Northview Shopping Centre (Pty) Ltd v Revelas Properties Johannesburg CC and Another (275/09) [2010] ZASCA 16; 2010 (3) SA 630 (SCA) ; [2010] 3 All SA 422 (SCA) (18 March 2010)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2010
>>
[2010] ZASCA 16
|

|

Northview Shopping Centre (Pty) Ltd v Revelas Properties Johannesburg CC and Another (275/09) [2010] ZASCA 16; 2010 (3) SA 630 (SCA) ; [2010] 3 All SA 422 (SCA) (18 March 2010)

Links to summary

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no
:
275/09
In the
matter between:
NORTHVIEW
SHOPPING CENTRE (PTY) LTD Appellant
and
REVELAS PROPERTIES JOHANNESBURG CC First Respondent
NICK CHRISTELIS Second Respondent
Neutral citation:
Northview Shopping Centre v Revelas
Properties
(275/09)
[2010] ZASCA 16
(18 March 2010)
Coram:
LEWIS,
HEHER, MLAMBO and MALAN JJA and THERON AJA
Heard:
22 February 2010
Delivered
18 March 2010
Summary:
Where an agent of a close corporation, who is not a
member, concludes on its behalf a contract for the sale of land,
authorization
must be in writing in order to comply with
s 2(1)
of
the
Alienation of Land Act 68 of 1981
.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from
:
South Gauteng High Court (Johannesburg)
(Brett AJ sitting as court of first instance):
The appeal is dismissed with costs.
JUDGMENT
LEWIS JA (HEHER, MLAMBO and MALAN JJA and THERON
AJA concurring)
[1] The appellant, Northview Shopping Centre (Pty) Ltd (Northview),
claimed specific performance of a contract for the sale of immovable
property that it alleges it purchased from the first respondent,
Revelas Properties Johannesburg CC (Revelas). The second respondent,
Mr Christelis, is the husband of the sole member of Northview, a
close corporation. He signed the contract on behalf of Revelas.
The
issue before us is whether he was authorized to sign the contract, as
required by
s 2(1)
of the
Alienation of Land Act 68 of 1981
. Revelas
contends that he was not, as he had no written authority from it, and
that the sale is thus invalid for want of formalities.
Northview
contends, on the other hand, that written authority is not required
when a close corporation is the principal.
[2] Northview, in its particulars of claim,
alleged that Christelis was duly authorized to sign the contract,
which is enforceable
against Revelas. It excepted to the claim on two
bases (and raised several other exceptions, none of which was
adjudicated by the
high court and that are not before us). First it
asserted that the claim was vague and embarrassing since it did not
expressly aver
that Christelis was authorized in writing (the
pleading exception); and second, in the alternative, Revelas asserted
that the claim
lacked averments necessary to sustain an action (the
substantive exception).
[3] Brett AJ in the high court upheld the
substantive exception, saying that he agreed that ‘if a person
other than the member acted
on its [the close corporation’s] behalf
that person would constitute an agent properly so called within the
meaning of the Act
[s 2(1) of the
Alienation of Land Act]. More
over,
in concluding the agreement relied upon by the plaintiff [Northview]
the second defendant [Christelis] purported to “act on
behalf of
the close corporation ie as an agent and not as its functionary.”’
The high court also upheld the pleading exception
on the basis that
there was no allegation that Christelis was authorized in writing,
and that the written authority should have been
annexed to the
particulars of claim together with the contract of sale. The appeal
to this court is with Brett AJ’s leave.
The requirement of written authority under s
2(1)
of the
Alienation of Land Act
[4
] I shall deal first with the finding on the substantive exception.
Section 2(1)
of the
Alienation of Land Act provides
:
‘
No
alienation of land after the commencement of this section shall . . .
be of any force or effect unless it is contained in a deed of
alienation signed by the parties thereto or by their agents acting
on
their written authority.’
