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[2017] ZAFSHC 114
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T v T and Others (387/2017) [2017] ZAFSHC 114 (6 July 2017)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 387/2017
In
the matter between:
H.
J. T.
Applicant
and
J.
M. T.
First Respondent
H.
F. T. N.O.
Second Respondent
J.
M. T. N.O.
Third Respondent
A.
J. D. J. N.O.
Fourth Respondent
H.
J. T. N.O.
Fifth Respondent
THE
MASTER OF THE HIGH COURT,
BLOEMFONTEIN
Sixth Respondent
JUDGMENT
BY:
SNELLENBURG, AJ
HEARD
ON:
15 JUNE 2017
DELIVERED
ON:
6 JULY 2017
[1]
The applicant, H. J. T., one of three siblings born of the marriage
between
J.
M. T. [Mrs T.] and H. F. T. [Mr T. Sr], seeks the removal of his
mother from the office as trustee of the Kleinfontein Trust
[interchangeably referred to as either the Kleinfontein Trust or the
Trust] by way of motion procedure. The marriage relationship
between
Mrs and Mr T. Sr deteriorated to the stage where Mrs T. instituted
divorce proceedings which are currently pending in this
court. As
will become apparent certain claims in those divorce proceedings gave
rise to the present application.
[2]
Before considering the merits of the main application the
interlocutory application needs to be disposed of. The applicant in
the main application is also the applicant in the interlocutory
application. Mrs T., Mr A. J. D. J. N.O. and the Master of the
High
Court, Bloemfontein are joined as respondents in the interlocutory
application. The applicant seeks the following relief in
his
interlocutory application, to wit: (i) condonation for the late
filing of his replying affidavit in the main application; (ii)
that
Mr A. J. D. J. N.O. [Mr D. J.] be joined in the main application as
second respondent; (iii) that the Master of the High Court
be joined
as third respondent; (iv) that Mrs T. (joined as the only respondent
in the main application) become the first respondent;
(v) that the
dispute between the applicant and first respondent regarding whether
(the assets of) Kleinfontein Trust is the property
and alter ego of
H. F. T. be referred to arbitration in terms of clause 9 of the Trust
Deed of the Kleinfontein Trust, alternatively,
if the court finds
that an arbitrator can indeed adjudicate the removal of a trustee,
that the removal of the first respondent
as trustee be referred for
arbitration as a further dispute; (vi) that the main application be
postponed
sine die
(pending the arbitration); (vii) that the
interlocutory application be adjudicated simultaneously with the main
application and
(viii) that any respondent opposing the application
be ordered to pay the costs of opposition.
[3]
The main and interlocutory applications were postponed to be heard
simultaneously by agreement between the parties. As result
the relief
to that effect became moot and no order in that regard needs to be
made.
Joinder
[4]
Only the first respondent was initially joined in the main
application. The interlocutory application was made pursuant to Mrs
T.’s objection of the non-joinder of the trustees of the
Kleinfontein Trust and the Master of the High Court. It is no longer
in dispute that the trustees or the Master should be joined. It is
common cause that the most recent letters of authority issued
by the
Master authorises the applicant, Mrs and Mr T. Sr and Mr D. J. to act
as trustees on behalf of the Kleinfontein Trust.
[5]
The only issue regarding the joinder of the trustees of the Trust was
that the applicant only applied for the joinder of Mr
D. J.. The
applicant contended that it was not necessary to join Mr T. Sr in his
capacity as trustee as he had resigned as trustee.
The applicant also
contended that as he and Mrs T. were already parties to the
application, it was not necessary to join them again
in the
proceedings. As result the applicant only applied for the joinder of
Mr D. J. and the Master.
[6]
Mrs T. was joined in the proceedings in her personal capacity, not in
her representative capacity as trustee of the Trust.
