Brief Summary

Trusts — Removal of trustee — Trustee not given notice of meeting or informed of intent to remove her — Deprivation of opportunity to be heard rendering decision arbitrary — Tension between trustees not sufficient basis for removal — Appointment of new trustees not in accordance with trust deed. The applicants sought to challenge the removal of the first applicant as a trustee of the Meier Family Trust and the subsequent appointment of the first and second respondents as trustees. The court found that the removal was unlawful due to the lack of notice and opportunity for the first applicant to participate in the decision-making process, thus invalidating the appointments of the new trustees.

Comprehensive Summary

Summary of Judgment

Introduction

This was an application in the Western Cape Division of the High Court (Cape Town) for declaratory and ancillary relief concerning the lawful composition and control of the trusteeship of the Meier Family Trust (IT 16232/2007). The matter arose from a family dispute in which the first applicant sought to set aside her removal as a trustee, and to invalidate the subsequent appointments of two trustees who replaced her.

The applicants were Margo Meier (the first applicant and former spouse of the Trust’s founder), together with two of her adult children, Marné Meier and Morné Meier (second and third applicants), who supported the relief sought. The principal opposing parties were Johannes Stephanus Gerhardus du Toit N.O. and Johan Hurter van Zyl N.O., cited as the first and second respondents in their purported capacities as trustees of the Trust. The Master of the Western Cape High Court was cited as the sixth respondent and was the authority responsible for issuing letters of authority and for the Trust register, but did not oppose the application.

The dispute was rooted in a sequence of purported trustee meetings and resolutions (in 2017, 2019, and 2021) by which the first applicant was excluded and ultimately removed as trustee, and by which Van Zyl and later Du Toit were appointed as trustees. The applicants contended that these steps were unlawful and invalid because they were taken without notice to the first applicant and not in compliance with the trust deed and fundamental principles of South African trust law.

As to procedure, the application was launched on 6 December 2021. The respondents initially raised a locus standi point, but in argument conceded that the applicants had standing, leaving the court to determine the validity of the first applicant’s removal and the validity of the appointments of Van Zyl and Du Toit as trustees. Costs were not finally determined in the judgment; the court directed further submissions on costs after delivery.

Material Facts

The Trust was created on 19 March 2007 by Cornelius Waldo Meier (“Meier Snr”) as a typical family trust. The initial trustees were Meier Snr, the first applicant (Margo Meier), and a representative associated with LDP Trust Company (later Stellenbosch Fiduciary Services (Pty) Ltd (“SFS”)). The Trust was registered with the Master under the Trust Property Control Act 57 of 1988.

On 4 July 2008, the trust deed was amended. The amended deed identified the first applicant and the Meier children (including the second and third applicants, and two minor children) as capital beneficiaries, and reserved to the trustees absolute discretion in allocating benefits. The trust deed contained administrative procedures for trustee meetings, including a requirement in clause 5.1 that written notice with a proposed agenda be delivered to all trustees with 24 hours’ notice, and contained provisions regulating appointment and removal of trustees, including clause 4.3 (powers of the donor or successors-in-rights to appoint/remove “under written instrument”) and clause 4.2 (at least two trustees at all times, and at least one suitably qualified to deal with financial matters).

The marriage between the first applicant and Meier Snr deteriorated. Divorce proceedings were instituted in 2015 and the parties were divorced on 23 May 2018. Meier Snr was later provisionally sequestrated on 6 July 2021 and finally sequestrated on 8 October 2021, with Mari Haywood N.O. and Retha Stockhoff N.O. appointed as provisional trustees of his insolvent estate on 15 July 2021.

A series of changes to trusteeship then occurred, allegedly without the first applicant’s knowledge or participation.

In relation to the 4 August 2017 meeting, the first applicant alleged that she received no notice of a trustee meeting held by round-robin procedure, and did not attend. The minutes recorded that SFS’s resignation as trustee was accepted and that Van Zyl was appointed. The first applicant did not sign the minutes. In the answering affidavit, Van Zyl stated it was uncertain whether notice was given but asserted that this was irrelevant. The court held that this response did not raise a genuine dispute of fact and accepted that no notice was given, and thus that clause 5.1 was not complied with.

