Smart NO v Burne No and Others (10194/2011) [2013] ZAKZDHC 59 (19 July 2013)

Smart NO v Burne No and Others (10194/2011) [2013] ZAKZDHC 59 (19 July 2013)

The court found that Mia, through her mother and guardian, had accepted the benefits conferred by the trust deed, as evidenced by substantial payments made for her support and education. This acceptance vested rights in Mia as a beneficiary. Once such rights are vested, the donor and trustees cannot lawfully amend the trust deed to remove the beneficiary or substitute another without the beneficiary's consent or that of her legal guardian. The purported amendments to the trust deed, which replaced Mia with the Lumiato Foundation as beneficiary, were executed without such consent and are therefore invalid. The original intention of the donor as expressed in the unamended trust deed must be...

Citation
[2013] ZAKZDHC 59
Parties
Applicant: Cheryl Smart N.O.; Respondent: Gerald Graham Burne N.O.; Respondent: Mario Jorge Ribeiro N.O.; Respondent: Rinioulla Bento N.O.; Respondent: Gert Johannes Francois Jansen Van Vuuren N.O.; Respondent: The Master of the High Court, Durban; Respondent: The Registrar of Deeds, Kwazulu-Natal; Respondent: The South African Revenue Services
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
19 July 2013
Case Number
10194/2011
Procedural Posture
Civil Application / Judgment
Outcome
Application granted. The amendments to the Mia Lab Trust Deed are declared null and void and set aside.
Judges
Nkosi
Legal Topics
Trust Deed Variation, Beneficiary Rights, Stipulatio Alteri, Acceptance of Benefit
Land and Property Civil Procedure Trust Deed Variation Beneficiary Rights Stipulatio Alteri Acceptance of Benefit

Case Brief

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Parties

Cheryl Smart N.O.

Applicant

Gerald Graham Burne N.O.

Respondent

Mario Jorge Ribeiro N.O.

Respondent

Rinioulla Bento N.O.

Respondent

Gert Johannes Francois Jansen Van Vuuren N.O.

Respondent

The Master of the High Court, Durban

Respondent

The Registrar of Deeds, Kwazulu-Natal

Respondent

The South African Revenue Services

Respondent

Procedural Posture

Civil Application / Judgment

Legal Issues

  1. 1 Whether the variation of the Mia Lab Trust Deed on 16 September 2008 is valid.
  2. 2 Whether the benefits under the trust had vested and been accepted by the beneficiary.
  3. 3 Whether the donor and trustees could amend the trust deed without the beneficiary's consent.

Ratio Decidendi

The court found that Mia, through her mother and guardian, had accepted the benefits conferred by the trust deed, as evidenced by substantial payments made for her support and education. This acceptance vested rights in Mia as a beneficiary. Once such rights are vested, the donor and trustees cannot lawfully amend the trust deed to remove the beneficiary or substitute another without the beneficiary's consent or that of her legal guardian. The purported amendments to the trust deed, which replaced Mia with the Lumiato Foundation as beneficiary, were executed without such consent and are therefore invalid. The original intention of the donor as expressed in the unamended trust deed must be...

Court Disposition

Application granted. The amendments to the Mia Lab Trust Deed are declared null and void and set aside.

Orders

  • The deed of amendment dated 16 September 2008 in respect of the Mia Lab Trust, purporting to remove Mia as sole beneficiary and replace her with the Lumiato Foundation, is declared null and void and set aside.
  • Any disposition, alienation, or distribution of assets from the Mia Lab Trust to the Lumiato Foundation is set aside.