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Minister of Education and Another v Syfrets Trust Ltd NO and Another (2544/04) [2006] ZAWCHC 65; 2006 (4) SA 205 (C); [2006] 3 All SA 373 (C); 2006 (10) BCLR 1214 (C) (24 March 2006)

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Case No 2544/04

This application concerns a charitable trust, known as the Scarbrow Bursary Fund Testamentary Trust (the trust), which was established in terms of the will of the late Dr Edmund William Scarbrow (the testator), who died in 1921. The trust awards bursaries to ‘deserving students with limited or no means’ of the University of Cape Town (the university). However, in terms of the will, eligibility for the bursaries is restricted to persons who are of ‘European descent’, not of Jewish descent, and not female. The validity of these provisions of the will is being challenged in this application.
[2]     

The first applicant is the national Minister of Education (the minister). The second applicant is the university. Syfrets Trust Limited (Syfrets), in its capacity as trustee of the trust, is the first respondent. The Master has been cited as the nominal second respondent. Both respondents abide the decision of the court. By order of this court, granted on 10 September 2005, Adv Heunis SC was appointed as curator ad litem to potential beneficiaries of the class referred to in the will. He submitted a full report and also addressed written as well as oral argument to the court in support of the contested provisions of the will. The court is indebted to him for his assistance in this regard. The helpful contribution of Adv Marcus SC, who appeared with Adv S Budlender for the applicants, should also not go unmentioned.

On 23 April 1920, the testator executed the will in question, clause 4 of which stipulates that the residue of his estate should be held in trust and that after the death of his wife, and in the event of both his sons dying without being survived by lawful issue, it should (in terms of sub clause (d)) be applied for the purpose of –

‘forming a Fund to be called “THE SCARBROW BURSARY FUND” the income whereof shall be used and appropriated by the Administrators of my Estate for providing bursaries for deserving students with limited or no means of either sex (but of European descent only) of the University of Cape Town who have passed the Matriculation Examination and who desire to proceed with and complete their studies for some recognized profession in any of the Universities of the Kingdom of Great Britain and Ireland, the United States of America, the Dominion of Canada or in any recognized University on the Continent of Europe, to assist them to do so – the said bursaries to be held by and payable to the students awarded the same for periods of from two to four years. I direct that the several amounts of the bursaries, the students to be awarded the same and the periods for which they shall respectively be entitled to hold and receive the same shall be in the sole discretion and control of the Council or other governing body of the University of Cape Town. I also enjoin on the Administrators of my estate the duty of cordially co-operating with the said body in giving the most useful and beneficial effect to my wishes as herein set forth, and I direct that it be periodically announced (by advertisement in the press) that bursaries from the said Fund – styling it in each instance “The Scarbrow Bursary Fund” – are open to such deserving students in order that the fact thereof may be brought home to all interested.’ (My emphasis.)
[4]     

On 2 December 1920, the testator added a codicil – in manuscript – in which he further restricted the criteria for eligibility of candidates as follows:

‘By virtue of the power reserved by me so to do under my Last Will and Testament, I now alter my possible bequest to the University of Cape Town, being the portion of clause “4" in the section “d”, so far as it affects persons of Jewish decent (sic), and females of all nationalities, none of whom are to be eligible to compete for any Scholarships founded by the University of Cape Town in connection with my bequest.’ (Again my emphasis.)
[5]     

The testator died on 7 July 1921. Subsequently, in 1953 and 1965 respectively, both his sons died without leaving lawful issue, thus causing the Scarbrow Bursary Fund to be established in terms of the provisions of the will and codicil. In 1969, however, the council of the university decided, by reason of the discriminatory conditions contained in the will, that it could not accept the duty of administering the bursaries in question and informed the trustee of this decision. In the result, the role reserved in the will for the council, that of administering the bursaries and selecting the recipients, has since that time been performed by Syfrets in its capacity as trustee of the trust.
[6]     

