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[2012] ZASCA 147
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BoE Trust Ltd NO and Another (in their capacities as co-trustees of the Jean Pierre De Villiers Trust 5208/2006) (846/11) [2012] ZASCA 147; 2013 (3) SA 236 (SCA) (28 September 2012)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Reportable
Case No: 846/11
In the matter between:
BoE TRUST LIMITED NO
.
..............................................................
First
appellant
ILMARY KEDDY NO
...................................................................
Second
appellant
FREDERICK GORDON BROWNELL NO
.
..................................
Third
appellant
(in their capacities as co-trustees of the Jean Pierre
De Villiers Trust 5208/2006)
Neutral citation:
BoE Trust Limited NO &
others
(846/11)
[2012] ZASCA 147
(28 September 2012)
Coram:
CLOETE, MALAN, SHONGWE, PILLAY JJA AND
ERASMUS AJA
Heard:
10 September 2012
Delivered:
28 September 2012
Summary: Will – interpretation of - freedom of
the testation – racially exclusive provision in trust.
____________________________________________________________________________
ORDER
___________________________________________________________________________________________________________________
On appeal from:
Western
Cape High Court, Cape Town (Mitchell AJ sitting as court of first
instance):
1 The appeal is dismissed.
2 The costs of the appeal, to be taxed as between
attorney and client, are to be paid out of the funds of the trust.
3 A copy of this judgment must be forwarded, by the
trustees, to all the named charitable organisations.
_______________________________________________________________
JUDGMENT
_______________________________________________________________
ERASMUS AJA (CLOETE, MALAN, SHONGWE AND PILLAY
CONCURRING):
[1] This is an appeal against the judgment and order of
Mitchell AJ in the Western Cape High Court, Cape Town in which he
dismissed
an application to have the word ‘White’, used
to identify a group of persons to benefit in terms of a trust,
deleted.
[2] The appellants are the trustees of the Jean Pierre
De Villiers Trust (the Trust), a trust created by the will of the
late Daphne
Brice De Villiers. Mrs De Villiers bequeathed some of her
assets to her siblings, her nephews, her nieces and her godchild. The
residue of her estate was left to the Trust.
[3] Mrs De Villiers’ last will and testament,
dated 14 July 2002, included the following provisions:
‘
3.6 The residue of my estate to my
hereinafter appointed trustees, in trust, to be administered by them,
in terms of the powers
granted herein and for the following purposes:
The trust shall be known as the “JEAN PIERRE DE VILLIERS TRUST”
My trustees are empowered to use so much of the net income and, if
found necessary, of the capital as they shall decide, to provide
my
retired domestic assistant PAULUS MPAI (identity number 15431), with
a monthly income of R300 (three hundred rand) during his
lifetime.
The remaining income shall be applied by my trustees for the
provision of small bursaries to assist
White
South
African students who have completed an MSc degree in Organic
Chemistry at a South African University and are planning to complete
their studies with a doctorate degree at a University in Europe or in
Britain.
The selection of these students, and the size and duration of the
bursaries shall, after discussions between them, be the joint
responsibility of the four Organic Chemistry Professors of the
Universities of Cape Town, Stellenbosch, Bloemfontein and Pretoria
in
consultation with Syfrets Trust Limited. The only provisos in the
selection of suitable candidates are that, in addition to
a
competence in Organic Chemistry, such students must exhibit both the
desire and the ability to benefit culturally from a period
spent at
such a university and that they must return to South Africa for a
period to be stipulated by the Professors listed.
All surplus income shall be capitalised;
In the event that it should become impossible for my trustee[s] to
carry out the terms of the trust, I direct that the income generated
by the trust be used annually to provide donations equal in size to
each of the following charitable organisations:
THE HEART FOUNDATION OF SOUTH AFRICA;
OPTIMA COLLEGE;
THE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS;
BOY’S TOWN;
THE SALVATION ARMY;
MEALS-ON-WHEELS;
S.O.S. CHILDREN’S VILLAGES;
AVRIL ELIZABETH HOME;
NATIONAL SEA RESCUE INSTITUTE;
THE SOUTH AFRICAN BLIND WORKERS ORGANISATION.