The provision is not new. It was first included in
s 30
of the Transvaal Transfer Duty Proclamation 8 of 1902; was
carried into s 1(1) of the General Law Amendment Act 68 of 1957;
repeated
in s 1(1) of the Formalities in Respect of Contracts of Sale
of Land Act 71 of 1969 and repeated again in the
Alienation of Land
Act. Cases
dealing with the provision span more than a century.
Of
particular importance in this matter are the decisions dealing with
the application of the provision where a party to the sale
is a
juristic person, which date back at least to 1913 with the landmark
judgments in
Potchefstroom Dairies and
Industries Co Ltd v Standard Fresh Milk Supply Co
.
1
The
Potchefstroom
Dairies
principle
[5] The question before the court in this case was
whether a contract for the sale of land signed by a partner, on
behalf of a partnership,
was subject to the requirement of
s 30
of
the Proclamation. De Villiers JP held that the requirement of written
authority did not apply where a partner signed for a partnership
because a partner is not an agent of the partn
ership
within the meaning of
s 30
of the Proclamation. Partners, he said,
were more than agents: a partner ‘sustains the double character of
agent and principal
in one and the same transaction’.
2
[6] Bristowe J agreed with this conclusion, but
elaborated also on the application of the written authority
requirement in respect
of other juristic entities, such as companies.
It is his judgment that has been the foundation of the principle that
corporate entities,
being unable to act other than through natural
persons, cannot give written authority to their representatives, and
that therefore
the written authority requirement does not apply when
a functionary of a company signs a contract for the sale of land. It
is largely
on the interpretation of the following passage that this
appeal turns.
[7] Bristowe J said:
3
‘
Under that section [s 30 of
the Proclamation of 1902] a contract of sale, if not signed by the
principal, must be signed by his agent
“duly authorised in
writing”. That must, I think, mean “authorised in writing by the
principal”. The principal must therefore
be capable of giving the
agent the power which he is appointed to exercise. And for this
purpose he must be capable of exercising
those powers himself.
Moreover the use of the word “authorised” points I think to an
express authorisation as distinct from one
arising by implication of
law. So that it seems to me that the agency contemplated by the
section is one expressly created by a person
who could himself have
exercised the delegated power had he chosen to do so.
In this view tutors, curators,
corporations and partnerships are all excluded. Tutors and curators
are excluded because the acts which
they are appointed to perform are
ex hypothesi
acts which their wards cannot perform. Corporations are excluded
because having neither minds nor hands of their own they cannot
themselves do what their agents do for them. And partnerships are
excluded because the agency of a partner for his co-partner is
not
expressly created but arises by implication of law as soon as the
partnership relation is constituted. Not only is this in my
opinion
the effect of the section properly construed, but it seems to me to
be a reasonable interpretation and one which accords
with the true
facts of the case. Tutors and curators are really not agents at all.
They are principals, though with limited powers.
And if they enter
into a contract of sale they do so by virtue of a faculty incidental
to their office and not of any power derived
from the ward. So
although the seal of a corporation is affixed by an agent, the seal
once affixed is the signature of the corporation.
And quite apart
from the special provisions of the Companies Act it would not be true
to say that a document properly sealed with
the corporation’s seal
is executed by an agent. Similarly in the case of a partnership. By
the partnership contract a relation
is established between the
parties which persists during the continuance of the partnership and
for all partnership purposes by virtue
of which each partner becomes
prima facie
capable
of signing the firm’s name. The name so signed is really the
signature of the firm, though written by one partner; just
as the
seal of a company is the signature of the company though affixed by
an agent.’
[8] The principle expressed in this passage has been applied
consistently since then to companies, partnerships and co-operative
societies. And as counsel for Northview points out, it has been
viewed against all the different provisions enacted from time to
time
that require an agent to have written authorization in order to bind
a principal to a contract for the sale of land.
