The question of when a trustee's resignation becomes effective is of significant practical importance. Determining the precise date of resignation is essential, as it affects when a trustee ceases to owe fiduciary duties to the trust and when exposure to potential liability for trust-related matters ends. A resigning trustee should therefore be mindful that accountability for the administration and decision-making of the trust may continue until the resignation has legally taken effect.

In Soekoe N.O. and Others v Le Roux (898/2007) [2007] ZAFSHC 135 (29 November 2007)  ("Soekoe"), the Court considered the requirements for a trustee's resignation and concluded that a trustee remained legally accountable to his fellow trustees for the entire period until the Master of the High Court officially removed him from the office as a trustee. This approach places considerable emphasis on the Master's formal recognition of the resignation. In practical terms, it means that a trustee remains vested with the powers, duties and responsibilities of office until amended Letters of Authority have been issued. Consequently, a trustee may remain exposed to potential liability between submitting a resignation and the Master's formal amendment of the trust records.

A different and more pragmatic approach was adopted in Meijer NO and Another v Firstrand Bank Ltd (formerly known as First National Bank of Sourthern Africa) and Another, In re: Firstrand Bank Ltd (formerly known as First National Bank of Sourthern Africa) and Another v Meijer and Others (2123/2010) [2012] ZAWCHC 23 (4 April 2012) ("Meijer"). Recognising the administrative delays that commonly arise within the Master's Office, the Court held that a trustee's resignation becomes effective upon delivery of written notice to both the Master and the ascertainable beneficiaries, provided that the Master acknowledges receipt of the notice. Under this interpretation, the effectiveness of a resignation does not depend on the subsequent issuance of amended Letters of Authority, but rather on compliance with the statutory notice requirements contained in the Act. This approach seeks to balance the legislative framework with the practical realities facing trustees.

The issue resurfaced in Die Orffer Landgoed (Pty) Ltd v Orffer N.O. and Others (17494/2024) [2025] ZAWCHC 14 (23 January 2025) ] ("Orffer Landgoed case"), where the Court was required to determine the status of a trustee who had previously resigned. In that matter, Die Orffer Landgoed advanced funds to the Bloubank Boerdery Trust ("the Trust"). As part of efforts to settle its indebtedness, the Trust granted Die Orffer Landgoed a special power of attorney authorising the sale of certain trust assets, including a farm owned by the Trust.

Following the conclusion of the sale agreement, the original signed power of attorney was misplaced, preventing the transfer from being registered in the Deeds Office. When a replacement original was requested, a dispute arose regarding whether the signature of the former representative trustee was required. The Trust argued that the former trustee's signature remained necessary, while Die Orffer Landgoed contended that the trustee had validly resigned in accordance with the trust deed and that the resignation had been noted by the Master. The Court agreed with Die Orffer Landgoed and relied substantially on the reasoning adopted in the Meijer case, effectively recognising that the resignation had taken effect notwithstanding the absence of amended Letters of Authority.

Despite the guidance provided by the Orffer Landgoed judgment, the legal position remains unsettled. The differing approaches adopted in Soekoe and Meijer, together with the subsequent endorsement of the Meijer approach in Orffer Landgoed, highlight the continuing uncertainty surrounding the requirements for an effective resignation. Until the issue is definitively settled by a higher court or through legislative intervention, trustees should exercise caution when resigning. Each matter should be assessed on its own facts, with due regard to the provisions of the relevant trust deed, the requirements of section 21 of the Trust Property Control Act 57 of 1988, and the applicable case law.

The resignation of a trustee is far more than a procedural or administrative step. It carries significant legal consequences for trustees, beneficiaries and third parties dealing with the trust. As a prudent risk-management measure, trustees may wish to adopt the more conservative approach reflected in Soekoe, namely treating their resignation as effective only once amended Letters of Authority have been issued by the Master. While this approach may not ultimately prove to be legally required in every case, it may assist in minimising disputes concerning authority, liability and the validity of actions taken on behalf of the trust.