[1]
The applicant also acts in his personal capacity, not in his
representative capacity as trustee of the Trust. It is therefore not
correct to argue that they are before the court in any capacity other
than in their personal capacities. They should be joined
in the
proceedings in their representative capacities. As for Mr T. Sr, he
is still authorised as trustee (the Master indicates
in his report
that he has not received the letter of resignation) and as a trust
acts through its authorised trustees it can do
no harm to join all
the trustees presently authorised to act on its behalf. The applicant
only seeks costs from such party opposing
the main application and
only Mrs T. opposes the relief. A common-sense approach to the
joinder point in this matter dictates that
the joinder of the
trustees of the Trust in these circumstances would not cause any
prejudice to them or the existing parties to
the application and
would allow the matter to be ventilated, rather than cause the
parties further exposure to wasted costs if
the matter is postponed
for the inevitable joinder thereafter.
[7]
At the commencement of the matter I indicated to the applicant’s
counsel, Mr Heymans, as well as the first respondent’s
counsel,
Mr Tsangarakis, that I intended to join the trustees and Master to
the proceedings as necessary parties and then immediately
thereafter
hear arguments on the remaining issues in the interlocutory
application as well as the main application, barring either
or both
of them persuading me that it would be prejudicial to the trustees or
their respective clients. I requested Mr Heymans
to take an
instruction whether Mr T. Sr who appeared to be receiving counsel
from the same attorney that represented the applicant
in these
proceedings, would have any objection to his joinder and whether it
would be necessary to postpone the main application
for filing of
further affidavits once he and the other trustees were joined. I made
a similar request to Mr Tsangarakis. I was
assured by Mr Heymans that
there was no objection to the joinder and he gave me the assurance
that there would be no need to postpone
the matter. Mr Tsangarakis
gave a similar assurance on behalf of Mrs T..
[8]
I therefore made an order that the trustees be joined as second to
fifth respondents respectively and the Master of the High
Court as
the sixth respondent. Mrs T. became the first respondent. The
Master’s joinder in the proceedings at that stage
was a matter
of formality. The Master filed a report prior to the hearing and
indicated that he would abide by the court’s
order. In light of
the relief I am of the view that the Master should have been joined
in the main application from the outset.
In light of the facts of
this matter there can be no prejudice if he is joined.
[9]
As the joinder was finalised before I heard further arguments and
reserved the judgment, I will henceforth refer to the parties
as they
are after the joinder and as reflected in the heading above. Mrs T.
is the first respondent and also in her representative
capacity as
trustee of the Trust the third respondent. Mr HF T. is the second
respondent in his representative capacity as trustee
of the Trust,
but for sake of convenience I will refer to him as Mr T. Sr. Mr D. J.
is the fourth respondent in his representative
capacity as trustee of
the Trust. Mr HJ T. is the applicant and in his representative
capacity as trustee of the Trust the
fifth respondent. The Master is
the sixth respondent but will still be referred to as the Master.
Condonation
[10]
The applicant seeks condonation for the late filing of his replying
affidavit in the main application. The application is opposed
by the
first respondent on the basis that the applicant has failed to show
good cause for the indulgence and does not tender costs.
[11]
The principles for condonation in terms of Rule 27 are well settled.
The principles were aptly summarised in
Standard
General Insurance Co Ltd v Eversafe (Pty) Ltd and Others
2000 (3) SA 87
(W) at para 12:
“
It
is well-established that an applicant for any relief in terms of Rule
27 has the burden of actually proving, as opposed to merely
alleging,
the good cause that is stated in Rule 27(1) as a jurisdictional
prerequisite to the exercise of the Court's discretion.
Silber v Ozen
Wholesalers (Pty) Ltd
1954 (2) SA 345
(A) at 352G. The applicant
for any such relief must, at least, furnish an explanation of his
default sufficiently full to enable
the Court to understand how it
really came about and to assess his conduct and motives (Silber v
Ozen Wholesalers (supra at 353A)).
Where there has been a long delay,
the Court should require the party in default to satisfy the Court
that the relief sought should
be granted. Gool v Policansky
1939 CPD
386
at 390. This is, in my view, particularly so when the applicant
for the relief is the dominus litis plaintiff.