[9] In
Suid
Afrikaanse Sentrale Koöperatiewe Graanmaatskappy Bpk v Thanasaris
4
Murray J, having set out the reasoning of De Villiers JP in
Potchefstroom Dairies
said:
‘
The concurring judgment of
Bristowe J is to the same effect, and goes further by expressing the
view that the reasoning for the exclusion
of partners from the
operation of the section is equally applicable to exclude
corporations as well: the agency contemplated by the
section is one
expressly created by a person who could himself if so minded have
exercised the power which he has elected to delegate.
Tutors,
curators, corporations and partners are excluded from the section;
tutors and curators because the acts they are appointed
to perform
are acts which
ex
hypothesi
their wards
cannot perform; partnerships because the agency of a partner for his
co-partner is not expressly created but arises by
implication of the
law on the constitution of the partnership relation. “Corporations
are excluded because having neither minds
nor hands of their own they
cannot do what their agents do for them.”’
[10] Trusts are treated differently, however. In
Thorpe v Trittenwein
5
this court held that a trustee who did not have the written authority
of co-trustees to sign a contract for the sale of land did
not bind
the trust. Scott JA said that the position was different from that of
a partnership. Trustees, unlike partners, are required
to act
jointly. He said:
6
‘
As previously indicated the
very object of s 2(1) of the Act [the
Alienation of Land Act] is
on
grounds of public policy to facilitate that proof by requiring the
authority to be in writing and so avoid needless litigation.
Whether
one regards Thorpe [the trustee who had signed the contract for the
trust] as having acted as a functionary of the trust
and in that
sense a principal or as both a principal (as co-trustee) and agent of
the other co-trustees, the result in my view must
be the same. Given
the object of the section, it must be construed, I think, as being
applicable on either basis. In other words,
the reference in the
section to “agents” must be understood as including a trustee who
may in a sense be said to sign as a principal
(ie as the trust), but
whose power to bind the trust is nonetheless dependent upon the
authority of the co-trustees. To do otherwise
would be to thwart the
clear object of the section. It follows that in my view the agreement
of sale (as supplemented by the addenda)
is void
ab
initio
and of no
force and effect.’
[11] There is nothing to suggest that the
Potchefstroom Dairies
principle is incorrect in so far as juristic persons generally are
concerned. And, as already pointed out, it has been applied for
nearly a century. The only question is whether it applies to an agent
of a close corporation who is not a member. Before dealing
with the
differences between provisions governing companies and those
governing close corporations, I should make it clear that there
is in
my view no difference in principle between a person authorized by
virtue of his or her position within a company, on the one
hand, and
one who is a member of a close corporation on the other, to sign a
contract for the sale of land. A member of a close corporation,
authorized as such to sign, is in the same position as a functionary
of a company authorized to sign (both without requiring written
authority). For the sake of convenience I refer to a person
authorized by law (or the internal rules of a juristic entity) as a
‘functionary’,
so as to distinguish his or her position from that
of an agent authorized by expression of will (sometimes referred to
as an ‘outside
agent’). Thus at issue in this appeal is whether
an agent, as opposed to a functionary, can bind a close corporation
to a contract
for the sale of immovable property where there is no
written authority to do so.
Section 69 of the Companies Act
[12] The question of written authority in so far as companies is
concerned is regulated by the provisions of the Companies Act 61
of
1973. Section 69 reads:
‘
Contracts by companies. –
(1) Contracts on behalf of a company may be made as follows:
Any contract which if made
between individual persons would by law be required to be in writing
signed by the parties to be charged
therewith may be made on behalf
of the company in writing signed by any person acting under its
authority, expressed or implied,
and may in the same manner be
varied or discharged;
any contract which if made
between individual persons would by law be valid though made orally
only and not reduced to writing,
may be made orally on behalf of the
company by any person acting under its authority, expressed or
implied, and may in the same
manner be varied or discharged.
(2) All contracts made in
accordance with this section shall be effectual in law and shall bind
the company and its successors and
all other parties thereto.’
