2
Introductory background
1. The first applicant and the first to third respondents are siblings. They are
the appointed trustees of the W Wypkema Trust with trust registration
number T1943/84 (the ‘Trust’) as well as the primary beneficiaries of the
Trust.1 They are cited in both their representative and personal capacities
in these proceedings.
2. I will refer to the siblings individually by their first names, in keeping with
how they were mentioned in the papers, namely ‘Otto’ (first and second
applicant), ‘Emma’ (first and fourth respondent), ‘Agatha’ (second and
fifth respondent, and ‘Wypke Jr’ (third and sixth respondent). Where I
refer to Otto, Emma, Agatha and Wypke Jr collectively, I will eith er refer
to them as ‘the trustees’ or ‘the primary beneficiaries’, or ‘the siblings’ ,
depending on the context. Where I refer to the respondents collectively,
namely Emma, Agatha and Wypke Jr, I will refer to them either as the
‘respondent trustees’ or the ‘respondent siblings’.
3. Oral argument was presented at the hearing of the matter by Adv S.
Symon SC and Adv J. Blaau SC on behalf of Otto. For Emma, Mr A. Franklin
SC presented oral argument. For Agatha, Mr F. Snyckers presented oral
argument. Wypke Jr was unrepresented and chose not to present oral
argument, although heads of argument were filed of record on his behalf
by his erstwhile legal representatives.
4. The Trust was founded by the siblings’ father, Wypke Wypkema (Snr) (‘the
founder’) in 1984 . The Trust is currently regulated by an amended trust
1 Other beneficiaries include the children and grandchildren of the primary beneficiaries, as well as the
founder. In terms of clause 16 read with clause 1.2.2.2 of the trust deed, inter alia, the descendants
(children/grandchildren) of the primary beneficiaries would only be entitled to their parents’ share of
the trust fund, upon distribution of the fund on the vesting date, if such parent were to die before the
date of vesting.
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deed (‘the trust deed’) which was executed by the founder and signed by
the trustees on 1 March 1989 . The Trust was established as a family or
inter vivos trust in terms of which the trust assets were to be managed and
controlled by family members , as trustees, for their benefit, as
beneficiaries.
5. The founder resigned as a trustee of the Trust on 2 July 2014. He remained
a limited income beneficiary of the Trust until his death on 19 December
2020. Prior to his resignation as trustee, the founder together with the
siblings were the named trustees. Prior to the founder’s death, t he
beneficiaries included the founder, the siblings and their descendants.
6. It is common cause that the trust’s assets are worth somewhere between
R1.5 billion and R1.7 billion. Since all four primary beneficiaries are still
alive, they each stand to benefit from any distribution that occurs upon
vesting, to the tune of hundreds of millions of rands.
7. Trust assets include, inter alia, shareholding in various entities through
which three private hospitals established by the founder, are operated. 2
Approximately 80% of the net value of the Trust’s assets is contained in
the Arwyp Group of companies , one of which is AMC . There is no
controversy about the fact that AMC is by far the most valuable company
in the Arwyp Group in which the Trust holds an indirect majority
shareholding.3
2 The hospitals include the Mayo Clinic of South Africa in Roodepoort ("the Mayo Clinic" ), the Flora
Clinic in Florida (“the Flora Clinic" ), and the Arwyp Medical Centre ("AMC" ) in Kempton Park.
3 Otto refers to AMC as the operating company of the Arwyp Group of companies in his papers. Emma
confirms in her answering affidavit that t he majority of the Trust's assets lie in the Arwyp Group of
Companies and, in turn, a substantial portion of the Arwyp Group's assets are housed in AMC. Wypke
Jr states in his answ ering affidavit that “It is common ground that the trust is an indirec t majority
shareholder of AMC. Arwyp Holdings (Pty) Ltd (Arwyp Holdings) holds 78.6% of the issued shares in
AMC. The trust holds all of the issued shares in Arwyp Holdings. ” Agatha’s A rwyp organogram,
attached as annexure ‘AS8’ to her answering affidavit, illustrates the position clearly.
4
8. Otto was a director of Arwyp Holdings and AMC prior to the founder’s
death. On 5 May 2021, the siblings were appointed as directors of all the
companies in which the trust is a shareholder. These include AMC, Arwyp
Properties, Arwyp Holdings, and Arwyp Training Institute. Thereafter,
inter alia, various alleged corporate governance failures were uncovered
through investigations conducted by independent third parties into the
affairs of AMC. There is a pending action against Otto (and other
defendants), which was instituted by AMC pursuant to such investigations
and findings.4
9. According to Otto, on 20 April 2023 his siblings had him removed as a
director of Arwyp Holdings and on 17 May 2023 his siblings had him
removed as a director of AMC. In June 2023, the AMC action was instituted
against Otto, which he is defending and in which proceedings he denies all
allegations of misconduct levelled against him.
10. After the founder’s death, a dispute arose between the trustees as regards
the vesting date and the validity and enforceability of certain writt en
‘riglyne’ (also referred to as letters of wishes [‘Lows’] or ‘guidelines’ in the
papers). 5 Otto contend ed that the date of vesting was the date of the
founder’s death - in consequence of which vesting has occurred - and that
4 According to Emma, a report was obtained from Comello Forensic Group. She states that “ That
report paints a disturbing picture of potential misappropriation of hundreds of millions of rand and poor
financial, operational and corporate governance at the instance of Otto. The report raised several
preliminary concerns relating to potential corporate malfeasance, the potential misappropriation of
hundreds of millions in company funds, the apparent use of related and interrelated entities as conduits
to facilitate the misappropriation of company assets and other unlawful transactions. These are
reflected in reports which are compiled by third parties.”
reflected in reports which are compiled by third parties.”
5 Four different riglyne were executed - they are referred to in the papers as the 2014 Low/riglyne; the
2018 Low/riglyne; the 2019 Low/riglyne and the 2020 Low/riglyne. At the time that the dispute arose,
Otto contended that the 2020 riglyne were to be enforced.
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the founder’s 2020 riglyne (representing the founder’s wishes and made
in terms of clauses 14 and 16 of the trust deed) are valid, binding and
enforceable vis-à-vis the trustees and the trust. Emma and Agatha held
the opposite view – that the date of vesting had not arrived (and is yet to
be determined by the trustees in conformance with the trust deed ) and
that the riglyne are not valid, binding or enforceable against the trustees
and the Trust in law.
11. Leaving aside questions of validity or enforceability, in terms of the 2020
riglyne, Otto and Emma stand to receive the lion’s share of the trust assets
that will be distributable on vesting. In terms of the 2014 and 2018 riglyne,
Otto and Emma will also receive more than Agatha and Wypke Jr on
vesting. In terms of the 2019 riglyn e, the siblings will share equally in the
trust assets on vesting.
12. As the dispute remained unresolved, on 3 August 2021, Otto instituted an
action in his capacity as trustee against the Trust, citing the trustees in
their representative capacity, nomine officio, qua Trust. At that stage, he
sought the following relief:
“1. An order declaring the 3 December 2019 guidelines6 to be valid, binding, and
enforceable vis-a-vis the trustees and the Trust; and
2. That the costs of suit be borne by the Trust, unless any defence to the suit
that might arise, is found to be vexatious or mala fide, in which event the costs of
suit are to be ordered de bonis propriis against any Defendant found to be
defending the action vexatiously or being mala fide, jointly and severally, the one
vexatious defending party paying, the other to be absolved.”
6 It is common cause that the riglyne of 3 December 2019 is in fact what the parties refer to as the
2020 Low/riglyne. The action was initially instituted by Otto to declare only the 2020 riglyne as valid
and binding and enforceable. Pursuant to an amendment to the particulars of claim, Otto relies on the
2020 riglyne and in the alternative, on the 2019 riglyne, alternatively, the 2018 riglyne, further
alternatively, the 2014 riglyne
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13. The action was defended by the trustees (Emma, Agatha and Wypke Jr)
and is pending adjudication . Emma and Agatha and Wypke Jr are each
represented by their own attorneys in the action although Wypke Jr’s
attorneys withdrew shortly before the hearing of th is matter. Wypke Jr
nonetheless attended the hearing in person but placed on record that he
aligned himself with the relief sought by the respondents in their affidavits
(the dismissal of the application with costs) and that he would abide by
the arguments presented on Emma and Agatha’s behalf at the hearing.
14. In December 2023 and January 2024, Agatha and Emma each delivered a
separation application . Issues identified for separate and prior
determination were: (i) Otto's locus standi to represent the Trust in the
main action (a defence pleaded by Emma only); (ii) whether the 2020 LOW
is valid, constitutes written guidelines as envisaged in clauses 14 and 16 of
the trust deed, is binding, and is to be given effect to by the trustees in
accordance with clause 16 of the trust deed; and (iii) whether the 2020
LOW determined the vesting date as the date of Wypke Senior's death .
Otto has opposed these applications.
15. Pursuant to the delivery of the separation applications, Otto gave notice
that he intended to amend his particulars of claim. In September 2024 ,
Otto obtained an order by consent to join the beneficiaries named in the
trust deed, being the primary beneficiaries and their descendants, to the
action. The particulars of claim were ultimately substantially amended by:
(i) Citing all the beneficiaries of the Trust in the proceedings;
(ii) Introducing alternative claims within the main claim (claim A) for
declaratory relief as to the vesting date of the trust and as to the
force and effect of the riglyne, aimed at effecting distribution of
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trust assets to the primary beneficiaries in terms of the 2020 riglyne
and in the alternative, in terms of the 2019 or the 2018 or the 2104
riglyne;
(iii) Introducing claim B , which is a claim for a statement and
debatement of account and repayment to the Trust of ‘the Fees and
the Other Fees as may be found to be due to t he Trust’, together
with interest thereon. The claim is ostensibly for the siblings to
personally repay all legal fees they allegedly unlawfully caused the
Trust to pay on their behalf in defending the action; and
(iv) Introducing claim C, being a claim for the removal of the siblings as
trustees of the trust;
(v) In respect of each of the three claims, a cost order is sought against
each party who opposed the relief (i.e., the respondent trustees in
their representative and personal capacities) personally, paya ble
jointly and severally on the attorney and client scale.
