Breetzke and Others NNO v Alexander NO and Others (232/2019) [2020] ZASCA 97; [2020] 4 All SA 374 (GP); 2020 (6) SA 360 (SCA) (2 September 2020)

Breetzke and Others NNO v Alexander NO and Others (232/2019) [2020] ZASCA 97; [2020] 4 All SA 374 (GP); 2020 (6) SA 360 (SCA) (2 September 2020)

The Supreme Court of Appeal held that a company which knowingly participates in a trustee's breach of fiduciary duty, and benefits from that breach, is liable in delict to the beneficiaries for losses arising from the breach. The court found that the allegation of knowing participation suffices to plead wrongfulness, and that the particulars of claim against Ziningi Properties (Pty) Ltd were not excipiable. The court relied on established authority, including Yorkshire Insurance and Gross v Pentz, confirming that joint liability arises where a third party knowingly aids or facilitates a breach of trust. The court rejected the argument that corporate separateness shields Ziningi from...

Citation
[2020] ZASCA 97
Parties
Appellant: Gavin Anthony Breetzke NO; Appellant: Michael John Breetzke NO; Appellant: Margaret Ann Breetzke NO; Respondent: Robert Edward Alexander; Respondent: Ziningi Properties (Pty) Ltd; Respondent: Rodney John Trotter NO; Respondent: Brett Dennis Berriman NO; Respondent: Angela Claire Alexander NO
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
2 September 2020
Case Number
232/2019
Procedural Posture
Civil Appeal / Appeal From Kwa Zulu Natal Division of the High Court, Pietermaritzburg, Following an Exception Upheld Against the Amended Particulars of Claim.
Outcome
Appeal upheld; exception dismissed.
Judges
Wallis, Mbha, Mocumie, Molemela, Dlodlo
Legal Topics
Breach of Fiduciary Duty, Knowing Participation in Breach of Trust, Pure Economic Loss, Wrongfulness in Delict, Corporate Separateness, Exception Procedure
Civil Procedure Commercial and Corporate Delict Breach of Fiduciary Duty Knowing Participation in Breach of Trust Pure Economic Loss Wrongfulness in Delict Corporate Separateness +1 more

Case Brief

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Parties

Gavin Anthony Breetzke NO

Appellant

Michael John Breetzke NO

Appellant

Margaret Ann Breetzke NO

Appellant

Robert Edward Alexander

Respondent

Ziningi Properties (Pty) Ltd

Respondent

Rodney John Trotter NO

Respondent

Brett Dennis Berriman NO

Respondent

Angela Claire Alexander NO

Respondent

Procedural Posture

Civil Appeal / Appeal From Kwa Zulu Natal Division of the High Court, Pietermaritzburg, Following an Exception Upheld Against the Amended Particulars of Claim.

Legal Issues

  1. 1 Whether a company that knowingly participates in a trustee's breach of fiduciary duty is liable to the beneficiaries for losses arising from the breach.
  2. 2 Whether the particulars of claim against Ziningi Properties (Pty) Ltd disclose a cause of action in delict.
  3. 3 Whether wrongfulness is sufficiently pleaded where knowing participation in a breach of trust is alleged.

Ratio Decidendi

The Supreme Court of Appeal held that a company which knowingly participates in a trustee's breach of fiduciary duty, and benefits from that breach, is liable in delict to the beneficiaries for losses arising from the breach. The court found that the allegation of knowing participation suffices to plead wrongfulness, and that the particulars of claim against Ziningi Properties (Pty) Ltd were not excipiable. The court relied on established authority, including Yorkshire Insurance and Gross v Pentz, confirming that joint liability arises where a third party knowingly aids or facilitates a breach of trust. The court rejected the argument that corporate separateness shields Ziningi from...

Court Disposition

Appeal upheld; exception dismissed.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the high court is altered to read: 'The exception is dismissed with costs, such costs to include the costs consequent upon the employment of two counsel.'