What’s behind the shutdown of High Court Masters’ Offices?

They have been dogged by allegations of corruption for years.
The offices administer deceased and insolvent estates, and have been described as ‘breeding grounds for predators looking to pick at the cadavers of deceased estates’. Image: Shutterstock

On Monday Justice and Correctional Services Minister Ronald Lamola announced that all 15 Masters’ Offices within the country’s high courts were to be shut down for a day while the Specialised Investigating Unit (SIU) conducted search and seizure operations.

The offices were due to reopen on Wednesday. In a statement, Lamola apologised for any inconvenience, adding: “This investigation was necessitated by several allegations of maladministration and corruption and the Mpumalanga case wherein it is alleged that an official in the master’s amassed R1.7 million through fraudulent activities which further highlighted the need for an investigation of this nature.

“As a result, we will be shutting down all Masters’ Offices across the country to enable the SIU to gather, collate and retrieve information relevant to the investigation without any hindrance.”

One of the primary tasks of the Master’s Office is administration of deceased and insolvent estates.

It also administers the Guardian’s Fund, which manages money on behalf of those deemed legally incapable, as well as minors, unborn heirs, and missing or untraceable people.

King Sibiya, head of Lungelo Lethu Human Rights Foundation, which defends the poor against abusive creditor practices, says he has been complaining for years about corruption in and around the Masters’ Offices, which he says are breeding grounds for predators looking to pick at the cadavers of deceased estates.

“We are inundated with cases of widows whose husbands have passed on and who in terms of the law are the rightful executors of the deceased estate. But it is a common practice among banks to have themselves appointed as executors instead, particularly where there is an outstanding mortgage loan owed by the deceased.

“This leads to huge conflicts of interest where banks are deciding how to share the spoils in their favour, with no proper oversight whatsoever from the Master.

“The banks then rush to court to foreclose on a mortgaged property without following the law,” he adds.

“I am obviously extremely pleased that the SIU is now looking into this and that we might finally get some justice for the thousands of people who have been financially ripped off by this kind of predatory behaviour.”

Read: Banks slapped down over home repossessions in Joburg court case

Tony Kay, a KwaZulu-Natal property developer, has campaigned for years for police to investigate the nexus between liquidators and the Masters’ Offices after a Shelly Beach property deal he was involved in went pear-shaped. It was then that the liquidators stepped in.

The property developers in this case, like many others, complained that the auction process was irregular.

The Pretoria Master’s Office last year launched an inquiry into a botched property deal in which Pietermaritzburg liquidator Pierre Berrangé was involved. In recent years, the complaints against liquidators and Masters’ Offices have multiplied – along with the sums involved.

“We want a Master’s Office that will conduct its affairs with integrity in line with Batho Pele [‘People first’] principles and not squander resources meant for the poor and vulnerable in society,” said Lamola on Monday.

Read: Winding up an estate

“We are fully aware that the Master’s Office plays a critical role in our communities, it is an office that works for the most vulnerable in our communities, it works for orphans, minor children, and the widowed. We do however request members of the public to postpone their intention to visit the Master’s Office just for a day.”

The accusations against the Master’s Office, some of them aired in the Zondo commission of inquiry into state capture, range from the opportunistic to the criminal.

The surprise search and seizure raid will have caught corrupt officials in the Masters’ Offices off guard, leaving little time to lose files or shred incriminating evidence.

The SIU investigation will also look into the affairs of the Guardian’s Fund, as well as the supervision of the administration of companies and close corporations in liquidation.

Big money

The 2018 annual report for the Guardian’s Fund showed assets of R13.6 billion, almost 24% more than the R11 billion it had in 2016. In 2018 it received more than R1 billion in investment income.

One of the reasons the fund keeps growing is that so much of this money remains unclaimed, according to Sean Rossouw, founder of Benefits Exchange.

Benefits Exchange offers a free search engine for those trying to track down pension and other benefits that may be owed to them (the first search is free, while a processing fee of R25 applies to subsequent searches).

The Guardian’s Fund is managed by the Public Investment Commissioner.

