NT and CT, both trustees together with others of the B-B-RED Trust (the trust), opened a bank account with the first respondent (SB) pursuant to a resolution of all the trustees to do so and which appointed NT and CT to act on behalf of the trustees. NT and CT were accordingly recorded by SB as trustees and authorised signatories on the bank account. The trust was set up and funded by WP Ltd “…with the broad object of advancing the socio-economic development and upliftment of the Bakubung-Ba-Ratheo community.” During July 2011 M, who was the account executive for the account at SB, received an instruction signed by NT and CT to transfer R5.5m from the trust’s account to the Bakubung Economic Development Unit (BEDU). M gave effect to this instruction. During October 2011 another trustee, G, went to see M and stated that it had come to his attention that the transfer was made without a resolution or minutes authorising same. He later the same day requested M by email to stop all transfers from the trust “…until we notify you as trustees.” M responded by email the next day and concluded with “Please urgently send us a written request signed by ALL trustees to this effect.” A week later M received another instruction from CT and NT to transfer R4m to BEDU, which was effected by M. Five weeks later, on 28 November 2011, NT and CT were removed as trustees of the trust and on 6 December 2011 SB was notified of this fact and requested to replace them as signatories with G, K and W. In July 2014 the trustees issued summons against SB for repayment of both amounts transferred, on the basis of the following averment in their court papers: “The first defendant undertook to exercise reasonable care to ensure that it will not authorise or approve the withdrawal of funds from the bank account without the relevant resolution of the trustees which was passed or adopted by the trustees in terms of the relevant provisions of the Trust’s Deed of Trust, a copy whereof was made available to the defendant when it agreed to open the bank account for the Trust.”
The Gauteng High Court (Johannesburg) held that SB acted in accordance with its mandate received from the trustees and cannot be held liable for repayment of the R9.5m. G, who testified for the plaintiffs at the trial, admitted that no liability can attach to SB for the first transfer of R5.5m.
The trustees appealed to the Supreme Court of Appeals (SCA) with leave granted by the trial court.
The SCA (Mocumie JA, with Ponnan, Mbha and Nicholls JJA and Matojane AJA concurring) dismissed the appeal with costs. The court referred to its previous judgements in Lupacchini NO and Another v Minister of Safety and Security and Land and Agricultural Bank of South Africa v Parker and Others about the nature of the trust form and the role of trustees as the only persons through which a trust can act. The court held that M was fully justified in requiring a written request signed by all trustees before he was willing to ignore instructions received from the trustees authorised to deal with the bank account.