Vorster N.O v Buthelezi and Others (10754/2022P) [2023] ZAKZPHC 109; [2023] 4 All SA 889 (KZP) (13 October 2023)

Vorster N.O v Buthelezi and Others (10754/2022P) [2023] ZAKZPHC 109; [2023] 4 All SA 889 (KZP) (13 October 2023)

The court found that the first to fourth respondents, as trustees, distributed substantial trust funds to themselves, their relatives, and associated entities, in a manner inconsistent with the charitable objectives of the Ubunye Be Afrika Development Trust. The trust deed provides for reasonable remuneration and expenses, but not for large gratuities or project payments to trustees and their associates. The respondents failed to demonstrate any legitimate basis for such payments, and their conduct was prejudicial to the trust and its beneficiaries. The court held that the original beneficiaries do not enjoy a preference over other beneficiaries, and the trust is not a trading trust. The...

Citation
[2023] ZAKZPHC 109
Parties
Applicant: Benjamin Jacobus Vorster N.O; Respondent: Felix Khulekani Buthelezi; Respondent: Ephraim Mfuneni Zungu; Respondent: Nontobeko Precious Angela Buthelezi; Respondent: Nomusa Zethu Qunta; Respondent: Mabutho Miya N.O; Respondent: Cynthia Themba Khumalo N.O; Respondent: The Master of the Kwazulu-Natal High Court, Pietermaritzburg
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
13 October 2023
Case Number
10754/2022P
Procedural Posture
Urgent Application / Final Judgment on Application for Removal of Trustees
Outcome
Application granted. The first to fourth respondents are removed as trustees of the Ubunye Be Afrika Development Trust.
Judges
E Bezuidenhout
Legal Topics
Trust Property Control Act, Removal of Trustee, Fiduciary Duties, Conflict of Interest, Trustee Remuneration, Charitable Trust Objects
Land and Property Civil Procedure Commercial and Corporate Trust Property Control Act Removal of Trustee Fiduciary Duties Conflict of Interest Trustee Remuneration +1 more

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Parties

Benjamin Jacobus Vorster N.O

Applicant

Felix Khulekani Buthelezi

Respondent

Ephraim Mfuneni Zungu

Respondent

Nontobeko Precious Angela Buthelezi

Respondent

Nomusa Zethu Qunta

Respondent

Mabutho Miya N.O

Respondent

Cynthia Themba Khumalo N.O

Respondent

The Master of the Kwazulu-Natal High Court, Pietermaritzburg

Respondent

Procedural Posture

Urgent Application / Final Judgment on Application for Removal of Trustees

Legal Issues

  1. 1 Whether the first to fourth respondents, as trustees, were entitled to pay or distribute trust funds to themselves and related parties.
  2. 2 Whether the payments made by the trustees were in accordance with the trust deed and the objectives of the Ubunye Be Afrika Development Trust.
  3. 3 Whether the conduct of the first to fourth respondents justified their removal as trustees under section 20(1) of the Trust Property Control Act.

Ratio Decidendi

The court found that the first to fourth respondents, as trustees, distributed substantial trust funds to themselves, their relatives, and associated entities, in a manner inconsistent with the charitable objectives of the Ubunye Be Afrika Development Trust. The trust deed provides for reasonable remuneration and expenses, but not for large gratuities or project payments to trustees and their associates. The respondents failed to demonstrate any legitimate basis for such payments, and their conduct was prejudicial to the trust and its beneficiaries. The court held that the original beneficiaries do not enjoy a preference over other beneficiaries, and the trust is not a trading trust. The...

Court Disposition

Application granted. The first to fourth respondents are removed as trustees of the Ubunye Be Afrika Development Trust.

Orders

  • The first, second, third and fourth respondents’ powers to act as trustees of the Ubunye Be Afrika Development Trust are suspended.
  • The first, second, third and fourth respondents are removed as trustees of the Ubunye Be Afrika Development Trust with immediate effect and are directed to return their letters of authority to the seventh respondent.