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[2014] ZAWCHC 159
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Louw and Others v Absa Trust Limited and Others (19085/2007) [2014] ZAWCHC 159 (28 October 2014)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
number: 19085/2007
DATE:
28 OCTOBER 2014
Before:
The Hon. Mr Justice Binns-Ward
In
the matter between:
MARTIN
RICCIARDI N.O.
ISMAIL
SHAIK HASSAN PARKER N.O.
(in
their capacities as joint trustees to the insolvent estate of
ALBERT
MURRAY LOUW)
....................................................
First
Plaintiffs
WERNER
FRANCIS LOUW
.................................................
Second
Plaintiff
WILHELM
JACQUES LOUW
................................................
Third
Plaintiff
And
ABSA
TRUST
LIMITED
.....................................................
First
Defendant
AND
FOUR OTHERS
.......................................
Second
to Fifth Defendants
JUDGMENT
DELIVERED ON 28 OCTOBER 2014
BINNS-WARD J:
[1]
During his lifetime the late Francis Albert
Murray Louw (‘F.A.M. Louw’) was the owner of the farm
Vierlanden on the
outskirts of Durbanville. The farm, which was
approximately 230 ha. in extent, comprised of three portions, the
smallest
of which was Erf 1604, Vierlanden Estate, Durbanville, being
5.1603 ha. in extent. In terms of his will Vierlanden was
bequeathed
in trust until the death of his son, whereupon it was to
devolve in equal shares on his grandchildren. His widow and,
after
her demise, his son, also named Francis Albert Murray Louw, and
his daughter, Brunhilde Emilia Murray Marais, were appointed as
the
income beneficiaries of the testamentary trust. The executor
dative of the deceased estate, Volkskas Limited, was nominated
as the
trustee in terms of the will. F.A.M. Louw died on 20 June
1973. The liquidation and distribution account
in respect of
his estate duly reflected that the portions of land making up
Vierlanden were transferred to Volkskas Limited as
trustee of the
F.A.M. Trust. Mr T.F.B. Erlank, in his capacity as manager of
the estates division of Volkskas Limited, Cape
Town, was appointed,
in terms of
ss 14
and
16
of the
Administration of Estates Act 66
of 1965
, as the nominee of Volkskas Limited in respect of the
administration of the Trust on 5 July 1973.
[2]
It is common ground that the actual
administration of the Trust was attended to on behalf of the
appointed trustee initially by
the trust division of Volkskas Limited
and thereafter by a separate corporate entity, Volkskastrust Limited,
and latterly, from
1991, by the first defendant, Absa Trust Limited.
Volkskas Limited, the appointed trustee, is no longer in existence.
A brief description of the relevant corporate genealogy is called for
because a critical issue in the case is whether the claim
on which
the action is based in fact lies against the first defendant, or
whether it should have been brought against another company.
[3]
The
assets and liabilities of Volkskas Limited, the executor dative and
nominated trustee, were transferred to a company known as
Volkskas
Handelsbank Limited in October 1978. Volkskas Handelsbank
Limited had changed its name a few days before the transfer
to
Volkskas Limited. The transfer took place in terms of s 30
of the Banks Act 23 of 1965 that was then in force.
[1]
The ‘new’ Volkskas Limited changed its name to Volkskas
Bank Limited with effect from 12 April 1989. Volkskas
Bank
Limited’s assets and liabilities were transferred, in terms of
section 54 of the Deposit-Taking Institutions Act, 1990,
[2]
to United Bank Limited in September 1991. The transfer happened
in terms of an agreement between a number of companies including
Volkskas Bank Limited, Allied Bank Limited, Allied Building Society
Limited and United Bank Limited. Consequent upon the
transfer
of their assets and liabilities to United Bank Limited, the Registrar
of Banks gave notice on 25 October 1991, in
terms of s
30
Act 94
of 1990, of the cancellation of the registrations of Absa
Motorbank Limited, Allied Bank Limited, Allied Building Society
Limited
and Volkskas Bank Limited as registered deposit taking
institutions with effect from 30 September 1991. United Bank
Limited
coterminously changed its name to Absa Bank Limited.
[4]
Absa
Trust Limited became known as such pursuant to the name change to
that effect of Sage Trust Company Limited in September 1991.
Sage Trust Company Limited had originally been incorporated in August
1915 as Northern Trust Company Limited. It went through
a
number of name changes during the course of the twentieth century.
The name change in 1991 would appear to have been part
and parcel of
the reorganisation and restructuring involved in the amalgamation of
the businesses of a number of deposit taking
institutions into what
became called Absa Bank Limited. There is no genealogical
relationship between Absa Trust Limited
and Volkskastrust
Limited.
[3]
It is evident,
however, that the functions discharged by Volkskastrust Limited and
the staff and premises used by it to do
so were taken over by Absa
Trust Limited after the amalgamation. Volkskastrust Limited had
originally been incorporated in
1961 with the name Transvaal Orphan
Chamber and Board of Trustees Limited. It went through a number
of name changes, becoming
Volkskastrust Limited on 31 March
1982.
[5]
The currently relevant provisions of the
will in terms of which the F.A.M. Louw Trust was established went as
follows:
Ek
bepaal dat my plaas Vierlanden in trust oorhandig moet word aan
VOLKSKAS BEPERK as my administrateurs met vrystelling van verskaffing
van sekuriteit.
My
Adminstrateurs word gemagtig om die trustbate in ontvangs te neem met
magte om te beredder, te beheer en te bestuur, te verhuur,
te
verkoop, te belê, beleggings op te roep en herbeleggings te
maak en origens om volgens hulle diskresie daarmee te handel
ten
einde die trustbates te beveilig en te ontwikkel en te verbeter en om
’n inkomste vir die trust te verdien.
Dit
is my begeerte dat die plaas Vierlanden nie verkoop moet word nie,
maar behoue moet bly tot by afsterwe van my seun FRANCIS
ALBERT
MURRAY LOUW.
Desnietenstaande
word my administrateurs heirmee verder uitdruklik gemagtig om die
eiendom of dele daarvan te verkoop indien Durbanville
se dorpsgebied
sodanig uitbrei dat dit volgens hulle diskresie in die beste belang
van die trust blyk te wees om sodanige verkope
aan te gaan.
