Harvey NO and Others v Crawford NO and Others

• Jurisdiction: South Africa
• Judge: Ponnan JA, Tshiqi JA, Zondi JA, Dambuza JA and Molemela JA
• Judgment Date: 17 October 2018
• Citation: 2019 (2) SA 153 (SCA)
• Docket Number: 1016/2017 [2018] ZASCA 147
• Hearing Date: 17 October 2018
• Counsel: A Beyleveld SC (with T Rossi) for the appellants. JP White for the respondents.
• Court: Supreme Court of Appeal

Molemela JA:

[1] In January 1953 Mr Louis John Druiff (the donor) executed a notarial deed of trust (the trust deed) which was subsequently amended in part. It would appear that on the same day the donor also executed a will (the will). J

Molemela JA

[2] A The salient provisions of the trust deed, as amended, are as follows:

'4. Duties of Trustees

A.

The trustee or trustees shall stand possessed of the trust fund and shall invest and re-invest the capital of the trust fund, and the nett revenue and income derived therefrom, or part thereof, shall either B be allowed to accumulate, and the amount so accumulated added to the capital of the trust fund, or the whole of the nett income and revenue, or part thereof, shall be applied for the benefit of all or any of the following persons, who may be alive at that time, namely:

(a)

Gladys Elizabeth Clark (born Druiff)

Married without community of property to Robert Bruce Clark.

(b)

Nina Dorothy Lewin (born Druiff) C

Married without community of property to Leo Lewin.

(c)

Lester Philip Druiff.

(d)

Dulcie Helena Wilkinson (born Druiff)

Married without community of property to Michael Ayscough Wilkinson. D

(e)

The child or any children of the said Gladys Elizabeth Clark (born Druiff).

(f)

The child or any children of the said Nina Dorothy Lewin (born Druiff).

(g)

The child or any children of the said Lester Philip Druiff.

(h)

E The child or any children of the said Dulcie Helena Wilkinson (born Druiff).

It shall be entirely at the discretion of the trustees as to how much of the revenue shall be accumulated and how much applied for the benefit of the aforesaid beneficiaries and no beneficiary shall be entitled to dispute the authority of the trustees in the exercise of F the discretion hereby conferred upon them. The trustees shall have the power in their absolute discretion at any time during the trust period to apply for the benefit of any beneficiary above referred to, part or the whole of the capital of the trust fund.

B.

On the death of the said Louis John Druiff the discretionary powers set out above shall cease and the nett revenue and income shall be G divided equally between and paid to the said four children of the donor. If any child has died at such time, his or her share shall devolve upon his or her descendants per stirpes.

5. Period of Trust

If the whole of the capital has not been applied for the benefit of the H beneficiaries, as provided in paragraph 4 hereof, the trust shall remain in force for a period of one year after the death of the said Louis John Druiff.

6. Termination of Trust

At the expiration of the trust period as hereinbefore provided the trustees shall realise the capital, or balance of capital, and divide the I amount so realised equally between the said four children of the said Louis John Druiff. In the event of any child dying prior to the termination of the trust, his or her share shall devolve upon his or her legal descendants per stirpes. If such child has no legal descendants, his or her share shall be divided equally between the remaining children or their legal descendants per stirpes. If at such time there are no children J alive and no legal descendants of such children, then the trustees shall

Molemela JA

divide the capital between such persons as may be nominated as the A heirs in the will of the donor, or if the donor has failed to make a will, between the next-of-kin of the said donor.'

[3] It is undisputed that at the time of execution of the trust deed, the donor had four children, three of whom already had children of their own. One of his daughters, Ms Dulcie Helena Harper (Ms Harper) was B married but did not have any children. Subsequent to the donor's death, Ms Harper lawfully adopted two children. Upon the respective deaths of Ms Harper's siblings, their quarter shares of the capital duly devolved upon their children. When it became evident that there was uncertainty as to whether her adopted children would, upon her death, receive her quarter-share of the capital, Ms Harper decided to approach the C Western Cape Division of the High Court (Dlodlo J) (the court a quo) for relief. She was cited as the first applicant and her two adopted children as the second and third applicants (the second and third appellants). The trustees of the trust (trustees) and the Master of the High Court (the Master) were cited as the respondents. The trustees opposed the D application and the Master opted not to do so. The children of Ms Harper's siblings were later joined as co-respondents.

