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IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION, MAHIKENG
Case No: M 676 / 2023
In the matter between:
RUSTENBURG LOCAL MUNICIPALITY FIRST APPLICANT
MUNICIPAL MANAGER: RUSTENBURG
LOCAL MUNICIPALITY SECOND APPLICANT
EXECUTIVE MAYOR: RUSTENBURG
LOCAL MUNICIPALITY THIRD APPLICANT
And
SEROBATSE SOLOMON MAGAU FIRST RESPONDENT
OPTI PROPERTY CONSULTANTS CC SECOND RESPONDENT
In the main review application between:
SEROBATSE SOLOMON MAGAU FIRST APPLICANT
OPTI PROPERTY CONSULTANTS CC SECOND APPLICANT
And
RUSTENBURG LOCAL MUNICIPALITY FIRST APPLICANT
MUNICIPAL MANAGER: RUSTENBURG
LOCAL MUNICIPALITY SECOND APPLICANT
EXECUTIVE MAYOR: RUSTENBURG
LOCAL MUNICIPALITY THIRD APPLICANT
TSAKANE KWENA PETER MOTANI FOURTH RESPONDENT
MONTANI PROPERTY V ALUERS FIFTH RESPONDENT
MEMBER OF THE EXECUTIVE
COUNCIL (MEC) FOR NORTH WEST
PROVINCIAL DEPARTMENT OF
COOPERATIVE GOVERNANCE AND
TRADITIONAL AFFAIRS SIXTH RESPONDENT
CORAM: MAODI AJ
Date judgment reserved: 22 May 2026
Judgment is handed down electronically by distribution to the parties’ legal
representatives by e -mail. The date that the judgment is deemed to be handed
down is 20 August 2026 at 14h00.
ORDER
1. In t he main review application under case number M 676/2023, the first
respondent is not duly authorised to act on behalf of the second respondent and
the first respondent may not proceed to act on behalf of the second respondent.
2. In the main review application under case number M 676/2023, the attorneys
acting on behalf of the second respondent are not duly authorised by the second
respondent to act on behalf of the second respondent and the said attorneys may
not proceed to act on behalf of the second respondent.
3. The launching and continuation of the main review application under case
number M 676/2023 is not authorised by the second respondent, to the extent
only that it affects the second respondent.
4. The main review application under case number M 676/2023 is dismissed, only
against the second respondent.
5. The first respondent to pay costs on scale B including costs of counsel.
JUDGMENT
MAODI AJ
Introduction
[1] This is an interlocutory application in terms of rule 7(1) wherein the first
to third applicants (applicants) are denying and disputing that the first
respondent was and is duly authorised to act on behalf of the second
respondent. The applicants seek four prayers, that (i) – the first
respondent is not authorised to act on behalf of the second respondent and
may not proceed so to act ; (ii) – the attorneys acting on behalf of the
second respondent are not authorised to act on behalf of the second
respondent and may not proceed to so act; (iii) – the launching and
continuation of the main review application was not authorised by the
second respondent; and finally (iv) – that the main review application be
dismissed with costs as between attorney and client.
[2] The first and second respondents are the first and second applicants in the
main application in which they seek a review and setting aside of the
decision to appoint the fourth and/or fifth respondents as municipal valuer
for the first respondent together with other ancillary relief. The fourth and
fifth respondent s in the main application are not participating in the
interlocutory application before me as they have filed a notice to abide by
any order to be given by this Court. The parties before me shall therefore
be referred to as cited in the interlocutory application.
Applicants’ case
[3] On 7 December 2023 the applicants delivered a notice in terms of rule
7(1) disputing the authority of the first and second respondent’s attorneys
to act on behalf of the first and second respondents. The notice further
disputed the authority of the first respondent to act on behalf of the
second respondent. On 13 December 2023 the first and second
respondents delivered a reply to the applicants’ rule 7(1) notice in which
they (the respondents) attached a power of attorney signed by the first
respondent authorising the respondents’ attorneys to act on behalf of the
first and second respondents. The power of attorney was signed by the
first respondent on 27 November 2023. Together with the power of
attorney, the respondents delivered proof of membership of the first
respondent showing his membership interest in the second respondent to
be 49%.
[4] The proof of membership shows that the majority and larger portion of
membership in the second respondent, which is 51%, belongs to and is
held by one Masape Salome Magau with identity number 5[...]. Nowhere
in the documents provided by the respondents is it stated that the second
respondent authorise d the first respondent to act on its behalf . T here is
further no power of attorney by the second respondent authorising the
respondents’ attorneys to act on its behalf. There is no resolution by the
majority membership interest holder, authorising the first respondent to
act on behalf of the second respondent.
