About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2014
>>
[2014] ZAGPPHC 285
|
|
Combrick N.O and Another v Plooy N.O and Others (59864/2012) [2014] ZAGPPHC 285 (14 May 2014)
REPUBLIC OF SOUTH
AFRICA
NORTH GAUTENG
HIGH COURT PRETORIA (REPUBLIC OF SOUTH AFRICA)
CASE
NO: 59864/2012
DATE:14
MAY 2014
In the matter
between:
DA COMRINCK
N.O
............................................................
FIRST
APPLICANT
EM COMBRINCK
N.O
................................................
SECOND
APPPLICANT
AND
AJ DU PLOOY
N.O
.........................................................
FIRST
RESPONDENT
M WILKEN
N.O
.......................................................
SECOND
RESPONDENT
AJ JANSE VAN
RENSBURG N.O
............................
THIRD
RESPONDENT
C MURRAY
N.O
......................................................
FOURTH
RESPONDENT
EM MOTALA
N.O
.......................................................
FIFTH
RESPONDENT
Z CASSIM
N.O
.............................................................
SIXTH
RESPONDENT
JUDGMENT
BAQWA J
[1] This is an
application for an order declaring that the Combrinck Trust is
entitled to receive R5 million from the proceeds of
erf 10,
Doornkloof, Centurion by Taberna Trust to Interfocus SA Investments
84 (Pty) Ltd in terms of a sale dated 10 January 2007
and for an
order directing the fourth, fifth and sixth respondents in their
capacities as duly appointed trustees of the insolvent
estate of AJ
Du Plooy, the first respondent, to forthwith release the amount of R5
million plus interest to the Combrinck Trust.
[2] Applicants, who
are the trustees in the Combrinck Trust also seek an order directing
that the fourth, fifth and sixth respondents
pay the costs of the
proceedings, jointly and severally, the one paying the other to be
absolved.
[3] The matter has
been set down for a trial regarding the issues set out above and the
fourth and sixth respondents are opposing
the action.
[4] At the
commencement of the hearing of oral evidence the respondents made an
application for certain issues to be separated in
terms of the
provisions of Rule 33(4) of the Uniform Rules of Court and that the
remaining issues stand over for determination
after the adjudication
of the separated issues. The application for separation was not
opposed by the applicants and I accordingly
granted an order for
separation after which the following issues remain for determination:
4.1. Whether the
Combrinck Trust, at all relevant stages had the capacity to act.
4.2. Whether further
parties should be joined in the matter or not.
[5] A brief
background to this matter is as follows. The amount of R5 million
claimed by the applicants is held by the respondents
in an interests
bearing trust account. It appears from the founding affidavit that
during the steps taken to procure a compromise
under the provisions
of section 311 of the Companies Act the applicants acquired a right
to funds via a company known as Silver
Falcon Trading 199 (Pty) Ltd.
The funds originate from an immovable property, which was registered
in the name of a trust, the
Taberna Trust, of which first respondent
was one of the trustees.
[6] In the founding
affidavit, the applicants rely upon an agreement to which Silver
Falcon Trading 199 (Pty) Ltd was also a party.
That company is not a
party in these proceedings. The applicants contend that the agreement
must be rectified.
[7] Respondents
submit that a rectification of an agreement cannot be sought unless
all parties to the agreement are before the
Court. The action by the
applicants is therefore opposed on the basis of non-joinder.
[8] Further, the two
applicants allege that they are the trustees of the Combrinck Trust
and as authority to bring this application
they rely upon a
resolution signed only by the first and second applicant. As against
this letter of authority signed by the Master,
the appointment of
trustees reveals a third trustee, a company, Jean Management (Pty)
Ltd. A search at the CIPC established that
Jean Multi Management
(Pty) Ltd is in liquidation.
[9] The person who
represented Jean Multi Management in its capacity as a trustee of the
Combrinck Trust is the first respondent,
who at the time was a
director of the company. It is common cause that first respondent is
under sequestration and is therefore
disqualified to be a director of
the company. The fact that Jean Multi Management (Pty) Ltd is under
liquidation is not contested
by the applicants.
[10] The applicants
admitted in a pre-trial conference held on 6 May 2014 that the
Combrinck Trust currently has only two trustees
and the trust deed
which is part of the papers before me requires that there be a
minimum of three trustees to enable it to validly
transact. It
further empowers the trustees when the number falls below three to
appoint a third to the remaining trustees who were
the Combrincks.
It is common cause
that the applicants did not utilise this power to appoint a third
trustee after the liquidation of Jean Multimanagement
(Pty) Ltd.
[11] The question
then arises as to whether they had the locus standi in iudicio to act
or to institute the present action. The
Supreme Court of Appeal
considered the question in the matter of Land and Agricultural Bank
of South Africa v Parker and Others
2005(2) SA 77 (SCA).