[4] Ms Harper, inter alia, averred in her founding affidavit that during the donor's lifetime she had confided in him about the fact that she had had two miscarriages and was therefore considering adoption. E The donor had advised her not to make a hasty decision, as she was still young. The relief sought by Ms Harper and the second and third appellants in the court a quo was an order declaring that the words 'children', 'descendants', 'issue' and 'legal descendants' used in the trust deed, be interpreted so as to include the second and third appellants F notwithstanding that they were adopted. They contended that excluding them would amount to unfair discrimination on account of their birth. The basis for the relief they were seeking was threefold: (a) that it was not evident from the trust deed that the donor intended to exclude adopted children G from benefiting under the trust (b) that the trust deed should be interpreted to include rather than exclude adopted children, which would be in line with the spirit, purport and object of the Bill of Rights, particularly s 9 of the Constitution [1] and public policy (c) that at the time the trust deed was executed, the donor did not know for sure that Ms Harper was unable to bear children.

[5] Before the court a quo it was contended on behalf of the appellants H that if the terms of the trust deed were interpreted only to include the donor's biological descendants, that interpretation would bring about consequences that the donor did not contemplate or foresee. It was argued that the exclusion of the second and third appellants would amount to unfair discrimination, thus falling foul of s 9(4) of the I Constitution. The court a quo was accordingly requested to, in the alternative, grant an order varying the terms of the trust deed as contemplated in s 13 of the Trust Property Control Act 57 of 1988.

Molemela JA

[6] A The respondents' opposition of the matter was essentially premised on the following grounds: (a) the locus standi of Ms Harper to launch this application; (b) that even if the donor was aware that adoption was an option for Ms Harper, this imputed knowledge did not justify the inference that the donor intended adopted children to be included as B beneficiaries of the trust; (c) that whereas the donor enjoyed legal assistance in the execution of the trust deed and the subsequent amendment to such trust deed, he did not take steps to make express provision for the inclusion of adopted children in the trust deed. The court a quo delineated the issues it had to determine as follows:

'[6] C . . . (a) Whether or not the second and third applicants should be considered children, descendants, issue or legal descendants for purposes of the trust deed; or (b) whether, upon the first applicant's death, her one-fourth share is to be dealt with as if she had died childless.'

[7] The court a quo dismissed the point in limine raised in respect of D Ms Harper's locus standi. That finding has not been attacked on appeal. In respect of the merits, the court a quo reiterated that when interpreting a trust deed, consideration had to be paid to the ordinary meaning of the words, which must be read in the context of the whole trust deed. It also considered the circumstances existing at the time when the trust deed E and its amendment were executed, as well as Ms Harper's averment that the donor was aware of the fact that she was considering adoption. Having examined previous cases where the courts were prepared to interfere with the provisions of the will, it found that all those cases related to trusts with a public purpose and nature. It concluded that the right to equality was, in those instances, of more importance than the F present matter where the trust created is of a private nature.

[8] The court a quo found no basis for a conclusion that the trust deed brought about consequences that the donor could not have foreseen. The donor was aware that adoption was an option for Ms Harper and could have included adopted children as beneficiaries if that had been his G intention. Having had regard to the accepted dictionary meaning of the words 'descendant', 'progeny' and 'issue', the court held that the trust deed under discussion had the effect that only the biological descendants of the donor's children were capital beneficiaries of the trust. The court a quo was satisfied that that was the clear intention of the donor.

[9] H The court a quo highlighted the protection under s 25 of the Constitution of a person's right to property, including the right to dispose of their assets as they wish upon their death. It warned that inroads into freedom of testation are not to be made lightly. It stated that courts have no competency to vary the provisions of the donor's I trust deed just as they have no power or authority to change a testator's will. Effect should always be given to the wishes of the testator. On the other hand the court a quo stressed that courts will refuse to give effect to a testator's directions where such are contrary to public policy.

[10] The court a quo stated that the trust deed must be interpreted in J accordance with the intention of the donor. It held that the...