- High Court in Cape Town removed an attorney as executrix of her late twin sister’s estate.
- Acting Judge M Louw found she used estate funds to pay legal costs incurred defending litigation brought against her personally.
- The court ordered the appointment of an independent executor and barred her from becoming trustee of a trust established for the deceased’s twin children.
The High Court in Cape Town has removed an attorney from her position as executrix of her late identical twin sister’s estate after finding that she improperly used estate funds to finance litigation brought against her in her personal capacity. This created an unacceptable conflict between her own interests and those of the estate’s beneficiaries.
Acting Judge M Louw ruled that the attorney could no longer continue administering the estate because her personal interests had become so entangled with her fiduciary obligations. The court also declared that she should not be appointed trustee of the testamentary trust set up for the benefit of the deceased’s twin children and ordered her to pay the costs of the application on a punitive attorney-and-client scale.
Years of litigation
The application was brought by the twins’ father, acting on behalf of the children, against the attorney, who is the deceased woman’s identical twin sister, the children’s maternal aunt, and the executrix of the estate. The Master of the High Court in Cape Town and the Legal Practice Council were also cited as respondents.
The dispute dates back to the death of the children’s mother in September 2018, following complications after surgery. Several years before her death, she had received R5.6 million from the settlement of a Road Accident Fund claim arising from a motor vehicle accident. The money was initially paid into her sister’s trust account in November 2014, and then moved into an investment account held in the attorney’s name.
Shortly after receiving this settlement, the deceased made a new will. She mostly disinherited her husband, left the residue of her estate to the twins, named her sister as executrix, and directed that a testamentary trust be created to manage the children’s inheritance until they turned 21.
Following the deceased’s death, the will was accepted by the Master in April 2019, and the attorney was formally appointed as executrix.
Earlier battle reached the Supreme Court of Appeal
The father later launched proceedings to compel the attorney to account to the estate for the R5.6 million. Although the High Court initially dismissed that application, a Full Court overturned the decision and ordered her to account.
She then succeeded on appeal in the Supreme Court of Appeal, which found she was not required to account to the estate for the money. The Constitutional Court subsequently refused leave to appeal, ending that litigation.
Judge Louw emphasised that the present application was not about whether the attorney had to account for the R5.6 million. Instead, he said the question was whether she had breached her fiduciary duties by using estate funds to pay for her personal defence in that litigation.
Father alleged millions were spent
The father argued that more than R3 million of estate funds, representing about 80% of the money under the executrix’s control, had been paid to attorneys who represented her during the accounting litigation.
He contended that she had improperly used money belonging to the estate to defend herself in proceedings brought against her personally, which placed her in an irreconcilable conflict of interest. She would ultimately be required, as executrix, to recover those same funds from herself on behalf of the estate.
His legal team further argued that executors occupy fiduciary positions with a duty to preserve estate assets, avoid conflicts of interest, and never use estate property for their own benefit.
Executrix denied any breach
The attorney denied acting improperly. She maintained that the earlier litigation directly affected the administration of the estate and that she had defended it both in her personal capacity and as executrix.
She claimed she had acted on legal advice, denied deriving any personal benefit, and argued that estate funds had been used legitimately to protect the interests of the estate. Her legal team also argued that the father had failed to establish the precise amount spent on the litigation and said that removing an executor was an exceptional remedy, reserved for the clearest cases.
Judge found estate administration lacked transparency
Judge Louw rejected the attorney’s explanation. He found that the accounting litigation had always been directed against her in her personal capacity and concluded that the legal costs incurred in defending it were personal expenses.
“I am satisfied that the accounting application was, at all material times, directed against [the attorney] in her personal capacity,” the judge said. He added that there was “no ambiguity in that regard”.
The judge also rejected her reliance on legal advice. “Whatever advice may have been given, the decision to authorise payment from estate funds remained hers as executrix,” he said. “One would reasonably expect an attorney, especially one administering a deceased estate, to appreciate the difference between defending litigation in a personal capacity and incurring expenses on behalf of the estate.”
Judge Louw was highly critical of the way the estate had been administered, saying the evidence showed a lack of transparency. “What is particularly concerning is the lack of transparency that emerges from the papers,” he said.
“The overall impression created by the papers is that the administration of this estate has been cloaked in secrecy rather than marked by the openness and accountability expected of a fiduciary.”
He also pointed to repeated transfers of estate funds between different accounts, uncertainty surrounding legal costs, multiple changes of attorneys and agents, and years of delay in winding up the estate.
Children’s interests came first
Judge Louw said the court had approached the matter from the perspective of the minor children, who were the main beneficiaries of the estate. “As the Court is the upper guardian of all minor children, their best interests are of paramount importance and have remained a central consideration throughout this judgment,” he said.
The judge concluded that the attorney’s personal interests had become inseparable from her duties as executrix. “In my view, the facts show a clear conflict between [her] personal interests and her fiduciary duties as executrix,” he said.
He added that she shouldn't have remained in office because her continued appointment was “not in the best interests of the estate or its minor beneficiaries”.
Independent executor ordered
The court removed the attorney as executrix, ordered her to hand over all estate assets and records, directed the Master to appoint an independent executor with at least 15 years’ experience within 15 days, and declared that she may not serve as trustee of the testamentary trust created for the twins.
She was also ordered to pay the costs of the application on the attorney-and-client scale, including the costs of two counsel, from her own pocket rather than from the estate.
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