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[2018] ZANCHC 31
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Van Wyk v Daberas Adventures CC (1431/2016) [2018] ZANCHC 31 (1 June 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape High Court, Kimberley)
REPORTABLE:
YES
CIRCULATE
TO JUDGES: YES
CIRCULATE
TO MAGISTRATES:NO
CIRCULATE
TO REGIONAL MAGISTRATES: NO
CASE
NO:
1431/2016
DATE
HEARD:
21
MAY 2018
DATE
DELIVERED:
01
JUNE 2018
In
the special review
:
VAN
WYK,
MARIANNA
Appellant
and
DABERAS
ADVENTURES
CC
Respondent
Coram:
Williams ADJP
et
Olivier J
et
Mamosebo
J
JUDGMENT ON
SPECIAL REVIEW
Olivier
J:
[1.]
The
appellant, Ms Mariana Van Wyk, in her capacity as a trustee of the
Chris Van Wyk Trust (“
the Trust
”)
had instituted motion proceedings against the respondent, Daberas
Adventures CC.
[2.]
In
the founding affidavit it was averred by the appellant that she had
been authorised by her co-trustees to bring the application
on behalf
of the Trust. She attached a copy of the relevant resolution,
which reflected
[1]
that the
appellant and all the other trustees had decided that the appellant
was authorised, in her capacity as a trustee, to institute
motion
proceedings against the respondent for,
inter
alia
,
orders:
2.1
that the respondent, its members and its employees vacate the
property of the
Trust;
2.2
that the respondent, its members and its employees cease all work on
the property,
and that they demolish and remove all the erected
constructions without damaging the property of the Trust;
2.3
that the respondent replace or repair the fences to the condition in
which they
had been prior to the respondent’s activities there;
2.4
that the barricades and the lock preventing access to the property
through the
main gate be removed; and
2.5
that the Trust be allowed to erect certain fences.
[3.]
Annexed
to the founding affidavit there were also supporting affidavits by
the remaining trustees Mr C J Van Wyk , Ms Marianné
van Wyk
and Mr C J P Van Wyk, in which they stated that the appellant was
authorised in her capacity as trustee to institute against
the
respondent such legal proceedings as she may in the exercise of her
own and exclusive discretion deem fit.
[4.]
It
was common cause that the appellant and the said trustees had at the
time been all the serving trustees of the Trust.
[5.]
At
the hearing of the application the respondent raised three
in
limine
objections, one of which was that the
appellant lacked
locus standi
.
This particular objection was upheld and the application was
dismissed with costs on that basis. In this regard the
Court
a
quo
(Snyders AJ) found:
5.1
that the resolution to authorise the appellant to bring the
application was
invalid because the decision had been taken without
the vote of Mr B C Van Wyk, which was found to have been a
requirement in terms
of clause 8.3 of the trust deed; and
3.2
that the other trustees had in any event not been entitled to
delegate the power
as set out in the resolution:
3.2.1
because the delegation of this particular power was not provided for
in clause 8.8 of the trust
deed; and
3.2.2
because the trust deed contained no other express provision for the
right to delegate any power,
including this one.
[6.]
The
Court
a quo
granted
the appellant leave to appeal, and ordered the costs of an
application for condonation and the costs of the application
for
leave to appeal to be costs in the appeal.
[7.]
The
arguments set out in the heads of argument on behalf of the appellant
were briefly:
7.1
that the authorisation of the other trustees had not been required
for the appellant
to have deposed to the founding affidavit;
7.2
that the respondent could only have challenged the appellant’s
authorisation
through the mechanism of Uniform Rule 7(1); and
7.3
that, as each of the trustees had been properly identified and had
supported
the application, the Trust should not have been non-suited
merely because they had not been joined and cited as co-applicants.
[8.]
I
do not understand the findings of the Court
a
quo
to be that the lack of
locus
standi
resulted from the appellant not having
been authorised to depose to the founding affidavit, or that the
mechanism of Uniform Rule
7(1) should have been utilised by the
respondent. In argument before us Mr Van Aswegen, counsel for
the appellant, did not
pursue these arguments and they therefore do
not have to be considered.
[9.]
Suffice
to say that the provisions of the Rule
apply
to "
the
special type of power which is given by a client to his attorney to
authorise him to institute or defend legal proceedings on
the
client's behalf
"
[2]
and that they are to be used where there is a “
fear
that a person may deny that he was a party to litigation carried on
in his name
”
[3]
.
The issue here was not whether the appellant, who was herself the
“
client
”
and also the “
party
”
as envisaged in
Uniform
Rule 7(1)
[4]
,
had
authorised the attorney. It was whether she had been entitled
to do so.
ABSENCE
OF THE VOTE OF MR B C VAN WYK
[10.]
At
the time of the launching of the application Mr B C Van Wyk had, as a
result of the sequestration of his estate, ceased to be
a serving
trustee.
[11.]
Mr
Nel, counsel for the respondent, argued that Mr Van Wyk had to be a
trustee “
for the Trust to function
”,
that in his absence, and in fact until his death, “
no
decisions (
could)
be
taken that would bind the Trust estate
”
and that the rest of the trustees did “
not
have capacity to make decisions
” in the
absence of Mr Van Wyk and for so long as he was alive. This
argument was based upon provisions of clause 8.4
of the Trust Deed,
the relevant part of which reads as follows:
“
Alle
besluite en optredes van die Trustees sal by wyse van meerderheidstem
geskied mits die stem van
BAREND CHRISTIAAN
VAN WYK
en na sy/haar
dood die stem van
MARIANNA VAN WYK
en by sy/haar
dood die stem van die TRUSTEE testamentêr aangewys deur
BAREND CHRISTIAAN
VAN WYK
as sy opvolger,
een van die meerderheidstem is.
…”
[12.]
