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[2020] ZASCA 135
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Fletcher v McNair (1350/2019) [2020] ZASCA 135 (23 October 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
No: 1350/2019
In the matter between:
WARREN
JOHN FLETCHER
APPELLANT
and
GILLIAN
CLAIRE MCNAIR
RESPONDENT
Neutral
citation:
Fletcher v McNair
(1350/2019)
[2020] ZASCA 135
(23 October 2020)
Coram:
CACHALIA,
MAKGOKA
AND PLASKET JJA AND
EKSTEEN AND SUTHERLAND
AJJA
Heard:
7 September 2020
Delivered:
This judgment was handed down
electronically by circulation to the parties’ representatives
by email, and by publication on
the Supreme Court of Appeal website
and release to SAFLII. The time and date for hand down is deemed to
be 10h00 on the 23
rd
day of October 2020.
Summary:
Trust
—
trustee —
removal of — breakdown in relationship between co-trustees
originating from outside the Trust – on its
own not sufficient
for removal of co-trustee — determinative test always whether
Trust property and affairs imperilled.
ORDER
On
appeal from:
Gauteng Division of the
High Court, Pretoria (Vally J with Wepener and Mahalelo JJ
concurring, sitting as court of appeal): judgment
reported
sub
nom
McNair v
Crossman
2020 (1) SA 192
(GJ).
1
The appeal is upheld with costs, which includes the costs in the
application
to adduce further evidence.
2
The order of the Full Court is set aside and substituted with the
following:
‘
The
appeal is dismissed with costs.’
JUDGMENT
Makgoka
JA (Cachalia and Plasket JJA and Eksteen and Sutherland AJJA
concurring):
[1]
This appeal concerns the removal of
the appellant, Mr Warren Fletcher, as a trustee of the McNair Family
Trust (the Trust) at the
instance of the respondent, Mrs Gillian
McNair. Sitting as the court of first instance in the Gauteng
Division of the High Court,
Johannesburg (the high court), Mudau J
dismissed the respondent’s application with costs. On appeal,
the Full Court reversed
the decision and removed the appellant as a
trustee and replaced him with the respondent’s sister. With the
special leave
of this court, the appellant appeals against the order
of the Full Court.
[2]
The Trust is an inter vivos one,
created by a deed of trust in 2006 in terms of which Mrs Morag
Crossman was the founder and first
donor. The first trustees were her
husband, Mr Gerald Crossman (Mr Crossman), her son, the late Mr
Steven McNair (the deceased)
and his wife, the respondent. Mr
Crossman was the deceased’s stepfather. The respondent and her
two adult children
are the beneficiaries of the Trust. In terms of
the deceased’s Will the appellant replaced the deceased as a
trustee upon
the latter’s death. The respondent and Mr Crossman
are the co-executors of the deceased’s estate.
[3]
The Trust assets comprise a share
portfolio worth approximately R2.8 million and a 75 percent
shareholding in a property-owning
company, Top Spin Investments 101
(Pty) Ltd (Top Spin). Mr Crossman owns the remaining 25 percent of
the shares in Top Spin. The
respondent and Mr Crossman are
co-directors of Top Spin, which purchases, sells and lets property.
It relies on rental income to
meet its financial obligations.
[4]
During
his lifetime, the deceased was a businessman. As of March 2008 and
until shortly before his death in August 2010, he was
a 75 percent
shareholder and director of Applied Pneumatics SA (Pty) Ltd
(Applied), which sold pneumatic products, but is now in
liquidation.
[1]
Mr Crossman was
also a 25 percent shareholder and director of Applied. The deceased
was involved in the day to day management of
Applied that leased
several properties from Top Spin in Port Elizabeth, Johannesburg, and
Richards Bay.
[5]
The deceased was diagnosed with a
terminal cancer in February 2010. When his demise became inevitable,
he invited his brother, Mr
David McNair (Mr McNair), to become
involved in the management of Applied. He also transferred 24 percent
of his shareholding in
Applied to Mr McNair, and thus retained 51 per
cent of the shares. Four days before his death, Mr McNair and the
respondent were
appointed as directors of Applied. Thus, when the
deceased died, the shareholding in Applied was as follows: the
deceased (51 percent);
Mr Crossman (25 percent) and Mr McNair (24 per
cent). As a result, upon his death, the deceased’s estate held
his 51 per
cent shareholding.
