The legal position regarding the validity of amending a trust deed, by a trustee, in the absence of a Letter of Authority

Abstract

An anomaly of the legal situation is formulated "between a trustee who signs a new trust deed before it is registered, who is therefore not yet authorised, but performs legal action to sign a contract that sets in motion rights and obligations and where he accepts a donation on the one hand, and a trustee who is legally nominated by way of a resolution by the authorised trustees and appointed as trustee to sign the amended trust deed on the other". How can there be a difference in the legal position of these two scenarios, where the same legal principles should be applicable? The analogous legal position relating to the powers of a trustee who signs a new trust deed before it is registered, thereby pointing out the anomaly, is contained in the Chief Master's Directive issued in 2017. It also identifies the practical implications of the implementation of the Chief Master's direction, nullifying acts and transactions of a newly appointed trustee after the initial registration of the trust. Well respected trust law scholars are of the opinion that the aforesaid indifference constitutes an anomaly in law that leaves a lacuna around the question of which comes first: the chicken or the egg? On the one hand, all new trustees who sign a new trust deed can, according to the Master, do so legally before the Letter of Authority is issued to them, but when a replacement or new trustee appointed in terms of a resolution wants to do the same, the Master refuses to accept the appointment, and requires the new trustee to be authorised first by way of an amended Letter of Authority before noting the amendment.