McChesney NO v Old Mutual Wealth Trust Company Proprietary Limited NO and Others (3017/23) [2024] ZAWCHC 446 (14 February 2024)

begin wrapper begin container begin header begin slogan-floater end slogan-floater - About SAFLII About SAFLII - Databases Databases - Search Search - Terms of Use Terms of Use - RSS Feeds RSS Feeds end header begin main begin center # South Africa: Western Cape High Court, Cape Town South Africa: Western Cape High Court, Cape Town You are here: SAFLII >> Databases >> South Africa: Western Cape High Court, Cape Town >> 2024 >> [2024] ZAWCHC 446 | Noteup | LawCite sino index ## McChesney NO v Old Mutual Wealth Trust Company Proprietary Limited NO and Others (3017/23) [2024] ZAWCHC 446 (14 February 2024) McChesney NO v Old Mutual Wealth Trust Company Proprietary Limited NO and Others (3017/23) [2024] ZAWCHC 446 (14 February 2024) Download original files PDF format RTF format make_database: source=/home/saflii//raw/ZAWCHC/Data/2024_446.html sino date 14 February 2024 # IN THE HIGH COURT OF SOUTH AFRICA IN THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE DIVISION, CAPE TOWN CASE NO: 3017/23 In the matter between: MARY-ANNE McCHESNEY N.O. Plaintiff and OLD MUTUAL WEALTH TRUST COMPANY # PROPRIETARY LIMITED N.O. PROPRIETARY LIMITED N.O. (in its capacity as executor of the Estate Late Nikolaos Papadopoulos) First Respondent MANDY HAMILTON DIX-PEEK N.O. (in her capacity as nominee executrix in the Estate of the late Nikolaos Pappadopoulos) Second Respondent MATTHEW LAMONT WALTON N.O. Third Respondent MANDY HAMILTON DIX-PEEK N.O. (in their capacity as trustees for the time being of the Katina Swanepoel Inheritance Trust) Fourth Respondent ETIENNE RHODERIC SWANEPOEL N.O. (in his capacity as the joint curator bonis and the curator ad personam to Katina Swanepoel) Fifth Respondent GUY LLOYD-ROBERTS N.O. (in his capacity as the joint curator bonis to Katina Swanepoel) Sixth Respondent MASTER OF THE HIGH COURT Seventh Respondent Court : Acting Justice R Barendse Heard :    02 February 2024 Delivered : Electronically on 14 February 2024 # JUDGMENT JUDGMENT # BARENDSE AJ BARENDSE AJ A. INTRODUCTION [1] The interpretation and consequences of the Will of a deceased person often give rise to disputes among those whom the Will was intended to benefit particularly as a testator ordinarily enjoyed a special relationship with his/her beneficiaries. [2] Persons nominated and ultimately appointed as executors to a Will have the obligation to execute the instructions and wishes of a deceased person and to ensure that the heirs in the estate receive what is lawfully due to them. As is illustrated by the facts of this matter, this can be a challenging duty to fulfill, particularly when competing interests and diverse views enter the fray. [3] The so-called golden rule for the interpretation of a Will enjoins the Court to establish what the wishes of a testator were by having regard to the language used to express those wishes. Once this is accomplished those wishes must be given effect to, unless the law prevents the execution thereof 1 . [4] The crux of the legal dispute in this matter was whether the Last Will and Testament of the deceased authorized the executors thereof to register a trust for the purposes and in the terms as they did. # B.FACTUAL BACKGROUND B. FACTUAL BACKGROUND [5] The late Mr. Nikolaos Pappadopoulos ("the deceased") executed a Will dated 24 December 2018. A Codicil was added to the Will on 20 August 2019. He passed away on 21 January 2020. [6] The Will inter alia made provision for a number of legacies, directed expressly that in certain circumstances trusts had to be created and the testator appointed his two daughters, Ms. Katina Swanepoel ("the patient" and Ms. Vassilia Paynter as the heiresses in equal shares to the residue of his estate. [7] The second respondent, representing the first respondent, was appointed as the executrix to the Will on 29 September 2020. [8] On or about 6 January 2021 the patient suffered a subarachnoidal haemorrhage (bleeding on the brain) and a stroke which left her with brain damage which incapacitated her to the extent that she became unable to manage her own affairs. It appears to be common cause that the patient's condition is irreversible. [9] The applicant in this matter was appointed as curatrix ad litem to the patient during May 2022. Her report in that capacity was submitted to the court during October 2022. [10] The fifth respondent is the patient's husband. On 17 November 2022 the fifth and sixth respondents were appointed as the curators bonis to the patient. [11] The applicant's initial powers were limited to investigating and reporting to the court on the patient's mental capacity and whether