About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2016
>>
[2016] ZAWCHC 98
|
|
Trustees for the Time Being of the Roy Seawright Trust v Seawright (A108/2016) [2016] ZAWCHC 98 (15 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO: A108/2016
DATE:
15 AUGUST 2016
In
the matter between:
THE
TRUSTEES FOR THE TIME BEING OF THE
ROY
SEAWRIGHT
TRUST
..............................................................................................
APPALENTS
And
CAROLY
WINNIFRED ANNE
SEAWRIGHT
...........................................................
RESPONDENT
Date of hearing:
26 July 2016
Date
of judgement: 15 August 2016
JUDGMENT
[1]
In issue in this appeal is whether the trustees of the Roy
Seawright Trust (‘the Trust’) should be ordered to pay
costs
de bonis propriis
on an attorney and client scale to the
78-year-old respondent, Ms Carolyn
Winnifred Anne
Seawright,
a beneficiary of the Trust, following the
withdrawal of an application to have the respondent placed under
curatorship on grounds
of alleged prodigality.
[2]
The
respondent’s father, Mr Robert
Morton Felix Seawright, established the Trust on 9 June 1994. On 11
June 2014 the appellants,
namely Mr David Cosgrove, Mr John Seldon,
Mr Richard Harris and the Nedgroup Trust Limited, as trustees of the
Trust, instituted
an application against the respondent to have her
declared incapable of managing her affairs on the basis of her
alleged prodigality.
This application was made approximately a week
before the respondent instituted an action for the removal of the
appellants as
trustees of the Trust on the grounds of their alleged
misconduct. Following receipt of the answering papers, the appellants
withdrew
the curatorship application but their tender of
party
and party costs was refused by the respondent. This caused the issue
of costs to be argued before the Court
a quo,
which ordered
the appellants to pay the costs of the application
de bonis propriis
to the respondent on the scale between attorney and client. With
leave granted on petition the appeal now turns on the costs order
made.
[3]
The Trust deed provides that:
‘
4.
Disposal of Income and/or Capital
Until
the termination date hereinafter referred to, the nett income and/or
capital of the Trust Funds may in the absolute discretion
of the
Trustees, be used for the benefit or any one or more of the Donor,
his descendants and their spouses or any Trust of which
the
aforegoing persons is or may become a Beneficiary, as the Trustees
shall deem fit and they shall accumulate any income not
so used.
5.
Disposal of Capital at Termination Date
5.1
The Trust shall terminate upon the date (referred to as the
“Termination Date”) which shall be 50 (Fifty) years
after
the death of the Donor or such other date as determined in clause
5.3.
5.2
The balance of the capital (including any accumulated income) held by
the Trust as at the Termination Date shall evolve upon
the Donor’s
children, Carolyn Winifred Anne Seawright and Linda Veronica
Seawright in equal shares, or if any one shall have
predeceased the
Termination Date, upon her issue per stirpes, failing issue, upon the
surviving child of the Donor with issue of
any predeceased child
taking in place of the parent per stirpes.
If
there are no such persons in esse, then the balance of the capital
(including any accumulated income) shall evolve upon the Trustees
for
the time being of the Barton Mark Trust failing such Trust for
whatsoever reason, upon the Trustees for the Time Being of the
Clifford Harris Usufructuary Trust, to be dealt with by, and subject
to, the possession and control of, the said Trustees in terms
of the
said Trusts. In the event of the latter Trust having terminated then
the balance of the capital shall be distributed in
accordance with
the provisions of that Trust…’.
[4]
By the time of Mr Seawright’s death
in 2001 the Trust’s assets had a market value of in excess of
R21 million and almost
three times that by 2012. Mr Harris, the son
of Mr Seawright’s sister, who is a beneficiary of the Clifford
Harris and Barton
Mark Trusts, was appointed as a trustee of the
Trust and after Mr Seawright’s death, as executor of his
estate. Neither the
respondent, nor her sister who passed away on 17
September 2009, had children with the result that the respondent is
currently
the sole beneficiary of the Trust.