In
my view the provisions clearly apply to only decisions reached by
majority vote, as opposed to unanimous decisions taken by all
serving
trustees. In my view the intention was that, in the event of
split decisions, only majority votes which included
the vote of Mr
Van Wyk would carry through.
[13.]
Mr
Nel’s interpretation of the provisions would mean that the
Trust would be rendered incapacitated for as long as Mr Van
Wyk is
alive. The rules of interpretation that are applicable to
contracts also apply to the interpretation of trust deeds
[5]
.
The approach to be followed is by now trite and was reaffirmed in
Sea
Plant Products Ltd v Watt
[6]
.
[14.]
In
my view the “
grammatical
and ordinary meaning”
of the language used in this clause is clear and unambiguous and does
not “
result
in some absurdity, or some repugnancy or inconsistency with the rest
of the instrument”
[7]
.
[15.]
Mr
Nel’s interpretation of the provisions is in my view
inconsistent with the clear meaning of the words and would lead to
the absurd result that the Trust would be incapacitated for as long
as Mr B C Van Wyk is alive.
[16.]
The
provisions should also be read in the context of those of the
preceding clause, which requires the presence of Mr Van Wyk to
constitute a quorum in the event that a meeting is attended by a
majority of the serving trustees, as opposed to all the serving
trustees.
[17.]
It
could also be argued that an interpretation that would result in the
failure of the Trust should be avoided
[8]
.
[18.]
Decisions
taken by majority vote must be distinguished from those taken
unanimously by all serving trustees. It must be kept
in mind
that, although common, a provision that a decision can be reached by
majority vote (as opposed to decisions taken jointly
and unanimously)
to an extent constitutes an abrogation of the joint action
requirement that generally applies to Trusts
[9]
.
[19.]
It
follows that I am of the view that the Court
a
quo
erred in finding that the serving
trustees had, in the absence of Mr Van Wyk, not been able to take
valid decisions by means of
what was in this case a unanimous vote by
all of them jointly.
DELEGATION
[20.]
In
terms of clause 9.2.8 of the trust deed one of the powers of the
trustees would be to institute or defend legal proceedings.
[21.]
Clause
8.8 of the trust deed provides that trustees could authorise one
another to sign, for official purposes, any document required
for the
administration of the Trust and for the execution of any transaction
in connection with the affairs of the Trust.
[22.]
The
wording of the latter clause is similar to the wording of a clause
considered by the Supreme Court of Appeal in
Nieuwoudt
NO and Another v Vrystaat Mielies (Edms) Bpk
[10]
and which was held not to have empowered a trustee to authorise
another trustee to sign, in his or her capacity as such, a contract
of sale on his behalf.
[23.]
In
my view it is clear that the power to institute or defend legal
proceedings is not a power as envisaged in clause 8.8, and
accordingly
its delegation to another trustee is not provided for by
the provisions of that clause. The present trust deed in fact
does
not make express provision for trustees to delegate the power
and the function to institute and defend legal proceedings.
[24.]
Mr
Nel, relying on
Hoosen
and Others NNO v Deedat and Others
[11]
,
submitted that the right to delegate this specific power may not be
implied from the provisions of a trust deed and that, in the
absence
of an express provision to this effect in a trust deed, it cannot be
delegated.
[25.]
Mr
Nel furthermore latched on to the fact that the appellant’s
three co-trustees had, in their supporting affidavits, stated
that
the appellant had been authorised to institute such proceedings as
she would deem fit in her own and exclusive discretion.
Words
to the same effect appear in paragraph 6 of the resolution, in terms
of which the appellant was authorised to obtain such
other relief as
she would deem fit in her own and exclusive discretion. Mr Nel
argued that a delegation in these terms would
constitute an irregular
abrogation of their powers of the part of the co-trustees.
[26.]
In
the
Hoosen
case a trustee purported to authorise a third party to represent him
at all future meetings of trustees. The power of attorney
authorised the third party, in very wide and general terms, to do
everything that the authorising trustee would have been able
to do.
It was held that the express provision for the delegation of powers
in the particular trust deed was limited to “
matters
that are by and large purely administrative
”
and that the particular provision did not apply “
to
areas where the exercise of a discretion is called for by the
trustees in carrying out their duties and management and
control
”
[12]
.
[27.]
The
Court found that the general principle “
that
the fundamental decisions relating to a Trust need to be taken by the
trustees
” and the concomitant “
general
prohibition against the delegation of a fundamental discretionary
power
” would militate against an
argument that such a trust deed impliedly provided a right to
delegate functions “
in the manner sought
to be done by
(the trustee)
in
terms of the power of attorney
”.
[28.]
In
my view these findings in the
Hoosen
case pertained specifically to the delegation of “
fundamental
decisions
”
and of “
fundamental
discretionary power
”.
The right to delegate such a power would have to be expressly
provided for in a trust deed and, if not, it will not
readily be
implied
[13]
.
[29.]
It
is also important to take note of the distinction that was drawn
between the power to take part in decisions, on the one hand,
and the
power to implement such decisions, on the other hand. It was
expressly held that the “
implementation
”
of fundamental decisions may be delegated to others
[14]
.
[30.]
In
my view the
Hoosen
case is therefore not authority for the general proposition that the
right to delegate a power of a trustee could only arise from
an
express provision in a trust deed or, as put in the heads of argument
on behalf of the respondent, “
a
delegation of trustees’ duties must be permitted in the trust
deed. If not, it cannot be done
”.
The finding of the Supreme Court of Appeal was that the particular
delegation was not legally tenable in the absence
of express
provision therefor in the particular deed, not delegation in general.
The finding pertained to a delegation in the terms
concerned in that
specific matter or, as it was put in paragraph [25] of the judgment,
a delegation in “
the
manner sought to be done
”,
and “
in
(the)
terms
of
(that)
power
of attorney
”
[15]
.
