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2024
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[2024] ZAECMKHC 109
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Slabbert v Van Der Westhuizen N.O and Others (115/2022) [2024] ZAECMKHC 109 (4 October 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
OF INTEREST
CASE NO. 115/2022
In
the matter between:
JACO
SLABBERT
APPLICANT
and
GIZELLE
KLARA VAN DER WESTHUIZEN N.O.
FIRST RESPONDENT
In
her capacity as joint trustee for the
time
being of the LA TRUST – IT 927/95
HUGO
VAN DER WESTHUIZEN N.O.
SECOND RESPONDENT
In
his capacity as joint trustee for the
time
being of the LA TRUST – IT 927/95
THE
MASTER OF THE HIGH COURT
THIRD RESPONDENT
JUDGMENT
Rugunanan
J
[1]
This
is an application for
inter
alia
the removal of the first and second respondents as trustees of the LA
Trust (IT 927/95) (the trust) and the appointment in their
stead of
two other trustees, one of them being the applicant. The primary
issue for determination in what will hereinafter be referred
to as
the main application (where contextually appropriate) is whether the
conduct of the first and second respondents, allegedly
in their
refusal to account, justifies granting the applicant relief for their
removal in terms of s 20(1) of the Trust Property
Control Act 57 of
1988
[1]
(the Act).
[2]
The
applicant is a major male who resides in Gauteng where he pursues a
career in software development. He is a capital beneficiary
of the
trust and has the requisite interest entitling him to institute these
proceedings.
[2]
His assertion
that he is an income beneficiary is disputed. That, however, is not
relevant to his
locus
standi
.
[3]
The first and second respondents are
trustees of the trust having been authorised by written endorsements
issued by the Master of
the High Court, Makhanda. They reside on the
property and are married to one another. They both hold legal
qualifications but have
dissimilar occupational pursuits. The first
respondent is a prosecutor and the second respondent, a practising
attorney.
[4]
Save for the first and second respondents
who have opposed the applicant’s relief, the third respondent
chose not to engage
with the facts alleged by the parties and took no
part in these proceedings. As such, where mention is made of ‘the
respondents’
in this judgment it must be understood to be the
collective citation of the first and second respondents.
[5]
At the heart of the matter lies the
respondents’ administration of the main asset in the trust
comprising of 9 hectares of
fixed property known as portion 414 of
the farm Zwavelpoort 373 located in Gauteng (the property).
[6]
Before all else it is significant to point
out that the first respondent’s uncontradicted version is that
the intended purpose
of the purchase of the property by her and her
late husband, Mr Leon Andrè Slabbert, was to shield it from
creditors –
and that it was never intended to exclude her or
her late husband from residing on it.
[7]
This version assumes importance since the
respondents’ maintain that the intent of the applicant in
launching these proceedings
is to take control of the trust to
terminate the residence of the first respondent on the property and
to lay claim to what he
assumes he is now entitled by virtue of
having attained majority status.
[8]
The
respondents argue that the applicant’s course is premature and
is at odds with the provisions of the trust deed. The deed
stipulates
[3]
that no asset or
income of the trust will vest in any beneficiary until it is awarded,
paid over, or transported to such beneficiary
by the trustees. Being
a discretionary trust, no beneficiary will have a claim in relation
to the income or capital of the trust
during the term of the validity
of the trust. The deed furthermore provides that in the event of a
beneficiary holding out that
he has a claim in relation to the income
or capital of the trust prior to having any related or vested
interests, the trustees
will be entitled to let the trust continue
until such time as they deem appropriate
[4]
.
[9]
According to the respondents, these
provisions find application to the present matter.
The procedural context
of the hearing
[10]
There were two applications before this
court, both under the same case number:
(a)
the main application, and
(b)
a contempt application, in which the
applicant sought punitive relief against the respondents.
[11]
The main application was set down for
hearing on 1 September 2022.
[12]
By agreement between the parties an order
was taken before Bloem J on 23 August 2022 in terms of which:
12.1
The main application was postponed
sine die
; and
12.2
The first and second respondents were ordered to provide the
applicant with the following documents within
thirty (30) days:
12.2.1
A copy of the written disclosure as per clause 12.1
of the trust
deed;
12.2.2
A copy of the minute book as per clause 17.6 of the trust
deed;
12.2.3
The bank statements of the trust from date of opening
thereof; and
12.2.4
All source documents relied upon by the accountant
for the trust in
the preparation and finalisation of the financial statements for the
financial years 2005 to 2021.
[13]
The respondents’ non-compliance with
the order taken before Bloem J culminated in the institution of the
contempt application
in which the applicant, in addition to seeking
punitive relief against them, sought compliance with the terms of
that order. The
contempt application and the main application are
separate matters that were enrolled for hearing on 9 May 2024. They
were not
consolidated although technically the contempt matter arose
from an order interlocutory to the main proceedings. The applicant
did not proceed with the contempt application but urged that its
material be considered in the main application. On allegations
of
fact meant to achieve what was essentially contemplated in the order
by Bloem J, the applicant’s approach spawned a conundrum
in the
main application, presenting a departure from the standards for the
formulation of affidavits in motion proceedings. More
than this, the
factual discord in the papers between the two matters was glaring.
And as will become apparent later, the specific
aspects in regard to
which the applicant required the respondents ‘to account’
were undefined in the order formulated
in his notice of motion to the
main application. In line with these remarks this judgment reveals
the inherent difficulty with
the approach foisted upon the court by
the applicant and accentuates the necessity for observing the
required standards for drafting
affidavits in motion proceedings.
