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[2007] ZASCA 86
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Constantaras v BCE Foodservice Equipment (Pty) Ltd (208/06) [2007] ZASCA 86; [2007] SCA 86 (RSA) ; 2007 (6) SA 338 (SCA) (1 June 2007)
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THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
Case no: 208/06
In the matter
between
MICHAEL
CONSTANTARAS
...............................
APPELLANT
and
BCE FOODSERVICE
EQUIPMENT (PTY) LTD
...............................
RESPONDENT
Coram:
FARLAM, BRAND, HEHER, JAFTA JJA and HANCKE AJA
Heard:
23 MAY 2007
Delivered: 1 JUNE 2007
Summary:
Close Corporations Act 69 of 1984
s 23
– purpose of
– cheque signed on behalf of corporation not containing
prescribed information – personal liability
of signatory on
non-payment by corporation – defence of rectification not
available to meet claim under the Act.
Practice – exception – striking out of plea –
defendant entitled to opportunity to amend before granting of
judgment.
Neutral
citation: This case may be cited as
Constantaras
v BCE Foodservice Equipment
[2007]
SCA 86 (RSA).
_____________________________________________________________________
JUDGMENT
__________________________________________________________________
HEHER JA
HEHER JA:
[1]
This judgment concerns the personal liability of the representative
of a close corporation who signed and issued a cheque on its
behalf
at a time when the correct particulars of the corporation did not
appear on the cheque. Such liability arises by reason of
the
provisions of s 23(2)
1
of the Close
Corporations Act 69 of 1984 (‘the Act’).
[2] The plaintiff
sued the defendant for payment of two amounts of R65 229,25 being the
face value of two cheques dated 3 October
2004 and 3 November 2004
respectively drawn in its favour and dishonoured by non-payment. Each
cheque reflected the printed description
of the drawer as ‘Cater-Mart
(Pty) Ltd 2000/001852/07’ and was signed by the defendant
without an indication that he
did so in a representative capacity.
[3] The plaintiff
alleged that the defendant was personally liable because he failed to
indicate that he was signing for and on behalf
of the corporation. In
the alternative, and in the event that court should find that he did
act in a representative capacity on behalf
of the corporation, the
plaintiff averred that he was nevertheless personally liable in terms
of s 23(2) for the amount of the cheque
because in signing the cheque
the defendant did so without ensuring that the registered full name
and registration number of Cater-Mart
appeared on the face of the
cheque.
[4] The defendant
pleaded that he signed the cheque in his capacity as the authorized
signatory of Cater-Mart CC registration number
2002/020821/23 and
therefore did not incur personal liability on the cheque.
Alternatively the defendant pleaded rectification in
the following
terms:
‘
[I]t
was the common continuing intention of the parties to the cheque,
that, by signing the cheque as the duly authorized signatory
of the
corporation, the defendant was merely completing the signature of the
corporation and was not binding himself to be personally
liable
thereon, and that, accordingly, should it be held by reason of his
signature of the cheque that the defendant thereby incurred
personal
liability, this was a mistake common to the parties which justifies
rectification of the cheque:
8.3.1 to reflect the words “for and
on behalf of” before the words Cater-Mart” and/or
8.3.2 to substitute the words “CC
2002/020821/23” for the words “(Pty) Ltd 2000/001852/07”.
[5] The defendant
also pleaded an estoppel which plea was set aside on exception and
with which it is unnecessary to deal further.
[6]
The plaintiff excepted to the defendant’s plea on the grounds
that s 23(2) is peremptory in its terms and that rectification
would
circumvent the statutory provision and defeat the legislative
intention and was therefore not a remedy upon which the defendant
was
entitled to rely. The court
a
quo
(Tshiqi
J) agreed. Following
Epstein
v Bell and Another
2
the learned judge
held the defendant’s liability arose from the
punitive
provisions of the statute and was not contractual in origin and that
rectification could therefore not assist the defendant.