An advertisement that appeared in a weekend newspaper on 30 March 2002, inviting past and present students of the university to apply for the Scarbrow Bursary, came to the attention of the minister. What particularly caught his eye were the requirements that applicants for bursaries had to be ‘of European descent, male, gentile’. The minister accordingly addressed correspondence to Syfrets, requesting them to consider excluding the criteria relating to race, gender and religion for potential applicants in the light of the constitutional protection of equality. Syfrets, in its response, did not attempt to justify or defend the discriminatory conditions in any way. It indicated, nonetheless, that the principle of freedom of testation precluded it from deviating from or varying the wishes of a testator as contained in a will, unless a court order compelled it to do so.
[7]     

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Against this background, the present application was launched. The minister, as the first applicant, approaches the court as a member of the executive, which is required by s 7(2) of the Constitution to ‘respect, protect, promote and fulfil’ the rights in the Bill of Rights, including the right to equality. In addition, the minister is responsible for education policy, and in particular higher education policy, in terms of s 3(1) of the National Education Policy Act 27 of 1996 and s 3 of the Higher Education Act 101 of 1997. The minister also approaches this court in the public interest. His locus standi to bring this application is thus not in issue.
[8]     

The university, as the second applicant, approaches the court by virtue of the fact that the testator’s will envisaged that the university council would play a critical role with regard to administering the bursaries and selecting the bursary recipients. The university claims that it has been unable to fulfil this role by reason of the perceived discriminatory nature of the conditions in the will. It also has an interest because it is students of the university who are prohibited from applying for the bursary by virtue of their race, gender or religion.

The applicants claim an order, deleting the discriminatory provisions in the will. They contended that this court is empowered to grant such remedy on any one or more of the following grounds:

(a)      s 13 of the Trust Property Control Act 57 of 1988, which permits the court, in certain circumstances, to delete or vary provisions in a trust instrument;
(b)      the common law, which prohibits bequests that are illegal or immoral or contrary to public policy; and
(c)      direct application of the Constitution, more particularly the equality and anti-discriminatory provisions of s 9.
[10]    

As mentioned earlier, both respondents abide the decision of the court. In his report, the Master referred to the principle of freedom of testation and stated that these types of trusts are quite common. Similar provisions to those presently under consideration ‘were given effect to for years and in some instances for decades’. The Master accordingly submitted that, should the present application be granted, ‘this could have repercussions for various other existing trusts, which are not parties to these proceedings’. He referred, in conclusion, to various passages from Corbett et al and Cameron et al, where the learned authors express the view that the Bill of Rights applies ‘horizontally’ as between citizen and citizen, although there are as yet no decided cases in South Africa on its applicability to testamentary conditions in relation to charitable testamentary trusts.
[11]    

The curator ad litem submitted that the contested provisions of the will are valid, also invoking the testator’s freedom of testation. The arguments in support thereof will be examined in more detail below.
[12]    

This case thus brings into sharp focus some of the potential problems that have been foreshadowed by legal authors and scholars since the advent of the South African constitutional era, namely the juxtaposition of the constitutionally guaranteed principle of private ownership, together with its corollaries of private succession and freedom of testation, on the one hand, and the constitutional right to equality and freedom from unfair discrimination, on the other. All of the learned authors appear to recognise that some testamentary provisions that have been acceptable in the past will no longer pass muster, inter alia, by reason of the provisions of the equality clause in s 9 of the Constitution. The only question for them is which particular provisions will survive scrutiny and which will not. Corbett et al, for example, put it as follows:

‘How far the courts will go in invalidating testamentary conditions as being in violation of the Bill of Rights cannot be envisaged with confidence. It has been suggested, for instance, that different weights might be attached to the grounds mentioned in s 9, the equality provision, or that grounds alluded to in other sections of the Bill of Rights are not to be disregarded; that possibly race and religion will be regarded as more fundamental in the assessment of public policy than, say, sexual orientation or culture.

