THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 334/18
In the matter between:

JOAN CYNTHIA GRIESSEL NO

FIRST
APPLICANT
SHIRLEY ANN VAN WYK NO

SECOND
APPLICANT
CARYN SCHUTZ NO

THIRD APPLICANT
JOAN CYNTHIA GRIESSEL

FOURTH APPLICANT
SHIRLEY ANN VAN WYK

FIFTH APPLICANT
DE VILEBOIS ETIENNE DE KOCK

SIXTH APPLICANT
CELESTE MARIE DE KOCK

SEVENTH APPLICANT
MANYELETI (PTY) LTD

EIGHTH APPLICANT
and

HAROLD LEE DE KOCK

FIRST RESPONDENT

THE MASTER OF THE HIGH COURT OF SOUTH
AFRICA PRETORIA

SECOND RESPONDENT

Neutral citation:
Joan Cynthia Griessel NO & others v De Kock (334/18) [2019]
ZASCA 95 (6 June 2019)
Coram:
Navsa ADP and Leach, Majiedt and Molemela JJA and Davis
AJA

Heard:

23 May 2019

Delivered:
6 June 2019

Summary:
Discretionary trust – trustees having power to select beneficiaries from
listed potential beneficiaries - whether potential beneficiary acquired rights capable of
protection.

___________________________________________________________________
ORDER
___________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Bam AJ sitting as
court of first instance).
The application for leave to appeal is granted.
The appeal succeeds only to the limited extent, reflected in para 3 of this
order.
The order of the court a quo is set aside and replaced with the following:
‘3.1
The first, second and third respondents are ordered to forthwith reinstate the
applicant’s rights a beneficiary under the Arathusa Trust IT 4883/99, in particular,
equal access to and enjoyment of the farm Arathusa 241 KU, Pilgrims Rest in
Mpumalanga as was the practice before 14 January 2013.
3.2
The first, second, third and ninth respondents are ordered to pay the costs of
the application, including the costs occasioned by the employment of two counsel,
jointly and severally, the one paying, the others to be absolved.’
Each party is to pay its own costs of the appeal.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Molemela JA (Navsa ADP and Leach and Majiedt JJA and Davis AJA concurring)
Introduction

[1] This is an application for leave to appeal, referred for oral argument in terms of
s 17(2)(d) of the Superior Courts Act 10 of 2013. The parties were directed to be
prepared, if called upon to do so, to present oral argument in relation to the merits.
We heard submissions both on the application for the leave to appeal and the merits.
The background is set out hereunder.
Background facts
[2] In 1999, two sisters created an inter vivos trust known as the Arathusa Family
Trust (the trust). The only assets of the trust are all the shares in the eighth applicant,
a company called Manyeleti (Pty) Ltd (the company), which owns a farm that is part
of a game reserve. The three trustees appointed in terms of the trust deed were the
two sisters (first and second applicant) and the third applicant, a chartered
accountant who is an independent trustee. The trust deed gave the trustees the
power to, within their discretion, select beneficiaries from time to time from amongst
those described as ‘potential beneficiaries’. All the potential beneficiaries had been
afforded the right to visit the farm with their families on vacation on a rotational basis.

[3] A difference of opinion over the development of the farm for commercial use
resulted in acrimony between the first respondent and the rest of the family. The
trustees then resolved to amend the trust deed. The effect of the amendment was
that the first respondent was removed as a beneficiary in the trust. Aggrieved by his
purported exclusion as a beneficiary, the first respondent approached the high court
claiming re-instatement of his rights as a beneficiary. That litigation was settled on
the basis that the purported amendment of the trust was to be regarded as ‘of no
force and effect and invalid’. The settlement agreement was made an order of court
on 17 February 2016.

