Trustees need to act jointly – this is the golden rule of trust administration. However, due to different interests or personalities, trustees do not always get along. But can a trustee be removed just because there is disharmony between the trustees or between the beneficiaries and a particular trustee? What can be done when a trustee refuses to attend trustee meetings or to give his co-operation in executing decisions taken by the trustees? Can such a trustee be removed from office? In certain circumstances a trustee can be removed by the Master of the High Court or by the court itself or in terms of the powers contained in the trust deed.

Removal of trustee in terms of the trust deed

The trust deed can also provide for the removal of a trustee by his co-trustee, either by requesting the trustee to resign (referred to as an involuntary resignation) or where the majority of trustees have the power to remove a trustee.

Good cause has to be present for a resolution to be taken by the majority of trustees to get rid of a trustee.

It was decided by the court that even where the trustees unilaterally had the right to request a trustee to vacate his/her office, their discretion to make such a request had to be based on reasonableness. The court further found that such a request has to be taken at a properly constituted trustees’ meeting and upon proper notice of their intention.

Removal of trustee by the Master of the High Court

A trustee may at any time be removed from his office by the Master:

• if he has been convicted of any offence of which dishonesty is an element or of any other offence for which he has been sentenced to imprisonment without the option of a fine; or
• if he fails to give security to the satisfaction of the Master within two months after having been requested thereto or within such further period as is allowed by the Master; or
• if his estate is sequestrated or liquidated or placed under judicial management; or
• if he has been declared by a competent court to be mentally ill or incapable of managing his own affairs or if he is detained as a patient in an institution or as a State patient; or
• if he fails to perform satisfactorily any duty imposed upon him by or under the Trust Property Control Act or to comply with any lawful request of the Master.

Removal of trustee by the Court

The High Court may remove a trustee either in terms of the common law or in terms of the Trust Property Control Act which states that a trustee may, on the application of the Master or any person having an interest in the trust property, at any time be removed from his office by the court if the court is satisfied that such removal will be in the interests of the trust and its beneficiaries. 

The general principle is that a court will exercise its common law jurisdiction to remove a trustee if the continuance in office of the trustee will be detrimental to the beneficiary or will prevent the trust from being properly administered.

The principles for the removal of trustees has been summarized by the Supreme Court of Appeal as follow:

• the court may order the removal of a trustee only if such removal will be in the interests of the trust and its beneficiaries;
• the power of the court to remove a trustee must be exercised with circumspection;
• the deliberate wishes of the deceased person to select persons in reliance upon their ability and character to manage the trust, should be respected and not be lightly interfered with;
• where there is disharmony, the essential test is whether it imperils the trust or its proper administration;
• mere friction or animosity between the trustee and the beneficiaries will not in itself be an adequate reason for the removal of the trustee from office;
• mere conflict amongst trustees themselves is not a sufficient reason for the removal of a trustee at the suit of another;
• neither mala fides nor even misconduct are required for the removal of a trustee;
• incorrect decisions and non-observance of the strict requirements of the law, do not of themselves, warrant the removal of a trustee;
• the decisive consideration is the welfare of the beneficiaries and the proper administration of the trust and the trust property.

The determinative test is always whether any state of affairs – be it incompetence, misconduct, incapacity, or lack of trust and respect among trustees or beneficiaries – has resulted in the trust property or its proper administration being placed at risk.

The following are examples of circumstances which justify the removal of a trustee by a court are the following:

• where the trustee, without furnishing any explanation for his conduct, removes trust funds from an apparently safe investment with a financial institution and transfers them to his personal account;
• where the trust deed requires that, if a decision is to be taken, notice must be given to all the trustees so that they may decide thereon and the trustee deliberately refrains from informing one of his co-trustees of the intended decision;
• where the trustee does not ascertain from the trust deed what the rights and obligations of the office of trustee entails;
• where the trustee treats the trust and its assets as his own, for example by selling the trust assets without the proper approval of the other trustees as required by the trust deed;
• where the trustee expresses no independent views about matters affecting the trust, but relies entirely upon a dominant co-trustee and approves of his conduct;
• where the trustee, without objection, allows grave misconduct on the part of a co-trustee in the administration of trust property, and thus exercises no control at all over the trust property.

From the above it appears that removing a trustee who does not resign voluntarily can be a tedious process and it is advisable that legal advice be obtained before commencing with any process to remove a trustee.