The judgement by The Supreme Court of Appeal in Land and Agricultural Bank v Parker and Others 2004 JDR 0574 (SCA) has had far reaching ramifications for Trusts, Trustees and Business owners. The gist of the decision is that the courts have become more vigilant in ensuring that the trust is not merely an “alter-ego” and that there is a distinct separation of control and benefit between the Trustees and the Beneficiaries.
It was stated that the Parker case ‘….brings to the fore yet again questions about the use and abuse of the trust form in business dealings.’ The court held that the trust is undermined where the functional separation between control and enjoyment i.e. between Trustees and Beneficiaries, is lacking. A directive was issued to the various Masters Offices throughout the country to insist on the appointment of an independent outsider as trustee to every trust in which the trustees are beneficiaries and the beneficiaries are all related to one another.
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