[6]
After the deceased’s death, Mr
McNair continued his managerial duties in Applied, until June 2015,
when the relationship between
him and the respondent soured, and the
respondent took over as a manager. The reasons for the fall-out
between the respondent and
Mr McNair are not germane to the dispute
in this appeal. Suffice it to say that it created much tension
between them and affected
the smooth running of Applied. They did not
agree on how Applied had to be managed. They accused each other of
misappropriation
of funds, and they laid criminal charges against
each other in this regard.
[7]
Meanwhile, the relationship between
the respondent, on the one hand, and the appellant and Mr Crossman,
on the other, also deteriorated,
both in their capacities as
shareholders of Top Spin and as trustees. The respondent accused the
appellant and Mr Crossman of excluding
her from the affairs of Top
Spin, and of siding with Mr McNair in respect of her conflicts with
him, or at the very least, of being
supine in the face of what she
considered oppressive conduct on the part of Mr McNair against her.
The respondent further accused
the appellant and Mr Crossman of not
acting in the best interests of the Trust and of having conflicts of
interest.
[8]
In this regard, it has to be pointed
out that apart from being a trustee, the appellant is an accountant,
and a director of Alchemy
Financial Services Incorporated (Alchemy
Finance). That entity was responsible for the monthly bookkeeping for
Top Spin and the
secretarial administration of Top Spin, Applied and
the Trust. As a representative of Alchemy Finance, the appellant
operated the
bank account of Top Spin. The appellant was also a
representative of Alchemy Audit Services Incorporated (Alchemy
Audit), which
was the auditor of Top Spin and was appointed to
administer the deceased’s estate.
[9]
The complaints by the respondent
against the appellant and Mr Crossman, as set out above, gave rise to
three issues. The first concerned
Applied’s debt to Top Spin,
for which she became personally liable. The second was about the sale
of a Top Spin property
in Port Elizabeth. The third related to a
distribution agreement involving Applied. Below is a summary of each.
[10]
Regarding the first, Applied owed
rental money to Top Spin in respect of the properties it leased from
Top Spin. On 12 November
2015 during a shareholders’ meeting of
Top Spin the respondent assumed personal liability for the debt,
should Applied not
pay it within three months, and it was resolved as
such. As of February 2016, Applied had still not settled its debt to
Top Spin.
On 8 February 2016, the respondent requested Mr McNair’s
cooperation to release certain of Applied’s funds to enable
it
to meet its obligations. Mr McNair refused. The respondent complained
that the appellant and Mr Crossman, knowing that Applied
had funds to
settle its debt to Top Spin, stood by and did nothing about Mr
McNair’s refusal to release the funds.
[11]
A shareholders’ meeting of Top
Spin was held on 24 March 2016. Only the appellant and Mr Crossman
attended. The respondent
had earlier indicated her unavailability to
attend due to short notice and had requested the meeting to be
rescheduled to a later
date. Her request was not acceded to, and the
meeting went ahead in her absence. Two relevant resolution were taken
in that meeting:
first, to take legal action against the respondent
for Applied’s debt, pursuant to her undertaking in the meeting
of 12 November
2015. Second, to sell one of Top Spin’s
properties in Port Elizabeth.
[12]
Pursuant to the first resolution, on
12 April 2016, Top Spin’s attorneys sent a letter of demand to
the respondent, after
which she paid Applied’s debt. The
respondent complained that the decision to pursue legal action
against her only, and not
jointly with Applied, was a vendetta
against her by the appellant and Mr Crossman aimed at ruining her
financially. The respondent
suggested that the decision to sell the
Port Elizabeth property, taken in her absence, served as proof that
the appellant and Mr
Crossman were intent on excluding her from the
decision-making in Top Spin and indirectly, in the Trust.
