Trustworthy: do trustees need to comply with the Promotion of Access to Information Act?
Image: File photo.
A recent deadline for relevant entities to submit their PAIA Annual Returns by 30 June 2025 has raised the question of whether trusts are included among the entities covered by the PAIA. The PAIA's primary aim is to grant individuals the right to access information held by both public and private bodies, thereby fostering a more transparent and accountable society. Section 32 of our Constitution states that 'Everyone has a right of access to any information held by the state and any information held by another person that is required for the exercise or protection of any rights.'
The PAIA, Regulations, 'Professor Google' and guidance by the Court cause more confusion than providing clarity, as it is blatantly clear that trusts, which are considered unique entities by our courts, were never specifically catered for in the legislation.
In South Africa, both public and private bodies must comply with the PAIA. This means that nearly all entities, from government departments to private companies, are required to follow PAIA regulations and keep a PAIA manual. Public bodies are defined in the PAIA as any government body, institution, or organ performing a public function. This includes national and provincial departments, municipalities, and state-owned enterprises.
Clearly, trusts do not fall under this definition. The only remaining category in which a trust might be classified is 'private bodies'. 'Private bodies' are defined as 'a) a natural person who carries or has carried on any trade, business or profession, but only in such capacity; (b) a partnership which carries or has carried on any trade, business or profession; (c) any former or existing juristic person'. Trusts cannot be seen as 'partnerships', so the only remaining options are (a) and (c).
Is a trust a 'juristic person'?
'Professor Google' suggests that for the PAIA, a trust is considered a 'juristic person', similar to a company or close corporation, and is therefore subject to the PAIA because it is regarded as a 'private body'. According to this definition, all 'juristic persons' are deemed private bodies and must comply with the Act, regardless of whether they conduct a business, trade, or profession, since no additional qualifying criteria are specified.
Prior to January 1, 2022, certain small private bodies were exempt from the requirement to have a PAIA manual based on sector, number of employees, and annual turnover. However, this exemption has been removed, and now all private bodies, regardless of size, must comply with the PAIA. A private body now includes all juristic persons, regardless of whether they conduct trade, business, or a profession. This means that any trust, including family, testamentary, special, and business trusts, must comply with PAIA.
The Trust Property Control Act, however, defines a trust as 'an arrangement' rather than a 'person'. Consequently, a trust is not regarded as an independent entity or juristic person that can be owned, sold, or transferred, as is the case with a company or a close corporation. Instead, a trust is considered a legal institution of its own kind or class (sui generis) in South Africa (Braun v Blann & Botha case of 1984 and Rosner v Lydia Swanepoel Trust case of 1998). This was confirmed in the Tusk Construction Support Services (Pty) Ltd v Independent Development Trust case of 2020, where it was held that even though a trust does not have a legal personality, it 'remains 'a legal institution sui generis''.
Therefore, a trust does not possess legal personality (unless a statute defines it as such) because it is simply an accumulation of assets and liabilities administered and owned by the trustees (case of Land and Agricultural Bank of South Africa v Parker in 2005). As the PAIA does not specifically include a trust in the definition of a 'juristic person', such as the Companies Act and the Income Tax Act, it cannot be inferred that a trust is considered a 'juristic person' within the meaning of a private body in PAIA. This definition, therefore, will not bring a trust within the PAIA net.
Are trustees carrying on, or have they carried on, any trade, business, or profession?
The only remaining possibility for including trusts as 'private bodies' that must adhere to the requirements of the PAIA is if the trustees can be seen as natural persons who engage in or have engaged in any trade, business, or profession. In this instance, a 'private body' actually refers to individuals running businesses in their personal capacities (sole proprietors) and not through entities, including trusts. Again, trusts are not explicitly mentioned or included. However, in the case of Kilbourn v Zwemstra and others in 2023, the judge held that 'the trustees are natural persons who carry on the business of the trust, albeit in a representative capacity. In my view, therefore, a trust falls squarely within the definition of a private body.
The aforesaid interpretation is consonant with the Constitutional imperative that information should be accessible to persons seeking to exercise or protect a right. Whilst under the pre-democracy regime, secrecy often led to abuses and violations of human rights, under our democratic dispensation, it is important to promote transparency.
I can see no reason why a trust should be treated any differently from any other juristic or natural person that carries on a business or trade.' If this interpretation is accepted, the application will be far narrower to the various types of trusts. Unlike the above interpretation, only trusts that carry on trades or businesses will be included, and family, testamentary, and special trusts will be excluded.
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