She accordingly
upheld the exception and granted judgment in favour of the plaintiff.
With her leave the defendant appealed to this
Court.
[7]
Counsel for the defendant submitted in support of the appeal that
once rectified to reflect a signature in a representative capacity,
the close corporation would stand alone as the drawer. Rectification,
he contended, would not defeat the purpose of s 23(2). Therefore
it
furnished a permissible remedy.
Epstein
v Bell
was,
he submitted, wrongly decided in so far as Magid J had followed
distinguishable English authority.
[8]
Alternatively, so counsel argued, the description of the drawer on
the cheque was merely out-dated. The company bearing that name
and
number had been converted to a close corporation. That was an
alteration in legal status without the creation of a new or separate
corporate identity and was, in his submission, irrelevant to s 23(2)
of the Act (or to 50(3) of the Companies Act 61 of 1973 which
contains equivalent provisions in relation to officers and agents of
companies). Counsel referred to the terms of s 27(5)
3
of the Act to
emphasise his submission that s 23(2) was complied with in substance
if not strictly in form. He maintained that ‘a
simple search’
in the office of the Registrar of Companies would have revealed (if
the respondent did not already know of the
fact) that the company had
converted to a close corporation.
[9]
The plaintiff’s claim arose
ex
lege
as
a remedy created by s 23(2) of the Act. The defendant relied on the
defence of rectification to provide himself with an answer
to the
statute: the cheque duly rectified would
ex
tunc
be
regarded as complying with its terms. If the statute does not permit
of reliance on such a defence rectification will serve no
purpose.
The question is accordingly one of interpretation.
[10] The whole of s
23 of the Act is relevant. According to its plain wording the
principal purpose of ss (1) is to ensure that in
its contact and
dealings with the public a close corporation discloses in
unmistakable terms
(i) its corporate
status;
(ii) the fact of its
registration as a close corporation;
(iii) the full name
under which it is registered;
(iv) the number
allotted to it on registration.
The purpose is
achieved, in the first instance, by requiring such disclosure by the
corporation
(a) on the outside
of its registered office and every office in which the business of
the corporation is carried on; and
(b) on all notices
and official publications of the corporation and in all bills of
exchange, promissory notes, endorsements, cheques
and orders for
money, goods or services purporting to be signed by or on behalf of
the corporation, and on all letters, delivery
notes, invoices,
receipts and letters of credit of the corporation.
[11] The language is
peremptory. A failure to comply constitutes an offence. It is clear
that the offence is committed irrespective
of whether any member of
the public has actually seen a relevant document or whether such a
person has been misled by any such document
or been aware of the
absence of the required particulars or their inaccuracy. The section
protects the public by ensuring that it
is not exposed to the risk of
being misinformed or misled by requiring objective compliance in the
documents themselves. It follows
that where a member of the public is
involved it is irrelevant that he does or does not know the true
facts relating to the company.
[12] Section 23(2)
reinforces ss (1) by imposing criminal and civil sanctions on members
of the corporation and its representatives
who issue or authorise the
issue of the said documents and who sign on its behalf the bills,
notes, endorsements, cheques and orders
specified therein. The
purpose is achieved by requiring compliance before or at the time the
document in question is issued or signed.
Here also it is apparent
that the criminal offence which ss (2) creates is committed by the
objective failure to comply without the
need for communication to a
third party.
[13]
The personal liability to holders which ss (2) imposes on members and
representatives of the corporation who contravene its terms
depends
upon the same default as does the offence. The only additional
factum
probandum
is
that the corporation has not duly paid the amount of the bill, note,
cheque or order. The state of mind of the holder, his knowledge
or
intention, does not suddenly become relevant; the mere fact of
authorising or issuing a defective document in a specified category
creates the liability
4
.
In these circumstances, according to its terms the section creates a
statutory civil penalty for non-compliance which arises independently
of any contractual relationship which may exist between the holder of
any document in the specified categories, the authoriser or
signatory
and the company.
