Trustee responsibilities are a serious matter

We learn from case studies

One of the cases we learnt a lot from was the infamous Insolvent Estate C790/2008 of the Surf Trust in liquidation, with the Best Trust Company Western Cape (Pty) Ltd as its independent trustee and Jose Delgado its nominee.

It is the duty of a trustee to act with care, diligence and skill. Prof. Walter Geach wrote in his book, Trusts, Law and Practice, the following; “Reckless behaviour by a trustee would clearly fall foul of this provision, but so would negligence, sloppiness, and general tardiness in carrying out any act on behalf of the trust. A trustee can, it seems fall foul of this duty either by an act or by an omission, and a trustee who merely leaves trust matters in the hands of others, with no further query or interest, would most certainly be in breach of this duty.”

One of the duties of an independent trustee is to account for his actions, or lack thereof, when he is requested to do so by the legal authorities. When a liquidation commission asks him to appear before them, he has no choice. He has to give full co-operation immediately, because it’s in the best interests of the trust for him to co-operate fully. If he does not co-operate, it can lead to unnecessary annoyance and even antagonism on the part of the commissioner, the creditors, and especially the creditors’ legal team.

In my opinion, the behaviour of Jose Delgado during the run-up to the formal liquidation hearing of the Surf Trust in 2008 certainly didn’t advance the trust’s case at all. This is what happened; you can judge for yourself whether Delgado had the best interests of the trust at heart in his actions:

The Commission’s first sitting was on 15 July 2008, and Delgado was requested to appear before the Commission. .........................

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