Should any of these institutions no longer exist at such time, I
direct that my trustee shall choose institutions with similar
aims
and objectives. I direct that all such donations be sent directly to
the organisation concerned and not to organisations collecting
on
their behalf.’
(My emphasis.)
[4] From a letter written by her sister, annexed to the
founding papers, it is clear that Mrs De Villiers had been repeatedly
advised
that one of the primary objects of the trust, to bequeath
bursaries to ‘White’ students, would possibly not be
given
effect to, as it was discriminatory. Notwithstanding this
warning, her will retained the word. The testatrix was of course free
to change her will at any time up to her death. She did not. She did
however provide that should it become impossible for the trustees
to
carry out the terms of the trust, the income generated by the trust
had to be used annually to provide donations to a number
of
charitable organisations. Mrs De Villiers passed away on 10 February
2006.
[5] The first stipulation, under para 3.6 of the will,
that provided for the payment of a monthly income to the testatrix’s
retired domestic assistant Mr Paulus Mpai, has been given effect to
and is still continuing. Having regard to the wording of the
will
itself, it is clear that the testatrix firstly wanted to provide for
Mr Mpai. She made provision, in the event that the income
might be
insufficient, that capital could be used to satisfy this bequest. The
provision for the bursary fund must therefore be
separated from the
bequest to Mr Mpai. This interpretation is reinforced by the fact
that the section that deals with the bursary
bequest, which comes
after the provision made for Mr Mpai, starts with ‘The
remaining income…’
[6] It can furthermore be accepted that the motivation
of the testatrix to provide for bursaries in her will was the fact
that her
late husband was a leading applied chemist, with doctorates
in chemistry from both Oxford University and the University of
Pretoria.
Her wish was clearly to set up this trust in memory of her
late husband after whom the trust was named.
[7] In order to give effect to the bequest of bursaries
for ‘White South African students’ the trustees, through
their
legal representatives, contacted the universities concerned.
The enquiry was aimed at establishing whether the universities would
accept the bursary bequests, on the conditions stipulated in the
will. The letter from the legal representative of the appellant
to
the universities indicated that the bursary fund would be in an
amount that exceeds R250 000.00 per annum.
[8] All the universities responded negatively as a
result of the racial selection criterion attached to the bursary. The
University
of Stellenbosch, through its legal services department,
alluded to the fact that the university has adopted a new bursaries
and
scholarships policy which covers the awarding and administration
of bursaries to fair, non-discriminatory and equitable standards.
They therefore elected to repudiate the bequest on behalf of the
university. They, however, indicated that should the trust deed
be
amended in due course to exclude the racial discriminatory condition,
they would be willing to participate in the bursary fund.
The
University of the Free State indicated that should the bursary be
available to all races, they would gladly confirm their
participation.
[9] The University of Pretoria expressed similar
sentiments as the University of Stellenbosch, and stated the
following:
‘
The University wishes to emphasise that
there are many students from across the racial spectrum who, save for
the “race specific
limitation”, would qualify for the
scholarships envisaged in the will. It would therefore be remiss for
the University to
exclude certain segments of South African society,
as reflected in the students demographics, from consideration for
these bursaries
on the ground as stated. . . .
The University is therefore prepared to except the bequest on the
condition that the requisite steps are taken for word the “White”
to be deleted from the will’.
The University of Cape Town, through the office of the
registrar, noted that the bursary was for “Whites” only
and responded
as follows:
‘
While we are pleased that the testator has
recognised the importance of the scholarships for doctorate study in
organic chemistry,
the organic chemistry professor at University of
Cape Town (in his/her representative capacity) will not take part in
this, but
would do so with the executors and the administrators to
obtain (as we believe the constitution suggest that they ought) a
High
Court ruling scrapping the racial restriction’.
[10] Given the attitude of the four universities, the
appellants moved in the high court for a rule nisi calling upon all
interested
parties to show cause why the word ‘White’
should not be deleted from the will. The rule nisi was granted and
served
on the Master of the High Court and the universities
concerned. It was not served on the charitable organisations. No
opposition
to the rule nisi was received and a final order was
sought.
