THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 149/2015

In the matter between:

JOHANNA DOROTHEA GOWAR

FIRST APPELLANT
FRANCOIS PETER GOWAR

SECOND APPELLANT

and

REGINALD DAVID GOWAR

FIRST RESPONDENT
TERTIUS NICOLAAS VAN DER WALT

SECOND RESPONDENT
MASTER OF THE HIGH COURT,

THIRD RESPONDENT
GRAHAMSTOWN

Neutral citation:    Gowar v Gowar (149/2015) [2016] ZASCA 101 (9 June 2016)
Coram:
Maya DP, Majiedt, Petse JJA and Victor and Baartman AJJA
Heard:
19 May 2016
Delivered:
9 June 2016

Summary:  Trust and trustee ─ removal from office on grounds of misconduct ─ power
of the high court to remove trustee under the common law not abrogated by s 20(1) of
the Trust Property Control Act 57 of 1988. Trust ─ termination of ─ power of the court in
terms of s 13 of the Trust Property Control Act to terminate a trust circumscribed.

ORDER

On appeal from: Eastern Cape Division of the High Court, Grahamstown (Smith J
sitting as court of first instance):
1 The appeal is dismissed with costs including the costs of two counsel.
2 The cross-appeal is dismissed with costs.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Petse JA (Maya DP, Majiedt JA and Victor and Baartman AJJA concurring):

Introduction
[1] This appeal and cross-appeal emanate from a long-standing family feud about
the control of various family trusts. Both concern the quintessential issue of the
circumstances in which a court may remove a trustee from office in terms of either the
common law or s 20(1) of the Trust Property Control Act 57 of 1988 (the Act). A related
issue is whether the appellants have satisfied the requirements of s 13 of the Act which
empowers a court to terminate a trust in certain defined circumstances.

[2] The second appellant, Mr Francois Peter Gowar, and the first respondent,
Mr Reginald David Gowar, are brothers. The first appellant, Mrs Johanna Dorothea
Gowar, is their mother. They all have an interest either as trustees or beneficiaries (or
both) of four family trusts, namely: (a) the David Gowar Trust; (b) the Rietfontein Trust;
(c) the Gowar Farm Trust; and (d) the R D Gowar Testamentary Trust. These trusts
were established at various times by Mr Reginald Denver Gowar, the father of the
second appellant and the first respondent and formerly a farmer of Somerset East, who
passed away in July 2007 (the deceased). The first respondent and the second
respondent, Mr Tertius Nicolaas van der Walt, are chartered accountants and business
partners. The third respondent, the Master of the High Court, Grahamstown (the
Master), took no part in the proceedings and I shall therefore refer to the first and
second respondents collectively as „the respondents‟.

[3] The David Gowar Trust owns seven farms. The Rietfontein Trust owns two farms
whilst the R D Gowar Testamentary Trust owns one farm, farming equipment and
livestock. The Gowar Farm Trust owns farming equipment and livestock.

[4] The second appellant and the first respondent are the trustees of the David
Gowar Trust. They, together with their respective spouses and descendants, are the
beneficiaries of this trust. The respondents are the trustees of the Rietfontein Trust, the
second appellant having been removed as trustee. The beneficiaries of the Rietfontein
Trust are the David Gowar Trust, the first respondent and his spouse and descendants.

[5] The second appellant and the respondents are the trustees of the Gowar Farm
Trust.  The beneficiaries of the Gowar Farm Trust are the appellants, the first
respondent and the two brothers‟ spouses and descendants. The second appellant and
the first respondent are, in addition, the trustees of the R D Gowar Testamentary Trust
and also its beneficiaries, as are their respective descendants.

[6] The chief protagonists in this bitter and drawn-out dispute are the Gowar
brothers. Their conflict largely stemmed from their irreconcilable differences about how
the affairs of the various trusts could be best served in the interests of the beneficiaries.
Despite concerted endeavours by third parties, including the first appellant, to mediate
the dispute remains unresolved.

