THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No: 16/2010

In the matter between:

GABRIELLE LUPACCHINI NO
First Appellant
ROCHELLE CONRADIE NO
Second Appellant

and

MINISTER OF SAFETY AND SECURITY
Respondent

Neutral citation:
Lupacchini v Minister of Safety and Security (16/2010) [2010]
ZASCA 108 (17 SEPTEMBER 2010)

Coram:
NUGENT,
PONNAN,
CACHALIA,
BOSIELO
and
TSHIQI JJA

Heard:
30 AUGUST 2010

Delivered:
17 SEPTEMBER 2010

Summary:
Trusts – s 6(1) of Trust Property Control Act – trustee without
authorisation of the Master to act in that capacity commencing
legal proceedings – effect of s 6(1) on validity of the
proceedings.

_____________________________________________________________________

ORDER
_____________________________________________________________________

On appeal from: Free State High Court, Bloemfontein (Van der Merwe,
Van Zyl JJ and Claasen AJ sitting as court of appeal):

The appeal is dismissed with costs.
_____________________________________________________________________

JUDGMENT
_____________________________________________________________________

NUGENT JA (PONNAN, CACHALIA, BOSIELO and TSHIQI JJA
concurring)

[1] A trust that is established by a trust deed is not a legal person – it is
a legal relationship of a special kind that is described by the authors of
Honoré’s South African Law of Trusts1 as ‘a legal institution in which a
person, the trustee, subject to public supervision, holds or administers
property separately from his or her own, for the benefit of another person
or persons or for the furtherance of a charitable or other purpose.’ In Land
and Agricultural Bank of South Africa v Parker Cameron JA elaborated:2
‘[A trust] is an accumulation of assets and liabilities. These constitute the trust estate,
which is a separate entity. But though separate, the accumulation of rights and
obligations comprising the trust estate does not have legal personality. It vests in the
trustees, and must be administered by them - and it is only through the trustees,
specified as in the trust instrument, that the trust can act . . . .
It follows that a provision requiring that a specified minimum number of trustees must
hold office is a capacity-defining condition. It lays down a prerequisite that must be

15ed (2002) by Edwin Cameron with Marius de Waal, Basil Wunsh and Peter Solomon para 1.
22005 (2) SA 77 (SCA) paras 10 and 11.

fulfilled before the trust estate can be bound. When fewer trustees than the number
specified are in office, the trust suffers from an incapacity that precludes action on its
behalf.’

[2] By the nature of the office of trustee the control and administration
of the trust property vests in each trustee individually. It follows that
where there is more than one trustee they must act jointly unless the trust
instrument provides otherwise.3 And because they have individual
interests all must necessarily join in litigation concerning the affairs of
the trust (though it seems that one trustee might authorise another to sue
in his or her name). That was reaffirmed by Parker, in which a petition to
this court for leave to appeal, and the consequent appeal, brought at the
instance of trustees whose number fell short of the minimum required by
the trust deed, were held to be a nullity.4

[3] Although a trustee’s appointment is effected by the trust instrument
the trustee is precluded from acting in that capacity by s 6(1) of the Trust
Property Control Act 57 of 1988 until he or she has been authorised to do
so by the Master. The section reads:
‘Any person whose appointment as trustee in terms of a trust instrument, section 7 or
a court order comes into force after the commencement of this Act, shall act in that
capacity only if authorized thereto in writing by the Master.’
The Master will authorise a trustee to act in that capacity only if security
has been furnished for the due and faithful performance of his or her
duties, except in various specified circumstances.5

3Parker, above, para 15.
4Parker, above, para 41.
5Sections 6(2) and (3).

[4] It is not controversial in this case that the effect of the section is
that an appointed trustee may not commence legal proceedings relating to
the affairs of a trust – nor may one trustee authorise another to institute
proceedings on his or her behalf – unless he or she has the relevant
authorisation.6 What is controversial is the consequences for proceedings
that are commenced by a trustee without such authorisation. The Minister
of Safety and Security (the respondent), who was the defendant in an
action commenced in that way, contends that the proceedings are a
nullity. The trustees who commenced the action (the appellants) contend
that they are not.