16. In respect of claims B and C, Otto has alleged that the use by the siblings
of trust funds to pay their legal fees in defending the action is wrongful
and in breach of the fiduciary duties owed by them as trustees in that they
are not acting in the best interests of the Trust but in our own interests,
and that their personal interests as beneficiaries are in conflict with the
interests and duties they owe to the Trust as trustees.
17. Otto’s amendments took effect on 11 October 2024, 7 being a period of
three years after the institution of the action in August 2021. In respect of
7 Proof of electronic service of the amended summons and Particulars of claim on 11 October 2024 is
found at 02-130 of the papers. Filing thereof took place on even date (at 02-3). There is some mention
in the papers that the amendments to introduce claims A,B & C were effected in May 2024, however,
I could not locate proof thereof in the electronic file.
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the primary relief sought , being claim A, the main issues essentially
remained the same, namely (1) whether the riglyne are valid, constitute
written guidelines as envisaged in clauses 14 and 16 of the trust deed, are
binding, and are to be given effect to by the trustees in accordance with
clause 16 of the trust deed, and if so, which one of the four riglyne should
be enforce d and (2) whether the trustees have determined the vesting
date as the date of the founder’s death.
18. The present application was launched on 22 March 2024. In these
proceedings, Otto seeks the following relief:
“1. The first to sixth respondents are hereby interdicted and restrained from,
directly or indirectly procuring that the funds of the W Wypkema Trust with
trust registration number T1943/84 ("the Trust"), are used to pay for any
further legal fees or other costs incurred by all or any of them f or or in
connection with the defence against the action instituted by the first applicant
and/or second applicant against them out of in this Court under case number
37198/2021 ("the Action" ), and until such time as the Action (including any
appeals) has been finally determined.
2. That those respondents who oppose this application, be ordered to pay the
costs of this application, jointly and severally, the one paying the others to be
absolved, and on the attorney and own client scale inclusive of the costs of two
counsel. “
19. The issues arising for consideration in these proceedings , include the
following:
(i) As regards the nature of the application, whether this matter
should be decided on ordinary and established principles applicable
to interdicts and if so, w hether Otto has made out a case for
interdictory relief; or
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(ii) whether the relief sought in the matter should be viewed not as a
‘true’ or ‘classic’ interdict, but as a type of sui generis procedure or
case that invokes th is court’s supervisory power to control the
alleged unreasonable incurrence by the respondent siblings of
triplicated, uncontained and unrestrained legal costs, at the Trust’s
expense, in order to prevent the improper use of trust funds;
(iii) The proper categorization of the capacity in which the siblings are
‘truly’ acting in advancing their opposition to the action , i.e.,
whether they are acting in their capacity as trustees or whether
they are acting, ‘in truth and in substance’ in their capacit y as
beneficiaries, in procuring payment of their legal fees by the Trust;
(iv) Whether the respondent siblings are entitled and authorized to use
trust funds to defend the action.
Otto’s pleaded case in the founding affidavit
20. Otto alleges as follows. In defending the action, the siblings are pursuing
their personal interests as beneficiaries and not the interests of the trust
estate. They are therefore not entitled to the indemnity usually afforded
to trustees who litigate on behalf of a Trust.
21. The siblings are also not acting jointly as trustees in defending the action.
They are not represented by the same legal teams, nor have they
delivered a single cohesive plea on behalf of and in the interests of the
Trust in the action. The power afforded to trustees to institute or defend
litigation in clause 4.2.16 of the trust deed is an authorisation for the
trustees (plural) to act jointly and does not confer authority on each of the
trustees to appoint their own attorney s to defend their interest s as
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beneficiaries and to advance separate defences and to procure that the
Trust pay their personal legal fees.
22. The 10 July 2024 resolution, purportedly authori zing the payment of
individual fees under the guise of defending the Trust, is invalid. It was
passed in breach of the fiduciary duties which the sibling trustees owe to
the Trust in that they are using the Trust as their personal piggy bank to
fund, what is in truth and substance their personal litigation , on a
luxurious and triplicated scale, whilst acting in their personal interests, not
those of the Trust, and in conflict with Trust interests.
23. As beneficiaries, his siblings personally stand to gain if the action fails, not
the Trust.
24. Regarding a prima facie right to interdict and restrain the siblings from
using trust funds in the litigation going forward, Otto alleges that such a
right arises arise by virtue of the fiduciary duties he owes to the Trust as a
trustee (which fiduciary duties include the obligation trustees have to act
in the trust’s best interest and not their own, and not to use trust funds to
pay for their personal legal fees ) and from his right to protect the trust
assets to which he has a claim as a beneficiary of the Trust.
25. As to the requirement of a well -grounded apprehension of irreparable
harm, Otto alleges that “It is obvious that my siblings are the majority of the
trustees and will not act to protect the Trust against their own inappropriate use of
Trust funds to pay their attorn eys to protect their interests. ” He states that the
siblings have managed to spend approximately R3.2 million8 so far on legal
8 In table A of his heads, Otto states that the siblings legal expenditure has increased to approximately
R6.48 million
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fees. Although the Trust is asset rich, its liquidity is not boundless, and at
the rate of spending by the siblings, the continuing depletion of the Trust’s
liquid reserves in paying their litigation costs is prejudicial. If the action
succeeds, he alleges that he is unsure whether his siblings possess the
financial ability to satisfy a costs order made in his favour or to repay legal
fees unlawfully paid from trust funds in terms of claim B.
26. As regards the balance of convenience, he alleges that he has been forced
to fund the action from his own resources. In circumstances, where the
siblings “have obdurately insisted on having their own legal teams and
have boldly entered defences on entirely different grounds to each other
(at least insofar as the erstwhile Agatha and Wypke faction, versus the
Emma faction), the balance of convenience falls against them.”
27. As to the absence of an alternate satisfactory remedy, he alleges that the
only way in which to protect the trust from “the unauthorized use of its
funds” and his rights as a beneficiary, is to impose an interim interdict
restraining his siblings from paying their separate legal fees in the action
using trust funds.
28. To avoid undue prolixity, I do not intend to summarize the pleaded cases
of the respondent siblings. Suffice it to say, that the arguments contained
in the heads filed on their behalf and advanced at the hearing, align with
the factual allegations contained in their affidavits.
29. I am unable to do justice to all the detailed legal arguments presented on
behalf of the parties in this judgment. I have, however, considered them
carefully together with the authorities cited.
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Discussion
Nature of the application
30. Otto relied on the remedy of an interdict , as it is known in our law , to
prevent the alleged improper and unauthorized use of trust funds by the
respondent siblings in the litigation going forward. He dealt with the
requirements of an interim interdict in both his founding affidavit and his
heads of argument.9
31. It was during oral argument advanced on his behalf at the hearing that he
relied, for the first time, on a different basis, being the court’s supervisory
powers, for an entitlement to the relief sought . This basis was neither
pleaded nor dealt with in his heads of arg ument. It was simply invoked in
the course of oral argument.
32. Even if I were to accept that the court has supervisory powers to prevent
the abuse or improper use of trust funds to pay legal fees ,10 I am not
convinced that this case provides the opportunity for considering its
application for several reasons.
9 The requirements of an interim interdict are trite: the applicant is required to establish (i) a prima
facie right though open to some doubt; (ii) a well -grounded apprehension of irreparable harm if the
interim relief is not granted and the ultimate relief is granted; (iii) a balance of convenience in favour
of the grant of interim relief; and (iv) the absenc e of any other satisfactory remedy. See: Setlego v
Setlego 1914 AD.
10 See Genesis Medical Aid Scheme v Registrar, Medical Schemes and Another 2017 (6) SA 1 (CC)
at par 30 where the following was said: “Once established, a trust creates a legal relation of fiduciary
obligation on the part of the trustee towards the beneficiary. That relation is distinct from a purely
contractual or commercial relationship. This is because a trustee occupies a fiduciary office that is
subject to supervision and regulation by the courts. Even in a consensual trust, the trustee is not simply
a contracting party, but assumes an office subject to court supervision and public control, as no
contractant does.” See too Land and Agricultura l Bank of South Africa v Parker [2004] ZASCA 56 ;
2005 (2) SA 77 (SCA) (Parker) at paras 23, 34 &37.” (emphasis added)
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33. Firstly, because such causa is sought to be relied on belatedly without the
requirements for its invocation having been addressed or canvassed in the
papers or heads.11 Secondly, aside from its late introduction as a causa for
the relief Otto seeks, without notice to opposing counsel, it appears to me
to be a last minute change of tack to in order to overcome a fundamental
difficulty Otto faces in this case, namely, to create a basis for the relief he
seeks, which at its core amounts to a pre -emptive de bonis propriis costs
order in his favour, in advance of the trial, on the very issues the trial court
is yet to determine. Thirdly, the question of improper use of trust funds is
an issue that ought properly to be determined by the trial court after all
evidence has been led, tested and evaluated, and not on paper. Fourthly,
Mr Blaau argued that the court in this case is not dealing with an ordinary
or classic interdict involving ordinary contracting parties, but with a sui
generis procedure that ought to apply because the parties have an interest
in the trust assets and the Trust must be closely monitored in dealing with
third parties and in its dealings between parties who are interested in trust
assets. This, however, begs the question: if the sui generis procedure now
sought to be relied on (with a disavowal of reliance on common law
principles that govern interdicts) why was interdictory relief sought based
on requirements that govern ordinary interdicts in notice of motion and
founding affidavit ? The notice of motion has never been amended to
provide for any sui generis supervision, which is designed to prevent
abuses of the trust form by persons occupying a fiduciary position.12 It is
11 The general rule that a litigant must make out its case in the founding affidavit, is subject to the
following exception, which was set out in My Vote Counts NPC v Speaker of the National Assembly
2016 (1) SA 132 (CC) at para 177 . There the Constitutional Court said: “a point that has not been
raised in the affidavits may only be argued or determined by a court if it is legal in nature, foreshadowed
in the pleaded case and does not cause prejudice to the other party.” The invocation of the court’s
supervisory power is not only legal in nature, it is also fact dependant.
