BREAKING UP A TRUST? THE SCA SAYS NOT SO FAST

In the recent case of Lenette Janse De Wit & 2 Others v Toerien De Wit NO & 6 Others 2026 ZASCA 23, the Supreme Court of Appeal (SCA) provided important guidance on the interpretation of section 13 of the Trust Property Control Act 57 of 1988 (TPCA), which deals with, inter alia, the termination of a trust by the courts.

Read the case here: https://www.saflii.org/za/cases/ZASCA/2026/23.html

Lenette Janse De Wit & 2 Others v Toerien De Wit NO & 6 Others 2026 ZASCA 23

The case arose from a dispute within the De Wit family regarding the continued operation of the De Wit Family Trust (“Trust”), following the death of the founder of the Trust. Both the high court and the SCA ultimately dismissed the application to terminate the Trust, but for different reasons.

Discretionary Trust established

Elbert De Wit Snr (“Elbert Snr”) established the Trust in 1995. The Trust was created as a discretionary trust, meaning that the trustees were granted wide powers to exercise their discretion in accordance with the trust deed. Importantly, the trust deed provided that the trustees could determine, in their sole discretion and by majority vote, the vesting date of the Trust.

The Trust holds 100% of the shareholding in the family’s holding company, De Wit Group Pty Ltd (“DWG”). DWG in turn holds all the shares in its subsidiaries and 50% in Gasvoorsieners Boland Proprietary Limited (“Gasvoorsieners)”. The assets held in these companies therefore constitute Trust assets.

Save for Gasvoorsieners, the companies’ assets largely consist of immovable property. Some of the businesses within DWG operate from some of these properties, while other properties are occupied by members of the family.

The trustees of the Trust at the date of the hearing were, Lenette De Wit (“Lenette”), Elbert Snr’s surviving spouse, Toerien De Wit (“Toerien”), son of Elbert Snr and Lenette; and Philip Rall (“Rall”), the independent trustee.

The beneficiaries of the Trust at the date of the hearing were, Lenette, Toerien, Elbert De Wit Jnr (“Elbert Jnr”), son of Elbert Snr and Lenette, Maryke Smit (“Smit”), daughter of Elbert Snr and Lenette, and Karmien Kruth (“Kruth”), daughter of Elbert Snr and Lenette.

Death of the Founder

Following the death of the founder, relations between the beneficiaries and the trustees deteriorated. Lenette, Smit and Kruth pressed the Trustees to declare a vesting date and distribute the capital of the Trust. The majority trustees, namely Toerien and Philip, opposed doing so at that stage.

This disagreement ultimately led to litigation. The appellants approached the high court seeking an order in terms of section 13 of the TPCA terminating the Trust, alternatively an order removing Toerien and Rall as trustees and permitting Lenette to appoint replacement trustees. The high court dismissed the application and the SCA dismissed the appeal.

Trust Property Control Act

Before considering the reasoning of the courts, it is useful to examine the relevant statutory provision. Section 13 of the TPCA provides the following:

“If a trust contains any provision which brings about consequences which in the opinion of the Court the founder of a trust did not contemplate or foresee and which-

(a) hampers the achievement of the objects of the founder; or

(b) prejudices the interests of the beneficiaries; or

(c) is in conflict with the public interest,

the Court may, on application of the trustee or any person who in the opinion of the Court has a sufficient interest in the trust property, delete or vary any such provision or make in respect thereof an order which such court deems just, including an order whereby a particular trust property is substituted for particular other trust property, or an order terminating the trust.”

The appellants relied on this section to request the termination of the Trust.

High Court Reasoning

The high court considered whether the appellants had satisfied the requirements under section 13 of the TPCA.

It identified 2 (two) jurisdictional requirements inherent in section 13, being:

whether the impugned provisions had brought about the consequences which the founder had not foreseen or contemplated; and

whether the impugned provisions had any of the three consequences listed in subparagraphs (a) – (c).

The high court held that the first jurisdictional requirement under section 13 was satisfied.

Importantly, the high court relied heavily on Elbert Snr’s wishes that he expressed prior to his death, which was that he wanted an equal distribution of trust capital between the beneficiaries. According to the high court, the trustees used their discretionary powers to not give effect to the founder’s wishes, which in turn resulted in a breakdown of family relations, which could not have been foreseen by the founder.

However, it held that the second requirement was not met and therefore dismissed the application to terminate the Trust. The appellants appealed this decision to the SCA.

SCA Reasoning

Although the SCA arrived at the same conclusion, it disagreed with the high court’s interpretation of section 13. According to the SCA, the first jurisdictional requirement was in fact not met.

Importantly, the SCA confirmed that absent the 2 (two) jurisdictional requirements inherent in section 13, a court cannot exercise its statutory powers. This means that the requirements of section 13 must firstly be satisfied, and only thereafter the court may consider the termination of the Trust.

In establishing whether the first jurisdictional requirement was satisfied, the SCA emphasised that the founder’s intention is very important to determine whether unforeseen consequences were in fact brought about. The intention of Elbert Snr is determined from the trust deed itself, and not from his later informal statements or discussions.

In this case, the founder did not tie the Trust’s existence to any specific event or date and therefore it can be said that the lifespan of the Trust was deliberately open-ended. In fact, the Trust Deed gave wide discretionary powers to the trustees, including the discretion to determine whether and when a vesting date should be fixed.

Elbert Snr, as founder, was bound by the terms of the Trust Deed and had no power to amend it by a mere verbal expression. He also took no steps to formally vary the terms of the Trust Deed. It must therefore be accepted that he retained the intention as expressed in the Trust Deed. For these reasons, the SCA held that the high court incorrectly placed its focus on the expressed wishes of Elbert Snr, which should not have been determinative.

The SCA accordingly held that:

the founder clearly contemplated that trustees could delay determining a vesting date;

the Trust Deed required a majority decision to determine the vesting date;

Beneficiaries had no vested right to demand distribution; and

the trustees were acting within the powers granted to them under the Trust Deed.

The SCA also accepted the respondents’ evidence that the main objective of the Trust is to expand trust benefits and create sources of income, rather than to distribute trust assets. To achieve this, the businesses must be grown as it has not achieved its full potential yet.

Moreover, the financial structure of the Trust made an immediate distribution impractical and potentially detrimental. Much of the Trust’s value was tied up in property and operating businesses, meaning liquidation at that stage would produce suboptimal returns.

Lastly, the competing distribution demands of Smit and Kruth cannot both be accommodated, i.e. cash distribution for the one and Trust asset distribution for the other one.

Accordingly, the court found that the dispute arose not from unforeseen consequences of the Trust Deed, but from the Trust’s financial position and the beneficiaries’ dissatisfaction with the trustees’ decisions.

CONCLUSION

The SCA confirmed that section 13 of the TPCA sets a high threshold for the variation or termination of a trust. Courts will intervene only where the trust provisions produce consequences that the founder did not foresee and that hamper the trust’s objectives, prejudice beneficiaries or is not in the public interest.

In this case, the discretionary powers granted to the trustees were consistent with the structure and purpose of the Trust, and no formal steps were taken to alter this. The trustees’ decision not to fix a vesting date was therefore not contrary to the founder’s intention, but rather an exercise of the discretion deliberately granted in the Trust Deed.

The appeal was accordingly dismissed, reaffirming the principle that courts will be slow to interfere with the operation of a trust where the trustees act within the powers granted by the trust instrument.

More broadly, the case serves as a reminder to founders of trusts to ensure that their trust deeds accurately reflect their intentions and are updated where necessary.