Horowitz v Brock and Others

• Jurisdiction: South Africa

Horowitz v Brock and Others
1988 (2) SA 160 (A)

1988 (2) SA p160

Citation	1988 (2) SA 160 (A)
Court	Appellate Division
Judge	Joubert JA, Grosskopf JA, Smalberger JA, Nicholas AJA and MT Steyn AJA
Heard	August 17, 1987
Judgment	November 5, 1987

Flynote: Sleutelwoorde

G Will — Construction of — Testators' estate massed and a trust created — Survivor to have life interest — On her death, share due to daughters to be retained by trustees and income to be paid to daughters during their lifetime — On their death, their shares of corpus to be distributed amongst their 'lawful children in equal shares who shall H attain the age of 25 years' — Surviving daughter A having two children, son R and daughter T — T died leaving daughter E, and R had two sons — Upon A's death, issue arose whether phrase 'lawful children' used in the will meant descendants of first degree only or whether it included grandchildren and further descendants — Provincial Division upholding I latter interpretation — On appeal, Court holding that unless indicia to contrary, term 'children' in will to be interpreted to refer to descendants of first degree only — In instant case sufficient indicia in will to rebut such presumption — Testators therefore must have intended to include in concept of 'lawful children' any grandchildren J entitled to inherit by way of representation in place of predeceased

1988 (2) SA p161

A parent — Corpus of trust therefore to devolve equally upon R and E — Appeal against Court a quo's dismissal of E's application for a declaratory order to the above effect, allowed.

Estoppel — Res judicata — Court requested by trustees in testamentary dispute to make ruling on certain issue — Court making ruling but not B incorporating it in its order — Beneficiary under trust thereafter seeking declaratory order in Court a quo contrary to terms of ruling — Court a quo refusing to grant such order, holding that it was precluded from granting relief sought on grounds of res judicata as Provincial Division's ruling constituted integral part of judgment as effectively as if it had been part of Court's order — Court on appeal considering C issues of res judicata and issue estoppel — Court not deciding whether issue estoppel forming part of our law, as in instant case essential requirement for valid defence of either res judicata or issue estoppel lacking — Request for ruling divorced from its legal consequences because no relief sought consequent thereupon (which is presumably why Provincial Division did not make ruling part of its order) and thus did D not introduce new issue into proceedings — Court a quo consequently not precluded from adjudicating upon relief claimed in application and should not have upheld plea of either res judicata or issue estoppel.

Headnote: Kopnota

In terms of their will, the estates of the testator and testatrix were massed and held in trust subject to the conditions of the will. The survivor E was entitled to a life interest in respect of the trust. On such survivor's death, legacies had to be paid and the balance of the trust had to be divided amongst the four children of the testator and testatrix, viz M, W, F and A. Clause 7 of the will provided that the shares of the balance of the trust estate accruing to F and A (both daughters) should be retained and held in trust and the annual income F paid to each during their lifetime. On their respective deaths the trustees were to hold the shares for the benefit of and to pay over the same to their lawful children in equal shares 'who shall have attained the age of 25 years...'. When the survivor died, F and A each had two children - F had sons L and M, and A had a son R and daughter T. F died in 1976 and her sons had attained the age of 25 years and a quarter of the trust estate was distributed to each of them. A was still alive and her son R was married and had two minor children. T had died in 1966 G leaving a minor daughter, E. A wished to renounce all her rights of whatsoever nature in the trust in favour of her son R, who had undertaken, if the renunciation became effective, to pay a sum into the estate of T and for a further sum to be made available for his minor children. The trustees of the trust thereupon applied to a Local Division for declaratory orders: (1) that upon renunciation by A in favour of R of all her rights in the trust the corpus in the trust will pass to R to the exclusion of any living or unborn person and the trust terminate; (2) that the estate of T had no claim to the corpus of the H trust; (3) that E had no claim to the corpus of the trust; (4) that on A's death (failing renunciation) R would be exclusively entitled to the corpus of the trust; (5) that on R's death during A's lifetime A would acquire full dominium in the assets of the trust to the exclusion of any other person whether alive or unborn. The Local Division granted a declaratory order in terms of prayer (2), but refused the remaining prayers. After the date of the judgment in the Local Division, A died. I In an appeal to the Full Bench of the appropriate Provincial Division against the decision of the Local Division, the only issue remaining for decision, in view of A's death, was whether the phrase 'their lawful children' in clause 7 of the will, meant descendants of the first degree only, as contended by the trustees and R, or whether it included grandchildren and further descendants, as the Local Division held. The Provincial Division confirmed this latter decision of the Local Division. The trustees had also requested, should the appeal to the Provincial Division not be upheld, that the Court (the Provincial J Division) should give a ruling