[5]
During 2005 the respondent was declared
incapable of managing her own affairs and was placed under
curatorship following an application
made by a close personal friend,
without opposition from the respondent who took the view that it
would free her from the burden
of managing her financial affairs and
enable her to pursue her artistic pursuits. The curatorship was
chiefly the result of the
respondent’s unfortunate business
dealings during 2004 which led to greatly increased costs being
incurred by her in the
renovation of her home. In 2010 the respondent
was released from this curatorship following an application which was
not unopposed.
[6]
Mr Cosgrove, in his capacity as trustee of
the Trust, deposed to the founding affidavit in support of the
appellants’ curatorship
application. In this affidavit he
stated that:
‘
8.
Harris is the respondent's cousin. He
has known the respondent for his entire life. However, his
relationship with the respondent
has on occasion been difficult, and
they have seldom agreed on the administration of the trust. It is
fair to say that the respondent
dislikes and does not trust Harris.
9.
Harris is a beneficiary of the Mark trust and of the Harris trust. As
the respondent has no descendants, pursuant to clause 5.2
of the
trust deed, the Mark trust, or failing that, the Harris trust, will
become the sole beneficiary of the trust’s capital
balance at
its termination.
10.
For these reasons, Harris and the other trustees are of the view that
it is not appropriate for him to be directly involved
in these
proceedings, other then to authorise me to act on the applicant’s
behalf.
11.
None of the other trustees are related to the respondent, nor have
any of them ever met her. They do not have a personal interest
in the
outcome of this application. However, in their capacities as
trustees, they have a direct interest in the relief sought.
12.
The trustees’ interest in this application arises from their
position as trustees of the trust. The purpose of the trust
is to
benefit the donor (Roy Seawright), his descendants, and their
spouses. Of these beneficiaries, only the respondent remains.
The
trustees are therefore under a duty to apply the assets held by the
trust for the benefit of the respondent
.’
[7]
Apparent from the papers is that the
respondent’s access to funds from the Trust had long been an
issue between the parties.
The appellants contended that the
respondent’s demands for payment and the changes in her legal
advisors caused ‘
alarm
’.
Mr Cosgrove, who has not met the respondent, stated that she ‘
is
a prodigal, and therefore incapable of managing her affairs. The
reports of Doctors Rausch, Czech and Zabow and of Advocate Van
der
Westhuizen confirm that this is the case, as does the evidence that
the respondent has squandered funds whenever they came
to hand
’.
There is no dispute that apart from the updated report received from
Professor Tuviah Zabow, who had not consulted with
the respondent
since 2007, the remainder of the medical reports relied upon related
to the first curatorship application and had
not been updated. The
appellants took issue with the fact that monies inherited by the
respondent from her sister had been used,
with R1.5 million remaining
in her attorney’s trust account.
[8]
From the correspondence attached to the
founding affidavit it is apparent that on 17 November 2011 the
respondent through her erstwhile
attorney sought a significant
increase in monthly maintenance from the Trust and access to various
of its accounting records. The
appellants refused to accede to the
requests and sought information from her attorney as to the
respondent’s circumstances
which was not forthcoming. On 7
September 2012 the appellants informed her attorney that Professor
Zabow had been appointed to
consider her position, particularly her
ability to manage her affairs, and asked to report as to whether any
of her conduct caused
concern. In response the appellants were
informed that the respondent refused to consult Professor Zabow and
that she had engaged
a financial advisor who was handling her
financial affairs, with the inheritance received from her sister
invested by the financial
advisor. In addition, the appellants were
informed that funds held by the respondent’s previous attorney
from her sister’s
estate were to be invested by attorney.
