Powers of trustees

General powers
The trustees’ powers in respect to the administration of the trust are derived from the trust instrument. In this sense it can be said that the trust instrument represents the source of the trustees’ powers. A practical approach when drafting a trust deed is to give the trustee all possible powers which may be necessary to ensure his proper administration of the trust. There are sound reasons for this practice. If a trust makes no provision for a particular power, a valid inference may be that the founder did not intend the trustee to have that power. For example, the power to sell property does not include the power to mortgage it (Olivier 75).

It is also important when drafting a trust deed that the electronic precedents used to do so, are not outdated, that it apply to the specific circumstances and that the different powers given to the trustees are properly synchronized and practicable for example when defining beneficiaries wide enough to include all and everybody related by blood or affinity to say A, B and C that for instance the variation clause does not state that upon the demise of the founder the deed will be capable of an amendment between the trustees and “all the beneficiaries” (an example often occurring in practice). It will be impractical if not impossible to involve “all those related by blood or affinity” ie all uncles, aunts, nephews, nieces etc as well as all the “in-laws” related by affinity. Where the founder is deceased a deed containing such a variation clause may then be capable only of an amendment by applying to Court (see B18 infra). Sometimes such a wide definition of beneficiaries is also not correlated with the clause empowering the trustees to appoint new substitute trustees and say failing to do so within a specified time, involving then “all the beneficiaries” to do so (see also B6.2.3).
The parties involved as beneficiaries and their relationship will normally determine the nature and degree of discretionary powers given to the trustees. See in this regard paragraph B10 supra (Van Dorsten 443 and 458).

A trustee who was chosen by virtue of some special quality could not delegate his powers, authority and duties to anyone else. In all other cases a trustee could delegate his powers provided that he (1) did not thereby free himself from liability for the conduct of the person appointed to act for him, or the general body of trustees and (2) could at any time freely revoke the appointment (Hoosen v Deedat [1997] 3 All SA 32 (D); 1999 4 SA 425 (SCA)). In Nieuwoudt v Vrystaat Mielies (Edms) Bpk 2004 3 SA 486 (SCA) at 494I–J, Harms JA states:

“However, as mentioned by Farlam JA, the fact that trustees have to act jointly does not mean that the ordinary principles of the law of agency do not apply. The trustees may expressly or impliedly authorise someone to act on their behalf and that person may be one of the trustees. There is no reason why a third party may not act on the ostensible authority of one of the trustees, but whether a particular trustee has the ostensible authority to act on behalf of the other trustees is a matter of fact and not one of law”.

Only a delegation of powers is allowed (ie the appointment of another for whose acts one will be responsible to act on one’s behalf) and not an abdication (the appointment of another to act instead of oneself, so as to relieve oneself of responsibility). The trustee retains office as trustee with primary responsibility to the trust beneficiaries and is accordingly at liberty at any time to revoke the delegation of authority. It follows that a trustee will not necessarily be protected from liability for breach of trust by the fact that he or she has acted on wrong legal advice given by an attorney (Honoré 270; Cameron 328; Boyce NO v Bloem 1960 3 SA 855 (T); Jowell v Bramwell-Jones 1998 1 SA 836 (W); 2000 3 SA 274 (SCA)).

Remuneration of trustees

Section 22 of the Trust Property Control Act stipulates that a trustee shall in respect of the execution of his official duties be entitled to such a remuneration as provided for in the trust instrument or where no such provision is made, a reasonable remuneration, which shall in the event of dispute be fixed by the Master (Honoré 287 et seq; Cameron 348 et seq).


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