[13]
The respondent’s complaint
about the distribution agreement was this: In July 2006, Applied’s
international supplier
requested a letter confirming Applied’s
shareholding. The respondent requested the appellant, in his capacity
as a representative
of Alchemy Finance, to write the requested
letter. The appellant obliged, but also mentioned in the letter that
Applied’s
shareholders and directors were engaged in both
criminal and legal proceedings against each other.
[14]
The respondent objected to the
reference to her regarding the criminal charges, and pointed out
that, at that stage, the only charges
were those laid by her against
Mr McNair, and there were none against her. The appellant refused to
amend the letter, and the respondent
elected not to send it. As a
result, the international distributor cancelled the agreement, and
later transferred it to Mr McNair’s
newly formed company. The
respondent held this out as an example of the appellant’s
collusion with Mr McNair and Mr Crossman
to harm the business of
Applied.
[15]
Against
this factual background, the respondent launched an application in
the high court for the removal of the appellant and Mr
Crossman as
trustees of the Trust. The application came before Mudau J, who
dismissed it with costs in the light of this court’s
decision
in
Gowar.
[2]
He subsequently granted leave to appeal to the Full Court.
Before the appeal was heard by the Full Court, Mr Crossman resigned
as a trustee, and thus took no part in the appeal. That was still the
position in this court.
[16]
The respondent’s appeal was
upheld by the Full Court, which granted an order removing the
appellant as a trustee and replaced
him with the respondent’s
sister. The appellant is aggrieved with that order, hence the appeal
to this court.
[17]
Before I consider the Full Court’s
reasoning and conclusion, it is necessary to restate the law on the
removal of trustees
in the light of certain remarks by the Full Court
on this subject.
[18]
The court has inherent power to remove a trustee from
office at common law.
This power is also sourced
in s 20(1) of the Trust Property Control Act 57 of 1988 (the Act)
which provides that:
‘
20.
Removal of trustee ─
‘
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 his removal will
be in the interests of the Trust and its beneficiaries.’
[19]
Our jurisprudence on the removal of
trustees is neatly collated in
Gowar
at
paras 31-32. There, Petse JA undertook a useful examination of
authorities, from which the following principles can be distilled:
(a) the court may
order the removal of a trustee only if such removal will, as required
by s 20(1) of the Act, be in the interests
of the Trust and its
beneficiaries;
(b) the power of
the court to remove a trustee must be exercised with circumspection;
(c) the
sufficiency of the cause for removal is to be tested by a
consideration of the interests of the estate;
(d) the deliberate
wishes of the deceased person to select persons in reliance upon
their ability and character to manage
the estate, should be
respected, and not be lightly interfered with;
(e) where there is
disharmony, the essential test is whether it imperils the Trust
estate or its proper administration;
(f) mere
friction or enmity between the trustee and the beneficiaries will not
in itself be an adequate reason for the
removal of the trustee from
office;
(g) mere conflict
amongst trustees themselves is not a sufficient reason for the
removal of a trustee at the suit of another;
(h) neither mala
fides nor even misconduct are required for the removal of a trustee;
(i)
incorrect decisions and non-observance of the strict requirements of
the law, do not of themselves, warrant
the removal of a trustee;
(j) the
decisive consideration is the welfare of the beneficiaries and the
proper administration of the Trust
and the Trust property.
[20]
With these principles in mind, I
consider three specific passages in the judgment of the Full Court,
which need clarification. The
first two appear in para 29. In the
first passage, the court mentioned that:
‘
The
court’s power to remove a trustee though is not restricted to
the statutory grounds. Its power to remove a trustee is
derived from
its inherent power which has been recognised in our law for over a
century and has now been entrenched in the law
by s 173 of the
Constitution of the Republic of SA, Act 108
[3]
of 1996 (the Constitution).’
[21]
Section 173 of the Constitution
reads:
‘
173.
Inherent power
–
The
Constitutional Court, Supreme Court of Appeal and High Courts have
the inherent power to protect and regulate their own processes,
and
to develop the common law, taking into account the interests of
justice.’