[5] The question arises in relation to the Lupacchini Family Trust. The
trust deed that established the trust provided for a minimum of two
trustees. The first trustees were Ms Melinda Lupacchini and Mr Gabrielle
Lupacchini (the first appellant) who were both authorised by the Master
to act in that capacity on 4 October 1994. At a meeting of the trustees on
3 June 2003 Ms Lupacchini noted her intention to resign and it was
resolved that Mr Luigi Lupacchini would act as ‘temporary trustee’. Ms
Lupacchini notified the Master of her resignation in a letter that was
received by the Master on 2 September 2003. On 8 September 2003
Messrs Gabrielle and Luigi Lupacchini resolved to pursue an action
against the state for damages arising from what was said to have been an
illegal raid by the police at the property of a night club that was
conducted by the trust. Then in November 2003 they resolved to appoint
Ms Conradie (the second appellant) as a trustee. A letter was written to
the Master advising him of the appointment but the letter was not
received. In August 2004 the foreshadowed action was commenced by

6See Honoré, above at p 219: ‘The language of the section is emphatic: someone appointed as trustee
“shall act in that capacity only if authorized thereto in writing by the Master”.’

the two appellants in their capacities as trustees against the Minister and
those are the proceedings that are now before us. It was only after the
action was commenced, on 15 December 2004, that the Master authorised
Ms Conradie to act as trustee.

[6] The question that was placed before the court of first instance by
way of a stated case was whether the absence of such authority on the
part of Ms Conradie at the time the action was commenced rendered the
proceedings a nullity.7 It was agreed between the parties in the stated case
that if it did then the action must be dismissed and if it did not then the
special plea must be dismissed. I might add that nothing was sought to be
made of the validity of the decision taken by Messrs Gabrielle and Luigi
Lupacchini on 8 September 2003 to pursue the action. But if that decision
was at all material the same question would arise because there is no
suggestion that Mr Luigi Lupacchini had been authorised by the Master
to act in the capacity of trustee (even if his appointment as ‘temporary
trustee’ was capable of having been made) when that decision was taken.

[7] The court of first instance (Rampai J) found that the action had
been validly commenced and he dismissed the special plea. Much of his
reasoning was based upon the decision of Conradie J in Watt v Sea Plant
Products Bpk.8 On appeal to the full court (Van der Merwe and Van Zyl
JJ and Claasen AJ) that order was reversed. The present appeal against
the order of the full court is before us with the special leave of this court.

[8] The consequence for the validity of an act that has taken place in
conflict with a statutory prohibition has been considered in numerous

7It was not expressed in those precise terms but that was the effect of the stated case and the basis upon
which it was argued.
8[1998] 4 All SA 109 (C).

cases. One of the earliest cases was Schierhout v Minister of Justice,9 in
which Innes CJ said the following:
‘It is a fundamental principle of our law that a thing done contrary to the direct
prohibition of the law is void and of no effect.’
But that will not always be the case. Later cases have made it clear that
whether that is so will depend upon the proper construction of the
particular legislation. What has emerged from those cases was articulated
by Corbett AJA in Swart v Smuts:10
‘Die regsbeginsels wat van toepassing is by beoordeling van die geldigheid of
nietigheid van ‘n transaksie wat aangegaan is, of ‘n handeling wat verrig is, in stryd
met ‘n statutêre bepaling of met verontagsaming van ‘n statutêre vereiste, is
welbekend en is alreeds dikwels deur hierdie Hof gekonstateer (sien Standard Bank v
Estate Van Rhyn 1925 AD 266; Sutter v Scheepers 1932 AD 165; Leibbrandt v South
African Railways 1941 AD 9; Messenger of the Magistrate’s Court, Durban v Pillay
1952 (3) SA 678 (AD); Pottie v Kotze 1954 (3) SA 719 (AD), Jefferies v Komgha
Divisional Council 1958 (1) SA 233 (AD); Maharaj and Others v Rampersad 1964
(4) SA 638 (AD)). Dit blyk uit hierdie en ander tersaaklike gewysdes dat wanneer die
onderhawige wetsbepaling self nie uitdruklik verklaar dat sodanige transaksie of
handeling van nul en gener waarde is nie, die geldigheid daarvan uiteindelik van die
bedoeling van die Wetgewer afhang. In die algemeen word ‘n handeling wat in stryd
met ‘n statutêre bepaling verrig is, as ‘n nietigheid beskou, maar hierdie is nie ‘n vaste
of onbuigsame reël nie. Deeglike oorweging van die bewoording van die statuut en
van sy doel en strekking kan tot die gevolgtrekking lei dat die Wetgewer geen
nietigheidsbedoeling gehad het nie.’

