Case Law[2025] ZAWCHC 14South Africa
Die Orffer Langdoed (Pty) Ltd v Orffer N.O and Others (17494/2024) [2025] ZAWCHC 14; [2025] 2 All SA 777 (WCC) (23 January 2025)
High Court of South Africa (Western Cape Division)
23 January 2025
Judgment
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# South Africa: Western Cape High Court, Cape Town
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## Die Orffer Langdoed (Pty) Ltd v Orffer N.O and Others (17494/2024) [2025] ZAWCHC 14; [2025] 2 All SA 777 (WCC) (23 January 2025)
Die Orffer Langdoed (Pty) Ltd v Orffer N.O and Others (17494/2024) [2025] ZAWCHC 14; [2025] 2 All SA 777 (WCC) (23 January 2025)
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sino date 23 January 2025
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
REPORTABLE
Case
Number: 17494/2024
In
the matter between:
DIE
ORFFER LANDGOED (PTY) LTD
Applicant
and
CHRISTIAAN
JOHANNES ORFFER N.O.
First
Respondent
ELMIEN
ORFFER N.O.
[in
their official capacity as
Trustees
for the time being of
The
Bloubank Boerdery Trust]
Second
Respondent
REGISTRAR
OF DEEDS, CAPE TOWN
Third
Respondent
JUDGMENT
ANDREWS
AJ
Introduction
[1]
This
is an opposed application for an order to have a Special Power of
Attorney (“SPA”) declared as an original for
purposes of
Regulation 65 (1) of the regulations in terms of the Deeds
Registration Act
[1]
(“the
Deeds Registration Act”). Alternatively, an order directing the
First and Second Respondents, and/or the Trust
to sign and furnish
the Applicant with a duplicate original of the Special Power of
Attorney. What initially appeared to be a fairly
crisp issue for
determination, metamorphosised into distilling a lacuna identified in
the law pertaining to the effectiveness of
a Trustee’s
resignation under the Trust Property Control Act (“the TPCA”),
due to the arguments presented against
the relief sought in both the
main and alternative claims. The effectiveness of a Trustee’s
resignation under the Trust Property
Control Act (“the TPCA”)
arises from the arguments presented against the relief requested in
both the main and alternative
claims.
[2]
The First and Second
Respondents sought a declaratory
order stating that the Bloubank
Boerdery Trust (“the Trust”) is not bound by the Special
Power of Attorney signed on
14 December 2022. Alternatively, that the
Special Power of Attorney has been revoked by the Trust, and Special
Power of Attorney
is of no force and effect. They also contended that
the sale agreement concluded on 28 May 2024, by the Applicant on
behalf of
the Trust with O2 Fruit (Pty) Ltd (“the sale
agreement”), for the sale of Portion 1 of Farm 52, Bloubank
Farm, Tulbagh
(“the property”), is of no force and
effect, alternatively be set aside by the Court. Alternatively, the
registration
of the property be stayed pending a potential referral
to oral evidence or a potential action.
[3]
The Third Respondent
did not oppose the application.
Any reference to “the
Respondents” must be understood to mean the First and Second
Respondents.
Historical
background
[4]
The parties provided
the contextual narrative to assist
the Court in understanding the
historical background giving rise to the respective applications.
The property was originally
part of a larger farm that was bequeathed
to the First Respondent and his brother. As a consequence of what the
First Respondent
described as “significant personal differences
and conflicts” between them, they agreed that the farm would be
subdivided
leading to the Trust becoming the registered owner of the
property. The Applicant conducts its farming enterprise from the
Bloubank
Farm.
[5]
The First Respondent
was initially the only shareholder
of the Applicant. The business of
the Applicant encountered financial challenges that necessitated the
involvement of an investor.
Cape Five Group (Pty) Ltd (“the
Cape Five Group”), a holding company, stepped in to provide a
capital injection. As
part of the fund raising, they received shares
in the Applicant. Almost immediately after entering into the
partnership, the Covid-19
pandemic occurred which was followed by a
severe hailstorm, both of which impacted the financial success of the
farm. As a result,
the Applicant encountered further financial
difficulty. The First Respondent did not have the financial resources
to cover the
operations of the farm and the Trust. The Applicant was
unable to get out of financial distress. The Applicant had over time
provided
loans and advanced monies to the Trust. As at the date of
signature of the Special Power of Attorney, the Trust was indebted to
the Applicant in excess of R17 million.
[6]
To ensure the
payment of the Trust debt to the Applicant,
the Trust consented to
provide the Applicant with the necessary authority to sell, amongst
other assets, the Bloubank Farm and
from the proceeds of the sale to
settle the outstanding debt. On or about 14 December 2022, the
Trust concluded the Special
Power of Attorney. On 28 May 2024,
the property was sold to O2 Fruit. The original Special Power of
Attorney was in the Applicant’s
possession and was misplaced
when the Applicant relocated offices.
The
Applicant’s case
[7]
The Applicant has
sold the property; however, it cannot
transfer it due to
non-compliance with the applicable regulations pertaining to land
registration. The Applicant astutely remonstrated
that in terms of
the Special Power of Attorney, it has the right to sell the property,
and to effect transfer thereof to the purchaser.
Therefore, in order
to pass transfer of the property, the Applicant is required to lodge
the original Special Power of Attorney
and is currently unable to do
so as the original has been misplaced. The Applicant is not
able to procure another original
power of attorney from the Trust as
the Trust disputes the Applicant’s authority to sell the
property on its behalf.
[8]
The Applicant
contended that the Trust’s opposition
to this application is
mala fides
as it has raised non-meritorious grounds of
opposition and an ill-founded counter-application in an attempt to
obfuscate these
proceedings and to prevent the inevitable
consequences to the First and Second Respondent that will follow from
the sale of the
property.
Trust’s
grounds of opposition
[9]
The Trust disputed
that the Applicant has the right
to sell and/or transfer the property
pursuant to the Special Power of Attorney, as it principally asserted
that:
a)
The SPECIAL POWER OF ATTORNEY is invalid because the First Respondent
was not duly authorised by the Trust
to grant the SPECIAL POWER OF
ATTORNEY in favour of the Applicant;
b)
The SPECIAL POWER OF ATTORNEY was revoked and
c)
They obtained a higher offer.
Principal
submissions by the parties
[10]
The Respondents contended that the
letters of authority in respect of
the Trust were never amended by
the Master of the High Court. The Trust maintain that Mr Stofberg’s
resignation has no legal
effect until the letters of authority are
amended to reflect such a change. The Respondents argued that Mr
Stofberg was required
to participate in the Trust’s decision to
sign the Special Power of Attorney. The Applicant, however, asserted
that this
argument is legally unsound and that it is sufficient for a
resigning Trustee to notify his Co-Trustees and the Master of his
resignation,
after which the resignation becomes effective upon the
Master’s acknowledgement. The Applicant postulated that Mr
Stofberg’s
resignation became effective as from 12 June 2019,
the date of his resignation, and as such, he was no longer a Trustee
from that
date onwards.
[11]
The
Respondents’ arguments insofar as it relates to the lacuna in
the law concerning the effectiveness of a Trustee’s
resignation
in terms of the TPCA becomes apposite to determining when Mr
Stofberg’s resignation took effect. The Respondents
indicated that the authorities appear to hold conflicting views on
this issue. This argument is premised on the seemingly
contradictory judgments in
Soekoe
NO v Le Roux
[2]
and
Meijer
NO v FirstRand Bank Limited
[3]
.
[12]
The Respondents contended that a
distinction must be drawn between the
formalities of a resignation
and when such resignation becomes effective. They argued that even
though a Trust Deed may set out
the formalities regarding a Trustee’s
resignation, this does not detract from the question as to when such
a resignation
becomes effective. The Applicant proffers as a counter
argument asserting that Mr Stofberg’s resignation was in
compliance
with, and pursuant to the provisions of the Trust Deed.
They submitted that the argument regarding Mr Stofberg’s
resignation
pursuant to the TPCA, should only be addressed if it is
established that Mr Stofberg did not resign in compliance with the
provisions
of the Trust Deed. They reasoned that if it was required
to be in terms of the provisions of Section 21 of the TPCA, Mr
Stofberg’s
resignation was effective from the date the Master
acknowledged receipt thereof. Therefore, according to the Applicant,
Mr Stofberg’s
resignation was effective prior to the signature
of the SPECIAL POWER OF ATTORNEY in terms of the Trust Deed and/or
the TPCA.
[13]
The
Respondents furthermore contended that the proposition that when a
Trustee resigns in compliance with the formalities required
in a
Trust Deed that he or she simply stops being accountable to the
beneficiaries for the assets under their control cannot be
tenable.
Conversely, the Applicant argued that the Respondents’
proposition postulated to the effect that the general position
prior
to the TPCA being promulgated was that a Trustee did not enjoy the
right to resign as a Trustee and that a Trustee had no
right to
resign from such position, is incorrect. In this regard, a Trustee
required the leave of the Court to resign only if the
Trust Deed did
not provide for his resignation.
[4]
Therefore, even prior to the promulgation of the TPCA, a Trustee
could resign in terms of the provisions outlined in the Trust
Deed.
The Respondents asserted that this must be interpreted within the
context of the conclusion drawn by the authors in
Honorés
South African Law of Trusts
(“Honorés”)
on
this aspect. I will deal more comprehensively herewith, later in this
judgment.
[14]
The Respondents suggested that it is a
far more common sense and business-like
approach to insist that,
regardless of any resignation, the Trustee must continue to act until
such time as the Master has amended
the letters of authority to
replace the Trustee. This, it was argued, would mean that a Trust
could never be subject to the whims
of a “resigned”
Trustee. The Respondents made an analogy of a situation in which a
Trust Deed requires that a Trust
must always have three Trustees. It
reasoned that if one Trustee resigned by giving notice to the other
two Trustees and that resignation
was effective immediately, then the
Trust would be unable to undertake any valid actions until the Master
appointed a new Trustee.
However, if the resignation is only
effective once the letter of authority is issued, then the resigning
Trustee would be required
to continue to act to ensure that the Trust
can take valid decisions.
[15]
Likewise, if a Trustee’s
resignation was to be effective immediately,
such scenario would
render a Trust unable to administer the assets held under a Trust.
The Respondents argued that it is therefore
irrelevant to the
question of when a resignation is effective, and whether or not, the
Trustee complied with the formalities in
a Trust Deed when resigning.
[16]
The essence of the Applicant’s
argument therefore hinges on whether
the Trust would be in Court if
the original SPECIAL POWER OF ATTORNEY had not been lost;
particularly since the Respondents
have raised the legal argument
concerning the validity of the SPECIAL POWER OF ATTORNEY more than 3
years after the signing thereof.
