The
late Vitalis Musungwa Gava Zvinavashe, in a bid to ensure that his
estate, accumulated during his lifetime, was properly administered
during the last part of his life and after his death, decided to form
a trust, namely, Vitalis Musungwa Gava Zvinavashe Trust (hereinafter
referred to as the Trust). The beneficiaries of the Trust included
himself, ...
The
late Vitalis Musungwa Gava Zvinavashe, in a bid to ensure that his
estate, accumulated during his lifetime, was properly administered
during the last part of his life and after his death, decided to form
a trust, namely, Vitalis Musungwa Gava Zvinavashe Trust (hereinafter
referred to as the Trust). The beneficiaries of the Trust included
himself, his wife, his children, who included the respondent, his
mother, and his late brother Francis Pachedu Zvinavashe's children.
On
25 February 2009 he executed a Notarial Deed of Donation and Trust
(herein after referred to as the Deed of Trust) in which the above
was captured. On the same date, the late Vitalis Musungwa Gava
Zvinavashe executed his 'Last Will and Testament.' In that Last
Will and Testament' (hereinafter referred to as the Will) he
appointed four trustees who included the three applicants and the
respondent. The respondent was nominated executor of the Will and
administrator of the estate. After the demise of the testator, the
respondent was duly appointed executor testamentary on 22 April 2009.
In that capacity he duly performed his function and on 27 October
2009 the estate distribution account was confirmed by the Master of
the High Court.
In
that account, certain assets were transferred to the Trust in terms
of clause 5.3 of the Will. The Trust is run and managed by a Board of
Trustees. That Board had the first applicant as Chairman and the
second applicant as Secretary.
On
30 April 2012, the Applicants filed this application.
They
alleged that the respondent has usurped authority and administration
of Trust assets from the direction and control of the Trust and is
administering Trust assets without the direction and control of the
Board of Trustees, and, in so doing, is prejudicing the Trust and
Trust Beneficiaries of their interest in the Trust. The applicants
thus seek an order that the respondent, and any person who draws
authority from him, be interdicted from:-
1.
Interfering with the day to day management of the Trust Schools,
namely, Tynwald Primary School and Tynwald High School.
2.
Prohibiting any auditor appointed by the applicants from accessing
the Trust Schools' accounts and auditing such accounts.
3.
Harassing and/or dismissing any employees of the Trust and Trust
Schools without authority of the Board of Trustees.
4.
Directly accessing any funds belonging to the Trust and Trust Schools
without lawful authority of the Board.
In
his opposition, the respondent raised some points in limine in which
he challenged the locus standi in judicio of the applicants to bring
this application.
The
respondent contended that the first and second applicants lack the
requisite locus standi in judicio to bring this application in that
they were appointed to the office of trustee on 8 April 2009 for a
period of three years. Three years have since lapsed and they have
not been re-appointed. He also contended that the applicants lack the
requisite locus standi in judicio to bring this application as they
do not have a resolution authorising them to bring the application as
they did.
The
respondent further contended that the matter is lis pendens in that
he has instituted proceedings in this court on 24 April 2012 for an
order directing the second applicant to convene a meeting of the
Trust to deal with the issues complained of in this application.
Those proceedings are still pending.
On
the above issues, the respondent contended that the application
should be dismissed.
The
applicants argued that their terms of office have not lapsed. The
first and second applicants are trustees by virtue of their office
and so are virtually there for their lifetime. If anything, the
respondent is shooting himself in the foot as he is amongst those
trustees whose terms are time-framed.
In
determining the question of locus standi in judicio it is imperative
to bear in mind the objectives of the Trust. These are:-
(a)
To utilize the property of the Trust and the income of the Trust Fund
for the maintenance and benefit of the beneficiaries;
(b)
To invest the Trust Fund
in such a manner as the Trustees for the time being shall deem fit;
(c)
To do all such things which are incidental or conducive to the
attainment of the above objects.
It
was in an effort to realize the above objectives that the Donor
executed the Notarial Deed of Donation and Trust on 25 February 2009.
On the same day he executed his Last Will and Testament. Both
documents contain a clause on the appointment of trustees. The Deed
of Trust provides for the duration of the appointments whereas the
Will is silent on that aspect. The Will contains no other provisions
on the tenure and future appointments of trustees. It is only in the
Deed of Trust where such provisions are found.