[14] Counsel for the
appellant conceded that s 23(2) does not expressly render the state
of mind of the holder of the instruments
to which it relates relevant
to the imposition of personal liability on the person who issues,
authorises or signs the document.
But, he submitted, there must be
read into the section the qualification that in order for personal
liability to arise the holder
must be unaware of the true facts
relating
to the status, registration, name and number of the corporation at
the time of receiving the defective instrument. (He did
not explain
why rectification should be necessary to establish such awareness.)
He submitted
that
the consequences of an interpretation which excluded such a
qualification would be arbitrary, bear no relation to the degree
of
fault on the part of the holder and may result in an obligation to
pay very great amounts of money. He did not, however, contend
that
the result would be absurd.
[15] The structure
of s 23 suggests that the legislature had in mind that the relatively
light criminal sanctions of themselves would
not be sufficient to
procure compliance with the obligations of a corporation. It
therefore added the weight of personal liability
as a penalty likely
to increase the effectiveness of the protection afforded to the
public. There is an obvious correlation between
the amount of the
instrument, the degree of responsibility of the person authorising,
signing, or issuing it and the loss suffered
by the holder who must
rely in the first instance on the corporation to pay the amount.
Moreover the responsible member or representative
can be expected to
have an insight into the ability of the corporation to meet its debt
which the holder will usually not possess.
Thus, although the section
may bear hard and even at times unfairly upon the responsible persons
I do not agree that an implication
of awareness on the part of the
holder is necessary in order to give proper effect to the legislative
purpose.
[16] It follows that
rectification of a document, which is an equitable remedy which
requires proof of the common intention of all
parties to a
contractual instrument in order to place them in the relationship to
each other that they intended, cannot and does
not provide a defence
against the claim of a holder who relies on the liability created by
s 23(2).
[17] That really is
an end of the matter. But reference to the decided cases dealing with
companies bears out the interpretation.
[18]
In
Cotona
Oil & Cake Ltd v Gangut and Another
5
Hefer J said of s
50(3)(b) of the Companies Act, in his usual incisive manner,
‘
The
Legislature has seen fit to impose personal liability upon directors
of companies who sign cheques in the form in which the present
one
was signed, and, in my view, the fact that the receiver of such a
cheque is aware of the fact that it was intended to be signed
on
behalf of a company is irrelevant. The defendant’s defence is
accordingly completely untenable.’
[19]
In
Abro
v Softex Mattress (Pty) Ltd
6
a promissory note
and written orders were signed by the excipient in which the name of
his principal was furnished as ‘Henwoods’.
In fact
Henwoods was a trading name of a company Libertas (Andries Street)
(Pty) Ltd which name was not disclosed in the order. When
the company
failed to pay the respondent sued the recipient personally relying on
s 58 of the Companies Act 46 of 1926 (a predecessor
of s 50 of the
1973 Act). An exception on the ground that the note and orders did
not purport to be signed by or on behalf of the
company was
dismissed. Henning J construed the statute. He recognised that its
terms were imperative and found the language neither
obscure nor
ambiguous. He concluded that any misdescription of a company’s
name or any omission therefrom was intended to render
the section
operative.
[20]
In
Sadler
v Nebraska (Pty) Ltd and Another
7
the name of the
drawer printed on the cheque was that of the respondent in the
citation whereas the registered name of the company
was Nebraska
Manufacturing Co (Pty) Ltd. Goldstone AJ following
Abro
v Softex Mattress
accepted
the law to be that the section is to be strictly and literally
interpreted and that any misdescription of the name of a company
would render the signatory guilty of a criminal offence and
personally liable to pay the holder in the event of non-payment by
the
company (at 722 F-H).
[21]
In
Epstein
v Bell
8
two directors of
South African Unlisted Securities Market Exchange (Pty) Ltd signed
five cheques drawn on that company’s account.
