Northern Cape agriculture dept must pay for investigation into possibly corrupt trusts, court rules

A court has ruled that the Northern Cape department of agriculture is liable for the costs of an investigation into concerns about equity schemes which were designed to empower and uplift farmworkers.

After a Northern Cape farming scheme designed to uplift farmers was accused of maladministration and corruption, the master of the high court stepped in to investigate the extent of possible corruption.

The Northern Cape department of agriculture was saddled with the R4m costs of the investigation by the master and tried to avoid paying. However, last week the Kimberley high court dismissed the department’s attempt to avoid paying. 

Background

The Northern Cape department of agriculture held meetings in 2017 in response to concerns about equity schemes which were designed to empower and uplift farmworkers in the area.

The master of the high court is both a person and office established to administer and regulate trusts and similar entities. In the Northern Cape, the master is Craig Davids. Since many of the schemes involve trusts, the master’s office was invited as a stakeholder in these meetings.

A complaint was made against Badirammogo Trust by beneficiaries . Lawyers for the beneficiaries requested the master’s office to investigate the trust for possible maladministration and corruption. The department agreed and requested the master to start an investigation.

The master’s office appointed investigator Mpho Sebashe in 2017. 

Several meetings were held and Sebashe wrote up his report where he outlined findings regarding maladministration and sent it to the master. Further, the master himself noted maladministration from the department in its handling of the matter. After reading the report, Davids ordered the department was liable for the costs of the investigation amounting to about R4m.

The department disputed it was responsible for the investigation costs and argued against it before a full bench of the Kimberley high court.

The dispute

The department argued that, in law, it is not responsible for the R4m being demanded of it by the master for an investigation his office conducted.

Though the department had requested the investigation after being alerted by the Badirammogo beneficiaries, the department argued it was the trust that should be liable. The department had no control over the investigation or the appointment of Sebashe and no authorisation had been sought from the department.

Writing for the majority court on Friday, judge Cecile Williams said nothing in law required this. There was also no doubt the department had requested the investigation. Upon making a request to the master, “it is thereafter entirely within the discretion of the [master] ... whether such an investigation should be carried out.”

The department also alleged that the master’s office had “colluded” with beneficiaries’ attorneys or Sebashe “to saddle the department with a costs order”. But, Williams noted, there was “no evidence before us that the [master] had reacted or responded to [beneficiaries’ lawyers’] request prior to the department requesting him to investigate the various trusts.” She also wrote “there can ... not be anything sinister” about the report focusing on Badirammogo Trust due to the sheer number of complaints the master’s office had received about the trust. The allegations against the master, Sebashe and others “have no merit”.

The department also took issue with the master appointing Sebashe. The department claims the master “merely acceded” to the request from the beneficiaries’ attorneys to appoint him as the investigator. However, Williams noted Sebashe and his consulting firm were already involved with the equity schemes’ concerns, and “would be the obvious choice to be appointed as the ... investigator.”

There had been no complaints when Sebashe was appointed and he attended to various tasks as the investigator.

The department also complained the master had saddled it with costs because it had made the request. Yet, as Williams noted, that was not the only reason. The master found “instances of maladministration and questionable compliance with the [law] on the part of the department.”

Williams found the master’s justification the department pay for the investigation was lawful and dismissed the department’s attempts to avoid paying. 

moosat@businesslive.co.za