This they argued, highlights the
modus operandi
of the First Respondent in an attempt to delay
the inevitable.
Common
cause facts
[17]
The following facts are common cause:
a)
The Trust initially comprised of 3 Trustees, namely the First and
Second Respondents, as well as Boshoff Visser
Trustdienste (Pty) Ltd,
represented by Arnoldus Jacobus Stofberg (“the Third Trustee”);
b)
The Trust, at the time of the conclusion of the SPECIAL POWER OF
ATTORNEY, and the date of the institution
of the application, was and
is indebted to the Applicant.
c)
On
14 December 2022, the First and Second Respondents, in their
capacities as Trustees for the Trust, signed the resolution
[5]
that authorised the Trust to conclude the SPECIAL POWER OF ATTORNEY,
and authorised either of them to sign the SPECIAL POWER OF
ATTORNEY
on behalf of the Trust.
d)
The Third Trustee tendered a written resignation as Trustee on 12
June 2019.
e)
On 14 December 2022, the First Respondent signed the SPECIAL POWER OF
ATTORNEY in favour of the Applicant.
The salient terms of the SPECIAL
POWER OF ATTORNEY included
inter alia
:
i)
the Applicant was authorised to sell Bloubank Farm, with a reserve
price of R12 million;
ii)
The Applicant was authorised to execute any act or deed relating to
the alienation and/or transfer of Bloubank Farm in
any Deeds
Registry;
iii)
The Applicant was authorised to repay the amount due to it by the
Trust from the proceeds of the sale and
iv)
The SPECIAL POWER OF ATTORNEY will subsist until such time as
Bloubank Farm is sold and successfully transferred to the purchase,
and the full purchase price is paid and distributed in accordance
with the terms of the SPECIAL POWER OF ATTORNEY.
f)
The Applicant concluded a sale agreement with O2 Fruit on 28 May 2024
in terms of the SPECIAL POWER OF
ATTORNEY, pursuant to which the
Trust transferred the property to O2 Fruit.
Legal
position regarding the resignation of a Trustee
[18]
It therefore behoves this Court to
consider whether the Respondents
raised a meritorious challenge to
the validity of the SPECIAL POWER OF ATTORNEY, more particularly, in
the light of the resignation
of the third Trustee. The law lacks
clarity regarding the effective date of a Trustee’s resignation
as the Trust Property
Control Act (“TPCA”), is not clear
on when a Trustee’s resignation becomes effective.
Section 21 of the
TPCA stipulates as follows:
‘
Whether
or not the Trust instrument provides for the Trustee’s
resignation, the Trustee may resign by notice in writing to
the
Master and the ascertained beneficiaries who have legal capacity, or
to the tutors or curators of the beneficiaries of the
Trust under
tutorship or curatorship’
[19]
As
a starting point, I find it prudent to consider and reflect on the
commentary by the authors of
Honorés
regarding
the resignation of a Trustee. Under common law, a Trustee could not
resign from their position without good reason and
the Court’s
consent, unless the Trust instrument provided otherwise.
[6]
This was due to the assumption that a Trustee cannot relinquish
his or her fiduciary duties merely by electing
not
to perform them
[7]
.
[8]
In terms of the TPCA, more particularly Section 21 thereof, the
Trustee is entitled to resign regardless of whether the Trust
instrument provides for this.
[20]
The
authors of
Honorés
[9]
recognised that this provision represents a progression beyond the
common law, where the Trust instrument would permit a Trustee
to
resign, however, if it did not, permission of the Court had to be
obtained, which would only be granted for good reasons. They
further
elaborate by stating that:
‘
The
statute now contains a general power of resignation subject to
certain formalities. The Trustee who resigns must do so by notice
in
writing to (a) the Master and (b) the ascertained beneficiaries who
have legal capacity or, in the case of beneficiaries under
tutorship
or curatorship, to the tutors or curators concerned. The entitlement
to resign is not subject to the Masters or the Court’s
permission. But it should be remembered that
the
Trustee willingly assumed office
.
Hence,
fiduciary obligations mean that he or she cannot resign at any time
and regardless of the needs of the Trust and the interests
of the
beneficiaries
.
If
resignation would prejudice the Trust, the policy of giving effect to
validly constituted Trusts must at least temporarily prevail,
and
until as suitable accessor is available, override considerations of
private convenience
.
Resignation would accordingly be possible only when there remains at
least one further Trustee capable of administering the Trust
or when
the Trustee who resigns arranges for the Master to appoint a
substitute capable of administering the Trust. A Trustee who
resigns
arbitrarily despite possible prejudice to the Trust may in
appropriate circumstances be liable for breach of Trust.’
[10]
[my
emphasis]
[21]
Honorés
, states
that when the Trust instrument permits resignation, any specified
formalities outlined in the Trust instrument must be
complied with.
Moreover, they opine that the object of the provision in the Trust
Property Control Act concerning resignation appears
to be to allow a
Trustee to resign notwithstanding the provisions of the Trust
instrument, not to impose the formality of written
notice to the
Master and others on all resignations. It is of seminal importance
that a Trustee is not prohibited from resigning,
as the statutory
language is permissive (“may resign”).
[22]
In
Meijer
NO v Firstrand Bank Ltd
[11]
(“Meijer”)
the
Court notably left open the question whether or not the statutory
mode of resignation as contemplated in Section 21 was intended
to
establish a rule applicable for all resignations, regardless of
whether the internal requirements provided for in the Trust
instrument have been met.
[12]
‘
[7]
The Applicants, in their Founding Affidavits, departed from the
premise that as neither of them had been replaced as Trustees
by the
Master, they have residual legal obligations in terms of their
respective positions as Trustees. In his Replying Affidavit
the First
Applicant referred to the fact that he has since learned that the
Master had not been informed of the resignations which
had been
tendered in 2001 and that the resignations were ostensibly only
delivered to the Master on 5 April (sic) The First Applicant
then
proceeded as follows:
"Even
if it should be held that the resignation of the applicant became
effective already in 2001, despite the fact that the
master did not
replace us as Trustees, and this is not conceded, the second
respondent could not legally on her own take decisions
binding the
Trust at the time that she signed the 'certificate in respect of a
loan to a Trust' on 22 January 2007’
[13]
[23]
Meijer
references the
afore-quoted excerpts from
Honorés
insofar
as the trite legal principles at common law and the statutory
prescripts of Section 21 of the TPCA are concerned.
Dlodlo J,
as he then was, goes on to pose the very question that this Court is
called upon to answer in
casu
namely:
‘
The
question which is more vexed, however, is (a) whether the resignation
of a Trustee is of any force and effect until such time
as the Master
has appointed and authorised another Trustee to act in his or her
stead and (b), if not, whether or not the statutory
mode of
resignation (as provided for in Section 21) was meant to lay down the
rule for all resignations - regardless of the fact
that the internal
requirements provided for in the Trust instrument have been met.’
[14]
[24]
It
is trite that when a Trustee authorised by the Master to act,
resigns, the statute mandates the prompt return of the written
authority to the Master.
[15]
However, the Act is silent on exactly when the resignation becomes
effective. The Court in
Meijer
considered
the judgment of
Soekoe
NO v Le Roux
[16]
(“Soekoe”)
,
where it was held that the resignation only becomes effective once
the Trustee who resigned was replaced by his or her successor.
[17]
The writers of
Honorés
proposed
that ‘
[t]his
could be the proper approach if the resigning Trustee is the only (or
the only remaining) Trustee in a particular instance.
But in Meijer
NO v Firstrand Bank Ltd
[18]
the
Court suggested an alternative because the approach in Soekoe could
lead to “hardship”.’
[19]
[25]
The Court in
Meijer
remarked that
Soekoe
has faced criticism, particularly
in academic circles, which I regard as being worthy to restate in
order to understand how this
vexing question has been dissected with
a view to possibly finding an answer to the lacuna in the law in this
context. Justice
Dlodlo, as he now is, distilled the various
interpretations and academic critiques as follows:
‘
It
is true that judgment in
Soekoe
matter
supra
has been the subject of criticism
particularly in academic circles. See for instance Olivier Strydom &
Van den Berg
Trust Law and
Practice
, p 3.17
et
seq,
where the authors point out
that the decision creates practical problems. What is important to
note, however, is that the authors
also justify their criticism by
saying that:
"Once
a Trustee has, in our opinion, complied with the provisions of
Section 21 we find it hard to understand how it could
be the
intention of the legislature that that Trustee still remain liable
until new letters of authority had been issued by the
Master of a
High Court".
Olivier
et
al,
Trust Law and Practice, seem
to be more circumspect. At p 3-18 they say the following:
"Furthermore
if a Trust Deed provides for resignation by a Trustee in a certain
manner, compliance with that provision of the
Trust Deed should be
enough. It might be worthwhile to include a clause in a Trust Deed
stating that a Trustee’s resignation
will be effective from the
date upon which the Master of the High Court receives notice of such
resignation."
With regard to
the question posed in (b)
supra
,
Cameron
et
al,
in Honore's South African Law
of Trust seem to subscribe to the view that the statutory mode of
resignation provided for in Section
21 is not prescriptive in
instances where the Trust instrument permits resignation:
"Apart
from the requirement of written notice introduced by the Trust
Property Control Act, when the Trust instrument permits
resignation
there are no particular formalities for resigning, apart of course
from those the instrument itself may specify. The
object of the
statutory provision concerning resignation appears to be to allow a
Trustee to resign notwithstanding the provisions
of the Trust
instrument, not to impose a formality of written notice of the Master
and others on all resignations. The statutory
mode of resignation is
additional, and is capable of being exercised alongside other methods
permitted by the Trust instrument."
Discussion
[26]
It is undisputed that Mr Stofberg
resigned as the third Trustee on 12
June 2019, by giving written
notice. On 29 March 2021, the Master of the Western Cape High Court,
noted Mr Stofberg’s resignation.
The SPECIAL POWER OF ATTORNEY
was signed on 14 December 2022.
[27]
It is my view, that there cannot be a
proverbial one size fits all approach,
as it is manifest that Section
21 is not prescriptive in instances where the Trust instrument
permits resignation
. To my mind, if a Trust Deed
makes provision for the resignation of a Trustee in a particular
manner, such provision of the Trust
Deed ought to be honoured and
implemented accordingly. The grey area arises when the Trust
Deed does not specify the effective
date of a Trustee’s
resignation. This may lead to a number of permutations which
might include
inter alia
:
a)
The actual date of the resignation;
b)
The date
when the written notice was sent to the Master and ascertained
beneficiaries;
c)
The date when the Master receives the notice of the resignation;
d)
The date when the Master notes the resignation (acknowledges receipt
thereof) or
e)
The date when the Master officially removes the Trustee from office
and issues amended letter of authority.
