THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 141/2019

In the matter between:
KGOMOTSO S. TSHAKA NO

FIRST APPELLANT
MARGARET M. MONNAKGOTLA NO

SECOND APPELLANT
JABULANI B. GUMBI NO

THIRD APPELLANT
WENGLIAN MA NO

FOURTH APPELLANT
and
STANDARD BANK OF SOUTH AFRICA
LIMITED

FIRST RESPONDENT
BAKUBUNG ECONOMIC DEVELOPMENT
UNIT

SECOND RESPONDENT

Neutral citation:
Tshaka N O & others v Standard Bank of South Africa
Limited & another (Case no 141/2019) [2020] ZASCA 73
(25 June 2020)
Coram:
PONNAN,
MBHA,
MOCUMIE,
NICHOLLS
JJA
and
MATOJANE AJA
Heard:
15 May 2020
Delivered:

This judgment was handed down electronically by circulation
to the parties' representatives by email, publication on the Supreme Court of
Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be delivered at 12H00 on 25 June 2020.

Summary:
Claim by trust against bank for recovery of monies transferred out
of bank account – bank acting on instructions of authorised signatories – bank
insisting on the written instruction of all trustees to stop further transfers – such
instruction not forthcoming - bank not liable.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Van der Nest
J, sitting as court of first instance):
The appeal is dismissed with costs.

JUDGMENT

Mocumie JA (Ponnan, Mbha and Nicholls JJA and Matojane AJA concurring)

[1] This appeal arises over a dispute between the parties in respect of the
transfer of R9,5 million by officials in the employ of the first respondent, the
Standard Bank of South Africa Limited (the Bank), from the bank account of the
Bakubung-Ba-Ratheo Economic Development Trust (the Trust) to the second
respondent, the Bakubung Economic Development Unit. Van der Nest AJ, sitting
in the South Gauteng High Court Division, Johannesburg, dismissed the
appellants’ claim. The appeal is with leave of the court a quo.

[2] The appellants, are the four Trustees of the Trust. Three of the four,
Kgomotso Sedielapa Tshaka NO (the first appellant), Margaret Mapaseka
Monnakgotla NO (the second appellant) and Wenliang Ma NO (the fourth
appellant), were appointed by the Master of the North Gauteng High Court,
Pretoria in terms of s 6(1) of the Trust Property Act 57 of 1988 on 12 August 2013.
The fourth trustee, Jabulani Ben Gumbi NO (the third appellant), has been a
trustee since the establishment of the Trust. The Trust was established in 2006 by
way of donation from the Wesizwe Platinum Limited (the donor) in the sum of
R10 million, with the broad object of advancing the socio-economic development
and upliftment of the Bakubung-Ba-Ratheo community (the community). At
inception there were five trustees. Aside from the third appellant, the remaining

trustees were the Kgosi of the community, Michael Henry Solomon, Lorna
Maloney and Choice Franscinah Tshetlhe. In terms of the Trust Deed, Mr Solomon
and Ms Maloney were appointed by the donor, whilst the third appellant and Ms
Tshetlhe were appointed by the Kgosi in consultation with the Traditional Council
of the community. At a meeting of the Trust on 28 November 2011, the
resignations of Mr Solomon and Ms Maloney were tabled and accepted; and Mr
Tshaka and Mr Ma were appointed in their stead.

[3] The Trust Deed provided:
‘11.
ACCOUNTING MATTERS, AUDIT AND BANKING AND OTHER ACCOUNTS
11.4
The banking account shall be opened in the name of the trustees for the time being
of the Bakubung Ba Ratheo Economic Development Trust into which account all payment
of cash received by the parties shall be deposited by 1(one) person authorised to trustees
and from which account all payments due by the Trust shall be made by means of cheques
or electronic fund transfers drawn on such banking account and signed by 1(one) person
authorised thereto by the trustees’

[4] In a document dated 23 July 2007, entitled Resolution of Bakubung Ba
Rantheo Economic Development Trust it is stated:
‘By resolution of trustees of Bakubung-Ba Rantheo Economic Development Trust as at
LEDIG, Republic of South Africa.
The trustees of Bakubung-Ba Rantheo Economic Development Trust hereby authorize
Nyasa Tengawarima and Choice Franscina Tshetlhe in their capacities as
Trustees/authorised signatories, to open bank account(s) for the Trust at Standard Bank
of South Africa Ltd, to arrange and maintain electronic banking access as well as
transnational limits and to sign all relevant documentation pertaining to the
aforementioned.
The authority will remain in force indefinitely or until advised otherwise, by the trustees, by
way of a further resolution.’