[5] In the main review application, it was the second respondent, not the first
respondent, who was the successful bidder appointed by the first
applicant to execute a number of municipal valuation functions. Only a
member/shareholder of the second respondent could be nominated as the
“designated municipal valuer” of the first applicant.
Respondents’ case
[6] The deponent to the respondents’ answering affidavit is the first
respondent who states that he has provided a power of attorney dated 27
November 2023 in terms of which he authorised the respondents’
attorneys (PL Samuels Inc) to act on behalf of the first and second
respondents. The power of attorney includes a ratification clause on what
might have been done prior to the date of execution by PL Samuels
Incorporated. Sometime during April 2024 Mr Paul Samuels, the
principal of PL Samuels Incorporated, passed away.
[7] To avoid the matter being struck from the roll, on 29 July 2024 the
respondents served the applicants with a notice of substitution appointing
Sekgala and Njau Attorneys (respondents’ current attorneys of record) in
the stead of PL Samuels Incorporated. The applicants have not challenged
the authority of Sekgala and Njau Attorneys or any of its directors to act
on behalf of the respondents. The late Mr PL Samuels is the only one
precluded from acting on the basis of the rule 7 notice in support of the
current application. Based on the rule 7 notice and the interlocutory
application, Sekgala and Njau attorneys or any of its directors are not
precluded from representing the first or second respondent. Therefore, the
first two prayers (prayers [a] and [b]) by the applicants, fell off with the
death of Mr PL Samuels.
[8] There is no challenge to the authority of Sekgala and Njau Attorneys to
act on behalf of the second respondent. Secondly, Sekgala and Njau
Attorneys have substituted PL Samuels as attorneys to the first and
second respondents. Thirdly, the authority to act by the first respondent
on behalf of the second respondent is separate from the authority of
Sekgala and Njau Attorneys to maintain the suit at the instance of both
respondents. Fourthly, the failure by the applicants to challenge the
authority of Sekgala and Njau Attorneys to act on behalf of the second
respondent in the main application is fatal to the interlocutory application.
[9] There are two members of the second respondent being the first
respondent and his wife. The first respondent is acting in his personal
capacity and does not need authority to act on his own behalf . The first
respondent has sufficient personal interests in the subject matter of
litigation, having been appointed in his own right as the municipal valuer
by the first applicant . Prayer 1.1 of the notice of motion in the main
application relates to the first respondent in his own personal capacity.
The first respondent has interest in the remainder of the prayers sought in
the main application.
[10] The first respondent is a member of the second respondent whereas the
first applicant is not a member thereof and should accept that the first
respondent is the agent of the second respondent in line with section
54(1) of the Close Corporations Act, Act 69 of 1984. The relief in the
main application is competent in his own name (first respondent) without
the second respondent as a party.
Applicant’s reply
[11] The onus falls on the first and second respondents to satisfy the court that
the first respondent is authorised to act on behalf of the second
respondent. Only a member of the second respondent holding the
majority membership stake can assist in defeating the challenge by the
applicants’ rule 7 notice by executing and providing a written resolution.
That person is Masape Salome Magau with identity number 5[...]. There
is no such resolution and the first respondent was not able to secure or
produce same. The applicants challenge not only the authority of PL
Samuels, but the authority of any other and subsequent attorneys to act on
behalf of the second respondent.
The authorities and reasons for judgment
[12] I am dealing here with a juristic person in the form of the second
respondent. Juristic persons can only effectively function through natural
persons behind them who run and operate them for the benefit of those
who own them. After all , they are business enterprises and exist, in the
main, for the benefit of those who own them, with the principle of majority
rule being of paramount importance. The ones who own majority stake are
the ones who stand to benefit more than others. The reverse is true. That is,
the ones who own majority stake are the ones to suffer more losses than
others, should there be any losses. The wishes and intentions of the
majority must be respected. That is the natural order of juristic persons.
