Business trusts and family feuds: The objectives of a trust founder are sacrosanct

On 06 March 2026, the Supreme Court of Appeal of South Africa (“SCA“) reaffirmed the principle that the objectives of a trust may only be found in the trust deed and cannot be varied by the wishes of the founder expressed informally in family meetings and dinner tables prior to their death. The judgment which is the subject of this note is Lenette Janse De Wit & Others v Toerien De Wit N.O. & Others (607/2024) [2026] ZASCA 23.

What happened?

In 1995, Mr Elbert De Wit Snr (“Elbert Snr“) formed the Elbert De Wit Family Trust (“Trust“). Elbert Snr was married to Ms Lenette De Wit (“Lenette“), and they had four children; Toerien De Wit (“Toerien“), Maryke Smit (“Maryke“), Karmien Kruth (“Karmien“) and Elbert De Wit Jnr (”Elbert Jnr”). Elbert Snr and Philip Rall (“Philip“) were trustees since the formation of the Trust. Toerien became a trustee in 2015. Philip is an attorney and therefore an independent trustee. In terms of Elbert Snr’s will, Lenette replaced him as the third trustee. In terms of the trust deed, Elbert Snr, Lenette and their children are income beneficiaries of the Trust. In terms of his will, Elbert Snr nominated Lenette and their children as the capital beneficiaries of the Trust.

The Trust owns the entire issued shares in the capital of De Wit Group Proprietary Limited, which in turn owns shares in various companies. The Trust assets are worth approximately R 120 million.

Between 2017 and 2019, and whilst Elbert Snr was seriously ill, he expressed a series of verbal wishes regarding how the Trust property should be distributed after his death. These wishes were recorded in several emails and memoranda. However, the trust deed was not formally amended. The essence of his wishes was that there should be an equal distribution of the Trust capital among the beneficiaries. He did not want a liquidation of assets to achieve this purpose. He said he wanted the businesses to continue to operate. At some point, Elbert Snr asked that each beneficiary should indicate whether they were interested in a particular Trust asset, or whether they would prefer a distribution in cash. There was some divergence between the beneficiaries, with Karmien preferring cash payment and Maryke, specific assets.

After the death of Elbert Snr, acrimony developed between the beneficiaries and the trustees. They were separated into two camps. In the first camp, Maryke, Karmien and Lenette (the only trustee in this camp) wanted the vesting date to be declared and the Trust capital distributed. In the second camp, Toerien and Philip (the majority trustees) refused to determine the vesting date. The first camp applied to the High Court of South Africa, Western Cape Division (“High Court“) for an order dissolving the Trust in terms of section 13 of the Trust Property Control Act, No. 57 of 1988, as amended (“TPC Act“), appointing a receiver to take control of the Trust property and giving that receiver the power to liquidate and distribute the Trust assets.

What does section 13 of the TPC Act say?

Section 13 of the TPC Act provides as follows –

“Power of Court to vary trust provisions

If a trust contains any provision which brings about consequences which in the opinion of the Court the founder of a trust did not contemplate or foresee and which –

(a) hampers the achievement of the objects of the founder; or

(b) prejudices the interests of the beneficiaries; or

(c) is in conflict with the public interest,

the Court may, on application of the trustee or any person who in the opinion of the Court has a sufficient interest in the trust property, delete or vary any such provision or make in respect thereof an order which such court deems just, including an order whereby a particular trust property is substituted for particular other trust property, or an order terminating the trust.” [Emphasis added]

What were the main arguments by Lenette (minority trustee) and Toerien and Philip (majority trustees)?