[4]
[6]
A
decision was taken by the administrators of the trust in 1984 to sell
Vierlanden. This led to the sale of the two large portions
thereof to
El Dawn Investments (Pty) Ltd, a property development company, for an
amount of just over R6 million. On
28 April 1987, Messrs
JP Fourie, acting in his capacity as manager of the trust division,
Volkskastrust Limited, and Gert Kruger,
acting in his capacity as the
branch secretary of the trust division of Volkskastrust Limited, as
such in their capacities as nominees
of Volkskas Limited, concluded a
written sale agreement in terms of which Erf 1604 was sold to the son
of F.A.M. Louw for an amount
of R120 000. The sale
occurred upon the written consent thereto of the son’s fellow
income beneficiary, his sister,
Brunhilde Marais. The deed of
sale contained a condition that made the contract subject to the
rezoning of the property for
residential purposes and for the removal
of title deed restrictions prohibiting subdivision of the property or
its use for other
than agricultural purposes. The condition was
required to be fulfilled by a 31 January 1988. The
condition was
subsequently deleted in terms of an addendum executed
by the parties.
[5]
In
the result the property was transferred by the Trust to the son on
28 April 1988, and, on the same date, transferred on
by him to
Messrs Nortier and Wiid in terms of a separate deed of sale at a
price of R220 000. The property was mortgaged
by the end
purchasers for the capital sum of R280 000. The two transfers
and the mortgage were executed in the deeds registry
in terms of a
single batch of transfer documents.
[7]
In
December 1991, after the death in July of that year of F.A.M. Louw’s
daughter, Brunhilde Marais, the son, of the first
part, the surviving
husband of Brunhilde, of the second part, and the capital
beneficiaries of the Trust, assisted by their respective
fathers
where necessary on account of their minority, of the other parts,
entered into a written agreement with each other and
purportedly with
Volkskas Bank Limited, as the trustee of the F.A.M. Louw Trust for
the splitting of the assets of the Trust to
enable the further
administration of the resulting half portions of the capital of the
Trust to occur in a manner that would allow
the Louw and Marais
beneficiaries independently to recommend to the trustee how their
respective portions should be invested.
(The copy of the deed
of agreement put in evidence does not appear to have been signed on
behalf of Volkskas Bank Limited.
Volkskas Bank Limited was in
any event no longer the trustee by virtue of the amalgamation and
attendant transfer of its assets
and liabilities to United Bank
Limited in the latter’s new name Absa Bank Limited. The
effect of the transfer, which
was announced in terms of s 30 of
Act 94 of 1990 in the Government Gazette dated 25 October 1991,
was that the appointment
of Volkskas Bank Limited as trustee fell, in
terms of s 54(3)(c) of the Act,
[6]
to
be construed as if Absa Bank Limited had been appointed.) The
agreement contained a cross-reference to an earlier agreement
concluded between the families and Volkskastrust Limited, purportedly
qua trustee,
[7]
in
July 1991, providing for the purchase by the Trust of fixed property
to the value of R930 000 for the use of the son. The
sum
of R930 000 equated to the amount of a secured loan advanced
earlier by the trustee to Brunhilde Marais. The preamble
to the
July 1991 agreement acknowledged that Vierlanden had been sold by the
trustee. The alleged significance of the execution
of these
agreements will become apparent when I describe later one of the
defences raised by the first defendant in the action
[8]
The son of the late F.A.M. Louw died on 9
January 2005. The trust capital was thereafter distributed to
the capital beneficiaries
on 7 April 2005. At the time of
the son’s death, his eldest son, Albert Murray Louw, was an
unrehabilitated insolvent.
Albert Murray Louw’s
estate had been sequestrated on 11 November 2004. He was
rehabilitated on 25 November 2005.
The first defendant alleges
that the order made in his application for rehabilitation contained a
paragraph that provided as follows:
Dat
die curator (sic) van die insolvente boedel al die surplusgelde direk
aan die Applikant oorbetaal en om die gelde nie in die
Voogdyfonds te
stort nie.
[8]
(A
copy of the rehabilitation order issued by the registrar, which is in
the trial bundle –exhibit A – contains
no such
provision. It was agreed between the parties that the documents
in the trial bundle are what they purport to be.
[9]
)
[9]
On
20 December 2007, F.A.M. Louw’s three grandchildren by his son
issued summons against the first defendant claiming damages
in
respect of an alleged breach by the trustee of the F.A.M. Louw Trust
of its fiduciary duty. After the receipt of an amended
plea by
the first defendant (delivered in September 2013) in which it was
alleged that Albert Murray Louw’s claim, if any,
vested in the
trustees of his insolvent estate by reason of
s 25(1)
of the
Insolvency Act 24 of 1936
, and that he therefore lacked standing,
application was made to substitute the trustees of the insolvent
estate as first plaintiff.
The application was granted
[10]
notwithstanding opposition by the first defendant. An
application for leave to appeal against the decision substituting the
trustees as the first plaintiff was abandoned pursuant to an
agreement between the parties, which provided that the costs of the
interlocutory proceedings would be costs in the action.
[10]
The summons was served on the first
defendant on 21 December 2007. Four other defendants were
joined in the action by
virtue of their potential interest as capital
beneficiaries of the Trust by virtue of their descent from the late
daughter of the
late F.A.M. Louw. No relief was sought
against the second to fifth defendants, and they did not take an
active part
in the litigation. In terms of an agreement between
the plaintiffs and the first defendant, endorsed by the court in
terms
of
rule 33(4)
at the outset of the hearing, the issue of the
quantum of any damages that the plaintiffs might prove themselves to
have sustained
was stood over for trial separately from, and after,
all the other issues in dispute between the parties had been tried
and determined.
[11]
In their particulars of claim, as finally
amended, the plaintiffs made the following allegations in support of
their identification
of the first defendant as the party liable to
compensate them in delict:
11.3
During the period subsequent to 5 July 1973
and up to April 2005, and pursuant to take-overs, amalgamations and
name changes in
respect of the corporate structures involved, the
administration of [the Trust] and the powers and responsibilities of
Volkskas
Limited in respect thereof were taken over by Volkskastrust
Limited and its duly authorised nominees.
11.4
In the premises, First Defendant is the
successor-in-title of Volkskas Limited and of Volkskastrust Limited
in the administration
of [the Trust].
11.5
Volkskastrust Limited and First Defendant
were respectively each liable for the acts and omissions of its
predecessor-in-title in
the administration of [the Trust].
