Jowell v Bramwell-Jones and Others

• Jurisdiction: South Africa
• Citation: 1998 (1) SA 836 (W)

Jowell v Bramwell-Jones and Others
1998 (1) SA 836 (W)

1998 (1) SA p836

Citation	1998 (1) SA 836 (W)
Case No	94/26842
Court	Witwatersrand Local Division
Judge	Heher J
Heard	June 5-9, 1995; June 12-16, 1995
Judgment	January 24, 1996
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)

Flynote : Sleutelwoorde I

Will — Construction of — Trust created — Will providing that 'the shares held by me' in private company to vest in trust — Sole asset of said company certain shares in public company — Contention that such shares including also 'that which shares represented', viz private company's assets in form of its investment in public company, rejected as being inconsistent with plain language of will. J

1998 (1) SA p837

Trust and trustee — Trust — Testamentary trust — Vesting — Dependent upon conditionality of A bequest — Condition in question generally one of survival — Will providing that bequest to capital beneficiaries (testator's children) 'shall remain vested in my trustee/s until such time as each child reaches the age of 25' — No provision for substitution of children — Trustee's interest in B corpus purely fiduciary — No need to imply condition of survivorship — Children's right of enjoyment merely postponed for own protection.

Company — Shares and shareholders — Shares — Sale and transfer of — Testator creating testamentary trust of which subject-matter was his shares in private company — Sole asset of C private company certain shares in public company — These shares property of private company, a third party, and testator having no right, alive or by will, to divest said company of its underlying assets (viz its shares in public company) by vesting them in trust.

Negligence — Action for damages — For acts and omissions causing pure economic loss — Defendants (respectively a stockbroker, chartered accountant, attorney and supplier of financial D services) having advised trustee of testamentary trust by recommending and implementing a scheme designed to enable trustee to maximise her income to detriment of vested rights of capital beneficiaries — Scheme contrary to provisions of will — Trustee lacking business, financial or legal knowledge and depending entirely on defendants' advice — Whether defendants' conduct E wrongful — On basis that defendants in possession of knowledge attributed to them in claim, no reason why they should not have prevented loss by due exercise of their knowledge and skill — Ought to have advised trustee to act lawfully and assisted her to rectify situation they had caused — Defendants' insouciance in execution of their professional mandate amounting to socially inadequate conduct — Fact that beneficiaries had contractual remedy against trustee not sufficient F to deprive them of delictual claim against defendants — Prima facie case of wrongfulness made out.

Delict — Intentional wrongful act causing damage — Causation — No reason why criminal law principle that, where intended result of conduct materialises, it matters not that precise cause or G connection between conduct and result not foreseen provided only that actual deviation from actor's contemplation was not material, should not be adopted also in civil law context.

Damages — Prospective loss — Action for damages for prospective loss of enjoyment of trust property — Victim of delict who has suffered some damage will not be barred from suing for such H damages, including prospective loss, merely because measure of damages difficult to assess — Court to do its best on such evidence as presented to it — Where no damage yet suffered at date of delict (or trial) and such loss as may eventuate merely speculative, no Aquilian remedy available — In casu balance between advantages and disadvantages flowing from actions of trustee cannot be struck until arrival of date for enjoyment of trust property — Aquilian action unavailable. I

Attorney — Liability of to third parties — No conceptual obstacle to delictual liability of attorney to non-client for damages caused by negligence in conduct of client's affairs.

Pleadings — Exception — On ground that pleading vague and embarrassing — Must go to whole cause of action and not to particular paragraphs of J

1998 (1) SA p838

pleading — Uniform Rules of Court maintaining essential distinction between substance of cause A of action (dealt with under Rule 23) and particularity of pleading (dealt with under Rule 18(4)) — Where Rule 18(4) relates to material facts, it requires that plaintiff shall furnish only those particulars strictly necessary to enable defendant to plead, such particulars to be incorporated B into statement of plaintiff's cause of action at outset — Where lack of particularity relating to mere detail, defendant's remedy is to plead to averment made and to obtain particularity required either by means of discovery/inspection procedure or by means of request for particulars for trial — Rule C 30 may also be invoked to strike out claim pleaded when individual averments lack sufficient particularity — However, contention that particulars of claim vague and embarrassing cannot rest on mere averment that they lack particularity.