12 See Parker, above n 10, at paras 37 where the court referred to appropriate cases in which the
court’s supervisory powers may be invoked.
.
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common cause that all the trustees are the primary beneficiaries in this
case. It is thus inevitable that they will be interested parties. 13 The trust
deed itself envisages this. The fact that trustees are interested parties
does not in and of itself constitute abuse.
34. Furthermore, the court’s supervisory powers are employed in relation to
the conduct of per sons occupying fiduciary positions, such as trustees.
That in itself undermines Otto’s argument that the case is one in which the
respondent siblings are, in truth and in substance , only acting in their
personal capacity, as beneficiaries , and are advancing beneficiary
positions rather than trustee positions, their purpose being to secure a fair
and equal distribution, as Mr Symon and Mr Blaau vociferously argued. It
becomes a self-defeating argument where Otto seeks to invoke the court’s
supervisory powers over trustee conduct but at the same time arguing
that the respondents are not acting as trustees. And, ironically, a personal
cost order is sought against the respondent siblings, both in their
representative and personal capacities, in the action . As against the
respondent trustees who act in their representative capacity, such an
order amounts to a de bonis propriis order.14
35. I will therefore determine the matter based on ordinary principles relating
to interdicts in our law.
13 See Rademeyer v Jesseman and Others [2021] JOL 50848 (GJ) at paras 66-70.
14 See Cawood N.O and Another v Claassen and Others (1191/2022) [2022] ZAFSHC 119 (18 May
2022) at paras 32-33; Cilliers et al, Herbstein & van Winsen, The Civil Practice of the High Courts of
South Africa, vol 2, 982 – 987 where, inter alia, the following is stated: “An award of costs de bonis
propriis may be made only when a person acts or litigates in a representative capacity. It is unusual
to order a litigant in a fiduciary position to pay costs de bonis propriis, and good reason for such a
course should be shown, such as want of bona fides, negligent or unreasonable action, or improper
conduct by a trustee or executor.” (emphasis added)
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36. Having heard argument by Mr Blaau in relation to foreign law principles,
which he submitted may assist the court in its assessment, and having the
foreign judgments to which I was referred , I am not convinced that the
cases were helpful, precisely because none of them dealt with the same
type of relief as is sought in these proceedings. Peculiar if not
extraordinary relief is sought in this matter is effectively for an
anticipatory de bonis propriis cost order by way of an interdict aimed at
stopping the use of trust funds by trustees in litigation brought against the
Trust and defended by the trustees qua Trust. Mr Snyckers is correct when
he argued that the making of a de bonis propriis cost order against the
respondent trustees right now - in respect of all future litigation in th is
matter including any appeals – “is something no-one has ever seen before,
not in the sphere of trusts or estates or in any other type of litigation - and
for which no precedent has been cited, whether in terms of our law or
foreign law. ” I pause to mention that t he foreign law cases were not
addressed in the heads of argument prepared on behalf of Otto, and once
again, opposing counsel were not given notice prior to the hearing that
foreign law cases would be relied on.
37. There was some dissensus between Mr Symon and Mr Blaau in oral
argument. Mr Snyman suggested that the common law may need to be
developed 15to cater for this type of relief, on the basis that “this matter
involves itself with what the law should be now with constitutional
guidance and with regard to the position of the court in supervising costs”,
whereas Mr Blaau argued that there is no such need for development ,
15 Development of the common law only occurs where there is a need for such development. The
requirements for development of the common law, as set out in Oliver NO v MEC for Health: Western
Cape Provincial Department of Health 2025 (5) SA 384 (SCA) at paras 21 -22, have in any event not
been met in the present case.
16
given that the court in Stander 16 endorsed the notion of pre-emptive cost
applications and it thus forms part of our law.
38. Stander set out what the English law provides in respect of a pre-emptive
application known as a Beddoe application, in which trustees come to
court to seek directions when they either sue or defend proceedings in
their representative capacity. In such an application, the trustees are
expected to make a full disclosure to the court of the strengths and
weaknesses of their case. If the court sanctions the proceedings, the
trustees will enjoy an indemnity from the trust estate, regardless of the
outcome. The court’s directions would typically not be given once for all
but would sanction certain steps, where after an application for further
judicial advice would be necessary. 17 A Beddoe application may thus
involve in effect what is known as a pre-emptive costs order.18
39. As will be apparent from the aforegoing, Beddoe applications are
concerned with litigation by or against trustees who sue or are sued
nomine officio. The argument that a Beddoe type application was available
to the trustees in this matter , who ought to have obtained permission
from the court , in advance, to use trust funds to pay for their litigation
costs, rather than to arrogate to themselves the right to do so , is, with
respect, paradoxical. The main thrust of the argument presented by both
counsel representing Otto is that the litigation itself is not about trust
business, rather, it is a beneficiary dispute , because vesting has occurred
and all that is left is for a distribution of trust assets to be made to the
beneficiaries. The litigation expenses have been improperly incurred by
the respondent siblings, so the argument went, because they are really
16 Stander v Schultz 2008 (1) SA 81 (C)
17 Id par 49.
18 Id par 50.
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acting and defending the main action in their personal capacities
irrespective of how they have been cited.
40. Stander was concerned with an application by the trustees for permission
to use trust funds to fund their defence in a pending main application in
which the beneficiaries sought their removal from office . In the main
application, they had been sued only in their personal capacities and not
in their representative capacities. The court held that an application for
the removal of a trustee is a claim against the trustee personally.19 If the
trustee who is sued in his personal capacity is removed for misconduct or
other improper or unreasonable behaviour, his opposition to the
application for his removal would inevitably be found to have been
unreasonable, and he could not only be ordered to pay the other side’s
costs personally but would have no entitlement to an indemnity from the
trust in respect of his own costs. 20 If the trustee is vindicated at the end
of the case, he would be entitled to recoup any loss suffered by him from
the trust estate. This would be the difference between his full reasonable
expenditure in defending himself on the one hand, and any amounts
recouped from the unsuccessful complainant on the other.21
41. Whilst Stander concerned a Beddoe type application,22 far from endorsing
Beddoe type applications or importing them into our law, the court in
Stander held that:
“It is clear that on the approach reflected in the commonwealth cases the current
application would have to fail,23 and that this conclusion accords with the principles
19 Id, par 34.4
20 Id par 42.
21 Id, par 22
22 Stander was not dealing with an interdict to stop the trust from paying the costs of the litigation. It
concerned trustees requesting the court to allow them to have their costs paid like one encounters in
Beddoe applications.
23 I.e., even in a world where Beddoe applies, this type of application would fail.
18
of our own law discussed earlier ...As a matter of basic principle, therefore, an
application of the kind now made by the trustees is fundamentally misconceived .
They ask in advance for an order that their defence of the application for their
removal be funded by the trust estate. Since they would only be entitled to such an
indemnity if their opposition were justified, the court could not make such an order
without deciding the main case. In effect, the trustees ask the court to rule that
regardless of whether or not they are acting reasonably in opposing the m ain
application, they are entitled to an indemnity. The making of such an order is
contrary to all authority, which is to the effect that trustees enjoy an indemnity only
if they oppose proceedings properly and reasonably. The trustees’ demand also
offends basic notions of justice and commonsense. ”24 (emphasis added; own n 23
included))
42. At par 22 of the judgment, the court set out the default position where a
trustee is sued personally – the trustee cannot have his costs paid out of
the trust fund unless his opposition is found to be reasonable, in which
event, he would be entitled to be reimbu rsed for those costs . This is, as
was held in par 31 of the judgment, is to be decided at the end of the case,
because if it were to be decided upfront, it would pre -empt the trial
court’s decision.25
24 Stander, above n 16, at par 58.
25 In paras 28, 30 and 31 of Stander, the following was said:
“[28] the order which the trustees seek in their interlocutory application ... is unprecedented (at least,
no authority has been cited in favour of it) and it runs counter to principle . Furthermore, if granted, it
would have the effect of pre -empting any future decision on the costs of the removal application.
Specifically, it would preclude the court seized with the matter from ordering the trustees to bear their
own costs thereby depriving the court hearing the removal application of a significant part of its
discretion, specifically as regards costs.
[30] If the removal applicatio n succeeds and some or all of the applicant’s allegations are proven, it
would be unfair for the Trust to be saddled with the trustees’ costs on the basis of this interlocutory
application. The court removing the trustees – if that is the ultimate outcome – ought to have the
discretion to order that the Trust not bear the trustees’ costs. The order sought by the trustees could
result in the (otherwise avoidable) depletion of the Trust’s estate.
[31] It is further submitted that there is no warrant for interfering with the usual rule that the question
of costs be decided at the end of the matter. To order that the trustees be indemnified for their legal
costs at the outset of the litigation and even before the issue of their fitness for office has been
assessed could result in prejudice to the Trust.” (emphasis added)
19
43. The default position in terms of the common law is the opposite where
trustees are sued in their representative capacities. In that scenario, the
trustees are entitled to be indemnified out of the estate for their
opposition subject to the finding of the C ourt at the end of the case that
they acted mala fide or unreasonably or negligently or improperly.26
44. In Re Estate Potgieter ,27 the appeal court held that a trustee cannot
approach a court for directions as to whether he is entitled to defend
proceedings against him in his representative capacity, or to ask for
26 Stander, above n 16, at paras 19 & 29.
27 Re Estate Potgieter 1908 TS 982 , a decision of a Full bench, which is binding on me. The case
involved an appeal against a de bonis propriss order that had been made against the trustee. Dispute
had arisen about whether or not a trustee in insolvency was favouring certain creditors in defending
proceedings. There was a finding up front ordering de bonis propriss costs against the trustee which
led to an appeal against that order.
The principle set out in Potgieter was the following: ““…That is an exceptional order to make in a
case where a trustee of an insolvent estate, or any other person in a similar fiduciary position, is an
unsuccessful litigant. The usual order in such a case is to give costs against him in his
representative capacity, that is, in the capacity in which he is sued; and when an order is made
that a trustee should pay the costs, it is understood that he is to pay them out of the estate.
