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[2022] ZAFSHC 5
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R.S v ABSA Trust Limited and Others (515/2021) [2022] ZAFSHC 5 (6 January 2022)
SAFLII Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case no: 515/2021
In
the matter between:
R[....]
S[....]
Applicant
and
ABSA
TRUST LIMITED
First
Respondent
(in
its capacity as the Trustee R S[....] Trust)
THE
MASTER OF THE NORTH
GAUTENG
HIGH COURT-PRETORIA
Second
Respondent
SSH
MAHLOMAKULU
Third
Respondent
CORAM:
PAGE AJ
HEARD
ON:
7 OCTOBER 2021
DELIVERED ON:
6 JANUARY 2022
Factual Matrix:
[1]
Ms. R[....] S[....], (the Applicant) was involved in a motor vehicle
accident at the
age of nine years. She sustained severe bodily
injuries as well as a head injury which caused an underlying brain
oedema.
[2]
She instituted proceedings against the Road Accident Fund. On 5
August 2009 the court
issued an order in terms of which an amount in
damages of R 4000 000.00 was awarded to the Applicant.
[3]
The court order provided for the establishment of a trust in
accordance with the Trust
Property Control Act 57 of 1988.
[4]
The R S[...] Trust was duly registered in terms of the court order.
ABSA TRUST LIMITED
(The First Respondent) was appointed as the
trustee. The Applicant was appointed as the sole beneficiary of the
trust.
[5]
The Applicant is currently aged 24 years and has qualified as a Chef
and in addition
obtained a qualification in Business Administration.
Since 2017, upon becoming a major, the Applicant has been making
attempts
to have the trust terminated to enable her to manage her own
affairs. The First Respondent declined all attempts by the Applicant
to have the trust terminated by mutual consent.
[6]
The Applicant thus launched this application requesting the
termination of the trust
in terms of Section 13 of the Trust Property
Control Act 57 of 1988.
[7]
The First Respondent opposes the application requesting that the
dismissal of the
application and in the alternative and order staying
the application pending a medical examination of the Applicant and
the appointment
of a curator ad litem who would be tasked to
determine whether the Applicant is capable of managing her own
financial affairs.
[8]
The First Respondent has requested condonation for the late filing of
its answering
affidavit and counterclaim. I have had sight of
the papers and the arguments in this respect and grant condonation
for the
late filing of same. The Applicant has not vehemently opposed
the application for condonation and the court proceeded to hear
argument
on the merits.
[9]
Both parties have raised the lack of locus standi in iudicio against
each other
in limine
. The Applicant raises the issue that the
deponent to the First Respondent’s founding affidavit is not
the same person who
was the appointed representative of the trust in
the letters of authority. It is accepted that the representative has
been replaced
and Mr Thobile Maphosa who deposes to the affidavit is
duly authorised to represent the First Respondent. Condonation is
thus granted.
[10]
It is submitted on behalf of the First Respondent that the Applicant
lacks the legal capacity to instruct
attorneys to act on her behalf.
I deal with the averred mental capacity of the Applicant more
fully below in the judgment
and it suffices to say at this stage that
I am satisfied that the legal representative has been authorised to
act and that no good
cause exists to find that he is not so
authorised.
[11]
To reiterate, the points
in limine
raised by each of the
parties are thus dismissed.
[12]
For the sake of clarity it may be necessary to refer to the relevant
portions of the court order dated
5 August 2009 which forms the basis
upon which the deed of trust was created.
The relevant portion
of the order reads:
[13]
5. The plaintiff’s
attorneys are hereby directed to:
5.1
cause a trust to be established in accordance with the Trust
Property Control Act No 57 of 1988
(“the trust”).
5.2
pay such amount as may be due to the minor to the trust for the
benefit of the minor.
6.
The trust instrument contemplated in paragraph 5, supra, shall
provide that:
6.1
the minor shall be sole beneficiary of the trust.
6.7
there shall be exclusion of any community of property in the event of
the marriage of the minor.
…
6.10
the trust shall terminate upon the death of the minor, in which event
the trust assets shall pass to the
estate of the minor.
6.12
the trustee shall maintain the minor as may be reasonably requested
from time to time.”
The Deed of trust
[14]
“5.1 The beneficiary will have immediate
vested rights in the trust fund.
…
5.3
The trust shall terminate when the TRUST FUND has been paid out. In
the event of a beneficiary dying
before the termination of his trust
its portion shall devolve upon his estate.”
The Applicant’s
Case:
[15]
It is the Applicant’s case that she has become a major and she
deems it fit to handle her own
financial affairs including funds in
the trust of which she is the beneficiary.
[16]
She submits in her founding affidavit that since she is a major with
the necessary mental capacity,
she can control her own finances and
assets. She submits that she should be free to conduct her own
financial affairs without the
assistance of the First Respondent.