[28]
To
reiterate, in terms of the TPCA, regardless of whether the Trust
instrument provides for the Trustee’s resignation, the
Trustee
may resign by written notice to the Master and the ascertainable
beneficiaries who have legal capacity. This,
notwithstanding
the provisions of the Trust instrument
.
Therefore, even if the Trust Deed makes provision for resignation, a
Trustee may invoke the statutory provision for resignation
which
appears to be an additional option available to a Trustee. The
writers of
Honorés
proposes
that if a Trustee resigns in terms of Section 21 of the TPCA, the
resignation should take effect not only upon it being
shown that the
written notice was sent to the Master and ascertained beneficiaries,
but also upon the Master acknowledging receipt
of that notice.
[20]
This
reasoning fails to account for safeguards in situations where for
instance, the Trustee’s resignation was arbitrarily
motivated,
possibly to the detriment of the Trust beneficiaries. It is important
to note that if the Trust instrument stipulates
additional
requirements concerning resignation, a Trustee’s resignation
will be effective only once these requirements have
been fulfilled.
[29]
This
Court must carefully scrutinise the provisions of the Trust Deed with
a view to establishing whether there were any additional
and further
prerequisites pertaining to the resignation of a Trustee. In
casu
,
the
salient clause in the Trust Deed stipulates that
[21]
:
‘
5.5.
‘n Trustee hou op om as ‘n
Trustee van die Trust op
te tree:
5.5.1.
as hy as Trustee bedank, wat hy geregtig is om te doen deur
skriftelike kennisgeweing aan sy mede-Trustee(s) te dien
effekte;’
[22]
[30]
The
Trust Deed specifically states that the Trustee ceases to act in that
capacity if he resigns as a Trustee, which he is permitted
to do by
simply giving written notice to his co-Trustee. On a strict
interpretation of Section 21
of
the TPCA, that resignation should be considered effective when it is
shown that the written notice was sent to the Master and
ascertained
beneficiaries, but also upon acknowledgment by the Master of the
receipt thereof.
In
casu
,
the Trust
instrument did not stipulate other requirements with regards to
resignation, except that he was to give
written
notice to his Co-Trustees
.
To my mind, the common sense and business-like approach proposed by
the Respondents would essentially curtail a Trustee from
relinquishing their fiduciary obligation until
such
time as the Master has amended the letters of authority to appoint a
new Trustee.
[31]
Mr Stofberg’s resignation is
dated 12 June 2019 and reads as follows:
‘
Aanvaar
hiermee my bedanking as Trustee van Bloubank Boerdery Trust…
Ek
hoop en vertrou u vind bogenoemde in orde so.’
[32]
It is evident that the Trustee
provides no reasons for resigning. There
is no requirement in the
Trust Deed that the resigning Trustee needs to provide reasons for
resignation. It seems that Mr Stofberg
has fulfilled the requirements
as set out in the Trust Deed. Nothing more was required of Mr
Stofberg on an ordinary grammatical
reading of the Trust Deed. It is
however, noteworthy that the Trust Deed does not address the
resigning Trustee’s residual
legal obligations. In terms of the
TPCA, it is sufficient for the resigning Trustee to notify his
Co-Trustees and the Master of
his resignation and once the Master
acknowledges the resignation, it becomes effective.
[33]
In reply to a letter dated 30 November
2020, the Master directed a letter
to BVSA Worcester (Pty) Ltd,
bearing date stamp 29 March 2021, as follows:
‘…
I
hereby confirm that the resignation as Trustee by Boshoff Visser
Trustdienste (Pty) Ltd has been noted and placed on record.
In
order for a new Letter of Authority to be issued please provide the
following:
Original
Letter of Authority dated 13 July 2015 or a sworn affidavit by the
Trustee if it cannot be located
Acknowledge
by the remaining Trustees that they are aware of the resignation
Advise
whether or not this is a “family business Trust”, if so
then provide the necessary documentation to appoint an
independent
Trustee OR written motivation to waive same’
[34]
The Master has essentially
acknowledged the resignation. The context
of the Master’s
response is to be considered. I will deal with this aspect in greater
detail later in this judgment. However,
I deem it necessary to
reiterate that it is not about the resigning Trustee obtaining the
Master’s permission to resign,
which is not a requirement, it
goes to the heart of clearly defining the procedure for resignation
insofar as
:
a)
When it is deemed to be effective; and
b)
Whether interim measures ought to be put in place to ensure that the
business of the Trust continues to function;
and
c)
Curtailment of arbitrary resignations.
[35]
I
interpolate to state that I am ever mindful that Section 21 of the
TPCA is a progression beyond the common law, however, it appears
that
a Trustee has the liberty to resign without providing justification
for relinquishing its fiduciary obligations. There appears
to be no
safeguards to prevent arbitrary resignations of Trustees. In my
view, it is not competent for a Trustee to simply
give up his or her
fiduciary duty by simply electing not to fulfil them. As I see it,
fiduciary obligations must override private
convenience in
circumstances where no cogent reasons have been advanced by a
resigning Trustee.
[36]
In a letter penned by Mr Stofberg
dated 13 May 2024, addressed “to
whom it may concern”, he
writes that as at that date, no new letters of authority were
received and essentially indemnifies
BVSA Worcester (Pty) Ltd from
any consequential financial loss or damages that may flow.
‘
Hiermee
bevestig ons as rekenmeesters van bogenoemde Trust dat Mnr AJ
Stofberg reeds as Trustee bedank het on 12 Junie 2019. Daar
is nog
nie ‘n nuwe magtingingsbrief om te bevestig nie.
BVS
Worcester (Edms) Bpk en sy direkteure aanvaar geen aanspreeklikheid
ten opsigte van enige finasiële verliese of skade wat
enige
party mag lei as gevolg van die vertroue wat hulle op hierdie skrywe
geplaas het nie.’
[23]
[37]
Mr Stofberg considered it essential to
indemnify BVSA Worcester (Pty)
Ltd from any consequential financial
loss or damages. This suggest to me that he was uncertain about his
status as a resigning
Trustee and, for good measure, believed that it
was important to direct this communication to the Master. Of further
significance,
it was emphasised that no amended letter of authority
was issued. There was clearly a concern that the status of Mr
Stofberg as
Trustee could be deemed as extant notwithstanding the
“noted” letter of resignation.
[38]
In
Soekoe
(supra)
,
it was unequivocally established that a resigning Trustee remained
legally accountable to his fellow Trustees until the Master
formally
removed him from office as a Trustee. Furthermore, his duties did not
cease upon resignation, but instead he was succeeded
by a new
Trustee.
[39]
It
however behoves this Court to consider the matter of
Investec
Bank Ltd v Adriaanse
[24]
(“Adriaanse”)
,
which the Applicant referred to as being directly relevant to the
matter in
casu
.
In
Adriaanse,
Investec
Bank instituted action against the Defendants, in their capacity as
Trustees of the Kudu Trust, based on a suretyship executed
by the
Kudu Trust in favour of Investec for the indebtedness of Scarlet Ibis
Investments (Pty) Ltd, having been liquidated, to
Investec. Scarlet
Ibis, represented by the Second Defendant, Mr Adriaanse, applied for
a loan from Investec. Investec granted
the loan against certain
measures being put in place to secure the loan which included a
suretyship entered into by Adriaanse in
his personal capacity, along
with a suretyship by the Kudu Trust. The Defendants’
opposition based on the premise that
the Trust lacked competence to
execute such surety as it was not to the advantage of the
beneficiaries and therefore, exceeded
the Trustee’s authority.
It argued that Investec had an obligation to interrogate the
transaction with increased diligence,
ensuring that it would be
sustainable for the benefit of the Trust and beneficiaries. The
Defendants further submitted that, even
if it is found that it did
fall within the Trust’s powers, it was not executed with the
consent of all Trustees, based on
the fact that the third Trustee, Mr
Kleingeld, had not signed the resolution to enter into such
suretyship. The Court was called
upon to determine
inter
alia
:
a)
whether the execution of the suretyship was to the advantage of the
Trust and the beneficiaries, as was required
by the Trust Deed; and
b)
if so, whether all of the Trustees consented to said suretyship; and
c)
whether they were empowered to do so in terms of the Trust Deed.
[40]
The Court held it to be trite
that “
Trustees have the primary responsibility to act in
accordance with the dictates of the Trust Deed, and one should guard
against
the unintended consequence of developing a quantitatively
higher standard of diligence and care on the part of the outsider
dealing
with a Trust, than on the part of the Trustees themselves.”
The defendants maintained that Investec needed to ensure there was a
benefit to the Trust and its beneficiaries, thereby relieving
the
Trust of responsibility for its assessment of profitability and
placing the onus on Investec for not doing their due diligence
and
examining the Trusts projections. The Court determined that this
approach to go “
against simple logic and the dictates of
business efficiency, which should characterise the dealings between a
Trust and the outside
world.”
The Court deemed this defence
to be unsustainable and rejected it. In determining whether there was
sufficient consent to conclude
the suretyship, the Court accepted
that the third Trustee had resigned from holding such office and,
therefore, at the time of
conclusion of the suretyship agreement in
question, the Kudu Trust only had two Trustees, namely the First and
Second Defendant,
both of whom had duly signed the authorising
resolution and had consented thereto. In determining whether the
Trustees were empowered
to conclude the suretyship, the Court held
that aside from the fact that the Trust Deed required there to be
three Trustees at
all times, it had regard to the plain language
construction and found there to be no limitation on the remaining
Trustees’
powers in respect of executing the deed of
suretyship. The Court eventually determined that the remaining
Trustees were empowered,
according to the Trust Deed, to do so.
[41]
Since
the promulgation of the TPCA, neither the founder nor the other
Trustees may refuse a Trustee’s resignation. This is
also
applicable to the Master of the High Court. The principle essentially
embraces the notion that a Trustee cannot be forced
to remain in
office against his or her free will.
In terms of
Adriaanse
,
the Court held that while outsiders have an interest in
self-protection, the primary responsibility for compliance with the
Trust
Deed rests with the Trustees.
[42]
The Court in
Adriaanse
did
not address the question of when a Trustee’s resignation became
effective., However, and appositely so, the Court determined
that
there was no limitation on the remaining Trustees’ powers in
respect of execution of the deed of suretyship. This perspective,
in
my view, is instructive on the Courts approach. It is indeed the
Trustees’ primary obligation to act in accordance with
the
dictates of the Trust Deed. However, each matter is to be determined
on its own merits, bearing in mind that there may be practical
constraints. In
casu
, Mr Stofberg had already resigned in 2019
and by 2024, no new letters of authority were issued.