This also appears from the finding that the delegation in that matter
“
properly
construed, seeks to transfer to the first respondent the third
respondent’s rights and duties, and concomitant powers,
arising
from attendance and voting at meetings of the Trust. This
amounts to a delegation to the first respondent of the
third
respondent’s judgment and discretion in relation to the
decision-making process of the Trust. It constitutes
at least a
temporary abdication of the third respondent’s functions in
favour of a non-trustee
”
[16]
.
[31.]
It
is also important to bear in mind that the Court in the
Hoosen
case was concerned with a purported delegation of power by an
individual trustee, as opposed to the delegation of a power by the
body of trustees. The remark, in paragraph [23] of the
judgment, that the trust deed concerned there made “
no
provision for the exercise of any powers or functions by individual
trustees
unless authorised thereto by
the body of trustees
” in my view
suggests that, at the very least, “
the
body of trustees
” could delegate, at
the very least, the type of power:
30.1
that cannot be said to amount to a “
fundamental
discretionary power
”; and
30.2
that does not relate to an area “
where
the exercise of a discretion is called for by the trustees in
carrying out their duties of management and control
”.
[32.]
The
resolution concerned in the present matter reflects, and as far as
the relief indeed sought in the notice of motion is concerned,
that
the body of trustees delegated, by unanimous decision, only the power
to institute legal proceedings against the respondent
and to sign all
documents and take all steps to bring such proceedings to finality.
The resolution in itself, and once again
as far as the relief is
concerned that is sought on the strength thereof, does not purport to
delegate any discretionary power
[17]
,
let alone one that could be said to relate to the “
judgment
and discretion
(of
the other trustees)
in
relation to the decision-making process of the Trust
”
[18]
.
[33.]
The
fact that the other trustees have in their supporting affidavits
interpreted the resolution as meaning that the appellant would
have a
discretion, presumably as regards the type of legal proceedings to be
instituted, is of no consequence. It is the
objective contents
of the resolution which are decisive, and not what the other trustees
may subjectively have intended to decide,
and the resolution “
must
be interpreted objectively in order to determine (its) precise ambit
and legal effect
”
[19]
.
[34.]
In
any event, even on their subjective interpretation and intention, the
discretion referred to would have pertained to only the
type of legal
proceedings to be instituted, and not the general “
decision-making
process of the Trust
”.
[35.]
As
long as a delegation of power does not amount to an abdication of the
fundamental discretionary powers of a trustee in the exercise
of his
or her duties as a trustee, and unless it is prohibited by a trust
deed, “
a
delegation of powers … can validly be done in law by
trustees
”
[20]
,
which could include “
decision-making
functions in respect of litigation
”
[21]
.
[36.]
The
Court
a
quo
interpreted the following dictum in
Goolam
Ally Family Trust t/a Textile Curtaining and Trimming v Textile
Curtaining (Pty) Ltd
[22]
to mean that a right to delegate a power can only exist if it is not
only not prohibited in the trust deed, but in fact expressly
provided
for in it:
"The
general rule is that joint trustees must act jointly. Generally
speaking a joint trustee may delegate his duties to a
co-trustee or
to any other agent but the power to do so depends on the provisions
of the trust deed ... If it is prohibited it
cannot be done "
[37.]
I
respectfully disagree with this interpretation. The words “
If
it is prohibited it cannot be done
”
simply cannot be read to also mean “
If
it is (
not
expressly provided for
)
it cannot be done
”.
The Court in the
Goolam
case was in any event only called upon to decide whether a case had
been made out in the papers that “
the
application or the decision to bring the application
”
had been authorised by the second trustee, who had not deposed to a
supporting affidavit like the other trustees had
[23]
.
Whether the second trustee would, in terms of the particular deed of
donation, have been entitled to authorise it, was not
the issue.
[38.]
The
following remarks in the
Nieuwoudt
case
[24]
also imply that
express provision for the right to delegate a power or a function is
not a general requirement:
"
Although
there was nothing in the trust deed which prevented the trustees from
delegating certain functions to one of their number
or even to an
outsider
(cf
Coetzee v Peet Smith Trust en andere
2003 (5) SA 674
(T) at 680I-J),
the first appellant did not deal expressly in his affidavit with the
question as to whether powers of management
over the trust business
had been delegated to him so as to enable the day to day business of
the trust to be carried on
."
[25]
(My emphasis)
[39.]
In
a concurring judgment it was held that “……
..
the ordinary principles of the law of agency
(applied)”,
that “
trustees
may expressly or impliedly authorise someone to act on
their behalf and that person may be one of the trustees”
and
that “………
whether
a particular trustee has the ostensible authority to act on behalf of
the other trustees is a matter of fact and not one
of law
”
[26]
.
[40.]
There
is no indication in the present trust deed that the intention was to
limit the delegable powers to those envisaged in clause
8.8. In
fact, when regard is had to the provisions of clause 7 it is in my
view clear that no such limitation was intended.
In terms of
this clause a trustee could be authorised to act on behalf of a
co-trustee in his/her temporary absence.
[41.]
The
“
decision-making
functions in litigation
”
are not the type of functions that are not delegable in the absence
of express provision therefor in a trust deed
[27]
.
[42.]
I
have already alluded to the distinction drawn in the
Hoosen
case between the process of arriving at decisions through the
exercise of a trustee’s fundamental discretionary powers, on
the one hand, and the implementation of those decisions, on the
other, and to the fact that it was held that “
(T)he
implementation of such decisions may be delegated to others …
”
[28]
.
Even if it could be said that the power to make a decision whether to
institute or defend legal proceedings, as envisaged
in clause 9.2.8
of the trust deed in the present matter, constituted a “
fundamental
discretionary power
”
[29]
,
and one that could only be delegated if the trust deed expressly
provided for such delegation
[30]
,
this is not what was delegated in the present matter if regard is had
to the contents of paragraphs 1 to 5 of the resolution.
The
decision to institute the legal proceedings was taken by all the
trustees jointly. Paragraphs 1 to 5 of the resolution
delegated
only the implementation of that particular decision to the appellant.