the patient was capable of managing her own affairs. Upon application by the applicant and the fifth respondent an order was granted on 17 November 2022 extending the applicant's powers to challenge the formation of the trust and bring the current proceedings. This order authorized the applicant and the curators bonis (5 th and 6 th respondents) to institute the present proceedings jointly. For reasons that are not entirely clear, the applicant is the sole applicant in these proceedings. [12] On 30 May 2022 the executors registered the Katina Swanepoel Inheritance Trust ("the trust"). It is evident from the papers that prior to the registration of the trust correspondence was exchanged between the second respondent and 5 th respondent. This correspondence reflects that at the time the 5 th respondent took the view that paragraph 9 of the Will authorized the executors to register a trust for the benefit of the patient. During this exchange of correspondence 5 th respondent proposed certain trust provisions to 2 nd respondent which ought to be included in the trust deed, albeit subject to the views of the ultimately appointed curator/s bonis, who were at that stage not yet appointed. The assertion that the executors were empowered by the Will to form a trust for the benefit of the patient was repeated by 5th respondent in the founding affidavit to which he attested in the application for his appointment as a curator bonis and curator ad personam to the patient. [13] Two children were born of the marriage between the patient and the 5 th respondent namely a son, Mathew ("Matt') and a daughter, Alexandra. ("Alex"). Matt suffered complications during his birth which left him with cerebral palsy. Matt was as such heavily dependent on his parents and remain so dependent on the 5 th respondent. Alex is a qualified attorney resident in the United Kingdom. It appears to be common cause that the relationship between Alex and her parents is strained. [14] Although there is a dispute between the parties as to what value, if any, should be attached thereto, it is common cause that on 16 November 2016, some two years before executing his 2018 Will, the testator authored a letter which he signed in the presence of two witnesses ("November letter"). This letter was addressed to the "Trustees and the Trustees-Elect". In this letter the testator put what he called a "strong request" to the trustees of the Nick Pappadopoulos Family Trust, the Nick Pappadopulos Mathew Trust and the trustees of the trusts to be formed in terms of his Will. It deserves mentioning that at that stage the Mathew Trust was already in existence. [15] The November letter also recorded that the relationship between the testator and the 5 th espondent deteriorated "to the point that it is irreconcilable". For a clear understanding and context of the letter paragraphs 4 and 5 and the penultimate paragraph of the letter are quoted below: "I am concerned that Etienne Swanepoel might bring pressure to bare ( sic) and unduly influence the benefits, which I wish to share with my daughters and grandchildren through my Trusts. Should this occur it will be totally outside the goodwill and spirit in which I care for my daughter and grandchildren and such behaviour by him would be totally unacceptable." [16] The November letter also reflected an express request on the part of the testator that the 5 th respondent should not then or at any time in the future be appointed as a trustee of any trusts of which the testator was the donor and any trust to be formed under his Will. [17] The inheritance trust registered by the executors had as trustees the 2 nd respondent and the 3 rd respondent was assumed as a trustee. It has the patient as a primary beneficiary and appointed the patient's children as the secondary beneficiaries. [18] A legal dispute arose from the refusal by the 1 st and 2 nd respondents to include the 5 th respondent as a beneficiary of the inheritance trust which 2 nd responded intended to register for the benefit of the patient. As will appear from the contents of paragraph 12 above there was no prior dispute around whether the paragraph 9 of the Will empowered the executors to create an inheritance trust for the patient. [19] It is at this stage apposite to record some of the provisions of the Will. Clause 6, dealing with the residue of the estate reads as follows: “ 6 RESIDUE OF ESTATE 6.1 I bequeath the rest and residue of my Estate to my daughters, VASISILIA PAYNTER and KATINKA SWANEPOEL, in equal shares." [20] Clause 9 of the Will reads as follows: "9 PAYMENT TO TRUST OR CORPORATION 9.1 For the purposes of this Clause, unless the context shall clearly otherwise indicate: 9.1.1 “ Trust ” shall mean and include any Trust created by any Deed of Trust, Settlement, Declaration of Trust, Will, Codicil or other instrument in any part of the world. 