Potgieter NO en andere v Shell South Africa (Pty) Ltd (390/2001) [2002] ZASCA 105; 2003 (1) SA 163 (SCA) (13 September 2002)

Potgieter NO en andere v Shell South Africa (Pty) Ltd (390/2001) [2002] ZASCA 105; 2003 (1) SA 163 (SCA) (13 September 2002)

The court held that the trust deed, when properly interpreted, did not intend to restrict the term 'company' to its strict technical meaning, and that a close corporation falls within its ambit for the purposes of trustee powers. The trustees were authorised to bind the trust as surety for Dirkies Vervoer, as the suretyship was for the benefit of Dirkie, the sole beneficiary involved. The lack of evidence to rebut the prima facie inference that the trustees acted to benefit Dirkie meant the trust was liable. The appeal was dismissed and the costs order of the lower court, including costs of two counsel, was confirmed.

Citation
[2002] ZASCA 105
Parties
Appellant: Annemarie Potgieter N O; Appellant: Christina Elizabeth Lloyd N O; Respondent: Shell South Africa (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
13 September 2002
Case Number
390/2001
Procedural Posture
Civil Appeal / Appeal From Lower Court Judgment
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Howie, Olivier, Nugent, Conradie, Jones
Legal Topics
Trustee Powers, Suretyship, Interpretation of Trust Deed
Commercial and Corporate Civil Procedure Trustee Powers Suretyship Interpretation of Trust Deed

Case Brief

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Parties

Annemarie Potgieter N O

Appellant

Christina Elizabeth Lloyd N O

Appellant

Shell South Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Lower Court Judgment

Legal Issues

  1. 1 Whether the trustees of a family trust were authorised by the trust deed to bind the trust as surety for the obligations of a close corporation of which a beneficiary was the sole member.
  2. 2 Whether the term 'company' in the trust deed includes a close corporation for purposes of granting suretyship.
  3. 3 Whether the suretyship was given for the benefit of a beneficiary as required by the trust deed.

Ratio Decidendi

The court held that the trust deed, when properly interpreted, did not intend to restrict the term 'company' to its strict technical meaning, and that a close corporation falls within its ambit for the purposes of trustee powers. The trustees were authorised to bind the trust as surety for Dirkies Vervoer, as the suretyship was for the benefit of Dirkie, the sole beneficiary involved. The lack of evidence to rebut the prima facie inference that the trustees acted to benefit Dirkie meant the trust was liable. The appeal was dismissed and the costs order of the lower court, including costs of two counsel, was confirmed.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.