[43]
Therefore, in an attempt to demystify
the identified lacuna, the Chief
Master’s Directive may be
informative and could provide valuable insights into the relationship
between Trust instruments
and the TPCA. In this regard, The Chief
Master’s Directive 2 of 2017, dealing with various Trust
matters stipulated as follows
regarding the resignation of a Trustee:
‘
Procedures
for the resignation of a Trustee may be contained in the Trust
instrument in which instance such procedures should be
adhered to.
Section 21 of the Trust Property Control Act does not exclude or
override the provisions of a Trust instrument which
allow a Trustee
to resign
.
For
more information on this aspect, refer to Meyerowitz D, The Law and
practice of Administration of Estates and their Taxation,
2010
edition, par. 23.26 and Cameron E, De Waal M, Wunsh B, Solomon P &
Kahn E, Honoré's South African law of Trusts,
5
th
edition,
9228-229.
[25]
Where
the Trust instrument fails to make provision for the resignation of a
Trustee the provisions of section 21 of the Trust Property
Control
Act, 1988 will apply
.
In
terms of section 21 of the Trust Property Control Act, 1988 a Trustee
must give notice of his or her resignation in writing to
the Master
and to the ascertained beneficiaries. The Courts have not, on the
date of this directive, had the opportunity to decide
what
ascertained beneficiaries in the context of section 21 of the Act
means, Masters must therefore give the words their normal
meaning,
namely beneficiaries with vested rights that are known to the
Trustees.
The
Trust Property Control Act, 1988 does not contain any provision
authorising the Master to refuse to accept the resignation of
the
Trustee. Masters must note that upon his or her resignation a Trustee
is not absolved from any liability incurred while he
or she was a
Trustee.’
[26]
[44]
The
learned authors of
Wills
and Trusts
[27]
is similarly insightful on this point, where they appositely opined
as follows:
‘
It
appears that the more flexible approach in the said Meijer case with
regard to notice of resignation in terms of section 21 can
from a
good and practical base for determining when a resignation of a
Trustee actually takes effect, even in the case of alternative
methods of resignation as prescribed by a specific Trust Deed. For
instance, if the deeds prescribe notice of resignation to be
given to
the co-Trustees, it is submitted that it can only take effect not
only upon it being shown that the written notice was
sent to the
co-Trustees and the Master, but upon acknowledgement by the Master of
the receipt thereof (as per the Meijer case).
It is suggested that
this is also a case, whether it be a notice to the ascertained
beneficiary as required by, for instance, a
particular Trust Deed. It
is further suggested that this is required for the sake of legal
certainty and because of the indispensable
role of the Master in the
authorising and removal of Trustees.
Thus, the Master’s
acknowledgement of receipt of the notice of resignation should
perhaps in all instances be the trigger
moment or moment to cause the
resignation to take effect, and not the removal of the name of the
Trustee from the letter of authority.
This could be conducive of more
fairness
as well as legal certainty
because in respect of the acknowledgment by the Master of receipt of
a notice of resignation, the resigning Trustee is more directly
involved in the process by, for instance delivering a notice to the
Master’s office and getting a date stamp on a copy of
the
letter of resignation than when due to possible delays in the
Master’s office which may occur between the delivery to
his
office and the removal of the Trustee’s name from the letter of
authority, a resigning Trustee could be unfairly prejudiced.’
[my emphasis]
[45]
Dlodlo J, in
Meijer
recognised
the importance that there be legal certainty
and
remarked as follows:
‘
I
am of the view that this is exactly why Rampai J in
Soekoe
matter
supra
decided that matter in the manner already referred to in
this Judgment.
To ameliorate any possible hardship that
may result from the above finding made by Rampai J, it is suggested
that proof of the fact
that resignation had been sent to the Master
in writing coupled with an acknowledgement of receipt by the Master's
office should
suffice. In my view, in the latter scenario, the
Trustee should be deemed as having resigned
.
In other words, the resignation should take effect not only upon it
being shown that the written notice was sent to the Master
and the
ascertained beneficiaries, but upon an acknowledgement by the Master
of the receipt thereof. Merely because the papers
in the instant
matter do not prove that the Master was notified in writing of the
two Applicants' resignation, I hold that they
remained Trustees.
’
[46]
The Court ultimately determined that
the moment the Master acknowledged
receipt of the Trustee’s
resignation, would be when the resignation was deemed to take effect.
The reasoning behind Justice
Dlodlo’s view was to ameliorate
hardship to the resigning Trustee. The Respondents in
casu
however, submitted that it can hardly be said to be hardship to have
to continue to act as a Trustee until letters of authority
are
amended. They contended that the consideration of hardship is
to be viewed in relation to the potential hardship that
beneficiaries
of a Trust may suffer in light of the fiduciary responsibilities that
such appointment holds.
[47]
The golden thread that runs throughout
the authorities relied upon by
the parties are pellucid, in that a
Trustee is permitted to resign if a Trust instrument makes provision
in this regard. It is
furthermore manifest that Section 21 of the Act
does not supersede the provisions contained in a Trust instrument. A
Trustee cannot
reasonably be expected to remain in office against
their will. Therefore, there was no prohibition on Mr
Stofberg’s
resignation which by and large complied with the
provisions of the Trust Deed.
[48]
The only issue remaining is the
determination of the precise moment
when Mr Stofberg effectively
resigned. In this regard, the academic opinion from
Wills and
Trusts
grappled with the issue when the resignation of a
Trustee actually takes effect, namely whether it can be the date of
resignation,
or the date on which the resignation is received by the
Master or another date entirely. They opined that ‘
for the
sake of legal certainty but not necessarily of fairness. It is
submitted that the resignation can take effect (and the authority
granted is terminated) only after the Master has removed the name of
the Trustee from the letter of authority.’
They then
proceed to acknowledged the confirmed position taken in the
Soekoe
matter.
[49]
To reiterate, if the timeline were to
be taken into account in this
matter
in casu,
it is evident
that although Mr Stofberg resigned in 2019, by May 2024, the Master
had yet to issue new letters of authority. Given
the circumstances,
it would, in my view be unreasonable to expect a Trustee to continue
to hold office for such an inordinate duration.
[50]
The next question to wrestle
with is whether the approaches postulated
in
Soekoe
and
Meijer
would amount to compromising fairness
over legal certainty. Maintaining a balance, in my view,
requires an approach that avoids
the necessity of making these
challenging decisions. It cannot be the case that, on one hand, a
Trustee is forced to remain in
office while, on the other hand, the
beneficiaries of the Trust stand to be adversely affected if the
process lacks clarity. In
this case, the TPCA is silent on when
the resignation of a Trustee actually takes effect.
[51]
For instance, in matters where a
child’s interests need to be
safeguarded, as seen in the
Soekoe
, where a Trust was established to assist a minor child
whose parent had been killed in a motor vehicle accident. The
reasoning
postulated by the Applicant in
casu
would result in
the Trust being administered by the remaining Trustees without a
professional Trustee to look after the funds in
the Trust. In
circumstances such as these, it is my view that the scales must tip
in favour of ensuring that the Trust operates
for the benefit of the
beneficiary, being the minor child.
[52]
It
therefore behoves this Court to consider the matter in
casu
through the lens of its unique factual matrix as the Trust in
question. The matter of
Soekoe
,
although, unreported, provides valuable insight into the Court’s
approach pertaining to the resigning Trustee’s accountability
to his fellow Trustees until the Master formally removed him from
office as a Trustee. It highlights that the resigning Trustees
responsibilities do not cease upon resignation, but rather continue
until such Trustee is replaced with a new Trustee. Whilst the
Applicant argued that the reasoning in
Meijer
is
on point, thorough and unassailable, the Respondents postulated that
the Court in
Meijer
made
mere
obiter
comments on the issue. They contended that a firm finding on the
issue was made in
Soekoe
;
which was not overturned in either
Meijer
or
Sidwell
NO v Du Buisson NO
[28]
(Sidwell).
[53]
The
Respondents advanced an argument that the “unassailable”
reasoning was based on academic criticism of the
Soekoe
judgment.
The Respondents argued that this “unassailable” reasoning
is ultimately just a conclusion by the authors of
Trust
Law and Practice
,
in terms of which they concluded that they ‘
find
it hard to understand how it could be the intention of the
legislature that a Trustee will remain liable until new letters
of
authority had been issued by the Master of the High Court.’
[29]
The Respondents’ critique of the writers conclusion is founded
on the fact that they did not provide any reasoning as to
why they
find it hard to believe that this should be the intention.
[54]
The
approach adopted in
Sidwell,
where
the Court suggested that despite formalities stipulated in a Trust
instrument itself, the provision of section 21 of the TPCA,
must in
any event be complied with, appears to be premised on an approach to
overcome the lacuna earlier identified. This is, because
section 21
of the Act only deals with circumstances under which a Trustee may
resign, stipulating certain formalities that must
be complied with.
It does not stipulate the event at which the Trustee will no longer
be regarded as a Trustee of the Trust.
[55]
In
casu
, Mr Stofberg occupied
the position of Trustee as an independent Trustee. On 29 March 2021,
the Master enquired whether the resignation
of Mr Stofberg was
acknowledged by the remaining
Trustees and whether they are aware of it. The Master subsequently
enquired about the nature of the
Trust, specifically whether or not
it was a family business Trust and
if
so, then the necessary documentation had to be provided to appoint an
independent Trustee, or a written motivation had to be
submitted to
waive same. The response from the Master appears to be in keeping
with the
Chief Masters Directive 2 of 2017 as earlier referred
to in this judgment. It appears evident that the Master in conducting
the
said enquiry required the necessary documentation to initiate the
process for the appointment of another independent Trustee. The
Master was clearly astute to ensure that the provisions of Section 21
of the TPCA was complied with in relation to whether the
written
notice of Mr Stofberg’s resignation was also provided to the
ascertained beneficiaries. In terms of these Directives,
the notice
must be given to beneficiaries with vested rights and interest that
are known to the Trustees.
[56]
The Respondents argued that there has
been a lack of compliance with
Section 21, as it remains unclear
whether the beneficiary, Charlotte Offer was notified of his
resignation. It was emphasised by
the Applicant that because the
Trust is a discretionary Trust, Charlotte Orffer is an income
beneficiary of the Trust. As such,
Charlotte Orffer only acquires a
vested right and becomes a beneficiary for the purposes of Section 21
of the TPCA, after the Trustees
have made the decision to distribute
income to the beneficiary. There is no evidence before this Court
that Charlotte Orffer is
a beneficiary with a vested interest and
that she required notice of Mr Stofberg’s resignation in terms
of Section 21 of
the TPCA. The Applicant contended that because the
Respondents allege that Mr Stofberg’s resignation is invalid,
it was for
them to prove that the resignation was invalid.
