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[2019] ZAGPPHC 295
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Sibanda v Road Accident Fund (77461/2014) [2019] ZAGPPHC 295 (8 July 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
Case
Number: 77461/2014
8/7/2019
In
the matter between:
NYAMBE
PETROS SIBANDA o.b.o R[….] S[….]
Plaintiff
and
ROAD
ACCIDENT FUND
Defendant
JUDGMENT
DU PREEZ, AJ
INTRODUCTION:
1.
The
plaintiff, Mr. Nyambe Petros Sibanda, who is the father and natural
guardian of a minor child (born on 15 February 2006) named
R[….]
S[….]
("R[….]"),
instituted action against the
defendant, the Road Accident Fund, after R[….] sustained
severe head and brain injuries in
a motor vehicle collision on the
Lethlabile public road on 15 November 2009.
2.
The
parties settled both the merits
[1]
and the
quantum
of
the claim in the amount of R4,125,701.00
(“the
award”),
[2]
but the defendant objected to an
inter vivo
trust
being created, at the behest of the plaintiff, for the benefit of
R[….] to receive and protect the award.
3.
The
defendant's objection is premised on the following submissions:
3.1
The
costs pertaining to the creation and administration of a trust, is
expensive and will attenuate the award to the detriment of
R[….].
In this regard the defendant submitted that the administration costs
will amount to 6% of the award, to wit R247,542.06.
3.2
R[…..]’s
parents, knowing and appreciating R[….]'s needs and
circumstances, are best suited to deal with the
award in the interest
of R[….],
[3]
which will be a cheaper option than creating a trust to do so.
3.3
If
there are concerns that R[….]'s parents will not be able to
properly administer the award, the award could be paid into
the
guardian's fund, administered by the Master of the High Court,
Pretoria, from which R[….]'s maintenance and expenses
could be
paid.
DISCUSSION:
4.
As
the upper guardian of R[….] (and all other minors within its
jurisdiction) and having considered all relevant facts, submissions
and legal principles, this Court is unable to agree with the
defendant's objection and exercises its discretion in favour of a
trust being created for R[….], for the following reasons:
The
plaintiff's stance as to the desirability of a trust:
4.1
The
plaintiff, who knows and appreciates his own abilities and
capabilities as well as R[….]'s special needs and
requirements,
proposed the creation of the trust to receive and
administer the award on behalf of and for the benefit of R[….].
I am informed
that R[….]'s mother is also in favour of the
creation of a trust.
4.2
If
effect is to be given to the defendant’s argument that R[….]'s
parents are best suited to decide in which manner
the award has to be
protected and administered, their desire to create a trust for R[….],
refutes the objection.
The
practice in the Gauteng Division, Pretoria:
4.3
In
most cases where a minor receives a damage award after a motor
vehicle accident, this Court usually appoints a curator
bonis
or orders that an
inter
vivo
trust be created with the minor
as beneficiary, to administer the award in the best interest of the
minor.
4.4
The
reasoning behind the creation of a trust is sound, because its object
is to protect the capital of the award and to ensure that
the funds
are utilised for the benefit of the beneficiary.
4.5
This is achieved, among others, by:
4.5.1
Requiring
the trustees to furnish security to the Master of the High Court or
any other authority for the proper compliance of its
duties as such;
4.5.2
The
obligation on the trustees, among others, to:
4.5.2.1
Act
in good faith and to act with care, diligence and skill which can
reasonably be expected from a person who manages the affairs
of
another;
4.5.2.2
Avoid
a conflict of interest;
4.5.2.3
Ensure
that a reasonable return is obtained on the trust capital;
4.5.2.4
Keep
complete records, statements and accounts of all transactions and to
prepare proper statements in connection with all financial
activities
in accordance with the Generally Accepted Accounting Practice in
South Africa;
4.5.2.5
Comply
with the relevant legislation.