[9]
On 19 April 2013 the appellants informed
the respondent of their intention to bring an application to have her
placed under curatorship
and asked for information from her attorneys
concerning the respondent’s ability to manage her financial
affairs. Concern
was expressed that the respondent may dissipate her
assets and ‘
cause harm and
distress to herself
’. On 23 April
2013 her attorneys replied that there was no reason to suppose that
the respondent lacked capacity to manage
her affairs and that a
financial advisor assisted her. Also on 19 April 2013 the appellants
sought a report from Dr D Dennis, in
whose care the respondent has
been since 2007, as to his treatment of the respondent and her
ability to manage her financial affairs.
The appellants’
attorneys informed Dr Dennis that they took the view that the
respondent should not have been discharged
from her earlier
curatorship and that they had decided to approach the High Court to
seek that she again be placed under curatorship.
On 16 May 2013 Dr
Dennis indicated his refusal to respond to the appellants’
enquiries on the basis of patient confidentiality.
Shortly
thereafter, on 22 May 2013, the appellants obtained a report from
Professor Zabow who cautioned against the respondent’s
exposure
to ‘
potential abuse/mismanagement
’
and proposed that a full clinical report was warranted, although
noting that ‘
the extent of
financial affairs are not specifically of direct relevance to her
mental capacity
’.
[10]
Nine months later the appellants instituted
the curatorship application. Mr Cosgrove stated in support of the
application that -
‘…
the
trustees have been disbursing funds to the respondent for many years.
As a consequence they have become aware of her profligacy.
In the
past, they have attempted to address the respondent’s problem
by disbursing limited monthly amounts to her. This has
not proven
effective. The respondent spends funds the moment she received them.
As a result, the trustees now have great difficulty
in advancing
funds to the respondent in good conscience, knowing that they will
immediately be frittered away
.’
[11]
He indicated further that the record was
not overburdened with correspondence which was not relevant to the
issues at hand but that
such correspondence would be made available
if required, continuing that:
‘
I
am disclosing this fact lest it be contended by the respondent that
the trustees are bringing this application in order to subvert
her
allegations of misconduct against them
.’
[12]
The respondent opposed the curatorship
application, disputed that she is a prodigal or that she is of
unsound mind and took issue
with the absence of evidence put up to
support the application. She stated that the appellants had known for
some time that she
intended to take legal action against them based
on her allegations of their serious misconduct related
inter
alia
to the establishment of an
offshore trust which was endowed with more than R8 million from the
Trust, with a further distribution
made from Trust assets of almost
R2.5 million. On 13 September 2013 the respondent demanded that the
appellants resign as trustees
of the Trust on grounds of this
misconduct and that ‘
barely a
week
’ before she instituted
summons on 18 June 2014 in her removal action, the appellants sought
that she be declared a prodigal.
This, she contended, was done with
‘
the manifest purpose
’
not to safeguard her interests ‘
but
to shield the
[appellants]
from
an enquiry into their alleged gross misconduct as trustees
’.
In her answering affidavit she took issue with their plea filed
in response to her removal action in which the appellants
claimed she
is a ‘
spendthrift
’
and made reference to their curatorship application. This, the
respondent indicated, substantiated her belief that the application
was an abuse of Court process. Given that she routinely acts upon the
advice of a psychiatrist, a retired financial advisor and
a firm of
attorneys, the respondent stated that she has not felt or been
vulnerable to financial exploitation and that the appellants’
curatorship application was consequently one without merit.
[13]
The respondent provided a history of
limited payments she had received from the Trust from October 2004
when Mr Harris gave her
two options: to sell her R2 million house and
“go it alone” with R1759.00 per month made available to
her after expenses,
which she refused; or to take a loan from the
Trust which included the payment of monthly expenses and R6000.00 for
“discretionary
spending”. As a result a loan agreement
was concluded, with the respondent supporting herself from the equity
in her house,
which she stated ‘
preserved
the funds of the Trust…not for my benefit, but ultimately for
the benefit of Harris and his family
’.