When it is desired that a trustee should pay costs personally, the order is made in the form in which it
was made in this case --- that he pay the costs de bonis propriis. But that, as I have said, is an
exceptional order, and it usually indicates that there is in the mind of the court soiree (sic) disapproval
of the trustee's conduct in connection with the matter in dispute; and I think that before making an
order of that kind against a trustee there should be some good ground shown for departing from the
usual rule in such cases.”: (at 1000-1001).(emphasis added)
At 1002, the general rule was expressed thus:” “So that I think as the result of the authorities we may
lay down as a general rule in these cases that a trustee should not be ordered to pay the costs
of unsuccessful litigation de bonis propriis, whether he is a plaintiff or d efendant, unless it
appears that there was a want of bona fides on his part or that he acted negligently or
unreasonably.” (emphasis added).
These principles have since been endorsed by higher court in Grobelaar and Grobelaar 1959 (4) SA
719 (A) at 725 B -C; and Pheko and Others v Ekurhuleni Metropolitan Municipality 2015 (5) SA 600
(CC) at par 51.
These principles were also endorsed in Stander (above n 16) at paras 38 & 39.
20
directions from the court or seek the court’s sanction with regard to his
defence, as he must “take the responsibility upon himself.”28
The proper categorization of the capacity in which the respondent siblings
are ‘truly’ acting in advancing their opposition in the action (and this
application)
45. The question is whether the trustees are acting in their capacity as
trustees in opposing the litigation or whether they are, in truth and in
substance, acting in their personal capacities as beneficiaries in
furtherance of their personal financial interests , as beneficiaries, as Otto
contends.
46. On Otto’s version, vesting has already occurred. Therefore, in terms of
clause 16 of the deed, the trust assets fall to be distributed. Otto contends
that assets must be distributed in accordance with the founder’s wishes
as expressed in the 2020 riglyne (with reliance on the other riglyne in the
alternative). The respondent trustees contend for an equal distribution
amongst the primary beneficiaries in accordance with the founder’s
wishes. Whether the date of vesting has been determined by the trustees,
is in dispute, and falls for determination at trial. How any distribution is to
be effected is also an issue that arises for determination at trial , because
the validity, enforceability and binding nature of the riglyne , including
what the founder’s wishes were, are in dispute. These issues implicate a
proper interpretation of the provisions of the trust deed.
47. The action instituted by Otto against the Trust in 2021 was f or relief
against the Trust. The trustees were cited qua Trust and the action was
defended by the trustees , acting nomine officio . Otto sought, at that
28 Id, at 1004 (per Soloman J) & 1008
21
juncture, that the Trust be ordered to pay the costs of the Trustees. It was
only three years later that the trustees were joined to the action in their
capacity as beneficiaries, and that claims for their removal as trustees and
for the repayment of legal fees expended on their behalf to the Trust were
introduced.
48. As pointed out by Mr Franklin, the relief which Otto seeks in the action
goes to the very heart of the trust objects and its existence; and how or in
which manner the trust assets are to be distributed, to whom , in what
proportions and when. With this submission I am in agreement.
49. Otto submits that the respondent siblings are in in pursuance of their own
personal interests as beneficiaries in defending the action, the premise being
that the vesting date has already arrived and so it is just a question of
distribution of trust assets to the beneficiaries. On Otto’s version, the Trust
is effectively at an end because vesting already occurred on the date of the
founder’s death. The argument overlooks that , whether or not the vesting
date was determined by the trustees in terms of the provisions of the trust
deed, and has arrived, is in dispute. That the founder’s wishes are as set out
in the 2020 riglyne is also in dispute. And the validity and enforceability of
the riglyne is also in dispute.
50. Otto’s argument rests on the assumption that his version is the correct one,
which is certainly not a forgone conclusion. It is an issue which the trial court
is yet to decide. Be that as it may, assuming for purposes of argument ,
without finding , that Otto’s version is correct, it is indisputable that the
termination of a trust would result in the loss of office for the trustees29 and
thus implicates them directly . Otto’s declaratory relief fundamental ly
29 Snyman v De Kooker NO and Others 2024 (6) SA 136 (SCA) at [21]
22
impacts the continued existence of the Trust and goes to the heart of the
trust objectives which is to protect and preserve the Trust and its assets for
the benefit of all the beneficiaries.30
51. Moreover, the basis on which the distribution is to be effected – whether in
accordance with the riglyne , or not - and when - based on whether or not
vesting has occurred, are quintessentially issues that implicate trustees in the
performance of their duties, one of which, in relation to trust property, is to
effect the distribution of net trust assets to the appropriate benefic iaries at
the time(s) stipulated in the trust deed. The argument that this is really just
a fight amongst beneficiaries and that the respondent siblings do not act as
trustees in any genuine sense, cannot therefore be sustained on the facts of
this case.
52. It would be inappropriate for me to make any findings on the merits of the
matter and thereby-pre-empt the trial court’s findings. Otto’s approach in
assuming the correctness of his stance and then mounting his arguments
based thereon is fundamentally flawed. It amounts to faulty reasoning in
the construction of an argument.
53. Let me elaborate. Otto alleges that payment of the respondent sibling’s
legal fees, using trust funds, is wrongful and their conduct in doing so
constitutes a breach of the fiduciary duties owed by them to the Trust. As
Mr Franklin puts it: Otto uses the very issues in dispute and which are yet
to be determined by the trial court as a basis for contending that the
30 In Jooste NO and Another v Pretorius and Others 2025 (3) SA 95 (SCA) at par 42, the Supreme
Court of Appeal stated that the removal of a trustee is a decision of considerable importance for the
governance of a trust because a trustee will have no claim of right to hold the office of trusteeship. In
par 60 of the judgment, the court held that “Trustees must act honestly and reasonably. They have a
duty to protect the assets of the trust for the benefit of the benefici aries. For these reasons, as a
general rule a trustee should not be ordered to pay costs de bonis propriis (out of own pocket),
whether as an applicant or respondent, unless she has acted in bad faith, negligently or unreasonably.”
23
payment of fees by using trust funds is wrongful and in breach of the
respondent trustees’ fiduciary duties, which conduct must be stopped
now to avert ongoing prejudice by depletion of the trust fund to the Trust
and himself as beneficiary. Whether their use of trust funds amounts to a
breach of their fiduciary duties or whether they were conflicted in doing
so, are issues yet to be determined at trial. The only basis on which Otto
can contend, in these proceedings, that his siblings are not acting in
discharge of their duties is by assuming that his version is correct. The logic
of this contention is irrefutable.
54. Mr Franklin pointed out in oral argument that the implementation of the
2020 riglyne would result in the following distribution to the primary
beneficiaries:
(i) Otto and Emma would each receive approximately R680 million
worth of trust assets; and
(ii) Agatha and Wypke Jr would each receive approximately R170
million worth of trust assets.31
55. From Emma’s perspective, the action seeks to impose upon the Trust the
enforcement of the disputed 2020 riglyne, which would fundamentally
alter the structure and purpose of the Trust and result in: (i) the dissolution
of the Trust; and (ii) a grossly disproportionate distribution of the Trust
assets with Emma and Otto gaining 80% of the value of the Trust assets to
the exclusion of the rem aining beneficiaries; and (iii) Otto gaining a
significant stake in the ownership and control of AMC. This would also
diminish both the value and the strategic direction of the trust estate in
that it would place a principal revenue generator for the Trust outside of
31 As I understood matters, there was not contention about these figures.
24
the Trust's control. Opposing the action is essential to prevent the erosion
of the founder's legacy, to preserve the trust assets for the benefit of all
its beneficiaries, and to safeguard the interests of all beneficiaries, by
ensuring an eventual fair and equitable distribution of Trust assets. And
that is why she is opposing the relief sought in the action in her capacity
as trustee.
56. As pointed out by Mr Snyckers, it is artificial for Otto to contend that this
is a dispute amongst siblings in their personal capacities. If there is a
conflict between the trustees in their capacity as trustees and
beneficiaries, it is a conflict that is created and which is inherent in the
trust deed itself. It is not a conflict that would disqualify them from acting
in both capacities. These submissions appear to me to be correct, having
regard to the provisions of clause 4.2.24 of the trust deed,32 taken at face
value.
57. Mr Snyckers further submits that the interpretation of the trust deed and
how it must be applied, irrespective of the consequences of who gets what
or who gets more or who gets less , are issues that arise in the action and
are for the trial court to determine . There can be no qualm with that
contention. What is at issue at trial are two questions: (i) must the trustees
follow the dictates of law by way of letters of wishes? In other words, are
the letters of wishes (riglyne) enforceable in law? and (ii) if they are
enforceable, does it mean that the vesting date has occurred and has the
32 Clause 4.2.24 reads; “ “Any trustee may exercise, and consent to the exercise, of all powers and
discretions granted to them under this deed or by law, notwithstanding that the trustee has a direct or
other personal interest in the manner or outcome of the exercise of such power or discretion. However,
any trustee may, notwithstanding this, but without any obligation, choose to refrain from acting other
than as a formal party in any matter in which they have such a personal interest and may allow their
co- trustees to act alone in exercising the aforementioned powers and discretions in relation to such
matter. Each trustee who has such an interest in the action affecting trust funds will, however, be
obliged to disclose the nature and extent of their interest to the co-trustees in advance.”
25
trust come to an end? 33 Both involve interpretation and administration
issues, irrespective of the consequence that some will get less and others
will get more. If, on the other hand, the riglyne are not enforceable, then
it will be for the siblings , as trustees, to decide on wh at is best for the
siblings, as beneficiaries, and what is fair and . I agree.