[43.]
In
terms of paragraph 6 of the resolution the body of trustees had also
decided to delegate to the appellant any decision about
whether to
seek other relief than that set out in paragraphs 1 to 5 of the
resolution. Whether the power to make this particular
decision
could be described as a “
fundamental
discretionary power
” that could not be
delegated, is not necessary to decide. The relief sought in the
notice of motion is covered by and
limited to the contents of
paragraphs 1 to 5 of the resolution and the appellant has therefore
not, in bringing the application,
exercised the power envisaged in
paragraph 6 of the resolution.
[44.]
To
summarise as far as the issue of delegation is concerned, the absence
of express provision in a trust deed for the delegation
of a decision
regarding the institution or opposition of legal proceedings in a
specific case would not render such a delegation
invalid, and even
less the delegation of only the implementation of such a decision,
provided that it is not expressly or impliedly
prohibited in terms of
the trust deed. In such a case the “
ordinary
principles of the law
of
agency
”
[31]
would prevail, which would allow a trustee to authorise another
trustee to act on his or her behalf.
“
ON
BEHALF OF THE TRUST”
[45.]
Mr
Nel referred to the statement of the appellant in the founding
affidavit that she had been authorised to bring the application
on
behalf of the Trust. Words to the same effect appear in the
introductory portion of the resolution. Mr Nel argued
that,
because the Trust is not a legal
persona
,
it would be legally impossible to institute legal proceedings on its
behalf.
[46.]
In
my view there is absolutely no merit in this argument. If
property and assets can be held and administered by trustees
“
on
behalf of
”
a Trust
[32]
, they could surely
also institute legal proceedings on its behalf. The words are
in fact commonly used in judgments to denote
actions taken by
trustees in the administration of the affairs of Trusts
[33]
.
[47.]
In
support of his argument Mr Nel referred to cases like
Land
and Agricultural Bank of South Africa v Parker and Others
[34]
and
Gowar
and Another v Gowar and Another
[35]
,
in which it was reaffirmed that a Trust does not have legal
personality. These cases do not, however, in my view provide
support for Mr Nel’s argument.
[48.]
In
BOE
Bank Ltd (Formerly NBS Boland Bank Ltd) v Trustees, Knox Property
Trust
[36]
it was held, in considering a similar argument:
45.1
that even though a Trust is not a legal
persona
“
it
is recognised that a Trust has a legal existence, whether it be
called ‘an entity’, ‘an institution’
or ‘an
arrangement’
”
[37]
;
45.2
that the “
arrangement
whereby assets and liabilities are vested in a trustee or in trustees
… is, in everyday parlance referred
to as ‘a
Trust’
”
[38]
;
45.3
that the real question is whether the party concerned is sufficiently
identified and that,
even though it would better to refer to the
trustees “
as
the named Trustees, in their capacity as Trustees of the Trust or as
the Trustees for the time being of the Trust
”,
rather than to the Trust itself, this is not decisive in
circumstances where the true identity of the Trust is clear
[39]
.
[49.]
The
Court in the
BOE
Bank
case also referred to the case of
Rosner
v Lydia Swanepoel Trust
[40]
in which Goldstein J remarked at 128D to E that:
“…
cases
in the name of a trust are not unknown, …”
[41]
[50.]
The
BOE
Bank
case was referred to with approval in
Standard
Bank of South Africa Limited v Swanepoel NO
[42]
,
in which it was held:
47.1
that the Court in the
BOE
Bank
correctly
“
held
that the description of the principal debtor as a trust in the deed
of suretyship was sufficient identification …
”
[43]
;
and
47.2
that the dictum in the
Parker
case that “
a
trust does not have legal personality and, in the absence of the
authorisation of the trustees, as required by the deed of trust,
cannot be bound by a contract
”
does not mean that a Trust cannot enter into a contract
[44]
.
[51.]
Mr
Nel went on to argue that, because the other three trustees had
purported to authorise the deponent to bring the application
on
behalf of the Trust, they had in effect not authorised her to
institute the legal proceedings on their behalf, in their capacities
as co-trustees of the deponent. Mr Nel relied on the case of
Van
der Westhuizen v Van Sandwyk
[45]
where it was held
[46]
that,
even if it is to be assumed that a trustee could in his/her name
institute legal proceedings on behalf of all the other trustees,
it
would still be a requirement that such a trustee be authorised to act
on behalf of the other trustees.
[52.]
Even
though the appellant and her co-trustees have in the present matter
not explicitly averred that the appellant instituted these
proceedings on behalf of the other trustees, it is in my view
abundantly clear that this is precisely what happened. The
body
of trustees intended legal proceedings to be brought against the
respondent, and intended the appellant to represent them
in doing
so. The appellant clearly did not “
bring
this application on her own
”, as Mr Nel
would have this Court interpret the evidence.
JOINDER
[53.]
Mr
Nel argued that, in any event, all the trustees should have been
joined as applicants. He once again relied on the
Van
der Westhuizen
case,
where it was held
[47]
that all
trustees must be joined as parties.
[54.]
In
the
Van
der Westhuizen
case Streicher J (as he then was) disagreed with the following
obiter
dictum
in
Mariola
and Others v Kay-Eddie NO and Others
[48]
:
“
Unless one
of the trustees is authorised by the remaining trustee or trustees,
all the trustees must be joined in suing and all
must be joined when
action is instituted against a trust.”
[55.]
Streicher
J interpreted the following passage at p 266 of the 4
th
edition of
Honoré’s South African
Law of Trusts
as requiring that all trustees
in any event be joined in suing or being sued:
"All
the trustees must join in suing and all must be sued ..., though it
is sufficient for one trustee, if properly authorised
by the
remaining trustees, to sign the power of attorney on their behalf.
There appears moreover to be no requirement of formality
regarding
how the remaining trustees should signify their association with the
action so long as adequate proof is produced that
the litigating
trustee has been properly authorised to act on behalf of all the
other trustees."