This ‘
unfair financial regime
’
imposed on her, the respondent stated, ‘
is
certainly not what my father had intended’
.
[14]
When her curator
bonis
,
Mr Michael Lane, sought further funds for the respondent given the
‘
ample provision
’
made for her by her father, this was denied by the appellants on the
basis of an inheritance received by the respondent
from her father
which included an investment portfolio worth R2.4 million, which they
claimed she had spent in a reckless and wasteful
manner. On 6 March
2007, in response to Mr Lane, it was stated that the loans provided
to the respondent were to address this and
given that ‘
the
capital was entrusted to the trustees not solely for the benefit of
[the respondent and her sister]
but also
for the benefit of the ultimate capital beneficiaries
’
of which the ‘
trustees are
mindful’
.
[15]
In the appellants’ replying affidavit
Mr Cosgrove dealt with the respondent’s claim that the trustees
were motivated
by an ulterior purpose in bringing the application by
denying misconduct and persisting that the appellants’ decision
to
launch the application was ‘
entirely
reasonable
’, lacked ulterior
purpose and was brought about by the respondents refusal to deal with
the applicants’ enquiries.
He stated that the application was
made ‘
merely to ensure that the
respondent was not - again improperly influenced by unscrupulous
service providers. The respondent had
been previously diagnosed with
a mental condition that left her susceptible to same
…’.
[16]
Having
heard argument on the issue of costs, the Court
a
quo
ordered the appellants to pay the repondent’s costs
de
bonis propriis
on the attorney and client scale. In doing so, regard was had to the
decision of
Cooper
NO v First National Bank of SA Ltd
[1]
in which it was stated that ‘
(t)he
general principle of the common law is that a trustee, who acts in a
representative capacity, cannot be ordered to pay costs
de bonis
propriis unless he has been guilty of improper conduct
’.
While finding that the trustees’ failure to deal in its reply
with the respondent’s ‘
serious
allegations’
on
the part of trustees ‘…
regarding
irregular dealings
’
in transferring monies offshore ‘
by
or from the Trust
’
was not in keeping with their fiduciary duties and that they had not
acted properly in this regard, the Court
a
quo
found that the trustees ‘
cannot
be blamed for their decision to bring the application
’.
This was circumstances in which the Court was ‘
unable
to make a finding…on the papers
’
as to whether the application was a strategem to obstruct the
respondent’s application for the removal of the trustees.
[17]
Regard was also had by the Court to the
position of Mr Harris as a potential beneficiary under the Trust. In
this regard the Court
found that:
‘
It
appears clearly from the founding affidavit that respondent’s
attitude towards him was hostile. For that reason applicants
created
a façade which was calculated to conceal the fact that Mr
Harris was one of the persons that instituted the proceedings
against
her. In my view this was also improper. They were acting jointly as
trustees in this application and there were no grounds
for attempting
to conceal this fact from respondent’.
[18]
The appeal turns on whether the Court
a
quo
erred in finding that the
appellants had conducted themselves improperly in failing in their
replying affidavit to deal with the
respondent’s allegations of
their irregular dealings and whether the finding that a façade
was created in their founding
affidavit was calculated to conceal
that Mr Harris was one of the applicants. The respondent opposes the
appeal on the basis that
the appellants acted improperly in bringing
the curatorship application, which was aimed at disabling her a week
before her prosecution
of an action to have them removed as trustees
of the Trust.
[19]
Extensive heads of argument were filed in
the matter. In argument Mr
Woodland
SC
raised a number of reasons as why no impropriety on the part of the
appellants existed in the matter. These included that there
was no
immediate harm to the respondent in bringing the application in that
what was sought was an investigation into her position
by a curator
ad litem
in circumstances in which she had previously been under curatorship
for five years due to spending money unwisely. Mr Lane, as
curator
bonis,
it
was contended had in retrospect indicated that it was unwise to
release the respondent from curatorship, although he did not
confirm
this view in a confirmatory affidavit. Professor Zabow reported on 22
May 2013 that a full clinical report was warranted
and the respondent
was vulnerable. After her release from curatorship the respondent had
come into money from her sister which
had been depleted and the
appellants were concerned that ‘
history
would repeat itself’
. The
respondent’s attorney had stonewalled the trustees when he had
refused information sought regarding the respondent.