In relation to the 30 January 2019 meeting, it was common cause (and not meaningfully disputed) that the first applicant also received no notice of a purported trustee meeting in Cape Town at which Meier Snr and Van Zyl purported to remove her as trustee. The minutes recorded a resolution that “the Donor and majority of the Trustees” removed the first applicant, with a note that she would be notified by registered post. A letter was allegedly sent on 29 March 2019 but, on the papers, it did not reach her.

On 6 July 2021, the day of Meier Snr’s provisional sequestration, minutes recorded a meeting at Stellenbosch attended by Meier Snr and Van Zyl. The minutes recorded (i) the appointment of Du Toit as trustee with immediate effect, (ii) the resignation of Meier Snr as trustee, and (iii) a request to SFS to implement changes with the Master. The court observed that the precise timing on that day was unclear, but considered it potentially material given the trust deed’s disqualification of insolvent trustees.

The respondents’ case on the merits was that the donor (Meier Snr) had power under clause 4.3 to remove and appoint trustees “under written instrument”, and that the minutes of the meetings constituted such written instruments. Meier Snr filed an affidavit (referred to in the answering papers) claiming that the minutes were intended to serve as the written instruments required by clause 4.3 and that the first applicant was not acting in the Trust’s best interests.

The court ultimately treated as decisive that the first applicant was excluded from meetings without notice, that the meetings were not properly constituted, and that the documentary mechanism relied on by the respondents did not comply with the trust deed’s requirements for appointment and removal.

Legal Issues

The central legal question was whether the first applicant’s removal as trustee and the subsequent appointments of Van Zyl and Du Toit as trustees were lawful and valid having regard to (i) the provisions of the trust deed governing meetings, appointment and removal of trustees, and (ii) fundamental trust-law principles requiring trustees to act jointly and properly.

This was primarily a dispute about the application of law to largely common-cause facts, especially where the absence of notice was either admitted or not genuinely disputed. To the limited extent that factual dispute existed (such as whether notice was given for the August 2017 meeting), the court addressed whether a real dispute of fact had been raised.

A further issue concerned the appropriate remedy once the existing trusteeships were set aside, including whether the court should order the Master to appoint specific replacement trustees (namely the provisional trustees in Meier Snr’s insolvent estate), and how to deal with the trust deed’s requirement of at least two trustees and one trustee suitably qualified in financial matters.

Finally, costs remained an issue for later determination; the court considered competing considerations but deferred a final costs order pending further affidavits and written submissions.

Court’s Reasoning

The court approached the matter by reaffirming foundational principles of South African trust law and then applying those principles to the trust deed and the sequence of purported trustee decisions.

Relying on Land and Agricultural Bank of SA v Parker and others 2005 (2) SA 77 (SCA), the court emphasised that a trust (absent statutory provision) is not a legal person; the trust estate vests in trustees and can act only through them, and the trust deed is the constitutive instrument defining who the trustees are and how the trust can be bound. The court further reiterated the rule that, unless the trust deed provides otherwise, trustees must act jointly in order to bind the trust estate, referring to Nieuwoudt and another NNO v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA). The judgment also noted trustees’ general duties at common law to act in good faith, with diligence, and with an independent mind.

Against that framework, the court examined clause 5.1 of the trust deed, which entitled any trustee to summon a meeting but required written notice with a proposed agenda to all trustees with 24 hours’ notice. Although clause 5 permitted flexibility (including round-robin style decision-making), the court treated compliance with the notice requirement—particularly where a trustee was entitled to attend and participate—as essential to a properly constituted meeting.

