Private Law

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    The authorization of trustees in the South African law of trusts
    (University of the Free State, 2006-11) Smith, Bradley Shaun; Van der Westhuizen, W. M.; Van Schalkwyk, J. H.
    English: An analysis of the historical development of the trust in South Africa indicates that the trust has formed a part of South African jurisprudence for almost two centuries and, as such, has become a vibrant, dynamic and highly versatile institution in both commercial and legal practice. Initial recognition of the trust was occasioned chiefly by piecemeal (and fragmented) pre-Union legislation and case law. After 1910 the existence of the trust was confirmed by the Appellate Division – at that time the highest court in South Africa – and uniform legislation become applicable throughout the four provinces of the newly-established Union. The 1913 Administration of Estates Act was the first post-Union Act to apply to the law of trusts. This Act however only applied to the testamentary trust, but other legislation (such as the Trust Moneys Protection Act of 1934) eventually followed which applied to both testamentary and inter vivos trusts. The promulgation of the Trust Property Control Act 57 of 1988 is, however, widely regarded as being the most important contribution by the Legislature to the South African law of trusts. Section 6(1) of the 1988 Act introduced the requirement of written authorization of all trustees before they could act in that capacity. However, despite the seemingly clear and unambiguous wording adopted by the Legislature, the Courts have not interpreted and applied the section in a uniform fashion, leading to great uncertainty especially as far as the effect of non-compliance with section 6(1) is concerned. This dissertation attempts, by way of the legal historical method of research, to analyse the reported cases dealing with section 6(1), to compare the development of the requirement of written authorization with analogous requirements posed by previous legislation, and, as a consequence, to determine the true purpose of and rationale behind the insertion of the section. In order to combat the current uncertain legal position, three possible solutions are suggested, namely common law mechanisms, legislative intervention, and the correct interpretation of section 6(1).