[22]
There are two distinct parts of s
173. The first relates to the court’s inherent power to
regulate its own processes. This
relates to matters of procedure. The
second concerns the court’s power to develop the common law,
which relates to substantive
issues of law. It is the latter power
that the court must have had in mind when it made that reference.
This is because the removal
of trustees is an issue of substantive
law, and not of procedure. The Full Court’s reference to the
court’s inherent
power in relation to the removal of trustees
should therefore not be conflated with the court’s inherent
power to regulate
its own process. The court’s remarks should
thus be understood to mean that in terms of s 173 of the
Constitution, the court
has inherent power to develop the common law
on the removal of trustees, where the interests of justice dictate.
[23]
In the second passage in para 29,
the court discussed a possible further ground on which a trustee may
be removed at common law.
After pointing out that courts have
traditionally removed a trustee for misconduct, incapacity or
incompetence, the court said
the following:
‘
Though
it must be said that each of these three grounds may also be a basis
for an application for removal in terms of s 20(1) of
the Act if it
can be proved that the alleged misconduct, incapacity or incompetence
imperils the Trust property or the administration
of the Trust and
courts have often found this to be the case. However, there is a
further ground, which I elaborate upon below.
It is that the
relationship between co-trustees has broken down to the extent that
they no longer have any mutual respect and trust
for each other. This
too, can be brought under s 20(1) of the Act, for it could imperil
the property or administration of the Trust.
But it does not always
have to be so.’
[24]
Later, at para 35 the court
elaborated on this ground:
‘
[E]ach
[of the Trustees] should accept that despite their differences the
other is acting in the best interest of the Trust and
its
beneficiaries. Once that mutual respect and trust is lost then their
position as co-trustees is imperiled. At that point the
dial has
moved and the administration of the Trust as well as the management
of its property is placed at risk. Put differently,
their
incompatibility places the Trust property and its affairs at risk. It
is a risk that the Trust should not be exposed to for
the obvious
reason that should it eventuate the detrimental effect on the Trust
could be devastating and irreversible.’
[25]
The suggestion that ‘once
mutual respect and trust is lost’ then ‘the
administration of the Trust as well as the
management of its property
is placed at risk’ should be qualified. I assume that
what the court meant to convey was
that if the loss of mutual respect
and trust among trustees results in the Trust property being
imperiled, that could form a basis
for removal of one or more of the
Trustees. This seems to tie in with the court’s earlier remarks
when introducing this topic.
[26]
It has to be so, because loss of
mutual trust and respect does not, without more, translate to a
ground for the removal of a trustee,
or to a conclusion that the
Trust property has been imperiled. It must further be established
that, as a result, the Trust property
has been imperiled or the
administration of the Trust and the management of its property are at
risk. That is a factual enquiry.
In other words, it cannot be assumed
a priori that because there is lack of trust, respect or
compatibility among trustees, the
Trust property is imperiled, and
therefore, the removal of a trustee is justified. The determinative
test is always whether any
state of affairs – be it
incompetence, misconduct, incapacity, or lack of trust and respect
among trustees or beneficiaries
– has resulted in the
Trust property or its proper administration being placed at risk.
[27]
The other remarks appear in para 33,
where the court sought to distinguish
Gowar
as follows:
‘
It
is important to note that while the appellant and her children as
beneficiaries seek the removal of the second respondent as
trustee
the appellant also does so as a co-trustee. To that extent the
learning in
Gowar
…is of limited value to our facts for it focusses only on the
conflict or enmity between a beneficiary and a trustee, and
not
between co-trustees.’
[28]
With respect, there is no basis in
our law for this distinction. The grounds on which a trustee may be
removed do not depend on
who the applicant is, be it a trustee, a
beneficiary or any other interested person. This purported
distinction led the Full Court
to an erroneous belief that it was not
bound by
Gowar
,
whereas it was, and obliged to follow it. Its misdirection led it
astray, as demonstrated below.