The
plaintiff alleged that ‘[i]n effecting the sale, the executor
failed to perform its duties with the care, diligence and
skill which
can reasonably be expected of a person who manages the affairs of
others, and in any event exceeded its powers in terms
of the will, in
that:
1.
it was not in the trust’s interest to sell Erf 1604 during
1987;
2. no reasonable
trustee would have sold Erf 1604 prior to 9 January 2005;
3. the executor sold
Erf 1604 to provide additional income for the beneficiaries, when it
was not authorised to do so;
4. in selling Erf
1604 at substantially below the market value thereof, the executor in
effect distributed capital to an income
beneficiary of the Trust not
entitled to capital;
5. the executor
preferred one income beneficiary, namely [Albert Murray] Louw’s
and Second and Third Plaintiffs’ father,
over the other
beneficiaries of the Trust, including [Albert Murray] Louw and Second
and Third Plaintiffs; and
6. the executor
failed to have due regard to [Albert Murray] Louw’s and Second
and Third Plaintiffs’ interests in Erf
1604, they being minors
at the time’.
[12]
In its plea, as finally amended, the first
defendant raised the following defences to the plaintiffs’
claim:
1.
That it was not the successor in title
(‘successor in law’ would, I think, be a more accurate
expression of what was
sought to be alleged) to Volkskas Beperk, the
nominated trustee, or to Volkskastrust Limited, the company that had
been attending
to the administration of the trust at the time of the
sale of Erf 1604 and that it thus could not be liable in respect of
any delict
committed by the trustee or its agent.
2.
That
the vesting of the benefits in Francis Murray Louw and the second and
third plaintiffs in terms of the trust took place upon
the death of
the late F.A.M. Louw in June 1973 and that the plaintiffs’
claims, if any, had therefore been extinguished by
prescription three
years after the agreement of sale in respect of Erf 1604 was
concluded, being 28 April 1987, or the date upon
which each of them
attained majority, whichever was the later.
[11]
3.
That, in any event, the claim of the first
plaintiff, which on the plaintiffs’ case had vested on 9
January 2005, had been
extinguished by prescription before the
substitution of the co-trustees of the insolvent estate of Francis
Murray Louw as first
plaintiff in November 2013. (It was common
ground on the pleadings that the substitution of the trustees as the
first plaintiff
had occurred ‘
ex
nunc
’, that is with effect from
their admission as plaintiff, and not ‘
ex
tunc
’, that is with effect from
the institution of the action.)
4.
That
the effect of the provision allegedly contained in the order
rehabilitating Albert Murray Louw, quoted in paragraph [8],
above, was that the substituted co-trustees lacked standing to
prosecute the action.
[12]
5.
That the conclusion of the December 1991
agreement, described in paragraph [7], above, constituted an
‘implied’
ratification, condonation and acquiescence by
Albert Murray Louw and the second and third plaintiffs of and in the
sale of Vierlanden
by Volkskas Limited and a representation by them
that they condoned and accepted the conduct of the trustee in that
regard.
It was pleaded that ‘the trustee and/or Volkskas
Limited’ had acted to its/their prejudice upon an acceptance of
the
alleged representation in dealing with the trust capital in terms
of the agreement, distributing the trust capital to the capital
beneficiaries, not taking steps to ‘recover Vierlanden’
and not taking any steps to limit whatever damages the aforementioned
parties might have suffered between the date of the conclusion of the
agreement and the institution of the action. It was
alleged
that in the aforementioned circumstances, the plaintiffs were
estopped from denying the validity of the sale or to contend
that
‘Volkskas Limited and/or the trustees’ had acted
unlawfully or wrongfully.
[13]
The
plaintiffs delivered a replication. In respect of the special
plea of extinctive prescription raised against the substituted
first
plaintiff, the insolvency trustees invoked the provisions of
s 12(3)
of the
Prescription Act 68 of 1969
[13]
and
alleged that they had no knowledge of the debt until August 2013 and
could not have acquired such knowledge earlier by exercising
reasonable care in the circumstances. In answer to the first
defendant’s pleaded allegation that it was not the successor
in
law of either the nominated trustee, Volkskas Limited, or
Volkskastrust Limited, and thus not liable for the alleged delictual
conduct of either of those companies, the plaintiffs replicated as
follows:
10.1
It is common cause that, from 5 July 1973 onwards Volkskas Limited
administered the
estate in accordance with the testator’s will.
10.2
Subsequent to 5 July 1973 and pursuant to take-overs, amalgamations
and name changes
in respect of the corporate structures involved, the
administration of the testator’s estate and the powers and
responsibilities
of Volkskas Limited in respect thereof were taken
over by Volkskastrust Limited and its duly authorised nominees, and
thereafter
by First Defendant and its duly authorised nominees.
10.3
In administering the estate, First Defendant at all relevant times
represented to
Plaintiffs that it had taken over and continued with
the administration of the estate in accordance with the testator’s
will
and with due regard to the actions taken in the administration
of the estate prior to First Defendant’s involvement.
10.4
Plaintiffs accepted the representation as correct and, to their
detriment, allowed
First Defendant to administer the trust created
pursuant to the testator’s will
and instituted these
proceedings against First Defendant
.
10.5
In the premises, First Defendant is estopped from denying:
10.5.1
that it is the successor-in-title of Volkskas Limited and of
Volkstrust
Limited in the administration of the testator’s
estate and the trust created pursuant thereto; and
10.5.2
that it is liable for the acts and omissions of its
predecessors-in-title
in the administration of the testator’s
estate and the trust created pursuant thereto.
(I have quoted from
para 10 of the finally amended replication, dated 9 September
2014. The provisions thereof essentially
repeated what had been
pleaded in para 1 of the originally delivered replication, dated
24 March 2009. The underlined
words in para 10.4 of the
amended replication were not in the original version of the pleading
and seem to me to reflect the
only material point of differentiation
between the relevant parts of the two versions.)
[14]
With reference to the first defendant’s
allegation that the vesting of benefits in Albert Murray Louw and the
second and third
plaintiffs had taken place upon the death of the
late F.A.M. Louw in 1973, the plaintiffs made the following
allegations in their
replication:
13.5
On a proper interpretation of the terms of the will:
13.5.1 the
bequest to Plaintiffs was made payable upon an indefinite
dies
,
namely Plaintiff’s father’s death;
13.5.2 such
dies
was not certain to arrive in Plaintiffs’ lifetimes; and
13.5.3the bequest
was not subject to an intermediate interest.