[14]
In an attempt therefore to render the
judgment more easily understood the procedural context in which the
hearing took place will
be set out. In that regard the manner in
which the applicant required the court to approach the contempt
application despite not
pursuing it, is addressed at the onset.
[15]
It
is not possible to traverse all the allegations and material
contained in the papers to both applications. In argument
applicant’s counsel contended – on the basis of the
respondents’ own version – that there was a ‘capture’
of the trust supported by documentary proof evincing their ‘brazen’
and ‘stark’ perpetration of ‘fraud
and theft’
upon the trust. To begin with, the approach is misdirected. In motion
proceedings it is trite that the affidavits
constitute both the
pleadings and the evidence; hence the issues and averments in support
of the parties’ cases should appear
clearly therefrom.
[5]
It is to the founding affidavit that a court will turn to determine
what the complaint is, and for that reason the founding affidavit
must in itself contain sufficient facts to support the complaint.
[6]
It is imperative that a litigant should make out its case in its
founding affidavit and not belatedly in argument.
[7]
The applicant’s founding affidavits both in the contempt
application and in the main application, evinces a weighty absence
of
factual matter directly venting or even remotely corresponding with
the epithets articulated by counsel. Summing up the crux
of his case
in his replying affidavit to the main application, is the applicant’s
explicit assertion:
‘
No
impropriety in the administration of the trust [is] alleged save to
complain that the first and second respondents refused to
account
...’
[16]
That is the
lis
.
Put differently, it is not the applicant’s case that the trust
has been captured or that there is impropriety in its administration
due to theft or fraud, nor is it his case that the respondents’
refusal to account is due to fraud or theft.
[17]
The
contentions aforementioned are extraordinary considering that they
were not foreshadowed in the applicant’s founding papers
in the
main application; correctly triggering an objection by respondents’
counsel. Fraud is an illegality. In keeping with
the principles
underlying affidavits it must be alleged and it must be clearly and
distinctly proved.
[8]
It is not
anything to be lightly inferred
[9]
.
The same holds for any act of dishonesty associated with the capture
of the trust, or theft, or such other related conduct.
[18]
Apart from the obvious failing in the
applicant’s founding affidavit the documentary proof upon which
counsel relied is located
in voluminous annexures in the contempt
application. The papers in the contempt matter are burdened by
factual disputes. This prompted
concerns about the court having to
make findings of wilfulness and
mala
fides
beyond reasonable doubt solely on
affidavit evidence without any indication of any parties being called
for cross-examination under
uniform rule 6(5)
(g)
.
Although the applicant (quite sensibly in my view) elected not to
proceed with the contempt application, the court was requested
to
consider its content in the main application. In that regard it was
little short of testifying for the applicant when –
from the
bar – the attempt was made to traverse the annexures in the
contempt application.
[19]
Central to the nature of motion proceedings
is the established practice that they are adjudicated and assessed on
a set of papers
comprising of founding, answering, and replying
affidavits. The obvious difficulty with the course adopted by the
applicant is
that it falls foul of the purpose of a founding
affidavit and what is required to be set out in affidavits,
generally. It is impractical
for the court to import into the main
application material (on disputed issues) emanating from documents
included as annexures
in the contempt application. The annexures
comprise
inter alia
of an extract from the general ledger of the trust and so-called
proof of financial transactions; quotations for surveillance,
building maintenance, slate tiles, blinds and paint, including
payment of monies by the first respondent to the second respondent
from the trust banking account; invoices; and so-called conduct by
the second respondent relating to the trust allegedly prior
to him
being authorised to act as trustee.
[20]
In
motion proceedings the evidence is placed before the court in the
form of affidavits containing factual allegations made under
oath. In
argument the attempt was made to prove the applicant’s case by
referencing the aforementioned series of annexures
or documents
included in the contempt application. It is not open to a party to
merely annex to its affidavit a document and to
request the court to
have regard thereto. What is incumbent is the identification of
portions thereof on which reliance is placed
as an indication of the
case sought to be made out on the strength of the document
concerned.
[10]
The document
merely serves as proof of the source of the information, which
information ought properly to have been stated as facts
or evidence
made under oath and not marshalled from the bar
[11]
.
It cannot be expected of the court to conduct a forensic examination
by trawling through a mass of printed documents in the contempt
application and to speculate on the possible relevance of their
contents in the main application. This is a slothful means of placing
evidence before court in the expectation that factual findings
favourable to the applicant’s case would be made on issues
that
have not been properly raised – or raised at all – in his
affidavit founding the main application.
[21]
Application
proceedings are designed to achieve a relatively speedy resolution to
disputes compared to action proceedings. Compliance
with the
standards for the formulation of affidavits allows for the orderly
use of the resource capacity of a court to evaluate
an application
and to give due attention to the other matters on its roll. The
bottom line is that the applicant chose not to proceed
with the
contempt application. Engaging with its material is an exercise
fraught with uncertainty and strain. It may result in
the court
inadvertently choosing sides and in this way compromising the
independence and objectivity expected from the bench. Endorsing
the
approach would put in place an unpredictably porous regimen and may
set a standard of deviation from established practice with
disturbing
imprecision that diminishes certainty, fostering dysfunction
[12]
and prejudice.
Cadit
quaestio
.