I
am, however, of the view that the Testator was mindful of the fact
that a Trust had been created in terms of the Deed of Trust and any
aspects not contained in the Will were to be governed in terms of the
Deed of Trust. I say so because in the Will he does not purport to be
creating a second Trust but to be taking cognisance of the Vitalis
Musungwa Gava Zvinavashe Trust. For instance, in Clause 5.3, he
states that:-
“I
leave all my worldly belongings, movable and immovable, corporeal and
incorporeal, to the Vitalis Musungwa Gava Zvinavashe Trust, which is
a Trust for the benefit of my wife, all my children, my mother and my
late brother, Francis Pachedu Zvinavashe's children.”
I
am of the view that in interpreting the intention of the donor sight
must not be lost that he could not have been creating two distinct
Trusts on the same day with the same objects but varying terms for
the trustees - one to operate during his lifetime and the other after
his demise. It can also not be said he intended the Trust created in
terms of the Will not to outlive the lives of the trustees therein
stated. Clearly, the issue of appointment and tenure of trustees was
to be in terms of the Deed of Trust.
On
the contentious issue, as to whether the applicants term of office as
trustees had lapsed, it is pertinent to refer to the Deed of Trust
document itself. Both sides seemed to contend that only their
trusteeship had not lapsed but the other parties' had lapsed. In
this regard, in paragraph 10 of the founding affidavit, the first
applicant stated that:-
“The
position that I hold, as Chairman and Trustee, as well as that of the
Second applicant, are cast in stone in the Deed as the Deed
specifically states that in my capacity as the accountant to the late
General Zvinavashe and the Second Applicant in his capacity as the
Senior Partner of the law firm Mutumbwa, Mugabe and Partners legal
practitioners, we would be appointed as trustees for an indefinite
period or, in any event, for the duration of our natural lives.”
The
respondent, on the other hand, contended that:-
“The
appointment of the 1st
and 2nd
Applicants is not cast in stone. The Will did not appoint the
Applicant as Chairman. Clause 5.5(iv) of the Will provides for the
appointment of any other firm of Chartered Accountants as may be
decided by the other Trustees. Further, and in any event, the Trust
Deed does not in any way state that the Applicant is the Chairman and
neither does it state that he is a life Trustee.
In
any event, the Trust Deed provides for the tenure of office of the
Trustees appointed upon the death of the 'donor'.”
From
the latter part of this statement, one gets the impression that the
respondent believes that the tenure of office for 3 years was for
those trustees appointed after the death of the donor and did not
apply to trustees appointed during the donor's lifetime. Clause 4
of the Deed of Trust, titled 'Appointment of Trustees', provides
that:-
“4.1
The first Trustees of the Trust shall be -
(a)
Vitalis Musungwa Gava Zvinavashe (born 27/09/1943).
(b)
Margaret Mutamba Zvinavashe (born 03/03/1962).
(c)
Richard Musungwa Zvinavashe (born 29/03/1968).
4.2
The power of appointing the trustees shall vest in the trustees for
the time being of the trust.
4.3
Upon the death of the Donor, the number of Trustees shall be
increased to a minimum of 5 and a maximum of 7, two of whom shall be
respectively a lawyer and an accountant.
4.4
The lawyer shall be the Senior Partner or nominee of Mutumbwa Mugabe
and Partners or their successors in title, and likewise the
Accountant shall be the Senior Partner or nominee of the Donor's
Accountants.
4.5
In the event that the number of Trustees has fallen below 5, the
remaining trustees shall have the right to appoint further Trustees.
4.6
Trustees shall hold office for a period of 3 years and they shall be
eligible for re-appointment after the expiry of such term.”
As
can be noted, the Board of Trustees, during the lifetime of the
donor, comprised three persons, namely, the donor, his wife, and his
son Richard. The increase in the number of trustees was to occur
after the donor's death. Amongst the trustees to be appointed after
the donor's death were:-
(a)
The senior partner, or his nominee, of Mutumbwa Mugabe and Partners;
and
(b)
The Senior partner, or his nominee, of the Donor's Accountants.
In
clause 5.5 of the Will, the late Vitalis M G Zvinavashe appointed
four trustees in these terms:-
“I
HEREBY appoint the under listed to be the Trustees of the Vitalis
Musungwa Gava Zvinavashe Trust.