[11] The trustees contended that the word ‘White’
fell to be deleted as it was discriminatory against ‘potential
beneficiaries’ of the bursaries contemplated in the will, on
the basis of race. Consequently, they contended, the will was
contrary to public policy; the right to equality as enshrined in the
Constitution; the provisions of section 7 of the Promotion
of
Equality and Prevention of Unfair Discrimination Act;
1
the principles contemplated in sections 3 and 4 of the
National Education Policy Act;
2
and the principles set out in
Minister
of Education and Another v Syfrets Trust NO and Another
.
3
[12] The attitude of the trustees was set out in the
founding affidavit as follows:
‘
In spite of this contingent directive being
available to the trustees of the Trust, Keddy, Brownell and I are of
the view that it
would be prudent and preferable to rather fulfil the
primary purpose behind the creation of the Trust by obtaining an
order from
this Court that the word “White” be deleted
from clause 3.6 of the Will so that the bursary bequest is acceptable
to
the South African universities and can be used to assist students
in the manner contemplated in the Will, than resorting to a disposal
of the income to the charitable organisations.’
The attitude of the trustees and the purpose of the
bursaries are noble and commendable, but neither, unfortunately, can
be decisive
in giving effect to the terms of the will.
[13] The matter of
Curators, Emma
Smith Educational Fund v University of Kwazulu-Natal and Others
,
4
a judgment of this court, had not been decided at the
time the application was brought. Nor had it been decided at the time
the
court a quo gave its judgment on the application.
[14] In dismissing the ex parte application, Mitchell AJ
emphasized the principle of freedom of testation, the right to
property
as enshrined in the Constitution and the fact that it
‘includes the right to give enforceable directions as to its
disposal
on the death of the owner.’ He remarked that the
provisions were not clearly contrary to public policy in that the
Constitution
only prescribes discrimination which is unfair, and
further, that there may be sufficient reason in the instant case why
the testatrix
specifically nominated white students as the
beneficiaries of her bequest namely:
‘
The testatrix has thought fit to require
beneficiaries of the bursary trust to return to South Africa for a
period determined by
the universities concerned after obtaining their
doctorates. It seems at least possible that, in so doing, she was
seeking to ameliorate
this skills loss and indeed, to promote
importation of skills obtained overseas. Certainly, it seems to me
that the implementation
of the bequest in accordance with its terms
would have that effect.’
However, no finding was made on this point.
[15] The high court correctly found that the bursary
bequest was rendered impossible as a result of the universities’
stance.
The high court went on to find that this eventuality was,
however, expressly and in terms provided for by the testatrix in that
the trust income would then go to the charitable organisations.
[16] Nearly two years after the court below handed down
judgment, the appellants applied for leave to appeal. The appeal was
based
on the decision of this Court in
Emma Smith.
The
appellants contended that if they were to be given leave to appeal
‘then in view of the decision in Emma Smith, such
appeal must
succeed.’
[17] Mitchell AJ denied leave to appeal for the reason
that
Emma Smith
did
not affect his judgment regarding Mrs De Villiers’ will,
holding that the testatrix had foreseen the possibility that
the
bursary bequest might prove impossible to carry out, and had provided
an alternative to which effect had to be given.
[18] The appellants are before this court with its
leave. Before the appeal was heard, this court raised the issue of
non-joinder
of the charitable organisations named in the will. The
appellant’s attorneys wrote to the charitable organisations,
some
of whose names had changed in the meantime.
[19] The common law rule regarding the obligatory
joinder of parties is that anyone with a direct and substantial
interest in a
matter must be joined. The appellants concluded that
the charitable organisations did not have a legal interest in these
proceedings.
How they reached that conclusion is beyond
understanding. The relief they sought in the court below, was to
alter the trust created
by Mrs De Villiers. If the court below
granted the relief that was sought, the charities would not receive
the funds; if it did
not, the charitable organisations would. They
thus had a substantial interest and they should have been joined.
