IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case No: 13754/2023
In the matter between:
KAREN LOTTER N.O. Excipient/Defendant
and
THE TRUSTEES FOR THE TIME BEING OF
THE PHILDI TRUST Respondent/Plaintiff
In re:
THE TRUSTEES FOR THE TIME BEING OF THE PHILDI TRUST Plaintiff
KAREN LOTTER N.O. Defendant
Coram: Justice J Cloete
Heard: 30 April 2024, supplementary note delivered on 3 May 2024
Delivered electronically: 7 June 2024
JUDGMENT
CLOETE J:
Introduction:
[1] This is an exception taken by the defendant to the plaintiff’s particulars of
claim on the basis that the pleading lacks averments necessary to sustain a cause of
action on two distinct grounds. The first is that ex facie the pleading there is no
vinculum iuris between the plaintiff trust (the trust) and the deceased estate of the
late Mr Phillipus Van Staden (the deceased) of which the defendant is the executrix.
2
The second is that the agreement upon which the trust relies for its relief is a pactum
successorium and thus invalid and unenforceable.
[2] The deceased, who passed aw ay on 10 August 2021, was divorced from
Ms Magaretha Van Staden ( his ex-wife) on 21 October 2010. Earlier on 12 October
2009 the deceased and his ex -wife concluded a written settlement agreement to be
incorporated in their final order of divorce and this subsequently occurred. Relevant
for present purposes are the following clauses in the settlement agreement:
‘The Phildi Trust. As agreed between Husband and Wife the benefactors [sic]
of the current life insurance of the two parties (see addendum A) will be
nominated to the Phildi Trust in the event of death of either Husband and/or
Wife. The beneficiaries of the trust will remain as presently nominated and will
not change unless agreed to by both parties… [clause 4]
The Husband will also continue to pay all assurance [sic] contributions… (see
addendum A)… [clause 6]
This Agreement shall be binding upon the parties, and upon their heirs,
executors, personal representatives, administrators, successors, and assigns
[clause 12]’
[3] It bears mention that the trust seeks rectification of the word “benefactors” in
clause 4 to read “benefits” but nothing turns on this for purposes of this exception.
The cause of action to which the exception is directed is pleaded as follows:
‘10. On an appropriate interpretation of the agreement, the rights and
benefits accruing to the trust from the agreement did so without any need for
the trust to inform the deceased of their [sic] acceptance of those rights…
Claim B: damages
14. In breach of the agreement, the deceased:
14.1 Failed to nominate the Trust as the beneficiary of the policies; and
14.2 Discontinued the payment of the policies, causing their lapsing.
15. As a consequence of these breaches, and upon the death of the
deceased, the Trust suffered loss in the value of the policies…
19. At the date of his death, the policies would have entitled the
Trust, had the deceased complied with his obligations in terms of the
3
agreement, to payment of the following sums, representing the damages
suffered by the Trust by virtue of the deceased’s breaches calculated by
applying the aforegoing increases to the capital benefits recorded therein:…’
[4] There is no allegation in the pleading that the trust accepted the benefit s
conferred upon it in clause 4 of the settlement agreement. Further, the addendum to
the settlement agreement incorporated in the order of divorce reflects that there is no
nominated beneficiary of either of the two life policies in issue which means that,
given the deceased was the insured under both, on his death the proceeds (had the
policies not lapsed due to his non- payment of the premiums) would have accrued to
his estate.
First ground – no vinculum iuris
[5] Self-evidently the trust is not a party to the settlement agreement since it was
concluded only between the deceased and his ex -wife. The defendant submits that
clause 4 of the settlement agreement can only be a contract for the benefit of a third
party (stipulatio alteri) which benefit must be accepted by the third party (the trust) for
it to be enforceable.
[6] The trust raises two arguments in response. First, and ‘as a general
proposition’, courts are reluctant to determine the interpretation of contracts on
exception. Second, and in any event, the general rule that acceptance by a third
party of benefits arising from a contract is required for the establishment of a
vinculum iuris is subject to certain exceptions, one of which is the so- called Perezius
exception and this, it is contended, applies in the present case. Given there is no
dispute as to the requirements for a stipulatio alteri I deal with each of the arguments
raised by the trust with reference to the authorities upon which it relies.
[7] Counsel for the trust relied on a portion of para [39] in Picbel Groep
Voorsorgfonds v Somerville and Related Matters
1 (which I will underline for ease of
1 2013 (5) SA 496 (SCA).