[9] The problem has generally arisen in relation to contracts that are
concluded in conflict with a statutory prohibition. It arose in relation to a
contract that was concluded in conflict with the section that is now before

91926 AD 99 at 109.
101971 (1) SA 819 (A) at 829C-G. That principle has since been repeated by this court in numerous
cases: see, for example, Palm Fifteen (Pty) Ltd v Cotton Tail Homes (Pty) Ltd 1978 (2) SA 872 (A) at
885E-G; Metro Western Cape (Pty) Ltd v Ross 1986 (3) SA 181 (A) at 188F-189C; Absa Insurance
Brokers (Pty) Ltd v Luttig NO 1997 (4) SA 229 (SCA) at 238G-239B Geue v Van der Lith 2004 (3) SA
333 (SCA) para 18.

us in Simplex (Pty) Ltd v Van der Merwe NO11 – which was later
followed in similar circumstances by Griesel J in Van der Merwe v Van
der Merwe.12 Both cases held that a contract that was concluded by
unauthorised trustees was invalid. I am not aware of the correctness of
those decisions having been questioned,13 and their correctness has not
been challenged before us. Goldblatt J said the following in Simplex:14
‘[Section] 6(1) is not purely for the benefit of the beneficiaries of the trust but in the
public interest to provide proper written proof to outsiders of incumbency of the
office of trustee. (Honoré’s South African Law of Trust 4th ed at 179.) The whole
scheme of the Act is to provide a manner in which the Master can supervise trustees
in the proper administration of trusts properly and s 6(1) is essential to such purpose.
By placing a bar on trustees from acting as such until authorised by the Master, the
Act endeavours to ensure that trustees can only act as such if they comply with the
Act. This ensures that the trust deed is lodged with the Master and that security, if
necessary, is lodged with him before trustees start binding the trust’s property.
It was further submitted on behalf of the respondents that, because the Act neither
provided that unauthorised acts were invalid nor that such acts were criminal
offences, it was not the intention of the Legislature to have such acts visited with the
penalty of being treated as a nullity. I do not agree with this submission. It seems to
me that the failure to provide for a criminal sanction points to the fact that the
Legislature saw no need to punish a party criminally for an act which could have no
legal consequences. Further, it seems to me that it was so self-evident to the
Legislature that an act by a person not having the requisite authority was of no force
and effect that it did not deem it necessary to spell out such a conclusion in the Act:
“It is a fundamental principle of our law that a thing done contrary to the direct
prohibition of the law is void and of no effect.” Per Innes CJ in Schierhout v Minister
of Justice 1926 AD 99 at 109.’

111996 (1) SA 111 (W).
122000 (2) SA 519 (C).
13See Honoré, above, pp 220-221; Annual Survey of South African Law 1996 pp 198 and 467-468;
Annual Survey of South African Law 2000 pp 479-481; MJ De Waal: ‘Authorisation of Trustees in
terms of the Trust Control Act’ (2000) 63 THRHR 472; Michael Cameron Wood-Bodley: ‘The
Transactions of Unauthorized Trustees: Section 6(1) of the Trust Property Control Act 1988’ (2001)
118 SALJ 374.
14At 112J-113E.