[13] Section 69 was preceded by s 72(1)(a) of the
Companies Act 46 of 1926, which itself replaced s 74(1) of the
Companies Act 31
of 1909. Thus for a long period any agent of a
company, whether or not a functionary of the company, has, it is
argued, been able
to bind the company to a contract for the sale of
land without written authority by virtue of the provisions of s 69
and without
reference to the
Potchefstroom
Dairies
principle.
[14] Northview’s argument is thus that had
Christelis been representing a company, he would have been able to
bind it on his signature.
I have some doubt about whether s 69 was
ever intended to apply to a person who is not a functionary of a
company and who does not
have authority by virtue of his or her
position within the company, in terms of the company’s articles of
association or in terms
of a resolution of the company. It is so,
however, that the decisions based on
Potchefstroom
Dairies
do not deal with that
situation: all deal with functionaries of a juristic person such as
company secretaries, and partners. See,
for example,
Trever
Investments (Pty) Ltd v Friedhelm Investments (Pty) Ltd
7
where Trollip JA, referring to
Potchefstroom
Dairies
and cases applying it, said
that parol evidence was admissible to prove that the signatory to a
contract for the sale of land had
‘the necessary
implied
authority’ (my emphasis). He continued: ‘After all, in most cases
that is the only way in which “implied authority”, permitted
by
[s 69] of the Companies Act, could be established.’ The signatory
was a director of the company concerned.
[15] However, the meaning of s 69 and its ambit
were not debated before us: it was assumed that any agent for a
company, whether authorized
by law or by mandate, does not require
written authority to bind a company to a contract for the sale of
land.
8
No finding in this regard is made.
Contracts concluded on behalf of close corporations
[16] There is no provision equivalent to s 69 in
the Close Corporations Act 6
9 of 1984. Is
there any reason to treat close corporations differently? The Close
Corporations Act confers on members the power to
bind the close
corporation. Section 54 provides:
9
‘
(1) Subject to the provisions
of this section, any member of a corporation shall in relation to a
person who is not a member and is
dealing with the corporation, be an
agent of the corporation.
(2) Any act of a member shall
bind a corporation whether or not such act is performed for the
carrying on of the business of the corporation
unless the member so
acting has in fact no power to act for the corporation in the
particular matter and the person with whom the
member deals has, or
ought reasonably to have, knowledge of the fact that the member has
no such power.’
[17] Section 54(2) does no more than express the
usual rules relating to ostensible authority. And s 54(1) simply
confers on a member
authority
to act for a
close corporation, as the common law confers on a partner the power
to bind the partnership. The section does not regulate
the question
of written authority for the purpose of
s 2(1)
of the
Alienation of
Land Act, as
it is assumed s 69 of the Companies Act does. It is
clear, however, that on the reasoning in
Potchefstroom
Dairies
a member, who by law can
represent a close corporation, need not have written authority. But
why should that be true of an agent
of the close corporation who is
not a member, as is the case with Christelis?
[18] Assuming that Christelis did not have written
authority to sign the deed of sale, did he bind Revelas? Counsel for
Revelas argues
that only Mrs Christelis, the member, had the power to
bind the corporation. The basis of the argument is that
Potchefstroom
Dairies
deals with situations where the
juristic person can act only through a natural person, who has
authority by virtue of his or her
position to bind the entity –
that is where the principal cannot itself act, as in the case of
companies that have no ‘minds
nor hands of their own’. So too,
tutors and curators act for persons who have no, or limited, legal
capacity. In this case, Revelas
could act through Mrs Christelis. And
she could have given Christelis written authority to sign the
agreement of sale. The
Potchefstroom
Dairies
principle does not, therefore,
apply.
[19] The argument is thus that where there is no
implication of authority by law (as with a company director or
secretary, or a close
corporation member – who would all fall in
the class of functionaries of the juristic entity) written authority,
as required for
an agent under
s 2(1)
of the
Alienation of Land Act
i
s necessary. In the first class there is a
primary attribution of authority – by statute or other instrument.
