Jowell v Bramwell-Jones and Others

The appellant was one of four capital beneficiaries of a testamentary trust created under his late father’s will. The trust property consisted of shares held by the testator in a holding company, Glencordale (Pty) Ltd, whose sole asset was a shareholding in Trencor Ltd. The testator’s widow, Mrs Jowell, was both trustee and income beneficiary. On advice from various professional advisers (the respondents), Mrs Jowell caused Glencordale to sell its Trencor shares, lend the proceeds to another trust, invest in Eskom loan stock, and thereafter liquidate Glencordale. The scheme was aimed at maximising her income prior to emigration. The appellant alleged that this advice and assistance wrongfully caused a reduction in the value of his eventual capital entitlement and claimed delictual damages for pure economic loss before termination of the trust. The respondents excepted to the particulars of claim.

The appeal was dismissed with costs; the exceptions to the particulars of claim were upheld.

The case is important for clarifying that capital beneficiaries cannot claim delictual damages for alleged diminution of trust capital before the termination of a trust where enjoyment is postponed. It also affirms that trustees holding shares in a holding company owe fiduciary duties when exercising control, but that actionable loss must be actual and not speculative. The decision is a leading authority on prematurity of claims for pure economic loss in the trust context.