Steinweiss v Aaron's Trustee [1914] ZAWLD 17 (14 July 1914)

lnsol'vency.-Bonded property.--Duty of Trustee.-Law 13 of 1895, sec. 62.-Removal of Trustee.-Grounds for.-Law 13 of 1895, sec. 77.-Commission under sec l63 -Mandamus on Trustee .-Costs.

A bondholder in an insolvent estate valued his security at £9,000. Applicant, a concurrent creditor, called upon the trustee at the third meeting to abandon the security to the bondholder at that valuation. The trustee, who was also acting as agent for the bondholder, declined. Thereafter the bondholder reduced his valuation to £4,000, and proved as a concurrent creditor for the
balance. In an application for the trustee's removal for misconduct in refusing to abandon the secured property, Held, that as no valuation upon oath, under
sec. 62 of Law 13 of 1895, consequent upon dispute had yet been made, the trustee's option to take over or abandon had not yet arisen, and that, ·therefore,
there was no breach of duty. After the trustee had reported that the whole of the insolvent's assets were bonded, and that there was nothing for concurrent creditors, he was empowered by X & Y, both concurrent creditors, to act for them. The applicant moved resolutions calling upon the trustee to enquire into certain dealings by the insolvent's
widow, and to ask for a commission under sec. 163. No advantage could accrue to X & Y unless applicant's resolutions were accepted and successful action taken thereon. The rejection of the resolutions meant the risk of a contribution account to X & Y. ·The trustee by the use of X & Y's votes. but in the bona fide belief that- further investigation would be useless, secured their
rejection. Held, he had committed a breach of duty to X & Y even though they might thereafter have acquiesced in his action, but that his action though injudicious and improper did not justify his rem.c,val under sec. 77.