5
[20] The next question is whether a letter addressed to
this court, an appellate court, informing it that the charitable
organisations
have indicated that they abide the court’s
decision is enough to cure that failure by the appellants? Put
differently, was
the informal notice informing the charitable
organisations of the proceedings and asking them if they wished to
intervene (at the
appeal stage) sufficient notice? Is this type of
extra-judicial notice sufficient? In my view it is. Eventually each
of the charitable
organisations was properly informed of the nature
and purpose of the proceedings and unequivocally indicated that it
would abide
the decision of this court. The decision in
Amalgamated
Engineering Union v Minister of Labour
6
is accordingly distinguishable on the facts
.
[21] I now turn to the main issue in
the appeal. Should this Court uphold the appeal and allow a deletion
of a word in Mrs De Villiers
last will and testament based on the
principles enunciated in
Emma Smith
?
Can
Emma Smith
be
distinguished from this case?
[22] In
Emma Smith
this court held
that
the Bill of Rights applies to all law (which must by now, and
properly from the advent of the Constitution, be seen as trite),
including
the law relating to charitable
trusts. It further held that in the public sphere racially
discriminatory dispositions will not pass
constitutional muster. It
dismissed the appeal and allowed the order directing the deletion of
the racially discriminatory provisions
to stand.
[23]
Emma
Smith
also dealt with a testamentary
trust which created an educational fund to be administered by a
university restricting beneficiaries
to white bursars. The will
considered had been executed in 1938. The exclusive nature of the
will, which went further than merely
identifying persons of colour,
caused less funds than were available for the purpose, to be paid
out. The court identified the
question it had to answer as ‘whether
this bequest, to be administered by the university, can be allowed to
stand in its
racially exclusive form.’
7
[24] It is immediately clear that the
facts dealt with in
Emma Smith
are distinguishable from the facts of the instant
case. The testamentary trust dealt with there provided for the single
purpose
that the funds put in trust ‘shall be dedicated in
perpetuity
for the promotion and
encouragement of education.’ No alternatives were stated should
the terms become impossible to carry
out. Indeed, the trust
functioned for decades prior to being challenged in the new
Constitutional dispensation.
[25]
In the instant case no bursaries
were ever paid; they could not be, because of the universities’
stance. The giving of the
bursaries as Mrs De Villiers had intended
had become impossible as a result of the universities’ stance.
Must the alternative
provided in the will be given effect to? Does
Mrs De Villiers’ right to dispose of her assets as she saw fit,
whether we
agree with her exercise of that right or not, require a
court to see at least whether there is a way in which to interpret
her
will so as that it does not offend public policy?
[26] Section 25(1) of the
Constitution provides that no one may be deprived of property, except
where the deprivation is done in
terms of a law of general
application. What is more, it entrenches the principle that no law
may permit the arbitrary deprivation
of property. The view that
section 25 protects a person’s right to dispose of their assets
as they wish, upon their death,
was at least accepted in
Minister
of Education v Syfrets
, although no
decision to this effect was made. This view, is to my mind, well
held. For if the contrary were to obtain, a person’s
death
would mean that the courts, and the state, would be able to infringe
a person’s property rights after he or she has
passed away
unbounded by the strictures which obtains while that person is still
alive. It would allow the state to, in a way,
benefit from someone’s
death. Francois du Toit, after having done extensive research on
freedom of testation in South Africa
and in other jurisdictions,
8
states the position thus:
‘
Freedom of testation is considered one of
the founding principles of the South African law of testate
succession: a South African
testator enjoys the freedom to dispose of
the assets which form part of his or her estate upon death in any
manner (s)he deems
fit. This principle is supplemented by a second
important principle, namely that South African courts are obliged to
give effect
to the clear intention of a testator as it appears from
the testator’s will. Freedom of testation is further enhanced
by
the fact that private ownership and the concomitant right of an
owner to dispose of the property owned (the ius disponendi)
constitute
basic tenets of the South African law of property. An
owner’s power of disposition includes disposal upon death by
any of
the means recognized by the law, including a last will. The
acknowledgement of private ownership and the power of disposition of
an owner therefore serve as a sound foundation for the recognition of
private succession as well as freedom of testation in South
African
law.’
9
(Footnotes omitted.)