4
reference hereunder) but it is necessary to quote from other paragraphs of that
judgment as well:
‘[25] The exception in this appeal concerns the settlement agreement, its
interpretation and its implications for the right of one joint wrongdoer to claim
a contribution from other joint wrongdoers in terms of s 2(12) of the ADA…
[26] It is necessary first to say something about the proper approach to
issues such as these on exception. In Lewis v Oneanate (Pty) Ltd & another 2
Nicholas AJA stated that an excipient bears the burden of persuading the
court that “ upon every interpretation which the particulars of claim ” and any
agreement on which they rely “ can reasonably bear, no cause of action is
disclosed”. And, in Sun Packaging (Pty) Ltd v Vreulink,3 Nestadt JA confirmed
that there is no hard and fast rule that the interpretation of agreements is to be
avoided on exception. He said:
“As a rule, Courts are reluctant to decide upon exception questions
concerning the interpretation of a contract. But this is where its meaning is
uncertain . . . In casu , the position is different. Difficulty in interpreting a
document does not necessarily imply that it is ambiguous . . . Contracts are
not rendered uncertain because parties disagree as to their meaning.”
[27] What these authorities mean in this case is that if the relevant clauses
of the settlement agreement (for it is its terms that make or break the funds’
cause of action for purposes of the exceptions) can reasonably bear any
meaning that supports a cause of action in terms of s 2(12) of the ADA, the
exceptions must fail – and the appeal must succeed. If, on the other hand, the
relevant clauses of the settlement agreement can only reasonably bear the
meaning attributed to them by the respondents, and they are incapable of
sustaining a cause of action based on s 2(12) of the ADA, the exceptions
must be upheld – and the appeal must fail…
2 Lewis v Oneanate (Pty) Ltd & another 1992 (4) SA 811 (A) at 817F -G. See too First National Bank
of Southern Africa Ltd v Perry NO & others 2001 (3) SA 960 (SCA) para 6; Theunissen & andere v
Transvaalse Lewendehawe Koöp Bpk 1988 (2) SA 493 (A) at 500E-F.
3 Sun Packaging (Pty) Ltd v Vreulink 1996 (4) SA 176 (A) at 186J-187B.
5
[39] The only outstanding issue is whether the settlement agreement
contemplated a full settlement, as required by s 2(12), as this is not expressly
pleaded. In order to determine this, it is necessary (and permissible) to
interpret the settlement agreement that is relied on in the particulars of claim,
and which is “a link in the chain of [the funds’] cause of action” .4 In Dettmann
v Goldfain & another ,5 this court stated that courts are, in some instances,
reluctant to “decide upon exception questions concerning the interpretation of
a contract ”. Those circumstances are, first, where the entire contract is not
before the court; and secondly, where it appears from the contract or the
pleadings that “ there may be admissible evidence which, if placed before the
Court, could influence the Court’s decision as to the meaning of the contract ”,
provided that this possibility is “ something more than a notional or remote
one”.
[40] In this case, the entire settlement agreement is before the court and
there has been no suggestion, either in the pleadings or in argument, of the
meaning of the settlement agreement being influenced by admissible
evidence being led in the trial. Indeed, the parties are ad idem as to what the
relevant clauses of the agreement mean and I am of the view that that
meaning is the only reasonable meaning that those clauses can have. The
parties differ only in respect of what the legal consequences may be as far as
a cause of action based on s 2(12) of the ADA is concerned. As it was put in
the appellants’ heads of argument, the issue is ‘given the terms of section
2(12), what ex lege is the effect of this settlement agreement?’
[8] Applying all these principles to the present matter the following is evident.
There is a single allegation (in paragraph 10 of the pleading) that on an ‘appropriate’
interpretation of clause 4 of the settlement agreement the rights and benefits (in the
policies) accrued to the trust without any need for the trust to inform ‘the deceased’
4 Van Tonder v Western Credit Ltd 1966 (1) SA 189 (C) at 193H; South African Railways and
Harbours v Deal Enterprises (Pty) Ltd 1975 (3) SA 944 (W) at 953A; Moosa & others NNO v
Hassam & others NNO 2010 (2) SA 410 (KZP) para 17.
5 Dettmann v Goldfain & another 1975 (3) SA 385 (A) at 400A -B. See too Davenport Corner Tea
Room (Pty) Ltd v Joubert 1962 (2) SA 709 (D) at 715G-716E.
6
of its acceptance of those rights. But the intention of clause 4 is plain: the deceased
and his ex -wife, who were the only parties thereto, agreed that the ‘benefactors’ of
the policies ‘will be nominated to the Phildi Trust’ in the event of death of either of
them. I accept of course that the wording itself is poor, but their joint express
intention is nonetheless clear. They contracted for the benefit of a third party , viz. the
trust.