[7] Ultimately, the dispute culminated in an application brought by the appellants
against the respondents in the Eastern Cape Division of the High Court, Grahamstown.
In that application the appellants sought an order:
„1. That [the] first respondent be removed as trustee of David Gowar Trust (TM 5553/4) and R D
Gowar Testamentary Trust (For Reginald David Gowar and Francois Peter Gowar) (MT
2659/2007).
2. That [the] first and second respondents be removed as trustees of:
2.1 Gowar Farm Trust (IT 1231/1997);
2.2 Rietfontein Trust (TM 5692);

3. That [the Master of the High Court] be directed to appoint Jacobus Marthinus Abraham Louw1
and David Keith Reed as trustees of:
3.1 David Gowar Trust (TM 5553/4);
3.2 Gowar Farm Trust (IT 1231/1997);
3.3 Rietfontein Trust (TM 5692);
3.4 R D Gowar Testamentary Trust (For Reginald David Gowar and Francois Peter Gowar) (MT
2659/2007).
4. That Jacobus Marthinus Abraham Louw1 [Stephen Kenneth Gough] and David Keith Reed in
their capacities as trustees of the above trusts, be entitled to act in conjunction with the
remaining trustees of each such trust and to administer the affairs of the trusts, including the
passing of a resolution terminating each such trust and distributing the trust capital and income
to the beneficiaries of the various trusts in accordance with the provisions of such trusts.
5. That Jacobus Marthinus Abraham Louw [Stephen Kenneth Gough] and David Keith Reed in
their capacities as trustee of the above trusts be exempt from filing security with the Master of
the High Court in terms of the Trust Property Control Act 57 of 1988.
6. That first and second respondents be ordered to pay the cost of this application jointly and
severally, the one paying the other to be absolved. . . .‟

[8] In addition to opposing the application, the respondents also brought a counter-
application. In it, they sought the following relief:
„1. That second applicant be removed as a Trustee of the David Gowar Trust (TM5553), the
Gowar Farm Trust (IT 1231/97) and the R D Gowar Testamentary Trust (MT2659/2007);
2. That second applicant be ordered to pay the costs of first and second respondent‟s counter
motion.‟

[9] Both the main and the counter applications came before Smith J who dismissed
both with costs, concluding that:
„[45]
Under these circumstances I am not satisfied that the applicants have been able to
prove misconduct, lack of capacity, breach of fiduciary duties, or any other grounds to justify the
removal of the respondents as trustees. But neither have the respondents been able to
establish similar grounds for [the second appellant‟s] removal as trustee. For the reasons which
I have stated earlier, I am also not convinced that his removal as trustee will be in the interests
of the beneficiaries.‟
The court a quo went on to hold, from the facts outlined in its judgment, that:

1 Following objection from the respondents, Mr Louw was substituted with a Mr Stephen Kenneth
Gough.

„[46]
It must have been abundantly clear from [the] summary of the allegations in the main
and counter applications that there are extensive and fundamental disputes of fact.‟

[10] It continued:
„[47]
Mr Ford has belatedly applied for the matter to be referred for trial. He conceded that the
factual disputes are so numerous and interrelated that it would be impossible to refer only
certain discrete issues for oral evidence. It is in my view unavoidable that the ensuing trial would
be protracted, and will incur substantial expenses for the parties and the trusts. In addition, I am
of the view that it is extremely unlikely that the balance of probabilities in both the main and
counter applications will be disturbed by the hearing of viva voce evidence. The answers to the
allegations of misconduct in both the main and counter applications have been comprehensive
and reasonable, and those allegations relating to lack of capacity and breaches of fiduciary
duties have also been soundly refuted. There can also be little doubt that the applicants must
have anticipated the extensive disputes of fact, but nevertheless decided to institute motion
proceedings. I am accordingly loath to exercise my discretion to refer the matter for trial under
these circumstances.‟

[11] Aggrieved by the outcome of their respective applications, both parties sought
and were granted leave by the court a quo to appeal and cross-appeal against its
judgment.

Factual background
[12] It is necessary to set out some factual background. The trusts in issue were
established from 1994 to 2008. The various trust deeds state that the primary objects of
the trusts shall inter alia be the acquisition by purchase or otherwise of immovable
property or other property and the maintenance, development and improvement of land.
The founder was the deceased, a successful farmer during his farming career. He was
advised by the first respondent that it would be prudent, for estate planning purposes,
for him to conduct his farming operations and to pursue the acquisition of additional
farms under the auspices of a trust. Although the deceased was initially not receptive to
the proposal, he later agreed subject to the second appellant being made a beneficiary
of the David Gowar Trust. In addition, a certain Mr Phillip Gerber, a chartered
accountant and the deceased‟s confidant was, upon the deceased‟s insistence,
appointed as one of the trustees. The deceased subsequently transferred two of his
farms into this trust.

