Hanekom v Voight NO and Others

• Jurisdiction: South Africa
• Citation: 2016 (1) SA 416 (WCC)

Hanekom v Voight NO and Others
2016 (1) SA 416 (WCC)

2016 (1) SA p416

Citation	2016 (1) SA 416 (WCC)
Case No	15493/2014
Court	Western Cape Division, Cape Town
Judge	Bozalek J, Dlodlo J and Riley AJ
Heard	May 29, 2015
Judgment	August 13, 2015
Counsel	DJ Coetzee for the applicant.; A le Grange SC (with CR Cilliers) for the second, fourth and sixth respondents.

Flynote : Sleutelwoorde B

Trust — Trust instrument — Variation — Validity — Master's acceptance of variation as valid — Effect of on issue whether amendment valid — Master's acceptance constituting administrative act remaining valid until set aside on review.

C Trust — Variation — Testamentary trust — When competent — Once administration of deceased estate finalised, testamentary trust becoming independent legal instrument capable of variation by trustees and beneficiaries.

Trust — Testamentary trust — Nature — Once administration of deceased estate finalised, testamentary trust becoming independent legal instrument.

Headnote : Kopnota

D The appellant (H) together with her three sisters were the beneficiaries of a testamentary trust (the trust) created in the last will and testament of their late grandfather. In 2001 the beneficiaries and their father (the trustee of the trust) signed a memorandum of agreement amending the trust. It provided inter alia for the broadening of the classes of beneficiaries in the event of one of the sisters passing away before termination of the trust, and for the E appointment of the beneficiaries as co-trustees. The master subsequently authorised them to act as co-trustees.

At issue in this case — H's appeal to the full bench against her unsuccessful application in the court a quo [*] for a number of declaratory orders — was whether the 2001 memorandum constituted a valid amendment of the F testamentary trust deed. H contended that because the sisters' descendants were prejudiced by the broadening of the classes of beneficiaries, absent their permission, and absent a court order authorising the amendment, it did not.

Held

The question whether the (testamentary) trust deed could validly have been G amended by the 2001 memorandum ought not to be adjudicated with reference to the coincidence that the trust happened to be of testamentary origin. When the deceased estate was finalised, the trust moved out of the will and became an independent legal entity. The general rule regarding amendments to a trust deed was that the trustees and the beneficiaries could amend a trust deed. It would be highly artificial to view the initial H trust as solely or principally a testamentary trust and to artificially dictate that its whole structure must be determined by the provision that, in the event of one of the sisters predeceasing, (only) his great-grandchildren would be beneficiaries. Here the great-grandchildren remained amongst the potential beneficiaries but now, as things stood, that was dependent upon what the four sisters in their capacities as trustees decided. (Paragraphs I [10], [16] and [22] at 420F – G, 424A – D and 428C – D.)

2016 (1) SA p417

There was a distinction between the appointment of a trustee (occurring in terms A of the trust deed) and his or her written authorisation by the master (in terms of the master's statutory powers). The master's authorisation must necessarily take place against the backdrop of the particular trust deed because the trust deed was the 'defining source' of the trustees' powers. In a case such as the instant one, a choice must in effect be made between two trust deeds. Here the sisters' authorisation by the master to act as trustees B occurred in terms of the 2001 agreement, and the master's decision to so do stood (as an administrative act) until set aside. (Paragraphs [13] – [15] at 421I – 423I.)

Cases Considered

Annotations C

Case law

Afrisure CC and Another v Watson NO and Another 2009 (2) SA 127 (SCA): referred to

Bydawell v Chapman NO and Others 1953 (3) SA 514 (A): distinguished

Ex parte Hulton 1954 (1) SA 460 (C): dictum at 468F applied

Ex parte Jewish Colonial Trust Ltd: In re Estate Nathan 1967 (4) SA 397 (N): D dictum at 408E applied

Ex parte Knight and Others 1946 CPD 800: referred to

Ex parte Marais en Andere 1966 (3) SA 378 (O): dictum at 382 applied

Ex parte Watling and Others 1982 (1) SA 936 (C): distinguished

Groeschke v Trustee, Groeschke Family Trust and Others 2013 (3) SA 254 (GSJ): dictum in para [19] applied E

Hoppen and Others v Shub and Others 1987 (3) SA 201 (C): referred to

Jowell v Bramwell-Jones and Others 2000 (3) SA 274 (SCA) ([2000] 2 All SA 161): referred to

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) ([2012] 2 All SA 262; [2012] ZASCA 13): referred to

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) F ([2004] 3 All SA 1; [2004] ZASCA 48): dictum in para [26] applied

