Jowell v Bramwell-Jones and Others

• Jurisdiction: South Africa
• Court: Witwatersrand Local Division
• Judge: Heher J
• Judgment Date: 24 January 1996
• Citation: 1998 (1) SA 836 (W)
• Docket Number: 94/26842
• Counsel: LRG Serrurier (with him GD Chalmers) for the first and second excipients (first and second defendants) No appearance for the third defendant MD Kuper (with him DN Unterhalter) for the fourth excipient (fourth defendant) M Tselentis (with him A Subel) for the fifth and sixth excipients (fifth and sixth defendants) PA Solomon (with him GE Turner) for the seventh and eighth excipients (seven and eighth defendants) H Z Slomowitz (with him SJ Du Plessis) for the respondent (plaintiff)

Heher J:

This judgment concerns exceptions and procedural objections taken to a particulars of claim in which the plaintiff claims payment of R10 844 098 as damages from the eight defendants jointly and severally.

The plaintiff is one of the capital beneficiaries of a trust established by his late father. The E second, fourth, sixth and eighth defendants carry on business as, respectively, stockbrokers, chartered accountants, attorneys and a 'supplier of financial services' (which is also, to judge by its name, a corporate associate of a large firm of chartered accountants). The first, third, fifth and seventh defendants were, at the times material to the action, employees and/or officers F of the respective defendants who follow them in the citation. They, so it is alleged, were in their personal and representative capacities the particular persons responsible for the acts and omissions charged in the particulars of claim. Any reference therein to an individual is to be read as a reference to his or her employer, firm or company. Each corresponding pair of G defendants (save for the third defendant, who has not entered an appearance) is separately represented by an attorney and counsel and exceptions have been filed by all the defendants upon that basis.

The particulars of claim tells its own complex story. Since the exceptions are wide-ranging it is necessary that I allow it unrestricted expression: H

'11. On 20 December, 1965, the plaintiff's late father, Dr Abraham (also known as "Alan") Jowell (Dr Jowell) made a will ("the will"), a copy whereof is appendix 1 hereto.

12.

On 20 January 1970, Dr Jowell died at Johannesburg.

13.

Dr Jowell was at all times prior to his death and when he made the will married to Mrs Edna Mavis Jowell (Mrs Jowell). I

14.

Dr and Mrs Jowell had four children, all of whom are still alive, as is Mrs Jowell, the plaintiff being one of the said children.

15.

At the time that Dr Jowell made the will and at the time of his death:

15.1

Mrs Jowell was, as she had been throughout her married J

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life (and thereafter), a housewife with no business knowledge or acumen, and no A knowledge or ability in matters of finance, accounting, the management of assets, or business affairs or of the law, and was dependent in such areas and spheres on Dr Jowell, and she was also dependent upon him for her income and livelihood. B

15.2

Dr Jowell was aware that after his death she would be entirely dependent upon others to guide, advise and assist her in the aforesaid spheres, and she would be entirely dependent for her livelihood and income upon such assets as she had accumulated C during his lifetime at his instance, with his guidance, assistance and with such funds as he provided her with from time to time, and upon such income as accrued from such assets as would form part of his deceased estate upon his death.

15.3

Dr and Mrs Jowell maintained a comfortable standard of living and lifestyle in South Africa. D

15.4

Neither Dr Jowell nor Mrs Jowell harboured or held any intent to emigrate.

15.5

Dr Jowell desired that Mrs Jowell should continue to enjoy a standard of living and lifestyle after his death commensurate with that which she had enjoyed prior thereto. E

16.

Furthermore, at the time Dr Jowell made the will and/or at the time of his death:

16.1

He had many years previously caused a company, Glencordale (Pty) Ltd (Glencordale), to be incorporated. F

16.2

At or about the time of the incorporation of Glencordale or thereafter, he caused Glencordale to issue 75% of its issued share capital (the Glencordale shares) to him, and 25% thereof to Mrs Jowell,

16.3

Dr Jowell had many years prior to his death invested moneys in a business owned or G controlled by his brother, which business was later incorporated into Trencor Ltd (Trencor), as a result of which Dr Jowell obtained ordinary shares in Trencor, a public company listed on the Johannesburg Stock Exchange (the JSE).

16.4

Dr Jowell caused the said shares in Trencor (the Trencor shares) to be registered in the H name of Glencordale, and they were hereafter, and at all times material hereto and until the events which are hereinafter described took place, its property.