[10] It might be noted that Kropman NO v Nysschen15 later held that a
court has a discretion to retrospectively validate acts of a trustee that are
performed without the requisite authority. That proposition was
persuasively rejected in Van der Merwe16 and has been criticised by
various authors.17 No reliance was sought to be placed on it in this case
and I need say no more about it.

[11] The effect of s 6(1) on the validity of legal proceedings arose
pertinently in Watt v Sea Plant Products Bpk.18 That case differs from the
present case in this respect that it was the defendants who lacked the
Master’s authority to act in the capacity of trustees. The terms of a special
plea that was filed by the defendants do not appear from the judgment but
I think it can be inferred that it raised the objection that the trustees
lacked the capacity to be sued and that the proceedings were thus a
nullity.

[12] Conradie J considered the problem to be one that went to the locus
standi (the standing) of the trustees to be sued. He explained what he
meant by that as follows:19
‘Locus standi in iudicio is an access mechanism controlled by the court itself. The
standing of a person does not depend on authority to act. It depends on whether the
litigant is regarded by the court as having a sufficiently close interest in the litigation.’
He went on to pose the question before him as follows:20

151999 (2) SA 567 (T) at 576F.
16Para 20. See, too, the criticism in Honoré, above, pp 220-221.
17See Honoré, above, p 220-221; MJ De Waal, above, at 476; Michael Cameron Wood-Bodley, above,
at 377.
18[1998] 4 All SA 109 (C).
19At 113h.
20At 114a.

‘The question, then, to be posed in casu is whether at the time summons was issued
the trustees’ interest in the trust21 was too remote.’
And this was his answer to that question:22
‘The answer to this question depends upon the nature of a trustee’s appointment.
Where a trustee has been appointed – in a trust deed or otherwise – the appointment is
not void pending authorization by the Master in terms of section 6(1) of the Act (cf.
Metequity Limited and another v NWN Properties Limited and others [1997] 4 All SA
607 (T) at 611a-d). Although a trustee’s power to act in that capacity is suspended by
section 6(1) of the Act, he or she would, in my view, have a sufficiently well defined
and close interest in the administration of the trust to have locus standi in iudicio. Any
conclusion that the second and third defendants were by section 6(1) of the Act
deprived of locus standi in iudicio (which would mean not only that they could not be
sued but also that they could not approach the court to protect the interests of the
trust) would not give effect to the intention of the legislature. Whilst recognising the
desire of the legislature to regulate the rights and duties of trustees in the Act, one
should, I think, be slow to conclude that it would have desired to accomplish this by
controlling their access to, or accountability in, a court of law.’
On that basis his conclusion was that ‘the prohibitory phrase “… shall act
in that capacity only if authorised thereto …”, wide as it is, must be
interpreted to mean that a trustee may not, prior to authorisation, acquire
rights for, or contractually incur liabilities on behalf of, the trust…. I do
not … believe that the legislature intended with a provision of this kind to
regulate questions of locus standi in iudicio.’23

[13] Little fault can be found with the views expressed by the learned
judge in the context of the question that he posed but I do not think he
posed the right question. The court below pointed out that a person might
lack standing to sue or be sued in either of two circumstances. The first is

21The reference to the trust seems to have been inadvertent. The true question is whether he or she has
sufficient interest in the litigation, as the learned judge observed in the earlier passage I have referred
to.
22At 114a-114d.
23At 112 i-j.

where the law does not recognise the person as being capable of suing or
being sued – examples are unassisted minors and mentally disordered
persons without a curator.24 The second is where a person indeed has such
capacity but has no sufficient interest in the proceedings. Quite clearly a
trustee has sufficient interest in legal proceedings relating to the affairs of
the trust to enable him or her to sue or be sued – indeed, it is only the
trustee who might sue or be sued. I suggest that the true question in Watt
– as it is in this case – was not whether the trustees had a sufficient
interest but instead whether they were capable of suing or being sued at
all.