(i)
My wife, Margaret Mutamba Zvinavashe;
(ii)
My son, Richard Musungwa Zvinavashe;
(iii)
The Senior Partner for the time being, or his or her nominee, of
Messrs Mutumbwa Mugabe and Partners legal practitioners or their
successors in title.
(iv)
The Senior Partner for the time being or his or her nominee of Messrs
Ruzengwe and Partners Chartered Accountants or their successors in
title, or of any other firm of Chartered Accountants as may be
decided by the other Trustees.”
As
already stated, in the Will, no further details are provided save for
the appointment. The differences in the clauses pertaining to the
appointment of trustees must be interpreted in a manner that does not
create conflict. It is my view that as the two documents were
executed on the same date, albeit coming into operation at different
dates, the executor thereof was alive to the anomaly. The clear
intention of the testator was that whilst he was alive only three
trustees would run the Trust and upon his demise two professional
trustees would join the remaining trustees. In my view, these were to
become the core trustees whose trusteeship he wished to always be
present. It was in a bid to emphasize this that in the Will he
specifically appointed the four trustees. The other trustees, to meet
the minimum number of five (5) or maximum number of seven (7), as per
clause 4.3 of the Deed of Trust, were to be appointed by the trustees
for the time being of the Trust. It is clear from the submissions by
the parties and documents filed of record that, apart from the four
trustees appointed by the testator in his Will, two other trustees,
namely, Dr. A. P. Zvinavashe and Mr. K. Zvinavashe, were appointed to
make the number of trustees six (6). This was in accordance with the
provisions of the Deed of Trust.
The
issue that arises is whether the term limits stated in clause 4.6 of
the Deed of Trust is applicable to all or to some of the trustees.
Clause 4.6 states that:-
“Trustees
shall hold office for a period of 3 years and they shall be eligible
for a re-appointment after the expiry of the term.”
That
sub-clause does not, in my view, place a distinction between the
trustees. The donor did not wish for such a distinction. To confirm
this he provided for a definition of Trustee for the purposes of the
Deed of Trust. In this regard Clause 1 of the Deed of Trust states
that:-
“Trustees
shall mean the persons appointed as such under this Trust Deed,
including the first Trustees and the Trustees thereafter appointed.”
The
first Trustees are those appointed before his demise. See Clause 4 of
the Deed of Trust.
The
argument that some trustees are not subject to the term limits is
thus ill-founded. Every trustee, in my view, was to serve for 3
years, and, thereafter, be eligible for re-appointment. The criteria
for re-appointment would, of course, take cognisance of the
professional trustees that the donor intended to always be part of
the Board of Trustees. It is my view that had the donor intended that
some of the trustees should be there for life, without being
subjected to reappointment, he could easily have stated so without
any difficulties. I thus conclude that no trustee had life tenure
without being subjected to re-appointment. All the trustees, as
defined by the donor, were subject to a 3-year term and eligible for
re-appointment.
What
this means is that unless a trustee has been re-appointed since their
initial appointment, they have all overstayed.
The
applicants argued that notwithstanding clause 4.6 of the Deed of
Trust all trustees, the respondent included, continued in their
positions after the expiry of the 3 year period and the respondent
cannot rely on the said clause to claim that the applicants have no
locus standi in judicio to bring the application. In that light they
argued that the office of trustee is lost only by:-
(i)
Vacation;
(ii)
Resignation; and
(iii)
Removal.
Fortunately,
in this case, clause 13 of the Deed of Trust provides that:-
“A
Trustee shall vacate office if:-
(a)
He becomes of unsound mind or lunatic;
(b)
He becomes insolvent;
(c)
He is prohibited to be a director of a company in terms of the
Companies Act [Chapter 24:03];
(d)
He or she is a minor;
(e)
There is any other reason which makes him or her unable to conduct
duties as a trustee.”
Sub
clause 13(e) may be taken to include a situation where one has
overstayed in the office of trustee such that one's decisions are
tainted with invalidity.
