Trust deeds ordinarily contain a clause that prescribe that a trust shall always have a certain minimum number of trustees in office. Whilst is it accepted that an agreement concluded by a trust whilst the number of trustees are below the prescribed minimum is null and void, there seem to be confusion whether action by trustees on behalf of a trust whilst the number of trustees are below the prescribed minimum may be ratified after additional trustees have been appointed.

On 6 March 2026, and in Zurnamer NO and Others v JA Clift (Pty) Ltd and Others (25519/2024) [2026] ZAWCHC 106 (“JA Clift Judgment“), the High Court of South Africa, Western Cape Division (“High Court“) clarified the abovementioned confusion in the context of locus standi (legal standing) of a trust to institute legal proceedings whilst the trustees in office are below the prescribed minimum number.

What happened?

JA Clift Proprietary Limited (“JA Clift“), the first respondent in the application, was incorporated in 1939. The shareholders of JA Clift are various trusts with links to the descendants of James Andrew Clift; the Clift family patriarch who founded JA Clift in 1906.

On or about 18 November 2024, the applicants applied to the High Court on behalf of the Derek Kelynack Family Trust (“DKF Trust“) and the Jack Kelynack Family Trust (“JKF Trust“) seeking orders in terms of section 163 of the Companies Act, No. 71 of 2008, as amended, based on the alleged oppressive or unfairly prejudicial conduct by the majority shareholders and/or directors of JA Clift. At the time of the institution of the legal proceedings, Tracey Zurnamer (“Tracy“) and Marion Kelynack (“Marion“) were the trustees of the DKF Trust and Patricia Rix (“Patricia“), the trustee of the JKF Trust.

The resolution of the DKF Trust authorising the institution of legal proceedings was signed by Tracey and Marion on 24 May 2024; that is, prior to the institution of the legal proceedings. The resolution of the JKF Trust was also signed by Patricia on the same date and recorded that she was the “sole existing Trustee“. The respondents argued that since there was no evidence that the resolutions of the DKF Trust and the JKF Trust (collectively “Trusts“) were passed by the required number of trustees, the latest letters of authority confirming that the trustees were duly appointed and the trust deed of the trusts setting out requirements relating to the minimum number of trustees were not attached to the founding affidavit, the applicants failed to establish locus standi (legal standing to initiate the application).

In response to the locus standi issue, and on 08 August 2025, the applicants filed a supplementary affidavit explaining that on 22 November 2024; that is, after the application was initiated on 18 November 2024, Tracy and Jeanne Gallaway Pienaar were appointed as additional trustees of the JKF Trust and attaching another resolution of the JKF Trust dated 06 August 2025 ratifying the first resolution signed only by Patricia in May 2024, the letters of authority dated 22 November 2025 reflecting that Tracey, Marion and Pienaar were duly appointed as trustees and the trust deed of the JKF Trust.

What were the arguments raised by the respondents?

The respondents raised the following arguments on legal standing –

  • the locus standi issue had nothing to do with lack of authority, but everything to do with a lack of capacity of the Trusts;
  • in relation to the JKF Trust, the trust deed required a minimum of two trustees; therefore, the resolution instituting legal proceedings signed by only one trustee was null and void based on lack of capacity and was incapable of ratification; and
  • in regard to the DKF Trust, the resolution authorising the institution of legal proceedings did not establish locus standi since neither the trust deed nor the letters of authority of the DKF was attached in the founding affidavit; therefore, there was no evidence that the DKF Trust was a properly constituted entity or had capacity to litigate.

What did the High Court say?

The High Court decided that the applicants had failed to prove that they had legal standing to institute the application.

First, Pangarker J made the following general observations –

  • the applicants, as the parties instituting the application, are required to allege and prove their locus standi on behalf of the Trusts and such legal standing must appear clearly in the founding affidavit;
  • where a trust deed requires a minimum number of trustees in office at the time an action or decision is taken by them on behalf of a trust, then in circumstances where the minimum threshold is not met, “it invariably means that the Trust would lack capacity to take such action“; and
  • “…the following essential averments or allegations are necessary in respect of locus standi in relation to the Trusts:
      • that the Trustees have the necessary capacity to act on behalf of the Trust by virtue of their appointment in terms of Letters of Authority, a Court order, or, the Master’s Certificate (copies should be attached to the founding affidavit); and
      • that at the time of acting in respect of Trust matters (whether transacting or instituting legal proceedings), the number of Trustees in office, met the minimum threshold requirement of the Trust Deed.”