[13] As already mentioned, the David Gowar, the Rietfontein and the R D Gowar
Testamentary Trusts own several farms in the Somerset East and Alexandria districts.
The Gowar Farm Trust farmed, from 2000 until 2010, on all of the farms owned by the
other trusts and on Glen Cumming farm owned by the first appellant. The second
appellant was in charge of the farming operations conducted by the Gowar Farm Trust,
initially with the deceased and in later years on his own. The first respondent was
responsible for the bookkeeping and preparation of the financial records of all the trusts
and related matters. Some of the farms were purchased and paid for by the first
respondent whilst the others were purchased on behalf of the David Gowar Trust. From
the income generated through its farming operations, the Gowar Farm Trust inter alia
paid its own operating expenses, the deceased‟s and first appellant‟s expenses and the
second appellant‟s living expenses.

[14] Additional farms were acquired and paid for with loans obtained from certain
banks. The monthly bond instalments ─ or at least a portion thereof ─ were paid from
income generated from the farming operations of the Gowar Farm Trust. Occasionally,
the first respondent would pay any shortfall in the monthly bond payments. Initially, the
farming operations continued reasonably well and additional livestock was purchased.
Other farming ventures, albeit short-lived, were also undertaken. But later, the first
respondent expressed dissatisfaction about the manner in which the second appellant
conducted the farming operations. He was, inter alia, critical of the following: (i) the
farming operations that were allegedly running at a loss and thus could not repay the
loans and meet other farming expenses; (ii) the dilapidated state of the farm properties
and buildings; (iii) the second appellant‟s alleged preoccupation with advancing his
personal interests at the expense of the other beneficiaries of the various trusts in
breach of his fiduciary duties as a trustee; (iv) the alleged neglect and state of disrepair
of the farms‟ irrigation systems; (v) the second appellant‟s alleged failure to provide
accurate stock numbers for accounting purposes; and (vi) the fact that there was
insufficient income generated from the farming operations to pay rental to the trusts that
owned the farms.

[15] Following the deceased‟s death and during 2008 in the build-up to the escalation
of their irreconcilable differences, the second appellant and the first respondent

discussed the prospect of a division of the assets of the trusts. But as they could not
agree on how the division was to be implemented, it did not materialise. When this
happened, the second appellant and the first respondent apparently agreed that the
second appellant should farm for his own account from July 2009. A close corporation
named Peter Gowar Farms CC, to be used by the second appellant to conduct farming
operations for his own account, was registered. It appears that this arrangement was
shortlived for their differences persisted.

[16] Matters came to a head when, in June 2010, a meeting of the trustees of the
Rietfontein Trust was convened by the first respondent to which the second appellant
was allegedly invited. At that meeting, a resolution was taken in terms of which the
second appellant‟s trusteeship was terminated. Following the removal of the second
appellant as trustee, the respondents ─ being the remaining trustees ─ took a
resolution to withdraw all the farms from the management of the second appellant
through the Gowar Farm Trust and to let them to third parties at market-related rentals.

[17] The second appellant was aggrieved by this turn of events and asserted that the
respondents‟ action undermined the farming operations of the Gowar Farm Trust to his
financial prejudice as a trust beneficiary. This exacerbated the conflict between the
appellants and the respondents. And as the previous attempts by the second appellant
and the first respondent to agree on a division of the trust properties had come to
naught, the second appellant accused the first respondent ─ in the latter‟s capacity as
the trustee of the various trusts ─ of dishonesty and serious breaches of his fiduciary
duties towards the trusts‟ beneficiaries.

[18] On their part, the respondents asserted that the second appellant was guilty of:
(i) putting his personal interests above those of the beneficiaries of the trusts; (ii)
appropriating trust assets and income for his personal use; (iii) treating trust assets as
though they are his personal property; and (iv) refusing to account for his management
of the farming operations conducted by the Gowar Farm Trust. These accusations by
the second appellant and the first respondent levelled against each other were at the
heart of the dispute in the court a quo.

Locus standi
[19] Although the appellants‟ locus standi was disputed by the respondents in the
court a quo, it was no longer a live issue before us and thus no more need be said
about it.

Legal framework
[20] I propose dealing first with the law relating to the nature of a trust, the duties of
trustees, their removal from office and the statutory power of a court to vary any
provision of a trust or to terminate a trust. It is trite that a trust is not a legal person. „In
its strictly technical sense the trust is a legal institution siu generis . . . The trustee is the
owner of the trust property for purposes of administration of the trust but qua trustee he
has no beneficial interests therein.‟ (See in this regard: Braun v Blann and Botha NNO
& another 1984 (2) SA 850 (A) at 859D-H; Commissioner for Inland Revenue v
Friedman & others NNO [1992] ZASCA 190; 1993 (1) SA 353 (A) at 370D-H.)

