IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION) In the matter between:
PETER CARL KOHLBERG 	 Appellant
and
HAROLD MOULSDALE BURNETT, NO 	 1st Respondent
JOHN DAVID ENRAGHT-MOONY	 2nd Respondent
JOAN HILDEGARDE ENHAGHT-MOONY 	 3rd Respondent
LORIMER ERIC LEACH in his capacity as
curator-ad-litern 	 4th Respondent
ALICE MARY KOHLBERG 	 5th	Respondent
SANDRA JOAN SHILLINGTON 	 6th	Respondent
JOHN PETER ENRAGHT-MOONY 	 7th	Respondent
PATRICIA ANNE ENRAGHT-MOONY 	 8th	Respondent
Coram : RABIE, CJ , BOTHA, VAN HEERDEN, JACOBS,	JJA et
GALGUT, AJA.

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Heard:	Delivered:
27 February ,1986
JUDGMENT
RABIE, CJ:
This appeal is concerned with the question of
the validity of that part of clause 3 of the will of the
late Herbert Kohlberg in which he bequeathed the residue
of his estate to two trusts which he had created about
a year before his death. The Eastern Cape Division
(per Kannemeyer, J., with whose judgment Mullins, J.,
agreed) held, in an application brought by one of the
executors of the will (the first respondent in the
appeal/.......

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appeal) that the relevant part of the clause (to which
I shall refer as "the clause", or "clause 3") was valid
The Court dismissed the counter-application by the present
appellant ( who is also an executor of the will) in which
he sought an order declaring that the clause was invalid
and that the residue of the estate fell to be dealt with
according to the laws of intestate succession. The
judgment of the Court a quo has been reported: see
Burnett N 0 v. Kohlberg and Others, 1984(2) S.A. 137.
The aforesaid Herbert Kohlberg (hereinafter
referred to as "the deceased") died on 25 August 1979
He was a widower. He left two children, viz. the appellan-
and Joan Hildegarde Enraqht-Moony, the third respondent
in the appeal. In his will the deceased, after making
certain/......

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certain bequests, went on to provide as follows in
clause 3 thereof with regard to the residue of his estate:
"... I leave and bequeath the rest, residue and remainder of my Estate and Effects whether movable or immovable and of whatsoever nature and kind and wheresoever situate whether in possession, reversion, remainder or expectance, nothing excepted:
 (a)	As to THIRTY-FIVE per centum (35%) to THE KOHLBERG KOHLBERG TRUST to be administrated, dealt with and distributed as part of the capital and according to the conditions of that Trust; and
 (b)	As to SIXTY-FIVE per centum (65%) to THE KOHLBERG MOONY TRUST to be administrated, dealt with and
distributed as part of the capital and
the according to/conditions of that Trust.
Three executors were appointed in the will, viz.
the first respondent, John David Enraght-Moony (the second
respondent) and the appellant. The second respondent is
the/	

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the husband of the third respondent.
The two trusts mentioned in clause 3 of the will
are family trusts which the deceased created by means of
notarial deeds of donation and trust on 3 August 1978, i.e.,
on the same day on which he executed his will, but shortly
before he signed the will.
In clause 1 of the deed by which the Kohlberg
Kohlberg Trust was established it is recorded that the
deceased donated to the trustees of the trust the sum of
R3 500-00, to be held by them as the trust fund for the
purposes of the trust, and that this trust fund was to
be deemed to include such other assets as the deceased
might thereafter transfer to the trustees. A similar
statement/........

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statement appears in clause of the deed relating to
the Kohlberg Moony Trust, save that the amount of the
donation is said to have been R6 500-00.
Clause 15 of the Kohlberg Kohlberg Trust deed
provides how the trustees are to deal with the capital of
the trust fund after the deceased's death. The clause
is quoted at p. 138 E- p. 139B of the report of the
judgment of the Court a quo and need not be repeated.
It is sufficient to say that it appears therefrom that
the main intention of the deceased in creating the trust
was to benefit, after his death, his son (the appellant)
and the members of the latter's family. Clause 15 of
the Kohlberg Moony Trust contains provisions similar to
those/........