Lenette (minority trustee) and her co-applicants argued that–

clause 1.8 of the trust deed defined “vesting date” as “the date which the trustees may determine as [the] vesting date, which shall indicate the time at which [the] beneficiaries shall acquire vested rights with respect to the net trust assets;”
clause 7.3 of the trust deed provided that the trustees “shall be entitled, in their sole discretion, to continue the trust indefinitely, but upon termination thereof, [and] subject to the constraints imposed herein, shall allocate the capital to the beneficiaries in accordance with clause 1.6 hereof.” (Emphasis added.);
Toerien and Philip (the majority trustees) were misusing their discretion in clause 7.3 of the trust deed to continue the Trust indefinitely, rather than to determine a vesting date and distribute the Trust assets to the beneficiaries and therefore causing the breakdown in relationships among the family, and conflict between the trustees; something which Elbert Snr did not foresee or contemplate; and
the breakdown in family relations was hampering the objectives of the Trust set out in clause 3 of the trust deed as being –

the expansion of the Trust benefits and the creation of sources of income for the beneficiaries; and
to pay such funds from the income of the Trust to the various beneficiaries as may be reasonable and desirable in the opinion of the Trustees and in accordance with the guidelines set out in clauses 6; and

by virtue of his control of the Trust and its assets, Toerien controls the income of the Trust, contrary to the objectives of the Trust in clause 3 of the trust deed, and to the prejudice of all the other beneficiaries.

The riposte by Toerien and Philip (majority trustees) was as follows –

Lenette and her co-applicants had failed to satisfy the requirements for an order in terms of section 13 of the TPC Act;
Toerien and Philip were doing no more than acting within the powers accorded to them in the trust deed to further the objectives of the Trust;
what Lenette and her co-applicants wished to achieve was not possible because of the absence of liquid Trust assets;
Karmien’s wish for a cash capital distribution was irreconcilable with Maryke and Lenette’s wish for a distribution of trust assets in kind; and
as the beneficiaries could not agree how to achieve an equitable distribution, the objectives of the Trust were properly served by delaying the determination of the vesting date.

The High Court decided that whilst Lenette and her co-applicants had established that the use by Toerien and Philip of their discretion in clause 7.3 of the trust deed to continue the Trust indefinitely had brought about the family breakdown, which was not foreseen or contemplated by Elbert Snr, they failed to prove that there was a causal relationship between the family breakdown and the non-achievement of the Trust objectives. Lenette and her co-applicants were therefore unsuccessful. They appealed to the SCA.

What did the SCA say?

The SCA dismissed the appeal by Lenette and her co-applicants. It agreed with the High Court that the two jurisdictional requirements inherent in section 13 of the TPC Act are first, whether clauses 1.8 and 7.3 of the trust deed brought about consequences which the founder of the trust had not foreseen or contemplated (the anchor jurisdictional factor) and, second, whether clauses 1.8 and 7.3 of the trust deed had any of the three consequences listed in subparagraphs (a), (b) or (c) of section 13 of the TPC Act. However, the SCA disagreed with the finding of the High Court that the first jurisdictional requirement (the anchor jurisdictional factor) was established.

In regard to the question whether clauses 1.8 and 7.3 of the trust deed brought about consequences which Elbert Snr had not foreseen or contemplated (the anchor jurisdictional factor), Judges Keightley and Modiba said the following –