It followed that
when the answering papers came to light and ‘the answer
provided’, the appellants withdrew the application.
[20]
It was conceded for the appellants that
while the application may have been unfortunate, with its timing a
factor, the appellants
had nevertheless acted prudently in bringing
the application, given the respondent’s past prodigality and
there was no bar
on the respondent pursuing a removal action. The
decision of the Court
a quo
was, it was contended, arrived at upon wrong principle, unwarranted
and had severe reputational consequences for the appellants
whose
professional integrity is at stake and who ought not to have been
penalised for the manner in which they dealt with the conflict
between Mr Harris and the respondent, or for their lack of reply to
the misconduct allegations raised in the answering affidavit.
[21]
In opposing the appeal Mr
Duminy
SC maintained that the Court
a
quo
had not misdirected itself in its
finding that a façade had been sought to be created, that Mr
Harris was not involved in
the proceedings when he was required,
given his position as trustee, to act jointly with other trustees,
failing which the proceedings
would have been unauthorised. He
contended that the evidence relied upon could never have sustained
the application that the appellants’
attempted improperly to
preserve Trust assets through holding the respondent on a shoestring.
The application was therefore
mala
fide
and
an abuse of process, aimed at preventing the respondent from pursuing
her removal action when the improper offshore payments
of Trust money
had gone via Mr Cosgrove and his companies. It was factually
incorrect that the respondent had not replied to the
appellants’
request for information concerning her position and the reliance
placed on reports used in the 2005 application,
with a supplemented
report from Professor Zabow having been obtained in circumstances in
which he had not since 31 July 2007 consulted
with the respondent,
were improper. As a result, a punitive costs order against the
appellants was justified so as to ensure that
the costs payable are
not paid from Trust assets.
Evaluation
[22]
The
discretion of a
court
of first instance to impose costs is one in the ‘strict’
or ‘narrow’ sense, with the result that a
court of appeal
is not entitled to substitute its decision for the decision of the
court
a
quo
simply because the appeal court considers its conclusion more
appropriate. Instead, it may interfere with a costs order made only
where there is good reason to do so:
[2]
where the court
a
quo
did not exercise its discretion judicially; where the power conferred
on that court is exercised capriciously or upon wrong principle;
where a decision is reached which in the result could not reasonably
have been made by a court properly directing itself to all
the
relevant facts and principles; or where it did not act for
substantial reasons.
[3]
[23]
A
trustee is required by s
9
(1) of the Trust Property Control Act 57 of 1988 to act ‘…
in
the performance of his duties and the exercise of his powers …with
the care, diligence and skill which can reasonably
be expected of a
person who manages the affairs of another
.’
This
is so in that the trust estate vests in the trustee who is required
in the administration of the estate to exercise fiduciary
responsibility over it on behalf of and in the interests of
another.
[4]
The
fiduciary nature of the position of a trustee makes the standard of
conduct to be adhered to by a trustee
higher
than that which an ordinary person might generally observe in the
management of his or her own affairs.
[5]
It
requires
the trustee to act in the manner of a prudent and careful person who
is obligated to observe due care and diligence to protect
the
interests of the trust and its beneficiaries so as to avoid undue
risk or a conflict of interests.
[6]
It
follows as a general principle that a trustee who acts in a fiduciary
position will not be ordered to pay costs in his or her
personal
capacity unless, having regard to the circumstances of the matter,
there is shown to exist improper conduct;
[7]
a material departure from the responsibility of office;
[8]
a lack of
bona
fides
;
[9]
conduct actuated by ulterior motives;
[10]
or due to the unreasonableness of his or her conduct.