[27] Indeed, not to give due recognition to freedom of
testation, will, to my mind, also fly in the face of the founding
constitutional
principle of human dignity. The right to dignity
allows the living, and the dying, the peace of mind of knowing that
their last
wishes would be respected after they have passed away.
[28] But freedom of testation, and
the rights underlying it, are not absolute.
10
The balance to be struck between
freedom of testation and its limitations was formulated by Innes ACJ
as follows:
‘
Now
t
he
golden rule for the interpretation of testaments is to ascertain the
wishes of the testator from the language used. And when
these wishes
are ascertained, the court is bound to give effect to them, unless we
are prevented by some rule of law from doing
so.
’
11
[29] What is required then, firstly, and prior to any
enquiry as to whether some rule of law prevents us from giving effect
to those
wishes, is to first ascertain what the testatrix’s
wishes were. Indeed, the enshrined rights to dignity and property
demand
it.
[30] The key to determining what the testatrix’s
wishes were in the instant case, is what meaning should be attributed
to
the word ‘impossibility’. To ascertain that meaning
the court may have regard to evidence outside of the wording of
the
will ‘to fit the four corners of the will to the ground’.
12
The testatrix was informed, that it may be impossible to
give effect to the educational trust she had envisaged as a result of
its
effect being unlawful. It is with this impossibility in mind that
she included the word ‘impossible’ and stipulated
an
alternative.
[31] The appellants however, insist that this should not
be the case. They argue that a distinction is to be drawn between
different
types of impossibility. And that what Mrs De Villiers
actually meant was that her alternative arrangement would only be
triggered
upon, in the words of appellants’ counsel, ‘objective
impossibility’. This would be the kind of impossibility,
so the
argument goes, where no South African university will ever offer the
MSc in organic chemistry. I do not think this argument
is correct. As
I have said, the primary function of a court, in interpreting a will,
is to ascertain the intention of the testator.
To my mind, it is
clear that the testatrix intended that, quite simply, should it prove
impossible, for whatever reason, to give
effect to the provisions of
the educational bequest, that the money should go to the charitable
organisations. The testatrix clearly
set out a general scheme in
which she provided for foreseen eventualities. In my view therefore,
the fact that the universities
would not participate as a result of
the racially exclusiveness of the bequest is an impossibility in
respect of the bursary bequest.
The result must be that effect has to
be given to the wishes of the testatrix so that the bequest to the
named charitable organisations
is enforced.
[32] The court a quo ordered that the costs be paid out
of the funds of the trust. I can see no reason why this should not
include
the costs occasioned by the appeal.
[33] In the event, the following order is made:
1 The appeal is dismissed.
2 The costs of the appeal, to be taxed as between
attorney and client, are to be paid out of the funds of the trust.
3 A copy of this judgment must be forwarded, by the
trustees, to all the named charitable organisations.
________________________
NC Erasmus Acting Judge of Appeal
APPEARANCES
For Appellant: R J Howie
Instructed by:
Carter & Associates, Cape Town
Symington & De Kok, Bloemfontein
1
Act
27 of 1996.
2
Act
4 of 2000.
3
2006
(4) SA 205
(C).
4
2010
(6) SA 518
(SCA
).
5
Kethel
v Kethel’s Estate
1949 (3) SA 598
(A).
6
Amalgamated
Engineering Union v Minister of Labour
1949 (3) SA 637 (A).
7
At
para 1.
8
See
F Du Toit ‘The impact of social and economic factors on
freedom of testation in roman and roman-dutch law’ 1999
Stell
LR
232; F Du Toit ‘The limits imposed
upon freedom of testation by the boni mores: lessons from common law
and civil (continental)
legal systems’ 2000
Stell
LR
358.
9
F
du Toit ‘The constitutionally bound dead hand? The impact of
the constitutional rights and principles on freedom of testation
in
South African law’ 2001
Stell LR
222 at 224.
10
Rhode
v Stubbs
2005 (5) SA 104
(SCA) para 17 & 18
11
Robertson
v Robertson’s Executors
1914 AD 503
at 507
12
N
J van der Merwe& C J Rowland ‘Die Suid-Afrikaanse Erfreg’
3 ed at 478.