[49]
[56.]
In
essence the findings of Streicher J were:
54.1
that the Court in the
Mariola
case had mistakenly interpreted
the words “
though it is sufficient for one trustee, if
properly authorised by the remaining trustees, to sign a power of
attorney on their
behalf
” in the above-quoted passage from
the 4
th
edition of the book as denoting an exception to
the general requirement that all trustees should join or be joined,
while the words
were never intended to convey that anything more than
the signing of a power of attorney could be authorised; and
54.2
that all the trustees should therefore have joined as plaintiffs when
the particular action
was instituted.
[57.]
What
the
Van der Westhuizen
judgment boiled down to was therefore that the words “
Unless
one of the trustees is authorised by the remaining trustee or
trustees …
” in the above-quoted
dictum in the
Mariola
case had resulted from a wrong interpretation of what was said in the
4
th
edition of
Honoré’s South African Law of
Trusts
in respect of authorisation to sign a
power of attorney.
[58.]
The
Mariola
dictum
– and that interpretation of the particular passage in
Honoré’s
South African Law of Trusts
– has however, since the
Van
der Westhuizen
judgment, been applied in cases like
Cupido
v Kings Lodge Hotel
[50]
,
Glen
Elgin Trust v Titus and another
[51]
,
Buffelsdrift
Game Reserve Owners’ Association v Holkom and Others
[52]
,
Deutschmann
NO & Others v Commissioner for the South African Revenue Service;
Shelton v Commissioner for the South African Revenue
Service
[53]
and
Rosner v Lydia Swanepoel Trust
[54]
.
[59.]
In
Desai-Chilwan
NO v Ross and Another
[55]
Ngwenya J disagreed with the interpretation of Streicher J of the
particular passage in
Honoré’s
South African Law of Trusts
and held that, while it was preferable to join and cite all trustees,
the failure to do so “
should
(not)
non-suit
the trust where there was clear authority to bring the proceedings to
court
”
[56]
.
[60.]
Mr
Nel argued that Ngwenya J disregarded the principle reiterated in the
Parker
case “
that
… the trustees must act jointly if the trust estate is to be
bound by their acts
”
[57]
.
The answer to this argument is that the trustees in the present
matter did indeed act jointly, and as the body of trustees.
They took a unanimous decision that the legal proceedings be
instituted, and that the appellant would take the necessary steps
on
behalf of the Trust. This is abundantly clear on the papers,
and the fact that they had not all been joined as applicants,
and
cited as such, cannot in my view detract from this.
[61.]
The
qualification that, where not all trustees have been cited or joined,
there would have to be evidence of “
clear
authority to bring the proceedings to court
”
on the part of the trustee that is indeed cited and joined, is in any
event a clear indication that Ngwenya J recognised
the need that
trustees had to act jointly. However, the learned Judge found,
with reference to the said passage in the 4
th
edition of
Honoré’s
South African Law of Trusts
,
that citing the remaining trustees would not be the only way to
“
signify
”
[58]
the fact that they had in fact been part of a joint decision to
institute proceedings or had been authorised to do so.
[62.]
Mr
Nel argued that the finding of Ngwenya J that the applicant-trustee
had been duly authorised by the other trustee and was therefore
entitled to bring that application, had effectively placed the
applicant-trustee in the position of an agent and that the finding
had disregarded the rule that an agent has no right to enforce the
right of the principal in his/her own name. The resolution
in
the
Desai-Chilwan
case
made it clear however that the applicant-trustee was in fact acting
“
on behalf of the Clivia Property
Trust
”.
[63.]
In
Pro-Khaya
Construction CC v Trustees for the time being of the Independent
Development Trust
[59]
the individual trustees had also not been cited in the notice of
motion or in the founding affidavit. Their identities only
became known when they were cited in a counter-application. It
was found that the failure to cite them in founding could
be condoned
and it was found, adopting the approach of Ngwenya J in the
Desai-Chilwan
case, that “E
ffectively
all the trustees
(were)
before
the court in their capacities as trustees
”.
[64.]
In
coming to this finding the Court in the
Pro-Khaya
case referred to the 5
th
edition
of
Honoré’s South African Law of
Trusts
, where the following is also said at
pp 419 – 420:
"
Unless
one or more of the trustees are authorized by the others, all the
trustees must be joined in suing and all must be joined
when action
is instituted against a trust.
In
legal proceedings the trustees must act nomine officii and cannot act
in their private capacities. It is usual for the
trustees to be
cited as ‘A, B and C in their capacity as the trustees of the
XYZ Trust’ but cases in which the trust
as such is cited are
not unknown and there should be no objection to a citation of ‘the
trustees for the time being of the
XYZ Trust’."
[65.]
The
words “
Unless one or more of the
trustees are authorized by the others …
”,
which do not in this context appear in the passage relied upon in the
Van der Westhuizen
case, and the authors’ reference in a footnote to the
Mariola
dictum,
appear to be a
clear indication that the authors approve that approach and that it
would therefore not in such a case be essential
to join and cite the
other trustees as parties, or at least fatal not to do so. I am
fortified in this view by what is said
by the authors at p71:
“
Litigation
is sometimes conducted in the name of a trust instead of, as is
technically
more proper, the trustees in their official capacity
”
[60]
[66.]
In
my view words like “
unless one of the
trustees is authorised …
”
clearly denote an exception to the general rule that trustees should
join or be joined in litigation, and this is in my
view also how it
was understood and applied in the cases referred to in paragraph [56]
above.
[67.]
In
Risseeuw
NO v Alanza Boerdery (Edms) Bpk
[61]
the Court considered itself bound by the earlier decision in the same
division in the
Van
der Westhuizen
case.
Tuchten J went further and found that the
Van
der Westhuizen
dictum
was correct, but did not motivate this finding. With the
exception of the
Mariola
case, none of the cases referred to in paragraph [56] above were
mentioned.
