Westminster Bank Ltd NO and Others v Zinn NO

• Jurisdiction: South Africa
• Judge: Curlewis CJ, Stratford JA, Beyers JA, De Wet JA and Watermeyer AJA
• Judgment Date: 01 November 1937
• Citation: 1938 AD 57
• Court: Appellate Division

Curlewis, C.J.:

This is an appeal from a decision of the Cape Provincial Division upholding an exception to the declaration of plaintiff's, now appellant's, in an action for recovery of £7,993 7s. 10d. with interest. The facts as disclosed in the declaration and the grounds of exception are fully set out in the able judgment of VAN ZYL, J.P., in the court below, and it is unnecessary for me to repeat them here.

The question which the court below has to decide on the exception and which we have now to decide on appeal was and is whether the will of Courage Reid must be construed according to English law or according to South African law in deciding whether Courage Reid by his will did, or did not, exercise the right or power to bequeath by will the share of inheritance which devolved on him as fiduciary heir under the will of his father Henry Reid. As stated by the, learned Judge President in the court below, "three facts appear from the declaration: (1) that the property in respect of which Courage Reid was given the power of appointment was movable property situate in this country; (2) that the will which created that power was made in this country according to the laws of this country by a person domiciled in this country; (3) that the will in which Courage Reid is alleged by the law of England to have exercised the power of appointment is a will valid according to the law of England and made and left by him as his last will and testament while he was domiciled in England. It thus appears that the testator who gave the power of appointment was domiciled in this country while the testator to whom the power was given was domiciled in England both when he made his will and when he died."

When I used the words "power of appointment" in connection with the will of Henry Reid, I am using a phrase well known to English law, a phrase which has been adopted in argument in this case and in some decisions of South African Courts, but we must guard against the use of that phrase in connection with a South African will in any other sense than as referring to the right or mandate which a fiduciary has under our law to perform an act of testamentary disposition on behalf of another person, i.e., the person who created that right or gave that mandate. That is the only sense in which I shall use the phrase in connection with the wills of Henry Reid and Courage Reid.

Before entering into a discussion of the question for decision,

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it will be as well to consider what was the legal position of Courage Reid under the will of his father Henry Reid in order to obtain a clear conception of the so-called power of appointment under our law as distinct from the conception of a power of appointment under English law. This so-called power of appointment can under our law be created only by way of fidei commissum. In Union Government v Olivier (1916 AD at p. 89) JUTA, A.J.A, said: "It was upon that ground, indeed, that the petition is based: that because petitioner's husband exercised the power granted to him under the grandparents' will to bequeath his portion to one or more of his children as he should think fit, therefore the children inherited from their father. But this, as pointed out in the court below, is a misconception of the principles of our law. Such a power of appointment can only be exercised in our law by way of a fideicommissum; see Voet 36.1.39 and In re Myburgh (13 S.C. 218) and Stanley v Botha's Executors (19 S.C. 48) which followed Voet so - that the heir or legatee to whom the power of appointment is given is the fiduciary, and the persons selected from those named by the testator are the fideicommissaries under the will of the testator. From whence it follows that the children selected take as fidei commissaries from their grandparents." Our law does not make any distinction, as apparently the English law does, between a general power of appointment and a special power of appointment. Halsbury's Laws of England (Hailsham ed.), paragraph 926 says: "Powers to dispose of property may be either general or special. A general power is such as the donee can exercise in favour of such person or persons as he pleases, including himself, or his executors or administrators. A special power can only be exercised in favour of certain specified persons or classes." In Olivier and the two cases referred to in the judgment of JUTA, A.J.A, the power of Appointment was what according to Halsbury's definition would be regarded in English law as a special power. And I agree with VAN ZYL, J.P.,in stating that there is no reason why what was stated by JUTA, A.J. in Olivier or by DE VILLIERS, C.J., in Stanley v Botha's Executor as quoted by VAN ZYL, J.P., should not also apply to the case where the power of appointment is general. But in the case of Ladies' Christian Home and Others v SA Association (1915 CPD 467) KOTZÉ, J., had to deal with a power of appointment created by antenuptial contract, a power which according to English law would be regarded as a general