[9] Accordingly on this fundamental aspect there can be no uncertainty of the
kind envisaged in Picbel. As the Supreme Court of Appeal made clear ‘contracts are
not rendered uncertain because parties disagree as to their meaning’. Clause 4 can
only reasonably bear one meaning on this score and given that ex faci e the pleading
the trust did not accept the benefits of the right s bestowed upon it there is no
pleaded vinculum iuris. In addition the entire settlement agreement is before the
court. There is no suggestion in the pleading, and nor was there in argument , that
the meaning of clause 4 might be influenced by admissible evidence being led in the
trial. Moreover the contention in the trust’s heads of argument that because the
divorce order effectively dispensed with the necessity for the trust to accept the
benefit is not pleaded.
[10] Turning now to the trust’s second argument, namely that the provisions of
clause 4 fall within the so -called Perezi us exception. The legal position was
succinctly set out by the Supreme Court of Appeal in Hofer and Others v Kevitt NO
and Others
6 as follows:
‘In order to overcome the hurdle presented by the fact that there had been
no acceptance of the benefits by the appellants and the other more remote
beneficiaries, Mr Walther endeavoured to invoke what may be called “the
exception of Perezius”. Perezius ad Cod 8.55 stated as a general rule that a
donation is recoverable unless accepted by the donee . He added, however,
the important qualification that
6 1998 (1) SA 382 (SCA) at 387E-J.
7
“in the case of the settlement of property in a family the acceptance of the first
donee enures for the benefit of and is considered an acceptance by all the
beneficiaries”.
The Perezius exception has been received and applies to beneficiaries under
trusts created inter vivos in South Africa. See Honoré and Cameron (op cit at
422 n 72, and cases there cited).
It was pointed out, however, by Centlivres CJ in Crookes ’ case at 288E -H
that the exception only applies if the donated property is to remain in the
family of the donor and also is to be inalienable and is to remain intact . It is
clear from the provisions of the trust deed in the present application that the
trustees were empowered to sell the assets and to invest the proceeds in
such manner as they in their sole discretion deemed fit. There w as also no
prohibition of alienation to persons outside the family imposed on the ultimate
beneficiaries of the trust capital. Furthermore, the donor, Herbert, Charles and
Eleanora were only entitled to the income of the trust and their acceptance of
that benefit cannot be regarded as an acceptance of the capital which was to
go to the ultimate beneficiaries. The exception of Perezius cannot therefore
apply to the present case.’ (my emphasis).
[11] I do not see how the Perezius exception can apply in the present matter,
since there is no allegation in the pleading that the defendant is attempting to
recover the “donation” in clause 4 from the trust. The whole pleading is to the
opposite effect. But in any event w hat is not pleaded is: (a) the identity of the
trustees; (b) the identity of the beneficiaries; and (c) the terms of the trust deed.
There is no allegation that the trust is a family trust and the settlement agreement is
equally silent in this regar d, and there is not a single pleaded allegation that the
beneficiaries of the trust are family members of the deceased and his ex -wife. The
pleading thus lacks averments necessary to sustain a cause of action based on the
Perezius exception as well, and it is presumably for this reason that counsel for the
trust did not persist with argument on this point.
Second ground – pactum successorium
8
[12] In Borman en De Vos NNO en ’n Ander v Potgietersrusse Tabakkorporasie
Bpk en ’n Ander7 a pactum successorium was described as follows. For convenience
I adopt the English translation agreed between the parties with references to other
authorities omitted:
‘A pactum successorium (or pactum de succedendo) is, in short, an
agreement in which the parties regulate the devolution (successio) of the
estate (or a part thereof, or a specific item forming part thereof) of one or
more of the parties after the death (mortis causa) of the party or parties
concerned. An example of such an agreement is where A and B agree to
appoint each other as heirs; or where A and B agree that A will bequeath his
estate (or a part thereof) to B; or where A and B agree that A will bequeath his
estate (or a part thereof, or a specific item belonging to him) to C . An
agreement of this nature is contrary to the general rule of our law that estates
devolve ex testament o (by will) or ab intestato (intestate), and is considered
invalid except in the case where it is embodied in an antenuptial contract.’
(my emphasis)
[13] In the present matter it would be the third example in the quoted passage that
would apply if it is determined that clause 4 of the settlement agreement is a pactum
successorium. The trust argues that the third example does not apply since clause 4,
on any reading, does not regulate an inheritance. This argument is based on two
contentions. First, the proceeds of the policies never formed part of the deceased’s
estate and therefore no inheritance was contemplated. Second, ex facie the pleading
the rights and obligations in terms of the settlement agreement vested immediately
since the deceased was obliged, again immediately, to pay the monthly premiums of
the policies and ensure the nomination of the trust as beneficiary.
[14] To my mind both of these contentions are misplaced. As to the first, the
proceeds of the policies would, for the reason already given, have been paid to his
estate on the death of the deceased ( but for the nomination in clause 4 and had the
policies not lapsed) . The intention to bequeath this part of his estate was thus
7 1976 (3) SA 488 (A) at 501A-D.