[21] In Land and Agricultural Bank of South Africa v Parker and others [2004] ZASCA
56; 2005 (2) SA 77 (SCA) Cameron JA elaborated (para 10):
„. . . . [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 . . . .‟

[22] In Lupacchini NO & another v Minister of Safety and Security [2010] ZASCA 108;
2010 (6) SA 457 (SCA) Nugent JA took this theme further and observed that (para 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 Trusts 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.”‟

[23] Where more than one trustee have been specified in the trust deed they share a
common fiduciary obligation towards the fulfilment of the objects of the trust and must

act jointly. (Compare: Hoosen & others v Deedat & others [1999] ZASCA 49; 1999 (4)
SA 425 (SCA) paras 23, 24 and 26.)

[24] It is apposite at this juncture to make reference to s 9(1) of the Act. It reads:
„9. Care, diligence and skill required of trustee ─
(1) A trustee shall in the performance of his duties and the exercise of his powers act with the
care, diligence and skill which can reasonably be expected of a person who manages the affairs
of another.‟

[25] In Sackville West v Nourse & another 1925 AD 516, Kotze JA whose judgment
was supported by the other members of the bench, succinctly stated the position
relating to the fiduciary duties of trustees as follows (at 534):
„The effect of this authority is that a tutor must invest the property of his ward with diligence and
safety. It is also said that a tutor must observe greater care in dealing with his ward‟s money
than he does with his own, for, while a man may act as he pleases with his own property, he is
not at liberty to do so with that of his ward. The standard of care to be observed is accordingly
not that which an ordinary man generally observes in the management of his own affairs, but
that of the prudent and careful man; or, to use the technical expression of the Roman law, that
of the bonus et diligens paterfamilias . . .‟
The learned judge of appeal continued (at 535):
„We may accordingly conclude that the rule of our law is that a person in a fiduciary position, like
a trustee, is obliged, in dealing with . . . the money of the beneficiary, to observe due care and
diligence, and not to expose it in any way to any business risks.‟

[26] This principle was elaborated upon by this court in Administrators, Estate
Richards v Nichol & another [1998] ZASCA 82; 1999 (1) SA 551 (SCA) where the
following was stated (at 557D-F):
„. . . [T]he standard was higher than that which an ordinary person might generally observe in
the management of his or her own affairs. Such a person, it was pointed out, was free to do
what he liked with his property and not infrequently selected investments which were of a
speculative nature, particularly when the potential profits were high. A person in a fiduciary
position such as a trustee, on the other hand, was obliged to adopt the standard of the prudent
and careful person, that is to say the standard of the bonus et diligens paterfamilias of Roman
law, and was accordingly, as Kotze JA concluded at 535, “obliged, in dealing with and investing
the money of the beneficiary, to observe due care and diligence, and not to expose it in any way

to any business risks”. The need to avoid risks was emphasised in the judgments of both
Solomon ACJ and Kotze JA.‟

Removal from office of trustee
[27] It is now trite that the court has inherent power to remove a trustee from office at
common law. This power also derives from s 20(1) of the Act which provides as follows:
‟20. Removal of trustee ─
(1) A trustee may, on the application of the Master or any person having an interest in the trust
property, at any time be removed from his office by the court if the court is satisfied that such
removal will be in the interests of the trust and its beneficiaries.‟

[28] Although the Act does not spell out the grounds for the removal of a trustee, the
authors of Honoré’s South African Law of Trusts2 assert that the general principle which
has crystallised over time in the court‟s exercise of its common law jurisdiction ─ and is
now echoed in s 20(1) of the Act ─ is that a trustee will be removed from office when
continuance in office will prevent the trust being properly administered or will be
detrimental to the welfare of the beneficiaries.3