[57]
The Applicant further submitted that
as Co-Trustees and family members
of the beneficiary, it was within
their knowledge necessary to determine whether the beneficiaries had
vested rights and whether
they were informed of Mr Stofberg’s
resignation. The Applicant contended that it is both opportunistic
and disingenuous for
the Respondents, who are aware, or should
reasonably be aware whether the beneficiaries have vested rights and
have been informed,
to argue that there is no evidence that they have
been notified The Applicant therefore submitted that Mr Stofberg’s
resignation
complies with section 21 of the Act and that the SPECIAL
POWER OF ATTORNEY is valid and binding.
[58]
To reiterate, the TPCA does not
contain any provision authorising
the Master to refuse to accept the
resignation of the Trustee. However, in terms of the Chief Master’s
directive, it is incumbent
upon the Master to consider that upon the
resignation of a Trustee, the said Trustee is not absolved from any
liability incurred
during his or her tenure as a Trustee. Therefore,
if regard is had to the relevant literature and authorities on point,
it cannot
be that a beneficiary can be imperilled by the resignation
of a professional Trustee being immediate. The fiduciary
responsibility
of a Trustee cannot be overemphasised.
[59]
A
Trustee fulfils a fiduciary role, bearing a duty of utmost good faith
towards the Trust and its beneficiaries. Therefore, it cannot
simply
be a matter of metaphorically abandoning the ship proverbially
speaking once a resignation is tendered or the Master notes
a
resignation. This, because a Trustee’s fiduciary
responsibility is the legal obligation to act in the best interests
of the Trust and its beneficiaries. Therefore, those individuals who
accept such position must understand the seriousness of the
position.
Binding a resigning Trustee to their duties during this period until
such time
the Master formally
removes him or her from office
through the issuance of new
letters of authority, as per the Court’s approach in
Soekoe
would be tantamount to overriding the provisions of the Trust
instrument. Inasmuch as the Master has no power to refuse
resignations,
the Master, as the overseeing authority must, in my
view, ensure that Trusts continue to operate from the time that the
resignation
is noted until new letters of authority is issued.
Administrative delays in adopting the approach in
Soekoe
would effectively mean that Mr Stofberg would not have been released
from his fiduciary obligations until some years later.
[60]
Although Mr Stofberg has tendered his
written resignation in 2019, the
Master was still enquiring as to
whether formalities were complied with in 2021, and as at May 2024,
the Master had not issued
new letters of authority. Given these
circumstances, it would appear unreasonable to expect a Trustee to
continue to hold
office for such an undue period of time.
The
Master emphatically stated that in order for a new letter of
authority to be issued, the original letter of authority dated
13
July 2015 was necessary. Additional queries were also raised.
Consequently, any delay in issuing new letters of
authority cannot imperil the resigning Trustee as it has been
demonstrated
in
casu
that this process could take an
inordinate time.
[61]
As previously stated, Justice Dlodlo
in
Meijer
acknowledged that there was no legal
certainty and already postulated the view that “
It is
important that there be legal certainty in this regard”
,
which view I echo. It is furthermore worthy to mention that
Meijer
is distinguishable from the matter in
casu
in that the Master
was not informed about the resignations. The legal debate on
point provides no conclusive approach. In
my view, unless and until
the legislation addressing the lacuna is changed, or until binding
authority on point has been established,
divergent legal decisions
and academic literature will continue to saturate the jurisprudence
with divergent perspectives in this
regard.
[62]
To
maintain a balance, it is essential to adopt an approach that
addresses both fairness and legal certainty regarding the effective
date of the resignation of a Trustee. I propose that Section 21
of the TPCA be read in conjunction with Section 20(3) of
the TPCA
which makes it peremptory for the written letter of authority to be
returned to the Master without delay.
[30]
To my mind, once the written letter of authority has been returned by
the resigning Trustee’s, his or her fiduciary obligation
ceases.
[63]
However, for the purposes of
these proceedings in considering the afore-mentioned cumulative
factors along with the unique facts
of this matter, I determine that
Mr Stofberg’s resignation became effective when the Master
noted the resignation “
as Trustee by Boshoff Visser
Trustdienste (Pty) Ltd”
.
This determination is furthermore premised on the fact that Section
21 of the TPCA does not override the provisions in the Trust
instrument in terms of which there was compliance.
[64]
Having considered the lacuna
identified in the law regarding the effective
date of a Trustee’s
resignation in terms of the TPCA, I conclude that the First and
Second Respondents were empowered to
sign the resolution and SPECIAL
POWER OF ATTORNEY on 14 December 2022. On this basis alone, the
Respondents’ counter-application
requesting that the Court
confirms that it is not bound by the SPECIAL POWER OF ATTORNEY falls
to be dismissed. Should I be wrong
in reaching this conclusion, I
deem it necessary to consider the alternative relief sought by the
Respondents in the counterclaim.
The
alternative relief sought in the counterclaim
[65]
The Trust in the alternative seeks an
order for the revocation of the
Special Power of Attorney, thereby
declaring SPECIAL POWER OF ATTORNEY the sale agreement with the third
party be declared of no
force or effect or be set aside.
alternatively, the Trust applies for an order that registration
of transfer in terms of
the disputed sale agreement be stayed,
pending the finalisation of action proceedings which the Trust
intends to institute, asserting
that the disputed sale agreement is
of no force and effect, alternatively should be set aside by the
Court.
[66]
The Applicant argued that the Trust’s
alternative relief sought
in paragraph 3 of its counter application
is lacking in competence. The relief, in paragraph 3 of the
counter application
is in the alternative to paragraph 2, and
accordingly only arises for determination if the relief in paragraph
2 is dismissed.
If the relief in paragraph 2 is dismissed, the
validity of the sale agreement has been determined and is accordingly
res judicata
. Therefore, it was asserted that the Trust is
impermissibly seeking a re-determination of issues which have already
been determined.
Revocation
of the SPECIAL POWER OF ATTORNEY
[67]
This Court, having determined that the
SPECIAL POWER OF ATTORNEY was
properly executed by the Trust, is now
required to consider whether the Respondents’ contention that
it is not bound by the
SPECIAL POWER OF ATTORNEY because the SPECIAL
POWER OF ATTORNEY was revoked on 24 April 2023 and/or 23 July 2024 is
meritorious.
In this regard, the Trust averred that its indebtedness
to the Applicant ceased to exist when the Witzenberg farm was
transferred
from the Witzenberg Trust to Cape Five Properties (Pty)
Ltd in 2018. This contention in and of itself cannot, in my view, be
sustainable,
as this event pre-dated the resignation of Mr Stofberg
and the signing of the SPECIAL POWER OF ATTORNEY. The resolution was
officially
signed on 14 December 2022. Of significance is the fact
that 2 agreements were entered into, but the Trust only applies to
set
1 of the agreements aside. Therefore, it manifests that the Trust
specifically mandated the Applicant to pay First National Bank
and
then pay themselves what is owed. This contradicts the assertion that
the Trust’s indebtedness fell away.
[68]
In the alternative, the Trust
averred that the debt ceased to
exist on 17 May 2024, when an
improved sale transaction for the farm for R17 million was proposed
by the Trust but was purposefully
delayed due to a lack of
co-operation from the Applicant. Furthermore, the Trust submitted
that from such date(s), the SPECIAL
POWER OF ATTORNEY became
revocable, and the Trust validly revoked the SPECIAL POWER OF
ATTORNEY on 24 April 2023, alternatively
on 23 July 2024.
[69]
The Applicant raised 4 grounds
opposing the Respondents contentions
in this regard. Firstly, they
asserted that the Trusts own argument is non-sensical as a mandate
cannot be revoked twice. They
submitted that the assumed revocations
are not alleged in the alternative to each other. The Applicant
suggested that this demonstrates
mala fides
of the Respondents
and that throughout the history of this matter, they have repeatedly
approbated and reprobated the validity
of the SPECIAL POWER OF
ATTORNEY. In fortification of this contention, the Applicant
contended that it is only when it suits the
Respondents that the
SPECIAL POWER OF ATTORNEY is alleged to be revoked and at all other
times, they act in accordance with the
provisions of the SPECIAL
POWER OF ATTORNEY. By way of example, they demonstrated that the
Respondents have in the eviction application,
relied on its validity
as a defence.
[70]
Secondly,
in reference to
Smit
and Others v Origize 166 Strand Real Estate (Pty) Ltd and Others
[31]
,
it was argued that the SPECIAL POWER OF ATTORNEY expressly provides
that it shall remain in effect until the property has been
sold and
transferred, and the proceeds from the sale has been distributed in
accordance with the provisions of the SPECIAL POWER
OF ATTORNEY.
[71]
Thirdly, they contended that as a
matter of law, the SPECIAL POWER OF
ATTORNEY cannot be revoked since
it provided security for a debt. The Applicant reiterated that it is
common cause that at the
time when the SPECIAL POWER OF ATTORNEY was
concluded the Trust was indebted to the Applicant which indebtedness
remains unrefuted.
They argued that in these circumstances and as
authoritatively held in
Smit and Others v Origize 166 Strand
Real Estate (Pty) Ltd and Others
(supra),
the
SPECIAL POWER OF ATTORNEY is irrevocable for the duration that the
debt to the Applicant remains unpaid. Fourthly, they submitted
that
the Trust is estopped from alleging that the SPECIAL POWER OF
ATTORNEY has been revoked.
[72]
As mentioned earlier, the Respondents
counterclaim must however be viewed
against the backdrop of the
earlier conclusion reached. Having determined that the remaining
Trustees were empowered to pass a
resolution, it follows that the
SPECIAL POWER OF ATTORNEY was properly executed by the Trust.
[73]
In considering the manner in which the
Respondents articulated their
plea for revocation, it is self-evident
that a mandate cannot be revoked on two separate occasions. It is
furthermore, telling
that the Respondents have approbated and
reprobated as to the validity of the SPECIAL POWER OF ATTORNEY and
relied on its validity
as a defence in the eviction application.
[74]
The Applicant submitted that the Trust
has through its representations,
communications and conduct,
throughout the interactions between the parties, and during the
recent settlement of the eviction application,
represented to the
Applicant that it is still mandated by the Trust to sell the Property
in terms of the SPECIAL POWER OF ATTORNEY.