[5] On 19 December 2007, the Trust made an application to the Bank to open
and operate a bank account for and in the name of the Trust. The application form
lists Messrs Gumbi, Monnakgotla and Solomon as well as Mmes Tshetlhe and

Maloney as trustees and describes Nyasa Tengawarima as an ‘authorised
signatory’ and Choice Franscina Tshetlhe as ‘a further trustee and signatory’. On
21 January 2008 the Bank approved the application and opened a bank account
for and in the name of the Trust under Money Market cheque account number
42 871 642 3-001. A call account was linked to this cheque account for the use of
the Trust when necessary. The call account number is 228728711-7.

[6] On 21 July 2011, Mr Gordon Millar of the Bank, described as the ‘account
executive’ in respect of the Trust received a letter of instruction, stating:
‘Dear Gordon: Please accept this letter as the written instruction from the Trustees of the
Bakubung Economic Development Trust (the Trust) to Standard Bank to immediately
effect a transfer in the amount of R5 500 000 from the Trust’s bank account (Account No.
#42 871 6423) to the account of Bakubung Economic Development Unit (Account No.
#421067381).’

[7] This letter of instruction was accompanied by a document entitled
‘Resolution of the Bakubung Economic Development Trust passed at a meeting
held at Ledig on 21 July 2011’ This resolution stated:
‘1. The Trustees have approved the following:
1. . . .
2. The allocation of R5, 5 00 000 (five million five hundred thousand rand) for those
projects.
3. The issuance of the written instruction by any authorised signatories for the bank
account of the Trust at Standard Bank to transfer R5, 500 000 from the account of
the Trust to the bank account of BEDU.
Signed by: Nyasa Tengawarima-Trustee appointed by MH Solomon and Choice F
Tshetlhe.’

[8] Pursuant to this letter, on 26 July Mr Millar approved and authorised the
transfer of R 5, 5 million to the account of the second respondent. Nearly three
months later, on 17 October, the third appellant went to the Bank and met with Mr
Millar. He informed Mr Millar that he was a trustee of the Trust and that it had come
to his attention that R5, 5 million had been transferred from the bank account of

the Trust without a resolution or minutes of a Trust meeting or a suitable and legal
quorum of the Board. Later that day, Mr Millar received an email from the third
appellant. A number of issues were raised by the third appellant and concluded
with the following instruction: ‘please stop any transfers from the account . . . until
we notify you as trustees’. The next day Mr Millar replied to each of the queries.
His response, concluded as follows: ‘Please urgently send us a written request
signed by ALL trustees to this effect’.

[9] A week later, on 24 October 2011, Mr Millar received a second instruction
from the Trust. It as well, emanated from Ms Tshetlhe and Ms Tengawarima and
instructed Mr Millar to once again effect transfer to the second respondent in the
sum of R4 million. Not having heard anything from the third appellant in the
meanwhile, Mr Millar contacted Ms Tshetlhe, obtained approval and effected
transfer in accordance with the instruction on 28 October 2011.

[10] On 16 July 2014 the appellants issued summons, which consisted of a main
claim against the Bank and a conditional claim against the second respondent
seeking repayment of those amounts. The conditional claim, which is yet to be
determined, was stayed pending determination of the main claim. In support of the
main claim, the appellants alleged:
‘10.1
The first defendant will accept deposits lawfully made into the bank account for
and on behalf of the Trust and credit the Trust with the amounts so deposited as funds
available to the Trust;
10.2
The first defendant will authorise and approve withdrawal of funds from the bank
account [of the Trust] only if–
10.2.1 it was expressly instructed to do so in terms of a written resolution passed or
adopted by the trustees of the Trust; and
10.2.2  a copy of such resolution was presented to the first defendant’s authorised duly
manager by two signatories authorised by the trustees to operate the bank account;
10.3
The first defendant undertook to exercise reasonable care to ensure that it will not
authorise or approve the withdrawal of funds from the bank account without the relevant
resolution of the trustees which was passed or adopted by the trustees in terms of the