[29] In Fey NO and Whiteford NO v Serfontein & another [1993] ZASCA 8; 1993 (2)
SA 605 (A) this court remarked that there was nothing in s 60 of the Insolvency Act 24
of 1936 there under consideration that expressly or by necessary implication indicates
that the court‟s inherent common law power of removal from office of a trustee has been
displaced. It said the following (at 610A-E):
„Thereafter the learned Judge reasoned by analogy. It appears to me, with respect, that his
reasoning is instructive and sound. He said:
“It would seem to me that the position of a trustee in insolvency is analogous to that of a trustee,
administrator or executor in a deceased's estate. He occupies a position of trust. Under the
insolvency laws it is his function to liquidate the insolvent estate and account to creditors and
the insolvent for his administration. In this respect his fiduciary position differs little from that of
an executor or administrator of the estate property. In my view the Court has at common law the
same power to remove a trustee in an insolvent estate as it has in respect of a trustee, or
guardian or administrator in a deceased's estate.”
On the second issue before him Thirion J stated his conclusion in the following words:

2 Cameron, De Waal, Wunch, Solomon & Khan, Honoré’s South African Law of Trusts 5 ed (2002) at
223.
3 See for example: Sackville West above at 527.

“In my view the grounds for removal of a trustee as set forth in s 60 of the Insolvency Act 24 of
1936 as originally enacted were not intended to be in substitution of the Court's common law
powers but were intended to be additional thereto. Madrassa Anjuman Islamia v Johannesburg
Municipality 1917 AD 718 at 723 and 727.
The substitution of s 60 of the Act by s 18 of Act 99 of 1965, therefore, did not in any way affect
the Court's common-law powers to remove a trustee from office. This conclusion is in
accordance with the well recognised rule in the interpretation of statutes that, in order to oust
the jurisdiction of a court of law, it must be clear that such was the intention of the Legislature
(De Wet v Deetlefs 1928 AD 286 at 290), and in accordance with the rule that statutory
provisions which limit or do away with an aggrieved person's right to seek the assistance of the
Court have to be strictly interpreted. Benning v Union Government (Minister of Finance) 1914
AD 180 at 185.”‟
Although those remarks were made in a different but analogous context they, by parity
of reasoning, apply with equal force in the context of s 20(1) of the Act.

[30] For present purposes, two principles must be emphasised. First, the power of the
court to remove a trustee must be exercised with circumspection. Second, neither mala
fides nor even misconduct are required for the removal of a trustee. As to the former,
Murray J explained this in Volkwyn N.O. v Clarke and Damant 1946 WLD 456 as
follows (at 464):
„. . . [I]t is a matter not only of delicacy (as expressed in Letterstedt’s case [Letterstedt’s v Broers
(1884) 9 AC 371 (PC) at 387]) but of seriousness to interfere with the management of the estate
of a deceased person by removing from the control thereof persons who, in reliance upon their
ability and character, the deceased has deliberately selected to carry out his wishes. Even if the
. . . administrator has acted incorrectly in his duties, and has not observed the strict
requirements of the law, something more is required before his removal is warranted. Both the
statute and the case cited indicates that the sufficiency of the cause for removal is to be tested
by a consideration of the interests of the estate. . .‟

[31] As to the latter, Murray J said the following at 471:
„. . . . It is of course true that proof of dishonesty or mala fides is not essential for a case for the
removal of executors or administrators. . .‟
The learned judge continued (at 474):
„. . . [T]he essential test is whether such disharmony as exists imperils the trust estate or its
proper administration. . .‟

Thus, the overriding question is always whether or not the conduct of the trustee
imperils the trust property or its proper administration. Consequently, mere friction or
enmity between the trustee and the beneficiaries will not in itself be adequate reason for
the removal of the trustee from office. (See also in this regard: Tijmstra NO v Blunt-
Mackenzie NO & others 2002 (1) SA 459 (T) at 473E-G.) Nor, in my view, would mere
conflict amongst trustees themselves be a sufficient reason for the removal of a trustee
at the suit of another.

[32] Moreover, it must be emphasised that whilst a trustee is in law required to act
with care and diligence, the decisive consideration is the welfare of the beneficiaries
and the proper administration of the trust and the trust property. And, sight must not be
lost of the crucial fact that the court may order the removal of a trustee only if such
removal will, as required by s 20(1) of the Act, be „in the interests of the trust and its
beneficiaries‟. (My emphasis.)