[4] Pursuant to the settlement of that dispute, the first respondent, through his
attorneys, required the applicants to confirm that his right to visit the farm with his
family on a rotational basis would be restored. What followed was an unpleasant
exchange of correspondence by their legal representatives. The parties could not

reach agreement on the effect of their settlement agreement and of the first
respondent’s rights as a beneficiary in terms of the trust deed. With a view to
resolving the impasse, the first respondent instituted fresh litigation in the Gauteng
Division of the High Court, Pretoria (Bam AJ) (the court a quo). In the intervening
period, the first applicant resigned both as a trustee of the trust and as a director of
the company. The first respondent’s siblings, the sixth and seventh applicants, were
named as the first applicant’s successors both as trustees of the trust and directors
of the company. As at the time of the litigation instituted before the court a quo, the
Master had not yet issued the sixth and seventh applicants with letters of authority,
resulting in the first applicant still being cited as a party in her capacity as a trustee.
The three trustees were cited as the first, second and third respondents. The two
sisters were further cited in their personal capacities as the fourth and fifth
respondents. The designated directors of the company were cited as the sixth and
seventh respondents. The Master was cited as the eighth respondent and the
company as the ninth respondent.  All except the Master opposed the application.

[5] The relief sought in the court a quo was framed as follows in the Notice of
Motion:
‘1.1
That the Applicant’s vested rights, as a beneficiary, under the Arathusa Family Trust
be reinstated. Without derogation from the generality of the aforegoing, that the Applicant’s
rights of access to the property known as the farm Arathusa 241, Registration Division KU,
district Pilgrims Rest, Mpumalanga, be fully restored, as it existed and were exercised until
14 January 2013;
1.2
That the First, Second and Third respondents be removed as Trustees of the
Arathusa Family Trust and that the [Master] be requested to appoint Independent and
impartial Trustees for the Arathusa Family Trust;
1.3
Costs of suit; and
1.4
Further and/or alternative relief.’

[6] An in limine issue that was raised in the court a quo was the failure of the first
respondent (applicant in those proceedings) to cite the third respondent in her

personal capacity. It was submitted before that court that since the first respondent,
inter alia, sought to have all trustees removed, they should all have been cited in their
personal capacities, over and above being cited in their representative capacities.
Only the first and second applicants had been cited in a dual capacity. It was argued
that failure to cite the third respondent in her personal capacity constituted a material
non-joinder which, on its own, should result in the dismissal of the application. The
court a quo concluded that there was non-joinder and granted an order in terms of
which the third applicant was, in her personal capacity, joined as the tenth
respondent in the proceedings.

[7] In the court a quo, the basis of the trustees’ opposition of the matter was that
the first respondent was only a ‘potential beneficiary’ in the trust, had no vested right
in the trust property and, accordingly, had no rights that he could protect. The court a
quo found that the trustees had unlawfully discriminated against the first respondent.
It reasoned that the law did not allow the trustees to withhold the benefit enjoyed by
the other potential beneficiaries from the first respondent simply because the rest of
the family had issues with him. It then decided in favour of the first respondent and
granted the following order:
‘1.
The third respondent is joined in this action in her personal capacity as Tenth
Respondent.
2.
The first, second, third and ninth respondents are ordered to forthwith reinstate the
applicant's rights as a beneficiary under the Arathusa Trust IT 4883/99, in particular, equal
access to and enjoyment of the farm Arathusa 241 KU, Pilgrims Rest in Mpumalanga as was
the practice before 14 January 2013.
3.
The eighth Respondent is ordered to appoint an independent co-trustee in
consultation with the respondents and other interested parties such that at any given time
there are two independent trustees of the Arathusa Family Trust.
4.
The first, second, third and ninth respondents are ordered to pay the costs of this
application on a scale as between attorney and client, including the costs of two counsel
jointly and severally, the one paying, the others to be absolved.’

[8] The issues for determination before this court are: (i) whether leave to appeal
should be granted and, in the event that leave is granted; (ii) whether the first
respondent, as a beneficiary of a discretionary trust, acquired rights as against the
trust which were capable of protection; (iii) and if so, whether the court a quo was
correct in granting an order reinstating the first respondent’s access to the farm,
directing the Master to appoint an additional trustee, and issuing a punitive costs
order.