13.6 In the
circumstances:
13.6.1
the bequest to Plaintiffs was conditional upon Plaintiffs being alive
on the arrival of the specified date, namely
Plaintiffs’
father’s death;
13.6.2 vesting
in Plaintiffs did not take place on the testator’s death on 20
June 1973, but was postponed until the
arrival of the
dies
,
namely Plaintiff’s father’s death on 9 January 2005.
14. In the
circumstances, Plaintiffs’ cause of action could not, and did
not, arise prior to 9 January 2005, whether on the
testator’s
death or the date of conclusion of the agreement or one year after
each of the Plaintiffs attaining the age of
majority.
[15]
The
first defendant delivered a rejoinder to the plaintiffs’
replication.
[14]
It pleaded
that the insolvency trustees had knowledge of the cause of action and
of the facts underlying the cause of action as
pleaded in the first
defendant’s plea and (presumably, in the alternative to the
aforegoing although not expressly pleaded
as such) that they could
reasonably have acquired such knowledge more than three years before
the action was instituted.
[16]
Any one of a number of issues raised in the
case could be dispositive of the action, but it seems to me
convenient first to determine
whether the sale of Erf 1604 in 1987
gave rise to a delictual claim by the capital beneficiaries.
[17]
As noted in Cameron et al,
Honor
é’s
South African Law of Trusts
fifth
edition at §227, ‘[t]he main civil remedy against a
trustee for failure to carry out duties properly is an Aquilian
action for breach of trust. The action against a trustee for
loss suffered as a result of breach of trust is a delictual
action
for pure economic loss…..Like any other Aquilian action the
action for breach of trust is based on the defendant’s
fault,
which may consist of deliberate wrongdoing (dolus) or unintended
negligent fault (culpa in the narrow sense)….Under
the Trust
Property Control Act a trustee’s duties must be performed and
powers exercised with the care, diligence and skill
which can
reasonably be expected of a person who manages the affairs of
another. This is also the case at common law, by
which the care
required in an Aquilian action is the strict diligence that a good
and attentive head of a family (bonus et diligens
paterfamilias)
would observe’. In
Sasfin
(Pty) Ltd v Jessop and Another
1997 (1)
SA 675
(W), ‘[a trustee’s] delay in selling or an
imprudent sale of trust property’ was given as an example of of
a
breach of duty for which a trustee or executor could be held
delictually liable.
[18]
The first defendant’s
counsel
did not advance any written or oral argument to contend that the sale
of Erf 1604 in 1987 did not constitute a breach of
trust. I
think that they were right not to do so. The only argument put
forward rather tentatively was that the property
had been sold at
market value. In this regard the defendant’s counsel
relied on a valuation obtained for transfer duty
purposes after the
sale had been concluded, but before the property was transferred to
F.A.M. Louw junior.
[19]
The valuation purported to confirm the
value of the property to be in the amount of R120 000, which
corresponded with the amount
for which it had been sold. In my
judgment the valuation is of no assistance to any argument that the
sale of the property
at that price did not occasion any loss to the
Trust or to the capital beneficiaries. It is plain that the
valuation was
obtained, not to determine the true market value of the
property, but only to satisfy the requirements of the receiver of
revenue
in the context of the apparent concurrence of interest
between the Trust, as seller, and the income beneficiary purchaser.
The valuation of the land, according to the tenor of the valuer’s
report, was predicated on its character as rather poor
agricultural
land. The report described its stony ground and lack of water.
One can readily conceive that in the context
of the prior sale of the
rump of the farm Vierlanden, the agricultural value of Erf 1604, as a
minor remnant of the former whole,
would be much reduced. But
more pertinently, it is clear from the evidence that the value of the
land at that stage actually
lay in its readily identifiable potential
for subdivision and suburban development. This was evident from
the prior acquisition
by an affiliate company of the trustee of the
two larger portions of the farm for just such purpose. It was
also evident
in the ability of F.A.M. Louw junior to simultaneously
on-sell the property at a considerable premium over what he had to
pay for
it, notwithstanding that it had not yet been rezoned for
development purposes. To the extent necessary, the expert
opinion
evidence of the town planner, Mr Marthinus Scott,
adduced by the plaintiff at the trial confirmed the correctness of
the aforementioned
inferences.
[20]
In the context it is clear that the trustee
sold the property for the benefit of one of the income beneficiaries
and with complete
disregard of its duty in terms of the testamentary
trust instrument to the capital beneficiaries. The relevant
part of the
will enjoined the trustee to hold the farm Vierlanden for
the ultimate benefit of the capital beneficiaries and not to dispose
of any part of it unless, in its discretion, the expansion of the
town of Durbanville made it consider that it would be in the interest
of the Trust to do so. The ‘interest’
concerned would be achieved by the opportune conversion of the
Trust’s
capital in land to an advantageously alternative means
of capital investment. The sale of Erf 1604 did not have that
effect.
There is no doubt that the disposal of the land to
F.A.M. Louw junior on the basis described constituted a breach of
trust in the
sense relevant to give rise to delictual liability.
[21]
The party directly responsible for the
breach of trust was Volkskastrust Limited, which, as mentioned, had
been administering the
Trust on behalf of Volkskas Limited.
Volkskas Limited, as the trustee, would have been vicariously liable
for the delict
committed by its agent. The first defendant,
which administered the affairs of the Trust between 1991 and 2005,
contended
that as it had not succeeded to the liabilities of either
Volkskas Limited or Volkskastrust Limited, it could not be held
accountable
in respect of the wrong done by Volkskastrust Limited in
selling the property. The first defendant’s counsel
submitted
that the action should have been brought against Absa Bank
Limited, which, by virtue of an amalgamation as contemplated by s 54
of the Banks Act 94 of 1990 (at the time entitled the Deposit Taking
Institutions Act), had succeeded to the assets and liabilities
of
Volkskas Limited; cf.
Absa v Van Biljon
2000 (1) SA 1163
(W);
Nedcor
Investment Bank Limited v Visser NO and Others
,
2002 (2) SA 588
(T) and
Tecmed (Pty) Ltd
and Others v Nissho Iwai Corporation and Another
2011 (1) SA 35
(SCA) at para 21-24. I agree with that
submission.
