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Court case on trustees’ power to delegate

Van Wyk v Daberas Adventures CC [2018] ZANCHC 31

In this recent judgement by a full bench of the Northern Cape High Court in Kimberley, a decision by a single judge in motion proceedings that a trustee lacked locus standi to enter into litigation because all the trustees did not take part in the decision to institute the litigation was set aside.

The appellant (Van Wyk) in her capacity as trustee of the Chris Van Wyk Trust (the Trust) brought an application against the respondent to obtain an order that the respondent vacates the property of the Trust and remove certain structures put up by the respondents employees.  The respondent raised three points in limine, one of which was that the appellant lacked locus standi.  This was successful and the motion court dismissed the application on this point, because the court held

1) “… that the resolution to authorise the appellant to bring the application was invalid because the decision had been taken without the vote of Mr B C Van Wyk, which was found to have been a requirement in terms of clause 8.3 of the trust deed;”

and 2) “… that the other trustees had in any event not been entitled to delegate the power as set out in the resolution … because the delegation of this particular power was not provided for in clause 8.8 of the trust deed;” and “…because the trust deed contained no other express provision for the right to delegate any power, including this one.”

The trust deed provided that BC van Wyk had to be part of any majority decision to validate such a majority decision, and had to be present for the trustees to be quorate in the event that all trustees are not present at a meeting.  BC van Wyk ceased to be a trustee at the time when the decision to bring the application, because his estate was insolvent.

The full bench held that:
1.    The requirement that BC van Wyk be part of a majority applied only to majority decisions and not to unanimous decisions;
2.    To demand that no decisions can be made while BC van Wyk is still alive, because he cannot take part in the decision because of his insolvency is an absurd interpretation of the trust deed which would lead to absurd results;
3.    The existing trustees at the time took a unanimous decision to bring the application and to delegate the implementation thereof to the appellant;
4.    Hoosen and Others NNO v Deedat and Others 1999 (4) SA 425 (SCA) is authority only for the principle that a trustee cannot delegate the exercise of his discretion and decision-making to another, and does not mean that the implementation of decisions properly taken by trustees cannot be delegated;
5.    In this matter the existing trustees took a proper unanimous decision to sue, and then delegated implementation of that decision to the appellant;
6.    The decision of the motion court that the appellant lacked locus standi be set aside and that the matter be referred back for resumption of the original proceedings.

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