[9] Although the applicants’ locus standi was initially disputed by the first
respondent, it was no longer a live issue before us. Consequently, nothing more
needs to be said about it. Rather, the focus shifted to the nature of the rights, if any,
the first respondent had acquired in relation to the trust property.

[10] The salient provisions of the Trust Deed are as follows:
‘3.
DEFINITIONS
In this deed, unless the context otherwise requires, words importing the singular shall include
the plural and words importing the masculine gender shall include females, and vice versa;
the following expressions used in this deed shall have the meaning hereinafter assigned to
them unless the context shall clearly otherwise require, namely:
3.1
“beneficiary” shall mean that person or those persons who may from time to time be
selected by the Trustees in their entire and absolute discretion to be a beneficiary in respect
of the income or capital or both under this trust, from amongst the following potential
beneficiaries:
3.1.1 Shirley Ann de Kock

3.1.2 Joan Cynthia Griessel

3.1.3 Harold Lee de Kock

3.1.4 De Villebois Etienne de Kock

3.1.5 Celeste Marie de Kock

3.1.6 any trust established for the benefit of any of the aforementioned.
. . .
5.2
The Trustees shall have the power, in their entire discretion from time to time and at
any time to pay to, or to apply the whole of any part of the income of the trust fund for the
general advantage or anyone or more of the beneficiaries as the Trustees may decide, and

in such proportions and from such source as the Trustees may determine, and any income
so paid or applied shall accrue to the beneficiary.
. . .
9.
VESTING
The right of any beneficiary to payment of any income or capital under this trust shall, unless
the Trustees otherwise determine, vest in such beneficiary only on the date of such payment
or transfer. “Payment” and “transfer” shall include all forms of transfer of possession or
ownership of trust assets, but shall not include the crediting of a loan account in the name of
the trust or a loan account which a beneficiary has with the trust.
. . .
12.
POWER OF TRUSTEES
The Trustees shall administer the trust fund, and for this purpose shall have unrestricted
powers of dealing with the trust fund as if they were beneficially entitled thereto; without
limiting the generality of their authority, it is recorded that they shall have power:
12.1
to retain or to realise, invest and re-invest the trust fund in such manner and to such
property, movable or immovable, whatsoever and where ever, in any part of the world, as
they deem fit, regardless of limitations or restrictions imposed by statute or otherwise as to
the character of investments to be made by Trustees, and whether income producing or
speculative or not and subject to such conditions as they may deem fit;
12.2
to acquire by loan, purchase or otherwise, any assets whatsoever on such terms as
to payment as they may deem fit but without the authority to pledge any of the trust assets
for such purposes as the Trustees may deem fit;
12.3
to buy, sell, lease, let insure, alter, maintain, improve, turn to account, amortise,
exchange or alienate any property, movable or immovable;
12.4
to lend money or other assets, whether upon security or not to any beneficiary upon
such terms and conditions as may seem expedient to the Trustees;
12.5
to allow any beneficiary free use and enjoyment of any property controlled by them or
forming part of the trust fund, whether movable or immovable, upon such conditions, if any,
as to maintenance, insurance, rates and taxes and other expenses as they may deem fit. . . .
’
In addition, a general power was granted to the trustees in the following terms:
‘Generally, it is the intention of the Settlors that the Trustees are in fact to have the same
absolute control over and unfettered powers of investment and re-investments of the trust
assets as if, they had been absolutely and beneficially entitled to the trust capital [except] in
so far as the trust deed specifies otherwise and they are specially indemnified against any

claim arising from the loss of income or capital as a result of the bona fide exercise of the
discretion hereby granted to them.’

[11] It is trite that a trust is not a legal person. An inter vivos trust is governed by
the terms of a trust deed as well as the provisions of the Trust Property Control Act
57 of 1988. In its strictly technical sense, a trust is a legal institution sui generis.1 In
Lupacchini NO & another v Minister of Safety and Security,2  Nugent JA observed
that
‘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 of
persons or for the furtherance of a charitable or other purpose . . . .”’