[22]
On the other hand, I am unable to uphold
the contention by the plaintiffs’ counsel that merely because
the first defendant
succeeded Volkskastrust Limited in attending to
the administration of the Trust, and in doing so operated from the
same premises
and used the same staff as Volkskastrust Limited had,
that it falls to be inferred as a matter of probability that the
first defendant
must have assumed the latter’s liabilities.
It is equally probable, in my view, that the trustee’s
successor
in law, Absa Bank Limited, elected to discharge its
trusteeship functions through another corporate vehicle, to which the
business
of Volkskastrust Limited was transferred as a going
concern. Such an arrangement would no doubt have involved a
transfer
of Volkskastrust Limited’s assets and contractual
responsibilities, but it would not necessarily, or even probably,
have
entailed an assignment of Volkskastrust Limited’s
delictual liabilities, if any. What business or even moral
purpose
would there have been in such a transfer - which in any event
would be ineffectual without the consent of the person possessed of
the delictual claim – when, in the context of the amalgamation,
vicarious liability for Volkskastrust Limited’s relevant
delictual acts or omissions remained with Volkskas Bank Limited’s
successor in law, Absa Bank Limited, by reason of the applicable
legislative scheme?
[23]
It follows that the action can succeed only
if the estoppel pleaded in paragraph 10 of the plaintiffs’
replication (quoted
in para [13], above) is upheld.
[24]
The first defendant sought further
particularity with regard to the alleged estoppel. Its request
for trial particulars was
directed at the original version of the
replication. The first defendant posed the following questions
apropos the allegations
made by the plaintiffs in what became para s
10.3 and 10.4 of their replication as finally amended
(and
quoted above in paragraph [13]):
Ad
paragraph 1.3
[10.3 in the final
version]
thereof
1.
The plaintiffs are required to identify the
period covered by the allegation ‘
at
all relevant times
’.
2.
The precise date/s during the period when
the first defendant allegedly made the representation/s is/are
required.
3.
Precisely where on each occasion did the
first defendant make such representation/s?
4.
Who represented the first defendant on each
occasion in making such representation/s?
5.
Were the representations:
5.1
oral, and if so full particularity thereof
is required;
5.2
by conduct, and if so full particularity of
the conduct is required; and
5.3
in writing, and if so the plaintiffs are
required to describe the written documents with sufficient detail to
enable the first defendant
to idenitify same,
alternatively
in terms of the provisions of Rule 35(3) and (6) of the Uniform Rules
of Court.
Ad
paragraph 1.4
[10.4 in the final
version]
thereof
1.
…
.
2.
…
.
3.
…
.
4.
The plaintiffs are required to give full
particulars regarding the manner in which they acted to their
detriment in allowing the
first defendant to administer the trust.
[25]
The plaintiffs’ reply to the quoted
request for trial particulars went as follows in para s 21-23 of
the finally amended
version (dated 9 October 2014):
1.
The Plaintiffs refer to the period from
1991/1992 onwards.
2.
The representations appear from the
following documents in the Plaintiffs’ possession, all of which
have been discovered:
2.1
letter dated 2 March 1994 from the First
Defendant to the Master of the High Court;
2.2
letters dated 8 September 2000 from the
First Defendant, respectively to the Plaintiffs’ father and to
each of the plaintiffs;
2.3
final administration statement issued by
the First Defendant in respect of the Trust for the period 1 March
2005 to 7 April 2005;
2.4
letter dated 29 September 2005 from the
First Defendant to the Plaintiffs’ attorney, in response to a
letter dated 23 September
2005 from the Plaintiffs’ attorney;
2.5
letter dated 5 January 2006 from the First
Defendant to the Plaintiffs’ attorney, in response to a letter
dated 29 December
2005 from the Plaintiffs’ attorney;
2.6
letter dated 27 January 2006 from the First
Defendant to the Plaintiffs’ attorney;
2.7
letter dated 6 February 2006 from the first
Defendant to the Plaintiffs’ attorney, in response to a letter
dated 31 January
2006 from the Plaintiffs’ attorney;
2.8
letter dated 4 May 2006 from the First
Defendant to the Plaintiffs’ attorney, in response to a letter
dated 31 March 2006
from the Plaintiffs’ attorney.
3.
The Plaintiffs acted to their detriment in
not pursuing legal proceedings against Volkskastrust Limited prior to
the prescription
of their claim.
It follows that the
plaintiffs relied on representations made by the first defendant in
words.
[26]
In his contribution on estoppel in Joubert
(ed)
The Law of South Africa
(Second Edition) vol. 9 at para 652, the Hon. PJ Rabie (former Chief
Justice of South Africa) set out the following ‘general
statement of the doctrine’ of estoppel by representation:
Briefly
stated, the doctrine of estoppel by representation consists in this,
that a person is precluded, that is estopped, from
denying the truth
of a representation previously made by him or her to another person
if the latter, believing in the truth of
the representation, acted
thereon to his or her prejudice. Stated more fully, the doctrine as
applied in the courts of South Africa
may be said to amount to the
following: namely, that where a person (the representor) has by his
or her words or conduct made a
representation to another person (the
representee) and the latter, believing the representation to be true,
acted thereon and would
suffer prejudice if the representor were
permitted to deny the truth of the representation made by him or her,
the representator
may be estopped, that is precluded, from denying
the truth of the representation. This statement is subject to the
qualification
that in certain cases an estoppel will arise only if
there was fault, that is, dolus or culpa, on the part of the
representor when
he or she made the representation on which the plea
of estoppel is based.
The
doctrine of estoppel by representation is based on considerations of
fairness and justice, and is aimed at preventing prejudice
and
injustice. It is a rule of substantive law, and its function is to
provide a defence to a claim, or to counter a defence to
a claim. It
has to be pleaded and proved by the party who raises it. It is
not a cause of action and cannot found a claim,
but it can, in an
indirect way, by defeating a defence to a claim, operate to secure
the enforcement of a claim.
(footnotes
omitted)
[27]
The
representation must be one of fact.
[15]
Where the representation is in words, rather than say by conduct or
silence, an estoppel can be founded only if the representation
is
‘precise and unambiguous’.
[16]
The plaintiffs’ counsel accepted these propositions. In
their supplementary written argument they acknowledged
that the
plaintiffs were required to show:
1.
a clear, unequivocal and unambiguous
representation by words or conduct of a certain factual position;
2.
that they acted on the correctness of the
facts represented to their detriment; and
3.
that they reasonably understood the
representation in the sense alleged.
