Brief Summary

Trusts — Appointment of trustees — Review of Master's decision — Applicants, as beneficiaries and trustees, challenged the Master's appointment of new trustees without affording them a hearing — Court held that the Master's decision violated the principles of just administrative action and was set aside.

Comprehensive Summary

Summary of Judgment

1. Introduction

This was a statutory review application brought in the High Court (Northern Cape Division, Kimberley) to challenge an administrative decision of the Master of the High Court, Kimberley (“the Master”) concerning the governance of a trust. The proceedings were framed as an application to review and set aside (i) the Master’s decision of 4 September 2019 to appoint additional trustees and (ii) the letters of authority issued on the same date authorising those appointees to act as trustees of the Badirammogo Trust (“the Trust”).

The applicants comprised eight individuals, including one serving trustee and several beneficiaries. The first respondent was the Master. The second to sixth respondents were the persons appointed by the Master as trustees on 4 September 2019. Numerous further respondents were cited, with the Minister of Agriculture, Land Reform and Rural Development cited as an interested respondent, although no substantive relief was sought against that party in the order ultimately granted.

The matter became unopposed in substance. A notice of intention to oppose was initially filed by a group of respondents, but a subsequent notice of withdrawal was delivered. The Master did not file an answering affidavit and did not oppose the merits, although he filed an explanatory report (not under oath) and resisted a costs order against his office.

The dispute concerned the lawfulness, rationality, and procedural fairness of the Master’s exercise of statutory powers under the Trust Property Control Act 57 of 1988, particularly in relation to the appointment of further trustees and the procedural protections owed to existing trustees and beneficiaries when such appointments are made.

2. Material Facts

The Trust was created and registered in 2004 under the Trust Property Control Act 57 of 1988 as a vehicle for the economic empowerment of workers employed by Sonvrucht (Pty) Ltd and Charge Trust. The Trust held 45% of the issued shares in Sonvrucht (Pty) Ltd. Over time, a substantial number of beneficiaries elected to sell their participation shares back, in exchange for an agreed amount, after which they ceased to be beneficiaries; these persons were referred to in the judgment as the “erstwhile beneficiaries”.

During 2014, it became apparent to the erstwhile beneficiaries that the empowerment venture was financially benefiting the remaining beneficiaries substantially. The erstwhile beneficiaries accordingly sought to be reinstated as beneficiaries, but the judgment indicates that they did not pursue the matter until later developments.

In 2019, the Master requested the Trust’s accountants (rather than the trustees) to provide the Trust’s financial statements, without indicating the statutory authority or purpose for the request. This initiated extensive correspondence. When the trustees sought clarification, the Master disclosed that new trustees had been appointed and that the request was made at their behest.

On 24 March 2021, after a protracted period of enquiries, the Master informed the trustees that an investigation had been ordered in terms of section 16(2) of the Trust Property Control Act and that the investigation was initiated at the request of the Department of Agriculture, Land Reform and Rural Development. Documents later provided to the Trust’s attorneys during 2021 revealed, among other things, that an investigator (Mr Sebashe) had been appointed on 5 September 2016 to investigate the affairs of (inter alia) the Trust, and that the investigation related to “possible” irregularities.

The applicants’ factual case, as accepted for purposes of the review, was that throughout this process they were not informed of the investigation, its purpose or outcome, or that the appointment of additional trustees was being considered. They also contended that adverse findings were made in the investigation report against the trustees without interviewing them or the existing beneficiaries.

In the “Evaluation” section, the court identified certain matters as undisputed. These included that the Master failed to afford the applicants an opportunity to be heard, that the decision to order the section 16(2) investigation and to appoint further trustees was taken at the behest of the Department and disgruntled erstwhile beneficiaries, and that the Master’s stated reason for the decision was to restore order and stability on the farms and in the Trust. It was also undisputed that the applicants were not advised or informed about the appointment of the second to sixth respondents, and that the investigator’s report stated that the appointment was to investigate “possible” irregularities across various empowerment schemes.