Variation or termination of trust
[33] The variation of the provisions of a trust deed or its termination may be achieved
in various ways. For present purposes it is only the variation or termination in terms of
s 13 of the Act that is of relevance. Section 13 reads:
„13. Power of court to vary trust provisions ─
If a trust instrument contains any provision which brings about consequences which in the
opinion of the court the founder of a trust did not contemplate or foresee and which ─
(a)   hampers the achievement of the objects of the founder; or
(b)   prejudices the interests of beneficiaries; or
(c)   is in conflict with the public interest,
the court may, on application of the trustee or any person who in the opinion of the court has a
sufficient interest in the trust property, delete or vary any such provision or make in respect
thereof any order which such court deems just, including an order whereby particular trust
property is substituted for particular other property, or an order terminating the trust.‟

[34] Thus, s 13 of the Act is to the effect that the court may on application of the
trustee or any person who, amongst others, has sufficient interest in the trust property
delete or vary any such provision, in a trust deed which brings about the result specified

in the section or to grant „an order terminating the trust.‟ Cameron et al4 state that the
provisions have both subjective and objective criteria. The former relate to the founder‟s
lack of foresight or contemplation and the latter relate to prejudice to the trust object,
beneficiaries or the public interest. These criteria must be satisfied before the court can
intervene. Accordingly, as I see it, for the purposes of s 13 of the Act the appellants had
to establish on a balance of probabilities that any provision of the trust deed has
brought about any one of the consequences mentioned in s 13(a), (b) and (c) of the Act
and that the founder of the trust did not, at the time the trust was established,
contemplate or foresee such a result.

[35] In Potgieter & another v Potgieter NO & others [2011] ZASCA 181; 2012 (1) SA
637 (SCA) Brand JA who wrote the unanimous judgment of this court said (para 30):
„I do not agree that s 13 supports the authority assumed by the court a quo. I say this for two
reasons. First, I find no provision in the original trust deed which brings about any consequence
that could not be foreseen by the founder. The consequences which the court a quo found
untenable were brought about by an application of common-law principles, not by any provision
of the trust deed. . . .‟
Consequently, absent the jurisdictional criteria required in terms of s 13 of the Act, it
would not be competent for the court to exercise the statutory power conferred on it by
s 13. (See, for example: Curators, Emma Smith Educational Fund v the University of
KwaZulu-Natal & others [2010] ZASCA 136; 2010 (6) SA 518 (SCA) para 48.)

Discussion
[36] That there is a break-down of relationship between the chief protagonists is
apparent from the record. As appears above, the record is replete with disputed
accusations and counter-accusations which, it was asserted, are a manifestation of a
conflict of interests, misconduct, dishonesty and breaches of fiduciary duties made by
the one against the other. At the hearing before us, counsel were agreed that there are
material disputes of fact on the papers. Thus, applying the principles set out in Plascon-
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A),5 the averments
set out in the respondents‟ affidavits should be accepted in relation to the main

4 Cameron, De Waal, Wunch Solomon & Khan, Honoré’s South African Law of Trusts 5 ed (2002) at
517.
5 At 634E-635C; see also: PMG Motors Kyalami (Pty) Ltd & another v Firstrand Bank Ltd, Wesbank
Division [2014] ZASCA 228; 2015 (2) SA 634 (SCA) para 23.

application unless farfetched or clearly untenable. And, by the same token, the
averments contained in the appellants‟ affidavits must be accepted in respect of the
counter-application.

[37] Accordingly, to succeed in the relief that the appellants seek against the
respondents, namely, their removal as trustees, they must prove that the respondents‟
conduct of which they complain imperils the trust property or its proper administration or
that the removal will otherwise be in the interests of the trust and its beneficiaries.

[38] The appellants contended that the removal of the first respondent from the
trusteeship is necessary, inter alia, because he: (a) cajoled the second appellant into
agreeing to the appointment of the second respondent as a stratagem to gain control of
the Gowar Farm Trust; (b) required the second appellant to farm for his own account at
the height of a drought and when the drought broke, advised Cape Merino and Wool not
to accept any livestock or produce from the second appellant, but that if it did, to make
payment therefor to the Gowar Farm Trust which he controlled, so as to financially ruin
the second appellant; (c) deprived the second appellant of the use of the farms owned
by the Rietfontein Trust by letting them to third parties with devastating consequences
for the livestock; (d) unilaterally passed a resolution amending the beneficiaries of the
Rietfontein Trust to the prejudice of the David Gowar Trust; (e) appropriated income
derived from the letting of certain farms for himself; and (f) misappropriated the second
appellant‟s shares in GBG Estates Trust (Pty) Ltd. In all of this, so the appellants
contended, the first respondent acted in concert with the second respondent without
regard for the appellants‟ financial wellbeing.