[11]
[24]
Of the two findings of impropriety made by the Court
a quo
against the appellants to justify the punitive costs order imposed
against them personally,
one related to
the
attempt to create a façade which was calculated to conceal
that Mr Harris,
a potential beneficiary under the
Trust,
was one of the persons who had instituted the
application against the respondent
.
[25]
It
is trite that although trustees are required to act jointly in
accordance with the provisions of the trust deed, they may expressly
or impliedly authorise someone to act on their behalf and that person
may be one of the trustees.
[12]
When one trustee is authorised to act on behalf of the others, the
effect is not that the other trustees are relinquished from
their
fiduciary
duties or entitled to turn a blind eye to the actions or conduct of
the representative trustee.
[26]
Mr Cosgrove recognised in his founding
affidavit that the appellants were under ‘
a
duty to apply the assets held by the trust for the benefit of the
respondent
’. His claim that it
was
‘
not appropriate
’ for Mr Harris to
be
directly involved in the matter given his at times ‘
difficult
’
relationship with the respondent and that Mr Harris had done no more
than authorise Mr Cosgrove to act in the application,
was remarkable.
This was so not only given Mr Harris’ fiduciary duties and
responsibilities as a trustee but also Mr Harris’
involvement
in the matter until that time. On 26 August 2010 Mr Lane wrote to Mr
Harris confirming that he had spoken to Mr Harris,
reconsidered his
position and that he would be willing to continue in his role as
curator
bonis
‘
should
you require it’
. Thereafter,
correspondence from the appellants’ attorneys to the
respondent’s attorneys and Dr Dennis did not distance
Mr Harris
from the matter. The Court
a quo
was correct in finding that having decided jointly with the other
trustees to institute the application, the suggestion that it
was not
appropriate for him to be directly involved in the proceedings sought
to create a façade that Mr Harris had not
been party to the
decision to institute the application other than in authorising Mr
Cosgrove to act.
[27]
Turning to the misconduct allegations
raised by the respondent related to the trustees’ alleged
irregular dealings in transferring
trust monies offshore in
contravention of the Trust deed, Mr Cosgrove stated no more than that
the ‘
issues are all fully
canvassed in the removal action, and will be dealt with in due
course. I submit that no purpose would be served
by dealing with them
at this stage. To the extent necessary, the allegations are denied
.’
[28]
The misconduct alleged was of a serious
nature raised in the context of the respondent’s contention
that the curatorship application
was a strategem aimed at
incapacitating her from pursuing her removal action barely a week
before that action was instituted. The
Court
a
quo
cannot be faulted for its view that
serious trustee misconduct once raised warrants more than a denial
which seeks to deflect the
issue as opposed to one to be determined
in other proceedings. This is all the more so in the context of an
application to have
a trust beneficiary declared incapable of
managing her affairs. Having been raised in the manner it was, a
court determining the
curatorship application would necessarily have
had regard to the fact that allegations of misconduct had been raised
with the result
that the basis for and motive behind the curatorship
application would have come into issue. It was accordingly required
of the
appellants as trustees acting properly and in good faith to
draw the court into their confidence and provide a susbstantive reply
to the allegations raised.
[29]
Where
a trustee conducts litigation in bad faith, for example by concealing
material information from the court, he or she may properly
be
mulcted in costs.
[13]
In
Cooper
NO v First National Bank of SA Ltd
the majority judgment per
Smallberger
JA
stated that:
‘
The
general principle of the common law is that a trustee, who acts in a
representative capacity, cannot be ordered to pay costs
de bonis
propriis unless he has been guilty of improper conduct. The Judge a
quo found the appellant’s conduct to be “unacceptable”
.
Improper conduct is always unacceptable; but unacceptable conduct is
not necessarily improper. While the appellant’s conduct
may
have been ill-considered, and his application lacking in certain
essential detail to the extent that it may be said that he
did not
make a full disclosure of all relevant facts, one cannot, in my view,
go so far as to hold that his conduct was improper.