58. It is not insignificant that the present application - to prevent the use of
trust funds for payment of legal fees - was launched by Otto at a time
when he was in fact still seeking an order in the main action that the Trust
pay the legal fees incurred by trustees in the action. This was consistent
with the general common law principle that legal fees incurred by trustees
in the course of litigation instituted or defended by them in their official
capacity are payable by the Trust, unless their conduct is found to be mala
fide, unreasonable or negligent.34 The fact that claim C for the removal of
the trustees was introduced by later amendment, did not alter the fact
33 Vesting has two components . As was recognised in Wilkinson and Another v Crawford N.O. and
Others 2021 (4) SA 323 (CC) at par 62 (albeit in the context of a deceased estate), vesting comprises
of “two sub-moments, namely dies cedit, the time when a beneficiary obtains a vested right to claim
delivery of the bequeathed benefit unconditionally, and dies venit, the time at which the beneficiary’s
right to claim delivery of the benefit becomes enforceable.
In fn 76 of the judgment, the court referred to De Leef Family Trust v Commissioner for Inland Revenue
1993 (3) SA 345 (A) at 356 where it was stated that dies cedit was described as the moment the right
is due and owing; dies venit on the other hand is when ‘the time for enjoyment has arrived and delivery
or transfer of its subject matter may be claimed’, in other words: when the right becomes enforceable.
The trust deed in the present matter empowers the Trustees to determine the vesting date. In te rms
of clause 1.2.3 “ "The Vesting Date" shall be the date determined at any time by the trustees as the
vesting date, and shall indicate the point in time at which beneficiaries shall acquire vested rights in
respect of the net trust assets in terms of sub-paragraph 16, or sub-paragraph 11.3 in relation to that
beneficiary or group of beneficiaries for whom the Vesting Date has been so determined earlier.”
34 The right to indemnification for a trustee acting in their representative capacity, is an ongoing right.
A trustee is thus entitled to rely on that right from the outset, and may use the trust funds on an
ongoing basis to pay for the legal costs incurred in the opposition of proceedings. By way of
example, a trustee cannot be compelled to pay a debt of the trust estate in the first instance from
personal funds. See Ehrlich v Rand Cold Storage & Supply Co Ltd 1911 TPD 170; Burnett NO v
Kohlberg 1984 (2) SA 137 (E) 141D–G. When acting properly in the course of trust administration, a
trustee renders only the trust estate liable to others. Trust funds may therefore be used to settle the
liability in the first instance in which case no question of indemnity will arise. A trustee who chooses
to pay out of personal funds can claim to be indemnified from the trust fund.
26
that the main claim A was against the Trust. For approximately three years
before he launched this application, Otto was satisfied that the Trust was
liable for the fees incurred by the trustees. It was only three months after
the institution of this application that the amendments to Otto’ particulars
of claim were effected to include a removal claim and the beneficiaries
who had been joined to the action . Thus, when the application was
launched, a cause of action necessary to sustain the relief was missing.35
59. A court will only allow an amendment to pleadings to introduce a new
cause of action that did not exist at the time of the institution of the
proceedings in exceptional circumstances .36No such exceptional
circumstances have been demonstrated in this matter.
60. It is also not insignificant that initially, the action was instituted against the
respondents as trustees. The action was defended by the respondent
trustees, given that they contested Otto’s contentions regarding vesting
and the validity of the 2020 riglyne. They incurred legal expenses using
trust monies. Three years later, Otto alleged that by using trust monies,
his siblings were not acting in the interests of the trust, but persona lly,
which constitutes grounds for their removal. The tacking on of removal
relief, given the timing of its introduction, supports an inference that it
was used to bring the case in line with the Stander principle (referred to in
par 22 of Stander).37
35 In Evins v Shield Insurance Co Ltd 1980 2 All SA 40 (A) the court defined "cause of action" as every
fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to
judgment of the Court. It does not compromise every piece of evidence which is necessary to prove
each fact, but every fact which is necessary to be proved. At p 57, the court stated that a cause of
action does not materialise unless and until the occurrence of the last fact that constitutes a cause of
action.
36 Erasmus Superior Court Practice Part D1 Rule 28-10 and the authorities in footnote 54
.
37 Stander affirmed the principle that a trustee who defends the trust estate ordinarily enjoys the right
to funding from the estate to pay for that defence; withholding that funding is the exception, not the
27
61. The main import of the action instituted in 2021 was to establish the date
of vesting and validity of the 2020 riglyne. That main relief was subsumed
in claim A of the amended particulars of claim and did not change the
capacity in which the trustees were acting in relation thereto. I agree with
Mr Franklin and Mr Snyckers that claim C (removal relief) is ancillary to the
main claim, now claim A. The tacking on of the removal claim, although it
is a claim against the trustees personally, did not transform the e ntire
action into one in which the trustees are acting in their personal capacities.
It also did not alter the fact that the main claim lies against the Trust,
represented by the trustees. Claim B is also for relief against the trustees
and is directed at reimbursement to the Trust of any fees improperly
incurred by the trustees, for example, because the respondent trustees’
opposition in the litigation was unreasonably or unjustifiable or malea
fide. As the Constitutional Court affirmed in Pheko,38 whether conduct
warrants a de bonis propriis order, is fact bound, and is decided on all the
basis of all the circumstances.
rule, and this occurs when the merits of the main proceed ings are heard and decided (see paras
38 & 39 of Stander).
Stander also underscored that a court will not pre-emptively rule [ie decide in advance] on trustees’
litigation costs where they are sued in their personal capacities; the trial court must first decide —
on the merits—whether their defence was bona fide and reasonable. The same logic defeats Otto’s
present application. Otto seeks that this Court should compel the respondent siblings to fund the
defence personally on the premise that their conduct is vexatious, yet that allegation is precisely
what the trial court must in due course determine after hearing all the evidence at trial. It follows,
as a matter of pure logic, that u ntil the merits have been adjudicated, no court can (or should)
pronounce upon the trustees’ entitlement to an indemnity. Whether there is a proper basis for the
removal is also an issue that is to be determined by the trial court
38 Pheko and Others v Ekurhuleni Metropolitan Municipality 2015 (5) SA 600 (CC) at par 51, where
the following was said: “Costs de bonis propriis are costs which a representative is ordered to pay out
of his or her own pocket as a penalty for som e improper conduct, for example, if he or she acted
negligently or unreasonably. Whether a person acted negligently or unreasonably must be decided in
the light of the particular circumstances of each and every case .” (emphasis added; footnotes
excluded)
28
62. The costs of Emma, Agatha and Wypke Jr’s opposition to claim A (the main
claim) which they oppose in their representative capacity, are inextricably
linked to the costs incurred in opposing claims B and C. If Otto fails to
obtain personal costs orders against the trustees in relation to claim A,
then claim B falls away (personal reimbursement by trustees to the Trust
of all legal fees improperly paid using trust funds) and the main ground for
the removal of the trustees in claim C (wrongful use of trust funds to fund
litigation costs) falls away. Even if the trial court grants personal costs
orders against the trustees in relation to claim A, then it would not
necessarily follow that the trustees are to be removed from office.39
63. Otto relies on the fact that his siblings are each represented by separate
attorneys and have in some instances pleaded additional but disparate
defences, in support of the contention that they are ‘in truth and in
substance’ acting in their personal capacities.
64. It is trite that the respondents owe fiduciary duties to all of the
beneficiaries of the Trust, and are required to act with utmost good faith
and in the interests of all beneficiaries of the Trust. This includes, inter
alia, the duty to: (i) preserve the Trust assets and uphold the Trust Deed;
(ii) exercise all powers in such a manner that the beneficiaries reap the
benefits; (iii) treat beneficiaries impartially; and (iv) act independently
when discharging their duties.
65. The fact that the respondent trustees have engaged their own attorneys
and have pleaded certain additional or different points does not in and of
39 The requirements for removal are discussed in, inter alia, Sackville West v Nourse and Another
1925 AD 516; Volkuyn NO v Clarke and Damant 1946 WLD 456; Dlhomo and Others v Chalwa NO
and Another 2024 (4) SA 161 (KZP) ; and Hoppen and Others v Shub and Othe rs 1987 (3) SA 201
and Another 2024 (4) SA 161 (KZP) ; and Hoppen and Others v Shub and Othe rs 1987 (3) SA 201
(C); Mirchandani v Unica Iron & Steel (Pty) Ltd and Unica Iron & Steel (Pty) Ltd v Mirchandani
(802/2020 & 813/2020) [2022] ZASCA 58
29
itself mean that they ar e thereby pursuing their personal interests. They
are, as I have indicated earlier, defending qua Trust on fundamental issues,
namely, vesting and the validity of the riglyne, and the interpretation of
the trust deed, all of which affect the Trust and impa ct their duties as
trustees.40 The presence of separate defences does not detract from this.
The common thread that runs through all the defences is to ensure that
the Trust is protected and that the Trust's assets are properly distributed
in accordance with the trust deed and in terms of the law.
66. In terms of clause 4.1 of the trust deed, the trustees "shall be entitled to
perform any act whatsoever that is necessary and/or conducive to the
preservation or growth of the assets of the trust and in the interest of the
beneficiaries." In terms of clause 4.2.16 , the trustees are empowered to
institute or d efend legal proceedings and to sign all deeds, powers of
attorney or documents that may be necessary for this purpose. In terms
of clause 7.4, the trustees "shall be indemnified out of and from the trust
fund against all claims and demands of whatsoever nature that may be
brought against them arising from the powers granted to them under this
trust deed." In terms of clause 8.4, the trustees are, inter alia, entitled to
appoint attorneys " to carry out all or any matters of whatsoever nature
that are required to be done under this trust deed."
67. It is for the trial court to determine whether, in engaging three sets of
attorneys, the trustees acted improperly or reasonably and whether each
40 In Parker, above n 10 at par 10, the following was said: “Except where statute provides otherwise,
a trust is not a legal person. It is an accumulation of assets and liabilities. These constitute the trust
estate, which is a separate entity. But though separate, the accumulation of rights and obligations
comprising the trust estate does not have legal per sonality. It vests in the trustees, and must be
administered by them – and it is only through the trustees, specified as in the trust instrument, that the
trust can act. Who the trustees are, their number, how they are appointed, and under what
circumstances they have power to bind the trust estate are matters defined in the trust deed, which is
the trust’s constitutive charter. Outside its provisions the trust estate cannot be bound.”