“[34] The first difficulty, in our view, is that the high court started from the incorrect premise in reaching this conclusion. It focused its inquiry on Elbert Snr’s wishes as expressed between January 2017 and February 2019. This was erroneous. As we observed earlier, the intention of a trust’s founder is critical to the question whether the anchor jurisdictional factor has been satisfied. However, the relevant intention is that reflected in the trust deed, not what the founder may have said decades later.”; [Emphasis added]
“[35] The overall scheme of the trust as recorded in the trust deed envisages that it may continue in existence at the discretion of the trustees. Significantly, the lifespan of the trust is deliberately open-ended: the founder did not tie its continued existence to any specific date or event, such as his death, or the children reaching a certain age. On the contrary, it is the trustees who have the sole discretion to determine, among many other things, if, and when, a final distribution should be made.; [Emphasis added]
“[37] As founder, Elbert Snr, too, was bound by the terms of the trust deed. He had no power to alter the trust deed merely by an expression of verbal wishes. Nor did Elbert Snr take steps to effect any formal variation of the terms of the trust deed to fix a vesting date or otherwise limit the discretionary powers of the trustees.”; [Emphasis added]
“[38] Thus, it must be accepted that he retained the intention, as expressed in the trust deed, that it lay within the sole discretion of the trustees to determine the vesting date. He contemplated that they would exercise their discretion reasonably, taking account of all relevant circumstances. He understood that the trustees, and not the beneficiaries, had the power to make that determination. He also contemplated that not all trustees would agree when it came to decision-making. For this reason, the trust deed provides for a majority decision to prevail.”;
“[39] This intention of Elbert Snr, as clearly reflected in the trust deed, ought not easily to be overridden. Where the high court erred was in its assumption that Elbert Snr’s wishes, as discussed with his family, were determinative. The high court assumed that these prevailed over the trust deed. This resulted in it reaching the erroneous conclusion that the majority trustees had used their powers under the impugned provisions in a manner that Elbert Snr had not contemplated or foreseen.”; [Emphasis added] and
“[40] The high court erred further in accepting that the appellants were justified in expecting that the remaining two trustees would be persuaded to determine a vesting date and distribute the trust assets. Under the scheme of the trust as constituted in the trust deed, none of the appellants, as beneficiaries, have any right to insist that the trustees exercise their discretion under the impugned provisions to declare a vesting date. This was never the intention of the founder. The terms of the trust deed leave this solely to the discretion of the majority trustees. The beneficiaries have no vested rights yet in the trust assets and thus no authority to insist that a vesting date be fixed. Nor does Lenette have rights as a minority trustee to insist that her fellow trustees decide trust matters in a particular manner. The high court’s approach was based on an incorrect legal premise in this respect as well.”

In regard to the question whether clauses 1.8 and 7.3 of the trust deed had any of the three consequences listed in subparagraphs (a), (b) or (c) of section 13 of the TPC Act, the Judges said the following –

“…it would not be in the interests of the beneficiaries at present for the trustees to determine a vesting date and proceed to distribute the trust assets. First, it is not possible to give effect to the competing wishes of different beneficiaries. Second, the beneficiaries cannot agree on a different distribution mechanism, which puts the trustees in a difficult position. Third, and importantly, if a distribution were to be effected now, the returns on investment for the trust, and ultimately the beneficiaries, would not be optimal. Contrary to the contentions of the appellants, they have failed to satisfy the requisites of s 13(b) [of the TPC Act].”; and
“It cannot be said that the exercise by the majority trustees of their discretion under clauses 1.8 and 7.3… hampers the achievement of the trust objectives. The trust deed leaves it to the trustees, by way of a majority vote, to determine whether a vesting date should be fixed. The majority trustees, for rational reasons, have determined that as matters stand, this should not yet be done. This accords with the aims identified in the trust deed, to expand trust benefits and create sources of income.”.

What does this mean for me?

A trust is one of the most versatile structuring instruments for businesspeople. However, its efficient operation after the death of its founder is ordinarily jeopardized by disputes between beneficiaries and trustees. Feuds are part of business; therefore, founders of trusts must, during their lifetime, periodically review trust deeds to ensure that they continue to serve their intended objectives, notwithstanding the evolution of the family dynamics and business needs.

The following are practical lessons for founders arising from the judgment under discussion –

the intention of the founder in relation to a trust expressed in family meetings and dinner tables during his or her lifetime have no legal effect; if the founder wishes to change his or her objectives in relation to an existing trust or vary any of its provisions, the trust deed must be amended;
notwithstanding family feuds, Courts will respect and give proper weight to the intentions of the founder as expressed in the trust deed; therefore, provisions of trust deeds must be unambiguous;
termination of a trust by Courts after the death of a founder is an extraordinary remedy; therefore, trusts that are intended to operate perpetually will be preserved by Courts; and
the dissatisfaction of beneficiaries and minority trustees about the way the majority trustees exercise their discretion as trustees is not a justifiable reason to terminate a trust or interfere with its provisions.