”
This
passage also encapsulates the essence of the first respondent’s
opposition to the applicant’s application for condonation.
[12]
The first respondent’s opposition to the grant of condonation
was more than reasonable. The first respondent’s
counsel
however conceded that in as much as there was a lot of force in the
arguments that the applicant’s explanation for
his default was
subject to criticism, there would not be any material prejudice if
the late filing of the replying affidavit were
condoned and an
appropriate order regarding costs were made. This concession was
fairly made.
[13]
In light of the facts of the matter and in order to adjudicate the
matter on fully ventilated facts I am of the view that the
replying
affidavit should be allowed.
[14]
I therefore allow the replying affidavit. I will deal with the issue
of costs below.
Removal
of trustee from office by means of arbitration
[15]
Only the High Court and in certain prescribed circumstances the
Master have the power to remove a trustee from office.
[16]
The Supreme Court of Appeal decisively dealt with the High Court’s
power to remove a trustee in
Gowar
and Another v Gowar and Others
2016
(5) SA 225
(SCA) para 27 where Petse, JA on behalf of the unanimous
Court held:
“
It
is now trite that the court has inherent power to remove a trustee
from office at common law. This power also derives from s
20(1) of
the Act.
[2]
”
The
High Court’s power to remove a trustee from office stems from
its residual common law jurisdiction which was not displaced
by the
Trust
Property Control Act 57 of 1988
[the
Act] and also
s
20 of the Act.
[3]
The Master’s
powers to remove a trustee from office is contained in s 20 of the
Act.
[17]
Since its commencement on 31 March 1989 the Act regulates the control
of trust property and provides for matters connected
therewith of all
trusts save those exempted in terms of s 25 of the Act. It is common
cause that the Kleinfontein Trust is subject
to the provisions of the
Act.
[18]
Section 20 of the Act which deals with the removal of a trustee
provides as follows:
“
20
Removal of trustee
(1)
A trustee may, on the application of the Master or any person having
an interest in the
trust property, at any time be removed from his
office by the court if the court is satisfied that such removal will
be in the
interests of the trust and its beneficiaries.
(2)
A trustee may at any time be removed from his office by the Master-
(a)
if he has been convicted in the Republic or elsewhere of any offence
of which dishonesty
is an element or of any other offence for which
he has been sentenced to imprisonment without the option of a fine;
or
(b)
if he fails to give security or additional security, as the case may
be, to the satisfaction
of the Master within two months after having
been requested thereto or within such further period as is allowed by
the Master;
or
(c)
if his estate is sequestrated or liquidated or placed under judicial
management; or
(d)
if he has been declared by a competent court to be mentally ill or
incapable of managing
his own affairs or if he is by virtue of the
Mental Health Act, 1973 (Act 18 of 1973), detained as a patient in an
institution
or as a State patient; or
(e)
if he fails to perform satisfactorily any duty imposed upon him by or
under this Act or
to comply with any lawful request of the Master.
(3)
If a trustee authorized to act under section 6 (1) is removed from
his office or resigns,
he shall without delay return his written
authority to the Master.
”
[19]
A ‘court’ is described in section 1 of the Act as
provincial or local division of the Supreme Court of South Africa
[High Court] having jurisdiction.
[20]
In conclusion, as stated at the outset, only the Court and the Master
have the power to remove a trustee from office.
[21]
It follows that the relief for referral to arbitration of the
‘dispute’ pertaining to the removal of the first
respondent from the office of trustee and the relief pertaining to
the
sine
die
postponement of the main application pending the finalisation of the
envisaged arbitration, cannot succeed.
