Curators Ad Litem to Certain Potential Beneficiaries of the Emma Smith Educational Fund v The University of KwaZulu-Natal

Sir Charles George Smith died in 1941, leaving a will that created the Emma Smith Educational Fund to be administered by the Natal University College (now the University of KwaZulu-Natal). The Fund was established to provide bursaries for the higher education of 'European girls born of British South African or Dutch South African parents' who had resided in 'Durban' for at least three years. The Fund grew to approximately R27 million, with R4 million available for distribution, but the racially restrictive provisions meant that funds were not fully utilized. The University, a publicly funded institution, became embarrassed by administering a racially exclusive fund contrary to its commitment to non-racialism. It feared challenges under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. The University applied under section 13 of the Trust Property Control Act 57 of 1988 to delete the racially restrictive provisions and substitute 'the Ethekwini Municipality' for 'Durban'. Curators ad litem were appointed to represent potential beneficiaries.

• Whether section 13 of the Trust Property Control Act 57 of 1988 applies to a charitable educational trust created by will and administered by successive statutory educational institutions
• Whether racially restrictive provisions in a testamentary charitable trust administered by a publicly funded university are contrary to public policy and the equality provisions of the Constitution
• Whether the court should amend a trust instrument that discriminates on the basis of race
• Whether freedom of testation protects racially discriminatory testamentary dispositions
• Whether the geographical restriction to 'Durban' should be amended to 'the Ethekwini Municipality'
• Whether amendment of the trust provisions would unlawfully deprive beneficiaries of property

The appeal was partially successful. The order substituting 'the Ethekwini Municipality' for 'Durban' in paragraph 26(f)(2) of the will was set aside. Save for this substitution, the appeal was dismissed, meaning the deletion of the words 'European', 'British' and 'Dutch South African' from the will was upheld. No costs order was made.

Section 13 of the Trust Property Control Act 57 of 1988 applies to testamentary charitable trusts even when administered by successive statutory institutions, as the statutory provisions do not alter the essential nature of the trust. Racially restrictive provisions in a testamentary charitable educational trust administered by a publicly funded university are in conflict with public policy as they offend against the equality clause in section 9 of the Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. Public policy is now rooted in the Constitution and its fundamental values. In the public sphere, racially discriminatory testamentary dispositions will not pass constitutional muster. Where provisions in a trust instrument are in conflict with public policy and hamper the achievement of the testator's objects, section 13 of the Trust Property Control Act authorizes the court to delete such provisions. Constitutional imperatives to eradicate racial discrimination and move away from a racially divided past take precedence over freedom of testation where public charitable educational trusts are concerned. Publicly funded educational institutions obliged to serve all sections of society cannot be seen to associate with racially discriminatory practices. However, section 13 can only be invoked where jurisdictional facts exist demonstrating that a provision hampers achievement of the founder's objects, prejudices beneficiaries' interests, or conflicts with public interest.

The Court commented that testators who intend to benefit the underprivileged in education will not be dissuaded from doing so by the implications of this judgment, rejecting the 'chilling effect' argument. The Court distinguished the case from situations involving private testamentary dispositions to religious communities, clubs or schools, indicating these might be treated differently. The Court noted approvingly the English decision in Re Lysaght, Hill v the Royal College of Surgeons [1966] Ch 191 where a court struck down religiously discriminatory provisions to enable a college to administer bursaries. The Court observed that deleting the offending racial provisions would cure any potential voidness for vagueness or arguments that the Fund's object had fallen away. The suggestion of introducing racial quotas for future applicants was rejected as an unwarranted intrusion into trustees' discretion and as retaining elements of race-based selection. The Court noted that Sir Charles Smith must have been aware during his lifetime that Durban would continue to expand, suggesting foresight regarding geographical changes.

This case is significant in South African law as it confirms that racially discriminatory provisions in testamentary charitable trusts administered by public institutions are contrary to public policy and the constitutional equality guarantee. It establishes that constitutional values, particularly equality and non-racialism, take precedence over freedom of testation when charitable educational trusts administered by publicly funded institutions contain racially exclusive provisions. The judgment clarifies that section 13 of the Trust Property Control Act 57 of 1988 can be invoked to delete provisions that conflict with public policy rooted in constitutional values. It demonstrates the application of constitutional principles to private law relationships, specifically the law of succession and trusts. The case reinforces that public institutions cannot administer trusts that discriminate unfairly on prohibited grounds such as race. It provides guidance on when courts may intervene to amend trust instruments, requiring jurisdictional facts under section 13 before amendments can be made. The judgment also illustrates the limited application of the cy-près doctrine in South African law through statutory mechanisms.