[29]
I turn to the reasoning of the Full
Court. It upheld the appeal on two bases. First, it found that the
counter-accusations between
the respondent and the appellant showed
that they had lost respect and trust for each other. This, it said,
was sufficient for
the removal of both as trustees. However, as there
was no counter-application by the appellant, he was the one to be
removed. The
court said:
‘
The
contentions of the second respondent [the appellant] notwithstanding,
in my judgment the allegations made by him against the
appellant
together with the allegations made by the appellant [the respondent]
against him reveal an indisputable fact: the enmity
between them is
very deep. Aligned to this fact is more than a reasonable probability
that neither of them will recover from such
deep enmity in the near
future. They clearly have no trust and respect for each other and
this state of affairs will not abate
anytime soon.’
[30]
After noting that the removal of
both parties as trustees was alluded to during the hearing, and that
it could not entertain that,
the court proceeded as follows:
‘
All
that was before the Court was that she and the second respondent had
no respect for each other, had lost all trust and confidence
in each
other and that the continuation in office by the second respondent
would make it impossible for the Trust’s affairs
to be
diligently conducted by the Trustees. Hence, the application for his
removal. The Court should, therefore, restrict itself
to the issue of
his removal only. Had either of the respondents brought an
application for the simultaneous removal of the appellant
the outcome
may have been different. It is not necessary though for us to
speculate on the issue. The only issue before us is the
removal of
the second respondent. On that issue I hold that the appeal should
succeed.’
[31]
I assume, for present purposes, that
the Full Court was correct in its observation that the
counter-accusations between the respondent
and the appellant had
created enmity between them and had eroded mutual trust and respect.
But it is instructive that nowhere in
its reasoning, did the court
attribute that solely to the appellant. On the contrary, it appears
that the court considered both
the respondent and the appellant to be
equally responsible. This is apparent from the remarks that ‘had
either of the respondents
brought an application for the simultaneous
removal of the appellant the outcome may have been different.’
[32]
If,
in the view of the Full Court, both were responsible for the state of
enmity, lack of trust and respect, it is inexplicable
why the
appellant was removed. It appears on the court’s reasoning that
he was removed because he did not bring a counter-application
for the
removal of the respondent. This is clearly wrong. What is more, these
were motion proceedings. There is no suggestion that
the appellant’s
averments were far-fetched or clearly untenable. If the scale was
evenly poised, as the court’s reasoning
suggests, then a real,
genuine and bona fide dispute of fact arose – the type
envisaged in
Wightman.
[4]
A final order should not have been granted unless the court was
satisfied that the conduct of the appellant imperiled the Trust
property or its proper administration or that his removal would
otherwise be in the interests of the Trust and its beneficiaries.
[33]
I turn now to the second basis. The
Full Court found that the appellant had damaged Applied’s
business by stating in the letter
to the international distributor
that the shareholders of Applied had laid criminal charges against
each other. I have discussed
this in paras 13 and 14 above. Of this
issue, the court said (at para 37):
‘
There
is another reason why the appeal should succeed. The court a quo did
not consider the fact that the second respondent [the
appellant]
falsely represented to a third party that the appellant [the
respondent] was subjected to a criminal charge with regard
to her
conduct at Applied; refused to withdraw the representation when the
true facts were brought to his attention and that his
action
significantly damaged the business of Applied. While this significant
failure of judgment on his part concerned Applied
and not the Trust,
it must be remembered that his roles in both Applied and the Trust
were very closely connected. This is manifested
in, inter alia, the
allegations he made against the appellant in his answering affidavit
… and in the meetings of the shareholders
of Top Spin (in
which the Trust is the majority shareholder) where the issue with
regard to Applied took central stage. In other
words, the
misrepresentation of the true facts with regard to the affairs of
Applied contaminated the business affairs of the Trust.
It, I hold,
justifies his removal as a trustee of the Trust.’