[17]
In support of her application, the applicant attaches a medico-legal
neuropsychological assessment
summary report, dated 26 August 2019 by
Dr Mariske Pienaar, a clinical psychologist, of which the following
relevant excerpt is
apropos:
“
..some of
the neurocognitive and executive functions necessary for handling her
own finances and giving instructions (attention
and cognitive
flexibility) were variable in the testing situation. Other functions
were fairly intact (planning, abstract thinking,
working memory,
volition, self-monitoring etc). Although Ms S[....] did not
show optimal neurocognitive functioning, she
did demonstrate fairly
intact functioning (neurocognitive and emotional) to be able to
manage her own affairs as an adult.”
[18]
The First Respondent’s argument is, that based on the
serious injuries sustained by the Applicant
which includes an
underlying brain oedema, and in the absence of medical evidence in
support of the application for the termination
of the trust, the
mental capacity of the applicant to administer and control her own
finances is questionable. It is submitted
that the Applicant’s
mental capacity had not been re-assessed and as such there is no
medical evidence supporting the statement
by the Applicant that she
has the mental capacity to manage her own affairs and more
specifically her financial affairs.
[19]
Despite the contents of the medico-legal report and proof of the
qualifications obtained by the Applicant,
the First Respondent thus
remains vigorously in opposition and maintains that there is no proof
that the Applicant is able to manage
her financial affairs and
insists that the court stays the application in order for
curator
ad litem
to be appointed to report on the abilities of the
Applicant.
[20]
It is necessary to refer to the First Respondent’s reasoning
and its reaction to the request
to terminate the trust by agreement
in opposition to the termination of the trust with specific reference
to the averred lack of
mental capacity of the Applicant.
[21]
The First Respondent, as per the answering affidavit takes issue with
the fact that the Applicant has
not furnished sufficient medical
proof to support a finding that she has the ability to handle her
financial affairs.
It is noteworthy that it
appears from the papers that the First Respondent has initially been
obstructive in its endeavours to assist
the Applicant with the
necessary funds to enable her to obtain the necessary medical
assessment even though they insist on a medical
assessment of the
Applicant to ensure that she has the mental capacity to manage her
own financial affairs.
[22]
To illustrate the obstructive behaviour of the First Respondent I
have gleaned from the papers that
in September 2018, the Applicant
communicated with the First Respondent informing of her wish to
terminate the trust. The First
Respondent refused the request. The
Applicant thereafter approached Dr Pienaar who addressed an email to
the First Respondent requesting
an instruction from the First
Respondent for a neuro-psychological assessment.
[23]
The First Respondent replied to the request as follows:
“
Kindly be advised
that the request to settle the psychological assessment and tests
from the trust has been declined. The trust
is not liable for the
costs. Should the beneficiary wish to proceed, it will be at her own
expense.”
[24]
The Applicant, being dependent on the maintenance she receives from
the trust was not able to afford
the medical assessment. She states
in her affidavit that the trust had failed to perform the purpose for
which it is established,
namely, to advance and protect her interest.
[25]
In a terse and abrupt email dated 20 November 2018, the First
Respondent informs as follows:
“…
4.
Termination
Please refer to clause 6
of the order dated 8 August 2009 (attached) which addresses your
overall queries.”
Trust the above is in
order.”
[26]
The terse reply which does not even go as far as stating the clauses
referred to therein, may be understood
to draw the attention of the
Applicant to clause 6.10 which states that the trust shall terminate
upon the “death of the
minor”.
[27]
Be that as it may, the Applicant has attended to a medical assessment
from Dr Mariska Pienaar in 2019
as was required by the First
Respondent. It is not clear, but it seems that the Applicant was
liable to pay for the said assessment.
[28]
The First Respondent requests the Applicant in 2021 to subject
herself again for a second medical assessment
after she had attended
to the medical assessment by Dr Mariske Pienaar in 2019 and they
offer to pay for the costs of such assessment.
[29]
The Applicant did not attend to same. Her legal representatives
responded to this request by asking
for clarity suggesting that the
request for a second medical assessment is aimed at delaying of the
matter. The replying letter
further informs that they will leave it
to the court to decide whether a second assessment is necessary.
[30]
It is apparent from the papers further, that the Applicant has
approached different attorneys to assist
her with the process to have
the trust terminated. In a response to a detailed request addressed
to the First Respondent, an email
was sent to the then legal
representatives dealing of the unwillingness to incur costs to bring
an application for the termination
of the trust. The Applicant is
referred to by the First Respondent as someone who was “declared
incapable of managing her
own affairs.” No reference to the
Applicant being a minor at the time of the establishment of the trust
is made in this communication.