Referral
of dispute regarding whether (assets of) the Kleinfontein Trust is
the property and alter ego of Mr T. Sr
[22]
The relief is premised on clause 9 of the Trust Deed which provides
for compulsory arbitration in the event of an irreconcilable
dispute
between (a) trustees mutually or vis-à-vis each other, or (b)
where there is deadlock in votes regarding the same
matter on
consecutive occasions; or (c) where there is deadlock in votes in
between parties to the Trust; erstwhile parties to
the Trust;
trustees; the trustees and trust beneficiaries; trust beneficiaries
amongst themselves; forbears of trust beneficiaries;
forbears and
their descendants (in any grouping vis-à-vis the other) or
descendants mutually pertaining to any matter arising
from the Trust
Deed.
[23]
In my view the first respondent’s claim in the divorce
proceedings that Mr T. Sr hedged the comprehensive estate he had
been
able to accumulate, during the existence of their marriage due to her
direct and/or indirect contributions, in numerous trusts,
does not
fall in the class of dispute envisaged by clause 9 of the Trust Deed.
[24]
It follows that the referral and the relief pertaining to the
sine
die
postponement of the main application pending the finalisation of the
envisaged arbitration, cannot be granted.
Removal
of the first respondent as trustee of the Kleinfontein Trust from
office
[25]
During or about July 2005 the Kleinfontein Trust was created by
virtue of a written agreement titled “NOTARIëLE
(
sic
NOTARIËLE) TRUST– EN SKENKINGSAKTE”. The founder of
the Kleinfontein Trust was Mr T. Sr. The first trustees of
the Trust
were the second, third and fifth respondents. Both the first and
second respondent (in personal capacity) as well as
the applicant and
certain classes of the applicant’s descendants and their blood
relatives are income beneficiaries. The
applicant and certain classes
of his descendants and their blood relatives are the capital
beneficiaries. It is not necessary to
deal with the intricacies of
which class of beneficiary will benefit in what circumstances.
[26]
These being motion proceedings, the famous Plascon-Evans
[4]
rule applies. Wallis, JA recently restated the application of the
rule in the matter of
Media
24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty)
Ltd
2017
(2) SA 1
(SCA) para 36 where he succinctly explained it as follows:
“
Media
24 chose not to pursue this case by way of trial. Nor did it ask for
the matter to be referred to oral evidence. In asking
for it to be
decided on the affidavits alone, it therefore bound itself to the
long-established approach described in Plascon-Evans.
That meant that
the case could not be determined simply on a weighing of the
probabilities as they emerged from the affidavits.
The facts deposed
to by OUP's witnesses had to be accepted, unless they constituted
bald or uncreditworthy denials or were palpably
implausible,
far-fetched or so clearly untenable that they could safely be
rejected on the papers. A finding to that effect occurs
infrequently
because courts are always alive to the potential for evidence and
cross-examination to alter its view of the facts
and the plausibility
of evidence.
”
[5]
The
applicant did not request a referral for oral evidence. The
Plascon-Evans rule applies to final relief in motion proceedings
where disputes of facts arise:
“
where
in proceedings on notice of motion disputes of fact have arisen on
the affidavits, a final order, whether it be an interdict
or some
other form of relief, may be granted if those facts averred in the
applicant's affidavits which have been admitted by the
respondent,
together with the facts alleged by the respondent, justify such an
order.
”
[6]
Lastly
the affidavits in motion proceedings constitute both the pleading and
the evidence, in other words both
facta
probanda
and
facta
probantia
.
[7]
[27]
To contextualise the applicant’s case his contentions are
relevant. I will record which allegations are denied.
[28]
According to the applicant when the Kleinfontein Trust was erected
two further trusts were also created. The Trust Deeds of
these other
trusts were not produced in these proceedings by the applicant. The
applicant contends that the three trusts were created
by agreement
between his mother, father, Mr D. J., the applicant, his brother and
sister to “secure our separate futures”.
The “our”
refers to the three siblings. The applicant’s general
contention is that a trust was erected for each
child. Farms
“belonging to my father would be sold at an acceptable value to
the different trusts.” No details save
for the allegation were
provided. The applicant alleges that there was nothing sinister or
unacceptable about “it”.