9.1.2 A “ beneficiary ” shall mean a person entitled to benefit under my Will or in terms of any Trust created thereunder. 9.1.3 A beneficiary shall be deemed to be " beneficially interested " under a Trust, if capital and income comprised in that Trust may only be paid, applied to, or appointed (on the terms and subject to such conditions, limitations and restrictions as the Trustees of the Trust concerned in their sole discretion shall determine) to or for the benefit of: 9.1.3.1 such beneficiary and/or; 9.1.3.2 the children of such beneficiary and/or; 9.1.3.3 the descendants of such children and/or; 9.1.3.4 the parent, brother or sister of such beneficiary and/or 9.1.3.5. any wife, husband widow or widower of any of the persons mentioned in clauses 9.1.3.1 to 9.1.3.4 above; 9.2 I direct that any capital or income which would or could, but for the exercise by my Executors of any discretion in terms of this sub-clause, have devolved upon or accrued to, or been or become payable to, any beneficiary, may (subject to the applicable laws of the Republic of South Africa then in force), be paid by my Executors to any Trust or Corporation in which such beneficiary is beneficially interested. 9.3 I direct that no Trustee of any Trust to which any capital or income is paid pursuant to the provisions of this clause shall at any time or under any circumstances be required to give security to the Master of the High Court or any other the authority in terms of the Trust Property Control Act of 1988 or in terms of any other law which may now be, or which my hereafter become of force and effect. I furthermore direct that such exemption from security shall apply whether such trustee is resident in or outside the Republic of South Africa. 9.4   The payment of any income or capital to any Trust or Corporation pursuant to any of the above provisions shall constitute a full and final discharge to my Executors in respect of such income or capital." [21] The relevant provisions of Clause 10 dealing with the appointment and powers of the executor/s read as follows: "10. EXECUTOR 10.1 As Executors of my Will and Trustees of any Trust created thereunder, I nominate and appoint: 10.1.1 Catherine Margaret Currie 10.1.2 Ioannis Georgakopoulos 10.1.3 Old Mutual Wealth Trust Company (Pty) Limited 10.2 I direct that Old Mutual Wealth Trust Company (Pty) Limited shall handle the Administration of my Estate and any Trust created in terms of my Will. 10.3 Whenever the word "Executor(s)" is used in this Will, it shall mean and include Executor(s) and Trustee(s), any assumed Executor(s) and Trustee(s), their successor(s) and the survivor(s) of them, unless the context indicates otherwise. 10.6 It shall be in the sole and absolute discretion of my Executors to determine whether or not any assets of my Estate shall be realised and if so, the time and manner (including the right to sell by private treaty) of such realisation. 10.24  Any decision, discretionary or otherwise, made by my Executors in terms of this Will shall be final and binding on all beneficiaries and there shall be no appeal therefrom.” # C.PARTIES' CASES C. PARTIES' CASES [22] The applicant is of the view that the Will did not authorise the executors to create the inheritance trust for the patient. As such, she argues, the creation of the trust was ultra vires and void ab initio . As an alternative, and in the event that it is found that clause 9 was wide enough to allow for the creation of the trust, the applicant contends that the creation thereof offends the principle against delegation of will making power and that the trust ought to be set aside with immediate effect. [23] Applicant submitted that it is common cause, alternatively that it cannot seriously be refuted, that clause 9 did not expressly authorise the creation of a trust or corporation. The clause refers in the definition of Trust to a trust “ created by any Deed of Trust, Settlement, Declaration of Trust, Will, Codicil or other instrument in any part of the world ” . There are no words that directly enable the executor by virtue of the clause itself to create a trust. [24] Applicant further drew attention to the provisions of clause 5.1.18 of the Will which made express provision for the creation of a trust for the benefit of the surviving spouse. In this instance the testator expressly conveyed the wish that a trust is to be established, appointed trustees, stated the object of the trust and he expressly provided that the trustees shall have the powers and authorities bestowed upon them in clause 10 of the Will. Clause 9 contains