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those of clause 15 of the Kohlberg Kohlberg Trust, save
that they relate to the Kohlberg Moony Trust and the
beneficiaries thereunder, being the deceased's aforesaid
daughter (the third respondent) and the members of her
family.
In his counter-application in the Court a quo
the appellant said the following with regard to his contention that clause 3 of the will was invalid:'
"(i) The purported bequests to the Trusts purport
to' incorporate the terms and conditions of the Trust into the Will of the deceased;
(ii) The Deeds of Donation and Trust .... are not
part of the deceased's Will and, moreover, have not been duly executed by the deceased in accordance with the provisions of the Wills Act, 1953;
(iii) Both the Trusts were established inter vivos.
The/............

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The bequests to the Trusts have the effect of incorporating by reference the terms and conditions of the Trust Deeds into the Will
which, in law, is neither permissible nor valid;
(iv) It is submitted that a bequest to a Trust is valid only if the Will itself contains the terms and conditions of the said Trust but not otherwise. As the terms and conditions of the Trusts are not so reflected in the Will of the deceased, the purported dispositions to the Trust are invalid, of no force and effect and have no legal efficacy."
And also:
"It is not my contention ... that every bequest
to a Trust or Trustee has no legal efficacy.
I do, however, submit that where the Testator
intends that the Trustees are not to take beneficially
themselves, the terms and conditions of the Trust
have to be set out in the Will or, if incorporated
by reference, be executed in the manner required
by the Wills Act, No. 7 of 1953. Failing this,
the bequest to the Trust is of no legal force."
It/..........

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It appears that it was argued on behalf of the
appellant in the Court below that a trust, not being a
legal persona, cannot receive benefits under a wi11, and
that clause 3 of the deceased' s will should, for !:hat
reason, be held to be invalid. The Court, after discussing
the argument at some length, rejected it and held (at p
142 E-F of the report) that "although a trust as such
cannot strictly be a beneficiary under a will, a bequest
can be made to the trustee qua trustee for the benefit of
an existing trust ....". The aforesaid argument was not
advanced on appellant's behalf in this Court, and it is
accordingly not necessary to deal with it. I would merely
say that in my opinion counsel was correct in not pursuing it
The/...........

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The argument that was presented to us may be
summed up as follows: (a) the bequest in clause 3 of the
deceased's will is a bequest to the beneficiaries under
the two trusts mentioned in the clause; (b) the identity
of those beneficiaries appears from clause 15 of each of
the two trust deeds; (c) the terms of the trust deeds do
not, however, form part of the will, since a testator
cannot incorporate the terms of a document in his will
merely by referring to that document in the will (Moses v 
Abinacler, 1951(4) S.A. 537(A)); (d) the will consequently
fails to identify the beneficiaries of the bequest; and
(e) the residue of the estate therefore falls to be dealt
with as on intestacy. I should perhaps add at this point
that counsel did not contend - rightly so, in my view -
that/..........

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that the words which follow upon l;he names of the trusts
in paragraphs (a) and (b) of clause 3 of the will are
indicative of an intention to incorporate in the will the
terms of clause 15 of each of the two trust deeds.
The validity of the aforesaid argument depends
on the validity of the submission made in (a). Counsel
for the appellant referred to this submission as the crux
of the appeal. The short but crucial question is, therefore,
whether counsel is correct in contending that the bequest
of the residue of the estate was a bequest to the
beneficiaries under the two trusts, and not to the
trusts, or to the trustees, as representing the trust s
If this contention is correct, it would follow that the
deceased/.......

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deceased Tailed to indicate in his will to whom he intended
to bequeath the residue of his estate and that he should.
therefore, be held to have died intestate in so far as
the residue of his estate is concerned.
If ,a trust can receive benefits under a will,
I have difficulty in understanding the contention that the
deceased did not in clause 3 of his will declare who
the were to be/beneficiaries in respect of the residue of
his estate. It is clear from the language used in the
clause that the deceased bequeathed the remainder of his
estate to the two trusts mentioned therein. It is true,
of course, that a trust, not being a legal persona, cannot,
as a trust, acquire or hold property, but this fact docs
not/.............