They predicate this
contention on the following:
a)
The various communications between the parties, in which the Trust
throughout does not persist with its revocation
of the SPECIAL POWER
OF ATTORNEY, but rather enquired about the progress made with the
various sale agreements;
b)
After the first revocation of the SPECIAL POWER OF ATTORNEY on 23
April 2023, the Trust was invited to take
the necessary legal steps
in order to prevent the Applicant from further attempting to sell the
property in terms of the SPECIAL
POWER OF ATTORNEY. They assert that
the Trust never took any such steps, nor did they attempt to set
aside any of the previous
sale agreements. The Trust in fact followed
up on the progress of the sales.
c)
First and Second Respondents in the Heads of Argument filed on their
behalf in the eviction proceedings submitted
that the SPECIAL POWER
OF ATTORNEY was still valid.
d)
The order granted in the eviction application, in which the parties
recorded that there is at the date of the
order no sale agreement,
and the parties agree that the Applicant’s Attorney of record,
will keep the First and Second Respondents
updated on any progress
with the sale of the property.
[75]
The
Applicant contended that it was pursuant to these representations,
that the Applicant acted and concluded the sale agreement.
It is
trite that one cannot both approve (approbate) and reject (reprobate)
the same thing.
[32]
This in my
view, demonstrates that the Respondents, although now raising the
lacuna in the TPCA as to when the resignation of a
Trustee becomes
effective, never challenged the validity of the SPECIAL POWER OF
ATTORNEY in the eviction application. These legal
principles
highlight the importance of consistency and fairness in legal
transactions.
Existing
mandate
[76]
In
reference to
Smit
and Others v Origize 166 Strand Real Estate (Pty) Ltd and Others
[33]
it
was argued that the SPECIAL POWER OF ATTORNEY expressly provides that
it shall remain in effect t until the property has
been sold and
transferred, and the proceeds from the sale has been distributed in
accordance with the provisions of the SPECIAL
POWER OF ATTORNEY. This
argument, in my view, ties in with whether or not the SPECIAL POWER
OF ATTORNEY is valid. It is noteworthy
that the Respondents regarded
the SPECIAL POWER OF ATTORNEY as valid for the purposes of the
eviction. Yet, the Trust harbours
the belief that it is not bound by
the SPECIAL POWER OF ATTORNEY because the SPECIAL POWER OF ATTORNEY
was revoked on 24 April
2023 and/or 23 July 2024. It is evident that
the Trust has approbated and reprobated, which is akin to flapping in
the wind, proverbially
speaking in its attempt to stop the impending
sale of the property. This ties in with the doctrine of estoppel, as
the Applicant
argued that the Trust is estopped from alleging that it
has revoked the SPECIAL POWER OF ATTORNEY.
Estoppel
[77]
The
doctrine of estoppel serves as an essential principle in both English
and South African law, operating as a mechanism to prevent
parties
from conducting themselves inconsistently to the detriment of others
who relied on their representations. The doctrine
of estoppel is a
fundamental legal principle that prevents an individual from claiming
something contrary to what is implied by
their previous actions,
allegations, or conduct. In essence, estoppel requires consistency in
one's words and actions. It also
requires a clear representation by
one party to another. The party relying on the representation must
have acted to their detriment
in reliance on it. This doctrine serves
to promote fairness and prevent injustice by requiring parties to
adhere to their representations
when others have relied on them to
their detriment.
[34]
[78]
There
are significant and notable authorities on the doctrine of estoppel
in English law that are frequently referred to. These
include
Franklin
v. Neate
[35]
which explored detrimental reliance in equity;
Hughes
v. Metropolitan Railway Co.
[36]
,
which established that representations can arise from conduct or
implied promises;
Central
London Property Trust Ltd. v. High Trees House Ltd.
[37]
,
a landmark case introducing promissory estoppel as a defence in
contract law; and
Combe
v. Combe
[38]
,
which clarified that reliance must be detrimental and not merely
reliance on a promise.
[79]
These
cases illustrate the application of estoppel in various contexts and
have collectively shaped the modern doctrine of estoppel,
particularly in establishing its scope and limitations. The principle
of estoppel, as denoted in the aforementioned cases, prevents
a party
from denying or asserting anything that is inconsistent with their
earlier s actions, statements, or representations.
[39]
[80]
An overview is necessary to address
the jurisprudential significance,
practical application, and
doctrinal coherence of estoppel in relation to the previously
mentioned authorities.
Representation
[81]
Estoppel is founded on representation,
whether, explicit or implicit.
The cases of
Hughes v.
Metropolitan Railway Co
. and
Central London Property
Trust Ltd. v. High Trees House Ltd.
(“High Trees”)
underscore the potential for representations arising from both verbal
and non-verbal conduct. Nevertheless, the doctrine's application
can
be contentious when attempting to ascertain the clarity and intent
behind such representations. Although the
High Trees
case offers a compelling illustration of promissory estoppel within a
contractual framework, the judgement fails to provide explicit
guidance on the distinction between enforceable representations and
mere assurances, which is a common critique of its broader
consequences.
Detrimental
Reliance
[82]
Estoppel
is not invoked frivolously as a result of the detrimental reliance
requirement. The cases of
Franklin
v. Neate
and
Combe
v. Combe
emphasise the importance of substantive and demonstrable reliance.
Nevertheless, the precise degree of detriment that is required
continues to remain a subject of debate. The Court’s focus on
induced detriment in South African jurisprudence, as evidenced
in
MTO
Forestry (Pty) Ltd v Swart NO and Others
[40]
,
is consistent with the principle's equitable origins. However, it is
subject to scrutiny due to the subjective nature of detriment
assessment.
Consistency
and Injustice
[83]
The
objective of the principle of consistency is to preserve the
integrity of legal interactions. Authorities such as
Blair
Atholl Home Owners Association v City of Tshwane Metropolitan
Municipality
[41]
demonstrate how estoppel promotes predictability in legal
relationships. More particularly, it demonstrated the role of
estoppel
in ensuring consistency in administrative actions.
[84]
However,
the doctrine's perceived rigidity in restricting defences, as
demonstrated in
Moodley
v Minister of Police
[42]
,
highlighted the limitations of procedural defences constrained by
estoppel which has been perceived as a potential drawback. In
this
case, the Respondent's capacity to contest procedural irregularities
was arguably constrained by the doctrine.
Typologies
of Estoppel
[85]
Estoppel
is effectively categorised into its fundamental forms,
representation, conduct, and deed. This classification
facilitates
comprehension of its multiple applications. Nevertheless,
the critique is rooted in the exclusion of promissory and proprietary
estoppel, which have distinct jurisprudential underpinnings and
practical relevance, particularly in English law. For example,
proprietary estoppel, which was established in cases such as
Thorner
v. Major
[43]
,
which defined proprietary estoppel and its applicability in
property disputes It addresses equitable considerations in property
disputes, a dimension that remains inadequately examined in the
current analysis.
Jurisprudential
Comparisons
English
Law
[86]
The evolution of estoppel in English
law has been primarily shaped by
legal precedent, which demonstrates
a pragmatic approach. Nevertheless, critics contend that this
ad
hoc
evolution lacks a cohesive theoretical framework. While cases
such as
Hughes
and
High Trees
exhibit
judicial creativity, they also underscore the complexities associated
with reconciling the equitable origins of estoppel
with its
contractual implications.
South
African Law
[87]
The
South African Courts have skilfully incorporated estoppel into a
hybrid legal system, blending civil law traditions with common
law
principles. It is therefore manifest that there is no universal
approach. The doctrine of estoppel has been applied in
different contexts as illustrated in the more recent matter of
MTO
Forestry (Pty) Ltd v Swart NO and Others
[44]
,
which addressed the doctrine of estoppel within the context of a
contractual dispute. The Court held that estoppel can only be
invoked
where a party has been induced to act to their detriment by the other
party's representation.
[88]
Mthembu
v Nkosi
[45]
serves as an example of estoppel in property disputes, where the
Court examined the application of estoppel in a dispute over a
parcel
of land. The Court determined that the respondent's actions had
estopped him from disputing the appellant's rights to the
land.
[89]
The
matter of
City
of Tshwane Metropolitan Municipality v Blair Atholl Home Owners
Association (Pty) Ltd
[46]
,
involved a dispute between a municipality and a homeowner’s
association. The Supreme Court of Appeal applied the doctrine
of
estoppel to bar the municipality from denying the association's
rights, which had been established through a prior agreement.
[90]
In
Moodley
v Minister of Police
[47]
,
the Court considered the application of estoppel in a dispute over a
police officer's employment. The Court found that the minister's
actions had estopped him from denying the officer's right to a
hearing.
[91]
The application of estoppel in unique
socio-legal contexts, including
land disputes, is illustrated by the
cases referenced. However, the critique is rooted in the sporadic
inconsistency in its application,
which may be attributed to varying
judicial interpretations of equity.
Practical
Implications
[92]
The consequences of estoppel, as
described, underscore its transformative
potential in legal disputes.
However, the practical challenges cannot be overlooked which
includes:
a)
Preventing a party from denying a representation; that is, a party
may be prevented from denying a representation
they made, even if it
was incorrect or incomplete;
b)
Creating a binding obligation. In this regard, estoppel can create a
binding obligation on a party, even if
there is no formal contract or
agreement and
c)
Limiting
a party's defences and/or counter-claim(s).
[48]
(a)
Preventing Denial of Representation
[93]
Although estoppel's capacity to
prevent a party from denying prior representations
serves to promote
justice, it is susceptible to being overextended. For example,
failure to consider incomplete or ambiguous representations,
as
emphasised in
Combe
, may result in obligations that are
not intended by the parties.
(b)
Creating Binding Obligations
[94]
The doctrine's ability to impose
obligations in the absence of formal
agreements, as demonstrated in
High Trees
, raises concerns regarding its intersection
with the principle of freedom of contract. This tension is especially
evident in commercial
settings, where formal agreements and
predictability are of the utmost importance.
(c)
Limiting Defences
[95]
The effectiveness of Estoppel in
minimising defences, as demonstrated
in
Moodley
, is
emphasised, along with its potential for harshness. The Courts
continue to face significant challenges in balancing procedural
fairness and equity.
Conclusion
and Recommendations
[96]
The
doctrine of estoppel plays a critical role in guaranteeing fair
outcomes in a variety of legal contexts. The theoretical and
practical dimensions of the subject are illuminated by the cases and
principles that were examined.
[49]
The cases that were examined confirm its enduring relevance, while
the critiques emphasise the necessity of continuous improvement
to
grapple with modern legal questions. It therefore behoves this Court
to consider whether the reliance by the Applicant on the
doctrine of
estoppel finds application to the facts of the matter in
casu
.
