‘Greedy’ Executor Chucked Off US$30m Estate




Eddies Pfugari

THE High Court has removed executor for the US$30 million estate left behind by the late property tycoon, Edward Nyanyiwa, popularly known as Eddies Pfugari, from the position after one of the beneficiaries applied for his removal, it has emerged.

Pfugari’s daughter, Henrietta Nyanyiwa, had argued that the executor, Clive Mandizvidza, was charging 15% of the estate’s gross assets as opposed to the Statutory 5%.

It also emerged from court documents  seen by NewZimbabwe.com Monday that Mandizvidza had wrongly valuated properties left behind by the late businessman instead of shares in the flagship company, E. Pfugari Properties, as is legally permissible.

This was initially dismissed by the High Court earlier in 2021, but he appealed at the Supreme Court, which upheld the High Court ruling.

Henriatta argued that the Executor who is more interested in enriching himself at the expense and to the prejudice of the beneficiaries would have failed to perform his duties and must be removed from office.

The applicant had cited, Master of the High Court, executor Clive Mandizvidza, E. Pfugari estate private limited, and Eddies Pfugari private limited as the first to fourth respondents.

Henrietta is a beneficiary of the Estate, and she took issue with Master of the High Court’s decision to confirm the liquidation and distribution accounts filed by E. Pfugari Properties in respect of the estate.

She also contended being that there was never a proper valuation of the shares held by the deceased in the various companies he had interests in as envisaged by the Estate Duty Act [Chapter 23:03] and that hr wrongfully and unreasonably approved an executor’s fee of fifteen (15%) of the estate’s gross assets as opposed to the Statutory five percent (5%).

“That the Executor who is more interested in enriching himself at the expense and to the prejudice of the beneficiaries would have failed to perform his duties and must be removed from office,” she submitted.

According to the court papers Mandizvidza was appointed the executor of the estate of the late Edward Nyanyiwa on March 21, 2019.

On August 25, 2020 Henrietta’s legal practitioners wrote two letters of complaint to Master of the High Court and they called upon Mandizvidza who responded and after the response he dismissed the complaints by the applicant for want of substance hence this application.

In her application, Henrietta Nyanyiwa sought determination on whether the interim distribution account for estate of the Edward Nyanyiwa should be set aside or whether the fees charged by the Mandizvidza should be set aside and whether the second respondent should be removed as executor.

On August 5, 2020, the applicant tabulated her issues against the liquidation accounts for Estate of the late Edward Nyanyiwa.

“Her grievances can be summarized as follows, that the values of the late Nyanyiwa’s shareholding in various companies had not been properly determined in that the value of the shares in such companies is naturally affected by the companies’ liabilities and these were not taken into account in coming up with the values that the executor sought to rely on. Further, that the second respondent had charged a total of fifteen percent as his fees when such percentage was not due to him. According to the applicant the second respondent’s conduct constituted overcharging and that the account be set aside,” Justice Owen Tagu’s judgement reads.

Mandizvidza however refuted the allegations made against him and the liquidation account.

In relation to allegations of improper valuation of the late Edward Nyanyiwa’s shareholding, his defence was basically that the valuation had been done purely under section 6 of the Estate Duty Act and that the auditors who had valued the companies had taken into account all relevant facts and considerations.

On the question of his charges his response was that the applicant had failed to demonstrate how the estate had been overcharged and that he simply taxed the estate as informed by statute.

The Master of the High Court then agreed with the executor that section 6(g) (iii) is applicable in the valuation of company shares and that this approach had not been formally challenged to date.

Justice Tagu however said the questions that arise from the background was that whether there is any legal basis for the court to interfere with the decision made by the Master of the High Court concerning the valuation of the late Nyanyiwa’s shares in the mentioned companies, whether the fees charged by the first respondent should be set aside and the executor should be removed.

Justice Tagu said Mandizvidza did not dispute that the 15 percent fee was not fair.

“It is trite that that which is not disputed in the affidavits is taken as admitted. I say so because the first and second respondents did not dispute the applicant’s assertion that the 15% fee charged is neither fair nor reasonable. Once it is accepted that the first respondent ought to have assessed whether the fee charged is fair and reasonable, which he did not do since he simply followed what was placed before him by the second respondent (Mandizvidza) then it must follow that it was not as that fact was not challenged,” Tagu ruled.

“On that basis the confirmation of the accounts would have to be set aside with punitive costs to be borne by the estate. It is not surprising that both the first and second respondents dared not argue that the 15% charged is reasonable or fair that they did not even attempt to address that point because the fee is blatantly and grossly unfair because it leaves the second respondent as the major beneficiary of the estate ahead of the deceased’s own family, among other reasons set out in the founding affidavit.”

“A 5% fee would still translate to a very substantial amount by any standard and would have constituted a more that reasonable fee for the second respondent. If it is accepted, which is not, that 15% is indeed supported by statute, which it clearly is not, the first respondent was obliged to assess it in accordance with section 56 of the Administration of Estates Act following the applicant’s objection and come up with what he considers to be a fair and reasonable remuneration,” Justice Tagu ruled.

“Had he done so there is no doubt that he would have come up with a total of 5%, if not less, given the significant value of the estate, the number of beneficiaries and the liabilities of the estate, including the estate duty and the Master’s fees, to mention a few considerations,” he ruled.

Tagu further castigated Mandizvidza that his brazen attitude displayed when he went on to dispose the estate assets after the approval by Master of the High Court in the face of court challenges was an obvious misinterpretation of the law, coupled with mistrust of the executor in this case makes a very good case for his removal.

Tagu then ordered that the decision to confirm Mandizvidza’s interim liquidation and distribution accounts in the estate of the late Edward Nyanyiwa under DR Number 471/19 be set aside.

“The interim liquidation and distribution accounts filed by the second respondent in the estate of the late Edward Nyanyiwa under DR 471/19 be and are hereby set aside,” he ruled.

He also removed Mandizvidza from being the executor of the estate. – Newzimbawe.com