[68.]
Neither
was mention made of the following
dictum
(
obiter
)
in
Lupacchini
NO and Another v Minister of Safety and Security
[62]
,
where the Court also dealt with the position of trustees and held the
following
[63]
:
"
By
the nature of the office of trustee, the control and administration
of the trust property vests in each trustee individually.
It follows
that where there is more than one trustee they must act jointly
unless the trust instrument provides otherwise. And
because they have
individual interests all must necessarily join in litigation
concerning the affairs of the trust (
though
it seems that one trustee might authorise another to sue in his or
her name
).
"
[64]
[69.]
In
paragraph [4] of the judgment Nugent JA went on to find that one
trustee would only be able to authorise another “
to
institute proceedings on his or her behalf
”
if the former is in terms of section 6(1) of the
Trust
Property Control Act
[65]
entitled to act as a trustee. This too, in my view, clearly
implies that a trustee could delegate the power to institute
or
defend legal proceedings.
[70.]
That
this is, with respect, the correct position and that the right to do
so would not necessarily have to appear in the trust deed,
appears
from the following discussion of the
Risseeuw
and
Van der Westhuizen
cases by prof. M J De Waal of the University of Stellenbosch in his
article titled “
Law of Succession
(including Administration of Estates) and trusts
”
in
2014 Annual Survey 943
at pp 970 to 971 under the heading “
Trust
administration: General principles and the ‘joint-action’
rule
”:
"
The
court (In the Risseeuw case) apparently accepted, without stating it
explicitly, that the joint-action rule is also applicable
to legal
proceedings instituted by joint trustees. It is trite that this is
indeed the case and the court was consequently quite
correct in its
point of departure. However, on the authority of the judgment Van der
Westhuizen v Van Sandwyk
1996 (2) SA 490
(W) 495A–D, the
court took the view that all the trustees must be joined in the
action. It was therefore not enough, as was
the case in Risseeuw,
that one of the trustees was duly authorised by the remaining
trustees to institute the action on behalf
of the trust. The court
therefore upheld this ground of the exception.
However,
authority appears to be against this conclusion by the court in
Risseeuw. One way of alleviating practical difficulties
with the
joint-action rule is by employing the normal principles of the law of
agency in this context (see in general Nieuwoudt
& another NNO v
Vrystaat Mielies (Edms) Bpk
2004 (3) SA 486
(SCA); Parker (above para
[37.2]); 2013 Annual Survey 999–1000.) Regarding legal
proceedings on behalf of a trust, the position
has been formulated as
follows (Cameron et al above 419)
'Unless
one or more of the trustees are authorized by the others, all the
trustees must be joined in suing and all must be joined
when action
is instituted against a trust.'
Other
academic authors agree (see, for example, Du Toit above 101; RP Pace
& WM van der Westhuizen Wills and Trusts (service
issue 17, 2013)
para B17) and there also seems to be general judicial support for
this view in different divisions of the High
Court (see the cases
cited in Cameron et al above 419 n 21; Du Toit above 101 n 335).
Moreover, this view has now also —
albeit probably obiter —
received the blessing of the Supreme Court of Appeal in Lupacchini NO
& another v Minister of
Safety and Security
2010 (6) SA 457
(SCA)
where Nugent JA stated (para 2])
‘
And
because they [the trustees] have individual interests all must
necessarily join in litigation concerning the affairs of the
trust
(though it seems that one trustee might authorise another to sue in
his or her name).'
The
view taken in Risseeuw can therefore no longer be seen as the correct
one.’
"
[71.]
The
facts in
Villon
Family Trust v Kirby
[66]
are distinguishable from those in the present matter, to the extent
that in that matter the Trust was cited as the applicant, instead
of
a trustee being cited on behalf of the Trust. There was however
also, as in the present matter, a resolution which authorised
the
deponent to the founding affidavit to institute the proceedings “
on
behalf of
”
that Trust. An argument “
that
the trustees of the applicant should either have been cited in their
capacities as such or simply referred to as ‘the
Trustees for
the time being’ of the applicant
”
was rejected as being “
overly
technical
”,
and it was held that “
Although
it is desirable to cite the applicant in the manner contended for by
the respondent, this does not mean that a failure
to do so is fatal
to the applicant’s case
”
[67]
.
[72.]
Mr
Van Aswegen, counsel for the appellant, also referred us to
Rupert
Investments (Pty) Ltd v JH Petzer Inc and Others
[68]
.
In that case too all the trustees of the two Trusts had not been
joined. In terms of a resolution the trustee who
had been
joined had been authorised by the remaining trustees to oppose the
application. Fabricius J adopted the reasoning
of Ngwenya J in
the
Desai-Chilwan
case, found that it was clear “
that
all the Trustees were aware of the application and what was sought to
be achieved thereby
”
and held that the non-joinder of the other trustees had not caused
any prejudice.
[73.]
In
Pistorius
NO and Others vs Competition Commission of South Africa
[69]
it was held that “
it
is not sound trust law unqualifiedly to assert that merely because
all of the trustees were not joined as respondents from the
outset,
therefore the institution of the proceedings is a nullity
”
[70]
.
[74.]
In
the present matter “
enough
ha
(d)
been
placed before
(the
Court
a
quo
)
to
(have)
warrant
(ed)
the
conclusion that it
(was)
the
(Trust,
through its trustees)
which
(was)
litigating
and not some unauthorised person on its behalf
”
[71]
.
[75.]
In
the
Rosner
case referred to above it was, as already pointed out, remarked that
it frequently happens that Trusts are cited as parties, without
the
individual trustees being joined and cited as parties in their
representative capacities, that an amendment to join the individual
trustees did not in the circumstances of that matter affect the
substance of the matter and that, had the amendment not been granted,
“
any
judgment granted in the proceedings would
(have
been)
no
different from what it will be now that the amendment has been
granted
”
[72]
.
[76.]