9
manifest. Further, t he deceased did not retain the right to revoke his undertaking in
clause 4, as occurred in Ex parte Calder Wood NO: in re Estate Wixley 8 upon which
counsel for the defendant relied and where it was held that:
‘On the nature of a pactum successorium , Mr Jordaan drew my attention to
Ahrend and Others v Winter 1950 (2) SA 682 (T); Varkevisser v Estate
Varkevisser and Another 1959 (4) SA 196 (SR); Costain and Partners v
Godden NO and Another 1960 (4) SA 456 (SR) and Borman en De Vos NNO
en ’n Ander v Potgietersrusse Tabakkorporasie Bpk en ’n Ander (supra). I
think these cases show that a pactum successorium is an agreement relating
to the succession to an estate, or a portion thereof, or to a specific asset or
benefit belonging thereto, which postpones the devolution of personal rights
until the death of the owner and which prevents the latter from bequeathing
his estate or property to another person when otherwise he would be entitled
to do so. It is the deprivation or curtailment of testamentary freedom that
justifies the prohibition of such an agreement. Accordingly, an agreement not
to pass property mortis causa would be invalid on the same ground.
Does the contract between the deceased and the beneficiary fall into this
category? If it does not, then it affords no assistance to the applicant to
contend that the contract with the insurance company was but the juridical act
by which it was to be performed.
The foundation of a pactum successorium is that the person who contracts
with regard to his own succession purports to bind himself to that contract. He
does not seek to retain the unilateral right to revoke his promise. Should he do
so, then the contract is not one which conflicts with the general rule of our law
that inheritances must devolve ex testamento or ab intestato…
In the present case in promising the beneficiary the proceeds of the policy if
he were to be killed, the deceased contemporaneously retained the unilateral
right to revoke her nomination . He explained to her the conditions in the
beneficiary appointment form, which plainly permit of a revocation of the
nomination either expressly by written notice, or impliedly by cession of the
8 [1981] 4 All SA 389 (Z) at 397-398.
10
policy. Consequently her acceptance was within the framework of the
beneficiary appointment form.
I consider, therefore, that the retention by the deceased of the right to revoke
his promise made to the beneficiary effectively prevents their contractual
relationship from being designated a pactum successorium.’ (my emphasis)
[15] As regards the second contention it is indeed so that, upon conclusion of the
settlement agreement, the deceased became contractually bound to his ex -wife to
pay the policy premiums and nominate the trust as beneficiary of the policies, but
this does not detract from the invalidity in law of his undertaking to make that
nomination. As was made clear in McAlpine v McAlpine NO and Another:9
‘A donatio mortis causa is, in my view, simply a species of pactum
successorium and it is not suggested that the agreements in this case meet
the special requirements for validity of a donatio mortis causa, namely
unilateral revocability and compliance with testamentary formalities. (See
Joubert (ed) The Law of South Africa vol 8 paras 283-5.)
However, whether they be donations or not, in my opinion the basic
determinant as to whether or not the reciprocal promises in clause 1 of
agreement B constitute pactum successoria is the so-called vesting test. This
test is applied by asking in a particular case whether the promise disposing of
an asset in favour of another (whether by way of donation or other form of
contract) causes the right thereto to vest in the promisee only upon or after
the death of the promissor (which points to a pactum successorium );or
whether vesting takes place prior to the death of the promissor, for instance,
at the date of the transaction giving rise to the promise (in which case it
cannot be a pactum successorium).’
[16] Whichever way one looks at it the asset, being the proceeds of the life
policies, could only have vested in the trust upon the death of the deceased. The
undertaking to nominate the trust as beneficiary could not somehow have
accelerated the trust’s entitlement (had the deceased complied with his undertaking)
9 1997 (1) SA 736 (AD) at 750B-E.
11
to payment of the proceeds at some earlier date. It was not the obligation that vested
but the right to the proceeds of the policies. Further, and although submitted in the
trust’s heads of argument and advanced at the hearing, the contention that the
deceased in any event became obliged to comply with clause 4 by virtue of a court
order (i.e. the decree of divorce) the trust does not rely on this in the pleading; it only
relies on a breach of the settlement agreement. It follows that the second ground of
exception must also be upheld. As to costs, given the nature of the arguments it is
my view that scale B should apply.
[17] The following order is made:
1. The defendant’s exception to the plaintiff’s particulars of claim is
upheld;
2. The plaintiff is granted leave to serve a notice of intention to
amend its particulars of claim in terms of rule 28 within 15 court days
from date hereof; and
3. The plaintiff shall pay the defendant’s party and party costs on
scale B.
J I CLOETE
For excipient: Adv M De Wet
Instructed by: Nabal Attorneys (Mr R Nabal)
For respondent: Adv A Van Aswegen
Instructed by: Brand Attorneys (Ms C Brand)