Second, Pangarker J said the following regarding the DKF Trust –

  • “[51] The Trustees of the Derek Kelynack Family Trust allege in their confirmatory affidavits that they are the Trustees of such Trust but fail to state that they were properly appointed by Letters of Authority and/or Trust Deed or any other given instrument. Secondly…it was required of such Trust to indicate in its founding affidavit that it had locus standi to litigate against the respondents or at least, to institute the application. However, the founding affidavit is silent on this averment and merely refers to the Trust’s name, identifies the Trustees and mentions that Ms Pienaar is authorized to depose to the affidavit. Having regard to the legal principles discussed above, I am of the view that these averments are insufficient to establish locus standi ex facie the founding affidavit.”; and
  • “[53] Added to this, there is also no reference in the founding affidavit to the Trust Deed nor any other documents submitted by way of a supplementary replying affidavit, nor any averments which indicate the minimum required number of Trustees in office. Having regard to all these factors, I simply have no idea what the required minimum was, whether the Trust was quorate in May 2024 when it was resolved to institute the application and when the application was instituted in November 2024, and whether the Trustees had the necessary capacity to act on behalf of the Trust.” [Emphasis added]

Third, in regard to the JKF Trust, the following remarks are instructive –

  • “[57] …I conclude that at the time of resolving to institute proceedings in May 2024, the number of Trustees fell below two, meaning that the Trust lacked capacity…in those circumstances, any action taken/made on behalf of the Trust was precluded. In addition, clause 5.3.1 of the Trust Deed prescribes that where the number falls below the minimum of two Trustees, the sole Trustee retains power to appoint an additional Trustee to increase the number to meet the threshold. In this regard, there is no evidence that Ms Rix N.O., who is described as the sole existing Trustee in the May 2024 Resolution, acted in accordance with her duty in clause 5.3.1.  In addition, there is no evidence that Ms Rix N.O. acted as agent on behalf of a co-Trustee and she clearly failed to comply with clause 14.2 of the Trust Deed which required the Resolution to be signed by all the Trustees.”;
  • “[58] Thus, in respect of the action taken by Ms Rix N.O. – the Resolution to institute the application – my finding is that the Trust Deed’s requirement in clause 5 was not fulfilled, which led to the Trust suffering an incapacity which precluded action on its behalf. These findings should be the end of the matter for the Jack Kelynack Trust except that the supplementary replying affidavit then attempts to salvage the situation by introducing Letters of Authority and a second Resolution, SA2, as indicated above.”; and
  • “[68] The very late second Resolution [ratification resolution], dated 6 August 2025, many months after the institution of the application, which seeks to ratify the Trust’s involvement in the application, also does not assist the 3rd applicant for the reason that the initial action/decision/Resolution to institute the action, was a nullity due to the Trust suffering from an incapacity which precluded an action on its behalf…such nullity cannot be ratified.”

Why this judgement is important?

In Mhlari NO and Others v Nedbank Limited (251/2023) [2024] ZASCA 39 (4 April 2024), Nedbank Limited (“Nedbank“) concluded a loan agreement with the Patrick Malabela Family Trust (“Malabela Trust“) when the trustees of the trust were below the prescribed minimum. Since the loan agreement was null and void, Nedbank had to rely on unjustified enrichment to recover about R 5 million from the Malabela Trust. The JA Clift Judgment confirms that the importance of verifying the capacity of a trust in advance extends beyond transactional matters and includes litigation.

The following are the key lessons from the JA Clift Judgment worth noting –

  • before concluding a transaction with a trust or instituting legal proceedings on behalf of a trust –
    • trustees must ensure that the minimum number of trustees have been appointed in accordance with the trust deed and have passed the necessary resolutions; and
    • the latest letters of authority and trust deed, including all amendments thereto, must be scrutinised to ensure compliance with the capacity and authority requirements and must be attached to pleadings in legal proceedings;
  • a trust has no capacity to conclude agreements or institute legal proceedings if the number of trustees in office is below the prescribed minimum, in those circumstances, there are no trustees who could give authority to bind a trust;
  • the lack of capacity of the trust cannot be cured by a resolution ratifying the initial action; and
  • action by trustees may only be ratified through a resolution if the required number of trustees were in office and the ratification is meant to record and confirm the authority of a trustee who may have acted individually and without the concurrence of the other trustees; that is, lack of authority may be ratified but lack of capacity cannot.

Authors: Fezile Tembe and Baphethuxolo Mgqibi (under supervision by Siyabonga Shandu)