The estate of Mohamed Ismail Patel was provisionally sequestrated on 14 December 2016 and finally sequestrated on 18 April 2017. The first and second respondents, Mr Moollajie and Ms Fey, were appointed as joint provisional trustees on 22 December 2016. The estate was complex: the insolvent had absconded and his family was uncooperative, requiring substantial work to trace assets, hold enquiries and conduct litigation. By November 2017 the winding-up was substantially complete and the provisional trustees lodged a liquidation and distribution (L&D) account and applied for a special fee. After disputes over the appointment of a final trustee, the appellant, Mr Gore, was nominated and on 19 October 2021 the Master appointed Moollajie, Fey and Gore as joint final trustees. A dispute then arose: Moollajie and Fey contended that they alone were entitled to the tariff and special-fee remuneration for work performed during their tenure as provisional trustees, whereas Gore contended that as a joint final trustee he was entitled to an equal one-third share of all remuneration, including that earned before his appointment. On 13 June 2022 the Master held that the remuneration had to be reflected as a single composite amount without distinguishing between the provisional and final stages. On review, the Western Cape Division of the High Court set aside the Master's decision, ruling that a trustee may only claim remuneration for services rendered during the term of his or her appointment, and remitted the matter for separate taxation. The appellant appealed with the leave of the High Court.
The appeal is dismissed with costs, including the costs of two counsel.
(1) A trustee's entitlement to remuneration under s 63(1) of the Insolvency Act 24 of 1936 is personal and arises only in respect of services rendered by that trustee during the term of his or her appointment; it does not accrue as a commission shared among whoever happens to hold office when the L&D account is confirmed. (2) The default rule that co-trustees share remuneration equally in the absence of agreement, as articulated in Cooper v The Master, applies only where the trustees were jointly appointed from inception throughout the period to which the remuneration relates; it does not operate retrospectively to entitle a trustee appointed later to share in remuneration earned before his appointment. (3) Where the dispute is whether a person is entitled to share in remuneration at all, as opposed to mere inter se apportionment among joint trustees, it is a matter relating to the estate within the meaning of s 56(5) of the Insolvency Act. (4) A Master's decision based on a material error of law regarding the scope of a binding precedent and statutory interpretation is reviewable under s 151 of the Act read with s 6(2)(d) of PAJA.
The Court observed, in the alternative, that even if the Master's earlier decision of 13 June 2022 were treated as the operative ruling, it would have been equally open to challenge on the same grounds because it embodied the same error of law. The Court also noted that allocating realisations to the periods before and after Gore's appointment would not impose an 'untenable hardship' on the Master, because the date of each realisation is a matter of record and the exercise is no more demanding than what is already required in estates where a provisional trustee does not become a final trustee. Finally, the Court remarked that the matter was complex and raised a question of some general importance for the administration of insolvent estates, thereby justifying the employment of two counsel.
The judgment is the leading appellate authority on the relationship between provisional and final trustees' remuneration under the Insolvency Act. It establishes that remuneration under s 63(1) is strictly tied to personal service rendered during the currency of a trustee's appointment, and cannot be treated as an automatic commission shared by all final trustees regardless of when they were appointed. It also confines the Cooper equal-sharing principle to trustees who were jointly appointed throughout the relevant period, preventing its retrospective extension to late-appointed trustees. Additionally, the case clarifies that disputes concerning the existence of a trustee's entitlement to remuneration are matters relating to the estate and thus fall within the Master's power under s 56(5) and are reviewable under s 151 read with PAJA.