Court name
Harare High Court
Case number
HC 3265 of 2004

Mashoko v Mashoko/ Chikosi Family Trust & Anor (HC 3265 of 2004) [2011] ZWHHC 12 (02 March 2011);

Law report citations
Media neutral citation
[2011] ZWHHC 12

ALBERT MACHENGETE MASHOKO

versus

MASHOKO/CHIKOSI FAMILY TRUST

and

BARBARA MAONDE CHIKOSI

 

 

HIGH COURT OF ZIMBABWE

KARWI J

HARARE, 29 November 2005 and 3 March 2011

 

 

Opposed Application

 

 

T Magwaliba, for the applicant

IEG Musimbe, for the second respondent

 

 

KARWI J: After hearing arguments from both counsel, I ordered as follows:

 

a)         That the Notarial Deed of Trust executed on the 13 February 2001 establishing the first respondent be and is hereby amended by the deletion of the second respondent’s name as a trustee wherever it appears in the Deed of Trust.

 

b)         That an independent Estate Agent of repute operating in Harare be appointed as a Trustee by consent of the first and second respondents within seven days of this order and failure of which the Master of the High Court appoints an Estate Agent within seven days of  the respondents’ deadlock on such an appointment.

 

c)         Each party to pay its own costs.

 

Reasons for the above order have been requested and here are they.

The facts of this matter are common cause. The applicant and second respondent were married in terms of African customary law up to about 2003 when the union between them was terminated. The union of the parties had been blessed with two minor children namely Albert Tariro Mashoko and Albertina Hazvinei Mashoko.

During the subsistence of the customary marriage between the parties, the applicant as a founder established the first respondent (hereinafter referred to as “the trust”). He appointed the second respondent as a co-trustee.

The applicant instituted the present proceedings for the termination of the trust on the grounds inter alia that the second respondent was abusing trust property, leased the property donated to the trust by the applicant without his authority and consent and used the proceeds thereof for her own benefit without accounting to the applicant. The applicant also averred that the second respondent was refusing to hold meetings of the trust and conducted the affairs of the trust on her own while she did not keep any proper records of account in respect of the trust’s business. He also alleged that the second respondent was conducting the affairs of the trust in relation to the beneficiaries as well as its property as if it were her own business.

The applicant expressed the view that owing to irreconcilable differences between the trustees of the first respondent, the first respondent may not be operated to the benefit of the beneficiaries. Given that there are only two trustees, and that the second respondent cannot disclose material information to the other trustee, who happens to be the founder of the trustee and natural father to the beneficiaries, the first respondent becomes incapacitated and may not make decisions which are required from time to time, pertaining to the utilization of rentals and other related issues. Accordingly the applicant sought the court’s order dissolving the trust or alternatively  an order altering the terms of the trust deed to reflect that the second respondent be removed from her office as trustee.

In her opposing affidavit, the second respondent says that she entered into a lease agreement in respect of the trust property with the full knowledge of the applicant and that the applicant was aware that the proceeds of the lease were applied towards the payment of rent for a property where the second respondent and the children are currently staying. She added that some of the proceeds of the lease were used to erect a durawall and electric fence at the trust property. The second respondent said further that she intended to talk to the applicant upon renewal of the lease so that the proceeds could go into the children’s account. She also averred that she had used the balance of the proceeds of the rentals to buy air tickets for the children to go to the United Kingdom on holiday. She denied ever breaching any material or fundamental conditions of the trust.

The second respondent submitted, however, that she was not opposed to an independent trustee being appointed to govern the trust so long as the applicant pays for their professional fees. She suggested the appointment of an independent firm such as a firm of estate agents coupled with an order that the proceeds from the lease be used for the upkeep of the children.

The broad principle which our courts follow in deciding whether or nor to dissolve a trust or remove a trustee was set down many years ago in the case of Lettersteldlt v Broers (1884) 9 AC 371 (ALL ER 1881-1885 at 882). In considering the issue the court has to be satisfied that the continued trusteeship does not endanger the interests of the trust and its beneficiaries. See also Halsbury’s, Laws of England 3rded (38) at 94.