no such express provisions of a trust in the nature of the trust that was established for the patient, so the argument went. [25] The applicant directed the court to the fact that the testator left an unburdened inheritance to the patient and pointed at authority in support of the presumption against the imposition of a condition or the creation of a burden in respect of a bequest originally expressed in unconditional form. [26] The trust that was established for the patient named her as the primary beneficiary thereof and it nominates her children as the secondary beneficiaries upon termination. As such, the patient cannot exercise her freedom of testation and applicant drew attention to the fact that the patient executed her own Will on 14 December 2016, prior to her incapacitation. The effect of the trust created by the executors is that the patient's inheritance under the testator's Will cannot devolve in terms of her own Will upon her passing. Applicant argued that this violates the patient's fundamental freedom of testation. [27] The applicant referred the court to amongst others, the case of Braun vs Blann and Botha N.N.O. 2 i n which it was held that an executor could be vested with the power to select, in its discretion income or capital beneficiaries from a group of identified beneficiaries. In terms of this authority a testator may not delegate its will-making power to its administrators by authorising them to create a new trust, to determine the powers of the trustees of such a trust and to determine the beneficiaries of such a trust. [28] The first to fourth respondents ("the respondents") contended that clause 9 of the Will, properly interpreted and considered in the context of other relevant provisions of the Will and against the backdrop of the testator's clearly expressed requests by his November 2016 letter, the executors were vested with a discretion to establish the trust for the benefit of the patient. [29] Both parties referred the court to the judgment of Natal Joint Municipal Pension Fund v Endumeni Municipality 3 which is the seminal case on the interpretation of documents. The rules of interpretation espoused in Endumeni equally apply to the interpretation of Wills. [30] The respondents argued that clause 9.2 is in peremptory language. They submitted that the testator directed the executors to exercise a discretion (i.e. transfer half of the residue of the estate to the Patient in terms of clause 6.1 or have such inheritance held in trust as per clauses 9 and 10), and this they could only do after having taken office. They had no right to ignore it. As a matter of law, they were obliged to exercise the discretion vested in them by the Testator, which they did, so the argument went. [31] Respondents referred the court to the matter of Spangenberg and Others v Engelbrecht NO and Another 4 , in which the Supreme Court of Appeal (“SCA”) restated critical legal principles which pertain to a Court’s interpretation of a Will. The following insightful text from the Spangenberg judgment was quoted: [9] “ Generally, it is accepted that testators have the freedom to dispose of their assets in a manner they deem fit, except insofar as the law places restrictions on this freedom. The Constitutional Court has accepted that freedom of testation ‘is fundamental to testate succession’ and that it forms part of s 25(1) of the Constitution, in that it protects a person’s right to dispose of his or her assets, upon death, as he or she wishes. [10] This Court, in Harvey NO and Others v Crawford NO and Others referred to this this principle as follows: "The right of ownership permits an owner to do with her thing as she pleases, provided that it is permitted by the law. The right to dispose of the thing is central to the concept of ownership and is a deeply entrenched principle of our common law. Disposing of one’s property by means of executing a will or trust deed are manifestations of the right of ownership. The same holds true under the Constitution." [11] The principle of freedom of testation has been held to warrant constitutional refuge through the right to privacy, coupled with the right to dignity, in terms of ss 14 and 10 of the Constitution, respectively. As stated by Jafta J in King NO and Others v De Jager and Others 2021 (4) SA 1 (CC): “ It cannot be gainsaid that private testamentary bequests (when juxtaposed to public trusts) relate to our most intimate personal relationships and can very well be based on irrational and erratic decisions which are located in the domain of the “most intimate core of privacy”. It is, therefore, apposite for the right to privacy to play an active role in determining whether judicial interference can enter the