[22]
There are two further aspects about the
general manner in which the applicant conducted his case. The first
relates to a sizeable
document entitled Applicant’s
Chronological Table of Events, and the second relates to bundles of
case authorities that were
handed up from the bar. In argument
reference was made to the chronological table filed by the applicant
on 24 April 2024. The
document is a compilation of abbreviated
material extracted from the applicant’s affidavits in both
applications. There is
no doubt that the document was intended to
chart a timeline for navigating through the volume of material in
each of the applications,
but then only on the narrative of the
applicant’s version. Apart from the repeated reference to the
‘capture’
of the trust, which is not the case presented
in the main application, the inherent difficulty occasioned by
venting the content
of the contempt application in deciding the main
application is that the sifting process is rendered murky and
concomitantly diminishes
the significance of the founding affidavit
in the latter. This serves yet again to accentuate the necessity for
factual matter
to have been properly assimilated on oath in affidavit
form if the case meant to be argued is one of capture perpetrated by
the
respondents.
[23]
At the commencement of the hearing, two
bundles comprising of legislation, case authorities and extracts from
academic texts on
trust law and estates were summarily introduced.
The first bundle contains 77 pages and the second 151 pages. In total
the bundles
amount to a substantial 228 pages containing 21 case
authorities. Except for ten case authorities identified in the
applicant’s
practice note filed on 19 April 2024, none of
the 11 remaining cases in the larger bundle are referenced in his
heads of argument
(flied on 11 August 2022), or in his supplementary
heads (prepared on 23 November 2023 without indication of date of
filing).
[24]
The
practice directives in this division make it plain that heads of
argument shall be accompanied by a list of authorities to be
quoted
in support of the argument, and that the practice note applicable to
opposed motions shall
inter
alia
set out the principal authorities to be relied on.
[13]
This allows the court to do its preparation and research in advance
of the hearing of the matter, facilitating constructive engagement
with practitioners and disposing of the business of the court in an
efficient, effective and expeditious manner. The peremptory
list does
not feature in the applicant’s main heads and in his
supplementary heads. Accepting that counsel appearing for
the
applicant was not the author of the heads of argument, the issue
nonetheless arises with the introduction of the case material
in the
larger of the two bundles. It is necessary to quote, albeit in the
context of a criminal trial, the utterance in
S
v Ntuli
[14]
:
‘
Unless
counsel properly represents his or her client, the right to a fair
trial and the right to a fair appeal may be negated. At
issue is
simply the basic proposition that the minimum required of counsel is
to prepare and present a proper argument on behalf
of his or her
client. Heads of argument serve a critical purpose. They ought to
articulate the best argument available to the appellant.
They ought
to engage fairly with the evidence and to advance submissions in
relation thereto. They ought to deal with the case
law. Where this is
not done and the work is left to the Judges, justice cannot be seen
to be done. Accordingly, it is essential
that those who have the
privilege of appearing in the Superior Courts to their duty
scrupulously in this regard.’
[25]
In none of the additional case reports has
the applicant identified for consideration by the court the specific
facts, or pages
and paragraphs believed to be relevant, not to
mention the applicable legal principle. The same applies to the cases
referenced
in his practice note, none of which were mentioned, even
in passing, except for two that featured in the supplementary heads
of
argument. The
dictum
in
Ntuli
is of pertinence in the current matter for yet another shortcoming in
the presentation of the applicant’s case.
[26]
In summary:
(a)
the applicant’s material failure
to make out a case posited on ‘fraud’, ‘theft’
and ‘capture’
of the trust;
(b)
the unavailing approach that material
in the contempt application assumes relevance where that application
itself was not pursued;
and
(c)
the
failure to deal with the case law in the manner described –
points to the impracticality of doing justice where it is
entirely
left to the court to conceive a case far removed from the material in
the main application.
[27]
Cumulatively, these considerations do not
support the relief the applicant claims in the main application and
justifies dismissal
solely on that basis. But in any event, even if
the conclusion in that regard is incorrect, there are a few aspects
of its merits
that deserve consideration. In that regard, and in the
light of the views expressed hereinabove, factual matter from the
contempt
application does not feature.
The main application
[28]
Following an amendment to his notice of
motion the applicant in his founding affidavit, by mere substitution
of an unsigned and
unattested amended page, states that the purpose
of the application is to obtain the following relief:
‘
6.1
A declarator that the ostensible appointments of the first and second
respondents, as trustees
of the trust, were not valid in law and
therefore null and void;
6.2
In the alternative, an order that the first and second respondents,
in their personal capacities,
be removed as trustees of the trust in
terms of section 20 of the Act;
6.3
An order that the Master of the High Court be requested and
authorised to issue letters
of authority in terms of section 6(1) of
the Act to the applicant and Louis Stephanus Venter
[15]
as joint trustees for the time being of the trust;
6.4
An order that the Master be requested and authorised to call upon the
first and second respondents
to account in terms of section 16 of the
Act; and
6.5
An order that the first and second respondents be directed to comply
with the [Master’s]
request to account, alternatively an order
that the first and second respondents be directed to perform their
duty imposed upon
them by clause 13 of the trust deed.’
[29]
In addition, the applicant seeks an order
that the first and second respondents pay the costs of the
application in their personal
capacities, jointly.
