When a trust suffers a loss – through negligence, misconduct or mismanagement – can the beneficiaries take legal action directly against a third party? The answer is nuanced, and recent legal developments, such as the McCann v McCann case in the KwaZulu-Natal High Court, is bringing new clarity to the rights and remedies available to trusts and their beneficiaries.
According to PJ Veldhuizen, Managing Director of Gillan & Veldhuizen Inc., “The administration of trusts and estates is ultimately a matter of trust – pun intended. But that trust must be earned and safeguarded by careful planning, transparency and the right appointments. When things go wrong, beneficiaries are not without recourse.”
Traditionally, only trustees have the legal standing to act on behalf of a trust. But what happens when trustees are unable, or unwilling, to take action, or when their own conduct is under scrutiny? This is where the Beningfield exception comes into play. Originating in UK common law and affirmed by South African courts in cases like Gross v Pentz and more recently Standard Bank v July, this principle allows beneficiaries to step in under specific circumstances.
“The courts have held that if trustees are conflicted or delinquent, or if no trustee is available, a beneficiary with a direct interest may act to preserve or recover trust assets, explains Veldhuizen. “It’s not a free-for-all. The beneficiary must show a clear and pressing risk to the assets they stand to inherit or benefit from.”
The McCann Case
In the 2025 McCann case, the applicant brought an urgent High Court application to preserve the business interests of her late husband’s estate. With the executor not yet appointed, and concerns mounting over large and unusual cash withdrawals by the deceased’s father (a former trustee and now employee of the business), she sought to interdict family members from mismanaging company funds that formed part of the estate’s value.
Although she was not a trustee or business member, the court ruled she did have locus standi to act, thanks to her position as the deceased’s sole heir and the lack of an executor at the time. However, her claims only succeeded in part – the court confirmed limited relief and stressed that once an executor is appointed, the baton of responsibility passes fully to them.
“This case reinforces the idea that beneficiaries can act, but only when there is a legal vacuum and the risk of prejudice is real,” notes Veldhuizen. “It’s a powerful but narrow doorway. Once trustees or executors are in place, the courts are clear: it’s their job.”
Trustees have a fiduciary duty to act in the best interests of beneficiaries. This includes prudent financial management, disclosure of relevant information and acting according to the trust deed’s provisions. “Trustees are the custodians of someone else’s legacy,” says Katherine Timoney, a Senior Associate at GVInc. “Beneficiaries are entitled to proper accounting, access to trust documents and explanations for decisions affecting their rights.”
In Doyle v Board of Executors, the court confirmed that even if a beneficiary only stands to inherit upon another’s death, they are still entitled to a full accounting of the trust’s administration during that time. Transparency isn’t optional – it’s a legal obligation.
Disputes between trustees and beneficiaries are common and often avoidable. One of the most effective tools Veldhuizen recommends is the inclusion of a dispute resolution clause in the trust deed. Mediation and arbitration offer faster, more private solutions than dragging family grievances through the courts. “In emotionally charged matters like family trusts and estates, the goal should be preservation – not just of assets, but of relationships too,” Veldhuizen adds.
The ability of a beneficiary to sue on behalf of a trust should be the exception and not the rule. A well-drafted trust deed, transparent administration and careful selection of trustees can prevent the need for litigation in the first place. “Trusts are not just tax tools, they are instruments of legacy,” concludes Veldhuizen.