Legal Talk

A Russian businesswoman, 'Roza', who lived in Moscow, was the sole shareholder and director of a company in South Africa. Roza died in Russia and left no will, nor did she leave any documentation to say how her estate in South Africa was to be dealt with. She had two daughters whose relationship with each other was acrimonious at best. The financial manager of Roza's South African company, who was neither a shareholder nor a director of the company, brought an urgent application in the High Court, asking the court to grant him rights of an "interim receiver".

In South Africa when a person dies, his or her estate has to be wound up by an executor. This appointment is made either by the deceased in terms of a will, or by the Master of the High Court, if there is no will. All property in the deceased's name including any 'right, title or interest' to property, which the deceased would be entitled to, would be deemed to be part of the deceased's estate. This includes both immovable and movable or 'incorporeal' property, (such as shares in a company). The executor is expected to administer the deceased's estate, either according to the wishes of the deceased in terms of a will, or in terms of intestate laws, if there was no will.

In the matter before the court, there was no appointment of an executor to deal with Roza's affairs and those of her company. The attorney acting for one of Roza's daughters applied to be appointed as executor, but failed to file security to the Master. There was also an objection to his appointment by the other daughter on the basis of conflict of interest, and he was not appointed.

The Court said that a deceased estate cannot be liquidated unless there were letters of Executorship issued by the Master of the High Court or as he may otherwise direct and an executor is appointed and proper security is filed for the performance of his functions. The Court said that until such time as Letters of Executorship have been granted, an interim curator must be appointed. This interim curator must also provide security to the satisfaction of the Master of the High Court and must account for the property of the deceased in such a manner as the Master may direct.

The Court found no basis for urgency of the application, refused him the order and made him pay the costs of the application. If you run a business in the name of a company in which you own 100% shares and you are the sole director, I would recommend that you include a provision in your Memorandum of Incorporation [MOI] setting out who, upon your demise, would be responsible for the running of the business and ensure that you have a valid will drawn up. Talk to us about amending your MOI and/or drafting or updating your will.

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