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power of appointment. A clause in the antenuptial contract: provided that upon the death of Frances Tesselaar occurring after that of her husband Nicolaas Tesselaar the bonds or the proceeds thereof, together with any interest due thereon, shall devolve upon and be paid over to the children of the marriage and, failing children, to such person or persons as Mrs. Tesselaar may by her last will and testament appoint, and failing such appointment, to the next of kin of the said Nicolaas Tesselaar according to the law of succession;. There was no issue of the marriage, Nicolaas Tesselaar predeceased his wife after having made a joint will. Later Mrs. Tesselaar made a new will, in which she bequeathed several legacies, and stated that she appointed as heirs to the residue of her estate certain three institutions named by her and who were the plaintiffs in the case.

It was contended in that case that by instituting the plaintiffs residuary heirs in her will Mrs. Tesselaar had exercised the power of appointment conferred on her by the antenuptial contract in regard to the two bonds. KOTZÉ, J., after referring to the English statute, I Vict c. 26, sec. 27, which had been quoted to him, pointed out that the English common law prior to that statute was similar to our law in that a mere general devise by will of the residue did not comprehend the subject of a power of appointment, unless there was some reference express or implied either to the subject of the power itself or some circumstance existed from which it could be inferred that an exercise of the power of appointment had taken place. He said: "This appears to me in keeping with our own law, for there must be some indication at all events, to prove that a person possessing a power of appointment has, in fact, exercised such power."

"Now it is said that Mrs. Tesselaar, the testatrix, having the general power of appointment in respect of the bonds, had the general power of disposing of them by will, and that by disposing of the residue of her estate she must be taken thereby to have exercised the power of appointment and to have disposed accordingly of the bonds. No authority from our own law was cited in support of this contention, and in the absence of anything to indicate that the testatrix has either expressly or impliedly executed the power of appointment given her by the antenuptial contract, I am not at liberty to hold that she has in fact done so. There is no rule of our law that the mere disposal by the testatrix of the residue of her estate without more includes property which is the subject of the

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power of appointment. The testatrix after the legacies had been satisfied died possessed of residuary estate which was distributed among the three plaintiffs as the heirs of such estate. No doubt Mrs. Tesselaar had the power of dealing by will with the two bonds or the proceeds thereof as if they were her own property, but, quod non apparet non est, she has not done so."

Now what is the legal position of Courage Reid under the will of his father? He became on the death of his mother entitled to an equal share with his brothers and sisters of his father's estate; his share was however burdened with a fidei commissum so that he shall receive "the interests, rents, dividends or income" which may accrue thereon during his life, and upon his decease his share shall devolve upon his children in equal shares if more than one, and if only one the whole shall devolve upon such one as his, her or their own free and unencumbered property; and in default of issue Courage Reid had the right to bequeath his share in such manner as he may by last will or other testamentary writing direct, and failing such will his share shall devolve upon his lawful heirs. Courage Reid therefore, on the death of his mother, became fiduciary heir to a share of his father's estate amounting, as stated in the declaration, to the sum of £7,840 4s. 0d and that amount or fund remained in the hands of the executors and administrators of his father's estate in South Africa and was invested by them for his benefit. His right as fiduciary heir entitled him to receive the "interests, rents, dividends or income" derived from that capital sum, but the capital sum itself was burdened with fideicommissum in favour of his children, if any, who would be the fideicommissary heirs to Henry Reid and would on the death of Courage Reid inherit from Henry Reid that capital sum free and unencumbered. Henry Reid also provided in his will that should Courage Reid die without issue, he would have the right to bequeath that capital sum by last will in such manner as he may direct, and failing such will the capital amount must devolve upon his (Courage Reid's) lawful heirs, who would thereby become the fideicommissary heirs to Henry Reid. This capital sum...