[30]
In view of the approach adopted to the
contempt application the salient issues to be decided in what remains
as the main application
are whether or not the applicant has
succeeded in making out a case that the appointments of the first and
second respondents as
trustees of the trust were invalid,
alternatively, that the first and second respondents should be
removed as trustees. Accordingly,
consideration of the relief in
paragraphs 6.3 and 6.5 will not be necessary if the applicant fails
to secure orders in respect
of 6.1, 6.2 and 6.4.
[31]
In
argument reference was made to various provisions of the Act, such as
the maintenance of a trust account, registration and identification
of trust property, and the custody/destruction of documents
[16]
.
Mention was also made of the amended Act
[17]
where it deals with the disqualifications from office as a trustee.
In sum, these are matters that have not been dealt with in
the
applicant’s papers, or found their way into supplemented papers
incorporating factual material traversing the statutory
prescripts
relied upon. A litigant who relies on a specific illegality must
plead it. If he relies on a particular section of a
statute he must
say so, but in addition to referring to the section, he must plead
those facts which entitle him to invoke the
section.
[18]
[32]
The matter will accordingly be adjudicated
on the basis of the legislation prior to the amendments. This
judgment and the cases
to which reference is made must be read from
that perspective.
Overview
[33]
The trust is an
inter
vivos
trust. It was lodged and
registered within the jurisdiction of the Master on 23 May 1995
following its establishment in a deed
by its founder, the applicant’s
father, Mr Leon Andrè Slabbert. As appears to be the position
to date, the trust deed
attached to the founding affidavit identifies
the applicant solely as its beneficiary.
[34]
Upon registration of the trust, Mr Slabbert
was appointed as trustee. At that time he was not legally married to
the applicant’s
biological mother Ms Tarina Slabbert.
Subsequent to her passing during 1996 the applicant’s father
married the first respondent,
who had a three year old child of her
own, a son named Kyle. The applicant was also about three years of
age at the time.
[35]
In
May 1999 the trust acquired the property for a purchase price of
R370 000.
[19]
The
applicant’s father passed away in February 2002. His mortal
remains are interred in a grave on the property. Subsequent
to the
death of the applicant’s father, the first respondent was
awarded guardianship of the applicant by the high court
[20]
after a dispute between herself and the applicant’s uncle, Mr
Johannes Slabbert. The first respondent’s uncontradicted
evidence is that the uncle would assume guardianship of the applicant
upon the passing of both herself and the applicant’s
father.
[36]
Since the passing of the applicant’s
father, the position of trustee was held by Mr Daniel Johannes
Rudolph Schutte. Upon
his resignation he was replaced by the first
respondent on 10 March 2004. The first and second respondents were
married on 23 June
2004, whereafter on 29 May 2006 the second
respondent was endorsed by the Master to act as trustee together with
the first respondent.
The applicant resided on the property with both
respondents until 2012 when, having attained the age of 19, he
alleges he was requested
to leave (or it may be on the respondents’
version that he elected to exclude himself from the family unit due
to his deviant
behaviour and his desire to do as he pleases). The
respondents together with Kyle and their biological daughter Cara,
have since
been living on the property though indications are that
the applicant returned and resided there from time to time.
[37]
Further insight into this overview can be
gleaned from the following uncontradicted averments in the first
respondent’s supporting
answering affidavit:
‘
The
father of the applicant and I had a joint last will and testament
wherein we jointly recorded our combined related intentions.
[I]t was
always our intention that only upon the passing of the both of us,
guardianship of the applicant would pass to the brother
of my late
former husband. I confirm that the property being the principal asset
of the trust, was purposefully sourced by my late
former husband and
I, that we secured a mortgage bond registered in both our titles with
which to settle a portion of the purchase
price, and that we
subsequently secured a second mortgage bond over the property, again
in both our titles, the amount of which
was utilised by my late
former husband to financially stabilise his business enterprise which
was not faring well at that time.
The property was
purchased into the trust with the exclusive purpose of shielding it
from potential creditors, never to exclude
either my late former
husband or indeed me from residing upon it. … [The applicant]
cannot deny the related assertions of
the second respondent and I
pertaining to his upbringing and the way in which we … have
improved and maintained, and continue
to maintain the asset of the
trust.’
[38]
The revealing feature of what the first
respondent says is that it lays the foundation for the intended
purpose of the purchase
of the property and the intention that she
resides thereon.
[39]
Having dealt with the procedural context in
the conduct of the matter and following the above overview, attention
shifts to the
applicant’s founding affidavit in the main
application. The affidavit is a terse document, 26 pages in length
annexed to
which are 73 pages of material comprising of the deed of
trust, the Master’s endorsements, and a series of protracted
correspondence
typical of a ‘paper war’ exchanged between
the parties’ attorneys/agents. In motion proceedings it is
incumbent
upon an applicant to plead his case in his founding
affidavit. Apart from generically identifying the purport of the
correspondence
the applicant does not address the matter contained
therein which, if considered pertinent to the relief claimed, ought
to have
been stated as facts or evidence read as if included in the
founding affidavit. The second respondent pertinently emphasises that
the correspondence is discordant with the content of the founding
affidavit. The other drawback is that authorship of the
correspondence
is unconfirmed in a confirmatory affidavit by the
applicant’s legal representative as indicative that their
contents be read
into the founding affidavit. The practise of merely
attaching annexures to an affidavit without dealing with or
identifying the
material portions in the expectation that a court
will accomplish the sifting process is to be frowned upon. It is not
intended
to repeat what is said elsewhere in this judgment.