relevant provisions of the Trust’s Deed of Trust, a copy whereof was made available to
the defendant when it agreed to open the bank account for the Trust.
. . .
10.5  The first defendant undertook to exercise reasonable care, to act in good faith and
to ensure that it would not act negligently when managing the Trust’s account, specifically
when disbursing funds from the plaintiff’s account.
10.6
Mr Millar acted negligently in that:
10. 6.1 he failed to realize, when he should or ought to have realised, by the exercise of
reasonable are, that annexure ‘POC3’
10.6.1.1
was not a resolution properly passed or adopted by the trustees of the
Trust;
10.6.1.2
was not signed by all or the majority of the trustees of the Trust;
10.6.1.3
was not a lawful instruction by the trustees to the first defendant to
authorize and approve withdrawal of funds from the bank account’.

[11] The only witness to testify on behalf of the Trust was the third appellant. In
his evidence in chief, before the high court, the third appellant maintained that the
Bank acted outside its mandate and negligently by authorising the two transfers
without the resolution of the Board or approval by all the trustees.

[12] The high court found that the Bank was not negligent in acting on the
instructions of the authorised signatories. It held that the Bank had ‘made its
position clear’ in advising the third appellant, as one of the trustees at the time,
when he reported allegations of fraud against the authorised signatories, exactly
what steps he together with other trustees had to take.

[13] The first transfer of R5.5 million was effected on 26 July 2011. As the third
appellant conceded during the trial, at that stage, the appellants had not made any
allegations of fraud against the two signatories to the Bank, nor complained to it
about the alleged fraud. The Bank was thus simply unaware that anything
untoward had occurred. Before us, counsel for the Bank submitted that, this should
be the end of the matter. I agree with him, particularly because the third appellant
had conceded as much in the high court.

[14] The second transfer of R4 million, which was effected on 28 October 2011,
came about after allegations of fraud in respect of the two signatories were made
to the Bank. In his evidence in chief, the third appellant stated that on
17 October 2011, he approached Mr Millar and warned him about the illegality of
the first transfer of R5.5 million and that he had received information that another
transfer would be made without the authorisation of all the trustees. He put it as
follows in his evidence in chief:
‘I told Mr Millar that the R5.5 m that he had approved was fraudulent and I told [him] that
there is another request for R4 m that they [Pologwane] and the second defendant are
planning to [withdraw], R4 m and I cautioned him to say he should not allow the transaction
to take place, because as a trustee myself, I am making him aware that that instruction is
also fraudulent’.

[15] It is common cause that the third appellant later that same day, followed this
up with an email. As Mr Millar’s response to that email on behalf of the Bank
illustrates, the third appellant was informed that he had to secure ‘a written request
signed by all of the Trustees’. Without such new resolution, Mr Millar stated that
he was obliged to comply with the instructions which came from the Trust through
the authorised signatories.

[16] Under cross examination the third appellant, conceded that:
(16.1) Annexure A to the plea of the Bank was the only application the Trust made
to it for the opening of an account. In other words, the investment account bearing
number 428716423001, which is the subject of the claim of the Trust was activated
pursuant to that application;
(16.2) The completion and submission of the application was authorised by the
Trust in terms of the resolution dated 23 July 2007;
(16.3) The resolution reflected that the Trust authorised Mr Tengawarima and Ms
Tshetlhe to be the authorised signatories on the Trust bank account;
(16.4) There was nothing in the resolution preceding the completion and
submission of the application that imposed an obligation upon the Bank to look at
the Trust Deed before effecting a transfer;

(16.5) At the time that the R5.5 million was transferred he had not reached out to
the bank and made any complaints in respect of the account in issue and;
(16.6) Mr Tengawarima and Ms Tshetlhe were the authorised signatories in
respect of the account.

[17] The high court found:
‘[T]he first defendant made its position clear that it adopted the position that the two
persons were still authorised signatories on the account, and that it urgently required
written request from all trustees to give effect to a stop instruction on all transfers on the
account. No such instruction was forthcoming from either Mr Gumbi or the remaining
trustees’.