[14] Nonetheless, some of the cases that were referred to by the learned
judge have some bearing on the question before us and it is as well to
consider them at this point. One was Patel v Paruk’s Trustee.25 In that
case the trustee of an insolvent estate commenced proceedings without
the consent of the creditors or the Master, in conflict with s 73(1) of the
Insolvency Act 24 of 1936.26 Tindall JA rejected the contention that the
proceedings were a nullity, expressing his reasons for doing so as
follows:27
‘The … proviso, prohibiting the trustee from instituting or defending any legal
proceedings without the prescribed consent, was enacted, as between the trustee and
the creditors, in order to protect the estate from being dissipated in litigation. The
Legislature could not have intended that steps taken by a trustee to institute or defend
proceedings must necessarily be a nullity because the prescribed consent had not been
obtained. An interpretation to the contrary would bring about the result that, where

24Herbstein and Van Winsen: The Civil Practice of the High Courts and the Supreme court of Appeal of
South Africa 5ed (2009) by Andries Charl Cilliers, Cheryl Loots and Hendrik Christoffel Nel pp 160-
174.
251944 AD 469.
26At that time the section permitted a trustee to take legal advice and institute proceedings subject to the
following proviso: ‘Provided that … the trustee shall not act as aforesaid unless he has been authorised
thereto by the creditors or the Master.’
27 At 475.

there is not enough time to enable the trustee to obtain such consent, he may be
powerless to issue a summons timeously in order to prevent a claim due to the estate
from becoming prescribed or to file a plea in order to prevent a default judgment from
being obtained against him. The estate of the insolvent being vested in the trustee by
sec 20(1)(a), it would require different language from that contained in sec 73(1) in its
original form to justify the Court in upholding an interpretation leading to the results
mentioned … But under the proviso in its amended form the argument in support of
the validity of the objection is even weaker than it would have been under the original
….’

[15] Similar circumstances arose in Waisbrod v Potgieter.28 In that case
proceedings were brought by a liquidator without the authority of
creditors and contributories in conflict with s 130(2) and 142(4) of the
Companies Act 46 of 1926. Ramsbottom J said the following:
‘I think that the provisions of secs 130(2)(a) and 142(4) were enacted for the
protection of creditors and contributories and to prevent the assets of the company
from being squandered in useless litigation. As between himself and the company the
liquidator requires to be authorised before he embarks on litigation, and if he does so
without the prescribed authority the Court may refuse to allow him his costs out of the
assets of the company and he may have to pay them himself.’29
(Followed in Sifris & Miller NNO v Vermeulen Bros.30 See, too,
Tannenbaum’s Executors and Tannenbaum v Quakley and Liquidator of
Varachia Store (Pty) Ltd.31)

[16] While those cases are instructive they are by no means decisive.
The cases that I referred to earlier make it clear that the consequences that
attach to the performance of an act contrary to a statutory provision
depend upon the construction of the particular statute. And although a

281953 (4) SA 502 (W).
29Page 507G-H.
301973 (1) SA 729 (T).
311940 WLD 209.

trustee of the kind that is now in issue might share some characteristics of
a trustee in insolvency they do not altogether coincide. One distinction
that immediately comes to mind is that the acts that were in issue in those
cases were capable of being performed with the authorisation of the
creditors, from which it is plain that the restriction existed solely in the
interests of creditors. But as Goldlatt J said in Simplex32, s 6(1) ‘is not
purely for the benefit of the beneficiaries of the trust but in the public
interest to provide proper written proof to outsiders of incumbency of the
office of trustee’.

[17] One notable feature of s 6(1) that seems to me to lead strongly to
the conclusion that the acts of a trustee who lacks authorisation were
intended to be invalid is that there is no criminal sanction for acting in
that way. Where there is a criminal sanction the question will arise
whether that was considered by the legislature to be a sufficient
consequence for contravening the prohibition or whether nullity was to be
a consequence as well. As Bowen LJ said in Mellias v The Shirly and
Freemantle Local Board of Heath,33 cited with approval in Swart:34
‘[In] the end we have to find out, upon the construction of the Act, whether it was
intended by the Legislature to prohibit the doing of a certain act altogether, or whether
it was only intended to say that, if the act was done, certain penalties should follow as
a consequence’.