[34]
The Full Court misconstrued the
facts. As explained already, the letter was never sent to the
intended recipient. When the appellant
refused to amend the letter as
requested, the respondent decided not to transmit it to the
international distributor. Thus, the
reason the distribution
agreement was cancelled was not because of the letter, as the Full
Court incorrectly assumed. On the respondent’s
version, the
agreement was cancelled and later transferred to Mr McNair’s
company, as a result of Mr McNair’s false
representations about
Applied to the international distributor. Accordingly, there was no
false representation by the appellant
to a third party, as found by
the Full Court. Its conclusion was based on an incorrect
understanding of the facts. Consequently,
it erred in relying on this
as a basis for the removal of the appellant.
[35]
The Full Court seemingly drew a
negative inference against the appellant for inviting Mr McNair to
the meeting of Top Spin shareholders
on 12 November 2015. According
to the respondent, Mr McNair was not a shareholder of Top Spin. The
appellant’s explanation
was that the information at his
disposal then, was that Mr Crossman had sold his 25 percent
shareholding in both Top Spin and Applied
to Mr McNair and resigned
as director of both companies. On that understanding, Mr Crossman
could be present as a trustee. The
respondent fully participated in
that meeting, without objection to either Mr Crossman or Mr McNair’s
presence. Her legal
representative was present in that meeting.
Despite the Full Court making much of this aspect and devoting a
great deal of attention
to it, there is simply nothing to it.
[36]
The Full Court did not deal with the
other complaints by the respondent, namely the decision to pursue her
for Applied’s debt
to Top Spin and the sale of the Port
Elizabeth property. The first one was a major issue on the papers and
in the court of first
instance. As I have already mentioned, both
decisions were taken in a Top Spin shareholders’ meeting on 24
March 2016. I
consider each briefly. As stated earlier, the first
decision stemmed from the respondent’s undertaking in a meeting
of 12 November
2015 to personally assume Applied’s debt to
Top Spin, should Applied fail to settle the debt within three months.
[37]
The respondent sought to suggest
that she made the undertaking under duress, and that the appellant
had failed to advise her that
she had no legal obligation to make the
undertaking. There is no merit in this suggestion for the simple
reason that the respondent’s
legal representative was present
in that meeting. The respondent’s attempt to infer a sinister
motive in the decision by
the appellant and Mr Crossman in the
meeting of 24 March 2016 similarly lacks merit. They were entitled to
pursue legal action
based on an undertaking, voluntarily and validly
made, by the respondent. That they elected to pursue her and not
Applied is irrelevant.
The fact is that the respondent had not
complied with her undertaking to settle Applied’s debt. This
caused financial pressure
on the Trust investment where time was of
the essence.
[38]
This also contextualises the
decision to sell the property in Port Elizabeth. The decision was
necessitated by the respondent’s
failure to honour her
undertaking, which added pressure on Top Spin’s finances. The
appellant and Mr Crossman explained that
the property was vacant, and
they considered it a good commercial decision to sell it, based on
the financial implications for
Top Spin and ultimately, the Trust.
According to the respondent, the appellant and Mr Crossman had
conspired to sell the property
without consulting her, by taking that
decision in her absence on 24 March 2016. She said that when she
found out about the
sale, she initially sought to scuttle it but
later ‘reluctantly’ agreed to the sale.
[39]
In the light of the above, the
respondent’s attempt to show this decision as proof of
collusion between the appellant and
Mr Crossman to exclude her from
the decision-making in Top Spin is unsustainable. It is disingenuous
and lacks candour, especially
in the light of the fact that she later
agreed to it.
[40]
I turn now to the appellant’s
alleged non-action when Mr McNair declined the respondent’s
request to release some of
Applied’s funds. The respondent
complained that both the appellant and Mr Crossman stood by and did
nothing about Mr McNair’s
conduct. The Full Court agreed with
her and said that the appellant did nothing despite being ‘intimately
involved in the
affairs of Applied and Top Spin and therefore was
fully apprised of her efforts.’
[41]
To my mind, the criticism was
unwarranted. The appellant was not a shareholder or director of
Applied, and as such had no leverage
to force or prevail upon Mr
McNair to release the funds. Neither the respondent nor the Full
Court made any suggestion as to what
the appellant could possibly
have done about this. I am unable to think of any. The fact that he
was ‘intimately involved
in the affairs of Applied and Top Spin
and therefore was fully apprised of her efforts’ took the issue
no further.