The first respondent states that
trusts were erected by Mr T. Sr on advice of the Mr D. J., a
chartered accountant (the fourth
respondent in his representative
capacity). She also states she was merely informed by Mr T. Sr of his
intention to do so and was
never part of any decision-making process.
She denies the remainder of allegations insofar as it is contrary to
her version.
[29]
The applicant also alleges that a close corporation and other trusts
form part of the farming enterprise.
[30]
The applicant also contends that shortly before the first respondent
sued his father for divorce “
it
was decided that the joint farming enterprise would be split up and
that each of the children would then continue under their
own
Trusts
”
.
This is also denied by the first respondent.
[31]
The gravamen of the applicant’s case is the first respondent’s
allegation in paragraph 7.3 of her particulars of
claim. Paragraph
7.3 must be read in context. Paragraph 7 in relevant parts reads:
“
Gedurende
die bestaan van die huwelik tussen die partye het Eiseres direk of
indirek bygedra tot die groei en instandhouding van
die Verweerder se
Boedel deur die lewering van dienste en/of besparing van uitgawes wat
andersins aangegaan sou moes word en is
dit in die omstandighede reg
en billik dat 50% van die Verweerder se netto bates of sodanige
gedeelte daarvan as wat die Agbare
Hof reg en billik mag ag, aan
Eiseres oorgedra word deurdat Eiseres:
7.1
te alle tye die kinders en die Verweerder versorg het;
7.2
te alle tye die gesamentlike huishouding versorg het;
7.3
aan die Verweerder ‘n geleentheid gebied het om ‘n
omvangryke boedel op te gebou
het, welke boedel die Verweerder
verskans in verskeie trusts waarvan die finansiële besonderhede
aan Eiseres onbekend is en
behou Eiseres haar reg voor om mettertyd
die trustees van hierdie onderskeie trusts te voeg as partye tot
hierdie aksie;
7.4
die Verweerder bygestaan het in sy boerdery aktiwiteite.
”
[32]
The applicant alleges that he has been advised that the effect of the
allegation in paragraph 7.3 is that the first respondent
claims 50%
of the value of the properties of all the trusts. He further contends
that apart from the properties there is also a
substantial amount of
cattle in the close corporation. The applicant states that the
conduct of the first respondent by making
these allegations threatens
his own and his children’s future; creates uncertainty and that
the first respondent has an ‘unsurmountable
conflict of
interests’. The applicant contends that in terms of the law the
first respondent must act in the best interest
of the beneficiaries;
that she has a fiduciary duty towards the beneficiaries and her
claims in the particulars of claim are in
breach of these duties. The
applicant also relies on the fact that the first respondent refuses
to make any decision regarding
the affairs of the Trust without first
seeking advice from her attorney.
[33]
During argument the applicant’s counsel submitted that the
application also had a further purpose, namely to challenge
the first
respondent to ‘put her money where her mouth is’ as the
saying goes. She is challenged to say whether she
truly believes that
she is entitled to the relief she seeks and several other matters and
make an election, either serve as trustee
or pursue the claim, which
the applicant contends has no merit, and that she should be removed
as trustee. To this end the correspondence
shows that the first
respondent was put on terms to resign as trustee of the Trust and she
has refused. The applicant also relies
on an agreement which has
allegedly been reached before the divorce action whereby the first
respondent would resign. The applicant
contends that he would have
been appointed as trustee in the first respondent’s place and
that she reneges on that agreement.
This agreement is denied by the
first respondent. Lastly the applicant states that his brother has
been allowed to remove sheep
from the close corporation with which he
is farming on his own, therefore not as part of the farming
enterprise. Thís the
applicant contends shows that the first
respondent is not really against the dissolution of the larger
farming enterprise. The
first respondent denies any discussion or
agreement regarding the dissolution of the farming enterprise and
laments the lack of
details regarding these alleged discussions.