Each reflected
the drawer as ‘SA Unlisted Sec Market Exchange (Pty) Ltd T/A
USM Investments’. It was common cause that
the directors were
not responsible for the printed description and were unaware of the
legal effects of signing a cheque bearing
an abbreviated name of the
drawer company. The company was identified by its registered number
on the cheque. In an application for
summary judgment against them,
the directors relied on a right to rectification. Magid J granted
judgment. He held that they were
not sued as drawers of the cheques
and their liability was not contractual but statutory. Accordingly
rectification was not open
to them. The learned judge did not rely on
Blum
v OCP Repartition SA
9
(as submitted by
counsel for the appellant) but found that the conclusion arrived at
in that case coincided with his view
10
.
He referred to the
dictum
of
Hefer J in
Cotona
quoted above. In
relation to a defence that
mens
rea
was
an element of the offence Magid J found that (i) the language of the
prohibition was peremptory; (ii) the intention of the section
was
both strict and penal in its effect (referring in this regard
11
to
Scottish
and Newcastle Breweries Ltd v Blair and Others
12
);
the low penalty provided for the offence was an indication that
mens
rea
was
excluded; absence of
mens
rea
would
provide too easy and obvious an escape route and frustrate the
statutory objective; even if
mens
rea
were
an element of the criminal offence, it did not follow that lack of
the necessary mental element would entitle a director to escape
civil
liability, a consequence which the learned judge found to be at odds
with the legislative intention. In my view all these findings
are
borne out by an analysis of s 23. Although Magid J did not say so,
his conclusion regarding the exclusion of
mens
rea
as
an element in the offence must of itself have rendered rectification
(which depends on proof of the subjective
intention of the
parties) inapplicable.
[22]
In
Van
Lochen v Associated Office Contracts (Pty) Ltd and Another
13
Malan J noted
the cases which had required strict compliance with the section (or
its equivalent in other legislation). He cited
Atkins
& Co v Wardle
14
in which it was said
that the provisions were enacted ‘with the intention of
ensuring the strictest accuracy in this respect
for the protection of
the public’. The learned judge also referred to the history of
the provision as set out by J T Pretorius
‘Die Aanspreeklikheid
van Maatskappye in die Wisselreg’ in
(1983) 100
SALJ
240
at 256-7.
[23]
Of the considerable number of English cases dealing with equivalent
legislative provisions I propose to refer only to three.
Counsel
submitted that
Blum
v OCP Repartition SA
15
was distinguishable.
It seems to me, however, that, far from being so on grounds of
differences between South African and English
principles of
rectification, the judgment serves to identify the essence of the
weaknesses in the appellant’s argument.
[24]
In
Blum
the
signatory to the cheque was a director of a company, Bomore Medical
Supplies Ltd. The word ‘Limited’ was omitted from
the
drawer’s name on the instrument. The Court of Appeal (May and
Balcombe LJJ) accepted that the intention of all concerned
(the
plaintiff payee, the defendant director, the bank joined as a third
party by the defendants and the company itself) was that
the cheques
should be limited company cheques, paid by the company to the
plaintiff on the company’s account with the bank
in part
settlement of the company’s liability to the defendant. May LJ
pointed out that the claim based on the personal liability
of the
defendant was a claim on the statute and not a claim arising on the
cheque
16
.
(The defendant was not sued as a party to the cheque or the contract
for which it was given.) The consequence was twofold: the liability
of the defendant had to be determined in accordance with the
statutory provisions; rectification was inapposite because the
parties
to the cheque, the company and the plaintiff had no need of
rectification to give effect to their common intention
17
and the only purpose
of applying for rectification was the (forlorn) attempt to relieve
the director of his statutory liability
18
.
[25]
The reasoning in
Blum
seems
to me to be unexceptionable even in the context of South African law.
