BACKGROUND AND SUMMARY
|In casu, the Supreme Court of Appeal (SCA) judgment deals with the interpretation of a Notarial Deed of Trust, whereby the court was tasked with determining whether the words ‘children’, ‘descendants’, ‘legal descendants’ and ‘issue’ was intended to benefit and include ‘adoptive children’. |
In this matter, a trust donor – Mr Druiff, made provision for his children in his Will, stating that his children’s descendants or issue would inherit. The court had to, however, determine whether this would include the adopted children of his daughter.
In 1953, Mr Druiff executed a Trust Deed. At the same time, however, Mr Druiff executed a Will. The Will stipulated that upon his death, the trust income should be paid to his 4 (four) biological children, alternatively at the death of a child, such income should be paid to that child’s descendants.
At the time that the Will was executed, Mr Druiff had 4 (four) children, of which 3 (three) had their own children. After Mr Druiff’s death, one of his children Ms Harper, legally adopted two children of her own. Accordingly, the question to be determined was whether such children would be entitled to inherit from the trust, upon their adoptive mothers’ death. Upon the death of Ms Harper’s 3 (Three) siblings, each child’s shares in the capital of the Trust Deed duly devolved upon their children. There was uncertainty, however, as to whether Ms Harper’s 2 (Two) adoptive children would be entitled to inherit their respective share in the Trust Capital.
Ms Harper applied to the High Court for a declaration that the reference to ‘descendants’ and ‘issue’ in the Will, included her adopted children. After considering the definitions of the words as aforementioned, the High Court accepted the dictionary meaning of the words whereafter it was held that a Trust Deed had the effect that only the biological descendants of the donor’s children were beneficiaries of the Trust. The High Court was satisfied that this was the clear intention of the donor. Ms Harper then passed away, whereafter her executor appealed to the SCA.
|In a majority decision, the SCA held that “the trust deed speaks from the time that it is executed and must be interpreted as at that time.” The intention of the donor must be determined from the ordinary grammatical meaning of the language used in the circumstances that existed during such time. |
Accordingly, The Children’s Act 31 of 1937 was still in force at the time of the execution of the Trust Deed. According to such, adopted children were not entitled to any property unless the instrument clearly conveys the intention that the property shall devolve upon an adopted child.
Furthermore, it was argued by the court that it cannot be said that such an exclusion is contrary to public policy, since our law upholds the principle of freedom of testation in line with Section 25 of the Constitution, Act 108 of 1996. A testator is thus free to dispose of his property as he wishes.
The court further held that a distinction can be drawn between public and private trusts. In the public sphere a trust may not be allowed to discriminate, however, in the private sphere emphasis should be placed on freedom of testation.
Lastly, it was contended by the respondents that the donor enjoyed legal assistance in the execution of his Trust Deed therefore he was clearly able to and ought to have taken steps to make express provision for the inclusion of adoptive children in the Trust Deed.
The court held that by using the words ‘children’, ‘descendants’, ‘issue’, and ‘legal descendants’ in his Will, the donor did not intend to benefit adopted descendants. Due to the fact that the donor was aware that his daughter may not be able to have children, he ought to have provided for an express provision in his Will/Trust deed stating as such. Furthermore, the donor was aware that one or more of his children might die without issue, yet he did not make any provision for adoptive children in such instrument.
Although the applicable legislative provisions have changed over time, the law still upholds the principle of freedom of testation. In this case, the Trust Donor was therefore entitled to exercise his freedom of testation and expressly exclude adopted children.
Where a beneficiary has been excluded, he/she cannot challenge the disinheritance on Constitutional grounds. This however does not apply where a beneficiary has been included subject to a condition attached to the benefit, if such a condition is contrary to public policy. In this case, the Trust Deed was executed in 1953 and was not against public policy at the time. The appeal was thus dismissed with costs.
Written by Ashleigh Butler and supervised by Jasvir Sewnarain