It has not been
shown that there was a conscious attempt on his part to mislead the
magistrate or to use sec 69(3) unfairly to
his advantage. In the
circumstances the special costs order against the appellant was not
justified and falls to be set aside.’
[14]
[30]
More
than ordinary negligence is required before costs
de
bonis propriis
will
be ordered.
[15]
In
Re
Estate Potgieter
[16]
it was stated that such costs are justified on the basis that ‘
to
be utterly and egregiously wrong-headed is a luxury for which a
trustee may have to pay
’.
Where litigation is conducted in the trustee’s own interest
rather than that of the trust,
[17]
where there has been ‘
a
high or considerable degree of unreasonableness or negligence
’
[18]
or ‘
really
improper conduct
’
[19]
and order of costs
de
bonis propriis
have been found to be appropriate.
[31]
From the founding papers it is apparent
that there was perilously little in the way of factual material put
up by the appellants
in support of their curatorship application.
They relied on outdated medical reports which related to the earlier
curatorship application
and an updated report by Professor Zabow, who
had last consulted with the respondent in 2007 and had not consulted
with her prior
to providing such report. The ‘
alarm
’
claimed and the statement made that the respondent ‘
is
a prodigal, and therefore incapable of managing her affairs’
was unsubstantiated with no evidence
put up to support a conclusion that the respondent had ‘
squandered
funds whenever they came to hand
’.
The inheritance which had been received by the respondent from her
sister did not fall into the assets of the Trust and
the appellants’
concerns raised regarding such inheritance were answered when they
were informed by her attorney that the
respondent’s financial
matters were handled by a financial adviser and her erstwhile
attorney had invested certain funds
held. The application was
subsequently withdrawn.
[32]
Consequently,
the conclusion reached by the Court
a
quo
was one which could not reasonably have been made having regard to
all the relevant facts and principles. A punitive costs order
on an
attorney and client scale against the appellants was warranted given
the lack of a factual basis put up to support the application,
which
resulted in the subsequent withdrawal of an application which from
the outset appeared to have lacked merit. However, it
is material
that the two instances of impropriety relied on to justify
an
order
de
bonis propriis
did not lead the Court
a
quo
to find ‘
a
high or considerable degree of unreasonableness or negligence
’
[20]
or ‘
really
improper conduct
’
[21]
on the part of the appellants when the application was instituted.
The application could not have been lawfully instituted without
Mr
Harris acting jointly with the other trustees, and as much was stated
on the papers. Furthermore, it was a relevant consideration
that the
replying affidavit had been filed following a decision taken to
withdraw the application. The Court
a
quo
did
not find that there existed a high degree of unreasonableness or
improper conduct required to warrant a
de
bonis propriis
order being made against the appellants. No finding was made that the
application was made in bad faith, that the appellants had
concealed
material information from the Court or that they had acted in an
improper manner in instituting the application. The
issue taken with
their propriety in the two respects did not meet the threshold
required to warrant a conclusion that the appellants’
conduct
was of such an improper nature and so unreasonable as to warrant a
de
bonis propriis
order being made against them. In making the order that it did it
follows that the Court
a
quo
arrived at a result which cannot be sustained on the applicable facts
and principles. It follows that the order of the Court
a
quo
falls to be set aside and substituted with an order that the
respondent’s costs in the proceedings before that Court be paid
on an attorney and client scale by the appellants from the assets of
the Trust.
[33]
For all of these reasons, the appeal
against the judgment and order of the Court
a
quo
must succeed. There is however no
reason as to why the respondent, given the unique circumstances of
this matter, should be required
to bear any of the costs of the
appeal, including her own costs in opposing the appeal. Given the
facts of the matter and the basis
for the appeal, I see no reason as
to why all such costs should not properly be borne by the appellants
on an attorney and client
scale, payable from the Trust estate. Given
the issues involved, there is no reason as to why costs should not
include the costs
of two counsel where employed.