[97]
I interpose to state that Courts ought
to seek consistency while accommodating
the unique socio-legal
contexts in which estoppel operates. The diverse applications in
property, contractual, and employment disputes,
highlight the need
for nuanced judicial approaches. To my mind, a unified theoretical
framework for estoppel, would strengthen
its doctrinal robustness and
predictability. Lastly, clear judicial guidelines for assessing
detriment and reliance would mitigate
the subjective variability in
estoppel’s application.
[98]
These references clearly provide the
legal context and authoritative
support for the principles, cases,
and critiques presented in the aforegoing discussions. Consequently,
having regard to the jurisprudence
regarding the doctrine of estoppel
and the key elements elucidated, I am satisfied that the doctrine of
estoppel finds application
to the facts of the matter in
casu
.
In my view, the Trust has failed to persuade this Court that it has
in fact revoked the SPECIAL POWER OF ATTORNEY in circumstances
where
the Respondents have placed reliance thereon for the purposes of the
eviction. The doctrine of estoppel continues to serve
as a testament
to the legal system's ability to maintain a balance between certainty
and equity. The conduct and representations
of the Trust is therefore
inconsistent with their later assertions and as such they are
prevented from denying their previous conduct.
Consequently, the
Trust is estopped from alleging that it has revoked the SPECIAL POWER
OF ATTORNEY. To reinforce this conclusion,
I have also considered the
Applicant’s contention that as a matter of law, the SPECIAL
POWER OF ATTORNEY cannot be revoked
as it was provided as security
for a debt. In this regard, the Applicant reiterated that it is
common cause that at the time the
SPECIAL POWER OF ATTORNEY
concluded, the Trust was indebted to the Applicant, and this
indebtedness remains unrefuted.
Extant
debt
[99]
In the alternative, the Trust averred
that the debt was eliminated on
17 May 2024, when the Trust proposed
an improved sale transaction for the farm for R17 million.
However, the Applicant’s
lack of cooperation resulted in a
deliberate delay.
[100]
In my opinion, this proposition is untenable and
legally flawed, as its indebtedness
can only be discharged when the
debt is actually settled, rather than relying on an alleged improved
sale transaction. The Applicant’s
reference to
Smit and
Others v Origize 166 Strand Real Estate (Pty) Ltd and Others
clearly elucidated that the SPECIAL POWER OF ATTORNEY is irrevocable
for as long as the debt to the Applicant remains unpaid. Therefore,
I
find that that SPECIAL POWER OF ATTORNEY remains in effect has not
been revoked by the Trust.
The
sale agreement with the third party be declared of no force or effect
[101]
The
Respondents submitted that the sale agreement does not comply with
Section 2(1) of the Alienation of Land Act
[50]
due to the inadequacy of the “written authority” of the
Trust’s signatory to such agreement.
Section 2(1)
of the
Alienation of Land Act 68 of 1981
(South Africa) states:
‘
(1)
No land as defined in
section 1
of this Act shall be alienated,
except by means of a written deed of alienation, signed by the
parties thereto or by their agents
acting on their written
authority.’
[102]
This
section requires that any transfer of land ownership must be executed
in writing, through a deed of alienation, and signed
by the parties
involved or their authorized representatives. In the landmark
decision of
Thorpe
and Others v Trittenwein and Another
[51]
(“Thorpe”)
,
the Supreme Court of Appeal (“SCA”) issued a significant
ruling regarding the declaration of a sale agreement as void.
This
ruling provides clarity on the circumstances under which a sale
agreement can be declared void and highlights the importance
of
ensuring that sale agreements are properly drafted and executed to
avoid disputes. The SCA held that a sale agreement can only
be
declared void in circumstances where:
a)
The agreement is invalid
ab initio
meaning it was never valid
due to some inherent flaw or defect and
b)
The parties have not yet performed in terms of the agreement, where
for instance, the buyer has not paid the
purchase price, and the
seller has not transferred ownership.
[103]
The SCA emphasised that a sale agreement cannot be
declared void retrospectively, more
particularly after the parties
have already performed in terms of the agreement. The implications of
this ruling are significant
for the following reasons
a)
if a sale agreement is declared void, any payments made or transfers
of ownership that have taken place will
be considered invalid;
b)
However, if the parties have already performed, the agreement cannot
be declared void, and the parties will
be bound by its terms.
[104]
In accordance with the guidelines enunciated in
Thorpe
,
the sale agreement, which was concluded on 28 May 2024, demonstrates
that the Respondents have failed to make out a case on the
papers
that the sale agreement is invalid
ab initio
. They aver
non-compliance due to lack of “written authority” from
the Trust’s signatory to such agreement. The
Court having found
that the SPECIAL POWER OF ATTORNEY is valid, renders this ground of
opposition unsustainable. It is apparent
that the Applicant seeks an
order to have the SPECIAL POWER OF ATTORNEY declared an original for
the purposes of Regulation 65
of the Deeds Registries Act, which is
necessary for the transfer of the property. In terms of the SPECIAL
POWER OF ATTORNEY, the
Applicant has the right to sell the property
and to effect transfer thereof to the purchaser. I am not persuaded
that the Respondents
have made out a case that the sale agreement is
of no force and effect.
Setting
aside of the sale agreement
[105]
The Trust also sought an order setting aside the sale
agreement for the following reasons:
a)
The Applicant as the Trust’s agent did not act in good faith in
signing the sale agreement on the Trust’s
behalf and has an
interest in the signing of the sale agreement which conflicts with
its fiduciary duty under the SPECIAL POWER
OF ATTORNEY; and
b)
The Trust has obtained a purchaser on more favourable terms than the
sale agreement negotiated by the Applicant.
[106]
The Applicant argued that the Trust’s
counter-application for the setting aside
of the sale agreement is
premised on the same grounds for its opposition to the application,
save that it alleges a further ground
namely that it has obtained a
better offer, without stating who the purchaser is or providing the
purported offer. There is accordingly
no basis in law, they argued,
that would allow a seller to unilaterally resile from a sale
agreement because it has obtained an
offer for a higher purchase
price and on this basis, they contend, that the counter application
falls to be dismissed.
[107]
In
augmentation of this contention, the Court was referred to
Kaya
FM (Pty) Ltd v Gats Tour Operators (Pty) Ltd
[52]
(“Kaya”)
where
the Court held that:
‘
A
mandatory
must
carry
out
his
mandate
and
not
exceed
the terms
of
his
mandate.
He
must
act
in
good
faith
and
with
reasonable
care and the
mandator is entitled to be informed as to the progress of the
mandatory
and
can
from
time
to
time
call
upon
him
to
furnish
the
relevant information.’
[108]
The Court in
Kaya
clarified the function of an
agent in a contractual agreement. According to the
Kaya
judgment, an agent creates a legal relationship not for their own
benefit, but on behalf of another party. This means that an agent
acts on behalf of the principal, and their actions have a direct
impact on the principal's rights and obligations. In this context,
the Court highlighted that a contract of mandate may consist of an
undertaking to perform a task for another party in exchange
for
compensation. The agent or mandatary is expected to carry out the
task without being subject to the directions of the mandator
as to
the time, place, or manner of fulfilling the mandate. However, the
agent remains obligated to adhere to the directives provided
by the
mandator at the time the contract is concluded. The Court also
emphasises that an agent must act in good faith and reasonable
care,
and the principal is entitled to be informed about the progress of
the task. Accordingly, the agent has a fiduciary duty
to act in the
best interests of the principal and to provide regular updates
regarding their actions.
[109]
The
Court was also referred to the matter of
Transvaal
Cold Storage v Palmer
[53]
in which it was clearly established that an agent’s interest
must not conflict with his duty. This principle is a core
element of the law of agency, emphasising the fiduciary nature of the
agent-principal relationship. The Court emphasised that an
agent has
a duty to act in the best interests of the principal, without any
conflict of interest. An agent must not place their
own interests
above those of the principal or partake in actions that could
jeopardise their loyalty to the principal. An agent
must not place
their own interests above those of the principal or partake in
actions that could jeopardise their loyalty to the
principal. An
agent must not place their own interests above those of the principal
or partake in actions that could jeopardise
their loyalty to the
principal.
[110]
This
principle has been consistently upheld in South African law,
emphasising the importance of agents conducting themselves with
integrity, transparency, and accountability in their interactions
with principals. This trite legal principle has been reaffirmed
in
Investec
Bank Limited v Investec Private Bank Limited
[54]
where
the Court emphasised the importance of agents avoiding conflicts of
interest and prioritising the interests of their principals.
Absa
Bank Limited v National Commissioner, South African Revenue Service
[55]
highlighted the fiduciary duties of agents, including the duty to
avoid conflicts of interest and to act in good faith. These cases
demonstrate that the principle remains a cornerstone of the law of
agency in South Africa.
[111]
It
bears mentioning that the Applicant contended that it is unclear
whether the Trust relies on a common law fiduciary duty or a
fiduciary duty imposed by the contractual agreement. This, they
argued, is a significant distinction since the available remedies
are
determined by the alleged breached duty. They referenced the matter
of
National
Union of Metalworkers of South Africa obo Nganezi v Dunlop Mixing and
Technical Services (Pty) Limited
[56]
in this regard, where the Constitutional Court emphasised the
importance of contractual good faith obligations over fiduciary
obligations.
[112]
The Applicant contended that it remains to be determined
what the scope and ambit of
the Applicant’s duties were, and
whether there was a breach and violation of those duties. In
this regard, it was submitted
that the Applicant’s obligation
was encapsulated in the SPECIAL POWER OF ATTORNEY, namely that it had
to the best of its
ability sell the property for no less than R12
million. The reserved price was determined by the Trust, and the
Trust granted the
Applicant a mandate to sell the property for R12
million. The Applicant asserted that it fulfilled such mandate.
Therefore, the
notion of an alleged conflict of interest as suggested
by the Respondents is misguided according the Applicant. The Trust,
premises
this argument that the Applicant had a conflict of interests
because the first sale agreement provided for a fruit export
agreement
between O2 Fruit and Cape Five. The Applicant argued that
this was not a term of the third and extant sale agreement. In
addition,
it was submitted that the Trust does not allege nor prove
that the conclusion of the fruit export agreement is in conflict with
the Applicant’s obligation to sell the Property for
R12 million. Therefore, according to the Applicant, there is no
conflict of interest.
[113]
The Applicant also refuted the claim that it frustrated
its attempts to sell the property.
This, they argued is devoid of
merit. In support of its opposition hereto, it was submitted that
there is no obligation on the
Applicant to assist the Trust on its
own, to sell the property. The Applicant was mandated to sell the
property on behalf of the
Trust and not to help the Trust to sell the
property itself. This, notwithstanding the facts alleged by the Trust
in this regard,
does not evince a breach of any fiduciary duty or any
frustration. The Applicant furthermore remonstrated that the Trust
and the
First Respondent possessed all the requisite information and
knowledge regarding the property in order to conclude a sale
agreement.
