The Mercury

Choose your trustees well to avoid drama

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HOW EASY IS it (or not) to remove a trustee? Trustees are the guardians of the trust assets and have a duty to manage these assets in the best interests of the beneficiar­ies, as outlined in the trust deed. Choosing a trustee, without anticipati­ng various negative outcomes, who may become problemati­c later, may cost you dearly. may include the removal of a trustee, as approved by the majority of trustees. This clause does not seem to give the protection, as many people are hoping.

A recent case dealt with the issue whether a majority of trustees can remove another trustee from his/her office as trustee. A number of lessons can be learnt from the Trustees of the Ritom Trust versus Van Niekerk case, which was heard as recently as May 2018. In this case, three profession­al trustees, consisting of two auditors and a lawyer, wanted to remove the mother of the only beneficiar­y of the trust, as trustee. It appears if the beneficiar­y’s father, who is neither the founder, nor a trustee of the trust, influenced the other trustees to get rid of the mother, as trustee.

The following lessons are learnt: Even though a trust deed may contain a clause, empowering trustees to remove another trustee by majority vote, it is not sufficient to, without reason, enforce this clause. Trustees have to act reasonably and exercise reasonable care, to remove another. The removal of a trustee without good reason is against public policy and the principles of ubuntu, reasonable­ness and fairness.

The mere conflict between trustees and beneficiar­ies, or among trustees, is insufficie­nt for the removal of a trustee. Removal of a trustee will be ordered if the trustee’s continuanc­e in office will prevent the trust being properly administer­ed or will be detrimenta­l to the welfare of the beneficiar­ies. The overriding question is always whether or not the conduct of the trustee imperils the trust property or its proper administra­tion (Gowar case of 2016). If a trustee is requested by others to resign, he/ she shall vacate his/her office only in the event of an acceptance of request by him/ her; otherwise not.

Although the removal of a trustee on the happening of a certain event is allowed (Osman v Jhavari case of 1939), the decision of a majority of trustees to remove another is not seen as “an event”. “An event” cannot be a majority decision by trustees to cause the vacation from office by a trustee against his/her will and/or without good cause, whether by way of a request to resign, or otherwise.

Proper procedure should be followed to remove a trustee, such as a properly constitute­d trustees’ meeting and upon proper notice of the trustees’ intention.

Even if the master or a court removes a trustee as described above, he/she should have a right to challenge the decision in a court. The removal of a trustee, which may have the result that the whole purpose of the trust deed is undermined – to ensure that the interests of the beneficiar­ies are properly taken care of – will not be allowed.

In terms of Section 10 of the Constituti­on, everyone, including a trustee, has the right to have their dignity respected and protected. It is therefore difficult for “outsiders” to “dump” a trustee who is acting in the interest of the beneficiar­ies.

In terms of Section 34 of the Constituti­on, everyone has a right to have any dispute, that can be resolved by the applicatio­n of law, to be decided in a fair public hearing before a court.

 ??  ?? GWYNNE SHOTWELL, president and chief operating officer of Space Exploratio­n Technologi­es (SpaceX), from left, Nasa astronaut Bob Behnken, Nasa astronaut Doug Hurley, Nasa astronaut Mike Hopkins, Nasa astronaut Victor Glover, Garrett Reisman, senior adviser for human spacefligh­t at SpaceX, and Benjamin Reed, director of crew mission management at SpaceX, stand in front of the Crew Dragon spacecraft clean room during the Nasa Commercial Crew Program astronaut visit at the SpaceX headquarte­rs in Hawthorne, California, US, this week. Astronauts on SpaceX’s Crew Dragon will be the first to fly on an American-made commercial spacecraft to and from the Internatio­nal Space Station on their mission scheduled for April 2019. – Bloomberg
GWYNNE SHOTWELL, president and chief operating officer of Space Exploratio­n Technologi­es (SpaceX), from left, Nasa astronaut Bob Behnken, Nasa astronaut Doug Hurley, Nasa astronaut Mike Hopkins, Nasa astronaut Victor Glover, Garrett Reisman, senior adviser for human spacefligh­t at SpaceX, and Benjamin Reed, director of crew mission management at SpaceX, stand in front of the Crew Dragon spacecraft clean room during the Nasa Commercial Crew Program astronaut visit at the SpaceX headquarte­rs in Hawthorne, California, US, this week. Astronauts on SpaceX’s Crew Dragon will be the first to fly on an American-made commercial spacecraft to and from the Internatio­nal Space Station on their mission scheduled for April 2019. – Bloomberg
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