[40]
That said, focus shifts to whether the
applicant has made out a case for his relief.
The appointment of the
respondents as trustees
[41]
The complaint is that
(a)
the first respondent’s appointment as trustee was not in terms
of the trust deed, nor a court order;
(b)
the respondents’ appointments were not authorised in writing by
the Master; and
(c)
the trust deed disqualifies the second respondent form holding office
as trustee because he is married to the first respondent.
[42]
The appointment of the first respondent as
trustee followed her nomination as such by the Mr Schutte who
preceded her. Relevant
to her appointment, the applicant does not
specifically identify a provision in the trust deed that (i) either
disqualified her
predecessor from nominating her or, (ii)
disqualified her from being appointed. The basis upon which the
applicant contends that
the first respondent’s appointment was
not in terms of a court order is unsustainable where material
allegations are not
candidly disclosed to demonstrate the professed
necessity of a court order authorising her appointment (assuming, on
the version
of the applicant that such an order is a legal
requirement – and if it is a statutory requirement, then he
should say that).
[43]
The challenge to the first respondent’s
appointment is also posited on the applicant’s assertion:
‘
Should
it be that the first respondent was properly and legally appointed as
trustee of the trust in terms of section 6(1) of the
Act, then I wish
to point out that the trust deed provides therefore that the majority
of beneficiaries could elect to terminate
her appointment as trustee
in terms of clauses 6.6 and 6.6.2 of the trust deed.’
[44]
Assuming that the applicant is correct in
asserting that there are other beneficiaries, the fallacy with his
approach is that proof
that they are interested persons who support
such relief, is wanting.
[45]
Turning to the written authorisation with
which the applicant takes issue, the endorsement in favour of the
first respondent reads:
‘
This
is to certify that as Daniel Johannes Rudolph Schutte is no longer
trustee of the above-mentioned trust, Gizelle Klara Slabbert
is
authorised to continue with the administration of the said trust’.
[46]
As for the second respondent, the
endorsement reads:
‘
It
is hereby certified that Hugo Van Der Westhuizen is authorised to act
as trustee of the above-mentioned trust together with Gizelle
Klara
Slabbert’.
[47]
The
endorsements were issued on 10 March 2004 and on 29 May 2006,
respectively. They appear on separate pages and are in each instance
signed and date-stamped by the Master’s representative.
Section 6 of the Act permits the appointment of any person as
trustee ‘…if authorized (sic) thereto in writing by the
Master.’ The mode of writing (whether by means of human
agency,
mechanical or electronic means) or the medium on which the writing
must appear is not specified in the Act or in the regulations
promulgated thereunder
[21]
.
[48]
It
is not particularly clear what the applicant suggests by his
postulation that the respondents’ appointments were not
authorised
in writing. Accordingly, no sustainable basis has been
proffered for upholding his contention. I point out in passing,
organs of
state are duty bound to assist the courts to ensure their
effectiveness
[22]
. The
Master’s input would have been of assistance to this court in
its reflections on this specific issue.
[49]
Adverting to the alleged disqualification
of the second respondent, it is necessary to examine the provisions
in the trust deed.
Relevant for present purposes are the following
clauses:
‘
1.
WOORDOMSKRYWING:
In hierdie trustakte,
tensy dit uit die samehang anders blyk:
1.1
sluit woorde wat die enkelvoud aandui, ook die meervoud in emgekeerd;
…
…
4.
AANSTELLING VAN TRUSTEES
4.1
Die eerste trustees wat hiermee aangestel word, is soos in die aanhef
hiervan aangewys (en
word hierin na verwys as “die eerste
trustee”).
4.2
Daar moet te alle tye minstens 1 (een) trustee in amp wees.
4.3
Indien die aantal trustees, om welke rede ookal, benede die vereiste
minimum getal daal,
word die getal binne 60 (sestig) dae deur die
oorblywende trustees aangevul. As dit, om welke rede ookal, nie
moontlik is nie,
of nie gedoen is nie, kan die begunstiges in esse –
indien nodig deur hulle voodge bygestaan – sodanige vakature
aanvul;
Tot tyd en wyl die
vakatures aangevul is, is die oorblywende trustee or trustees
gemagtig om alle magte van trustees uit te oefen
vir die behoud van
die trustbates.
4.4
Die trustees is geregtig om bykomstige trustees van hulle keuse te
benoem en aan te stel
onderhewig aan die volgende beperkende
bepalings:
4.4.1 Indien
enige trustee ‘n getroude persoon is, sal enige gade van hom of
haar nooit kwalifiseer om as ‘n
trustee van die trust te ageer
nie tensy die diensdoende trustees eenparig en gesamentlik so besluit
en notuleer of sodanige gade
ingevolge sub-paragraaf 4.4.2
testamentêr aangewys is.’
[50]
The applicant’s complaint against the
second respondent is limited to his concise assertion:
‘
[On]
a proper interpretation of clauses 4.4 and 4.4.1 … the
appointment of [a] further trustee, being a spouse of one of
the
trustees, is only permissible if the trust had more than one trustee
and those trustees took a decision in terms of clauses
4.4 and 4.4.1.
… [T]he second respondent’s aforesaid nomination,
subsequent acceptance and appointment as trustee
were done against an
express provision of the trust deed and is therefore null and void.’