1988 (2) SA p162

A on the question whether the two sons of R were to be included in the concept of 'children' for the purposes of distribution and on the shares to which the respective 'children' were entitled. The Court held that, on the death of A, her share of the corpus of the trust devolved in equal shares upon her son R, and her grandchildren J, AB and E, the grandchildren becoming entitled to payment of their share of the corpus of the trust on attaining the age of 25 years. The order made by the B Provincial Division was, in substance, identical to that made by the Local Division. The above-mentioned 'ruling' made by the Provincial Division was never incorporated within its order. Subsequent to these proceedings, an application was made on E's behalf for an order declaring that the share of the late A in the corpus of the trust would devolve as to one-half upon R and as to one-half upon E, provided the latter survived to the age of 25. The relief sought was, therefore, contrary to the 'ruling' given by the Provincial Division in the course C of its judgment. The Court hearing this application (the Court a quo) held that it was precluded from granting the relief sought on the grounds of res judicata, concluding that the Provincial Division's ruling constituted an integral part of the judgment as effectively as if it had been part of the Court's order. The Court a quo accordingly dismissed the application but granted leave to appeal to the Appellate Division, which appeal was heard subsequent to E attaining majority. The respondents were R, his sons J and AB and the trustees. On appeal, the D Court outlined the issues to be adjudicated upon as being: (a) had the Court a quo hearing the application on E's behalf, been precluded from granting the relief sought either on the basis that the Provincial Division's 'ruling' rendered the matter res judicata in our law or (b) because of the applicability of the so-called doctrine of issue estoppel (assuming it to be part of our law) and (c) if the Court a quo was not so precluded, was E entitled to the relief sought on a proper interpretation of the testators' will? The Court therefore firstly E considered the issues of res judicata and issue estoppel and remarked that it was a vexed question whether issue estoppel was part of our law but that it was not necessary to decide the matter in the present appeal, for both res judicata and issue estoppel required for their operation that the same issue should have been adjudicated upon, and the fundamental question which arose in the present matter was whether the ruling given by the Provincial Division related to an issue properly F before it - if it did not, the declaratory order sought before the Court a quo could not be said to have related to an issue previously adjudicated upon, resulting in the absence of an essential requirement for a valid defence of either res judicata or issue estoppel. The Court held that the request for a ruling was divorced from its legal consequences because no relief was sought consequent thereupon (which is presumably why the Provincial Division did not make the ruling a part of G its order) and that it therefore did not introduce a new issue into the proceedings. The Court therefore concluded that the Court a quo had not been precluded from adjudicating upon the relief claimed in the application and that it should not have upheld a plea of either res judicata or issue estoppel. The Court then turned to the proper interpretation of the will.

Held, applying the rule in Galliers and Others v Rycroft (1900) 17 SC 569 that, unless there were indicia to the contrary, the term 'children' in clause 7 in the will must be interpreted to refer to descendants of H the first degree only.

Held, further, that there were sufficient such indicia to be found in the will to rebut the presumption on which the rule was founded.

Held, therefore, that the testators must have intended to include within the concept of 'lawful children' any grandchildren who would be entitled to inherit by way of representation in the place of a predeceased parent. (R's two sons, J and AB, therefore had no...