Counsel submitted that it conflicted with established
principles
enunciated in,
inter
alia
,
Dickinson
v SA General Electric Co (Pty) Ltd
19
which afford the
signatory of a cheque the right to apply for its rectification to
reflect his representative capacity. But there
is no conflict. Such a
signatory is sued on the cheque because
ex
facie
the
cheque he is the drawer and the equitable defence of rectification
permits him the opportunity to show that according to the common
continuing intention of the parties he signed in a representative
capacity. If however the signatory is sued on the statute the
underlying
assumption is that he indeed acted in a representative
capacity but is not entitled by reason of non-compliance with its
terms
to rely on that
capacity. So rectification cannot assist him. And because, as I have
pointed out earlier, the knowledge and intention
of the holder is
likewise irrelevant, both props necessary to maintain a rectification
defence have no significance in the determination
of his liability.
[26]
In
Penrose
v Martyr
20
(a judgment
delivered two years after the enactment of the Joint Stock Companies
Act 1856 (19 & 20 Vic c 47) which, in s 31, first
imposed
personal liability on company signatories) Crompton J said,
‘
I
think that intention of the enactment plainly was to prevent persons
from being deceived into the belief that they had a security
with the
unlimited liability of common law, when they had but the security of
Company limited;
and
that, if they were so deceived, they should have the personal
security of the officer
.’
(My
emphasis.)
The first part of
this passage has often been quoted with approval. The portion I have
italicized does not, for the reasons I have
given earlier seem
correctly to reflect the anticipatory purpose inherent in s 23(2)
which penalizes the authorisation, issue or
signing of the specified
documents without regard to the actual effect of those acts on any
person.
[27]
In the
Scottish
and Newcastle Breweries
case
21
,
supra
,
Lord Hunter reached substantially the same conclusion. He said,
‘
It
was submitted by counsel for the compearing defenders that it was
necessary to the operation of the statutory provisions in the
present
case that the pursuers should have been deceived or misled by the
failure to mention the correct name of the Company in the
said bill,
and that, in the absence of any averment to that effect, the
pursuers’ case was irrelevant. I can find nothing in
the
language of the statutory provisions which lends any support to such
an argument, and the only shadow of support for it to be
found in the
authorities cited to me is one sentence in the judgment of Crompton,
J., in
Penrose
v. Martyr
(
supra
)
at p. 503. I am far from clear that the sentence to which I have
referred necessarily supports counsel’s submission, and in
any
event no trace of such a view is to be found in either of the other
judgments in that case. The ration of the decision in
Penrose
v. Martyr
appears
to me to be that the defendant signed a bill on behalf of the Company
without their name being mentioned on it. (See per L.
Campbell, C.J.,
at p. 503.) I notice that the author of Gower on the
Principles
of Modern Company Law
,
2
nd
edition,
at p. 187, expresses the following opinion:-“It seems clear
that it makes no difference that the third party concerned
has not
been misled by the misdescription”. With that opinion, having
regard to the terms of the statutory provisions and to
the
authorities cited to me, I agree.’
22
[28]
I also do not accept the argument that there has, in the
circumstances of this case, been compliance with the terms of the
section.
In the first place the terms of s 23(1) and (2) are
peremptory in so far as they lay down the information which the
company,
its officers and agents are to furnish for the benefit of
the public. The deviations from the requirements of the section were
of
such a nature as to deprive the public entirely of the prescribed
details of the status and registration of the corporation. It is
no
answer to say that the defendant’s obligation would have been
met if the plaintiff had made reasonable enquiries.
[29]
In the result it seems to me that the court
a
quo
was
correct in concluding that the defendant’s plea of
rectification raised no sustainable defence to the plaintiff’s
claim.