The future holds out the prospect of a testamentary condition attaching to the taking effect of a testamentary benefit or the continuation of one, as under a trust, being wiped out on a constitutional ground. Assuming that it holds good on other counts, for instance certainty, a condition could possibly be invalid, for example, as prohibiting marriage not within a specified faith, race or nationality; or preventing conversion from, or requiring conversion to, a particular faith; or attaching restrictions of a racial or sexual or political nature on the utilization of a benefit.’
[13]    

Cameron et al are more emphatic, stating that –

‘the objects of a trust will have to conform with the disavowal of unfair discrimination under the 1996 Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act, which envisage equality even in person to person relations’.
[14]    

The problems highlighted by the various authors lend weight to a perceptive concluding remark to the trilogy of articles by Du Toit, namely that the task resting in the hands of the courts of deciding which testamentary provisions of a discriminatory nature should henceforth pass constitutional muster ‘is indeed an unenviable one’.

The three grounds for the application are all based, to a greater or lesser extent, on the provisions of s 9 of the Constitution, aimed at promoting equality and proscribing unfair discrimination. Thus, although separate, these grounds do not fall into impermeable compartments. As the Constitutional Court has pointed out, all statutes must now be ‘interpreted through the prism of the Bill of Rights’. Similarly, with regard to the common law, the court held that ‘the normative influence of the Constitution must be felt throughout the common law’.
[16]    

In my view, the applicants have made out a compelling case for relief on each of the three grounds advanced. However, in the view that I take of the matter (and employing Ockham’s razor), the present application can be dealt with on the basis of the existing principles of the common law, having proper regard to ‘the spirit, purport and objects of the Bill of Rights’. In what follows, I shall attempt to show that the contested provisions in the will in question are indeed contrary to public policy and, as such, unenforceable. This is an approach strongly advocated by Du Toit, who appeals for a ‘constitutionally-founded boni mores criterion’ in reassessing the ‘traditional approach’ to discriminatory clauses in charitable bequests. This approach also finds support in an insightful article by Lubbe, in which he points out (in the context of contract law) that it is incumbent upon the court to redefine ‘the content of black-letter rules and concepts’ of the common law so as to conform to the objective value-system of the Constitution. This can be achieved in a given case by giving content to ‘open legal norms’, such as public policy.

The ‘black-letter rule’ that requires consideration in this case is, of course, the principle of freedom of testation, on which the curator strongly relied. He pointed out that this common law principle lies at the core of our law of succession. He referred in this context inter alia to Corbett et al, who state that ‘South African law appears to take the principle of freedom of testation further than any other Western legal system’. He argued, further, that the right to private succession, including freedom of testation, has now been given constitutional content in the property clause contained in s 25(1).
[18]    

In this regard, counsel on both sides accepted that, although neither s 25 nor any other provision in the Constitution specifically refers to freedom of testation or the right of persons to dispose of their assets upon death, freedom of testation forms an integral part of a person’s right to property, and must therefore be taken to be protected in terms of s 25. This suggested principle has not yet been authoritatively recognised by our courts, although it enjoys support from some of the learned authors on the subject. I am prepared, for purposes of this judgment, to accept the correctness of such view without making any firm finding to that effect.
[19]    

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Proceeding from that assumption, I am of the view that the curator’s argument based on the property clause cannot succeed, for a variety of reasons. First, with regard to the meaning of ‘deprive’ in s 25(1), our courts have not yet given a definitive interpretation of this term. However, in First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service, & Another

(the FNB case), the Constitutional Court held that ‘in a certain sense, any interference with the use, enjoyment or exploitation of private property involves some deprivation in respect of the person having title or right to or in the property concerned’. In the more recent case of Mkontwana v Nelson Mandela Metropolitan Municipality & Another, the court found it unnecessary to determine precisely what would constitute ‘deprivation’. It was sufficient, for purposes of that case, to hold ‘that at the very least, substantial interference or limitation that goes beyond the normal restrictions on property use or enjoyment found in an open and democratic society would amount to deprivation.’
[20]    