Mr
Nel argued that Ngwenya J had in the
Desai-Chilwan
case, in interpreting the above-quoted passage in the previous
version of
Honoré’s
South African Law of Trusts
,
erroneously equated the right to authorise the signing of a power of
attorney (referred to in the passage) with the right to authorise
the
institution or opposition of legal proceedings. The
Cupido
and
Glen
Elgin Trust
judgments, however, both expressly referred to the same passage, and
both interpreted it (and therefor the reference to authorisation
to
sign a power of attorney) like the Court apparently did in the
Mariola
case
[73]
. The
Deutschmann
and
Rosner
cases also preceded the 5
th
edition of
Honoré’s
book, and yet both these judgments also followed the
Mariola
dictum.
[77.]
In
my view the citing of all trustees as parties constitutes a way of
signifying, and of satisfying the Court, that at least on
the face of
it the Trust is not being involved in unauthorised litigation.
This may be why it is preferable to do so, but
where this is at the
time that the proceedings are instituted signified by other
information, the failure to join the authorising
trustees should not
in my view non-suit the authorised trustee. In this respect I
find myself in respectful agreement with
the judgment of Ngwenya J in
the
Desai-Chilwan
case.
[78.]
The
Court in the
Van der Westhuizen
case did not have to consider a situation like this, in other words
where although all trustees have not been joined, it is nevertheless
objectively clear that those who have not been cited have authorised
the institution of the proceedings. Insofar as it could,
however, be said that the judgment in that matter is to the effect
that the failure to join all trustees would always be fatal,
even in
such circumstances, I would be constrained to respectfully disagree.
For the same reason I have to disagree with
the judgment in the
Risseeuw
case.
[79.]
In
my view the facts of the
Van der Westhuizen
case are in any event also in another respect distinguishable from
those in the present matter. The fact that it was only
five
years after the issue of summons in that matter that a resolution was
signed, purporting to authorise Van der Westhuizen to
institute the
action in his capacity as trustee, and furthermore purporting to
ratify steps already taken against him, leads to
the inescapable
inference that he had not been authorised as such at the time when
the action was instituted. In the present
matter the appellant
has, as I have already concluded, been properly authorised when the
application was lodged.
[80.]
Finally,
the trustees in the present matter have not only in their affidavits
confirmed the authorisation of the appellant.
They have
themselves asked that the relief sought in the notice of motion be
granted. To have non-suited the appellant, and
effectively the
Trust, under these circumstances and merely on the basis of the
co-trustees not having been officially cited as
co-applicants was,
with respect to the Court a quo, to elevate form over substance.
CONCLUSION
[81.]
It
follows that I am of the view that the application should not have
been dismissed on the basis of the specific point
in
limine. T
he order to that effect, and the
concomitant costs order should therefore be set aside, and be
replaced by an order that the point
is dismissed with costs.
[82.]
There
is no reason why the costs of the appeal should not follow this
result.
[83.]
In
the result the following orders are made:
1.
THE
ORDERS OF THE COURT
A QUO
THAT:
“
1.1 THE
IN
LIMINE
POINT REGARDING APPLICANT’S
LOCUS STANDI
IS UPHELD; AND
1.2 THE
APPLICATION IS DISMISSED WITH COSTS.”
ARE SET ASIDE AND
REPLACED WITH THE FOLLOWING ORDER:
“
THE
IN LIMINE
OBJECTION TO THE APPLICANT’S
LOCUS
STANDI
IS
DISMISSED WITH COSTS.”
2.
THE
MATTER IS REMITTED TO THE COURT A QUO FOR FURTHER HEARING.
3.
THE
RESPONDENT IS ORDERED TO PAY THE COSTS OF THE APPEAL, INCLUDING THE
COSTS OF THE APPLICATIONS FOR CONDONATION AND FOR LEAVE
TO APPEAL.
C
J OLIVIER
JUDGE
NORTHERN
CAPE DIVISION
I
concur.
C
C WILLIAMS
ACTING
DEPUTY JUDGE PRESIDENT
NORTHERN
CAPE DIVISION
I
concur.
M
C MAMOSEBO
JUDGE
NORTHERN
CAPE DIVISION
For the
appellant:
ADV W H VAN ASWEGEN
(Instructed by
Elliot Maris Wilmans & Hay
)
For the respondent:
ADV C J NEL
(Instructed by
Duncan & Rothman Inc.
)
[1]
In respectively paragraphs 1 to 5 of the resolution.
[2]
South
African Allied Workers' Union and Others v De Klerk NO and Others
1990 (3) SA 425
(E) at 436 E-F; See also
Erasmus
Superior Court Practice
,
Jutastat e-publications, RS 5, 2017,D1 93-95
[3]
Eskom
v Soweto City Council
1992 (2) SA 703
(W) at 705 E - F
[4]
In
Uniform Rule 1 the word "
party
"
is equated with "
any
reference to a plaintiff
or
other litigant
in terms
"
(My emphasis), and it is therefore clear that the word "
party
"
would for purposes of the Rule, and in the present context, refer to
an applicant or a respondent.
