Glencore Operations South Africa (Pty) Ltd and Others v Master of the High Court Northwest Province and Others

In 2009, Glencore and the Bakwena-ba-Mogopa community entered into agreements whereby the community acquired a 52% undivided share in the Rhovan Mining right. A trust was established and registered on 4 August 2009. The trust deed provided for the appointment of trustees: the Kgosi as founder and first trustee, two independent professional trustees (an attorney and accountant) to be appointed by the Kgosi with approval of the Traditional Council, two trustees by the Traditional Council, one by the Council of Headmen, and one each by three wards. Since establishment, no trustees were appointed due to internal conflict. A faction in the Traditional Council purported to appoint the second to seventh respondents as trustees, without endorsement of the Kgosi or other community members as required by the trust deed. On 16 November 2018, the Master removed the Kgosi as trustee and authorised the respondents to act as trustees. The respondents sought amendment of the trust deed to legitimise their positions and remove requirements for diverse representation. The appellants challenged the validity of the respondents' appointment and the Master's authorisation.

• Whether the second to seventh respondents were lawfully appointed as trustees in terms of the trust deed
• Whether the Master had power under s 6(1) of the Trust Property Control Act 57 of 1988 to authorise the respondents to act as trustees when they were not lawfully appointed
• Whether the respondents had locus standi to bring a counter-application for amendment of the trust deed
• Whether the jurisdictional prerequisites for amendment of a trust deed under s 13 of the Trust Property Control Act 57 of 1988 were satisfied
• Whether acquiescence by Glencore could validate an unlawful appointment of trustees

The appeal succeeded. The order of the high court was set aside and replaced with: (a) a declaration that none of the second to seventh respondents is a trustee of the Bakwena-ba-Mogopa Trust; (b) a declaration that the authorisation issued by the Master is invalid and set aside; (c) dismissal of the counter-application; (d) costs order against the second to sixth respondents in their personal capacities and the tenth respondent (Traditional Council), jointly and severally, including costs of two counsel.

The binding legal principles established are: (1) The Master's power under s 6(1) of the Trust Property Control Act 57 of 1988 to authorise trustees is strictly limited to persons who have been validly appointed as trustees in terms of the trust deed, s 7 of the Act, or by court order - the Master cannot authorise persons to act as trustees outside these three jurisdictional factors. (2) The office of trusteeship must legally exist prior to the issuing of letters of authority by the Master. (3) The trust deed is the trust's constitutive charter; who the trustees are, their number, how they are appointed and under what circumstances they have power to bind the trust estate are matters defined in the trust deed, outside of which the trust estate cannot be bound. (4) Where the trust deed requires appointment of a specific number and composition of trustees, a purported appointment of fewer trustees or different composition is invalid and cannot bind the trust. (5) Acquiescence cannot validate an unlawful appointment of trustees given their fiduciary role. (6) To have locus standi to seek amendment of a trust deed under s 13, a person must be a lawfully appointed trustee or show sufficient interest in the trust property.

The court observed that the proposed amendments sought by the respondents would have far-reaching consequences prioritising the self-interest of the putative trustees, including: removing the Kgosi and his successor as first trustee; extending terms from 3 to 5 years; removing independent professional trustees; removing the Council of Headmen's right to nominate a trustee; removing the three wards' rights to each nominate a trustee; and removing the 'fit and proper person' criteria. The court noted these amendments would be to the detriment of the community as they sought to endow an illegally appointed faction with all powers. The court also noted that one of the purported trustees (the second respondent, Mr Morebodi) had been disqualified from holding office as trustee by a prior high court judgment, and another (the seventh respondent) had passed away - factors ignored by the high court. The court observed that the high court's finding that the Master acted 'in the interest of beneficiaries' had no foundation in law and was not the proper yardstick for appointment of trustees under s 6(1).

This case clarifies the strict requirements for the appointment of trustees under the Trust Property Control Act 57 of 1988. It confirms that the Master's power under s 6(1) to authorise trustees is limited to persons lawfully appointed in terms of the trust deed, s 7 of the Act, or by court order. The Master cannot validate an unlawful appointment by issuing authorisation. The judgment reinforces the principle established in Parker that the trust deed is the trust's constitutive charter and outside its provisions the trust estate cannot be bound. It also clarifies the jurisdictional requirements for standing to seek amendment of a trust deed under s 13, requiring either lawful appointment as trustee or sufficient interest in the trust property. The case is significant for emphasising that trustees exercise fiduciary powers and control over trust assets, necessitating strict compliance with appointment procedures, and that purported acquiescence cannot validate an unlawful appointment.