[18] But where there is no criminal consequence it is difficult to see
how the legislature could have intended anything other than that the act

32 At 112J-113B.
33(1885) 16 QBD 446.
34At 829H-830A.

should be a nullity because otherwise a contravention of the prohibition
would have no consequences at all. As Golblatt J said in Simplex:35
‘It seems to me that the failure to provide for a criminal sanction points to the fact that
the Legislature saw no need to punish a party criminally for an act which could have
no legal consequences.’
Force is added to that construction by the fact that the supervisory regime
that is created by the Act expressly applies only to trustees who have
been authorised by the Master to act.36 If neither criminal sanction nor
nullity was the consequence of contravening the prohibition that would be
an invitation to trustees to ignore the Act altogether.

[19] I have drawn attention to two cases that have held that contracts
concluded in breach of the prohibition are invalid. One needs then to ask
whether there is any indication in the statute that the section was intended
to visit nullity on some acts but not upon others. Although counsel for the
trustees submitted that a distinction should be drawn he advanced no
persuasive reasons why that should be so. Indeed, it would seem to me to
be anomalous if a trustee were to be capable of engaging in litigation, but
yet be incapable of concluding contracts required to pursue the litigation.
And as the court below trenchantly pointed, it would be even more
anomalous if a trustee were to be capable of conducting major litigation
from beginning to end, with major consequences for the trust, but yet not
be capable of contracting for the purchase of a pen.

[20] Counsel for the trustees referred us to academic writing that he
submitted was in support of his view but I think that states the matter too

35At 113D.
36Section 1 of the Act defines a ‘trustee’ to mean ‘any person … who acts as trustee by virtue of an
authorization under section 6 …’. In s 4(1) the context shows that the term was intended to apply to a
trustee who has yet to be authorised, but the remaining regulatory provisions apply, in terms, only to
trustees who have been authorised.

strongly. The authors of Honoré assert that ‘[it] is therefore wrong to
argue that a trustee who has not yet received the Master’s authorization
has no capacity to sue or to be sued on behalf of the trust’37 but they rely
solely upon the decision in Watt for that assertion. And although they also
express the view that the decision in Watt is persuasive38 they provide no
independent reasons why that is so. MJ De Waal: ‘Authorisation of
Trustees in terms of the Trust Control Act’39 reviews the decided cases
that I have referred to without pertinent comment on the correctness of
Watt.
Michael
Cameron
Wood-Bodley:
‘The
Transactions
of
Unauthorized Trustees: Section 6(1) of the Trust Property Control Act
1988’40 advances reasons in favour of the trustees’ construction but
concludes rather tentatively as follows:
‘In light of the above considerations the proper interpretation of the section is
problematic. However, it seems probable that the acts of a trustee who lacks the
Master’s s 6(1) authority are void … although in terms of the decision in Watt there
may be some room for a trustee to perform certain limited duties prior to
authorization, if this does not entail acquiring rights for, or contractually incurring
liabilities on behalf of, the trust.’

[21] It was observed in Patel that one of the consequences of finding
litigation by a trustee to be invalid would be that he or she might then be
incapable of preventing a claim from prescribing or from filing a plea so
as to prevent a judgment being taken by default, which the learned judge
considered to be anomalous. I am not sure that those objections are well-
founded. The first objection seems to me to be overcome by s 13(1)(a) of
the Prescription Act 68 of 1969, which, amongst other things, extends the
running of prescription ‘if a creditor…is prevented by…any law…from

37Page 419. The authors note that that view is contrary to the view expressed in the previous edition.
38Page 221.
39(2000) 63 THRHR 472.
40(2001) 118 SALJ 374 at 387.

interrupting the running of prescription’.41 The second objection does not
seem to me insuperable in that a court is not obliged to grant judgment by
default, and will no doubt refrain from doing so if it is brought to its
attention that the trustee lacks capacity to defend the proceedings, and
might in any event rescind such a judgment once those facts become
known. But that apart, once it is recognised that at least some acts of an
unauthorised trustee are invalid then problems of that kind are capable of
arising just as much in relation to those acts – for example, the trustees
will be unable to exercise a valuable option that is about to expire, or to
exercise a right to renew a lease. The practical problems that were
referred to by Tindall JA – if they exist – and other practical difficulties
raised in argument before us, do not seem to me to be sufficient ground to
import an intention that legal proceedings are to be treated differently to
other transactions.

