Durandt v Fedsure General Insurance Ltd

The appellant and another person, Janse van Rensburg, were appointed joint provisional trustees, and later joint trustees, of an insolvent estate. Each trustee separately signed a standard-form undertaking and bond of security in favour of the Master of the High Court, binding himself to properly administer the estate and to be liable up to a stated amount for loss caused by his own failure or maladministration. Fedsure, an insurer, furnished suretyships to the Master securing the trustees’ performance. Van Rensburg later forged the appellant’s signature on a power of attorney, sold estate property, and absconded with the proceeds. The Master called upon Fedsure to make good the loss, which it did. Fedsure then sought to recover the amount from the appellant alone, alleging joint and several liability as co-trustee, despite the appellant’s innocence and lack of negligence.

The appeal was upheld with costs. The judgment of the court a quo was set aside and replaced with an order dismissing Fedsure’s claim against the appellant with costs.

The case clarifies that the liability of an insolvency trustee to the Master may depend strictly on the terms of the trustee’s individual bond of security, and that an innocent trustee is not automatically liable for a co-trustee’s fraud. It underscores the importance of careful interpretation of standard-form security undertakings and limits the right of recourse of sureties where no principal debt exists.