30
trustee’s opposition was justified. The court could not make such a
determination without deciding the main case. That is in accordance with
the general rule that costs are decided at the end of the matter. As Stander
made plain, and it is not for this court to pre-empt that decision.
Whether the respondents are entitled and have authority to defend and to
use trust funds
68. In terms of the common law, the general rule is that a trustee is entitled
to an indemnity in respect of expenses properly incurred, and this applies
inter alia in respect of legal expenses incurred by the trustee when sued
in his representative capacity. However the trustee will be held personally
liable for the costs if he acted mala fide or unreasonably or improperly in
bringing or defending the proceedings.
69. Otto disputes that there is a legal basis for using trust funds to finance his
siblings’ opposition to the action on the basis that neither the trust deed,
properly interpreted, nor any of the resolutions passed by the trustees
provide any entitlement or authority for their “unchecked” use of t rust
funds to pay for their legal fees and therefore his siblings’ conduct remains
“patently unauthorised, illegitimate and unlawful .” He submi ts in his
heads that his siblings “ cannot enable and authorise themselves to use
Trust funds for an improper purpose ,” to sanction their “prolific use of
Trust funds, and their election to separately oppose the Action, in
circumstances in which they should have done so jointly, and in which they
are plainly not acting in good faith and in the Trust’s interest but in their
own interest, and particularly in their interest as beneficiaries.”
70. In support of these contentions, Otto relies on certain provisions of the
trust deed:
31
(i) Clause 2.10 (which provides that in the event of a dispute between
the trustees at any time, the decision of the majority would be
binding, with the proviso that the fou nder had to be one of the
majority trustees), Otto’s contention being that once the founder
resigned as a trustee, the trustees no longer had the right to
overrule each other by way of a majority vote in the event of a
dispute between them and that they co uld then only make
decisions unanimously; and
(ii) Clause 4.2.16 (which provides that the trustees (plural) “shall have
the power to institute or defend legal proceedings and to sign all
deeds, powers of attorney or documents that may be necessary for
this purpose”), Otto’s contention being that the clause implies that
all of the trustees would have to be in favour of insti tuting or
defending proceedings and act jointly in doing so;
71. Otto disputes that certain clauses relied on by Agatha (albeit not by Otto)
assist his siblings, namely:
• Clause 4.2.24 (which provides that trustees may execute all powers
and discretions granted to them in spite of the fact that they have
a direct or other personal interest in the way or result of the
execution of such power, and that if they so choose, they can
instead recuse themselves and allow their fellow trustees to act
alone), Otto’s contention being that all his siblings are conflicted in
opposing the action (and this application) and that the ambit of this
clause was not intended to cover funding by the Trust of their
individual personal defences. The expenditure of Trust funds for
this purpose is against the interests of the Trust, and only serves
their individual interests;
32
• Clause 7.4 (which provides that trustees are exempted by and out
of the Trust funds from all claims and claims for payment of
whatever nature that might be instigated against them as a result
of the powers granted to them by the Trust), Otto’s contention
being that his siblings’ opposition to the action does not, and
cannot, arise from any valid exercise of the powers granted to them
by the trust deed. The siblings cannot expect to be indemnified
when they use trust funds against the trust’s interests and for the
illegitimate purposes of serving the ir own interests, as
beneficiaries.
• Clause 8.3 (which provides that the trustees shall be authorised to
settle and pay from the Trust, and from any income of the fund, all
expenses incurred by them in respect of executing the Trust and the
powers granted to them), Otto’s contention being that the clause
does not confer authority upon his siblings to act as they have, in
that, for the same reasons given in respect of clause 7.4;.
• Clause 10.1 (which provides, inter alia, that “All costs and expenses
lawfully incurred by the trustees in connection with the
administration of the trust (including trustees' remuneration and
any income tax payable by them in their representative capacity in
respect of the income thereof) shall be paid by the trustees from
the income of the trust fund...”) , Otto’s contention being that his
siblings “have not acted “ wettiglik” in acting as they have ” in
incurring legal costs which “are not in respect of compensation or
income tax, or any other analogous expenditure. Rather, the
expenditure is in the siblings’ own interest and not in the interest
of the Trust.”
33
• Clause 10.5 (which provides that subject to the terms of clause 10.6
of the Amended Trust Deed (which provides for the investment of
the Trust’s net income), the trustees may at any time up to and
including the vesting date, pay the net income of the Trust or use
the net income of the Trust to the benefit of all or such one or more
of the beneficiaries in such a way and subject to such conditions and
limitations that the trustees may from time to time determine at
their sole discretion, and that the net income on which beneficiaries
receive vested rights by way of an income distribution may be
specifically credited by the trustees on loan account without any
obligation to pay out such income) , Otto’s contention being that
Agatha’s reliance on clause 10.5 of the Amended Trust Deed
“unequivocally proves ” that his siblings are using their office as
trustees not in furtherance of the fiduciary duties which they owe
to the Trust but for their own personal benefit. He also contends
that his siblings have simply had the Trust pay their legal fees
without conferring any benefit on themselves as beneficiaries.
• Clause 14 (which provides that the discretion granted to trustees in
paragraphs 10 to 12 of the trust deed shall be an absolute and
unencumbered discretion and that the trustees shall not be
expected to provide any beneficiary any reason for the manner in
which suc h discretion has been utilised and except in so far as
relevant guidelines have been laid down by the founder in a will or
other document), Otto’s contention being that “the fact that the
exercise of discretions afforded to the trustees are said to be
absolute and unencumbered does not permit the siblings to a ct in
bad faith, or to utilise t rust funds for an improper purpose – the
trustees are accountable to the Court, the Master and to the
34
beneficiaries for the administration of the Trust’s assets.
Unauthorised expenditure of the Trust assets by the trustees, in
their own interests and not those of the Trust, are impermissible.”
72. I will focus on those clauses which Otto relies on for his submission that
the respondent trustees are not empowered by the trust deed to act as
they have. His opposition to the clauses relied on by Agatha is based on
the assumption that his version is correct.
73. In Harvey NO,41 the Supreme Court of Appeal confirmed that a trust deed
must be construed in accordance with the well-known and time honoured
rules regarding the interpretation of written contracts . As with the
interpretation of a written contract, the point of departure in interpreting
a trust deed is the grammatical or ordinary meaning of the words used,
read within the context of the trust deed as I a whole.
74. Clause 2.10 provides for decision making at a properly constituted
meeting of trustees by way of majority vote in the event of a dispute
between trustees, subject to the founder being one of the majority. A
decision taken by majority vote shall have the same force and effect as if
it were the unanimous decision of the trustees. On Otto’s construction,
41 Harvey NO and Others v Crawford NO And Others 2019 (2) SA 153 (SCA) at par 45.
In Natal Joint Municipal Pension Fund v Endumeni 2012 (4) SA 593(SCA) (Endumeni) at par 18, the
court set out what the process entails:
“Whatever the nature of the document, consideration must be given to the language used in the light
of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material known to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in the light of all these
factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that
leads to i nsensible or unbusinesslike results or undermines the apparent purpose of the
document. Judges must be alert to, and guard against, the temptation to substitute what they regard
as reasonable, sensible or businesslike for the words actually used. To do s o ... in a contractual
context it is to make a contract for the parties other than the one they in fact made. The ‘inevitable
point of departure is the language of the provision itself’, read in context and having regard to the
purpose of the provision and the background to the preparation and production of the document.”
35
after the founder resigned as trustee, trustees lost the right to overrule
each other with the consequence that they could only make decisions
unanimously. What then if a deadlock were to arise between the trustees
precisely because they held different views and could therefore all agree
on an issue, bearing in mind that each trustee is duty bound to apply an
independent mind42 to the affairs of the Trust ? Otto does not say. This
case itself illustrates the fact that trustees cannot always agree on trust
matters.
75. I am in agreement with the submissions made by Mr Franklin and Mr
Snyckers that Otto’s interpretation of clause 2.10 cannot be sustained ,
since it would not only render the Trust incapable of functioning without
the founder if trustees are not all in agreement (something the clause
specifically envisages) but it would frustrate the proper administration and
functioning of the Trust, surely an absurd and unworkable result! Whilst
the founder remained in office during his lifetime, the provision that he be
one of the majority would obviously apply. The founder formally resigned
in 2014 and passed away in December 2020. His resignation meant that
he was no longer in office and could therefore not participate in trustee
meetings, meaning that provision could and would no longer apply. Otto
does not say in his papers that all decisions taken by trustees pursuant to
the founder’s resignation were unanimous.
76. The clause expressly enshrines the principle of majority vote and must be
considered in the light of other clauses . The issue of majorita rianism is
enshrined in clauses 2.7 - in relation to a quorum , being a majority of
trustees; and 2.10 - in relation to the requisite number of votes for a
42 See: Wiid and Others v Wiid and Others (1571 / 2006) [2012] ZANCHC 62 (13 January 2012); See
too Parker, above n 10 at par 22, where the court held that “Independence of judgment on the part of
a trustee is an indispensable requisite of office [Honoré pages 89-91 (§ 52), 264 (§ 160).”
36
resolution to be carried. If there was to be a requirement of unanimity, it
would have been expressed in the trust deed. It was not.
77. As regards clause 4.2.16, Otto’s in terpretation, namely that all of the
trustees would have to be in favour of insti tuting or defending
proceedings (i.e., all would have to agree) , and must act jointly in doing
so, is, with respect, self-defeating. If this interpretation is correct, then one
wonders on what basis Otto instituted the action?
78. Mr Franklin submits that the clause identifies the persons who have the
power to make decisions in relation to legal proceedings, i.e., the trustees.
When the clause is read together with clauses 2.8 and 2.10 (which
enshrine the majority principle); a requirement of unanimity simply
cannot be inferred. I agree.