[22] I regret that I can find no indications that legal proceedings
commenced by unauthorised trustees were intended to be valid. On the
contrary, the indications seem to me all to point the other way. Unless it
were to be the case that all transactions performed in conflict with the
section are to be treated as valid – which clearly cannot be the case,
because otherwise the Act would be altogether ineffective – then I find
nothing to distinguish its effect on legal proceedings. Indeed, it would
seem to me that the case is even stronger for finding legal proceedings to
be a nullity. Conradie J sought to reconcile his finding in Watt with his
expressed view that unauthorised trustees are not capable of validly
contracting as follows:42

41Section 7(1)(b) of the Prescription Act 18 of 1943 had a similar effect, in that it suspended extinctive
prescription ‘during the period of disability of the creditor’.
42At 113a-c.

‘In entering appearance to defend this action the [trustees] incurred no contractual
liability on behalf of the trust save possibly for payment of their attorneys’ fees; that,
however, is not something which arises in these proceedings. The trust incurred no
contractual liability for costs to the plaintiff. It did not even incur any liability for
potential, judicially imposed, costs. If the [trustees] were not authorised to conduct the
litigation they would incur personal liability for any adverse costs order’.
While it is open to third parties to conclude contracts with trustees at their
peril, they are left no choice when it comes to being sued. If the only
consequence of trustees suing in conflict with the section is to be that the
trust is not bound to pay the costs, which is what Conradie J seems to
suggest, that would be cold comfort to those who are sued by a wealthy
trust that is administered by impecunious trustees.43 I do not think the
legislature could have intended to submit third parties to litigation at the
hands of unauthorised trustees with the consequence that they are
precluded from looking to the assets of the trust for recompense if the
trust were to lose.

[23] Fagan JA pointed out in Pottie v Kotze44 that
‘[t]he usual reason for holding a prohibited act to be invalid is not the inference of an
intention on the part of the Legislature to impose a deterrent penalty for which it has
not expressly provided, but the fact that recognition of the act by the Court will bring
about, or give legal sanction to, the very situation which the Legislature wishes to
prevent.’
The section makes it clear that a trustee may not act in that capacity at all
without the requisite authorisation. If we were to find that acts performed
in conflict with the section are valid it seems to me that we would be
giving legal sanction to the very situation that the legislature wished to
prevent. Parker makes it clear that legal proceedings commenced by
persons who lack capacity to act for the trust are a nullity and I see

43 See Harms JA in Nieuwoudt NO v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA) para 24.
441954 (3) SA 719 (A) at 726H.

nothing in the section to suggest that trustees who are prohibited from
acting in that capacity are in a better position. In my view the court below
was correct and the appeal must be dismissed.

[24] That leaves a question that relates to the costs. The Minister is
entitled to the costs of the proceedings, both in this court and the courts
below. It follows from my finding that the trustees were not authorised to
bind the trust for payment of the costs of launching the proceedings but I
do not think that we are able to interfere with the substituted order of the
court of first instance in that regard. By the time the matter was heard in
the court of first instance and the appeals were brought the trustees had
both been authorised to act and the trust is bound to pay the costs of this
appeal. The costs of the application for leave to appeal to this court have
already been ordered to be costs in the appeal.

[25] The appeal is dismissed with costs.

_________________
R W NUGENT
JUDGE OF APPEAL

APPEARANCES:

For appellant:
A J R van Rhyn SC

M D J Steenkamp

Instructed by:

Kramer Weihmann Joubert, Bloemfontein

For respondent:
M H Wessels SC

Instructed by:

S Chetty, State Attorney, Bloemfontein