Africa v Parker and Others 2005

(2) SA
77 (SCA) – LU3
• Africa v Parker and Others 2005 (2)
SA
77 (SCA) – LU3

• Group Members
• Shreya Sulagan
• Suveshan Tristan Nadasen
• Yashoda Lalparsad
• Tanaya Pillay
FACTS
• This is a battle about a family trust.
• It concerns an outstanding debt of over R16 million the
appellant bank (‘the bank’) claims the respondent trust
(‘the trust’) owes to it
• The parkers appointed their son as a third trustee instead
of an outsider and took a loan without consulting the third
trustee
• The trustees had purported to bind as surety for loans of many
millions of rands that companies associated with the family
businesses accepted from the Land Bank.
• When things went awry, the trustees resisted liability on many
grounds, including their own lack of capacity to bind the trust.
ISSUE
• Whether or not the Parkers had the power to
bind the trust in concluding the loan
agreements with the bank,
• And whether the trust deed empowers two
trustees to transact business in the absence
of the required minimum of three trustees.
COURTS DISCUSSION AND APPLICATION OF
LEGAL PRINCIPALS
• To answer the question about whether the
Parkers could make the trust commit to the bank
loans, Judge Kirk-Cohen pointed out that the
trust deed does not allow two trustees to do
business without the required three trustees.
• The bank argued that because the trust deed
allows decisions by a majority, it lets the Parkers
bind the trust without involving the son.
• In basic trust law, unless the trust deed says
otherwise, all trustees must agree together to
make decisions that legally affect the trust's
assets. This was highlighted recently in the case
of Nieuwoudt NO v Vrystaat Mielies (Edms) Bpk
COURTS DISCUSSION AND APPLICATION OF
LEGAL PRINCIPALS
• The Parkers alone were not ‘the trustees’ as
defined in the trust deed. Nor, while fewer than
three trustees were in office, were there ‘trustees’
on whose behalf the Parkers could act, or from
whom they could receive authority to bind the
trust estate.

• The Parkers in other words could not bind the

trust. This does not mean that their duties as
trustees ceased. On the contrary, their obligation
to fulfil the trust objects and to observe the
provisions of the trust deed continued
 CONCLUSION
The decision of the entire court was invalidated. Instead, it was replaced by a
statement that the appeal is removed from consideration, with expenses incurred.
Jacqueline Lesley Parker and Dakin Greig Parker, the trustees who initiated the
appeal proceedings without proper authorization, are required to personally and
collectively cover the expenses.