Practice — Irregular proceedings — Setting aside of in terms of Rule 30(1) of Uniform Rules of Court — Rule 30(2)(a) providing that application for setting aside may be made only if 'applicant D has not himself taken a further step in the cause with knowledge of the irregularity' — What constitutes — Rule 30(2)(a) creating species of estoppel — Party may not be heard to complain of an irregular procedural step if he acts in manner at variance with objection to that irregularity, even though he did not when taking that step appreciate that the other party's step was irregular — E Further step in proceedings one which advances proceedings one stage nearer completion and which, objectively viewed, manifests intention to pursue cause despite irregularity — Accordingly, filing of notice of exception containing as alternative application to set aside pleadings under Rule 18(12) read with Rule 30 not constituting further step within meaning of Rule 30(2).

Headnote : Kopnota

The plaintiff was one of the four capital beneficiaries of a testamentary trust established by his F late father, Dr J. The second, fourth, sixth and eighth defendants were respectively a stockbroker, a chartered accountant, an attorney and a 'supplier of financial services'. The first, third, fifth and seventh defendants were employees and officers of the defendants that G followed them in the citation. Dr J had made the will in question in 1965. Before his death in 1970 he had established a company called G (Pty) Ltd ('G'). Seventy-five per cent of the shares in G (Pty) Ltd were issued to him and 25% to his wife, Mrs J. Dr J also owned shares in a public company, T Ltd ('T'), which he had registered in the name of G. The T shares were H G's only asset. According to the particulars of claim Dr J had regarded the T shares as a permanent capital asset which would generate sufficient income by way of dividends to allow Mrs J to sustain the standard of living she was accustomed to - in other words, he had regarded G merely as a vehicle for the holding of the T shares. Mrs J was appointed trustee of the will trust. In terms of clause 3 of the will 'all the shares held by me in G' (the trust capital) were to vest in Mrs J in her capacity as trustee. She was granted 'all such powers and I authorities as are required or allowed in law', the only limitation being that she was to hold the capital of the trust (viz the testator's 75% shares in A) for her lifetime. The capital beneficiaries were the couple's four children, one of whom was the plaintiff. On the death of Mrs J the G shares were to devolve upon the children provided 'that the bequest due to them . . . shall remain vested in my trustee/s until such time as each child reaches the age of 25'. There also existed a further trust, the J

1998 (1) SA p839

AJ trust, an inter vivos trust created by Dr J, of which Mrs J was the trustee and income A beneficiary. The children were again the capital beneficiaries. Mrs J was not empowered to dispose of the assets of the AJ trust without the consent of the capital beneficiaries.

In 1989 Mrs J decided to emigrate to Canada. Lacking financial, business or legal knowledge, B she decided to procure the services of the defendants in order to obtain the necessary financial and legal advice with regard to such a move. Acting on defendants' advice, Mrs J put into operation a scheme (see para 31 of the particulars) in terms of which G sold its T shares and loaned the proceeds to the AJ trust. G was then liquidated and its claim for the repayment of the loan declared and distributed as a liquidation dividend to the AJ trust, which in turn used C this money to purchase fixed-interest bearing loan stock. The interest from this stock was to be paid to Mrs J in Canada. None of defendants nor Mrs J consulted the capital beneficiaries about the scheme.

Plaintiff's claim

Plaintiff's claim was based on defendants' alleged wrongful conduct in advising Mrs J to breach D the will trust and the AJ trust by selling the T shares held by G, thereby emasculating the personal right vesting in plaintiff as capital beneficiary. The claim was for R10 844 089, the amount of the alleged reduction in plaintiff's pro...