[18] Furthermore, the high court found:
‘At this stage the first defendant had heard nothing further from Mr Gumbi or any other
trustees pursuant to the urgent request made by Mr Millar. The first defendant followed
the same procedure as it did when it made the first payment, and telephonically contacted
Ms Tshetlhe who according to its records, was both trustee and an authorised signatory.
The purpose was to check and confirm that the second payment request was indeed
authorised. Contact was made with Ms Tshetlhe and the letter of instruction was annotated
accordingly by both an employee of the first defendant and by Mr Millar to indicate that
contact had been made. Payment was then made in accordance with this instruction, on
28 October 2011. No contact was made by Mr Gumbi.’

[19] In those conclusions the high court cannot be faulted. In its strictly technical
sense, a trust is a legal institution sui generis.1 In Lupacchini NO and Another v
Minister of Safety and Security,2 this Court observed,
‘A trust that is established by a trust deed is not a legal person – it is a legal relationship
of a special kind that is described by the authors of Honoré’s South African Law of Trusts
as “a legal institution in which a person, the trustee, subject to public supervision, holds or

1 Braun v Blann and Botha NNO & Another 1984 (2) SA 850 (A) at 859D-H; Commissioner for
Inland Revenue v Friedman & Others NNO 1993 (1) SA 353 (A) at 370D-H.
2 Lupacchini NO & Another v Minister of Safety and Security [2010] ZASCA 108; 2010 (6) SA 457
(SCA) para 1.

administers property separately from his or her own, for the benefit of another person of
persons or for the furtherance of a charitable or other purpose”’.3
As pointed out in Land and Agricultural Bank of South Africa v Parker and Others:4
‘[I]t is only through the trustees, specified as in the trust instrument, that the trust can act.
Who the trustees are, their number, how they are appointed, and under what
circumstances they have power to bind the trust estate are matters defined in the trust
deed, which is the trust’s constitutive charter.’ (Footnotes omitted.)

[20] Furthermore, this Court, in Parker, stated:5
‘It is a fundamental rule of trust law, which this Court recently restated in Nieuwoudt and
Another NNO v Vrystaat Mielies (Edms) Bpk, that in the absence of contrary provision in
the trust deed the trustees must act jointly if the trust estate is to be bound by their acts.
The rule derives from the nature of the trustees’ joint ownership of the trust property. Since
co-owners must act jointly, trustees must also act jointly. Professor Tony Honoré’s
authoritative historical exposition has shown that the joint action requirement was already
being enforced as early as 1848. It has thus formed the basis of trust law in this country
for well over a century and half.’

[21] It follows that Mr Millar cannot be faulted in insisting that the third appellant
urgently send him a written request signed by all the Trustees, before the Bank
could act on his concerns. However, from the time the third appellant approached
the Bank on 17 October 2011 it took almost fifty days before there was any
response. On 6 December 2011 the Trust wrote to the Bank informing it of the
resolution adopted on 28 November 2011, in terms of which:
‘4. Mr Nyasa Tengawarima and Ms Choice Tshetlhe be removed as signatories on
account number 42 871 642 – 001 of the trust with immediate effect.
5. Mr Jabulani Ben Gumbi I.D Number 7312035761081 as (A) signatory and Ms Kgomotso
Tshaka ID Number 6908230404087 or Mr Wenliang Ma Passport Number G31103243 as
(B) signatory be and are hereby added as the new signatories needs to sign together…’

3 Griessel NO and Others v De Kok and Another [2019] ZASCA 95; 2019 (5) SA 396 (SCA) para
11.
4 Land and Agricultural Bank of South Africa v Parker and Others 2005 (2) SA77 (SCA) para 10.
5 Ibid para 15.

[22] Counsel for the appellants could not provide any answer as to what caused
this delay in the light of the clear position adopted by the Bank. It follows that the
Trust has simply failed to make out a case against the Bank and the appeal must
fail.

[23] In the result, the following order is granted:
The appeal is dismissed with costs.

_______________________
B C MOCUMIE
JUDGE OF APPEAL
.

Appearances

For appellants:
K Tsatsawane SC
Instructed by :
Mkhabela Huntley Attorneys Inc., Sandton
Mc Intyre Van Der Post, Bloemfontein

For respondent:
J Babamia SC
Instructed by:
Bowman Gilfillan Inc., Sandton

Symington & de Kok, Bloemfontein