Doyle v Board of Executors

[1999] 1 All SA 309 (C)

Trustee – Inter vivos trust – Duty of trustee to produce a full and proper account to beneficiary –
The right to an account has two distinct concepts – It is both substantive and procedural – The
trustee owes his principal the duty of good faith – Part of the trustees obligation to his principal is
the duty to give an accounting to his principal of all that he knows and has done in the execution of
his mandate and with his principal’s property – This is a substantive legal duty – The agent must
explain himself and justify his actions and conduct.

Held – The right to an account has two distinct concepts. It is both substantive and procedural. It
is a right as well as a remedy. The duties of good faith, which are owed by an agent to his principal,
are the same as those which fall on a trustee. An agent must keep his principal’s property separate
from his own and must deliver to his principal that which is his. Part of the agent’s obligation to his
principal is the duty to give an accounting to his principal of all that he knows and has done in the
execution of his mandate and with his principal’s property. This is a substantive legal duty. The
agent must explain himself and justify his actions and conduct.

With respect to the Plaintiff’s claim for a proper accounting the Court held that it had a discretion
to deal with this matter with such flexibility as practical justice requires. The Court found in casu that
no proper account had been delivered.

The Court held that there was an essential difference between the rights of the Plaintiff on the
one hand and those of his late mother on the other. The deceased was an income beneficiary. She
was entitled, from time to time, while she was alive, to an account of the income arising from
the corpus as well as the manner of its administration. The Plaintiff’s rights were quite different. On
his mother’s death the Plaintiff became entitled to receive the trust capital. However it had been
invested or reinvested over the years, it had to be passed on to him. Consequently, the Defendant
was bound, on handing it over, to satisfy him with proper explanations relating to the full and true
trust capital. The Defendant was bound, in discharge of its duty of good faith, to demonstrate to the
Plaintiff that that which he had received was the correct product of the initial capital, properly
administered. Only once this has occurred would the Plaintiff be able to challenge any entry. If the
Defendant was unable to demonstrate its veracity, the matter could be set down for debate on the
unresolved issues.

Accordingly the Defendant was ordered to prepare a full and proper account to the Plaintiff.