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    Africa V Parker and Others 2005

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    Shreya Sulagan
    This case concerns a family trust that took out large loans without the approval of all trustees. The trust deed required three trustees to make binding decisions, but two trustees took out the loans without the third. The court found that the two trustees did not have the power to bind the trust under the terms of the trust deed. As there were not the required minimum of three trustees approving the loans, the trust was not obligated to repay the large debts. The two trustees who initiated the appeal without proper authorization were held personally responsible for expenses.

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    Africa V Parker and Others 2005

    Uploaded by

    Shreya Sulagan
    18 views7 pages
    This case concerns a family trust that took out large loans without the approval of all trustees. The trust deed required three trustees to make binding decisions, but two trustees took out the loans without the third. The court found that the two trustees did not have the power to bind the trust under the terms of the trust deed. As there were not the required minimum of three trustees approving the loans, the trust was not obligated to repay the large debts. The two trustees who initiated the appeal without proper authorization were held personally responsible for expenses.

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    Africa v Parker and Others 2005 (2)

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    This case concerns a family trust that took out large loans without the approval of all trustees. The trust deed required three trustees to make binding decisions, but two trustees took out the loans without the third. The court found that the two trustees did not have the power to bind the trust under the terms of the trust deed. As there were not the required minimum of three trustees approving the loans, the trust was not obligated to repay the large debts. The two trustees who initiated the appeal without proper authorization were held personally responsible for expenses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views7 pages

    Africa V Parker and Others 2005

    Uploaded by

    Shreya Sulagan
    This case concerns a family trust that took out large loans without the approval of all trustees. The trust deed required three trustees to make binding decisions, but two trustees took out the loans without the third. The court found that the two trustees did not have the power to bind the trust under the terms of the trust deed. As there were not the required minimum of three trustees approving the loans, the trust was not obligated to repay the large debts. The two trustees who initiated the appeal without proper authorization were held personally responsible for expenses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 7

    Africa v Parker and Others 2005

    (2) SA
    77 (SCA) – LU3
    • Africa v Parker and Others 2005 (2)
    SA
    77 (SCA) – LU3

    • Group Members
    • Shreya Sulagan
    • Suveshan Tristan Nadasen
    • Yashoda Lalparsad
    • Tanaya Pillay
    FACTS
    • This is a battle about a family trust.
    • It concerns an outstanding debt of over R16 million the
    appellant bank (‘the bank’) claims the respondent trust
    (‘the trust’) owes to it
    • The parkers appointed their son as a third trustee instead
    of an outsider and took a loan without consulting the third
    trustee
    • The trustees had purported to bind as surety for loans of many
    millions of rands that companies associated with the family
    businesses accepted from the Land Bank.
    • When things went awry, the trustees resisted liability on many
    grounds, including their own lack of capacity to bind the trust.
    ISSUE
    • Whether or not the Parkers had the power to
    bind the trust in concluding the loan
    agreements with the bank,
    • And whether the trust deed empowers two
    trustees to transact business in the absence
    of the required minimum of three trustees.
    COURTS DISCUSSION AND APPLICATION OF
    LEGAL PRINCIPALS
    • To answer the question about whether the
    Parkers could make the trust commit to the bank
    loans, Judge Kirk-Cohen pointed out that the
    trust deed does not allow two trustees to do
    business without the required three trustees.
    • The bank argued that because the trust deed
    allows decisions by a majority, it lets the Parkers
    bind the trust without involving the son.
    • In basic trust law, unless the trust deed says
    otherwise, all trustees must agree together to
    make decisions that legally affect the trust's
    assets. This was highlighted recently in the case
    of Nieuwoudt NO v Vrystaat Mielies (Edms) Bpk
    COURTS DISCUSSION AND APPLICATION OF
    LEGAL PRINCIPALS
    • The Parkers alone were not ‘the trustees’ as
    defined in the trust deed. Nor, while fewer than
    three trustees were in office, were there ‘trustees’
    on whose behalf the Parkers could act, or from
    whom they could receive authority to bind the
    trust estate.

    • The Parkers in other words could not bind the


    trust. This does not mean that their duties as
    trustees ceased. On the contrary, their obligation
    to fulfil the trust objects and to observe the
    provisions of the trust deed continued
    CONCLUSION
    The decision of the entire court was invalidated. Instead, it was replaced by a
    statement that the appeal is removed from consideration, with expenses incurred.
    Jacqueline Lesley Parker and Dakin Greig Parker, the trustees who initiated the
    appeal proceedings without proper authorization, are required to personally and
    collectively cover the expenses.

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