3. Legal Issues

The court was required to determine whether the application was properly brought as a statutory review under section 23 of the Trust Property Control Act 57 of 1988, rather than exclusively as a review under the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) and Uniform Rule 53.

On the merits, the central questions were whether the Master’s decision to appoint additional trustees under section 7(2) of the Trust Property Control Act was procedurally fair, including whether existing trustees and beneficiaries had a right, or at least a legitimate expectation, to be heard before such appointment; and whether the decision was reviewable under PAJA on the basis that it was taken for an ulterior purpose, under the unauthorised or unwarranted dictates of others, and/or was not rationally connected to the information before the Master and was unreasonable.

The dispute primarily concerned the application of legal standards to established or undisputed facts, particularly procedural fairness and rationality in administrative decision-making, together with an evaluative determination as to whether the circumstances gave rise to a legitimate expectation of prior consultation notwithstanding the wording of section 7(2).

4. Court’s Reasoning

The court first addressed the procedural route. Relying on the Supreme Court of Appeal’s discussion in Fesi v Ndabeni Communal Property Trust [2018] 2 All SA 617 (SCA), the court held that section 23 of the Trust Property Control Act creates a form of special statutory review. It accepted that this mechanism may allow a court to consider the merits broadly and is not confined to the narrower approach sometimes associated with PAJA review. The court was satisfied that the matter was properly before it as a section 23 review.

Turning to procedural fairness, the court recognised that a failure to give affected parties an opportunity to be heard ordinarily renders administrative action procedurally unfair under PAJA. It then engaged the authority of Moore NO and Others v Du Toit and Others (6900/2009) [2009] ZAKZPHC 66 (30 November 2009); 2009 JDR 1311 (KZP), which distinguishes between appointments under section 7(1) (where consultation is expressly required) and section 7(2) (which does not expressly require consultation). The Moore decision was treated as establishing that section 7(2) may impliedly exclude a strict obligation of prior consultation in some circumstances, particularly where urgent intervention may be needed to defuse conflict.

However, the court emphasised Moore’s qualification that the denial of a hearing under section 7(2) is not absolute, and that affected parties may have a legitimate expectation of being heard where the appointment may affect their interests or reflect adversely on existing trustees. Applying this to the facts it regarded as established, the court found that the applicants were unaware of the decisions and events affecting their rights, and that they were not afforded an opportunity to respond to allegations of malpractice reflected in the report. It reasoned that the appointment of the second to sixth respondents would affect the interests of beneficiaries and constitute an adverse reflection upon the serving trustees. On this basis, it concluded that the Master had an obligation to consult the applicants before appointing the additional trustees, and the failure to do so rendered the decision procedurally unfair.

Although the court indicated that a single established ground of review suffices, with reference to AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency, and Others [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR 1 (CC), it nevertheless addressed the further PAJA-based complaints. It accepted that the Master’s decision to order a section 16(2) investigation and to appoint further trustees was taken at the behest of the Department and disgruntled erstwhile beneficiaries and concluded that this meant the decision was taken for an ulterior purpose or motive and due to unauthorised or unwarranted dictates, engaging section 6(2)(e)(ii) and section 6(2)(e)(iv) of PAJA.

On rationality, the court reasoned that appointing additional trustees aligned with a disgruntled group would create two sets of people with conflicting interests and was therefore likely to destabilise the Trust, contradicting the Master’s stated aim of restoring stability. The court found that the decision bore no rational connection to the information before the Master, and it criticised the investigation report for lacking substantiated factual evidence and for not engaging with the relevant trust instrument. On these bases, it held that the decision was inconsistent with the rationality requirements captured in section 6(2)(f)(cc) of PAJA, and also found the decision irrational and unreasonable in the sense contemplated by PAJA.