79. Clause 4.2 of the trust deed sets out specific powers that the trustees as a
collective organ have. Clause 4.2.4 of the trust deed provides that "In
general, the trustees shall have such powers and authority in the
administration of the trust as is usually vested in the Board of Directors of
a company.” Mr Franklin submits that t he plural term "the trustees" is a
functional reference to the Board of the trustees in the context of
describing what the Board of Trustees is allowed to do . It cannot be
interpreted as also dealing with the manner of decision-making within the
Board. Clause 4.2 is not concerned with the manner; only the description
of powers. That must be correct. The office of trustees is held collectively,
decisions are taken by the body of trustees acting as a single legal organ
and that legal will is expressed through resolutio ns taken at validly
constituted meetings.
37
80. In Parker,43 the court held that “It is a fundamental rule of trust law, which this
Court recently restated in Nieuwoudt NO v Vrystaat Mielies (Edms) Bpk, that in the
absence of contrary provision in the trust deed the trustees must act jointly if the
trust estate is to be bound by their acts.” (footnotes excluded; emphasis added).
81. In the present case, the trust deed empowered the majority of the
trustees to meet and to make decisions that bind the Trust. To this extent
the joint action requirement was abrogated . The principle that trustees
must act jointly will be satisfied if they act by way of majority if the deed
allows them to.
82. As regards clause 4.2.24, it will be recalled that Otto contends that all his
siblings are conflicted in opposing the action (and this application ) and
that they are pursuing their personal interests as beneficiaries and are not
defending as trustees and that this clause does not permit the use of trust
funds to pay for personal costs. I agree with Mr Snyckers that Clause 4.2.24
contains a broad recognition of the fact that the trustees are also the
beneficiaries in terms of the trust deed and that they cannot be
disqualified from acting as trustees on the basis that they are also
beneficiaries. In effect, the clause envisages a conflict of interest and
precludes reliance on that fact as a basis to disqualify the trustee from
acting in such circumstances.
83. On the face of it, clauses 4.2.16; 2.10; 7.4; 8.3; 10.1; 10.5 and 14, read
together, contemplate that the trustees would have the power to defend
any proceedings brought against the Trust and to use trust funds to do so.
Clause 14 gives the trustees absolute and unfettered discretion in the
exercise of their powers. Clause 7.4 affords them a full indemnification out
43 Above n 10 at par 15.
38
of the trust fund. This is supported by the common law rule that trustees
who are sued in their representative capacity are indemnified from
personal payment of legal expenses unless the court decides at the end of
the trial that they ought to be personally liable
84. In addition, the trustees passed two resolutions to the effect that the Trust
is to fund the opposition to Otto’s claim. I deal only with the July 2024
resolution given that an interdict is forward looking.
85. On the face of it, the July 2024 resolution44 authorized the trustees, acting
in such capacity (including Otto), to have the Trust pay for their legal fees
in the action . The resolution contains a clawback provision which is
consistent with the common law, na mely, that if the court makes a de
bonis propriis cost order against any trustee, then such costs as have
already been paid by the Trust must be reimbursed to the Trust by that
trustee, by setting of f the costs against any capital distribution that may
be made to that trustee. In other words, the clawback provision allows for
reimbursement to be effected by set -off, given that on vesting, the net
assets will be distributed to the beneficiaries. It will of course be open to
the trial court, when ordering costs, to decide how reimbursement should
be made.
44 The resolution reads as follows:
“1. The Trustees are entitled to have their legal expenses in relation to the legal proceedings under
case number: 2021/37198 paid by the Trust subject to any costs orders that are made against a
trustee de bonis propriis.
2. The legal expenses payable by the Trust shall include the fees and disbursements payable to
each trustee’s attorneys of record, counsels’ fees and the fees payable to expert witnesses.
3. In the event that the court in the legal proceedings under case number 2021/37198 makes a
cost order against a trustee de bonis prop riis, then such costs as have already been paid by the
Trust shall be reimbursed to the Trust by that trustee by setting off the costs against any capital
distribution that may be made to that trustee.”
39
86. The resolution was passed at a duly constituted trustees ’ meeting in
accordance with clauses 2.7 and 2.8 read with 2.10 of the Trust Deed in
circumstances where all the trustees were present and voted . It wa s
passed by majority vote. Otto has not sought to have the resolution set
aside nor has he brought proceedings declare it invalid. On the face of it,
the resolution is operative and valid.
87. Otto contends that the resolutions are invalid based on his argument in
relation to clauses 2.10 and 4.2.16, which I have already dealt with , and
further based on his version that in giving effect to the resolution, his
siblings are acting in breach of their fiduciary duties and in breach of clause
15 of the trust deed.
88. At common law , trustees who are also beneficiaries are not disqualified
from acting as trustee s, even where their personal interests are
implicated. In Jowell,45Scott JA held as follows:
"A trustee must generally speaking avoid as far as possible a c onflict between her
personal interests and those of the beneficiaries (see Honoré’s South African Law
of Trusts 4 ed 260). But in the present case such a conflict was created by the will
itself. Mrs Jowell is both income beneficiary and trustee for the capital beneficiaries.
The mere fact that a particular transaction may appear to favour her rather than
the capital beneficiaries does not necessarily mean there was a breach of trust. But
such a transaction will be “narrowly scrutinized” “
89. Mr Snyckers submitted that the need for narrow scrutiny does not arise in
the present case because the July 2024 resolution does not favour any one
45 Jowell v Bramwell-Jones and others 2000(3)SA 274 (SCA) at par 16. See too: Cameron et al
Honore’s South African law of Trusts, 6th ed at 369-370, where the following is stated:
“ A trustee must as far as possible avoid a position where his or her private interest conflicts with his
or her duty as trustee. In other words, the trustee should avoid a position where his or her private
interests conflict with those of trust beneficiaries. This cannot of course apply where the trust
instrument itself creates a conflict, as by appointing the trustee for the capital beneficiary and income
beneficiary, even though in such situations if the trustee is also a beneficiary and acts in such a way
as to benefit him or herself at the expense of the other beneficiaries, the trustee’s acts will be narrowly
scrutinized.”
40
of the trustees any more than any other trustees. It confers exactly the
same benefit to all trustees, Otto included . That appears to me to be
correct.
90. Otto alleges that clause 15 of the Amended Trust Deed prohibits
distributions after the vesting date of the Trust and in the event that the
Trust has not vested, prevents beneficiaries from purporting to deal with
distributions that they may become entitled to prior to actually being paid
those distributions. Otto’s reliance on clause 15 of the trust deed is
misplaced. Clause 15, properly interpreted, means that until a beneficiary
has received payment of an income or capital distribution that beneficiary
may not cede, assign or pledge the payment that the beneficiary is due to
receive. Otto’s case is in any event, incongruous. On his version, vesting
has occurred, ie., precluding the passing of resolutions. Yet reliance is
placed on the passing of a resolu tion which is alleged to be in breach of
clause 15.
91. Aside from the common law, the provisions of the trust deed prima facie
empower the trustees to defend the action and to use trust funds doing
so. Likewise, the July 2024 resolution passed in accordance with the
provisions of the trust deed, expressly authorizes the use of trust funds to
pay the legal fees of each of the trustees individually.
Requirements for an interdict
92. Mr Franklin argued that, despite how the notice of motion is cast, the relief
sought is , in substance, final in effect. The interdict against using t rust
funds applies the instant it is granted and endures for the duration of the
action until all appeals are finalised. If the interdict is granted, the
trustees’ ability to defend the Trust at its own expense is irretrievably lost;
41
the legal costs will not be incurred by the Trust and there is nothing for
the trial court to revisit or modify in relation thereto. It would also render
nugatory the July 2024 r esolution. That immutability is the hallmark of
finality. Further, Mr Franklin submits that the order Otto seeks would
conclusively declare at the time it is given that the respondents possess
no right to use the Trust funds to defend the action, and that any reliance
on such a right was unlawful ab initio. This is not the preservation of the
status quo ; it is a distinct, self -contained, and a final determination of
substantive rights.
93. Although the above submissions are persuasive, I am prepared to decide
the matter on the basis of principles applicable to interim interdicts, for if
Otto cannot satisfy the less onerous requirements of an interim interdict,
he would not have satisfied the requirements of a final interdict.46
94. The requirements of an interim interdict are trite. An applicant must
establish:
(i) a prima facie right which requires protection in the interim period.
As the Constitutional Court put it, 47 “It is a right to which, if not
protected by an interdict, irreparable harm would ensue . An interdict is
meant to prevent future conduct and not decisions already made. .. the
46 The requirement for obtaining a final interdict were discussed In Equistock Properties 8 (Pty) Ltd
and Another v Oosthuizen and Others (738/2023 and 739/2023) [2025] ZASCA 06 (29 January 2025)
at par 17, where the following was said: “...the requirements for obtaining a final interdict are trite. The
following must be shown: (a) a clear right on the part of the applicant; (b) an injury actually committed
or reasonably apprehended; and (c) the absence of any other satisfactory remedy. As for a clear right,
it is established that an applicant must prove the right it seeks to protect on a balance of probabilities.
Whether an applicant has such a right is a substantive law question, but whether it has been
established is an evidential question. Where the point is genuinely in dispute in opposed application
proceedings, the applicant can only succeed if the facts averred by the respondent, together with the
facts in the applicant’s affidavits, which the respondent admits, establishes that right. ” (footnote
excluded)
47 National Treasury and Others vs Opposition to Urban Tolling Alliance and Others 2012 (6) SA 223
(CC), para [50].
42
applicant must demonstrate a prima facie right that is threatened by an
impending or imminent irreparable harm.” (emphasis added
(ii) a well-grounded apprehension of irreparable harm if the interim
relief is not granted and the ultimate relief is eventually granted
(iii) that the balance of convenience favours the granting of an interim
interdict; and
(iv) that the applicant has no other satisfactory remedy.
95. The harm that is protectable by an interdict must be irreparable in the
sense that it cannot be reversed.48 In my view, Otto has failed to establish
a right which is threatened by impending irreparable harm , nor has he
established the remaining requirements so as to entitle him to relief.