[51]
In
response to this challenge the respondents assert that clause 4.2
unambiguously stipulates that there should always be at least
one
trustee in office, and since clause 1.1 prescribes that words
denoting the singular shall include the plural and
vice
versa
,
the wording ‘diensdoende trustees’ in clause 4.4.1 meant
that the first respondent took a valid decision and was empowered
to
appoint the second respondent as trustee. Where the applicant has not
put up any further challenge supported by facts with reference
to the
trust deed the respondents’ interpretation accords with the
current state of the law in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[23]
regarding the interpretation of written instruments. Appositely,
whatever the language of the document, objective consideration
must
be given to the language employed in the light of the ordinary rules
of grammar and syntax with preference accorded to a sensible
meaning
and not one that leads to an insensible result.
[24]
The removal of the
respondents as trustees
[52]
A
trustee is a person in a fiduciary position and is obliged in dealing
with the money or property of a beneficiary to observe due
care and
diligence – this on the standard analogous to that of the
prudent and careful man.
[25]
A
court has the inherent power to remove a trustee from office either
in terms of the common law or the Act. Section 20(1) of the
Act
provides that:
‘
A
trustee, may, on 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.’
[53]
In
a concise exposition of the law the Supreme Court of Appeal in
Haitas
v Froneman and Others
[26]
stated:
‘
The
general principle is that a court will exercise its common law
jurisdiction to remove a trustee if the continuance in office
will be
detrimental to the beneficiary or will prevent the trust from being
properly administered. A trustee has a fiduciary duty
to act with due
care and diligence in administering the property on behalf of
another. However courts have taken a pragmatic approach
as to what
misconduct should be construed as imperilling trust assets.’
[54]
Further
in the judgment the Court went on hold
[27]
:
‘
[T]he
conduct of the trustees must be detrimental to the trust assets and
it is only then that their conduct may warrant removal.
It is not
necessary that their conduct be unimpeachable, but generally where
there is no impropriety and no financial gain on the
part of the
trustees, courts will not interfere.
[55]
Elsewhere
the Court made the further observation:
[28]
‘
That
the trustees, have in some respects, been lax in maintaining proper
accounting records of the trust cannot be denied. …
It was not
necessary to apply for the trustees removal to obtain financial
disclosures. This could have been obtained by far less
drastic
remedial action. In … the notice of motion it is exactly this
that is sought.
…
The appellant and his
mother disapprove of the manner in which the trust is being run but
this does not mean that it is rendered
dysfunctional.’
[56]
To
sum up, to succeed in obtaining relief against the respondents the
applicant must prove that their conduct imperils the trust
property,
or its proper administration
[29]
,
or is detrimental to him as beneficiary. In that regard the enquiry
is factual.
[30]
Mere fiction
or enmity between the trustee and the beneficiary/beneficiaries will
not in itself be adequate reason for the removal
of the trustee from
office.
[31]
[57]
The indubitable legal position set out in
the prescripts referred above were relied upon by the respondents and
have been of assistance
to this court in arriving at a decision.
[58]
As previously indicated the essence of the
applicant’s case is that there is no impropriety in the
administration of the trust.
His compliant is that the respondents
have refused to account. To begin with, there is no manifestation of
an overt refusal by
the respondents to account. Indications from the
answering papers are that the respondents (without specifying when
exactly), have
provided the applicant with financial
information/statements for the period 2005-2012, notwithstanding
being bombarded by a myriad
of requests to disclose information which
requests, they maintain, were continuously altered.
[59]
The second respondent pointedly states that
both he and the first respondent have always been willing to account
for their administration
of the trust. Although the respondents set a
deadline for compliance by 30 November 2021 but subsequently agreed
to the period
in the order taken before Bloem J, the requests
required scrutiny of historical documents going back to the date of
the appointment
of the first respondent as trustee and even dates
preceding that appointment. While failure to keep to self-imposed or
agreed timelines
may be scorned, the content of the answering papers,
particularly on disputed issues, precludes concluding that the
respondents’
conduct amounts to a refusal.
[60]
In the context of the applicable law I turn
to consider whether the respondents’ alleged refusal to account
imperils the administration
of the trust property or is detrimental
to the applicant.
[61]
Contrary
to what was argued regarding ‘fraud and theft’, it is not
the applicant’s case that the property is imperilled
by such
conduct, nor has he shown that the respondents’ alleged refusal
to account has imperilled the property. The second
respondent has put
up a detailed version of the maintenance, improvements, repairs and
upkeep of the property, the benefits of
which the applicant enjoyed
when he resided there. In reply, the applicant does not deny these
assertions and merely dismisses
them as being irrelevant. Far from
any indication that the property is imperilled, it is clear that it
has been improved and is
maintained. While there can be no doubt that
the respondents have been lax in consistently maintaining accounting
records (and
even minutes, whether in accordance with the trust deed
itself or legislation such as the Companies Act
[32]
as was argued by analogy), it has not been shown how such conduct is
detrimental to the interests of the applicant or imperilled
the only
asset in the trust such that the respondents’ removal as
trustees is necessitated.
[62]
Despite
these findings it is necessary to consider the applicant’s
apprehensions mentioned in his founding affidavit. Because
there are
factual disputes on these aspects, it is prudent to observe that
motion proceedings, as a rule, are determined on the
basis of common
cause facts
[33]
. It is well
established under the
Plascon-Evans
rule that where 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.’
