The Chief Master submitted a report under section 96(2) of the Administration of Estates Act, 66 of 1965, compiled by the Deputy Master responsible for trusts in the Pretoria Master’s Office to the Judge-President of the Gauteng High Court in 2021. The report dealt, inter alia, with the use of trusts to hold the proceeds of successful claims against the Road Accident Fund (RAF) and claims for medical negligence.
The Chief Master also issued two directives Chief Masters Directive 2021-01 and Chief Masters Directive 2021-02, both of which suspended part of the Chief Masters Directive 2017-02 – Dealing with Trust matters. This led to an impasse with regard to the registration of trusts where the court awarded damages to victims of motor vehicle accidents or medical negligence and ordered the setting up of a trust for the benefit of the victim(s).
The report proposed that in all cases where the claimants in these matters are minors or are fully or partially incapable of managing their own affairs, a curator bonis must be appointed and that the use of trusts must be avoided. Some of the reasons advanced were that the Master does not have sufficient powers to prevent abuse of such trusts and that trustees could set their own fees. There were also allegedly ambiguities in court orders w.r.t. the fees that trustees could charge and the powers of the Master to oversee the charging of fees.
The Judge-President referred the matter to a hearing before a full bench of the North Gauteng High Court, which took place on 2 and 3 November 2021. FISA applied to be, and was admitted as, a friend of the court (amicus curiae), together with six other amici curiae.
All the amici argued that the decision whether to set up a trust or appoint a curator bonis under these circumstances was to be taken in each case, depending on the circumstances, and that a blanket prohibition on the use of trusts is uncalled for.
The court (Keightly J, with Millar and Vallaro JJ concurring) held that there is no legal basis to prevent the use of trusts under these circumstances and that each case should be dealt with on its own merits. The court was also of the view that a practice directive must be developed to determine the process to be followed before these matters are brought to court. This includes the appointment of a curator-ad-litem to ensure that the interests of such claimants are protected in the process leading to the award of damages, as well as to place the court in a better position in each case to determine whether the appointment of a curator bonis is called for or whether the setting up of a trust would be more appropriate in the circumstances. The court also held that the court order creating the trust must specify the trustee fees or a method of calculating the fees.
The Chief Master’s response w.r.t. the implementation of the judgement is awaited.