Raymond Hlengwa Mfeka and Others v Gumede Ephraim Nkawana and Others

The Bhangazi Community was forcibly removed from the St Lucia Estuary area in the 1950s to establish a conservation area. After the enactment of the Restitution of Land Rights Act, the community filed a land claim which was settled in 1999 with financial compensation and benefits to be managed by the Bhangazi Community Trust, registered in 2001 with 556 beneficiary households. The trust deed required a minimum of seven trustees at all times, and a quorum of four trustees for any business. At the time of the application, only two of the original sixteen trustees remained. These remaining trustees claimed six additional persons had been elected or co-opted as trustees between 2009 and 2016, but these persons had never received letters of authority from the Master. Three beneficiaries brought an application seeking removal of the remaining trustees, a forensic investigation, freezing of accounts, and appointment of an interim board, alleging failures to maintain the required number of trustees, maintain membership registers, and submit audited financial statements since 2001.

• Whether trustees who have not received letters of authority from the Master in terms of section 6(1) of the Trust Property Control Act can validly act on behalf of a trust
• Whether a trust can act when the number of trustees falls below the minimum required by the trust deed
• Whether trustees lacking legal capacity have standing to oppose applications or institute appeals
• Whether costs should be borne personally by a trustee who prosecutes proceedings without proper authority

The appeal was struck from the roll with costs. The trustee, Mr Raymond Hlengwa Mfeka, who brought the appeal proceedings without authority to do so, was ordered to pay the costs in his personal capacity.

A provision in a trust deed requiring a specified minimum number of trustees is a capacity-defining condition that must be fulfilled before the trust estate can be bound. When fewer trustees than the minimum number specified in the trust deed are in office, the trust suffers from an incapacity that precludes action on its behalf. Trustees who have not received letters of authority from the Master in terms of section 6(1) of the Trust Property Control Act 57 of 1988 cannot validly act on behalf of the trust. Legal proceedings commenced or defended by trustees who lack proper authorization or where the minimum number of trustees is not met are a nullity and the purported trustees lack legal standing as litigants. Such trustees who persist in litigation despite lacking authority may be ordered to pay costs personally.

The court noted that the same legal standing issues would affect another court order (case number 6293/2016P) made on 11 February 2017, where different applicants had obtained relief against the same remaining trustees, who had opposed that application, instituted a counter-application, and consented to an order without having the required legal standing to do so. The court observed that the various complaints raised by the three beneficiaries regarding the administration of the trust (including failure to maintain membership registers and submit audited financial statements since 2001) raised serious concerns, but did not need to address these substantive issues given the determination on the threshold standing issue. The court also noted that there is a distinction between a trustee's capacity to bind a trust contractually (which requires proper authorization) and a trustee's capacity to be sued for wrongful acts, though this distinction was not determinative in the present case.

This case reinforces important principles regarding trust administration and legal standing in South African trust law. It confirms that: (1) trustees who have not received letters of authority from the Master under section 6(1) of the Trust Property Control Act 57 of 1988 cannot validly act on behalf of a trust; (2) when the number of trustees falls below the minimum required by the trust deed, the trust lacks capacity to act; (3) legal proceedings instituted or defended by unauthorized or insufficient trustees are nullities; and (4) trustees who prosecute litigation without proper authority may be personally liable for costs. The judgment emphasizes that trust deed provisions regarding minimum numbers of trustees are capacity-defining conditions that must be fulfilled before the trust can be bound. It reinforces the importance of compliance with statutory requirements for trustee authorization and demonstrates that practical or pragmatic considerations cannot override these fundamental legal requirements.