With respect to the 4 August 2017 meeting, the court found that the first applicant received no notice, and that this rendered the meeting invalidly constituted. While the meeting may have been quorate in a numerical sense, the court considered the deliberate exclusion of a trustee in circumstances where trustees were required to act jointly to be inconsistent with both the trust deed and trust-law principles. The court further reasoned that the resignation of SFS and the appointment of a replacement trustee were matters in which the first applicant was entitled to participate, including because clause 4.2 required at least one trustee suitably qualified in financial affairs. The appointment of Van Zyl was therefore not a valid joint decision of properly convened trustees and was not in compliance with the trust deed.

Turning to the 30 January 2019 meeting, the court held that the same deficiency—absence of notice to an existing trustee—meant the meeting was not properly constituted. The court added that the recorded resolution purported to remove the first applicant by the decision of the trustees present, whereas the trust deed did not authorise “fellow trustees” to remove a trustee in that manner. The respondents’ attempt to characterise the minutes as the donor’s exercise of clause 4.3.2 powers was rejected because, on the face of the minutes, the donor did not purport to exercise that clause; the decision was recorded as a trustees’ resolution at a meeting. Moreover, because Van Zyl’s appointment in 2017 was itself held invalid, his participation in the 2019 decision could not cure the defect and could not constitute valid trustee action.

The court placed weight on procedural fairness and arbitrariness in assessing the removal. It held that the first applicant was deprived of the opportunity to be heard because she was not informed of the meeting or of the intention to remove her. In the absence of contemporaneously communicated reasons, the court considered the decision arbitrary. The court rejected reliance on speculative assertions that notice did not matter or that her participation would not have made a difference.

In evaluating the respondents’ reliance on alleged conflict or lack of cooperation by the first applicant, the court relied on Gowar and another v Gowar and another 2016 (5) SA 225 (SCA), emphasising that friction or enmity between trustees, beneficiaries, or among trustees is not in itself sufficient for removal; the overriding inquiry is whether the trustee’s conduct imperils trust property or proper administration. On the evidence, the court found that the respondents had not demonstrated that the first applicant’s conduct justified removal in the Trust’s interests.

The court also endorsed the approach in Du Plessis and others v Van Niekerk and others 2018 (6) SA 131 (FB) to the effect that an implied requirement of good cause should be read into a donor’s power to remove a trustee under clause 4.3.2. On the facts, the court concluded that good cause was not established and the removal remained arbitrary.

As to Meier Snr’s ex post facto affidavit asserting that the minutes were “intended to serve” as written instruments under clause 4.3, the court reasoned that the mechanism actually used was not the preparation by the donor of a written instrument “by” or “under” his hand in the manner contemplated, but rather a round-robin trustee meeting process to the exclusion of the first applicant, producing resolutions later reduced to writing. This procedure was held to violate both the meeting notice requirements and the substantive structure of clause 4.3.

Regarding the appointment of replacement trustees, the court considered the trust deed’s requirement of at least two trustees and at least one trustee suitably qualified in financial matters. It noted that, after setting aside the appointments of Van Zyl and Du Toit, the first applicant would be reinstated and would temporarily be the sole trustee, which was inconsistent with clause 4.2 and required urgent regularisation. However, the court declined to direct that the first applicant appoint trustees under clause 4.4.1 given the emotionally charged context.

The applicants had proposed the appointment of the insolvency trustees, Haywood and Stockhoff, but the court raised concerns about potential conflicts of interest because their duties in winding up Meier Snr’s insolvent estate might conflict with the Trust’s interests and because the first applicant was the petitioning creditor in the sequestration. The applicants did not ultimately press that relief, and the court refused to appoint them as trustees.

Instead, the court concluded that the appointment of one or more additional trustees should be left to the Master, who would be required to act with due regard to the trust deed’s requirements. The court also noted, without deciding, that there were unresolved issues about Meier Snr’s residual donor powers after sequestration and whether the Trust might be a sham; it indicated that the Master could consider the papers and the judgment when deciding whether appointments were warranted.

On costs, the court considered that both sides claimed to act in the interests of the Trust and that trustees might have felt obliged to oppose, but it declined to make a final costs order without hearing further from the parties. It therefore directed supplementary submissions and/or affidavits on costs within two weeks.

