Beware of Fraud in Deceased Estates
In addition to our decades of experience and service, one of the assurances Appleton clients have is our administrator’s membership of the Fiduciary Institute of South Africa (FISA) and our strict adherence to its Code of Ethics. The below legal case highlights just one of the dangers and consequences of unprofessional estate administration.
The first respondent (L) and J was married until their divorce in 1997. In 2002 J bought a fixed property and it was registered in his name in the deeds office. J died in April 2004. In 2005 L approached the third respondent, the Master of the High Court in Johannesburg, and falsely stated that she was J’s surviving spouse. Letters of Authority were duly issued to her and she proceeded to have the fixed property transferred in her name. In 2006 she (J) then obtained a loan from ABSA and had a mortgage bond registered over the property as security for this loan. In 2015, when the fraud became known to the Master, applicant (B) was appointed as executor of J’s estate. B proceeded with the application to have the transfer of the property to L cancelled under the provisions of section 6 of the Deeds Registries Act, Act 47 of 1937. This section provides, inter alia, that no deed of transfer can be cancelled except by order of the court. B’s application, which was opposed by L, but not by the second respondent (ABSA), the third respondent (the Master), or the fourth respondent (the Registrar of Deeds), was based on the point that there was no just cause for the transfer as it was based on L’s fraud.
The court (Adams J) held that the principle “fraud unravels all” as enunciated by Lord Denning in the English case Lazarus Estates Ltd v Beasley [1956] 1 QB (CA) 702 at 712 is part of our law and has been applied by the Supreme Court of Appeals in Esorfranki Pipelines (Pty) Ltd and Another v Mopani District Municipality and Others [2014] ZASCA 21; [2014] 2 All SA 493. As such the fraud perpetrated by L cannot be allowed to stand and the property must be returned to J’s deceased estate. The court ordered the Registrar of Deeds to effect the cancellation of the transfer of the property to L.