[30] I have treated
the argument relating to the sufficiency of compliance as one bearing
on the question of the plaintiff’s
knowledge of the true facts
behind the corporation. In argument it was accepted by counsel that
compliance with the statute in the
absence of rectification was
neither pleaded nor properly formed a component of the answer to the
exception. Counsel then relied
on a different context. At the hearing
the learned judge was asked, in the event that she upheld the
exception and struck out the
defence, to grant the defendant leave to
amend his plea. She refused to do so remarking that no real basis had
been made for the
indulgence. The defendant appealed against her
refusal. In argument counsel submitted that the rule is that a party
whose pleading
is struck down on exception is afforded such an
opportunity as a matter of course.
[31]
That is certainly true of a successful exception to a summons:
Group
Five Building Ltd v Government of the Republic of South Africa
(Minister of Public Works and Land Affairs
[1993] ZASCA 4
;
1993
(2) SA 593
(A) at 602I-603J. Such a rule is both understandable and
necessary. Such an exception can never put an end to the dispute if a
plaintiff
has a viable alternative basis for its claim; even though
the original claim is struck down without leave to amend, the
plaintiff
can always issue a new summons in which the alternative is
pleaded. So refusing an amendment is merely a waste of costs. But the
plaintiff may be blocked by prescription. In such a case said Corbett
CJ in
Group
Five Building supra
at
603A ‘it would be contrary to the general policy of the law to
attach such drastic consequences to a finding that the plaintiff’s
pleading discloses no cause of action’. Neither of these
considerations is relevant to the striking down of a plea in its
entirety.
Prima
facie
the
defendant no longer has an answer to the claim and the plaintiff is
entitled to judgment. Whether that consequence is the correct
one is
considered in what follows.
[32]
In an
obiter
dictum
in
Princeps
(Edms) Bpk en ‘n Ander v Van Heerden NO en Andere
1991
(3) SA 842
(T) at 845 Harms J said that in the Supreme Court an
unsuccessful pleader is given the opportunity to amend his so-called
plea, even
when that plea has been set aside because it does not
disclose a defence. The
rationale
seems
to be that although the defence contained in the pleading may be bad
the pleading as such continues to exist. In the
Group
Five Building
case
(at 603F-H) Corbett CJ quoted with approval from
Johannesburg
Municipality v Kerr
1915
WLD 35
at 37 in which Bristowe J said that although the quashing of
an entire declaration on exception means that it is an absolute bar
to any relief being obtained on it, that ‘does not take the
declaration off the file or place the case in the same position
as
though no declaration had been delivered’. Despite the
distinctions between the effects of the striking down of a
particulars
of claim and a plea to which I have earlier referred, it
seems to me that, in principle, fundamentally defective pleadings
emanating
from a plaintiff and defendant should be dealt with on an
equal footing. Since the rule referred to above is firmly established
in
relation to the defective pleading of claims we should therefore
apply it
mutatis
mutandis
to
the flawed pleading of defences. That being so, Tshiqi J was wrong to
treat the defendant’s application for time to consider
an
amendment of his plea as the seeking of a indulgence. In the absence
of reason to believe the request was merely a ploy to delay
the
inevitable, such an opportunity should have been included in her
order upholding the exception as a matter of course (even if
no
application had been made). Para 2 of the order made by the learned
judge in which she granted judgment in favour of the appellant
requires amendment in consequence of this conclusion. The respondent
has, however, achieved substantial success and is entitled to
the
costs of the appeal including the costs of the application for leave
to appeal (which were reserved).
[33] The following
order is made:
1.
The appeal against paragraph 1 of the order of the court
a
quo
is
dismissed save as hereinafter set out.
2.
Paragraph 2 of the order of the court
a
quo
is
set aside and replaced with the following:
‘
2. The
defendant is given leave, if so advised, to file an amended plea.
The costs of the
proceedings on exception are to be paid by the defendant.’
3. The filing of the
amended plea for which provision is made in paragraph 2 is to take
place within one month of the making of this
order failing which the
plaintiff may set the matter down for judgment.
4.
The costs of appeal are to be paid by the appellant.