Order
[34]
In the result, I propose an order in the
following terms:
1.
The appeal against the judgment and order
of the Court
a quo
is upheld.
2.
The order of the Court
a
quo
is set aside and substituted with
the following order:
“
The
appellants are to pay the respondent’s costs on the scale as
between attorney and client, including the costs of two counsel,
where employed. Such costs are to be paid by the appellants from the
estate of the Roy Seawright Trust.”
3.
The costs of the appeal, inclusive of both
the appellants’ and respondent’s costs, are to paid by
the appellants on
the scale as between attorney and client from the
estate of the Roy Seawright Trust. Such costs are to include the
costs of two
counsel, where employed.
SAVAGE
J
I
agree and it is so ordered.
Goliath
DJP
I
agree.
CANCA
AJ
Appearances
:
For
appellants: G W Woodland SC and N Traverso
Instructed
by Norton Rose Fulbright
For
respondent: W R E Duminy SC and T R Tyler
Instructed
by Lampbrecht Attorneys
[1]
2001
(3) SA 705
(SCA) at para 37.
[2]
Biowatch
Trust v Registrar, Genetic Resources and others
2009 (6) SA 232
(CC) at para 29.
[3]
National
Coalition for Gay and Lesbian Equality & others v Minister of
Home Affairs & others
2000
(2) SA 1
(C
C)
at para 11;
Manong
and Associates (Pty) Ltd v City of Cape Town and another
2011 (2) SA 90
(SCA) at para 92, with reference to
Naylor
and another v Jansen
2007 (1) SA 16
(SCA) at para 14.
[4]
Land
& Agricultural Bank of SA v Parker and others
2005 (2) SA 77
(SCA) at para 20.
[5]
Administrators,
Estate Richards v Nichol & another
[1998] ZASCA 82
;
1999
(1) SA 551
(SCA) at 557D-F.
[6]
Ibid;
Robinson v Randfontein Estates Gold Mining Co Ltd
1921
AD 168
at 177-178.
[7]
Cooper
n 1
at
para 37.
[8]
Blou
v Lampert and Chipkin, NNO, and others
1973 (1) SA 1
(A) at 14;
Du
Plessis v Strauss
1988 (2) SA 105
(A) at 119G-J;
Boyce,
NO v Bloem
and others
1960 (3) SA 855
(T) at 865F-H, 875..
[9]
Grobbelaar
v Grobbelaar
1959
(4) SA 719
(A) at 725A-C;
Weiner
NO v Broekhuysen
2001 (2) SA 716
(C) at 726F-G.
[10]
Re Estate Potgieter
1908 TS 982
at 1003.
[11]
Jakins
v Burton
1971 (3) SA 735
(C) at 740B-H.
[12]
Nieuwoudt
and Another NNO v Vrystaat Mielies (Edms) Bpk
2004 (3) SA 486
(SCA) at para 23.
[13]
Honore’s South African Law of Trusts (5
th
ed) at 433;
Strydom
en ‘n ander v De Lange
en ‘n ander
1970 (2) SA 6
(T) at 14H.
[14]
Cooper
n 1
at
para 37.
[15]
Re
Estate Potgieter
n 10 at 1009.
[16]
Ibid
at 1012.
[17]
Lindenberg
v Giess, NO and Another
1957 (3) SA 30
(SWA) at 33F-34A and
Port
Elizabeth Assurance Agency & Trust Co Ltd v Estate Richardson
1965 (2) SA 936
(C) at 943.
[18]
Re
Estate Potgieter
n
10 at 1009-10
[19]
Honore’s (5
th
ed) at 435;
Natal
Bank v Kuranda’s Trustee
1904 TS 586
at 592.
[20]
Re
Estate Potgieter
n
10 at 1009-10.
[21]
Natal
Bank
n
19 at 592.