[63]
The applicant avers:
(a)
that in the 2005/2006 financial statements of the trust, a loan
account of R3,5 million appears in regard to which he has not been
informed of its origin and purpose;
(b)
that in 2008 the property was encumbered with a mortgage bond in
favour of Nedbank Limited in the amount of R1,7 million for which
he
has not been informed of its purpose or what became of the proceeds
thereof; and
(c)
that ‘other properties and businesses registered in the trust’s
name were sold for an amount in excess of R1,1 million’
and a
life policy in the amount of R1,1 million was paid to the first
respondent instead of the trust.
[64]
The
second respondent in paragraphs 27 to 35 of the answering affidavit
provides a detailed response to the applicant’s apprehensions.
It is not intended to reproduce the lengthy explanations in those
paragraphs save to state that they prompt disputes of fact more
particularly in the light of new matter raised by the applicant in
reply thereto, which ought properly – in the first instance
–
to have been dealt with in the founding affidavit. The material in
reply poses a drawback for the relief sought in paragraph
6.4 of the
founding affidavit. The order calling upon the Master to direct the
respondents ‘to account’ is open-ended.
A prayer for
specific relief must be formulated with precision and must be
consistent with the preceding allegations of fact. Where
the
allegations are unclear from his affidavits in the main application,
and where the applicant has not specified in his order
what exactly
he requires by calling on the respondents ‘to account’,
such an order may be incapable of enforcement,
and a court should
refrain from granting it.
[34]
To illustrate the irrationality of the applicant’s approach it
was impermissibly mentioned from the bar that statements for
amounts
of R1.65 million and R689 000 were not before the court. It is
indubitable that these are not insubstantial amounts
but if they were
issues in the applicant’s complaint, they ought to have been
properly identified and dealt with in his papers,
foreshadowing them
in his relief.
[65]
For these reasons the application falls to
be dismissed.
[66]
There is a further disquieting aspect about
the matter that bears mentioning. In the main application, the
founding and replying
affidavits were filed during January and March
2022. In his heads of argument respondents’ counsel points out
that on 2 August
2022 the respondents supplied the applicant’s
attorneys with the annual financial statements of the trust for the
years ending
2005 until 2021. This occurred in the course of the
contempt application (subsequent to the filing of the replying
affidavit therein)
and is confirmed by the applicant’s attorney
in in an affidavit dated 10 August 2022. In that affidavit
she identifies
the financial statements as annexures X1 to X17.
[67]
Despite the detail in the financial
statements traversing some 221 pages, she goes on to state that the
financial statements are
relevant for adjudicating the main
application.
[68]
The approach constitutes an abuse of
process.
[69]
Exactly on what issues in the main
application do the statements assume relevance is perplexing in the
light of the fact the applicant’s
papers in that application
were never supplemented. There is no indication by the attorney that
the applicant’s apprehensions
in the founding affidavit to the
main application have been laid to rest or whether they persist
notwithstanding the availability
of the financial statements.
Presumably, it might have been contemplated that the several thousand
entries in those statements
would have been dealt with in oral
argument.
[70]
For
the above reasons, the true basis for the contention that the
respondents have failed and/or refused to account is wanting where
the obligation to expatiate it rested with the applicant. Little
credit, if I might add, goes to those responsible for the preparation
of his papers.
[35]
Traversing
the material in the contempt application would not have lent any
assistance for reasons already mentioned.
[71]
For what it is worth, the adversarial
approach adopted by the applicant may have been justified had a
proper case been made out
in the main application. It is not intended
to repeat what is said by the respondents about the years they had
long spent in affectionately
nurturing him as their son. It is clear
that the applicant has his own point of view, but the friction or
resentment engendered
in his papers will not carry the day on a
woefully inadequate set of papers.
Conclusion
[72]
There remains one issue – costs.
[73]
The applicant has not been successful and
costs must follow the result.
[74]
The parties agreed that the costs in the
contempt application would be costs in the cause.
[75]
The
respondents did not seek punitive costs but contended that the costs
of counsel be awarded on scale ‘C’ of uniform
rule 67A.
The rule addresses itself only to awards of costs as between party
and party and permits a court to exercise control
over the maximum
rate at which the fees of counsel can be recovered under such an
award.
[36]
[76]
In the present matter the applicant argued
a case that was undoubtedly not articulated in his papers.
[77]
His arguments were replete with emotive
allegations without due consideration of their relevance and whether
there was a plausible
basis for them.
[78]
The record speaks for itself.
[79]
And
as for the correspondence and annexures, no more needs to be
said.
[37]
[80]
This judgment demonstrates that the entire
case was determined on the basis of the
Plascon-Evans
rule and that the acknowledged standards for the drafting of
affidavits were wanting.
[81]
The argument for the respondents was crisp
and focussed, and so too was the material contained in their heads of
argument.
[82]
My sense is that the scale for counsel’s
fees should not be lowered.
[83]
Information on file indicates that there
were two reserved costs orders; the first of which appears in the
order taken before Bloem
J on 23 August 2022, and the other appears
in an order granted by Smith J (as he then was) on 30 November 2023.
The circumstances
that gave rise to these orders were not dealt with
in argument and it is considered unnecessary to make orders in
respect thereof.
[84]
In the result the following order issues:
1.
The main application is dismissed.
2.
The applicant shall pay the first and
second respondent’s costs on the scale as between party and
party including of the fees
of counsel on scale ‘C’ in
terms of uniform rule 67A.
3.
The applicant is further ordered to pay the
costs of the contempt application on the same basis as in paragraph 2
hereof.