perimeter of private testamentary bequests. This, in turn, buttresses the point that when courts intervene in private testamentary bequests of this nature there ought to be a lower level of judicial scrutiny . ” [12] The ‘golden rule’ for the interpretation of Wills and the inherent limitation (that it should not contravene the law), was, as far back as 1914, described in Robertson v Robertson thus: "The golden rule for the interpretation of testaments is to ascertain the wishes of the testator from the language used. And when these wishes are ascertained, the court is bound to give effect to them, unless we are prevented by some rule or law from doing so." [13] Corbett J, in Aubrey Smith v Hofmeyer NO 1973 (1) SA 655 (C ) , referred to ‘the armchair approach’ in dealing with the interpretation of a will. He stated that: "Generally speaking, in applying and construing a will, the Court's function is to seek, and to give effect to, the wishes of the testator as expressed in the will. This does not mean that the Court is wholly confined to the written record. The words of the will must be applied to the external facts and, in this process of application, evidence of an extrinsic nature is admissible to identify the subject or object of a disposition. Evidence is not admissible, however, where its object is to contradict, add to or alter the clearly expressed intention of the testator as reflected in the words of the will ... in construing a will the object is not to ascertain what the testator meant to do but his intention as expressed in the will. On the other hand, in addition to receiving evidence applying the words of the will to the external facts, the Court is also entitled to be informed of, and to have regard to, all material facts and circumstances known to the testator when he made it. As it has been put, the Court places itself in the testator's armchair. Nevertheless, the primary enquiry still is to ascertain, against the background of these material facts and circumstances, the intention of the testator from the language used by him in his will." [14] In Aubrey Smith, Corbett J presciently, espoused the interpretative principles referred to in Natal Joint Municipal Pension Fund v Endumeni Municipality , the seminal case on interpretation of documents, where Wallis JA stated that: ‘Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. The inevitable point of departure is the language of the provision itself, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document'. [15] Although Endumeni did not deal with the interpretation of a will, the ‘golden rule’ and the ‘armchair approach’ can now be seen in the light of the principles enunciated in Endumeni. In his article published in the Potchefstroom Electronic Law Journal (PELJ), Justice Wallis opined that: “ There are areas of interpretation that are untouched by the contents of this paper, which has concentrated on contracts and statutes, rather than other areas of law. Perhaps the most obvious omission is the fertile field of the construction of wills and the extent to which the Endumeni approach to interpretation can be adapted to that situation. That is a particular omission, given that in articulating his golden rule Lord Wensleydale specifically said that it applied to “wills and, indeed statutes and all written instruments”. Wills are of course unilateral documents, but so are statutes, patent specifications and judgments, yet they all demand a broadly similar approach.” [16] Justice Wallis, in the PELJ article, referred to Raubenheimer v Raubenheimer 2012 (5) SA 290 (SCA) which dealt with whether an implied term could be incorporated into a will. Surprisingly, there was no specific reference to Endumeni in Raubenheimer. Leach JA, however, held that a court is ‘ guided by the same principles as those applied when implying tacit terms into a contract – it applies the well – known ‘bystander test’ in the light of the express terms of the will and the relevant surrounding circumstances and considers whether it is a term ‘so self-evident as to go without saying.’ Leach JA went on to adopt the ‘golden rule’ in his interpretation of the will. He held that: "In interpreting a will, a court must if at all possible give effect to the wishes of the testator. The cardinal rule is that “no matter how clumsily worded a will might be, a will should be so construed as to ascertain from the language used therein the true intention of the testator in order that his wishes can be carried out." # D.REASONING D. REASONING [32] The rules of interpretation as summarised in the cases quoted, especially in the Spangenberg judgment enjoin this court to have due regard to the November letter written by the testator and placed in receipt of the executors. The patient's unfortunate incapacity which arose prior to distribution of the inheritances precluded the executors from paying the patient's inheritance to herself. It was alluded to earlier herein that at a stage the executors and the fifth respondent were engaging around the establishment of an inheritance trust for the patient. Once the executors heeded the requests contained in the November 2016 letter they were precluded from payment of the patient's inheritance to a trust of which the fifth respondent was a trustee or beneficiary. [33] The Will expressly provided for trusts to be established in three instances namely for the surviving spouse, beneficiaries under the age of 25 years and in the event of the insolvency of a beneficiary. In view of the above the discretion granted to the executors in clause 9.2 must have contemplated the establishment of trusts other than in the above three instances. Absent such an intention, the said discretion would have served no purpose. [34] The testator did not foresee the tragedy that had befallen the patient and her family subsequent to his death. To the extent necessary, if one applies the well-known "bystander test" on the strength of the judgment in Raubenheimer v Raubenheimer 2012 (5) SA 290 (SCA) to the present matter in the context of all the provisions of the Will read with the November letter there is no doubt that the establishment of an inheritance trust for the patient was consistent with the testator's wishes. Although the November letter could not be regarded as a Will, the requests contained therein are very insightful and may be considered as extrinsic evidence when determining his wishes. It demonstrated a strong desire by the testator to care for and benefit his daughters and grandchildren. This much is clear from the extract of the letter quoted in paragraph 15 above. Given that this letter could not be regarded as a Will, the revocation clause in the Will had no impact thereon. [35] The next question that arises is whether the Will delegated the powers of testation to the executors as contended by the applicant. The court agrees with the respondents that the terms of the Will do not constitute the unlawful delegation of will making power of the kind contemplated in the matter of Braun v Blann and Botha NNO [1984] ZASCA 19 ; 1984 (2) SA 850 (A). It is clear that (1) the assets to be held and administered in the Trust for the benefit of the patient (half of the residue of the deceased estate); (2) the identity of the trustee (Old Mutual, with the power of assumption); (3) the categories of persons who may be beneficiaries of the Trust (clause 9.1.3), which include the Patient and her children; and (4) all of the powers which the trustees of the Trust may exercise are only those which have been expressly prescribed by the Testator. [36] Further, the provisions of clause 9.1.3 regarding who may be beneficially interested in the Trust accords with what Joubert JA decided at 866 in fin -867A in Braun, namely that trustees of testamentary trusts do enjoy the common law power of appointment, which enables them to select income and/or capital beneficiaries from a designated group of persons. [37] Applicant submitted that the trust in question violated the patient's own freedom of testation given that her inheritance from the testator's estate will not upon her death devolve in terms of her own Will. It must be borne in mind that while the patient is alive an heir named in her Will only has a speis (hope) to inherit. Vesting of rights will only occur upon the patient's death. As such, the patient's own Will is inconsequential for purposes of determining the present dispute. What is at stake here are the testator's own wishes however fair/unfair or irrational they may be perceived to be. # E.ORDER E. ORDER [38] It follows that it is this court's finding that the Will authorised the executors to establish the trust that was established for the patient and that the application falls to be dismissed. [39] There is no reason to depart from the ordinary rule that costs follow the event and it is ordered that the applicant shall pay the costs of this application in her nominal capacity. The result thereof is that the costs should be borne by the patient's curatorship estate. # R BARENDSE R BARENDSE Acting Judge of the High Court Appearances: For the Applicant: Adv. P van Eeden SC (instructed by Assheton-Smith Ginsberg Inc.) For First to Fourth Respondents: Adv. RJ Howie (instructed by Matthew Walton and Associates) 1 Robertson v Executors 1914 AD 503 at 507 2 [1984] ZASCA 19 ; 1984 (2) SA 850 (A) 3 2012 (4) SA 593 (SCA) 4 (717/21) [2023] ZA SCA 100 sino noindex make_database footer start