___________________
J A HEHER
JUDGE OF APPEAL
FARLAM JA )Concur
BRAND JA )
JAFTA JA )
HANCKE AJA )
1
S
23 provides as follows:
‘
(1)
Every corporation-
(a)
shall
display its registered full name (or a registered literal
translation thereof into any one other official language of the
Republic) and registration number in a conspicuous position and in
characters easily legible on the outside of its registered office
and every office or place in which its business is carried on;
(b)
shall
have that name (or such translation thereof) and registration number
mentioned in legible characters in all notices and other
official
publications of the corporation, including notices or other official
publications in electronic format, and in all bills
of exchange,
promissory notes, endorsements, cheques and orders for money, goods
or services purporting to be signed by or on behalf
of the
corporation, and all letters, delivery notes, invoices, receipts and
letters of credit of the corporation; and
(c)
shall
use a registered shortened form of that name only in conjunction
with that name or such literal translation thereof.
(2) If any member of, or any
other person on behalf of, a corporation-
(a)
issues
or authorizes the issue of any such notice or official publication
of the corporation, or signs or authorizes to be signed
on behalf of
the corporation any such bill of exchange, promissory note,
endorsement, cheque or order for money, goods or services;
or
(b)
issues
or authorises the issue of any such letter, delivery note, invoice,
receipt or letter of credit of the corporation,
without the
name of the corporation, or such registered literal translation
thereof, and its registration number being mentioned
therein in
accordance with subsection (1)
(b)
,
he shall be guilty of an offence, and shall further be liable to the
holder of the bill of exchange, promissory note, cheque or
order for
money, goods or services for the amount thereof, unless the amount
is duly paid by the corporation.
(3) Any corporation which fails
to comply with any provision of subsection (1) shall be guilty of an
offence.’
2
1997
(1) SA 483
(D)
3
‘
(5)
(a)
On
the registration of a corporation converted from a company, the
assets, rights, liabilities and obligations of the company shall
vest in the corporation.
Any legal proceedings
instituted by or against the company before the registration may be
continued by or against the corporation,
and any other thing done
by or in respect of the company shall be deemed to have been done
by or in respect of the corporation.
The conversion of a company
into a corporation shall in particular not affect-
any liability of a director or
officer of the company to the company on the ground of breach of
trust or negligence, or to any
other person pursuant to any
provision of the Companies Act; or
any liability of the company,
or of any other person, as surety.
(d)
The
juristic person which prior to the conversion of a company into a
corporation existed as a company, shall notwithstanding the
conversion continue to exist as a juristic person but in the form of
a corporation.’
4
It
is not necessary to consider the possibility of raising an estoppel
against the holder.
5
1977
(1) PH A26 (N)
6
1973
(2) SA 346
(D)
7
1980
(4) SA 718
(W)
8
1997
(1) SA 483
(D)
9
1988
Palmer’s Company Cases 416 ([1988] BCLC
170 CA)
10
a
t
487C
11
a
t
489F
12
1967
SLT 72
at 73
13
2004
(3) SA 247
(W)
14
(1889)
58 LJQB 377
at 381
15
s
upra
,
fn
8
16
a
t
175e-g
17
a
t
173g-i
18
a
t
174a; see also
Rafsanjan
Pistachio Producers Co-operative v Reiss
[1990]
BCLC 352
(QBD) at 361a-363e particularly at 363c.
19
1973
(2) SA 620
(A) at 629H-630A
20
(1858)
EB & E 499
21
s
upra
,
fn
12,
a
t 74
22
c
f
Gower’s
Principles of Modern Company Law
,
6ed (1997) by Paul L Davies, at 158:
‘
It
might be a useful reform to amend the subsection [s 349 (4) of the
United Kingdom Companies Act 1985] by affording the signatory
a
defence if he could establish that the holder had not been misled by
the misdirection; the recent decisions display a marked
disinclination to apply the provision when that is so.’
(citing
Lindholst
& Co A/S v Fowler
[1998] BCLC 166
(CA)
and
Rafsanjan,
supra,
fn
18)