De Wit and Others v De Wit and Others

The applicants (Lenette Janse de Wit, both in her personal capacity and as trustee of the Elbert De Wit Familie Trust, and Maryke Smit, a beneficiary) sought termination of the Trust under section 13 of the Trust Property Control Act, or alternatively removal of the first and second respondents as trustees under section 20. The Trust, established in 1995 by Elbert Snr, held substantial assets valued at approximately R120 million. After Elbert Snr's death in 2019, acrimony arose among family members regarding the distribution of trust assets. The applicants alleged that the majority trustees (Toerien de Wit, one of Elbert Snr's sons, and Phillip Rall, an attorney) were using wide discretionary powers in terms of clauses 1.8 (vesting date) and 7.3 (entitlement to continue the Trust indefinitely) to indefinitely delay vesting and capital distributions, causing a serious breakdown in family relationships. They argued this hampered the Trust's objects and prejudiced beneficiaries, who received little or no income or capital. The respondents opposed, contending they were acting in accordance with the Trust Deed and the founder's expressed wishes that the Trust businesses continue and that beneficiaries would eventually be bought out by Toerien, but that this required agreement on a distribution proposal.

• Whether the applicants had satisfied the jurisdictional requirements of section 13 of the Trust Property Control Act for variation or termination of the Trust, namely (a) whether clauses 1.8 and 7.3 of the Trust Deed brought about consequences which the founder did not contemplate or foresee, and (b) whether those consequences hampered the achievement of the objects of the founder or prejudiced the interests of beneficiaries.
• Whether the applicants had made out a case for removal of the first and second respondents as trustees in terms of section 20(1) of the Act on the basis that their removal would be in the interests of the Trust and its beneficiaries.

The application was dismissed with costs, including the costs of senior counsel.

For a court to intervene under section 13 of the Trust Property Control Act, an applicant must establish: (a) that a specific provision of the trust deed brought about consequences that the founder did not contemplate or foresee; and (b) that those unforeseen consequences hamper the achievement of the objects of the founder as stated in the trust deed (which must be sufficiently certain and objectively assessed), or prejudice the interests of the beneficiaries. A breakdown in family relationships alone does not suffice if it is not shown to have caused the hampering of the stated trust objects or prejudice to the beneficiaries' interests. Removal of a trustee under section 20 requires proof that trust property or its proper administration is imperilled, and mere friction or conflict between trustees or beneficiaries is insufficient.

The court noted that should the beneficiaries agree to a specific distribution proposal which the majority trustees then refuse to implement without valid reasons, that might possibly justify court intervention under section 13 in future. The court also remarked that, even if the section 13 jurisdictional requirements had been satisfied, it would not have ordered termination but might have considered an amendment to fix a vesting date, though it acknowledged it could not grant relief mero motu not sought by the applicants.

This case reinforces the strict two-stage test under section 13 of the Trust Property Control Act for varying or terminating a trust: an applicant must prove both that the impugned provision brought about unforeseen consequences and that those consequences hamper the express objects in the trust deed or prejudice the interests of beneficiaries. It confirms that 'fundamental purposes' outside the written objects are insufficient, and that termination is an extraordinary, last-resort remedy. The judgment also clarifies that conflict among trustees and beneficiaries does not automatically justify removal under section 20, and that a discretionary trust's wide powers do not, without more, constitute grounds for judicial intervention.