In the second class
there is a secondary rule of attribution –
authority conferred by the expression of will. In the latter class
there must be written
authority to comply with
s 2(1).
The rules
of
attribution
[20] Counsel for Revelas cites in this regard a
decision of the Privy Council:
Meridian
Global Funds Management Asia Ltd v Securities Commission
.
10
Lord
Hoffman, delivering the judgment of the Council, explained that a
company exists as a legal fiction because of certain rules.
And a
company runs in accordance with rules which tell one which acts are
those of the company. He said:
11
‘
It is
therefore a necessary part of corporate personality that there should
be rules by which acts are attributed to the company.
These may be
called the “rules of attribution
”.’
Lord Hoffman continued:
12
‘
The company’s primary rules
of attribution will generally be found in its constitution, typically
the articles of association, and
will say things such as “for the
purpose of appointing members of the board, a majority vote of the
shareholders shall be a decision
of the company” or “the
decisions of the board in managing the company’s business shall be
the decisions of the company”
There are also primary rules of
attribution which are not expressly stated in the articles but
implied by company law, such as
“
the
unanimous decision of all the shareholders in a solvent company about
anything which the company under its memorandum of association
has
power to do shall be the decision of the company”: see
Multinational
Gas and Petrochemical Co. v Multinational Gas and Petrochemical
Services Ltd
[1983]
Ch 258.
These primary rules of
attribution are obviously not enough to enable a company to go out
into the world and do business. Not every
act on behalf of the
company could be expected to be the subject of a resolution of the
board or a unanimous decision of the shareholders.
The company
therefore builds upon the primary rules of attribution by using
general rules of attribution which are equally available
to natural
person, namely, the principles of agency. It will appoint servants
and agents whose acts, by a combination of the general
principles of
agency and the company’s primary rules of attribution, count as the
acts of the company. And having done so, it
will also make itself
subject to the general rules by which liability for the acts of
others can be attributed to natural persons,
such as estoppel or
ostensible authority in contract and vicarious liability in tort.
It is worth pausing at this
stage to make what may seem an obvious point. Any statement about
what a company has or has not done,
or can or cannot do, is
necessarily a reference to the rules of attribution (primary and
general) as they apply to that company.
Judges sometimes say that a
company ‘as such’ cannot do anything; it must act by servants or
agents. This may seem an unexceptionable,
even banal remark. And of
course the meaning is usually perfectly clear. But a reference to a
company “as such” might suggest
that there is something out there
called the company of which one can meaningfully say that it can or
cannot do something. There
is in fact no such thing as the company as
such, no ding an sich, only the applicable rules. To say that a
company cannot do something
means only that there is no one whose
doing of that act would, under the applicable rules of attribution
count as an act of the company.
The company’s primary rules of
attribution together with the general principles of agency, vicarious
liability and so forth are
usually sufficient to enable one to
determine its rights and obligations. In exceptional cases, however,
they will not provide an
answer. This will be the case when a rule of
law, either expressly or by implication, excludes attribution on the
basis of the general
principles of agency or vicarious liability. For
example, a rule may be stated in language primarily applicable to a
natural person
and require some act or state of mind on the part of
that person “himself”, as opposed to his servants or agents. This
is generally
true of rules of the criminal law, which ordinarily
impose liability only for the actus reus and mens rea of the
defendant himself.
How is such a rule to be applied to a company?
One
possibility is that the court may come to the conclusion that the
rule was not intended to apply to companies at all; for example,
a
law which created an offence for which the only penalty was community
service. Another possibility is that the court might interpret
the
law as meaning that it could apply to a company only on the basis of
its primary rules of attribution, ie if the act giving rise
to
liability was specifically authorised by a resolution of the board or
an unanimous agreement of the shareholders. But there will
be many
cases in which neither of these solutions is satisfactory; in which
the court considers that the law was intended to apply
to companies
and that, although it excludes ordinary vicarious liability,
insistence on the primary rules of attribution would in
practice
defeat that intention. In such a case, the court must fashion a
special rule of attribution for the particular substantive
rule. This
is always a matter of interpretation: given that it was intended to
apply to a company, how was it intended to apply?