16.5

The Trencor shares were subdivided and, at the time of Dr Jowell's death, Glencordale held 247 000 Trencor shares. I

16.6

The Trencor shares were Glencordale's only asset, alternatively its most substantial asset.

16.7

Trencor was a company which, during Dr Jowell's lifetime and thereafter, was controlled and/or managed by Dr Jowell's brother and the latter's immediate family. J

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16.8

Dr Jowell and Mrs Jowell reposed great confidence, faith and trust in such persons and A in their ability to manage Trencor and advance its interests.

16.9

Trencor is a company held in high esteem by investors and in particular investors who are financial institutions, and its shares are regarded by them as having a "blue chip" status. B

16.10

In consequence, Dr Jowell retained his investment in the Trencor shares via the Glencordale shares, and this position obtained at the time that he made the will and at the date of his death.

16.11

Throughout Dr Jowell's lifetime (and after his death): C

(a)

Trencor prospered;

(b)

its shares steadily increased in value as reflected in turn by its share price per share on the JSE steadily increasing;

(c)

the said increase was of such nature that the said share price of the Trencor D shares on the JSE at any given time generally stood at or near its historic highest price previously ruling from time to time over the years;

(d)

the dividends (measured in money terms) which it paid to shareholders E increased regularly (and at least at the same rate as the increase in the rate of inflation) in approximately the same relationship as the annual average increase in its price per share from year to year;

(e)

in consequence, from year to year its dividend yield, measured as a percentage of an investor's (including Dr Jowell's) original investment in the Trencor shares, F steadily increased.

16.12

By reason of the aforegoing, the Trencor shares were, to the knowledge of Dr Jowell at the time that he made the will and at the date of his death, capable of providing (and did provide): G

(a)

a sufficient income by way of dividend in money which would steadily increase from year to year, as alleged above, to give Mrs Jowell on Dr Jowell's death and thereafter (quite apart from the capital value of her own assets and income generated therefrom), a comfortable home and a livelihood and lifestyle H commensurate with that enjoyed by Dr and Mrs Jowell during Dr Jowell's lifetime;

(b)

continued capital growth, so that, even if the full dividend income generated by the Trencor shares from time to time was paid to Mrs Jowell, the Trencor shares I would provide a capital asset, steadily increasing in value for the benefit of any heirs or beneficiaries of Dr Jowell in respect of the Trencor shares.

16.13

In consequence, Dr Jowell regarded the Trencor shares:

(a)

as a permanent capital asset, steadily increasing in value, which could be passed on his death to Mrs J

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Jowell to hold as trustee for the benefit of his children or other capital A beneficiaries;

(b)

which, during the lifetime of Mrs Jowell, would, without being sold or otherwise dealt with, generate sufficient income increasing from year to year by way of B dividend in money terms to provide Mrs Jowell with the livelihood, income and lifestyle aforesaid;

(c)

could be passed on upon her death to his children or other capital beneficiaries.

16.14

Glencordale was always regarded by Dr Jowell merely as a vehicle for the holding and the continued holding of the Trencor shares. C

17.

The facts set out in subparas 16.11(a), (b), (c), (d) and (e) were at all times:

17.1

well-known to persons, organisations and institutions who invested moneys in shares listed on the JSE, including stockbrokers, financial advisers, investment advisers, D portfolio managers, attorneys, accountants, and the like, including the defendants;

17.2

such persons regarded Trencor shares as "blue-chip" shares suitable to institutional investors, such as life insurance companies, pension funds and the like, for the E investment of their capital and the moneys of their policyholders and personal beneficiaries.

18.

In terms of the will:

18.1

Dr Jowell appointed Mrs Jowell to be the executrix of the will and the administratrix and trustee of the trust (the will trust) therein created; F

18.2

Dr Jowell directed that the capital of the will trust, being the Glencordale shares, should vest in Mrs Jowell in her capacity as trustee of the will trust;

18.3

the capital beneficiaries of the will trust were the children of Dr Jowell that survived G him;

18.4

Mrs Jowell was during her lifetime the beneficiary of the income from the Glencordale shares;

18.5

Mrs Jowell was the residuary heir.

19.

In terms of the will (according to its grammatical and ordinary meaning ascertained from the H terms of the will itself, alternatively so construed in its contextual setting as set out in paras 13--16 above, alternatively properly construed in the light of the circumstances therein set out), Dr Jowell's indirect shareholding of the Trencor shares, the property of Glencordale, was in fact and law the true subject of the will trust to which clause 3 of the will in particular I applied, and Mrs Jowell had no greater power over the Trencor shares than...