[34]
As far as the agreement in terms whereof the first respondent would
resign as trustee of the Trust goes, the first respondent’s
version is not farfetched or clearly untenable warranting that it can
be rejected merely on the papers. On these premises, as far
as the
alleged agreement goes, the first respondent’s version must
prevail. The same goes for the agreement or discussions
about the
larger farming enterprise being dissolved.
[35]
The real issue in question is whether the applicant has satisfied the
requirements to warrant the removal of the first respondent
from the
office as trustee of the Trust. The applicant’s case to this
extent rests
essentially
on
two grounds, namely the allegation (claim) in para 7 of the first
respondent’s particulars of claim in the divorce proceedings
and the fact that she currently enlists legal advice before making
any decision regarding the Trust.
[36]
The Mr D. J. deposed to a supporting affidavit in support of the
applicant. It is evident from his affidavit that the friction
between
the trustees of the Trust is according to him limited to first
respondent and Mr T. Sr pursuant to the divorce. Mr T. Sr
has
resigned as trustee. In my view, nothing turns on this evidence, but
even if I am wrong that issue is no longer relevant in
light of Mr T.
Sr’s resignation as trustee. The alleged disharmony does not
imperil the trust estate or its proper administration,
at least no
evidence to prove this has been advanced. In
Gowar
and Another v Gowar and Others
supra
the Supreme Court of Appeal referred with approval to
Volkwyn
NO v Clarke and Damant
1946
WLD 456
and held that
:
“
It
is well established that mere friction or enmity between the trustee
and the beneficiaries will not in itself be adequate reason
for the
removal of the trustee from office. (See also in this regard Tijmstra
NO v Blunt-MacKenzie NO and Others
2002 (1) SA 459
(T) at 473E –
G.) Nor, in my view, would mere conflict amongst trustees themselves
be a sufficient reason for the removal
of a trustee at the suit of
another.
”
[37]
It is trite that the power of the court to remove a trustee must be
exercised with circumspection. I do not intend to undertake
an
extensive review of the duties and obligations of a trustee. It well
documented and I accept for purposes hereof the duties
and
obligations contended for by the applicant. The question in this
matter is simply whether the applicant has shown that the
first
respondent’s claim in the particulars of claim (as well as her
intention to pursue the claim in the divorce proceedings)
[8]
,
creates an unsurmountable conflict of interests for the first
respondent between her personal interests and her duty as trustee
of
the Trust. The applicant perceived the relief to also include that
the first respondent claims that the assets of the Trust
is the
property of Mr T..
[38]
It is clear that but for the first respondent’s claim in para
7.3 of the particulars of claim in the divorce proceedings,
the
applicant would not have sought the first respondent’s removal
from the office of trustee of the Trust.
[39]
In
MM and Others v JM
2014 (4) SA 384
(KZP) Ploos van Amstel,
J was called upon to consider an exception against the plaintiff’s
particulars of claim where the
main issue was whether the assets in a
family trust can be taken into account in the determination of the
accrual of the husband's
estate. The court accepted for purposes of
determination of the exception that the allegations would be that,
but for the trust,
ownership of the trust's assets would have vested
in the defendant and that the trust is his alter ego. Although the
facts in that
matter is distinguishable from the facts in this
matter, the court was also called upon to consider the same issue
that arises
from this application, namely whether a trustee making
(and pursuing) a claim as first respondent makes in the divorce
proceedings
constitutes a breach of her fiduciary duties. To put it
differently, whether ‘an unsurmountable conflict of interests’
justifying the removal as trustee is inherent in such a claim by a
plaintiff who is also a trustee of the trust.
[40]
In para 21 Ploos van Amstel, J held as follows:
“
The
first ground was that JM cannot plead on the one hand that the trust
is a validly constituted one, that she is a trustee and
a
beneficiary, and at the same time allege that the trust in truth is
merely her husband's alter ego and that the assets of the
trust
therefore effectively belong to him and should form part of his
accrual calculation. There is not necessarily an inconsistency.