4.5.3
A
prohibition against the beneficiary using his or her interest in the
trust funds as security for debt or to encumber it in any
manner
whatsoever;
4.5.4
The
trustee's liability for breach of his or her fiduciary duties;
4.5.5
Excluding
any benefit accruing or payable to the beneficiary in accordance with
the trust deed, from the joint estate of the beneficiary
and his or
her spouse;
4.6
These
objects may for obvious reasons not be achieved if individuals, such
as parents, are entrusted with the administration of
the award. These
reasons include, but are not limited to, an inability to furnish
security, a lack of knowledge or proficiency
to administer such a
large sum of money, the non-separation of the award and personal
funds, creditors' access to the award and
a lack of supervision.
4.7
Furthermore,
the Tuchten judgment pertains to the necessity to appointment
curators
ad /item
to
protect the interest of children in actions against the defendant,
and not to the appointment of curators
bonis
or the creation of trusts for such
children once an award has been made in favour of them.
4.8
I
am therefore unable to find any compelling reason to deviate from
this practice in the present instance. There may, however, be
other
instances where it may be desirable to do so.
The
possibility to deposit the award in the Guardian's Fund:
4.9
The
guardian's fund was created by section 91 of the Administration of
Estates Act 24 of 1913
(“the
previous
Act”) and in terms of
section 86 (1) of the Administration of Estates Act 66 of 1965
(“the
new
Act”) , continued in
existence after the previous Act was revoked by the enactment of the
new Act.
4.10
The guardian's fund consists of all
moneys:
[4]
4.10.1
In the guardian's fund at the
commencement of the new Act; or
4.10.2
Received
by the Master under the new Act or in any law or
in
pursuance of an order of Court;
or
4.10.3
Accepted
by the Master for any known of unknown person.
4.11
Even
though there is no evidence that the award will not be protected if
paid into the guardian's fund, the same risks mentioned
in paragraph
4.6
supra
come
to the fore once the guardian's fund effects payments in terms of
section 90 of the new Act.
4.12
It
follows that the creation of a trust to receive and administer the
award tot R[….]'s benefit, is to be preferred, because
it will
better protect the utilisation of the funds.
The costs pertaining to the administration
of the trust:
4.13
The
argument that the administration costs pertaining to the
administration of the trust, will attenuate the award, is a red
herring.
4.14
Such
costs are resultant of the motor vehicle collision in which R[….]was
injured and the defendant has to pay same.
4.15
The
award will therefore not be diminished by such administration costs.
The
proposed trustee:
4.16
The
proposed trustee is a nominee of Absa Trust to accept appointments as
a trustee and is duly qualified to act as a trustee.
4.17
Absa
Trust is a well-known "trust" company and there is no
reason to suspect that either Absa Trust or its nominee will
not be
able to comply with a trustee's obligations.
4.18
The
appointment of the trustee is any event subject to the Master's
supervision and approval.
CONCLUSION:
5.
It
follows that there is no persuasive reason why an
inter
vivo
trust should not be created to
receive and administer the award for the benefit of R[….].
6.
I
accordingly make an order in terms of the draft court order prepared
by the plaintiff and which I have amended, initialled and
identified
by marking it with an
"X" .
DB
DU PREEZ
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
8
JULY 2019
Counsel
for the plaintiff: ADV M VAN
ROOYEN
Instructed by: SAVAGE, JOOSTE & ADAMS
Counsel
for the defendant:
ADV L MOHLAPAMASWI
Instructed by: TAU PHALANE INC
[1]
As per the draft order that was made an order of court by agreement
between the parties on 22 April 2016.
[2]
As per the draft order presented by the parties' respective counsel
and counsels' affirmation.
[3]
Relying on the (as yet) unreported judgment by Tuchten, J in the
Ex
parte applications of TR Molontoa o.b.o TR Molantoa and
O
Molantoa and other Applicants o.b.o children,
Case Number:
3198/2018, Gauteng Division, Pretoria
(“the Tuchten
judgment”).
[4]
Section 86 (1), 1 (a), 1 (b) & 1 (c).