[28]
The
first defendant’s counsel argued that the representations
relied upon by the plaintiffs did no more than inform the plaintiffs
and their then attorney that the first defendant had taken over the
administration of the Trust. Counsel submitted that these
advices were factually well-founded and thus did not constitute
misrepresentations of fact. Having considered the content
of
the correspondence identified in the plaintiffs’ reply to the
first defendant’s request for trial particulars I
have
concluded that the first defendant’s counsel’s argument
in this regard has to be accepted. I have been unable
to find
any representation by the first defendant that it had assumed the
liabilities of Volkskas Bank Limited or Volkskastrust
Limited.
I have reached this conclusion with a measure of regret, for I have
sympathy for the position in which the plaintiffs
and their attorneys
found themselves upon being confronted with having to try to unravel
the legally technical consequences of
the byzantine corporate
restructuring of Volkskas and its business in the context of the
amalgamation of financial institutions
that came to be known as
Absa. Indeed, as appears from the description of the history of
events above, companies in the Absa
Group themselves at times
purported to enter into various transactions involving the Trust
using the incorrect names or designations.
[17]
[29]
The correspondence does indeed convey
(correctly, it would appear) that the first defendant had taken over
the administration of
the Trust. That is not the same, however,
as representing that the first defendant had assumed the liabilities
of its predecessor
in the role (Volkskastrust Limited), or those of
the appointed trustee, Volkskas Limited, or its successor in law,
Absa Bank Limited.
[30]
The
most pertinent letters are those exchanged by telefax between the
plaintiffs’ then attorney and the Trust Manager of the
first
defendant, the aforementioned Mr Gert Kruger,
[18]
on 19 December 2007. The attorney’s letter went as
follows:
Dear
Sirs,
MRS.
C.W. LOUW & SONS – ALBERT, WERNER & JACQUE/ABSA TRUST
I
refer to my telephonic conversation on the afternoon on 18/12/07 with
your Gert Kruger, and confirm having requested you to urgently
provide me with a copy of the written authority given to ABSA Trust
Department during the approximate period 1991-1994 by the Master
of
the High Court to inter-alia administer and deal with the estates,
trusts etc. previously dealt with by estates, trust departments
etc.
of Vokskas/United/Trust and Allied Banks.
As
you also mentioned that the estate and trust departments of ABSA
Trust operated on a Power of Attorney granted to it by the
estate/trust departments of Volkskas (United/Trust and Allied Banks),
it would be appreciated if you could furnish me with a copy
of this
Power of Attorney especially if this is a different and separate
document to the authority granted by The Master of the
High Court.
We
thank you in anticipation of your kind co-operative assistance.
The evenly dated
reply from the first defendant read:
MRS
CW LOUW & SONS/ABSA TRUST
With
reference to your letter of 19 December 2007 we enclose herewith a
letter dated 2 March 1994 addressed to the Master of the
High Court
as requested.
If
you need anything else you can contact our Legal Officer Mr Johann
Koen at …
(Notwithstanding the
reference to him as ‘our Legal Officer’, Mr Johann Koen
was in fact an employee of another company
in Absa group, which the
first defendant’s attorney ventured in evidence might be called
Absa Fiduciary Services (Pty) Ltd.)
The enclosure to the
first defendant’s replying telefax, being a copy of a letter to
the Master of the High Court, Pretoria,
dated 2 March 1994, read:
Die
Meester van die Hooggeregshof
Pretoria
NUWE
RESOLUSIE EN SERTIFIKATE
Ons
stuur hiermee:
1.
Uittreksel uit die notule van die
Direksievergadering van Absa Trust Beperk gehou op 16 Februarie 1994.
2.
Sertifikaat t.o.v. aanstelling as
eksekuteur, trustee en curator uit hoofde van voormelde resolusie.
3.
Volmag van Absa Bank Beperk t.o.v.
aanstelling namens die Bank, gedateer 28 Februarie 1994.
Volgens
ons rekords kan Absa Trust boedels beredder waarin enigeen van die
volgende maatskappye testamentêr as eksekuteur
benoem is,
vanweë oornames, samestellings en naamsveranderings in die
verlede:
Volkskas
Beperk Volkskas Bank Beperk
Transvaalse
Weeskamer Beperk Volkskastrust Beperk
Santamtrust
Beperk Trust Bank of Africa Ltd
Santambank
Beperk Kredietbank Beperk
Bank
van Johannesburg Beperk UBS Bank Beperk
Northern
Trust Rand Natal Trust
Sage
Trust Sage Trust (Natal)
Absa
Trust Absa Bank
Bankorp
Trust
Wellington
se Eksekuteurskamer Beperk
Die
Sentrale Eksekuteurskamer Beperk
Die
Transvaalse en Vrystaatse Eksekuteurskamer Beperk
Die
uwe
J
H GROBLER
KONSULTANT:
REGSDIENSTE
[19]
[31]
These
telefaxes were exchanged on the day before the summons was issued.
In that context, the tenor of the attorney’s
letter suggests
that his enquiry was directed at determining whom to cite as the
first defendant in the action. It is evident
from earlier
correspondence and his possession of a copy of the will that the
attorney was aware of the appointment of Volkskas
Limited as executor
to the estate of the late F.A.M. Louw and as trustee to the
testamentary trust. It was plain that he
was also conscious of
the amalgamations and corporate restructuring that had brought the
Absa Group into being and it would appear
that he was looking to
identify the formal successor to either Volkskas Limited or
Volkskastrust Limited, intending to cite that
party as defendant in
the action. The attorney (who, as mentioned, no longer
represents the plaintiffs) did not give evidence
at the trial, but it
would seem probable that he was led to identify the first defendant
as the appropriate party to join by reason
of the statement in the
copy of the first defendant’s letter to the Master of 2 March
1994 that ‘Volgens ons rekords
kan Absa Trust boedels beredder
waarin enigeen van die volgende maatskappye testamentêr as
eksekuteur benoem is, vanweë
oornames, samestellings en
naamsveranderings in die verlede’.
[20]
That statement does not, however, constitute a representation by the
first defendant that it had assumed liability for any
delictual act
or omission of any of the companies named while such other company
may have been responsible at an earlier time for
the administration
of the estate concerned. It also does not represent that the
first defendant is Volkskas Limited, Volkskas
Bank Limited, or
Volkskastrust Limited under a changed name. The plaintiffs in
fact had constructive notice of the succession
by Absa Bank Limited
to Volkskas Bank Limited by virtue of the relevant notice thereof
published in the Government Gazette.
