07/11/2025
๐ง๐๐ ๐ฉ๐๐๐๐๐๐ง๐ฌ ๐ข๐ ๐ ๐ง๐ฅ๐จ๐ฆ๐ง ๐ฅ๐๐ฆ๐ข๐๐จ๐ง๐๐ข๐ก
In ๐๐ฉ๐ฆ๐ฑ๐ด๐ต๐ฐ๐ฏ๐ฆ & ๐๐บ๐ญ๐ช๐ฆ ๐๐ต๐ต๐ฐ๐ณ๐ฏ๐ฆ๐บ๐ด (๐ฉ๐ฆ๐ณ๐ฆ๐ข๐ง๐ต๐ฆ๐ณ ๐ต๐ฉ๐ฆ โ๐ข๐ต๐ต๐ฐ๐ณ๐ฏ๐ฆ๐บ๐ดโ) ๐ท ๐๐ฆ ๐๐ช๐ต๐ต ๐ข๐ฏ๐ฅ ๐๐ต๐ฉ๐ฆ๐ณ๐ด ๐๐๐ 2023 the Penvaan Property Trust (hereinafter the "Trust") bound itself as surety and co-principal debtor, jointly and severally, in favour of the attorneys for the timely payment of all amounts owing by Ms. Volker to the attorneys, in the suretyship contract that was signed on the Trust's behalf.
A trustee meeting was called by Ms. Volker, one of the Trust's three trustees, to consider the resolution to issue the suretyship. One trustee failed to attend the scheduled meeting. Nonetheless, the meeting's specifics and the suggested resolution were provided to this trustee via earlier email exchanges among the trustees. After deliberating on the issue, Ms. Volker, and the remaining trustee, who constituted a majority, signed the resolution.
When Ms. Volker was unable to pay the attorneys cost and expenses they claimed their rights under the suretyship, but the Trust declined to pay, claiming the purported suretyship was not enforceable, as entering into a transaction of this nature required unanimous consent.
The Supreme Court of Appeal held that according to our legal system, trustees must make decisions by a unanimous decision, unless the trust document specifies otherwise. In any event if the trust deed specifies that a decision can be made by a majority vote, ๐ฎ๐น๐น ๐๐ต๐ฒ ๐๐ฟ๐๐๐๐ฒ๐ฒ๐ ๐บ๐๐๐ ๐๐๐ถ๐น๐น ๐๐ถ๐ด๐ป ๐ฎ ๐ฟ๐ฒ๐๐ผ๐น๐๐๐ถ๐ผ๐ป ๐ถ๐ป๐ฑ๐ถ๐ฐ๐ฎ๐๐ถ๐ป๐ด ๐๐ต๐ฒ๐ถ๐ฟ ๐ธ๐ป๐ผ๐๐น๐ฒ๐ฑ๐ด๐ฒ ๐ผ๐ณ ๐๐ต๐ฒ ๐ฑ๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป ๐ฎ๐ป๐ฑ ๐๐ต๐ฒ๐ถ๐ฟ ๐๐ผ๐๐ฒ. A resolution that binds the trust to a contractual agreement with a third party must be signed by every trustee, even an absent or disagreeing trustee must sign the resolution.
Considering this and the wording used in the Trust Deed overall, the resolution was void since the third trustee abstained from the decision-making process. Thus, the suretyship's signature likewise had no legal significance.
It is therefore imperative that a trust resolution, signed by ๐ฎ๐น๐น the trustees is obtained, before an offer to purchase is signed on behalf of a trust.
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