They go on to state the Trust misapprehends that the
agricultural operation which is conducted on the property by the
Applicant
pursuant to the lease agreement does not form part of the
property.
[114]
The SPECIAL POWER OF ATTORNEY encapsulates the scope and
duties of the Applicant. The
Applicant averred that it
fulfilled such mandate. To the extent that a conflict of interest is
alleged, the Trust in my view, has
failed to allege or prove that the
conclusion of the fruit export agreement is in conflict with the
Applicant’s duty in selling
the Property for R12 million. I am
therefore not persuaded that there is a conflict of interest as
asserted by the Respondents.
Consequently, I am in agreement with the
Applicant’s contentions that there exists no legal basis that
would allow a seller
to unilaterally resile from a sale agreement
because it has obtained an offer for a higher purchase price.
Furthermore, there was
no obligation on the Applicant to assist the
Trust in the sale of the property. On this basis alone, the counter
application for
an order setting aside the sale agreement falls to be
dismissed.
Joinder
of further parties
[115]
The
Applicant in its Replying Affidavit, raises the issue that the Trust
has failed to include O2 in its counter-application and
that the
counter-application should be dismissed on the basis of
“misjoinder”.
[57]
The Respondent correctly, in my view, noted that the Applicant in all
likelihood meant to refer to the non-joinder of O2. Needless
to say,
this is merely a matter of semantics, as the argument raised by the
Applicant in this regard is unambiguous. They submitted
that O2 Fruit
has a direct and substantial interest in these proceedings. The
Applicant contended that the counter-application
cannot be considered
or determined without O2 Fruit, as O2 Fruit has not been joined.
[116]
The Trust maintains that the joinder of O2 Fruit is not
necessary in respect of the Trust’s
opposition to the relief
sought by the Applicant on the basis that it is not bound by the
SPECIAL POWER OF ATTORNEY alternatively
that the SPECIAL POWER OF
ATTORNEY has been revoked. In addition, they propound the view that
O2 Fruit is not a party to the SPECIAL
POWER OF ATTORNEY and that O2
Fruit not being before the Court as a party should not influence the
Court’s consideration
of the relief sought by the Applicant and
the Trust’s grounds of opposition thereto.
[117]
In light of the conclusion to which I have come, I do
not deem it necessary to consider
whether O2 Fruit should have been
joined as a party to the Counterclaim. I agree that O2 Fruit not
being before the Court as a
party should not influence the Court’s
consideration of the relief sought by the Applicant and the Trust’s
grounds
of opposition thereto.
[118]
The Respondents postulates that insofar as it pertains
to the lacuna in the law concerning
the effectiveness of a Trustee’s
resignation, and in light of the differing legal positions in the
case law, it is probable
that the Master should be given the
opportunity to make submissions on the issue. Moreover, the Third
Trustee has an interest if
the resignation is deemed to not have
taken effect yet. In light of the conclusion to which I have come to,
I do not believe it
necessary that the Master be given an opportunity
to make submissions on the issue, as the Court extensively considered
the relevant
authorities, the legislature and the Chief Master’s
Directives.
Conclusion
[119]
Finally, I am not persuaded that the Respondents have
made out a case in its counter
claim that the registration of the
property be stayed pending a potential referral to oral evidence or a
potential action. In my
view, the Trust would be unjustifiably
seeking a re-ventilation of issues which have already been
determined. In any event, there
is no factual dispute to refer to
oral evidence.
Costs
[120]
It is trite that costs ordinarily follow the result.
After carefully considering the
complexity of the matter, its value
and importance to the parties, in the exercise of my discretion, I am
of the view that costs
on Scale B are justified.
Order
[121]
Having heard Counsel for the Applicant and Counsel for
Respondents, and having read the
papers filed of record, the
following order is made:
1.
The Special Power of Attorney dated 14 December 2022 is hereby
declared an original for the purposes of Regulation
65 of the
regulations in terms of the
Deeds Registries Act, 47 of 1937
;
2.
The First and Second Respondents are liable to pay the costs of the
application which costs are to include
the reasonable costs of
counsel on scale “B”;
3.
The Respondents counterclaim is dismissed with costs.
P
D ANDREWS
Acting
Judge of the High Court of South Africa Western Cape Division, Cape
Town
Case
No: 17494/2024
APPEARANCES
:
Counsel
for the Applicant
:
Advocate Marnes de Wet
Instructed
by
:
STBB Attorneys
Counsel
for the 1
st
and 2
nd
Respondent
:
Advocate David van der Linde
Instructed
by
:
Muller Terblanche & Beyers Inc.
Hearing
date
:
30 October 2024
Judgment
Delivered
:
23 January 2025
This
judgment was handed down electronically by circulation to the
parties’ representatives by email.
[1]
Act
No. 47 of 1937.
[2]
[2007]
ZAFSHC 135
(29 November 2007).
[3]
[2013]
JOL 30560 (WCC).
[4]
Honorés
South African Law of Trust, Cameron et al.
(6
th
Edition), Section 135, page 262.
[5]
“
Trustees
Resolutions”, Annexure NWM3, record page 35.
[6]
Meijer
NO v Firstrand Bank Ltd
[2012]
ZAWCHC 23
(4 April 2012) at para [7].
[7]
Van
de Merwe NO v Hydraberg Hydraulics CC
2010
(5) SA 555
(WCC) para [17].
[8]
Honorés
ibid
page 262.
[9]
Honorés
ibid
page 262.
[10]
Honorés
ibid
pages 262 - 263.
[11]
[2012]
ZAWCHC 23
(4 April 2012).
[12]
Honorés
ibid
page 264.
[13]
At
para [7].
[14]
At
para [7].
[15]
Section
20(3) of the Trust Property Control Act 57 of
1988
‘
(3)
If a Trustee authorized to act under section 6(1) is removed from
his office or resigns, he shall without delay return his
written
authority to the Master.
’
[16]
[2007]
ZAFSHC 135
(29 November 2007).
[17]
At
para 8
‘…
Mr
La Grange,
inter
alia,
relied
on
WM
Soekoe and Others v Le Roux
(an
as yet unreported judgment of the Free State - Case 898/2007 (O)),
where Rampai J held as follows:
"I
have already found that the Respondent's resignation on 10 October
2006 did not legally relieve him of his duties as Trustee.
He
remained legally accountable to his fellow Trustees for the entire
period until the Master of the High Court officially removed
him
from office as a Trustee. ... The respondent's duties did not fall
away when he resigned, but when he was replaced by the
third
applicant.’
[18]
At
para 11.
[19]
Honorés
ibid
page 265.
[20]
Honorés
ibid
page 265.
[21]
Trustakte,
Record Page 222.
[22]
Applicant’s
Note in Rebuttal, para 8, page 3: ‘
A
loose translation of this provision is as follows:
“
5.5.
A Trustee will no longer act as a Trustee for the Trust:
5.5.1.
If he resigns as a Trustee, which he is allowed to do by giving
written notice to his co-Trustee;”
[23]
Annexure
“AA16”, Record page 193.
[24]
2014
(1) SA 84
(GNP) [23].
[25]
Meyerowitz
D et al ‘
The
Law and practice of Administration of Estates and their Taxation’
(Juta)
2023 Ed, 24.23, p 454. ‘
What
if the Trust instrument provides that a Trustee may resign by, say,
giving notice to his co-Trustees? It is submitted that
such
resignation would be effective; s 21 does not exclude or override
the provisions of a Trust instrument which allow a Trustee
to
resign.’
[26]
Circular
13 of 2017, Head Office File 12/4/2 & 5/9/3/2), dated 6 March
2017, para 3.9.
[27]
Van
der Westhuizen & Pace ‘
Wills
and Trusts’
(LexisNexis),
6.2.4.1 – Resignation by Trustee.
[28]
[2015]
ZAFSHC 177
(18 August 2015).
[29]
Meijer
ibid
para 8.
[30]
See
fn16.
[31]
[2020]
JOL 48745 (SCA).
[32]
See
Union
Government v. Smook's Trustee
1924 AD 281
;
Standard
Bank of South Africa Ltd. v. Ocean Commodities Inc.
1983 (1) SA 276 (A).
[33]
[2020]
JOL 48745 (SCA).
[34]
Spencer
Bower, K.R
.
Handley, Res Judicata
(LexisNexis, 2021); G Spencer Bower,
The
Law Relating to Estoppel by Representation
(4th ed, Butterworths, 2004).
[35]
Franklin
v. Neate
(1844) 13 M & W 481.
[36]
Hughes
v. Metropolitan Railway Co
.
(1877) 2 App. Cas. 439 which also discussed the equitable
underpinnings of estoppel in English law.
[37]
Central
London Property Trust Ltd v. High Trees House Ltd
[1947] KB 130.
[38]
Combe
v. Combe
[1951] 2 KB 215.
[39]
Amplers'
Precedents of Pleadings (LexisNexis, 10th edition), page 187.
[40]
MTO
Forestry (Pty) Ltd v. Swart NO and Others
(2004) 6 SA 620 (SCA).
[41]
Blair
Atholl Home Owners Association v. City of Tshwane Metropolitan
Municipality
(2014) 5 SA 511 (SCA).
[42]
Moodley
v. Minister of Police
(2020) ZACC 34.
[43]
Thorner
v. Major
[2009] UKHL 18.
[44]
(2017)
ZASCA 131.
[45]
Mthembu
v Nkosi
(2021)
1 SA 35 (SCA).
[46]
(2020)
ZASCA 105
.
[47]
(2020)
ZAKZPHC 34.
[48]
Freedom
of Contract and Estoppel: Treitel, G.H.
The
Law of Contract
(Sweet & Maxwell, 2022); Atiyah, P.S.
Essays
on Contract
(Clarendon Press, 1986).
[49]
Judicial
Guidelines and Theoretical Coherence: Burrows, A.
A
Restatement of the English Law of Contract
(Oxford University Press, 2016); Neels, J. & Perling, J. "
The
Doctrinal Development of Estoppel in South African Law
"
(2020)
SA
Law Journal
137.
[50]
Act
No. 68 of 1981.
[51]
2007
(2) SA 172 (SCA).
[52]
2015
JDR 2457 (GP) at para 22.
[53]
1904
(3) TS 4
(3 November 1904), page 16.
[54]
2011
(3) SA 531 (GSJ).
[55]
2015
(6) SA 287 (SCA).
[56]
[2019]
9 BLLR 865 (CC).
[57]
Replying
Affidavit, record page 442, para 58.
sino noindex
make_database footer start
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