[32]
The conclusion that the plaintiff’s
reliance on estoppel cannot be upheld means that the claim cannot
succeed and that the
action must be dismissed. It is therefore
strictly not necessary in the circumstances to deal with the other
defences raised
by the first defendant. For completeness,
however, and in case the matter is taken further, I shall do so,
albeit briefly.
[33]
I am not persuaded that the vesting of the
benefits in the Trust occurred upon the death of the late F.A.M. Louw
in 1973.
In my judgment the vesting occurred upon the death of
the plaintiffs’ father in 2005. Establishing the date of
the
vesting is a matter of interpreting the will. It was noted
by Watermeyer CJ in
Smith v Estate Smith
1949 (1) SA 534
(A) at 544-5 that-
‘
The
inference
[of an intention to vest the
benefits
a morte testatoris
]
is also not so strong when the testator bequeaths
the whole of his estate to trustees, … for the following
reasons. In the
interpretation of wills it has always been regarded
as necessary that the
dominium
in the testator's property must reside in someone. A usufructuary has
no
dominium
in the usufructurary property whereas a fiduciary has
dominium
in the fiduciary property. It follows naturally,
when property is bequeathed subject to an intervening interest which
is usufructuary
in character, that the
dominium
should be regarded as residing in the ultimate
beneficiary, because if it does not it would have to reside
temporarily in the executor
(see
Black v
Black's Estate
(21 S.C. 555))
or in the
heirs
ab intestato
and such a position was regarded as anomalous and not favoured (see
Estate Cato v Estate Cato and Others
(1915 AD 290
at pp. 300 - 301)). No such difficulty exists if the
intermediate interest is fiduciary in character. But the difficulty
as to
the
dominium
disappears where a testator bequeaths his estate to trustees, because
the trustees are fiduciaries in whom the
dominium
can reside and so the question as to the time of vesting of the
rights of the ultimate beneficiaries can be considered free from
any
difficulties as to residence of the
dominium
’.
The
authors of Corbett et al
The
Law of Succession in South Africa
2
nd
ed. acknowledge
[21]
that the
approach reflected in the passage just quoted was premised on the
identification of testamentary trusts as a form of fideicommissum,
a
notion that was that was subsequently rejected in
Braun
v Blann and Botha NNO
[1984] ZASCA 19
;
1984
(2) SA 850
(A) at 859B-C and 866B-C, but argue that ‘decisions
reached and principles formulated in regard to the vesting of
interests
under a testamentary trust remain, in general, good
authority’. I share that view because the legal policy
considerations
that informed the earlier decisions remain.
Those considerations are appropriately addressed by maintaining the
principles
formulated in the earlier judgments.
[34]
In the current case the power given by the
will to the Trustee in its discretion to dispose of the farm, if it
were thought to be
advantageous ‘to the trust’, makes it
clear the property did not vest in the capital beneficiaries upon the
death of
the testator. The defence that the claim had been
extinguished by prescription upon the attainment by the plaintiffs of
their
respective ages of majority (or a year thereafter) was
therefore without merit in my view.
[35]
Assuming
in favour of the first defendant that the order granted in November
2005 rehabilitating Albert Murray Louw from insolvency
did indeed
contain the provision quoted in paragraph [8], above, the import
thereof would not have been such as to displace the
effect of the
proviso to
s 25(1)
of the
Insolvency Act.
[22
]
The object of the provision is not clear to me, but it appears to
have been directed at avoiding the payment of any surplus
cash in the
insolvent estate by the trustees to the Master who would deposit it
into the Guardians’ Fund (cf. s 116
of the Act).
Even if I have misapprehended the intention of the provision, the
word ‘
surplusgelde
’
does not sensibly pertain to anything other than available funds; it
would do violence to the language to stretch it to
include corporeal
property or unliquidated claims. The effect of the proviso to
s 25(1) is that the delictual claim
that vested in the trustees
of the insolvent estate of Albert Murray Louw when his father died on
9 January 2005 remained vested
with them upon his rehabilitation in
November 2005. They did not deal with it in the liquidation and
distribution account
because they were unaware of it. The
challenge to the standing of the insolvency trustees as first
plaintiff was therefore
misplaced.
[36]
The plea of extinctive prescription raised
separately against the claim of the insolvency trustees by virtue of
their having been
substituted as first plaintiff only in 2013
foundered on
s 12(3)
of the
Prescription Act. (The
text of
the subsection has been quoted in note 13, above.) It is clear
from the evidence of the Louw brothers and the correspondence
put in
evidence that they were engaged in investigating the administration
of the Trust during the period 2005-2007.
In the context
it is not surprising that Albert Murray Louw would not have
appreciated the existence of the claim or reported it
to the trustees
of his insolvent estate during the period of his insolvency.
There has been no suggestion that the trustees
had any contact with
Louw after his rehabilitation. The indications are that the
only reason for such contact at a later
stage was the belatedly
introduced challenge to Louw’s standing as first plaintiff in
terms of an amendment to the first
defendant’s plea in 2013.
No evidence has been adduced to support the notion that the
insolvency trustees could reasonably
have been expected to have
acquired knowledge of the claim or the facts on which it is founded
before 2013.
[37]
The first defendant’s counsel
advanced no argument in support of the pleaded defence that the
conclusion of the 1991 ‘splitting’
agreement, described
in paragraph [7]
above, amounted to an
‘implied’ condonation or ratification by Albert Murray
Louw and the second and third plaintiffs
of the sale of Erf 1604.
Their decision was well advised because was there nothing to be said
for it. Condonation,
ratification or acquiescence of or in the
sale of Erf 1604 was a consideration that was entirely
irrelevant to the object
of the splitting agreement and there is no
reason to believe that the parties to the agreement gave the
propriety of the sale any
thought when concluding the agreement.
The conclusion of the agreement thus also did not constitute a
representation by conduct
by the capital beneficiaries of a
condonation, ratification or acquiescence of or in the sale of the
property. The defence
essentially comes down to an allegation
that by concluding the 1991 splitting agreement the capital
beneficiaries waived any delictual
claim they might have had arising
out of the sale of the fixed property out of the Trust. Waiver
is not lightly presumed.
A person can waive his rights only if
he appreciates what they are. The evidence in the current case
suggests that the capital
beneficiaries received no accounting in
respect of the administration of the Trust until after their father’s
death.