Peters and Others NNO v Schoeman and Others 2001 (1) SA 872 (SCA): dictum at 879 applied

Phillips v Fieldstone Africa (Pty) Ltd and Another 2004 (3) SA 465 (SCA) ([2004] 1 All SA 150): referred to

Regal v African Superslate (Pty) Ltd 1963 (1) SA 102 (A): referred to G

Registrateur van Aandelebeurse v Aldum h/a Onecor Group en Ander Besighede 2002 (2) SA 767 (SCA): referred to

Sibex Construction (SA) (Pty) Ltd and Another v Injectaseal CC and Others 1988 (2) SA 54 (T): referred to

Tijmstra NO v Blunt-Mackenzie NO and Others 2002 (1) SA 459 (T): H referred to

Trek Tyres Ltd v Beukes 1957 (3) SA 306 (W): referred to.

Case Information

DJ Coetzee for the appellant.

A le Grange SC (with CR Cilliers) for the second, fourth and sixth respondents. I

An appeal to the full bench. The order is at [24].

Order

(a)

The 2001 memorandum constituted a valid amendment to the 1980 trust deed. J

2016 (1) SA p418

(b)

A The appeal is dismissed with costs, which are to include costs occasioned by the employment of two counsel.

(c)

Costs shall be paid by the appellant in her personal capacity.

Judgment

Dlodlo J (Bozalek J and Riley AJ concurring):

Introduction B

[1] This is an appeal emanating from an application which served before Cloete J on 10 December 2014. This matter came to court consequent upon a dispute between four sisters, namely the appellant and the individuals cited as the first to sixth respondents, who are both trustees C and the beneficiaries of the Dr Marais Trust, registration No MT3990/86. The appellant appeals against certain findings made by Cloete J. The necessary leave to appeal was granted on 2 February 2015.

[2] The appellant initially only applied for a declaratory order in connection with the validity of an amendment to the original trust deed D of the Dr Willie Marais Trust (the 1980 trust deed). Thus there appears to be suggested that the two trust deeds relevant in this appeal are — (a) the trust deed which is attached to the last will and testament by means of which the 1980 trust deed was created; and (b) a document with the heading 'Memorandum van Ooreenkoms' signed in 2001 (the E 2001 memorandum).

[3] The respondents, answering to the appellant's application for the abovementioned declarator in connection with the validity of the 2001 memorandum as an amendment to the 1980 trust deed, brought a counter-application F for the removal of the appellant as a trustee of the trust. The appellant then amended her notice of motion to provide for the removal of all four trustees of the trust (including herself) and for the appointment of four independent trustees in their stead.

[4] The findings and orders made by the court a quo which to a greater extent form the crux of this appeal were that — (a) the Master of the High Court (the seventh respondent) carried out an administrative action G during 2001 by making a formal decision that the 2001 memorandum was valid and, as a consequence of the appellant not bringing an application for the review of the master's administrative action, the 2001 memorandum stood as the trust deed, valid since 2001; and (b) that both the appellant's application for the removal and substitution H of all the trustees and the respondents' application for the removal of only the appellant as a trustee were referred to trial. Thus, this court is not called upon to make any decision regarding those applications. The only question before this court for determination is whether the 2001 memorandum constituted a valid amendment of the 1980 trust deed. It is only helpful to first set out the background to the dispute over I the trust deed.

Background factual matrix

[5] It is common cause that there is a long-standing dispute between the parties (with the appellant in one camp and the first to sixth respondents in the other). This dispute is captured in the following averment J contained in the respondents' answering affidavit, namely:

2016 (1) SA p419

Dlodlo J (Bozalek J and Riley AJ concurring)

'Die dispute en meningsverskille het vele fasette maar sentreer veral A rondom die lotgevalle van wat tans die waardevolste bate van die Trust daarstel, naamlik 'n Kaap-Hollandse woning in Eversdal, wat oorspronklik 'n plaas-opstal was (die opstal). Die applikant probeer ten alle koste verhoed dat die opstal aan 'n buitestaander verkoop word (selfs teen 'n prys wat ongetwyfeld die markwaarde daarvan weerspieël), maar aan die anderkant het sy al herhaaldelik probeer of B aangebied om self (en in die mees onlangse geval via haar familietrust) die opstal te koop. Dit alles geskied teen die agtergrond daarvan dat die Trust likiditeitsprobleme het — die resultaat van die feit dat die Trust aan die een kant geen noemenswaardige inkomstegenererende aktiwiteite huisves nie, maar aan die ander kant noemenswaardige lopende kostes het, sodat 'n gunstige verkoping van die opstal tot die...