[5]
See
Honoré’s
South African Law of Trusts
,
5
th
Edition, p 268;
Kidbrooke
Place Management Association and Another v Walton and Others NNO
2015 (4) SA 112
(WCC) para [44]
[6]
2000 (4) SA 711
(C) at 720E - 721
[7]
Compare
Coopers
& Lybrand and Others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 767E - 768E
[8]
Compare
Heath &
another v Heath NO & others
[2006]
JOL 16886
(T) ( 2001 (JDR) 0970 (T)) at p 20
[9]
See
Land and
Agricultural Bank of South Africa v Parker and Others
2005 (2) SA 77
(SCA) (Also reported at
[2004] 4 All SA 261
(SCA))
para [17]; See also
Thorpe
and Others v Trittenwein and Another
2007 (2) SA 172
(SCA) para [14]
[10]
2004 (3) SA 486
(SCA) (Also reported at [2004] 1 All SA 396 (SCA))
[11]
1999 (4) SA 425
(SCA) (Also reported at [1999] 4 All SA 139 (A))
[12]
Ibid
,
para [24]
[13]
Ibid
,
para’s [24] to [26]
[14]
Ibid
,
para [24]
[15]
Ibid
,
para [29]
[16]
Ibid
,
para [14]; See also
Claase
v Transnet Bpk en ‘n Ander
1999 (3) SA 1012
(T) (Also reported at [1999] 3 All SA 142 (T))
[17]
Compare
Claase v
Transnet Bpk en ‘n Ander,
supra
,
at 1025 I - J
[18]
Hoosen and Others NNO
v Deedat and Others,
supra
,
para [14]
[19]
Ibid
,
para [10]
[20]
KO Investment Trust &
Another v Appleton Securities (Pty) Ltd
[2007] JOL 19807
(T) (2007 JDR 0305 (T)) para’s [15] to [17];
See also
Visser v
Estate Collins
1952
(2) SA 546
(C) (Also reported at
[1952] 2 All SA 331
(C)) at 550
[21]
SA Freight
Consolidators (Pty) Ltd v Chairman, National Transport Commission,
and Another
1987 (4)
SA 155
(W) (Also reported at
[1987] 3 All SA 147
(W)) at 164 E
[22]
1989 (4) SA 985
(C) at 988 D - E
[23]
Ibid
,
at 987 I
[24]
Nieuwoudt NO and
Another v Vrystaat Mielies (Edms) Bpk
,
supra
(para [22] and footnote 10),
[25]
Ibid
,
para [6] (of the majority judgment of Farlam J A).
[26]
Ibid
,
para [23]
[27]
See para [35] and footnote 21 above.
[28]
See para [29] and footnote 14 above.
[29]
See
Hoosen and Others
NNO v Deedat and Others,
supra
,
para’s [24] and [26]
[30]
Which is, as I have already concluded, not the position.
[31]
Nieuwoudt NO and
Another v Vrystaat Mielies (Edms) Bpk
,
supra
(para [22] footnote 10), para’s [6] and [23]
[32]
See
IM Verwey trading
as Verwey Werkswinkel v Burger NO and others
[2014] JOL 31765
(WCC) para [16]
[33]
Compare
Odendal v
Structured Mezzanine Investments (Pty) Ltd
2014 JDR 1134 (SCA) ([2015] JOL 33675 (SCA)) para [4];
Thorpe
and Others v Trittenwein and Another,
supra
,
para [6]
[34]
2005 (2) SA 77
(SCA) (Also reported at
[2004] JOL 12992
(SCA)) at
para’s [10] and [11]
[35]
2016 (5) SA 225 (SCA)
[36]
1999 (1) All SA 425 (D)
[37]
Ibid
,
at 436
[38]
Ibid
,
at 434
[39]
Ibid
,
at 436
[40]
1998 (2) SA 123
(W)
[41]
See also
Hyde
Construction CC v Deuchar Family Trust and Another
2015
(5) SA 388
(WCC) para [47]
[42]
2015 (5) SA 77 (SCA)
[43]
Ibid
,
para [12]
[44]
Ibid
,
para [18]
[45]
1996 (2) SA 490 (W)
[46]
Ibid
,
at 497 C - D
[47]
Ibid
,
at 495 D - E
[48]
1995 (2) SA 728
(W) (Also reported at
[1995] 3 All SA 287
(W)) at
731 E
[49]
Essentially the same remarks appear in the 5
th
edition of the book, at pp 322 – 323.
[50]
1999 (4) SA 257
(E) (Also reported at
[1999] 3 All SA 578
(EC)) at
263 G
[51]
[2001] (2) All SA 86
(LCC) (2001 JDR 0002 (LCC)) para [14]
[52]
[2014] JOL 32107
(GP) (2014 JDR 1427 (GP))
[53]
2000 (2) SA 106
(ECD) at 119 F - G
[54]
Supra
(para [47] and footnote 37), at 126 I - J
[55]
2003 (2) SA 644
(C) (Also reported at
[2002] 2 All SA 413
(C)) para
[21]
[56]
Ibid
,
para [21]
[57]
Land and Agricultural
Development Bank of South Africa v Parker and Others,
supra
,
at 85B - D
[58]
See para [53] above.
[59]
[2016] 2 All SA 909
(ECP) (2016 JDR 0629 (ECP))
[60]
My emphasis.
[61]
2014 JDR 0437 (GNP)
[62]
2010 (6) SA 457
(SCA) (Also reported at [2011] 2 All SA 138 (SCA))
[63]
Ibid
,
para [2]
[64]
My emphasis.
[65]
57 of 1988
[66]
(9878/2011)
[2012] ZAWCHC 45
(18 May 2012)
[67]
Ibid
,
para’s [24] and [25]
[68]
(36878/2013) [2015] ZAGPPHC 118 (13 February 2015)
[69]
[2017] ZACAC 4
(10 October 2017)
[70]
Ibid
,
para [43]
[71]
SA
Freight Consolidators (Pty) Ltd v Chairman, National Transport
Commission, and Another
,
supra
,
at 157 G - H
[72]
Rosner v
Lydia Swanepoel Trust,
supra
,
at 128 E; See also
Hyde
Construction CC v Deuchar Family Trust and Another
,
supra
(footnote 40), para [46]
[73]
Cupido v
Kings Lodge Hotel,
supra
,
at 263 G: “
Unless
one of the trustees is authorised by the remaining trustee or
trustees
, all
the trustees must be joined in suing and all must be joined when
action is instituted against the trust
”.
(My emphasis)
Glen
Elgin Trust v Titus and another,
supra
, para [14]: “
It
is a well-established principle of our law that in legal proceedings
brought by a trust, all trustees are required to sue jointly
unless
one trustee has the authority to act for the others
”.
(My emphasis)