13
not bring about that the two trusts were not properly
appointed as beneficiaries in clause 3 of the will. The
trustees of the two trusts are in law entitled to act
on behalf of the trusts and to hold, in their capacities
as trustees, property for the purposes of the trusts.
"It is trite law" , it was said by Steyn, C.J. in Commissioner
for Inland Revenue v. MacNeillies Estate, 1961(3) S.A.
833 at p. 840 G-H, "that the assets and liabilities in a
trust vest in the trustee.." In these circumstances it
cannot, in my opinion, be said that the deceased failed to
appoint beneficiaries in respect of the remainder of his
estate in clause 3 of his will. Counsel submitted, how-
ever, that the "actual beneficiaries" are not the trusts
or the trustees of the trusts qua trustees, but the
beneficiarics/.......

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beneficiaries under the trust deeds, and that, since their
identity is not revealed in the will but has to be 'sought
in the trust deeds, it must be held that clause 3 of the
will does not contain a valid disposition of the residue of
the deceased's estate. It is true that the beneficiaries
under the trusts are the only persons who actually benefit
by the bequest, since the trustees hold the trust funds
only in their representative capacities and not for their
own benefit. This does not mean, however, that the
beneficiaries under the two trusts are to be regarded as the
beneficiaries whom the deceased sought to appoint as his
beneficiaries in clause 3 of his will, but whose identity
he left to be determined by reference to the trust deeds.
The deceased did not appoint them as beneficiaries in his
will/.....

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will. Their rights to receive benefits are not derived
from the deceased's will, but from the terms of" the trust
deeds.
In the light of the aforegoing I consider that
counsel's argument cannot succeed and that the appeal
should be dismissed.
There remains the question of costs. In the
Court a quo the Court ordered that the appellant's costs
in respect of both the application and the counter-application
were to be paid out of the deceased's estate as between
attorney and estate, such costs to include the costs of
two counsel. Counsel for the appellant submitted that, in the
event/............

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event of the appeal being dismissed, the Court should order that the appellant's costs of appeal should be paid out of the deceased's estate. Such an order, it was submitted, would be justified on the following grounds: "(a) Although the appellant has a personal interest in the outcome of the appeal, the relief sought by him also relates to his position as an executor in the estate of the deceased; (b) the litigation was brought about by the deceased; (c) notwithstanding the finding of the Court a quo, the matter is res nova; (d) the appellant had acted on the advice of senior counsel." (Quotation from counsel's heads of argument.) I find myself quite unable to agree with counsel's submission. One may accept that
the appellant was, by reason of his position as executor
justified/...... .

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justified in seeking the decision of the Court on the
question whether clause 3 of the deceased's estate was
valid or whether the residue of the estate was to devolve
as on intestacy. A full Court of the Eastern Cape
Division gave its decision on that question, and it would
have been reasonable for the appellant, as executor, to
have accepted that decision. He was the only one of all
the parties to the application proceedings who did not
accept the Court's judgment, and in the circumstances it
can hardly be said that his decision to go' on appeal was
taken in the interests of the estate or of anyone (except
himself) who had an interest in the estate. His real
reason for deciding to go on appeal admits of little doubt.
He has a personal interest in the matter. He and the third
respondent/.....

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respondent (who was prepared to accept the validity of
clause 3 of the will) are the deceased's only children, and
an order that the residue of the deceased's estate should
be dealt with as on intestacy would be to his financial
advantage. Now that he has lost his appeal, it would be
inequitable to order, as we were asked to do, that his
costs of appeal should come out of the estate of the
deceased. Fairness demands, in my opinion, that he
should be ordered to pay the costs of the appeal
It is ordered as follows;
(l)	The appeal is dismissed with costs, including
the costs of the curator ad litem and the costs
of/......

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of the application for leave to appeal. Only
such costs as cannot be recovered from the
appellant may be paid out of the estate of the
late Herbert Kohlberg.

(2)

Should the appellant fail to sign the first and

final liquidation and distribution account in
the aforesaid estate as drawn by the first
respondent within 21 days of the date of this
judgment, the deputy sheriff of Port Elizabeth
is authorised to sign it on his behalf.
P J RABIE CHIEF JUSTICE

BOTHA, JA. VAN HEERDEN, JA. JACOBS, JA. GALGUT. AJA.

Concur.