Her
contention is not that the trust is invalid. She contends that her
husband has operated the trust in a manner which shows that
it is his
alter ego. She does not allege that the assets of the trust
effectively belong to her husband, but seeks an order that
they be
deemed to form part of his estate and that they should form part of
his accrual calculation. I have already found that
this is not a
valid claim. If she had averred that the trust assets in truth
belonged to her husband, without challenging the validity
of the
trust, I do not consider that such a claim would have been
excipiable. The second ground is that she is not entitled, as
trustee, to make a claim against trust assets, for in doing so she
would be breaching her fiduciary duties. The answer to this
point is
that she is not making a claim against trust assets. Her claim
relates to her husband's estate. In any event, I do not
see how a
trustee who makes a claim against trust assets thereby breaches her
fiduciary duties, provided of course that her claim
is a valid one.
The third ground of the exception is that evidence to contradict the
terms of the trust deed would breach the parol
evidence rule. I do
not consider that JM's claim seeks to contradict the terms of the
trust deed. As I have said, she does not
aver that the trust is a
sham. Her claim is based on the manner in which her husband operated
and controlled the trust, which may
in a particular case justify a
finding that assets which had been 'placed' in the trust in truth
belonged to the person controlling
the trust.
”
[41]
The mere fact that a trustee makes a claim that a trust is the alter
ego of her husband, or for that matter in the context
of this matter
makes a claim that assets were hedged in a trust, or makes a claim
against trust assets in these circumstances cannot
per
se
lead to the conclusion that she is acting in breach of her fiduciary
duties as trustee. In
MM
and Others v JM
supra
the court qualified its conclusion by adding that the claim should be
a valid one. Insofar as the use of the word ‘valid’
in
this context was meant to convey its ordinary meaning, namely that
the claim should have a sound basis in logic and reason,
or put
differently be defensible or justifiable, I agree fully with the
learned Judge.
[42]
The first respondent does not allege that the Trust is a sham or that
the Trust is invalid. Apart from the above finding the
applicant has
apart from relying on the claim and the intention of the first
respondent to pursue the same during the divorce proceedings,
placed
no tangible proof before the court in this matter that underlies the
allegation of the insurmountable conflict of interest
that the
applicant complains of. Save for the fact that she enlists legal
advice before making decisions, no other conduct has
been alleged or
proven that would justify her removal from the office as trustee. It
matters not whether the trustee makes a claim
against the assets of
the trust or avers that the trust is the alter ego as in this matter.
The applicant’s
ipse
dixit
that there are no merits in the claim by the first respondent tin
denied by the first respondent. This contention has certainly
not been proved as for as motion proceedings go.
[43]
It is perfectly understandable that the first respondent will seek
advice from her attorney in the present circumstances.
Her conduct
must be evaluated in context of the circumstances that exist
presently. Save that a trustee may at any time elect to
enlist expert
advice before making an informed decision, the first respondent
cannot be criticized for enlisting legal counsel
in the current
circumstances. The applicant repeatedly stated in his affidavit that
he means the first respondent no ill will and
that he is actually
acting in her best interest. The converse however appears to the case
if the correspondence is considered.
The applicant’s conduct
towards her as trustee has done little to substantiate his
statements. One example will suffice.
The Trust persistently refuses
to avail the information the first respondent requested. Regardless
of when the applicant became
a trustee he is fully aware of her
requests for information. The applicant argues that he is protecting
the first respondent against
herself because her legal costs will be
astronomical if her attorney peruses the various documents as it
consists of numerous boxes
of documents. The first respondent is a
grown woman presently in the midst of a divorce. She is more than
capable of making her
own decisions. Furthermore, in my view the
trustees are obligated to supply the requested information to the
first respondent,
yet they persistently refused to do so. They would
rather force the first respondent to make an application to court to
obtain
the information. To this end the applicant’s attorney
(who ostensibly acts on behalf of the Trust – it is not clear
whether the Trust took such a decision but it matters not for
purposes hereof) refers the first respondent’s attorneys to
the
accountant (fourth respondent) who in turn refers them to the
applicant’s attorney. The alternative argument that the
Trust
is not compelled to supply the information to the first respondent’s
attorneys is artificial, because it has neither
been made available
to the first respondent whilst the requests were made on her behalf
inter alia
in her capacity as trustee. It is understandable
that the first respondent would seek legal counsel in these
circumstances. It
does not take much effort to imagine the
circumstances she probably faces when a meeting of trustees is
convened. In saying this
I have sympathy for all the affected
parties, including the applicant, but that does not change the facts.