Whose act (or
knowledge, or state of mind) was
for
this purpose
intended to count as the act etc of the company? One finds the answer
to this question by applying the usual canons of interpretation,
taking into account the language of the rule (if it is a statute) and
its content and policy.’
[21] Counsel for Northview argues that the rules
of attribution expressed in
Meridian
are not part of South African law. It seems to me, however, that they
are simply rules of logic. And in any event, I consider that
they are
expressed (although more concisely) by Bristowe J in
Potchefstroom
Dairies
where he said:
‘
Moreover the use of the word
“authorised” points I think to an
express
authorisation as distinct from one arising by implication of law.
So
that it seems to me that
the agency contemplated by the section is one expressly created by a
person who could himself have exercised the delegated power
had he
chosen to do so
’
(my emphasis).
[22] Authority arising by implication of law in
this context is that conferred by statute, by the rules of the
juristic entity (in
articles of association, for example) or by the
common law in relation to partners. An express authorization is one
given to an agent
by a principal who can act for him or herself. In
the case of a close corporation the logical principle should in my
view prevail:
a member who is given authority by statute to bind it
needs no written authority.
13
But if a member authorizes an agent to enter into a contract for the
sale of land on behalf of the close corporation he or she must
do so
in writing.
[23] The logic of the principle is made clear by
an example dealing with a partnership. Assume a partnership of
doctors. It owns immovable
property from which the doctors practise.
They decide to sell the property. Any one of the partners, by virtue
of his or her position
as a partner, may sign the deed of sale
without any written authority from the others. But if they instruct
their bookkeeper, or
receptionist, to sign the deed that instruction
must surely be in writing in order for the partnership to be bound. A
close corporation
must likewise, through a member, give its attorney
or other agent written authority to sign the deed.
Anomalies arising from treating companies and close corporations
differently
[24] Northview argues that such a conclusion is
anomalous. Why should the position be different as between companies
and close corporations?
I consider that there is no anomaly.
There may be a difference but there is no deviation from the norm.
The argument begs the question as to whether there is a norm.
The
first reason for the difference lies in the very fact that the Close
Corporations Act does not include the equivalent of s 69
(whatever
its ambit is). We must assume that the omission of an equivalent
provision is deliberate. And secondly, even if there is
an anomalous
difference, the anomaly is no more significant than that which arises
if one treats people differently from close corporations.
If A, a
human being, authorizes B, an agent, to sign a contract for the sale
of land, the authorization must be in writing. It would
be
extraordinary if A, the sole member of a close corporation, could
orally (or perhaps even by conduct) authorize B, an agent, to
sign
such a contract.
[25] Moreover, a close corporation is intended to
be a simple entity, akin to a partnership, but with limited
liability.
14
The structure of a close corporation is designed for individual
entrepeneurs or for a limited number of people (10) to conduct
business.
There is no board of directors and each member has the
power to bind the close corporation, as discussed above. The complex
requirements
of company law are not intended to apply to them.
15
The fallacy in Northview’s argument arises through comparing close
corporations with companies rather than with partnerships or
individuals. It is partnership principles rather than company law
principles that govern the relationship between members.
16
It follows that a member, like a partner, need not have written
authority to enter into a contract for the sale of land. But where
a
partner or a member authorizes a third person (an agent in the true
sense) to enter into such a contract the authorization must
be in
writing.
Achiev
ing the
object of
s 2(1)
of the
Alienation of Land Act
[26
] The object of
s 2(1)
of the
Alienation of
Land Act is
to ensure certainty in respect of contracts for the sale
of land. That object is not defeated if a functionary of a company or
a
close corporation or any other juristic entity signs such a
contract. There is no uncertainty about the functionary’s
authority.
