The court in Die Orffer Landgoed (Pty) Ltd v Orffer NO and Others (17494/2024) [2025] ZAWCHC 4 (Orffer) dealt with an opposed application for an order to have a special power of attorney declared as original for the purposes of Regulation 65(1) of the regulations in terms of the Deeds Registration Act 47 of 1937. 

In making its determination, the court had to consider, inter alia, whether the resignation of a trustee comes into effect (i) immediately upon resignation in terms of the trust deed, (ii) when the Master acknowledges receipt of the trustee’s resignation, or (iii) when new letters of authority are issued by the Master. This lacuna has been discussed in the judgments of Soekoe NO v Le Roux [2007] ZAFSHC 135 (Soekoe) and Meijer NO v FirstRand Bank Limited [2012] ZAWCHC 23 (Meijer), although with conflicting conclusions reached. 

Facts

The relevant facts in Orffer are as follows:

• The Bloubank Boerdery Trust (Trust) was indebted to Orffer Landgoed Proprietary Limited (Landgoed) for more than R17 million, which Landgoed had provided in loans and advanced monies to the Trust.
• On 12 June 2019, the Trust received a resignation letter from Mr Stofberg, in his capacity as trustee of the Boshoff Visser Trustdiense Proprietary Limited (BVT), in which BVT resigned as an independent trustee.
• On 29 March 2021, the Master issued a letter that provided that the resignation as a trustee by BVT had been noted and placed on record.
• The Trust’s trust deed (the Trust Deed) provides that a trustee ceases to be a trustee when they resign, as they are entitled to do, by way of delivering written notice thereof to the other trustees.
• The Trust consented to providing Landgoed with the necessary authority to sell, amongst other assets, Bloubank Farm, and for the proceeds to be used in settlement of the outstanding debt. On 14 December 2022, the Trust concluded a special power of attorney, and the property was subsequently sold. The original special power of attorney, which was in Landgoed’s possession, was later misplaced.
• Although Landgoed had sold the property, it could not be transferred as the original special power of attorney was required to be lodged in compliance with the applicable legislation pertaining to land registration.
• Landgoed was unable to procure another original special power of attorney from the Trust as the Trust disputed Landgoed’s authority to sell the property on its behalf, citing that the special power of attorney was invalid as the Trust was not duly authorised to grant the special power of attorney.
• The Trust submitted arguments in which it contended that BVT’s resignation had no legal effect as the Master never issued amended letters of authority, and as such, BVT ought to have participated in the signing of the special power of attorney.
• Landgoed’s counterarguments contended that since BVT’s resignation complied with the Trust Deed, it was effective from the date on which the Master acknowledged receipt thereof, being prior to the signature of the special power of attorney.

Soekoe established that a resigning trustee remains legally accountable to their co-trustees until the Master, by providing amended letters of authority, removes the trustee from office, they are still liable to their co-trustees and their duties only cease once they have been succeeded by a new trustee. This case has been interpreted by many as laying down a principle that a vacancy occurs only when the Master issues revised letters of authority, which can be a long time after resignation (in the Orffer case, years had passed and still no new letters of authority had been issued).

In Meijer, in consideration of the importance of legal certainty, Dlodlo J remarked that in a scenario where there is proof of the fact that a resignation letter has been sent to the Master and the Master has acknowledged the letter, a trustee should be deemed to have resigned. The court in Meijer held that the moment the Master acknowledges the trustee’s resignation should be when the resignation is deemed to take effect. The court’s reasoning therefore was to ameliorate the hardship of a resigning trustee.

One can therefore appreciate that it would be unreasonable to expect a trustee to continue to hold office for an inordinate duration.

Finding

The court in Orffer aimed to balance fairness and legal certainty, and it was held that in this circumstance, and because the trust deed in question did not specify precisely when the resignation was effective, the resignation was effective when the Master noted the resignation.
Although not entirely clear from the judgment, the reasoning therein seems to indicate that had the trust deed been clear on this point – i.e. the exact moment a vacancy arises – the court would have followed that trust deed.

The court in Orffer confirmed the Meijer judgment, as it held that the approach followed in the Meijer judgment was appropriate and, as such, that the Master’s acknowledgement of receipt of the notice of BVT’s resignation was the moment when the resignation became effective.

With the Soekoe and Orffer cases providing divergent views on the matter, this area of trust law is officially a vexed one, if it was not already before. On the one hand, the Orffer reasoning is attractive and would be the preferable approach in most matters, as one typically would not want to wait until new letters of authority are issued before disregarding the resigned trustee as a member of the board. On the other hand, if the resignation of a trustee leaves the trust with a sub-minimum board and thus incapacitated (for instance, the trust deed happens to provide that there must be a minimum of three trustees, and one of them resigns), it may be convenient to resort to the Soekoe judgment, so that the trust can at least transact in the interim. One would have to assess each case on its merits and factual matrix, the content of the trust deed, how the numbers stack up (in terms of the members of the board of trustees) and whether it is possible to find a solution in the matter that complies with both the Soekoe version and the Orffer version.