I have not been referred to any authority justifying the conclusion that the relief sought in the present application amounts to a ‘deprivation’ of property. Insofar as the testator is concerned (even assuming that he can still at this stage be the bearer of rights in respect of property), the relief sought does not in any way interfere with his ‘use, enjoyment or exploitation’ of his property, nor does it constitute ‘substantial interference or limitation that goes beyond the normal restrictions on property use or enjoyment’. Having had full and unfettered use, enjoyment and exploitation of his property during his lifetime, the testator upon his death chose to dispose of his property by leaving it in trust to the appointed trustee. The present application does not seek to alter that state of affairs. All that it seeks to achieve is to vary the existing terms of the trust so as to remove therefrom certain provisions that are claimed to be repugnant to public policy. This kind of exercise has been performed by the courts in innumerable cases over the years, where trust instruments have been varied on the grounds of public policy, necessity or impossibility or in the application of the cy pr s doctrine – without it ever being suggested that the testators or the trusts in question were in the process being ‘deprived’ of their property. In my view, it would be unduly straining the language of s 25(1) to hold in these circumstances that the order sought, if granted, would amount to a deprivation of property.
[21]    

However, even if it were to be held that the order sought does indeed constitute a ‘deprivation’, I am not persuaded that any such deprivation could be regarded as ‘arbitrary’. For a deprivation to be arbitrary, it must be procedurally unfair or must take place without sufficient reason. In my view, there can be no question of procedural unfairness in this instance, given that any order would only be granted after a full hearing by this court and a weighing up of all relevant considerations in order to ascertain whether there is sufficient reason for granting such relief.
[22]    

In any event, it is of course trite that the principle of freedom of testation has never been absolute and unfettered: various restrictions have been placed on this freedom over the years – both by the common law and by statute; both in this country and in other open and democratic societies based on human dignity, equality and freedom. In this regard, Du Toit has performed a detailed and valuable analysis of rules applicable to limitation of freedom of testation in various common law as well as civil law jurisdictions. Save for what is set out later, it is not necessary to repeat that exercise for the purposes of this judgment. Suffice it to state that all of the jurisdictions examined recognise a limitation on the freedom of testation based on considerations of public policy. It is to a consideration of this crucial ‘open norm’ that I now turn.

The principle that the courts will refuse to give effect to a testator’s directions which are contrary to public policy is a well recognised common law ground limiting the principle of freedom of testation and has been applied since Roman times. The position in this regard is analogous to the principle in the law of contract regarding contractual provisions which are contrary to public policy and it would appear that identical considerations apply to both fields.
[24]    

Public policy – like its synonyms, boni mores, public interest and the general sense of justice of the community – is not a static concept, but changes over time as social conditions evolve and basic freedoms develop. As Hahlo succinctly put it, ‘Times change and conceptions of public policy change with them’. Public policy has in the past been gleaned from the boni mores, the general sense of justice of the community, as expressed by its legal policy makers, namely the legislature and the courts. As such, it has been described as ‘an imprecise and elusive concept’. Since the advent of the constitutional era, however, public policy is now rooted in our Constitution and the fundamental values it enshrines, thus establishing an objective normative value system. In considering questions of public policy for purposes of the present application, therefore, the court must find guidance in ‘the founding constitutional values of human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and non-sexism’.
[25]    

In the light of the foregoing considerations, it is axiomatic that the public policy of 1920 does not necessarily correspond in all respects with the public policy of today. A vivid illustration of the contrast between the values of the constitutional era and what has gone before is found in the judgment of Mahomed J (as he then was) in the landmark ‘death penalty case’, where he said the following:

‘[262]   … The South African Constitution … retains from the past only what is defensible and represents a decisive break from, and a ringing rejection of, that part of the past which is disgracefully racist, authoritarian, insular, and repressive, and a vigorous identification of and commitment to a democratic, universalistic, caring and aspirationally egalitarian ethos expressly articulated in the Constitution. The contrast between the past which it repudiates and the future to which it seeks to commit the nation is stark and dramatic. The past institutionalised and legitimised racism. The Constitution expresses in its preamble the need for a “new order … in which there is equality between… people of all races”. Chapter 3 of the Constitution extends the contrast in every relevant area of endeavour (subject only to the obvious limitations of s 33). The past was redolent with statutes which assaulted the human dignity of persons on the grounds of race and colour alone; s 10 constitutionally protects that dignity. The past accepted, permitted, perpetuated and institutionalised pervasive and manifestly unfair discrimination against women and persons of colour; the preamble, s 8 and the post-amble seek to articulate an ethos which not only rejects its rationale but unmistakenly recognises the clear justification for the reversal of the accumulated legacy of such discrimination. The past permitted detention without trial; s 11(1) prohibits it. The past permitted degrading treatment of persons; s 11(2) renders it unconstitutional. The past arbitrarily repressed the freedoms of expression, assembly, association and movement; ss 15, 16, 17 and 18 accord to these freedoms the status of “fundamental rights”. The past limited the right to vote to a minority; s 21 extends it to every citizen. The past arbitrarily denied to citizens, on the grounds of race and colour, the right to hold and acquire property; s 26 expressly secures it. Such a jurisprudential past created what the post-amble to the Constitution recognises as a society “characterised by strife, conflict, untold suffering and injustice”. What the Constitution expressly aspires to do is to provide a transition from these grossly unacceptable features of the past to a conspicuously contrasting

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“future founded on the recognition of human rights, democracy and peaceful co-existence and development opportunities for all South Africans, irrespective of colour, race, class, belief or sex”.’
[26]    

In view of this stark contrast it is self-evident, in my view, that it is the public policy of today – not of 1920 – which is decisive in the present application. This puts paid to an argument advanced by the curator, to the effect that the kind of provisions presently under consideration are quite common and can be found in many wills over the years; thus the provisions in question must be regarded as having been unobjectionable – at least at the time when the will was executed. (This line of argument is also supported by the Master in his report.) In my view, the position in this respect is analogous to the position in the law of contract, where questions of public policy have to be determined with reference to the time when the court is being asked to enforce or give effect to the provisions of the contract or the will, as the case may be; not the time when the contract was concluded or the will was executed.

In support of the applicants’ argument that the contested provisions in the will under consideration are contrary to public policy, most of the emphasis fell on the constitutional right to equality. Section s 9(1) of the Constitution provides that ‘everyone is equal before the law and has the right to equal protection and benefit of the law’. Sub-sections (3), (4) and (5) are particularly relevant to the present enquiry and provide as follows:

‘(3)     The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
(4)      No person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.

(5)      Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.’
[28]    

It was not disputed, nor could it be, that the provisions of s 9(4) do indeed apply ‘horizontally’. Apart from anything else, the sub-section itself contains its own internal regulating mechanism, providing that ‘no person’ may discriminate unfairly against ‘anyone’. This necessarily brings all natural and juristic persons – including a charitable trust like the present one – within the ambit of the section.
[29]    

Moreover, the national legislation envisaged by sub-sec (4) has now been enacted in the form of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act) and contains the same internal regulating mechanism as s 9(4) of the Constitution: in terms of s 7 of the Equality Act, ‘no person may unfairly discriminate against any person on the ground of race…’, whereas s 8 contains a similar prohibition against discrimination on the ground of gender.
[30]    

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As even a cursory perusal of our constitutional jurisprudence shows, equality is not merely a fundamental right; it is a core value of the Constitution. This is borne out by various provisions in the Constitution itself, which articulate the ideal of equality.

Section 1 of the Constitution, which sets out the founding values of the Republic – including the values of human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and non-sexism – is the most protected provision in the Constitution: it may only be amended with a supporting vote of at least 75 per cent of the members of the National Assembly and at least six provinces.
[31]    

The centrality of equality in the constitutional value system has also repeatedly been emphasised by the Constitutional Court. As Moseneke J put it in Minister of Finance v Van Heerden:

‘The achievement of equality goes to the bedrock of our constitutional architecture. The Constitution commands us to strive for a society built on the democratic values of human dignity, the achievement of equality, the advancement of human rights and freedom. Thus the achievement of equality is not only a guaranteed and justiciable right in our Bill of Rights but also a core and foundational value; a standard which must inform all law and against which all law must be tested for constitutional consonance.’
[32]    

However, in view of the fact that I have chosen to deal with the present application on the basis of the common law, rather than a direct application of the Constitution, it is not necessary for present purposes to consider the very substantial body of equality jurisprudence in any detail. Instead, the enquiry can be confined to the question whether or not the contested provisions in issue constitute unfair discrimination. If so, it must follow, in my view, that the contested provisions should also be regarded as being contrary to public policy.

