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Court case about election of trustees and waiver of rights – Malatji v Ledwaba NO and Others [2021] ZASCA 29

Malatji v Ledwaba NO and Others [2021] ZASCA 29

The appellant is one of the trustees elected by community members at a meeting convened by independent trustees of the Mamphoku Makgoba Community Trust (the trust) in January 2019. The respondents are the independent trustees appointed by the Master of the High Court after the Master removed the previous trustees (acting under section 20(2)(e) of the Trust Property Control Act, 57 of 1988 (the act)), the other trustees elected at the meeting and the Master of the High Court.

The trust was set up after some 603 members of a community in the Magoebaskloof area of Limpopo was successful with a land claim in the early 2000’s. After dissatisfaction with the original trustees, a declaratory court order was obtained in November 2015 that the term of office of these trustees had come to an end. When the trustees failed to step down, they were removed by the Master as indicated above. This led to further legal action by the removed trustees, which culminated in an order by the Supreme Court of Appeals (SCA) in December 2018 (Mocumie JA (Seriti, Wallis and Swain JJA and Rogers AJA concurring). This ordered the independent trustees (Ledwaba and Stols, the first and second respondents in the current matter) to hold a meeting of the original 603 claimants within 60 days in order to elect new trustees in accordance with the provisions of the trust deed.

The meeting was held and new trustees were elected, one of which was the current appellant, Malatji. Within a week after the meeting, the appellant consulted an attorney and brought an application to the Limpopo High Court in Polokwane. The gist of this application was that persons who were neither original claimants nor beneficiaries of the trust were allowed to vote at the meeting. This was under an agreement reached between opposing factions at the meeting, which became a drawn out affair running from 10:00 until the early hours of the next morning. Under the agreement, claimants or beneficiaries who were deceased or otherwise unable to attend could be represented by proxy with the proxy holders entitled to vote. The appellant’s case was that this was contrary to the trust deed, which did not provide for voting by proxy in elections for trustees and also required that decisions at community meetings had to be taken by simple majority. Some of the new trustees were elected by drawing as few as ten votes, while more than 200 persons attended the meeting. The Limpopo High Court (Semenya J) dismissed the application, leading to the current appeal.

In the SCA the respondents argued that the trust deed by implication allowed representation of claimants and beneficiaries by proxy and furthermore that by allowing himself to be elected as a trustee the appellant waived any rights he may have had to object to the process afterwards. A further argument was that by his acceptance of the agreement and participation in the election the appellant is estopped from claiming that the process was irregular.

The SCA (Eksteen AJA with Saldulker, Mbha and Mbatha JJA and Gorven AJA concurring) held that there is no common law principle allowing representation by proxy. In the absence of a specific provision in the trust deed authorising this, claimants and beneficiaries had to be present in person at the meeting to be entitled to vote. The deed prescribes a process for the replacement of beneficiaries in the case of an original claimant or beneficiary dying, and this process had to be followed strictly to enable the replacement to become a beneficiary and entitled to vote at meetings. The court also held that both a waiver of rights and estoppel have to be pleaded specifically. As the respondents failed to do so and there were in any event no evidence that the appellant waived his rights or created any cause for a belief that he did, neither a waiver of rights nor estoppel was available to the respondents.

The appeal was upheld with costs. The election of the trustees at the January 2019 meeting was set aside and the trustees elected there restrained and interdicted from acting as trustees. The independent trustees were ordered to hold a meeting within 60 days of the original 603 claimants or their properly appointed successors. No proxies will be allowed. At this meeting each of these community members entitled to attend will have one vote for each of the vacant trustee positions.

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