[12] A significant amount of effort was dedicated by the parties, both in the
affidavits that served before the court a quo and the arguments raised in the court a
quo and before us, on the question whether or not the right of access to the farm
which was previously afforded to the first respondent was a vested right. The first
respondent contended that his visits to the farm amounted to the free use and
enjoyment of a property controlled by the trustees as contemplated in clause 12.5 of
the trust deed. Relying on the provisions of clause 9 of the Trust Deed, he contended
that his visits to the farm constituted possession of a trust asset, which, in turn,
resulted in a vesting of rights, thus entitling him to approach the court a quo to protect
those rights.  He argued that his description as a potential beneficiary in the trust
deed was therefore immaterial.

[13] Relying on clause 3.1 of the trust deed, which grants the trustees the
discretion to select beneficiaries from a list of potential beneficiaries, the trustees
were at pains to point out that they had not yet selected beneficiaries. Since the

1 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.
2 Lupacchini NO & another v Minister of Safety and Security [2010] ZASCA 108; 2010 (6) SA 457
(SCA) para 1.

beneficiaries had not yet been selected, so the argument went, the first respondent
remained a potential beneficiary who merely had contingent rights and had no vested
rights worthy of protection. They argued that, notwithstanding the fact that the first
respondent and other potential beneficiaries had previously been allowed to
occasionally occupy the farm, no vesting of rights was consequent upon that
occupation, as the farm in question was owned by a separate entity, namely the
company. The company and not the trust, so the argument went, had exclusive right
to allow persons access to the farm.

Discussion
[14] It is convenient to start with the last argument. It is common cause that the
trust is the sole shareholder of the company, which is a registered private company.
Given that scenario, the trust, qua shareholder, has voting rights in the company. It is
trite that a trustee is the owner of the trust property for purposes of the administration
of the trust.3 Equally trite is that where more than one trustee have been specified in
the trust deed, they must act jointly in the fulfilment of the objects of a trust.4  Given
all these well-established principles, it cannot be gainsaid that the first, second and
third applicants, as trustees, jointly exercise the voting rights in the company, which
have been conferred by the shares owned by the trust.5 They therefore make
decisions pertaining to the farm, including granting access rights. The upshot of this
finding is that there was no need for the court a quo to pierce the corporate veil as it
purported to do.

[15] I turn now to determine whether there was a right that the first respondent was
entitled to protect. The first respondent’s reliance on clause 9 as support for his
proposition that rights became vested by virtue of him having been granted
possession of the trust asset (the farm) is misplaced. Clause 9 must be read in the
context of the other provisions of the trust deed and in relation to its purpose. It does
not, on its own, confer a vested right on any beneficiary. It is trite that contingent

3 Ibid.
4 Hoosen NO & others v Deedat & others [1999] ZASCA 49; 1999 (4) SA 425 (SCA) paras 23, 24 and
26.
5 See Jowell v Bramwell-Jones & others [2000] ZASCA 16; 2000 (3) SA 274 (SCA) para 14.

rights are generally not subject to tax.6  However, when a trustee exercises the
discretion by paying the beneficiary either income or capital, the beneficiary thereby
acquires a vested right in the money paid over, which becomes taxable.7 Clause 9
was therefore intended to distinguish between a loan and other income that is
distributed to beneficiaries in an attempt to ensure that a beneficiary is not saddled
with a tax liability when a loan was advanced to him or her.