Needless to say, the Applicant was
never declared incapable of managing her own affairs.
[31]
The manner in which the First Respondent has opposed the initial
request and the communications leading
up to the subsequent
application is somewhat disconcerting if one notes that the interests
of the applicant as the beneficiary
of the trust is ignored and
treated with disrespect. The First Respondent’s counsel dared
to submit orally that the Applicant
is wasteful with the minimal
amount paid to her by the trust since she has appointed a personal
trainer and some other luxury expenses.
I find the submissions to be
disrespectful to the Applicant who is entitled to a better quality of
life. The Applicant deals with
the poor state of her home which
requires renovations and it would seem that she has a desire to
better her accommodation but finds
the First Respondent’s
manner in dealing with her requests to be dismissive and
inconsiderate.
The First Respondent’s
case and opposing arguments
[32]
The First Respondent, in its opposition to the application refers the
court to the financial position
of the trust. It is submitted that
the capital sum of the trust as at 1 March 2020 was R 2 789 515.86.
It is submitted that the
Applicant’s expenses are paid by the
trust and includes rental, winter clothing, transportation and
schooling. It further
submitted that the funds have grown
steadily.
The Age of Majority of
the Applicant and Trust.
[33]
It is further submitted that clause 5.3 of the deed of trust that the
trust is not in any way dependent
on the age of the Applicant since
the said clause specifically provide that the trust will only
terminate when the funds have been
paid out in full.
[34]
It is submitted that paragraph 6.10 of the court order states that:
“
19.1 The
amendment of the trust shall be subject to the leave of the court;
19.2 The trust shall
terminate upon the death of the minor”
[35]
The argument of the First Respondent is that the fact that the
Applicant attained the age of majority
is therefore not a relevant
consideration for the termination of the Trust.
Evaluation of the
arguments
[36]
I find that it clear that the creation of the trust for the benefit
of the Applicant was due to the
fact that the Applicant was a minor
at the time. The principles applicable to the interpretation of Court
orders are well established
in Firestone South Africa (PTY) Ltd
1977
(4) SA 298
(A). It is thus trite that the Court’s intention
should be ascertained from the language of the judgment or order as
construed
according the usual, well-known principles of construction
of documents. Thus, as in the case of a document, the order and the
Court’s reasons for granting the order requires that it should
be read as a whole.
[37]
The point of departure as was held in Finishing Touch 163 (PTY)Ltd v
BHP Billiton Energy Coal South
Africa Ltd and others 2013(2) SA 204
(SCA) at paragraph 13 of the judgement, is to determine the manifest
purpose of the order.
This was endorsed by the Constitutional
Court in Eke v Parsons
2016 (3) SA 37
(CC). In Natal Joint
Municipal Pension Fund v Endumeni Municipality 20122(4) SA 593 (SCA)
at 603E-604D, the process of interpretation
was described as
involving a unitary exercise of considering language, context and
purpose. It is an objective exercise where,
in the event of
ambiguity a sensible meaning is to be preferred to one which
undermines the purpose of the document or order.
[38]
In the current matter, the order makes no reference to the
Applicant’s incapability or anticipated
incapability to manage
her own affairs. It does not refer to any findings in the action
pertaining to the soundness of the Applicant’s
mind.
[39]
The order refers purely to the Applicant’s status as being a
minor at the time and the Applicant
is referred to as a minor in the
order.
[40]
The Deed of Trust furthermore does not state that it was formed due
to the mental incapacity or anticipated
mental capacity of the
Applicant to manage her own affairs. The only consideration mentioned
in the deed is to safeguard the compensation
awarded to the Applicant
due to her minority age and incapacity at the time to manage her own
affairs and to perform juristic acts.
[41]
Section 13 of the Trust Property Control Act allows a court to effect
amendments to the terms of a
trust and to also terminate a trust. It
provides as follows:
“
If a trust
contains any provision which brings about consequences which in the
opinion of the Court the founder of a trust did not
contemplate or
foresee and which-
(a) hampers the
achievement of the objects of the founder; or
(b) prejudices the
interest of the beneficiaries;or
(c) is in conflict
with public interest,
the court may, on
application of the trustee or any person who in the opinion of the
Court has sufficient interest in the Trust
property, delete or vary
any such provision or make in respect thereof any order which such
Court deems just, including an order
whereby particular trust
property is substituted for particular other property, or an order
terminating the trust.”
[42]
In case, the basis upon which the Applicant seeks an order
terminating the trust is because she has
attained the age of majority
and deems it appropriate that she handles her own financial affairs
to her own discretion.