Turning now to the contested provisions of the will, it appears to me that the condition limiting eligibility for the bursaries to candidates of ‘European descent’ constitute an instance of indirect discrimination based on race or colour. The exclusion of Jews and women in terms of the codicil, in turn, constitutes direct discrimination on the grounds of gender and religion. Such discrimination, being based on some of the prohibited grounds specified in s 9(3) of the Constitution, is therefore presumed to be unfair ‘unless it is established that the discrimination is fair’. In Harksen v Lane NO & Others, the Constitutional Court distilled three criteria to guide the enquiry into fairness:

‘(a)     the position of the complainants in society and whether they have suffered in the past from patterns of disadvantage, whether the discrimination in the case under consideration is on a specified ground or not;
(b)      the nature of the provision or power and the purpose sought to be achieved by it. If its purpose is manifestly not directed, in the first instance, at impairing the complainants in the manner indicated above, but is aimed at achieving a worthy and important societal goal, such as, for example, the furthering of equality for all, this purpose may, depending on the facts of the particular case, have a significant bearing on the question whether complainants have in fact suffered the impairment in question. In Hugo, for example, the purpose of the Presidential Act was to benefit three groups of prisoners, namely, disabled prisoners, young people and mothers of young children, as an act of mercy. The fact that all these groups were regarded as being particularly vulnerable in our society, and that in the case of the disabled and the young mothers, they belonged to groups who had been victims of discrimination in the past, weighed with the Court in concluding that the discrimination was not unfair;

(c)      with due regard to (a) and (b) above, and any other relevant factors, the extent to which the discrimination has affected the rights or interests of complainants and whether it has led to an impairment of their fundamental human dignity or constitutes an impairment of a comparably serious nature.’
[34]    

Applying these criteria to the contested provisions under discussion, the presumption of unfairness is, in my view, fortified by the following considerations:
(a)     

The ‘complainants’ who are discriminated against in terms of the will fall into groups who ‘have suffered in the past from patterns of disadvantage’, namely blacks, women and Jews. This fact has been recognised in various judgments of the Constitutional Court.
(b)      The primary purpose which the trust sought to achieve is undoubtedly charitable and laudable, namely providing bursaries to ‘deserving students with limited or no means’ for tertiary study. Having done so, however, the provisions of the trust immediately disqualify over half of such potential candidates from applying at all on the basis of their race, gender or religion. Moreover, the trust does not promote marginalized groups; rather it discriminates against them. The trust does not promote one religious view and exclude all others; rather it targets members of one particular religious group for exclusion and stigmatisation and does so on the basis of their ‘descent’, rather than their beliefs. As a consequence, even Jews who may have converted to other religions will still be excluded by reason of their ‘descent’ – vague and uncertain as this term may be. The discrimination by the trust thus only serves to entrench and perpetuate previously existing patterns of advantage and privilege.
(c)     

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The conclusion of unfairness is reinforced by other legislation adopted by Parliament. In this regard, s 29 of the Equality Act (which section has not yet been brought into operation),

refers to a Schedule to the Act containing an ‘Illustrative List of Unfair Practices in Certain Sectors’. This list is ‘intended to illustrate and emphasise some practices which are or may be unfair, that are widespread and that need to be addressed’ and includes inter alia the following:

The prohibited grounds include, race, gender and religion. The fact that Parliament has enacted such legislation is therefore indicative of public policy and the community’s legal convictions in this sphere.
(d)     

Another piece of legislation serving as an indicator of public policy in the sphere of education is to be found in the provisions of the National Education Policy Act 27 of 1996, which was enacted so as to provide for the determination of national policy for education. In terms of s 3, the minister was tasked with determining national education policy in accordance with the provisions of the Constitution and the Act. Section 4, in turn, sets out certain ‘directive principles’ of the policy contemplated in s 3. It must be directed toward –