[16] It is undisputed that the trust that was created falls in the category of
discretionary trusts, since the trustees have been given the right, within their
discretion, to select beneficiaries from a list of potential beneficiaries. It follows that
none of the potential beneficiaries can claim rights in perpetuity, as their rights are
merely contingent.8 The question is whether the first respondent, as a potential
beneficiary in a discretionary trust, has rights that he could ask the court a quo to
protect. The judgment of this court in Potgieter & another v Potgieter NO & others9 is
instructive, particularly at para 28, where it is stated that:
‘I do not think it can be gainsaid that at the time of the variation agreement on 21 February
2006, the appellants enjoyed no vested rights to either the income or the capital of the trust.
They were clearly contingent beneficiaries only. But that does not render their acceptance of
these contingent benefits irrelevant. The respondents referred to no authority that supports
any proposition to that effect and I cannot think of a reason why that would be so. The import
of acceptance by the beneficiary is that it creates a right for the beneficiary pursuant to the
trust deed, while no such right existed before. The reason why, after that acceptance, the
trust deed cannot be varied without the beneficiary’s consent, is that the law seeks to protect
the right thus created for the first time. In this light, the question whether the right thus
created is enforceable, conditional or contingent should make no difference. The only
relevant consideration is whether the right is worthy of protection, and I have no doubt that it
is. Hence, for example, our law affords the contingent beneficiary the right to protect his or
her interest against mal- administration by the trustee . . . .’10

6 Estate Munro v CIR 1925 TPD at 693; Hilda Holt Will Trust v CIR 1992 (4) SA 661 (A).
7 Estate Munro v CIR ibid at 702; De Beer v CIR 1932 CPD 443 at 448; Hilda Holt Will Trust v CIR
ibid.
8 CIR v Sive’s Estate 1955 (1) SA 249 (A).
9 Potgieter & another v Potgieter NO & others [2011] ZASCA 181; 2012 (1) SA 637 (SCA).
10 Ibid para 28.

[17] During an exchange with the bench, counsel for the first respondent was
referred to the afore-mentioned dictum and asked whether, given the common cause
fact that all the potential beneficiaries, including the first respondent, had previously
been permitted to have a vacation at the farm, it was necessary to decide whether
the first respondent had vested rights or not. Counsel ultimately conceded that such
a determination was not necessary. That concession was correctly made. It is evident
from the dictum in Potgieter that even beneficiaries who have contingent rights are
entitled to protection. Trustees have an obligation to treat all the beneficiaries even-
handedly. As a beneficiary, the first respondent had a right to be protected against
arbitrary and discriminatory treatment.

[18] In this matter, the privilege of having a vacation on a farm situated in a game
reserve was taken away from the first respondent while the other potential
beneficiaries continued to enjoy the same rights. That constituted differential
treatment without a justifiable basis.  This was evidently prompted by the attitude of
the first respondent towards the development of the farm for commercial purposes,
which, over the years, increased to the point that the first respondent considered the
second applicant, his own mother, to be openly hostile towards him.

[19] The role of a trustee in administering a trust calls for the exercise of a fiduciary
duty owed to all the beneficiaries of a trust, irrespective of whether they have vested
rights or are contingent beneficiaries whose rights to the trust income or capital will
only vest on the happening of some uncertain future event.11 While discrimination on
the basis of need may, under certain circumstances, be justified by the needs of a
particular beneficiary,12 the trustees did not advance ‘need’ as the reason for treating
the first respondent less favourably. It is clear from the averments made in the
affidavits and the tenor of the attorneys’ correspondence that he was regarded as
obstructive and contrarian. That may be so, but that does not suffice as justification
for treating him less favourably. This therefore means that the trustees unfairly
discriminated against him. It follows that the court a quo was correct in re-instating
his right to visit the farm on a rotational basis.

11 Doyle v Board of Executors 1999 (2) SA 805 (C).
12 E Cameron et al Honore’s South African Law of Trusts 5 ed (2002) Thirteenth Impression 2016 at
316.

[20] I turn now to the ancillary orders granted by the court a quo. As regards the
issue of joinder, the applicants contended that the granting of joinder of the third
applicant in her personal capacity was irregular, as it was not properly applied for but
was only sought informally in argument before the court a quo. It is common cause
that the court a quo ultimately did not make any order against the third applicant in
her personal capacity. Nothing, therefore, turns on this aspect.