In paragraph (3) of
that judgment Cameron J.A (as he then was) stated:
73] The trust deed
requires that ‘there shall always be a minimum of three
trustees in office’. And when the number
falls below three, it
gives the power to appoint a third to the remaining trustees- who
were the Parkers. This power, coupled with
the minimum requirement,
in effect placed a duty on the Parkers to appoint a third trustee
when Senekal resigned. In breach of
their
duty to give effect
to the terms of the trust deed, they failed for nearly two years to
do so. Only in June 1998 did they notify
the Master of the High
Court- who has common law and statutory jurisdiction over the
administration of trusts- that Senekal had
resigned. ”
[12] In casu the
Combrincks (applicants) were in exactly the same position as the
Parkers and they were similarly in dereliction
of duty by failing to
appoint a third trustee. This omission was in breach of the terms
clearly set out in the trust deed.
The significance of
this omission is further dealt with by Justice Cameron in the
judgment (supra) as follows:
“[11] It
follows that a provision requiring that a specified minimum number of
trustees must hold office is a capacity-defining
condition. It lays
down a prerequisite that must be fulfilled before the trust estate
can be bound. When fewer trustees than the
number specified are in
office, the trust suffers from an incapacity that precludes action on
its behalf. ;’(my underlining)
Justice Cameron
continues to elucidate the result of the omission when he states:
"14 The Parkers
in other words could not bind the trust because no one could. This
does not mean that their duties as trustees
ceased. On the contrary,
their obligation to fulfil the trust objects and to observe the
provisions of the trust deed continued.
These required that they
appoint a third trustee when a vacancy occurred- a duty they signally
failed to fulfil. But until they
did so the trustee body envisaged in
the trust deed was not in existence, and the trust estate was not
capable of being bound.
For the Parkers to purport to bind the
trust estate during
this period was an act of usurpation that simply compounded the
breach of trust they committed by failing to
appoint a third trustee.
Such conduct may, as I indicate later (para 37.3), provide the basis
for impugning the very existence
of the trust; but that was not the
bank’s case”.
Similarly, until the
Combrincks appointed a third trustee the trust body envisaged in the
trust deed was not in existence and for
them to purport to institute
an action on behalf of the trust estate during this period was an act
of usurpation that exacerbated
the breach of trust they had committed
by failing to appoint a third trustee.
The final impact of
the actions of the Parkers in the judgment of Justice Cameron is
expressed as follows:
!,[40] In the
meanwhile, inattentive as ever to the trust deed, Parker continued to
act as though he was a trustee. He signed the
trust’s petition
for leave to appeal to this Court and the appeal to the Full Court
was instituted in the names of Parker,
Mrs Parker and the son ‘in
their capacities as appointed trustees for the time being of the
Jacky Parker Trust’.
[41] On the
principles set out earlier, and vindicated at the instance of the
trust, it is clear that none of these actions was
validly taken. Mrs
Parker and the son could not act on behalf of the trust. No one
could, for there were only two trustees. The
trust accordingly did
not validly petition this Court for leave to appeal against the
judgment of Roux J. Nor was it at any stage
properly before the Full
Court. ”
[13] In casu the
Combrincks continued to act as though they were trustees in
instituting this action in their names. It is clear
that their
actions were not
validly taken as the
trust at that time lacked capacity to act. They could not act on
behalf of the trust and they are accordingly
not properly before
Court.
[14] The second
question I have to determine is whether further parties are to be
joined in the matter or not. I do not have to
make any further
pronouncement regarding this issue due to the fact that the purported
action by the applicants is a nullity. No
party need be joined to an
action not validly instituted.
[15] In the
circumstances I have come to the conclusion that the trust is not
before this Court and that this case should be struck
from the roll.
[16] Regarding the
question of costs, I cannot make a costs order against a party that
is not before me. In any event, the applicants
were quite derelict
and inattentive to the execution of their duties in terms of the
trust deed. I find that it was necessary that
respondents employ the
services of two counsel. Respondents’ counsel have asked that
costs be awarded on a de bonis propriis
basis. I find that request to
be appropriate in the circumstances.
[17] In the result,
the following order is made:
17.1. The matter is
struck from the roll;
17.2. It is declared
that the Combrinck Trust did not, at the time of the launching of the
application, or at anytime thereafter
have the capacity to act;
17.3. The applicants
are ordered, jointly and severally, in their personal capacities to
pay the fourth to sixth respondents’
cost. Such costs include
all reserved costs, and shall include the costs consequent upon the
employment of two counsel.
S.A.M BAQWA
(JUDGE OF THE HIGH COURT)
Counsel for the
applicants: Adv SWWJ Van Der Sandt
Instructed
by: Marie De Jager Attorneys
Counsel for the
respondents Adv MP Van Der Merwe
AdvAPJ Els
Instructed
by: Tintingers Incorporated