96. It is irrefutable that the Trust has a substantial income generating asset
base. That is evident from the organogram referred to earlier in the
judgment. Otto’s right to pursue the action remains fully intact if the
interdict is not granted. The clawback provision in the July 2024 resolution
provides a mechanism for repayment to the Trust of legal fees wrongfully
expended in the event that a trustee is ordered to pay costs de bonis propriis.
There are also other methods for protecting the trust. Aside from the Stander
rule, which allows the trial court to revisit the use of trust funds for litigation,
the very relief which Otto seeks in claim B is aimed at allowing the Trust to
recoup trust monies found to have been improperly spent by the respondent
trustees.
97. The trial court has the widest discretion as to costs. Otto has not been
able to establish prima facie (or clearly) what the court is going to be
ordering at the end of the trial in relation to costs , for the simple reason
48 City of Tshwane Metropolitan Municipality v Afriforum and Another 2016 (6) SA 279 (CC) para
[59].
43
that he cannot pre -empt the trial court’s decision . He unquestionably
cannot establish with any certainty that the trustees will not get the costs
out of the trust fund, precisely because the trial court is yet to determine,
based o n all the circumstances, whether the respondents were
unreasonable, mala fide or negligent in defending. Even if it were to be
found that the trustees were acting in a personal capacity, if they were
bona fide , reasonable and not negligent in defending, th ey will still be
allowed to have their legal costs paid out of the trust fund. The court in
Stander pointed out, in par 5, that letters of wishes are not binding – prima
facie, therefore, it cannot be said at this juncture that the respondents are
opposing unreasonably or negligently.
98. If Otto succeeds at trial , then the trust fund would have vested in the
primary beneficiaries on the date of the founder’s death and each one of
the beneficiar ies would already have acquired vested rights in a
substantial portion of the trust fund. In these circumstances, there can be
no legitimate apprehension that the trustee respondents would be unable
to satisfy a de bonis propriis cost order. There is therefore no prospect at
all that, if the litigation is funded out of the Trust, but a reckoning is
ordered at the end of the trial (i.e. if Otto is correct that legal fees ought
not to have been funded by the Trust), any prejudice would be suffered by
Otto or by the Trust in its administration. If Otto does not succeed at trial,
then the opposition would have been justified in any event.
99. I agree with Mr Franklin submission that the high value of the Trust's
assets provides a significant financial buffer. Even with the legal fees
incurred, the Trust's overall financial stability remains, and will continue
to remain robust, and any depletion of liquid reserves does not pose a
threat to the Trust's financial health.
44
100. I therefore find that Otto has failed to establish a right that is threatened
by irreparable and imminent harm.
101. Otto contends that there are no alternative remedies given that his
siblings will not stop using trust funds unless this application is brought,
and the interdict is granted. The enquiry is not whether an interdict is the
only way to stop payments now; rather, it is whether adequate, effective
alternative remedies exist to vindicate the underlying righ t. Claim B
provides a satisfactory remedy in the event that the respondents are
ordered to personally repay amounts spent by the Trust in respect of their
legal fees. In addition, Otto is also seeking personal costs orders against
the respondents in the action . The July 2024 r esolution fortifies this
remedy. It recognises in its terms that the trial court has an overriding
discretion to make such costs orders as the court deems appropriate at
the end of the trial . These remedies are both adequate - they ensure
complete restitution , and the remedies are also effective - they are
already before the trial court and do not depend on future proceedings.
102. The balance of convenience also favours the T rust paying the legal fees
incurred by Emma, Agatha and Wypke Jr in the main Action , pending the
final determination of the main action. All the respondent trustees have
said that they would , in effect, be stymied in continuing with the Trust’s
defence if not funded by the Trust . Otto has not established that he (or
the Trust) will suffer any prejudice if the Trust continues to pay the legal
fees. If he succeeds at trial, the Trust would be able to recoup fees that
are found to have been improperly spent as the distribution that the
beneficiaries will receive run into hundreds of millions of rands. If he does
45
not succeed at trial then it is axiomatic that the fees would not have been
improperly incurred on behalf of and for the benefit of the Trust.
103. Otto adopts mutually inconsistent positions: He argues that future costs
orders de bonis propriis would not be sufficient (he speculates that the
respondents do not have the funds for this), and that the costs incurred
by the respondents would be " irrecoverable by the Trust ". On the other
hand, he insists the respondents should finance the entire defence from
their own pockets now , given that they each previously received a R1
million donation from the Trust . His assumption – that the respondent
trustees do not personally have funds - if correct, only serves to
underscore the fact that the balance of convenience lies in favour of the
refusal of an interdict.
104. In all the circumstances, I am unable to find that Otto has met the
requirements for the grant of an interdict.
Costs
105. In the notice of motion, Otto seeks an order that the respondents pay the
costs of the application jointly and severally, on the attorney and own
client scale, inclusive of the costs of two counsel.
106. Emma seeks the dismissal of the application with costs on Scale C inclusive
of the costs of two counsel, in her answering affidavit.
107. Agatha seeks the dismissal of the application with costs on the attorney
and client scale incl usive of the costs of two counsel , in her answering
affidavit.
46
108. Wypke Jr seeks the dismissal of the application with costs on the attorney
and client scale in his answering affidavit . In his heads, a punitive costs
order was not pursued.
109. Mr Snyckers submits that the application is vexatious and an abuse of the
process for reasons detailed below and that this court should mark its
disapproval with the manner in which Otto has prosecuted this application
by awarding attorney and client costs against him in his personal capacity.
110. First, Otto originally sued the trustees only in their representative capacity
and sought that the legal costs of action (including his own costs) be paid
by the Trust . He knew for a period of three years before institut ing the
Costs Application that the Trust was paying Emma, Agatha and Wypke
Junior’s legal fees, that they had raised different defences and that they
were separately represented. Otto’s sudden about-turn when he launched
this application, together with the amendments to his pleadings, w ere
clearly part of a stratagem to prevent his fellow -trustees from having
access to funds to properly oppose the action.49
111. Second, Otto has used the removal claim (claim C) as a basis to contend
that from 2 May 2024 , the trustees are precluded from using trust funds
in opposing the action, in circumstances where claim C did not even exist
at the time the application was launched.
49 Mr Franklin too argues that true aim of this costs application is to paralyse the Trust’s ability to
defend itself agains t Otto’s claims in the action . The introduction of removal relief by way of
amendment was an orchestrated and a contrived attempt to create a basis for contending that the
respondent trustees are acting personally,in conflict with their fiduciary duties, by using trust funds to
finance their litigation. Mr Franklin therefore submits that to the extent that there is such conflict (which
is denied) then “Otto has deliberately engineered the conflict by the belated inclusion of the removal
relief, over 2 years after the 28 April Resolution was passed. That relief is plainly entirely ancillary to
the purpose of the action and is inextricably linked to the merits of the action and whether the action
fell to be defended by the Trust in the first place.” I find this submission persuasive.
47
112. Third, the July 2024 resolution adopted by majority vote provides for the
Trust to pay all the trustees’ legal expenses, including Otto’s. His refusal to
avail himself of this option is not only unreasonable but calls into doubt
his bona fides in launching and persisting with this application. He certainly
cannot contend that he will be worse off if the costs are paid by the Trust.
113. Fourth, Otto accuses his siblings of litigating on a luxurious scale that is
excessive and wasteful, whereas it is Otto that litigates on a scale that is
excessive, wasteful, unreasonable and unnecessary, as further
demonstrated in heads of argument filed on behalf of Agatha. Inter alia,
Otto referred to irrelevant and extraneous matters in his affidavits, which
served only to embarrass his siblings ; and produced 171 pages of
duplicated documents in his replie s to the answering affidavit, repeating
the same contents in the first 23 pages of each replying affidavit.
114. In Plastic Converters,50 the court cautioned that the scale of attorney and
client is one which should be reserved for cases where it can be found that a
litigant conducted itself in a clear and indubitably vexatious and
reprehensible matter. The term ‘vexatious’ was considered in the context of
a punitive costs award in Johannesburg City Council ,51 where the court
expressed the view that proceedings may be regarded as vexatious when a
litigant puts the other side to unnecessary trouble and expense which it
ought not to bear. The Constitutional Court affirmed this approach in Public
Protector v SARB ,52 stating that a punitive costs order is appropriate ‘in
50 Plastic Converters Association of South Africa on behalf of Members v National Union of
Metalworkers of SA [2016] ZALAC 39; [2016] 37 ILJ 2815 (LAC) at para 46.
51 Johannesburg City Council v Television & Electrical Distributors (pty) Ltd and Another 1997 (1) SA
157 (A) at 177D-E.
157 (A) at 177D-E.
52 Public Protector v SARB [2019] ZACC 29; 2019 (9) BCLR 1113 (CC) at para 144.
48
circumstances where it would be unfair to expect a party to bear any of the
costs occasioned by the litigation’ 53 and is designed ‘to mark the court’s
displeasure at a litigant’s conduct, which includ es vexatious conduct and
conduct that amounts to an abuse of the process of court’.54
115. Without repeating what has been stated, I am persuaded that Mr
Snycker’s submissions have merit and that a special costs order is
warranted in respect of Agatha’s opposit ion. The timing of Otto’s
amendments (inter alia to introduce the removal claim) and the launch of
this application tends to support an inference that this application was
brought as a stratagem to stifle the respondent trustees’ ability to defend
the action on behalf of the trust. In effect, it amounts to an attempt at
paralysing the Trust’s ability to defend itself against Otto’s claims in the
action, in that a trustee cannot be compelled to pay a debt of the trust
estate in the first instance from personal funds . In these circumstances,
the application cannot be said to be bona fide . Otto sought an interim
interdict, based on ordinary common law principles rela ting to interdicts
in this application, only to change course at the hearing of the matter,
without notice to opposing counsel, to rely on what was termed a sui
generis procedure in the quest to find some other legally cognizable basis
to put a stop to the use of trust funds in the litigation . Had this not been
an afterthought, he would have included this relief in his papers. He must
have anticipated that he could not satisfy the requirements of an interdict.
Moreover, he launched this application prematurely at a time when a
cause of action did not yet exist.
53 Public Protector v SARB, para 221.
54 Public Protector v SARB, para 223.