[21] With regards to the order directing the Master to appoint an additional trustee,
I find the following remarks apposite. ‘. . . [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. . .
.’13

[22] Although these remarks were made in the context of a removal of a trustee
from office, they are, by parity of reasoning, apposite in relation to a court’s decision
to mero motu direct the Master to appoint an additional trustee. It is clear that there
was a dispute of fact pertaining to the first respondent’s allegation that the trustees
did not properly attend to the affairs of the trust to the point where a letter of demand
was issued against the trust. The court a quo merely stated that the appointment of
another independent trustee might quell acrimony between the parties and restore
the role of the trustees to what it should be. The third respondent is a chartered
accountant by profession and is therefore qualified to properly understand the
responsibilities of trusteeship.14  In the absence of facts conclusively showing that the

13 Volkwyn NO v Clarke and Damant 1946 WLD 456 at 464.
14 Land and Agricultural Development Bank of SA v Parker & others [2004] ZASCA 56; [2004] 4 All SA
261 (SCA) para 36.

third respondent would not be able to play that role, there is simply no legal basis for
an order directing the Master to appoint an additional trustee. The need for the
appointment of an additional independent trustee was simply not established in this
matter. In any event, in terms of the trust deed decisions must be arrived at
consensually. That would mean that the family and all the potential beneficiaries
have to reach agreement, which obviates any need for the appointment of a further
trustee.

[23] It was argued on behalf of the company that a costs order was granted against
it despite the fact that no relief was sought against it. It is evident from the papers
that this is a misstatement of the facts. The correct position is that the company was
cited as a respondent in the court a quo. In his founding affidavit, the first respondent
stated that he would not be asking for relief against certain parties unless they
opposed the relief without success. These were the company as well as the sixth and
seventh applicants. All these applicants made common cause with the trustees in
opposing the first respondent’s application and were unsuccessful. Since there is a
general rule that costs follow the cause, there is nothing untoward in mulcting them
with costs. The question remaining is whether a punitive costs order was necessary.

[24] It is trite that the determination of an award of costs is discretionary. That
discretion, however, must be exercised judicially. The first respondent did not at any
stage pray for a punitive costs order. The court a quo has not advanced any reason
for mulcting the applicants with a costs order on a punitive scale. In the absence of
any reasons justifying the granting of such an order, the ineluctable inference is that
the court a quo did not exercise its discretion judicially in that regard. A failure to
exercise a discretion amounts to a material misdirection entitling an appellate court to
interfere.15 As there are no facts justifying the granting of a punitive costs order falls
to be set aside.

15Trencon Construction Limited v Industrial Development Corporation of South Africa Limited &
another [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC).

[25]  In relation to the costs of appeal, cognisance has been taken of the fact that
the first respondent sought to defend the unsustainable punitive costs orders made
by the court a quo. Given the finding that such orders are to be set aside, it follows
that the applicants have had a measure of success in the appeal. Thus, the
appropriate order is for each party to pay own costs.

[26] For all the above reasons, I make the following order:
The application for leave to appeal is granted.
The appeal succeeds only to the limited extent, reflected in para 3 of this
order.
The order of the court a quo is set aside and replaced with the following:
‘3.1
The first, second and third respondents are ordered to forthwith reinstate the
applicant’s rights as a beneficiary under the Arathusa Trust IT 4883/99, in particular,
equal access to and enjoyment of the farm Arathusa 241 KU, Pilgrims Rest in
Mpumalanga as was the practice before 14 January 2013.
3.2
The first, second, third and ninth respondents are ordered to pay the costs of
the application, including the costs occasioned by the employment of two counsel,
jointly and severally, the one paying, the others to be absolved.’
Each party is to pay its own costs of the appeal.

___________________
M B Molemela
Judge of Appeal

Counsel for Appellants:
F H Terblanche SC (with him A J Wessels)
Instructed by:
Strydom & Bredenkamp Inc, Pretoria

c/o E G Cooper Majiedt Inc, Bloemfontein

Counsel for First Respondent:
M P Van der Merwe SC (with him Ms R
Oosthuizen)
Instructed by:
Jarvis Jacobs Raubenheimer Inc, Pretoria

c/o Rossouws Attorneys, Bloemfontein