It is also generally accepted that a trustee must observe fiduciary duties when executing his duties. See De Villiers v James 1996 (2) ZLR 597 at 603 where KORSAH JA, spelt out the three main principles which govern the administration of trusts, which are as follows: 

 

  1. the trustee must give effect to the trust instrument so far as it is lawful and effective;
  2. the trustee must exercise his or her powers with care, diligence and skill which can be reasonably expected of a person who manages the affairs of another; and
  3. except as regards questions of law, the trustee is bound to exercise an independent discretion.

 

Honores, South African Law of Trusts 4thed at190 proposes that the courts must be guided by the welfare of beneficiaries when faced with the delicate task of dissolving or removing a trustee from office. He states that “the court has the same powers of control, appointment and removal with reference to trustees and with reference to guardians and executors”.

In providing guidance, this court is indebted to the applicant’s legal practitioners in their research which provided clear illustrations of instances where the courts removed executors or trustees from office for a variety of reasons. In, Ex parte Soleman 1950 (2) SA 373 an executor was removed from office because of hostility to his co-executor and did not facilitate smooth communication by replying to urgent letters from his co-executor  and had made no effort to attend to the financial crisis of the trust which was threatening its existence. The court found the conduct of such trustee wanting in reasonable fidelity and that it endangered the interests of the trust.

In Tijmstra NO v Mackenzie & Ors 2002 (1) SA 459 (T) the court enunciated some of the commonly accepted grounds for the removal of a trustee from office as the following:

 

  1. where without explanation a trustee transfers trust funds from a safe investment into a personal account;
  2. where a trustee deliberately refrains from advising a co-trustee of a decision to be taken on behalf a trust;
  3. where a trustee treats trust property as his own; and
  4. where a trustee allows grave misconduct by a co-trustee in the administration of the property of the trust and thus exercises no control over trust property.

 

In considering whether or not the second respondent should be removed from office or alternatively whether or not the trust should be terminated, I have taken the following facts which are common cause into account. It is a fact that the trustees in this matter were once married, and that the trust was founded by the applicant during their marriage. It is true that their marriage came to an end in 2003. From there on their severed relationship affected the way they administered the trust. It is not surprising that the second respondent has refused to have meetings of the trustees. This is so notwithstanding a letter demanding such a meeting by the applicant’s lawyers dated 21 January 2004. The second respondent sees the meetings as unnecessary. She also says she has always administered the affairs of the trust with very minimal if any role being played by the applicant. In her opposing affidavit she contends that “This is basically a small Trust which is for the benefit of our minor children and there is not much which needs to be discussed if at all there is need to discuss anything”. It appears that the second respondent leased the trust property without having agreed on all terms with the applicant, and that she has not accounted for the rentals. In her opposing affidavit she says she hoped to discuss with the applicant on the utilization of the rentals.

It seems to me that the applicant has succeeded in proving that the second respondent has failed to discharge her fiduciary duties as is required by law. She has failed to attend meetings which are obviously important in planning and administering the affairs of the trust. She has clearly failed to account for the assets of the trust. It would appear normal for her to run the affairs of the trust alone without consultation.

It also seems to me that the two have developed irreconcilable differences which have rendered the operation of the trust difficult if not impossible. The second respondent has indicated that she has no problem if the trust was run by an independent trustee and that the trust continue to benefit the two children. I find this to be most constructive and probably the best way forward in view of the problem cited in the personal circumstances of the two trustees. It is for that very reason that I ordered as I did.

 

Accordingly, it is ordered:

 

  1. That the Notarial Deed of Trust executed on 13 February 2001 establishing the first respondent be and is hereby amended by the deletion of the second respondent’s name as a trustee wherever it appears.

 

  1. An independent Estate Agent of repute operating in Harare be appointed as a trustee by consent of the first and second respondents within seven days of this order and failure of which the Master of the High Court shall appoints an Estate Agent within seven days of the parties deadlock on such appointment.

 

  1. The costs of such trusteeship by the appointed Estate Agent shall be borne by the trust.

 

  1. Each party to pay its own costs.

 

 

 

 

 

 

Magwaliba, Matutu & Kwirira, applicant’s legal practitioners

I E G Musimbe & Partners, 2ndrespondent’s legal practitioners