In
Trustees, Leonard Cheshire Homes Zimbabwe Central Trust v Chite &
Others 2010 (1) ZLR 631 UCHENA J had occasion to deal with the issue
of trustees who had overstayed in the office and during their period
of overstay had made appointments of other trustees and decision to
evict occupants of the trust's property. At p645 B-D, the Hon Judge
said that:-
“This
court cannot, therefore, in order to give effect to the objectives of
the Trust, interpret the Deed of Trust in a manner inconsistent with
the limitations of the trustees' terms of office. The objective of
the Trust
is for it to be managed, in favour of disabled people, by people
holding office in compliance with its provisions….,. It is
therefore my view that the court cannot disregard the trustees'
failure to comply with the terms of their appointment in order to
keep the trust in existence. The court would, if there are no
lawfully appointed trustees, on application by interested parties,
appoint new trustees who would continue to uphold the objectives of
the Trust
and decide the way forward concerning the eviction of the defendants.
I cannot uphold invalid decisions made by trustees who no longer had
the mandate to manage the affairs of the Trust….,.”
The
effect of over-staying is thus that the decisions made are
susceptible to being challenged. They may in fact be invalid.
The
next issue is whether the fact of overstaying deprives the
applicants' locus standi in judico.
In
'The South African Law of Trusts' by T. HONORE, 2nd
edition 1976' the learned author…, states that:-
“The
general principle is that a person who is de facto administering a
Trust
as trustee has locus standi in any matter relating to the trusts; so
has a person who claims to be the rightful trustee and seeks
confirmation of his status.”
In
casu, the applicants' have clearly stated the capacity in which
they brought this application - it is one whereby they are
administering the Trust and the issues pertain to the Trust.
They also claim to be trustees in terms of the Will. I am of the view
that they have locus standi in that regard. Their capacity to make
valid decisions is, however, limited by the fact that they have
overstayed.
They
ought to regularise their stay in terms of the Deed of Trust.
Section
7 and 9 of the Companies and Association Trustees Act [Chapter 24:04]
provides for the appointment of trustees by the High Court on the
application, by petition, of persons there-mentioned. Section 7 of
the Companies and Association Trustees Act [Chapter 24:04] states
that:-
“As
often as by death, unsoundness of mind, resignation, failure to
elect, absence from Zimbabwe or other cause, the trustees or any of
them of any such company or the office-bearers or other trustees of
any association, or of any association which, under section five, is
placed under this Act, become incapable of acting in the execution of
the trusts for such company or association, it shall be lawful for
any person who is a member of or interested in such company or
association to apply, by petition, to the High Court for such order
as he conceives himself entitled to, and he may, by affidavit, give
such evidence in support of such petition as he thinks fit, may serve
notice of such petition on such person or persons as he may think it
needful or expedient to serve with such notice.”…,.
Section
9 of the Companies and Association Trustees Act [Chapter 24:04]
further states that:-
“If,
in any case, it happens that any immovable property has been granted
or transferred to any un-incorporated society or body established for
religious, charitable or educational purposes by the name borne by
such society or body and not through the instrumentality or
intervention of office-bearers or other trustees acting for and
representing such society or body, it shall be lawful for any person
who is a member of, or interested in, such society or body, to apply
by petition in manner and form as in section seven mentioned for the
appointment of trustees for such society or body; and the court to
which such petition is presented, proceeding in manner and form as in
sections seven and eight mentioned, may, if satisfied that the
appointment of trustees to act for and represent such society or body
is expedient, appoint such trustees; and section eight shall, in
substance, apply to the appointment of such trustees and to the power
of providing how new trustees shall be afterwards appointed and to
all other matters in section eight contained.”…,.
As
aptly noted by UCHENA J in Trustees, Leonard Cheshire Homes Zimbabwe
Central Trust v Chiite & Others 2010 (1) ZLR 631…,;
“Sections
7 and 9 provide for the appointment of trustees by the High Court to
ensure the continuation in existence of a Trust.
It is the Trust
that the law is interested in sustaining and not decisions of
trustees whose terms of office have expired or trustees appointed by
persons who had no mandate to act for the Trust.
Section 7 covers the trustees' inability to act because of death,
unsoundness of mind, resignation, failure to elect, absence from
Zimbabwe or other cause.”
The
sections basically provide leeway for the appointment of trustees in
the circumstances alluded to. In a case were all trustees have
over-stayed, and legally cannot make legally valid decisions, the
option is to have the trustees appointed or re-appointed by the High
Court as the case may be.
