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TRUSTS: majority decision vs. passed resoultion

15 Aug

Rampai J of the Free State High Court, in the  case of Steyn and Others NNO v Blockpave (Pty) Ltd 2011 delivered a judgment which states that its not the majority vote of the trustees that legally binds a trust, but rather a properly passed resolution.

This case held that although trustees may disagree internally on a matter, they are prohibited from disagreeing externally. They my debate matters internally and put them up for a vote, after which the decision of the majority shall prevail. However, in order for a trust to function legally, it requires the complete participation of all its trustees; all trustees of a trust are required to partake in the decision making process.

In this case, the trust had three trustees, but in making the decision to take legal proceedings against the respondent company, one of the trustee, who was generally marginalised from the activities of the trust was not informed about the meeting and therefore did not attend the meeting at which the decision to institute the legal proceedings was taken. The High Court therefore held that “…no proper resolution had been taken by the entire complement of the trust body to launch the proceedings.”

The full judgment is available here:

http://www.saflii.org/za/cases/ZAFSHC/2010/134.pdf

 

 
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Posted by on 15/08/2011 in Content

 

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