I am not satisfied that they appreciated in 1991 that
the sale of Erf 1604 had adversely affected their position as
capital
beneficiaries.
[38]
The action is dismissed with costs,
including the costs of two counsel.
A.G.
BINNS-WARD
Judge
of the High Court
[1]
Section 30 of the 1965 Banks Act was, insofar as currently relevant,
essentially identical to that of s 54 of the 1990 Banks
Act (Act 94
of 1990).
[2]
Act 94 of 1990, later renamed as the Banks Act.
[3]
Indeed,
there was evidence that Absa Trust Limited was part of the Allied
Group prior to the amalgamation.
[4]
I
direct that my farm Vierlanden must be transferred in trust to
Volkskas Limited as my administrators and that they be exempted
from
furnishing security.
My
administrators are authorised to take the trust assets into
possession with the powers to administer, control and manage,
to lease, to sell, to invest, to realise investments and to make
reinvestments, and otherwise to deal with the trust assets in
their
discretion with a view to preserving, developing and improving them
and to generate an income for the trust.
It
is my wish that Vierlanden should not be sold, but should be
retained till the death of my son
FRANCIS
ALBERT MURRAY LOUW.
That
notwithstanding, my administrators are hereby expressly authorised
to sell the property or parts thereof if the urban area
of
Durbanville expands in such a way that it would appear in their
discretion to be in the best interests of the trust to conclude
such
agreements of sale. (My translation.)
[5]
In
the addendum agreement, Gert Kruger, was described as the branch
secretary of the trust division of Volkskas Limited,
not
Volkskastrust Limited.
[6]
At
the relevant time s 54(3)(c) of Act 94 of 1990 read:
‘
Upon
the coming into effect of a transaction effecting the amalgamation
of one deposit-taking institution with another deposit-taking
institution as contemplated in subsection (2) (b), or a transaction
effecting the transfer of assets and liabilities of one
deposit-taking institution to another deposit-taking institution as
contemplated in subsection (2) (c)-
(c)
all agreements, appointments, transactions and documents entered
into, made, drawn up or executed with, by or in favour of
any of the
amalgamating institutions or, as the case may be, the institution by
which the transfer has been effected, and in
force immediately prior
to the amalgamation or transfer, shall remain of full force and
effect and shall be construed for all
purposes as if they had been
entered into, made, drawn up or executed with, by or in favour of
the amalgamated institution or,
as the case may be, the institution
taking over the assets and liabilities in question;..’
[7]
In
July 1991, Volkskastrust Limited would have been the agent of
Volkskas Bank Limited in respect of the administration of the
Trust. Volkskastrust Limited could at no time have itself been
the trustee as the trust instrument did not permit of substitution.
[8]
That
the trustee of the insolvent estate pay over the surplus monies
directly to the applicant, and not deposit the funds into
Guardians’
Fund. (my translation)
[9]
The
status of the documents in the bundle was agreed as follows:
1.
The documents (including copies) are what they purport to be
(without admission of the truth of the contents thereof), and
may be
used without formal proof.
2.
In relation to correspondence, the correspondence was written and
received on or about the dates indicated on them.
3.
Either party has a right to challenge any document in the bundle on
reasonable notice to the other party.
[10]
By
Yekiso J.
[11]
The
drafter of the first defendant’s plea appears to have
overlooked the provisions of s 13(1)(a) read with
s 13(1)(i)
of the
Prescription Act 68 of 1969
, which, if applicable, would
provide that the operation of extinctive prescription was delayed
for a period of one year after
the affected plaintiffs respectively
attained the age of majority. In the factual context of the
case, nothing turns on
this oversight, which no doubt explains why
the plaintiffs did not note an exception to the special plea.
[12]
This
defence was somewhat ironic in the context of the substitution of
the first plaintiff having occurred in reaction to an earlier
plea
by the first defendant in which it alleged that Albert Murray Louw
lacked standing by reason of the provisions of
s 25(1)
of the
Insolvency Act 24 of 1936
and that the claim, if any, thus vested in
the trustees of his insolvent estate.
[13]
Section
12(3)
provides: ‘A debt shall not be deemed to be due until
the creditor has knowledge of the identity of the debtor and of the
facts from which the debt arises: Provided that a creditor shall be
deemed to have such knowledge if he could have acquired it
by
exercising reasonable care’.
[14]
The
first defendant’s rejoinder was incorrectly labelled by its
drafter as a ‘rebutter’.
[15]
Lawsa
2
nd
ed., vol. 9 at para 657.
[16]
Lawsa
2
nd
ed. vol. 9 at para 659, citing
Hartogh
v National Bank
1907 TS 1092
at 1104 and
Southern
Life Association Ltd v Beyleveld
1989
(1) SA 496 (A)..
[17]
See
paragraphs [6]and [7], above.
[18]
Mr Kruger had previously been the branch secretary of Volkskastrust
Limited; see para [6], above.
[19]
The
Master of the High Court
Pretoria
NEW
RESOLUTION AND CERTIFICATES
We
forward herewith:
1.
Extract from the minutes of the board
meeting of Absa Bank Limited held on 16 February 1994.
2.
Certificate in respect of the appointment
as executor, trustee and curator arising from the aforementioned
resolution
3.
Power of attorney from Absa Bank Limited
in respect of appointment on behalf of the Bank, dated 28 February
1994.
According
to our records Absa Trust is permitted to administer estates in
which any one of the following companies were testamentarily
appointed as executor, following on take-overs, amalgamations and
name changes in the past:
[List
of companies named]
Yours
faithfully
JH
GROBLER
Consultant:
Legal Services
(my
translation)
[20]
‘
According
to our records Absa Trust is permitted to administer estates in
which any one of the following companies [those named
included
Volkskas Limited and Volkskastrust Limited] were testamentarily
appointed as executor, following on take-overs, amalgamations
and
name changes in the past.’ (my translation)
[21]
At
pp.169-170.
[22]
Section 25(1)
of the
Insolvency Act provides
:
The
estate of an insolvent shall remain vested in the trustee until the
insolvent is reinvested therewith pursuant to a composition
as in
section 119
provided, or until the rehabilitation of the insolvent
in terms of
section 127
or
127A
: Provided that, subject to the
provisions of subsection (3), any property which immediately before
the rehabilitation is vested
in the trustee shall remain vested in
him after the rehabilitation for the purposes of realization and
distribution.