[39] In argument, the appellants‟ counsel nailed his colours to the mast and relied
solely on three bases in support of the appellants‟ case which he contended fell outside
the realm of the factual disputes. He advanced three contentions. First, that the
surreptitious removal of the second appellant as the trustee of the Rietfontein Trust
leads to only one conclusion that it was intended to advance the first respondent‟s
interests. Second, the addition of the first respondent‟s wife and children as
beneficiaries of the Rietfontein Trust constituted a variation of the trust deed which was
impermissible. Third, the fact that 50 per cent of the shares in GBG Estates (Pty) Ltd, a
company in which the second appellant allegedly held a 25 per cent shareholding, were

transferred to the Dago Trust of which the first respondent and his family were
beneficiaries without reference to him and by amending the balance sheet of the David
Gowar Trust to delete the reference to the Trust‟s shareholding in GBG Estates (Pty)
Ltd, the first respondent acted to the prejudice of the trust‟s beneficiaries in breach of
his fiduciary duties.

[40] I deal with these grounds in the reverse order. Apropos the affairs of GBG
Estates (Pty) Ltd, it was contended that the first respondent‟s activities reveal an
extraordinary state of affairs which called for an explanation from the respondents as to
how the transfer of the shares came about. Yet, it was argued, the respondents
studiously avoided providing answers, choosing to take refuge in subterfuge by
contending that the dispute relating to those shares was res judicata. In my view, this
submission is unavailing. It overlooks the simple fact, highlighted by the respondents‟
counsel, that whatever may have happened with the shares of GBG Estates (Pty) Ltd
had no bearing on the affairs of the trusts. Simply put, it was not a trust issue and can
therefore found no basis for the removal of the respondents from trusteeship.

[41] As to the removal of the second appellant as the trustee of the Rietfontein Trust,
the appellants‟ contention was that the second appellant was removed merely because
he had prior thereto been required to resign but had refused to do so. The appellants
then took an inferential quantum leap, relying on this fact, to contend that the second
appellant‟s removal was calculated to advance the first respondent‟s interests and those
of the beneficiaries benefiting through him to the exclusion of all the other beneficiaries.

[42] The respondents, whilst admitting that the second appellant was indeed removed
as a trustee, nevertheless contended that his removal was permitted by clause 2.3 of
the trust deed which empowers the majority of the trustees to take a resolution
removing one of their number, as happened in their case. And that as the second
appellant‟s removal from trusteeship was accepted by the Master it remained effective
for as long as it was still extant. In my view, there is merit in respondents‟ submissions.
This must be so for the second appellant does not impugn his removal from trusteeship
but only seeks the removal of the respondents as trustees of the affected trusts.

[43] I deal next with the last contention advanced by the appellants in support of their
case that the respondents are guilty of misconduct warranting their removal as trustees.
It was contended on their behalf that the addition of the first respondent‟s wife and
children as beneficiaries of the Rietfontein Trust amounted to a variation of the
Rietfontein Trust deed. Consequently, as the sole beneficiary before variation was the
David Gowar Trust, its consent qua beneficiary was necessary and without it the
purported variation was ineffectual. In support of this contention the appellants placed
much store in Crookes NO & another v Watson & others 1956 (1) SA 277 (AD). There,
Centlivres CJ, in the course of examining old authorities and reference to the judgment
of this court in Commissioner for Inland Revenue v Estate Crewe & another 1943 AD
656, reiterated the principle that once a beneficiary accepts the benefit under the trust
he acquires rights and the trust deed can thus not be varied without his consent.6

[44] Counsel for the respondents submitted that the appellants presented no
evidence to establish that the David Gowar Trust had accepted the benefit bestowed
upon it in the Rietfontein Trust deed. Consequently, the respondents contended that in
the absence of such evidence the appellants‟ reliance on the decisions in Crookes NO
and Potgieter NO does not avail them. I agree. In the present case, in order to
successfully invoke Crookes NO and Potgieter NO,7 the appellants bore the onus of
proving that the David Gowar Trust had, in one way or other,8 accepted the benefit
bestowed on it. They have not discharged that onus.

Termination of the trust
[45] Before considering this part of the appellants‟ case it is necessary to have regard
to the terms of the trust deed. The relevant provision is clause 28. It reads as follows:
„28 Termination9
This trust shall terminate upon whichever of the following events shall happen the earlier;

6 See also: Potgieter above, para 28; Cameron, De Waal, Wunch Solomon & Khan, Honoré’s South
African Law of Trusts 5ed (2002) at 195.
7 Potgieter & another v Potgieter & others [2011] ZASCA 181; 2012 (1) SA 637 (SCA).
8 See for example: Ex parte Orchison 1952 (3) SA 66 (T) at 78H where the following is stated:
„. . . . But by agreeing to become vested with the dominicum of property and to administer it in terms
of the trust the trustees seem to me to have performed quite a different juristic act. They contracted
for the benefit of third parties who might or might not accept the benefits of the contract at some
future date . . . but they did not accept benefits under the contract for those third parties.‟
9 This is common to all four trust deeds.

