estate have been paid. I am in agreement with the submissions made by Ms Chingeya that the 3 stages in the administration of estates are: (1) gathering of all assets (2) liquidating the estates’ liabilities and lastly, (3) distributing the remainder of the assets to the beneficiaries entitled thereto. The distribution of the assets takes place after the liabilities have been liquidated. In casu the estate comprised 2 immovable properties including the matrimonial home but the estate had debts too. The first step the Executor ought to have taken was to liquidate the debts. It was irregular for him to proceed to distribute the matrimonial home on 31 January 2014 when the estate still had a debt of US$130 706, 29 in circumstances which were clear that the applicant had no means with which to pay that debt. It was also clear to him that the deceased’s children were opposed to this distribution plan. He abrogated his duties. The surviving spouse is not guaranteed to get the matrimonial home if the estate has debts owing. This is not what s 3A (a) says. The matrimonial home which is registered in the name of the deceased spouse cannot be treated as separate from his estate. The argument that the surviving spouse made contributions towards the acquisition of the matrimonial property is misplaced at this stage. As long as the property is registered in the name of the deceased spouse alone it forms part of their estate. It is therefore not exempt or immune from paying the estate debts if there are debts in the estate. Whilst the intention of the legislature was clearly that the surviving spouse should inherit the matrimonial home to allow for a continuation of the life the surviving spouse was accustomed to living, the legislature did not say that the inheritance of the matrimonial property takes precedence over payment of the estate liabilities. Instead the legislature prioritised the payment of the liabilities when it said that the matrimonial property shall be received from the free residue of the estate. This means that the matrimonial home is awarded to the surviving spouse by the Executor after all the debts of the estate have been paid.

In casu the applicant having been irregularly awarded the matrimonial property when the estate liabilities were still outstanding, the applicant was unable to raise money to pay off these liabilities. The matrimonial property was eventually sold in order to pay off the debts. What remains now is the surplus cash that remained after the whole debt of the estate was paid. The critical question is does this surplus cash form part of the free residue of the estate? The applicant contends that it does not because the matrimonial property was sold after it had already been awarded to her by the Executor and as such it was now her property. Mr Bhatasara argued that in view of that it is the applicant alone who should benefit from the surplus cash. I am however persuaded by Ms Chingeya’s argument that this surplus cash now forms the free residue of the estate and not the free residue of the matrimonial property. I say this because the matrimonial property forms part of the estate and it is only subject to distribution after all the liabilities of the estate have been paid. The awarding of the matrimonial property to the applicant before the liquidation of the liabilities that was done by the Executor was irregular and therefore of no consequence. Once the property was sold to pay the debts of the estate, it ceased to exist in the estate. It was no longer available to form part of the free residue. It is my considered view that once the matrimonial home is sold, its proceeds cannot be distinguished from all the other estate assets. The proceeds become part of the free residue of the estate. If the legislature had wanted the surviving spouse to solely benefit from the surplus cash from the proceeds of the sale of the matrimonial home in a case where such property is sold in order to pay the debts of the estate, it should have said so clearly.

The applicant’s claim that she be awarded the surplus cash makes it obvious that in running around and engaging in negotiations with other judgment debtors and the bank for the reduction of the debt amount and the release of the title deeds to the Glen Lorne property, the applicant was not doing this for the benefit of the rest of the beneficiaries or the estate but for her benefit alone. She knew that it was herself alone who stood to benefit from the saving of the matrimonial home since in terms of s 3 A (a) of the Deceased Estates Succession Act, it is the surviving spouse alone who inherits the matrimonial home. She knew fully well that the deceased’s 6 minor children would not get a share from the matrimonial home. She knew that they could only benefit from the Glen Lorne property which was not the matrimonial property, and she chose to have that property disposed of to their prejudice. With its disposal there was nothing that was going to be left as free residue of the estate. Unfortunately for the applicant and fortunately for the deceased’s 6 children, the Glen Lorne proceeds were not enough to liquidate all the debts of the estate. In addition to that, the applicant had no money to pay off these debts. In the end the matrimonial property had to be sold and everyone now stands to benefit.

In view of the foregoing, the Master was not wrong in his decision that the surplus cash from the proceeds of the sale of the matrimonial property be shared equally amongst the applicant and the deceased’s 6 children.  The argument that the applicant will be left without a roof over her head evokes sympathy, but it does not carry any favour with the provisions of s 3 A (a) of the Deceased Estates Succession Act which make it clear that the surviving spouse can only inherit the matrimonial home from the free residue of the estate. If there is no matrimonial home in the free residue, the surviving spouse loses out. What is there now is cash and in terms of s 3 (b) (ii) of the same Act, the applicant is entitled to receive from it the extent of a child’s share. The cash is divided amongst the children and the surviving spouse in equal shares. It is apparent that in making his decision the Master was alive to the provisions of the Deceased Estates Succession Act.

In the result, it be and is hereby ordered that the application is dismissed with costs.

Mupanga Bhatasara Attorneys, applicant’s legal practitioners

Chingeya-Mandizira, 3rd and 4th respondents’ legal practitioners