[43]
It is submitted by the Applicant’s counsel that the existence
of the trust at the stage of attainment
of majority by the Applicant,
deprives the Applicant of her own property without a lawful basis. It
is submitted that it has been
demonstrated that the Applicant is of a
sound mind to manage her own affairs. It is further contended that as
long as the trust
subsists, the Applicant would be arbitrarily
deprived of her property which amounts to a violation of Section 25
of the Constitution.
[44]
It is further contended that the subsistence of the trust post the
attainment of the age of majority
of the Applicant amounts to a
violation of Section 10 of the Constitution, namely her right to
dignity.
[45]
Case Law
[1]
illustrates that
constitutional values are considered when interpreting trust
principles even though the case law mentioned under
the footnote
refers to testate law and not to a deed of trust in the context of
the case at hand. I find the argument that
the subsistence of
the trust post-majority of the Applicant to be an arbitrarily
deprivation of her right to her property to be
fitting in the context
of this case. It is clear from the papers that the Applicant is being
restricted by the First Respondent
in her right to have control of
the trust funds and to decide on the manner in which she wishes to
increase the quality of her
lifestyle with specific reference to the
state of her residential accommodation.
[46]
The Applicant has attached photographs of the dilapidated state of
the immovable property belonging
to the trust which she is residing
in. Email communications wherein the Applicant pleads for the
maintenance of the immovable property
are attached as well. The First
Respondent’s response to the photographs and communications are
simply declined for unsatisfactory
reasons such as the reasoning that
the Applicant is not residing in the property alone.
[47]
It is clear from the reasoning by the First Respondent’s papers
that the interests of the beneficiary,
namely the Applicant is
severely prejudiced. This is clear from the conduct of the affairs of
the Applicant as mentioned upon her
request.
[48]
It is clear that the constitutional rights of the Applicant to
property and dignity are being violated
by the subsistence of the
deed of trust.
[49]
It is found that the order made did not contemplate that the
consequences of the trust should or would
be in conflict with the
public interest, namely an interference of the Applicant’s
right to self-autonomy. In this
regard, public interest relates
to the recognition, protection, and enforcement of the fundamental
rights to property and dignity.
[50]
The deed of trust does stipulate that it will terminate once the
funds have been depleted. It is however,
so that the trust was
created subsequent to the court order which does not include any such
order. The deed of trust does not deal
with the beneficiary being a
minor at the time of its creation nor does it deal with what the
situation would be once the minor
obtains majority. The founder of
the trust did not contemplate nor foresee the attainment of majority
of the minor and, as mentioned
hereabove the Applicant is prejudiced,
and the trust is clearly contrary to public interest.
[51]
In the circumstances of this case, I find that the jurisdictional
requirements set out in Section 13
of the Trust Property Control Act
57 of 1988 are present. That being so, this court is empowered to
terminate the trust.
[52]
The counter application by the First Respondent to either terminate
or stay the application subject
to the appointment of a curator ad
litem who should report on the mental capacity of the Applicant lacks
substance since a medico-legal
report is attached dealing with the
Applicant’s mental status. A further report to specifically
deal with the Applicant’s
ability to deal with her finances
specifically, is ill-fated and is clearly part of the First
Respondent’s conduct in the
matter which is to frustrate and
delay the interest of the beneficiary and should be frowned upon. It
is noted that once the Applicant
had obtained the medico-legal report
requested, a report which the First Respondent has declined to pay
for, it required a further
report to deal with the Applicant’s
ability to deal with her finances specifically. The application for a
curator to be appointed
in any event lacks circumstances showing that
the Applicant is of unsound mind and incapable of managing her
affairs. The fact
that that Applicant had suffered a brain injury as
a minor can hardly be regarded as a sufficient reason to prove that
she is incapable
of managing her finances if one considers her
improvement to finish schooling and obtaining two qualifications and
being able to
manage her affairs as an adult.
[53]
The application for appointment of a curator is in fact not supported
by the supporting affidavits
of at least two medical practitioners
and is defective.
[54]
I make the following order:
1. The
Application is granted as per 1 to 4 of the Notice of Motion.
2. The
First Respondent is ordered to pay the Applicant’s cost on the
party and party scale.
3. The
counter application is dismissed with costs on the party and party
scale.
C L PAGE AJ
FOR
THE APPLICANT:
ADV
MS MAZIBUKO
Instructed
by
MASIA
ATTORNEYS
FOR
THE FIRST RESPONDENT:
ADV
F BEZUIDENHOUT
Instructed
by
JAY
MOTHOBI INC
[1]
In
re Heydenrych Testamentary Trust 2012(4) SA 103(WCC); Curators, Emma
Smith Educational Fund v University of Kwazulu-Natal
2010 (6) SA 518
(SCA), Ex party BOE Trust Ltd 2009 (6) SA 470 (WCC); Minister
of Education v Syfrets Trust Ltd (4) SA 205 (C);