[44]
As stated, no other grounds have been proven that could conceivably
justify the removal of the first respondent from
the office of
trustee of the Kleinfontein Trust.
[45]
I do not agree with the applicant’s counsel that it is proper
to make an application of this nature with the purpose
to challenge
the first respondent to make the election or in counsel’s words
to challenge her to put her money where her
mouth is. In my view the
application in fact went much further than that and at times even
creates the impression that it was also
intended to elicit responses
that would aid Mr T. Sr in the conduct of the divorce proceedings. I
expressly refrain from further
commenting on this aspect or from
making a finding in this regard.
[46]
It follows that the application stands to be dismissed.
[47]
The applicant sought an indulgence regarding condonation for the late
filing of the replying affidavit. I already held
that the opposition
to the condonation application was reasonable and raised
considerations which were relevant to the adjudication
of the matter.
As matters stand the condonation was granted on the basis that any
prejudice would be remedied by an appropriate
cost order. The joinder
was necessitated as result of the non-joinder of necessary parties by
the applicant. The relief claimed
did not provide for all the
trustees. The first respondent was fully justified to oppose the
joinder in the manner she did, notwithstanding
the eventual order.
The relief that the interlocutory application be heard simultaneously
with the main application became moot
as result of the agreement
between the parties.
[48]
The relief that remained relevant regarding the interlocutory
application were prayers 1, 3, 4.1 and the costs of the
interlocutory
application as a whole. The applicant only succeeds with the relief
in prayer 1. The proper order regarding the costs
of the
interlocutory application is that the applicant should pay the first
respondent’s costs on an opposed basis.
[49]
The applicant is equally unsuccessful with the relief he seeks in the
main application. No reason exists why the costs
should not follow
the result. The costs order is obviously on an opposed basis.
[50]
Accordingly,
IT
IS ORDERED THAT
:
1.
Condonation
is granted to the applicant for the late filing of the replying
affidavit in the main application;
2.
The
applicant is ordered to pay the first respondent’s costs on
opposed basis pertaining to her opposition to the interlocutory
application as a whole;
3.
The
main application is dismissed with costs.
_____________________
N.
SNELLENBURG, AJ
APPEARANCES:
On
behalf of the applicant:
Adv P Heymans
Instructed by:
YDE
Attorneys
BLOEMFONTEIN
On
behalf of the first respondent: Adv S Tsangarakis
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
[1]
It is
trite that where an application or action is made for the removal of
trustee from office the claim against the trustee is
in personal
capacity. See
Stander
and Others v Schwulst and Others 2008 (1) SA 81 (C).
[2]
Trust Property
Control Act 57 of 1988
.
[3]
Fey NO and
Whiteford NO v Serfontein and Another
1993
(2) SA 605
(A)
.
[4]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at
634H – I
.
[5]
Also see
National
Scrap Metal (Cape Town) (Pty) Ltd and Another v Murray & Roberts
Ltd and Others
2012 (5) SA 300
(SCA)
.
[6]
Plascon-Evans
at
634H
– I
.
[7]
Transnet Ltd v
Rubenstein
2006 (1) SA 591
(SCA) para 28
;
Kham
and Others v Electoral Commission and Another
2016 (2) SA 338
(CC)
para 40.
[8]
The claim being that
Mr
T. Sr hedged the extensive estate, which he was at liberty to
accumulate during their marriage due to her direct or indirect
contributions, in numerous trusts, (of which I accept the Trust to
be one such trust).