28.1 the passing of unanimous resolution by the Trustees that in their sole and absolute
discretion, there is a good and sufficient reason for such termination and they resolve
accordingly; or
28.2 The entire Trust Capital has been distributed.‟

[46] The appellants seek the termination of the trust on the ground that the
relationship between the second appellant and the first respondent has broken down.
For this reason, the second appellant contends that he „no longer trusts the first
respondent and [is] not prepared to be associated with him in any manner whatsoever‟.
Hence he is seeking the appointment of independent trustees „who may then administer
the affairs of the various trusts in the interests of all beneficiaries and . . . terminate such
trusts and distribute the capital and income to the beneficiaries. . . .‟

[47] Counsel for the respondents submitted that the appellants have made out no
case for variation or termination of the various trusts. It was contended that absent the
jurisdictional requirements specified in s 13 of the Act the court is not vested with any
power under that section to vary or terminate the trusts.

[48] For the appellants it was argued that in substance what they seek is the
appointment of additional independent trustees who would administer the affairs of the
trusts in conjunction with the existing trustees. Those trustees would then, if they
considered there to be a good and sufficient reason to do so, terminate the trusts in
accordance with the provisions regulating their termination.

[49] This submission cannot prevail for the reasons explained in paras 34 and 35
above. Moreover, in their notice of motion the appellants sought an order for the
appointment of two independent trustees in order for them (in conjunction with the
remaining trustees) to, inter alia, pass a resolution terminating the various trusts and
distributing the trust capital and income. Having failed to bring their case within the
purview of s 13 of the Act, the relief sought in that regard was manifestly doomed to fail.
Nor have the appellants brought their case within the terms of clause 28 of the trust
deed.

Cross-appeal
[50] I deal next with the cross-appeal. It was in essence premised on the contention
that the court a quo erred in finding that „the removal of the second appellant as a
trustee was not in the interests of the beneficiaries of the affected trusts‟. And that the
court a quo should have found that an overwhelming case of misconduct against the
second appellant had been established.

[51] Earlier, I alluded to the fact that the fate of both the appeal and the cross-appeal
hinged entirely on the question whether the allegations and counter-allegations of
misconduct fall outside the realm of the factual disputes on the papers. Mindful of this
fact, counsel for the respondents, in pressing for relief against the second appellant,
contended that the second appellant: (a) preferred his personal interests above those of
the trusts and all other beneficiaries; (b) banked farming income from the Gowar Farm
Trust farming operations into accounts controlled by him; (c) utilised trust assets for his
personal benefit without accounting therefor; and (d) failed to account for livestock
losses in excess of R1 million. It was argued that the factual account in support of these
accusations was beyond question and that the second appellant‟s denials were far-
fetched and clearly untenable to warrant their rejection on the papers.

[52] Unsurprisingly, counsel for the appellants submitted that all of the allegations
against the second appellant were disputed. And that the second appellant‟s denials
were in fact not so far-fetched or clearly untenable that the court would be justified in
rejecting them merely on the papers. In my view, it is unnecessary to go into a detailed
discussion of this aspect. It suffices to say that the issues that counsel for the
respondents submitted were discrete and far removed from the factual conflict are in
truth inextricably intertwined with the factual matrix contested by the appellants. This
conclusion necessarily means that the cross-appeal too cannot succeed.

[53] It must follow, therefore, that the conclusion reached by the court a quo cannot
be faulted. Consequently, both the appeal and the cross-appeal fall to be dismissed.

[54] In the result the following order is made:
1 The appeal is dismissed with costs including the costs of two counsel.

2 The cross-appeal is dismissed with costs.

_________________
X M PETSE
JUDGE OF APPEAL

APPEARANCES:

For Appellants:

E A S Ford SC

Instructed by:

Pagdens Attorneys, Port Elizabeth

Claude Reid Inc, Bloemfontein

For First and Second Respondents:
A R Sholto-Douglas SC

(with D H De La Harpe)

Instructed by:

Coetzee & Venter Inc, Port Elizabeth

Cooper Majiedt Inc, Bloemfontein