[42]
In the final analysis, given the
nature of the shareholding in both Applied and Top Spin, the conflict
between the respondent and
Mr McNair in Applied, on the one hand, and
that in Top Spin between the respondent, Mr Crossman and the
appellant, on the other,
indirectly, spilled over to the Trust. But
there is no evidence that those frictions had any significant impact
on the administration
of the Trust. It seems the Trust is functioning
relatively well in the circumstances. Meetings are held where
effective decisions
are taken for the benefit of the Trust.
[43]
For example, in the meeting of the
Trustees on 25 May 2016 a wide range of issues were discussed, and
resolutions taken, despite
the acrimony between the respondent and
her co-trustees – the appellant and Mr Crossman. This meeting
is especially significant
in this regard because this is where the
respondent formally demanded the resignation of the appellant.
Despite that, the meeting
proceeded with its business. Another
meeting was held on 22 March 2017. A resolution was taken there
authorising the respondent
to transfer R50 000 from an
investment account into the Trust’s current account to pay for
various costs of the Trust.
What is more, the respondent and her
children, as the beneficiaries of the Trust, have received
distributions and loan repayments
of nearly R5 million. The Full
Court did not take into account any of these considerations.
[44]
I therefore conclude that the state
of the relationship of the appellant and the respondent has not
imperiled the Trust property
or its proper administration. I find no
other basis on which it would be in the interests of the Trust and
its beneficiaries to
remove the appellant.
[45]
This brings me to counsel for the
respondent’s invitation to this court to consider English law,
having referred us to several
authorities. I am not persuaded that we
need to resort to English law. Our law on the removal of trustees is
well-settled after
nine decades, starting with
Sackville
West v Nourse & another
1925 AD 156
and many others, right through to
Gowar
.
In any event, I find no discernable differences between English law
and ours. In both systems, the overriding consideration seems
to be
whether the Trust property is imperiled by any conduct of a trustee,
and whether the interests of the beneficiaries would
be served by
their removal. In exercising that power, the courts do so with
circumspection.
[46]
There remains the issue of costs.
The respondent made an application to adduce further evidence on
appeal. This related to the resignation
of Mr Crossman and whether
the Full Court was aware of this when it heard the appeal and the
impact thereof. This was irrelevant
for the purposes of this appeal.
After a brief debate during the hearing of the appeal, counsel for
the respondent did not persist
with the application. The respondent
has to bear the costs of that application.
[47]
In all circumstances, Mudau J was
correct in dismissing the respondent’s application in the first
instance and, as the Full
Court erred, as I have demonstrated, the
appeal has to succeed. The following order is made:
1 The appeal
is upheld with costs, which includes the costs in the application to
adduce further evidence.
2 The order
of the Full Court is set aside and substituted with the following:
‘
The
appeal is dismissed with costs.’
____________________
T M Makgoka
Judge of Appeal
APPEARANCES
For Appellant:
GM Young
Instructed
by:
Goërtz
Attorneys Inc., Randburg, Johannesburg
Symington
& De Kok, Bloemfontein
For
Respondent:
HP Van Nieuwenhuizen
Instructed
by:
Salant
Attorneys, Bedfordview, Johannesburg
Matsepes
Attorneys, Bloemfontein
[1]
The
final order of liquidation was granted on 2 June 2017.
[2]
Gowar
and Another v Gowar and Others
[2016] ZASCA 101; [2016] 3 All SA 382; 2016 (5) SA 225 (SCA).
[3]
The
Constitution was previously also numbered as if it were an Act
of Parliament – Act No.108 of 1996 – but,
since the
passage of the
Citation of Constitutional Laws Act of
2005
neither it nor the Acts amending it are allocated Act
numbers. The Constitution now is referred to and cited as ‘The
Constitution of the Republic of South Africa, 1996.’
[4]
Wightman
t/a JW Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
[2008] 2 All SA 512
;
2008 (3) SA 371
(SCA) para 13.