Liebenberg NO v MGK Bedryfsmaatskappy (Edms) Bpk (61/2001) [2002] ZASCA 116; [2002] 4 All SA 322 (SCA); 2003 (2) SA 224 (SCA) (25 September 2002)

Liebenberg NO v MGK Bedryfsmaatskappy (Edms) Bpk (61/2001) [2002] ZASCA 116; [2002] 4 All SA 322 (SCA); 2003 (2) SA 224 (SCA) (25 September 2002)

The Supreme Court of Appeal held that, although the trust deed conferred wide powers and discretion on the trustee, these powers were intended to achieve the objects of the trust and were subject to its express provisions and purposes. The trust deed did not expressly or by necessary implication empower the trustee to execute an unlimited deed of suretyship for the debts of a beneficiary. The intention of the testator was to ensure the real value of the trust assets was preserved and that an equal distribution among beneficiaries was possible upon termination of the trust. Allowing the trustee to bind the trust estate by unlimited suretyship would defeat this intention and expose the...

Citation
[2002] ZASCA 116
Parties
Appellant: Samuel Liebenberg NO; Respondent: MGK Bedryfsmaatskappy (Edms) Bpk
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 September 2002
Case Number
61/2001
Procedural Posture
Civil Appeal / Final Appeal Before Supreme Court of Appeal
Outcome
Appeal allowed; sequestration order set aside.
Judges
Vivier, Farlam, Navsa, Mpati, Heher
Legal Topics
Trustee Powers, Suretyship, Interpretation of Wills, Sequestration, Trust Property Control Act
Land and Property Civil Procedure Trustee Powers Suretyship Interpretation of Wills Sequestration Trust Property Control Act

Case Brief

Summary, issues, holding and outcome

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Parties

Samuel Liebenberg NO

Appellant

MGK Bedryfsmaatskappy (Edms) Bpk

Respondent

Procedural Posture

Civil Appeal / Final Appeal Before Supreme Court of Appeal

Legal Issues

  1. 1 Whether the trustee was empowered by the trust deed to bind the trust property by means of an unlimited deed of suretyship for the debts of a beneficiary.
  2. 2 Whether such power can be implied from the wide discretionary language of the trust deed.
  3. 3 Whether the sequestration order against the trust estate was justified.

Ratio Decidendi

The Supreme Court of Appeal held that, although the trust deed conferred wide powers and discretion on the trustee, these powers were intended to achieve the objects of the trust and were subject to its express provisions and purposes. The trust deed did not expressly or by necessary implication empower the trustee to execute an unlimited deed of suretyship for the debts of a beneficiary. The intention of the testator was to ensure the real value of the trust assets was preserved and that an equal distribution among beneficiaries was possible upon termination of the trust. Allowing the trustee to bind the trust estate by unlimited suretyship would defeat this intention and expose the...

Court Disposition

Appeal allowed; sequestration order set aside.

Orders

  • The appeal is allowed with costs, including those occasioned by the employment of two counsel.
  • The order of the court a quo is set aside and replaced with: 'The provisional order of sequestration is discharged with costs.'