Land and Agricultural Bank of South Africa v Parker NO and Others

The case concerned a family trust (the Jacky Parker Trust) established in 1992, whose trustees and beneficiaries were members of the Parker family. The trust deed required a minimum of three trustees. After the resignation of an independent trustee, the Parkers failed for nearly two years to appoint a third trustee, leaving only two trustees in office. During this period, and later after appointing their son (also a beneficiary) as third trustee without proper consultation, the Parkers purported to bind the trust as surety and co-principal debtor for substantial loans advanced by the Land and Agricultural Bank to family-related companies. When the loans were not repaid, the bank sought sequestration of the trust. The trust resisted liability, arguing that it had never been validly bound because the trustees lacked authority under the trust deed.

The appeal by the Land and Agricultural Bank was dismissed, and the decision setting aside the sequestration of the trust was confirmed.

This is a leading South African case on trustee authority and the abuse of family trusts. It clarified that a trust cannot be bound when fewer trustees than the minimum required by the trust deed are in office, and reaffirmed the joint action rule. The judgment strongly criticised the use of family trusts lacking separation between control and enjoyment, and emphasised the role of the Master and courts in developing trust law to promote accountability and protect outsiders.