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Court case about eviction of tenant from trust property

Kelsey NO and Another v de Hart [2020] ZAFSHC 2

E (second plaintiff) was married to P at the time of P’s death.  P had five children from a previous marriage to A.  P and his son, C, entered into a lease agreement under which C rented P’s farm for a period of five years at a stipulated amount with an annual escalation.  Shortly after conclusion of the agreement, P passed away.  In his will P bequeathed, amongst others, the farm to a trust of which E was an income beneficiary and C one of the eventual capital beneficiaries.  Upon E’s death the trust is to be terminated and the farm transferred to C.

The lease agreement burdened C with the maintenance of the water supply infrastructure on the farm and gave him the right to add to this infrastructure.

Upon expiry of the five years, by which time the farm had been transferred to the trust, the trustees, E and J (in her capacity as nominee of S Trust Ltd) attempted to enter into a new agreement with C.  J met with C, at which meeting C complained about the fact that the boreholes on the farm were running dry and that new boreholes would have to be sunk.  C was of the view that the trust should stand in for the cost.  J did not agree to this, but promised to have the water problems investigated.  Despite numerous attempts by J and her colleague D to resolve the issue through correspondence C refused to pay rent or enter into a new agreement, complaining that he has to transport water to some points on the farm and that a large part of the farm was not usable as a result.  C, however, carried on with livestock farming on the farm.

J’s successor, K, in her capacity as nominee of S, instituted the action as first plaintiff to recover the rental arrears from C and to get an order evicting him from the farm.

C’s version of events is that on the meeting after the expiry of the first five years of the lease, J asked him to stay on the farm to look after the farm while the water problem was sorted out.  C also filed a counterclaim on this basis and on the basis that the will created a fideicommissum and that the trustees, as fiduciaries, had to pay for the cost of maintaining the farm and sinking new boreholes.

The court (Meintjes AJ) rejected C’s evidence and accepted that of E, J and one B who was called as an expert valuator.  The court held that a trust is not a fideicommissum and referred in this respect to Braun and Another v Botha and Another [1984] ZASCA 19; [1984] 2 All SA 197 (D); 1984 (2) SA 850 (A). The court, in particular, considered whether J was at any time authorised to bind the trustees without E’s knowledge and consent and held that, as co-trustees, J and E had to act jointly in the absence of a clear authority by E and J, acting together, to authorise J to act alone.  The court found, on the evidence, that C’s version of his meeting with J cannot be accepted as true.  C was ordered to pay an amount as rental arrears and was ordered to vacate the farm.

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