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Discriminating provisions in a Trust
23 April 2012

In South-Africa freedom of testation is highly regarded, but the law does place certain restrictions on the principle. In Board of Executors in re Benjamin Godlieb Testamentary Trust and Others, the court addressed these restrictions and the effect of fundamental rights on freedom of testation.

In the aforementioned case the applicant brought an application before the Court, as the administrator of three charitable trusts, for the deletion of discriminatory provisions in the trusts. These provisions determined that the trust funds were to be applied for the education of “European boys and that at least one half of the boys had to be of British decent” and that the financial assistance provided by the trust, should go to “members of the white group”. The two issues that arose in the case were whether these provisions were discriminatory and whether the court could intervene in terms of section 13 of the Trust Property Control Act.

The court found that the relevant provisions in the trusts established unfair discrimination on the grounds of gender and race. The court found this to be in conflict with section 9(4) of the Constitution and with the public interest. The court also found that these discriminatory provisions led to consequences that the testators could not have anticipated or predicted. This conclusion was drawn on the ground that all of the trusts were executed before 1994, before the commencement of democracy and the coming into effect of the Constitution. The testators or trustees could not have anticipated that the discriminatory provisions would render the trust unconstitutional and unlawful. The court ordered that the discriminatory provisions with regard to race be struck out and that all references to gender were to be seen to refer to male and female alike.

The judge gave the following reasons for his finding. Section 9 of the Constitution provides that everybody is equal before the law and that the state may not unfairly discriminate against anyone on the grounds as listed in Section 9, which includes the grounds of gender and race. The Promotion of Equality and Prevention of Unfair Discrimination Act (Equality Act) states that one may not unfairly withhold bursaries, scholarships or any other form of assistance from learners of particular groups. The trusts only made provision for the provision of bursaries and financial assistance to white male students. The Constitution and Equality Act prohibits this kind of discrimination. Section 13 of the Trust Property Control Act enables the court to delete or alter provisions in a trust if these provisions bring about consequences that the founder did not contemplate or foresee. According to the common law, a court will not give effect to a testator’s instructions if they are contrary to public policy.

Freedom of testation can be restricted by the Constitution and Equality Act, the Trust Property Control Act and by the common law. These restrictions may interfere with a testator’s wishes, but in the case of Minister of Education v Syfrets Trust, the learned judge held that in certain cases the consideration of equality is of more importance than freedom of testation.

It is thus clear that while a testator may enjoy a certain extent of freedom of testation in South Africa; this freedom is not absolute and will always be subject to the application of the rights contained in the Constitution, in addition to the provisions of the Trust Property Control Act and the principles of the common law.