It derives from law. In Bristowe J’s words,
17
the authority ‘arises by implication of law’. But where the
authority arises from the expression of will (an ‘express
authorization’)
it must be in writing. If it were not, the
uncertainty as to the authority would defeat the object of the
section.
[27] I conclude, thus, that in the absence of
written authority given to Christelis by the member of Revelas, the
contract for the
sale of the property was invalid. The substantive
exception was thus correctly upheld by the high court.
The pleading exception
[28] In so far as the pleading exception is
concerned – that the written authority was not attached to the
particulars of claim,
and that the claim was thus vague and
embarrassing – my view is that it was sufficient for Northview to
plead that Christelis was
‘duly authorized’. Such an allegation
implies proper compliance with the requirement of written authority
and Revelas could have
denied that in its plea. There is ample
authority for the proposition that the denial of an agent’s
authority is a special defence
and must be specifically pleaded.
18
The finding that that exception was correctly taken was thus not
correct, and in any event would not be appealable given that it
was
not final in effect.
[29]
The appeal is
dismissed with costs.
______________
C H Lewis
Judge of Appeal
APPEARANCES
APPELLANT
: W Trengove
SC
M Chaskalson SC
Instructed by Derek Mazaham Attorneys
Johannesburg
Lovius Block Attorneys
Bloemfontein.
RESPONDENTS
: J Peter
Instructed by Cuzen Randeree Attorneys
Johannesburg
McIntyre & van
der Post
Bloemfontein.
1
1913 TPD 506.
2
At 511.
3
At 512-513.
4
1953 (2) SA 314
(W) at 317B-E. See also the
judgments of this court in
Muller v
Pienaar
1968 (3) SA 195
(A) at
200H-201D and
Trever v Friedhelm
Investments
1982 (1) SA 7
(A) at
18G-H. There are a number of decisions of the high courts too. They
need not be enumerated.
5
2007 (2) SA 172
(SCA).
6
Para 15.
7
1982 (1) SA 7
(A) at 18F-19C.
8
But s
ee P Wulfsohn
Formalities
in Respect of Contracts of Sale of Land Act
pp 150-153. He points to the anomaly that arises if s 69 is
interpreted to mean that an outside agent – not authorized by law
– can bind a company without written authority. He argues that
this is not what is intended. The argument was referred to by
Davis
J in
Myflor Investments (Pty) Ltd v
Everett NO & others
2001 (2) SA
1083
(C) at 1093H-1094E but rejected. The different views on this
issue are also set out in
De Villiers
and Macintosh The Law of Agency in South Africa
3 ed by J Silke (1981) pp102-103. See also P M Meskin
Henochsberg
on the Companies Act
127-128.
9
The section was amended in 1997 to simplify it
and to provide greater protection for third parties: see H S
Cilliers, M L Benade,
J J Henning, J J du Plessis and P A Delport
Close Corporations Law
3 ed
(1998) p 64.
10
[1995] 2 AC 500
(PC).
11
At 506B-D.
12
At 506C-507F.
13
See contra
Lombaard
v Dropprop CC
2009 (6) SA 150
(N) para
55. The court held that even a member required written authority,
which cannot be correct.
14
Cilliers et al above p15.
15
Lawsa
1
st
reissue, Vol 4, Part 3, para 414 and
Cilliers et al above p 13.
16
Cilliers et al above p 15 and J J Henning ’Die
aanspreeklikheid van ‘n beslote korporasie vir die handelinge van
‘n lid en
enkele ander aspekte van eksterne verhoudings’ (1984)
Tydskrif vir Regwetenskap
p 155 esp pp 166ff.
17
Potchefstroom Dairies
at 513.
18
Charugo Development Co (Pty) Ltd v Maree NO
1973 (3) SA 759
(A) at 763F-764A.