I
am of the view that from the manner in which the two professional
trustees are provided for in the Deed of Trust and in the Will it is
clear that they have a legitimate claim for re-appointment.
It
was the desire of the donor that the Senior Partner, or his nominee,
of Mutumbwa Mugabe and Partners or their successors in title will
always be one of the trustees. Equally, it was his intention that the
Senior Partner or his nominee of the donor's accountant, in this
case Messrs Ruzengwe and Partners shall always be a trustee. The
first applicant and second applicant happen to be the senior partners
in the aforementioned professional firms. In respect of the Chartered
Accountant, there is provision for trustees to decide on any other
firm of chartered accountants but that is in the event that the
trustees for the time being decide to appoint other chartered
accountants in place of Ruzengwe and Partners.
I
am of the view that by virtue of their apparent entrenched position,
they have cause to seek to protect the Trust.
Thus, whilst they may not make valid decisions they can nevertheless
approach the court for relief that is for the sustenance of the
Trust….,.
In
this application, the applicants seek an order interdicting the
respondent from doing acts which are prejudicial to the Trust. The
basic requirements for an interdict are:-
(i)
A clear right on the part of the applicant;
(ii)
An injury committed or reasonably apprehended; and
(iii)
The absence of any other satisfactory remedy available to the
applicant.
As
already alluded to, the applicants have an interest to protect the
Trust.
Their overstaying does not extinguish that interest. One would say
their interest stems from the fact that the Trust was virtually left
in their hands as professionals. Both the Will and the Deed of Trust
made it clear they were to be trustees by virtue of their office. By
virtue of that I am of the view that the first and second applicants
have shown a clear right. Clearly, they were not expected to fold
their hands as the Trust
was burning just because their terms as trustees had not yet been
renewed when, from the Deed of Trust and the Will, the renewal was
almost guaranteed.
On
the question of suffering irreparable harm, it is apparent from the
documents filed of record that after the Donor's death the
respondent duly administered the estate in terms of the Will. The
first and second applicants' appointment as trustees was effected.
Two other trustees were appointed to make a total of six (6)
trustees. The six trustees are virtually split - three aside. Such a
scenario cannot be said to be for the furtherance or advancement of
the objectives for which the Trust
was created. Clearly, such a split makes it difficulty to administer
the Trust.
In their founding affidavit, the applicants detailed a number of
transgressions they said were committed by the respondent. Though the
respondent denied some of the alleged transgression his explanations
in denial saved to confirm that it may be a situation of one faction
of the Board of Trustees doing their own thing without the unanimity
of or even participation of everyone who believed they were still
trustees. The respondent did not disclose in what capacity he did
some of the acts he admitted to. Clearly, the danger of the
respondent continuing to act as if he was still the administrator of
an estate that had already been wound up and disregarding the Board
of Trustees is real.
In
any case, as noted above, all the trustees over-stayed and whatever
decisions they make are likely to be invalid and not for the benefit
of the Trust.
A continuation of such conduct can only be detrimental to the
objectives of the Trust.
The
third requirement, of absence of a suitable remedy, is almost a
forgone conclusion. There is no suitable remedy that would make good
the prejudice to the Trust
and beneficiaries as a result of the respondent continuing acting as
alleged. It is only proper that he be interdicted and those
interested in the Trust
take appropriate steps to ensure trustees are re-appointed and proper
structures are put in place for the realization of the objectives for
which the Trust
was created.
Accordingly,
I find that the applicants have established a case for the grant of
an interdict. It is hereby ordered that the application be and is
hereby granted in the following terms:-
1.
That the respondent and any person obtaining authority through him be
and are hereby interdicted from interfering with the day to day
management of the Trust Schools, namely, Tynwald Primary School and
Tynwald High School.
2.
That the Respondent and any person deriving authority through him be
and are hereby interdicted from prohibiting any auditor appointed by
the Board of Trustees from accessing the Trust Schools' accounts
and auditing such accounts.
3.
That the respondent refrain from harassing and/or dismissing any
employees of the Trust and Trust Schools without authority of the
Board of Trustees.
4.
That the respondent and any person obtaining authority through him be
and is hereby barred from directly accessing any funds belonging to
the Trust and Trust Schools without lawful authority of the Board of
Trustees.