Having concluded that review grounds were established, the court held the decision had to be declared unlawful and set aside. It granted the relief sought and held that there was no reason to depart from the principle that costs follow the result, awarding costs against the first to sixth respondents on the specified scale.

5. Outcome and Relief

The court reviewed and set aside the Master’s decision of 4 September 2019 appointing the second to sixth respondents as trustees of the Badirammogo Trust. It also set aside the letters of authority issued on 4 September 2019 authorising the second to sixth respondents to act as trustees.

The court ordered that the first to sixth respondents pay the applicants’ costs, jointly and severally, on a party and party scale (Scale C) as set out in Uniform Rule 69(7) read with Rule 67A(3).

Cases Cited

Fesi v Ndabeni Communal Property Trust [2018] 2 All SA 617 (SCA)

Oudekraal Estates (Pty) Ltd v City of Cape Town and others 2004 (6) SA 222 (SCA)

Nel and another NNO v The Master (ABSA Bank Ltd and others intervening) 2005 (1) SA 276 (SCA)

Johannesburg Consolidated Investment Co v Johannesburg Town Council 1903 TS 111

Mofokeng v Master of the North Gauteng High Court 2014 JDR 0039 (GNP)

Moore NO and Others v Du Toit and Others (6900/2009) [2009] ZAKZPHC 66 (30 November 2009); 2009 JDR 1311 (KZP)

AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency, and Others [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR 1 (CC)

Legislation Cited

Constitution of the Republic of South Africa, 1996 (sections 33(1), 33(2), and 172(1)(a)–(b))

Promotion of Administrative Justice Act 3 of 2000 (sections 6(1), 6(2)(e)(ii), 6(2)(e)(iv), 6(2)(f)(cc), 6(2)(h), and section 8)

Trust Property Control Act 57 of 1988 (sections 6(1), 7(1), 7(2), 16(1), 16(2), and 23)

Rules of Court Cited

Uniform Rules of Court, Rule 53

Uniform Rules of Court, Rule 69(7)

Uniform Rules of Court, Rule 67A(3)

Held

The court held that the application was properly brought as a section 23 statutory review under the Trust Property Control Act 57 of 1988. On the merits, it held that the Master’s appointment of additional trustees on 4 September 2019 was unlawful because the applicants, as serving trustee(s) and beneficiaries with a direct and substantial interest, had a legitimate expectation of being heard before the appointment was made, and the Master’s failure to consult rendered the decision procedurally unfair.

The court further held that the Master’s decision was taken at the behest of the Department and disgruntled erstwhile beneficiaries, constituting an ulterior purpose and reflecting unauthorised or unwarranted dictates, and that the decision lacked a rational connection to the information before the Master. The decision and the resulting letters of authority were accordingly reviewed and set aside, with costs awarded against the first to sixth respondents.

LEGAL PRINCIPLES

Section 23 of the Trust Property Control Act 57 of 1988 provides a special statutory review mechanism that permits a court to consider the merits of the Master’s authorisations, appointments, removals, decisions, orders, or directions under the Act, and to grant appropriate relief.

Although section 7(2) of the Trust Property Control Act 57 of 1988 does not expressly require prior consultation before the Master appoints a co-trustee, the denial of a hearing is not absolute. Where the appointment may affect beneficiaries’ interests or reflect adversely on serving trustees, affected parties may have a legitimate expectation of being heard, and procedural fairness may require consultation.

Once a ground of review is established under PAJA, the administrative action must be declared unlawful and remedied through a just and equitable order, with PAJA section 8 giving legislative content to the remedial discretion.

Administrative action is reviewable where it is taken for an ulterior purpose, due to unauthorised or unwarranted dictates, where it is not rationally connected to the information before the administrator, or where it is so unreasonable that no reasonable decision-maker could have so acted, as contemplated by PAJA section 6(2).

Mendile and Others v Master of the High Court and Others (654/2023) [2026] ZANCHC 5 (23 January 2026)