Ellis in his Capacity as Trustee of Eldo Trust and Others v Noabeb (3565 of 2013) [2014] NAHCMD 81 (12 March 2014)

Ellis in his Capacity as Trustee of Eldo Trust and Others v Noabeb (3565 of 2013) [2014] NAHCMD 81 (12 March 2014)

The agreement is null and void because it is a simulated transaction in fraudem legis of the Transfer Duty Act, designed to evade payment of transfer duty by abusing the trust form and negating the separation of control and beneficial interest. The structure, which makes the defendant sole trustee and beneficiary, is inimical to the trust concept and results in the failure of the trust. The forfeiture and ejectment clauses are contra bonos mores and unenforceable.

Citation
[2014] NAHCMD 81
Parties
Plaintiff: Philippus Viljoen Ellis; Plaintiff: Jurgens Johannes Badenhorst; Plaintiff: Adam Ivo Dos Santos; Defendant: Godhard Noabeb
Court
High Court Main Division
Jurisdiction
Namibia
Judgment Date
12 March 2014
Case Number
3565 of 2013
Procedural Posture
Civil / Application for Default Judgment
Outcome
application for default judgment dismissed; agreement declared null and void
Legal Topics
Validity of Trust Agreement, Simulated Transactions, Transfer Duty Evasion, Contra Bonos Mores, Forfeiture Clauses
Source Language
English
Trust Law Property Law Tax Law Validity of Trust Agreement Simulated Transactions Transfer Duty Evasion Contra Bonos Mores Forfeiture Clauses

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Parties

Philippus Viljoen Ellis

Plaintiff

Jurgens Johannes Badenhorst

Plaintiff

Adam Ivo Dos Santos

Plaintiff

Godhard Noabeb

Defendant

Procedural Posture

Civil / Application for Default Judgment

Legal Issues

  1. 1 Whether the agreement is valid and enforceable given it contemplates the defendant as sole trustee and beneficiary
  2. 2 Whether the agreement is in fraudem legis of the Transfer Duty Act by simulating a transaction to avoid tax
  3. 3 Whether the forfeiture and ejectment clauses are contra bonos mores

Ratio Decidendi

The agreement is null and void because it is a simulated transaction in fraudem legis of the Transfer Duty Act, designed to evade payment of transfer duty by abusing the trust form and negating the separation of control and beneficial interest. The structure, which makes the defendant sole trustee and beneficiary, is inimical to the trust concept and results in the failure of the trust. The forfeiture and ejectment clauses are contra bonos mores and unenforceable.

Court Disposition

application for default judgment dismissed; agreement declared null and void

Orders

  • The application for judgment by default is dismissed.
  • The agreement entered into between the parties is declared null and void and of no force and effect.