Outcome and Relief

The court granted declaratory and consequential relief setting aside the disputed trusteeship changes.

It declared that the appointments of Du Toit and Van Zyl as trustees of the Meier Family Trust were unlawful, invalid, and of no force and effect, and authorised and directed the Master to remove them as trustees.

It declared that the removal of Margo Meier as trustee was unlawful, invalid, and of no force and effect, and authorised and directed the Master to correct the official records to reflect that she has been a trustee throughout and since the Trust’s registration.

It authorised and directed the Master, if satisfied that appointment of further trustees is warranted and acting with due regard to the trust deed, to appoint one or more additional trustees as soon as practically possible.

The court made no final costs order in the judgment. It directed the parties to address the court on an appropriate costs order by filing short affidavits and/or supplementary heads of argument within two weeks of delivery of the judgment.

Cases Cited

Ripoll-Dausa v Middleton NO and others [2005] ZAWCHC 6; 2005 (3) SA 141 (C)

Land and Agricultural Bank of SA v Parker and others 2005 (2) SA 77 (SCA)

Nieuwoudt and another NNO v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA)

Gowar and another v Gowar and another 2016 (5) SA 225 (SCA)

Du Plessis and others v Van Niekerk and others 2018 (6) SA 131 (FB)

Legislation Cited

Trust Property Control Act 57 of 1988 (including section 20(1))

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that trustee meetings and resolutions that were taken without notice to an existing trustee, contrary to clause 5.1 of the trust deed, were not properly constituted and could not validly conduct trust business affecting trusteeship. The first applicant’s exclusion from meetings at which she was removed, and at which trustees were appointed, resulted in decisions that were inconsistent with the trust deed and the joint-action requirements of trust law.

The court held further that the purported reliance on the donor’s powers under clause 4.3 of the trust deed could not validate the process used, because the mechanism employed was not a compliant “written instrument” by or under the donor’s hand, but rather trustee resolutions adopted through an improperly convened round-robin process that excluded a trustee entitled to participate.

Accordingly, the court set aside the removal of the first applicant as trustee and declared invalid the appointments of Van Zyl and Du Toit as trustees, directing the Master to correct the register and to consider appointing additional trustees consistent with the trust deed. The court declined to appoint the insolvency trustees (Haywood and Stockhoff) as replacement trustees due to potential conflicts of interest. Costs were postponed for further submissions.

LEGAL PRINCIPLES

The judgment applied the principle that, absent statutory provision, a trust is not a separate legal person; the trust estate vests in trustees and acts only through them, and the trust deed defines who the trustees are and under what circumstances they may bind the trust estate, as articulated in Land and Agricultural Bank of SA v Parker and others 2005 (2) SA 77 (SCA).

It applied the fundamental rule that, unless the trust deed provides otherwise, trustees must act jointly for their acts to bind the trust estate, consistent with Nieuwoudt and another NNO v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA). The court treated compliance with the trust deed’s meeting and decision-making provisions as integral to lawful joint trustee action.

The judgment applied the principle that the removal of a trustee is not justified merely by tension, enmity, or conflict; the controlling inquiry is whether the trustee’s conduct imperils trust property or its proper administration, following Gowar and another v Gowar and another 2016 (5) SA 225 (SCA).

It further applied the approach that a power to remove a trustee under a trust deed should be exercised only where good cause exists, endorsing the reading-in of such an implied requirement as discussed in Du Plessis and others v Van Niekerk and others 2018 (6) SA 131 (FB), and treated arbitrary removal without notice and opportunity to be heard as inconsistent with proper trust administration.

Finally, the judgment reflected the principle that remedial steps following invalid appointments/removals must respect the trust deed’s structural requirements (such as minimum numbers of trustees and financial competence requirements), and that, in an appropriate case, the Master may be directed to regularise trusteeship in accordance with the deed and the statutory framework.

Meier and Others v Du Toit N.O and Others (20736/2021) [2023] ZAWCHC 36 (27 February 2023)