M S RUGUNANAN
JUDGE OF THE HIGH
COURT
Appearances:
For
the Applicant:
R. Liddell
, instructed by Schwimm Venter Inc.,
c/o Wheeldon Rushmere and Cole Inc., Makhanda, (Ref Mr van der Veen).
For
the First and Second Respondents:
C. M. Rip
, instructed by
Wentzel & Partners Attorneys, c/o Whitesides Attorneys, Makhanda
(Ref: Mr Barrow/Mr Malaza).
Date
heard:
09 May 2024.
Date
delivered: 04 October
2024.
[1]
With effect from 29 December 2022, the Act has been amended by
the
General Laws (Anti-Money Laundering and Combatting Terrorism
Financing) Amendment Act 22 of 2022 as per Government Notice
1535 in
Gazette No. 47815.
[2]
Ras
NNO v Van der Meulen
2011
(4) SA 17
(SCA) para 9. See also the discussion in Geach,
Trust
Law in South Africa
,
Juta 2017 p238 para 5.18.1.2.
[3]
In
clause 18.4.
[4]
Clause 18.4.4.
[5]
Minister
of Land Affairs and Agriculture v D & F Wevell Trust
2008
(2) SA 184
(SCA) at 200D.
[6]
Director
of Hospital Services v Mistry
1979
(1) SA 626
(A) at 635H and
Elegant
Line Trading 257 CC v MEC for Transport, Eastern Cape
[2022] ZAECBHC 45 para 2.
[7]
My
Vote Counts NPC v Speaker of the National Assembly
2016
(1) SA 132
(CC) para 177, and see the authorities referred to in the
footnote thereto.
[8]
Courtney-Clarke
v Bassingthwaighte
1991 (1) SA 684
(Nm) at 690A.
[9]
Gilbey
Distillers & Vintners (Pty) Ltd v Morris NO
1990 (2) SA 217
(SECLD) at 226A.
[10]
Van
Loggerenberg, Erasmus Superior Court Practice, D1-58C, D1-58D
[Service 20, 2022].
[11]
Concomitantly protracting argument and adding to the generation of a
sizeable record.
[12]
See
Ramaphakela
v Municipal Employees Pension Fund and Another
[2024]
ZAGPJHC 634 para 8 in which
TWK
Agriculture Holdings (Pty) Ltd v Hoogveld Boerderybeleggings (Pty)
Ltd and Others
[2023] ZASCA 63
was quoted with approval in the context of assessing
an application for leave to appeal. The principle applies by parity
of reasoning.
[13]
Updated Joint Rules 3, 8 and 15 for the Eastern Cape Division of the
High Court issued under directive of the Judge President
on 27
January 2023.
[14]
2003 (4) SA 258
(W) at 265B-D.
[15]
According to the notice of motion, in his capacity as representative
of Wealth Succession Trustees and Executors (Pty) Ltd.
[16]
Sections
10, 11, and 17.
[17]
Section
6(1A).
[18]
Yannakou
v Apollo Club
1974 (1) SA 614
(A) at 623F-624E;
Courtney-Clarke
v Bassingwaithe
1991
(1) SA 684
(Nm) at 690A.
[19]
According to the applicant the purchase price was R240 000. In
his founding affidavit executed on 14 January 2022, he attaches
a
‘GhostConvey’ deeds office property search printed on 29
June 2015, some seven years prior to the institution of
these
proceedings. The document contains a disclaimer as to the accuracy
of the information it contains.
[20]
Case No 6386/2002 and Case No 6500/2003 in what was then known as
the Transvaal Provincial Division (TPD).
[21]
https://www.saflii.org/za/legis/consol_reg/ruttpca1988546/
(accessed on 29 September 2024)
[22]
Section 165(4) of the Constitution.
[23]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) para 18.
[24]
Ibid
para
18.
[25]
Gowar
and Another v Gowar and Others
2016 (5) SA 225
(SCA) para 25 in which reference is made to
Sackville
West v Nourse and Another
1925 AD 516
at 534.
[26]
[2021] ZASCA 1
para 30; see also the reference to
Sackville
West v Nourse & Another
1925
AD 516
at 52 and
Gowar
and Another v Gowar and Others
2016 (5) SA 225
(SCA) in fn 6 of the judgment.
[27]
Para 36.
[28]
Paras 36 and 40.
[29]
Gowar
and Another supra
paras
30, 31 and 37.
[30]
Fletcher
v McNair
[2020]
ZASCA the 135 para 26.
[31]
Gowar
and Another supra
para
31 in which reference is made to
Tijmstra
NO v Blunt-Mackenzie NO & others
2002 (1) SA 459
(T) at 473E-G, see also
Dhlomo
NO and others v Chalwa NO and another
[2023] ZAKZPHC 131 paras 63-65.
[32]
Act 61 of 1973.
[33]
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 27.
[34]
Mansell
v Mansell
1953 (3) SA 716
(NPD) at 721E.
[35]
A comment appositely made by Wallis JA in
Knoop
v Gupta
2021
(3) SA 88
(SCA), para 145 in his trenchant condemnation of the
practitioners responsible for the preparation of papers in that
matter,
and his sobering reminder of the professional responsibility
upon practitioners who draft papers for their clients.
[36]
Mashava
v Enaex Africa (Pty) Ltd
[2024] ZAGPJHC 387 para 5.
[37]
But see again
Knoop
v Gupta supra
para
145.