In terms of the Administration of Estates Act, the Master of the High Court is responsible for paying out from the Guardian’s Fund.

The SIU investigation will also look into “the supervision of the administration of companies and close corporations in liquidation; the safeguarding of all documentary material in respect of estates, insolvencies and liquidations; the processing of enquiries by executors, attorneys, beneficiaries and other interested parties; and the appointment of executors, trustees, curators and liquidators”.

Last year Business Day reported that 45 000 trust files went missing from the Pretoria offices of the Master of the High Court after a storm apparently blew off the roof at a storage facility.

The SIU will have a lot of paperwork to get through over the coming weeks and months.

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In most civilized countries the court and supporting structures are seen as the custodians of citizens civil rights/protection and safety. It is the pillar of society that should stand firm in the safe guarding of the citizens, the last line of defence so to speak. It is now alleged that our courts supporting structures has become a gateway to undermining the entire court process. It is not inconceivable that a proper investigation will reveal that staff could be guilty of many contraventions including the false authentication of documents. For example liquidation orders, summonses and the good old summary judgements.

Now it is alleged that they could be stealing orphaned children’s money. It appears our slippery slope gets steeper and steeper with each passing investigation.

Yet another example of an institution that twenty five years ago was staffed by qualified,competent and ethical individuals who took their jobs seriously and complied with the letter of law and which the ANC has taken and turned into a hopeless mess where criminals run there dishonest operations without fear of sanction. All very well to close them down for one day but who believes that anyone will be charged and go to jail or will even have pay back the stolen money. That never happens in SA.

I deal with several MO on a regular basis about deceased estates. The arrogance ,incompetence entitlement and bureaucracy and bad attitude of and by the officials must be experienced to believed.

You have described every service rendered by government employees, to a letter.

Home affairs, police, municipal offices, licencing, you name it. All serviced by incompetent, arrogant, gum-chewing, glued-to-their-phone, extended-lunch-taking inconsiderate uneducated appointed-by-their-uncle lowest-common-denominator “staff”.

High time!

It is sad that it took so long to expose dodgy dealings which have been in the open for years (if not decades), but at least there should now be plenty of worried master employees, bank employees, lawyers and liquidators scrambling around.

@Abri …Oh yeah…..

Who’s going to jail ?

N..o…b…o….d…..y

Good article on an important topic. Anybody in his/her right mind would welcome this investigation into an extremely important public office. I heard the first rumours of corruption in a Master’s Office at the end of the 1990’s. One of the senior people then told me that there were cases where a staff member was bribed with a new pair of shoes, while other staff members demanded a KFC barrel before doing what they were supposed and paid a salary to do.
Ciaran, unfortunately there are some factual inaccuracies in your article:
1. The Guardian’s Fund is not managed by the PIC, only the capital in the GF is invested by the PIC. The GF is under control of the Master, who administers receipts into and payouts from the GF.
2. The Master does not “appoint” trustees and has (except in limited circumstances described in the Trust Property Control Act (TPCA)) no say over who the trustees of a trust can and should be. Trustees are appointed in the trust instrument (a will, trust deed or court order). The Master’s only role is to authorise such trustees to act by way of a letter of authority issued under sec 6(1) of the TPCA, and to remove errant trustees under certain limited circumstances.

We were dealing with the winding of the estate of my late sister’s husband last year and I have experience first hand the rot in the master offices and they work with the damn lawyers who supposed to be helping people.

Every single thing to be finalized, you get asked how much do you have. Told them to go f themselves and got rid of the so called lawyer you was supposed to be helping my sister.

Its a shame that institutions that are supposed to be helping turned to be the ones praying on the innocent

Despite high fees and negative tax considerations here is a reason to consider an offshore trust or private foundation

Visited a Masters Office this morning. Wow! What a difference. In the office I visited at 9.30am all three desks in the office were occupied with staff actually working on files. I have not seen that in fifteen years. Normally there is one desk occupied by someone busy with her cellphone. Long may this last.

End of comments.

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