Liebenberg NO v MGK Bedryfsmaatskappy (Edms) Bpk

The appellant, as trustee of the HF Mokken Will Trust, appealed against a final sequestration order of the trust estate. The sequestration was based on an unlimited deed of suretyship signed by the testator’s widow, in her capacity as trustee, in favour of a cooperative (predecessor of the respondent) to secure all present and future debts of her son, a beneficiary of the trust. The suretyship exposed the entire trust estate to liability. The sole issue was whether the trust deed, contained in the testator’s will, authorised the trustee to bind the trust estate by an unlimited suretyship for a beneficiary’s debts in the absence of an express power.

The appeal was upheld with costs. The sequestration order granted by the High Court was set aside and replaced with an order discharging the provisional sequestration with costs.

The case is a leading authority on the limits of trustees’ powers under South African law, particularly in testamentary trusts. It clarifies that wide discretionary wording does not authorise trustees to expose trust assets to unlimited risk without express provision. The judgment reinforces the strict approach to implying powers in wills and protects beneficiaries from dissipation of trust assets through unauthorised suretyships.