[13] Section 46 (d) of the Close Corporations Act 69 of 1984 provides as
follows:
S 46 Variable rules regarding internal relations
The following rules in respect of internal relations in a corporation shall apply in so far as this
Act or an association agreement in respect of the corporation does not provide otherwise:
(a) …
(b) …
(c) …
(d) at any meeting of members of a corporation each member shall have the number of votes
that corresponds with the percentage of his or her interest in the corporation;
(e) …
(f) …”
[14] The decision to institute legal proceedings is an internal arrangement
between members of a close corporation. Therefore, it requires for their
conduct to be in line with the Act or the association agreement. In the
absence of such authority contained in the association agreement, the
correct approach would be to comply with the Act, specifically section 46
(d). Section 54 (2) provides that if a member does not have the power to
act on behalf of the corporation, his/her action does not bind the
corporation, more so if the person with whom a member of a close
corporation is dealing, has or ought to have, knowledge that the member
does not have authority. The applicants do not only have knowledge of the
first respondent’s lack of authority to act on behalf of the second
respondent, but they (applicants) have in fact raised an objection to that
effect. This should have been enough for the first respondent to accede to
the non -compliance with the Act. The first respondent has not provided
any association agreement authorising him so to act. The documents
provided indicate that he is the minority membership interest holder.
[15] The legal position has been set out in a number of cases, with the approach
in Boerboonfontein BK v La Grange N.O. and Another (A409/09) [2010]
ZAWCHC 81; 2011 (1) SA 58 (WCC) (15 April 2010) being repeated by
the Supreme Court of Appeal in the case of Steyn and Another v Venter
and Others 2025 (5) SA 140 (SCA) as follows:
“[17] Whether a member of a close corporation may perform management functions on
his own without the consent or cooperation of his fellow members was considered
in Boerboonfontein BK v La Grange N.O. The matter involved two members of a close
corporation, which owned a farm on which both members farmed separately. On the death of
the one member, Mr La Grange, a dispute arose between his family and the other member, Mr
Theron, pertaining to who would be entitled to the deceased’s membership. Mr Theron on
behalf of the CC instituted eviction proceedings against La Grange's family. The latter raised
a special plea claiming that the institution of the action was not authorised by the close
corporation as Mr Theron could not have acted alone, and without the executor who had
stepped into the shoes of Mr La Grange. They therefore had to act together. The appellants
drew a distinction between a member of a juristic entity as opposed to a member of such
entity’s governing body as referred to in s 13(1) of the CC Act.
[18] Binns-Ward J stated in Boerboonfontein:
‘Ingevolge art 2 van die Wet is 'n geregistreerde beslote korporasie 'n regspersoon. Dit bring
mee dat die korporasie 'n regspersoonlikheid van sy eie het wat apart en onderskeibaar van die
van sy lede is. In hierdie opsig is 'n beslote korporasie juridies net soos 'n maatskappy of 'n
ingelyfde assosiasie, en verskil dit in aard van 'n vennootskap. Soos in die geval van enige
ander regspersoon, hang die beslissings en optrede van 'n beslote korporasie af van die
besluite van die natuurlike persone wat dit beheer. 'n Onhoudbare situasie sou ontstaan as die
besigheid van regspersone nie op 'n samehangende wyse gevoer word deur die mense in
beheer daarvan nie. Dit beteken dat elke sodanige mens slegs binne sy of haar magte
ingevolge die statuut of stigtingsverklaring van toepassing op die regspersoon ter sake kan
optree. Waar daar 'n meervoud van E mense in beheer is met gelyke magte om die
regspersoon se sake te bedryf, kan die regspersoon samehangend funksioneer slegs as sy
beslissings en optrede deur 'n beslissende stem in 'n vergadering van sodanige mense bepaal
beslissings en optrede deur 'n beslissende stem in 'n vergadering van sodanige mense bepaal
word. As dit anders was, sou dit onmoontlik wees om 'n doeltreffende onderskeid te tref
tussen die handelinge en bedoelinge van 'n regspersoon en die van elkeen van die verskeie
natuurlike persone wat ten opsigte daarvan 'n individuele bestuursfunksie het.’ (Citation
omitted).
Binns-Ward J concluded that ‘[d]ie wilsuiting van 'n beslote korporasie word weergegee in 'n
beslissing wat die ondersteuning het van 'n meerderheid van die stemme van sy lede.’”
[16] The attempted English translation reads as follows:
In terms of Sec 2 of the Act, a close corporation is vested with legal personality and is
separate from its members. To this extend a close corporation is legally like a company or an
incorporated association and is different from a partnership.
As in the case of any other legal person, the decisions and actions of a close corporation is
dependent on the decisions of the natural persons that manages it. It would be untenable if
the business of legal persons is not being managed by the natural persons that oversee it. It
means that every natural person can only act according to his/her powers according to the
memorandum of association applicable on the legal person.
Where there is more than one natural person in a legal person vested with the same functions
and responsibilities, then the legal person can only act properly if the decisions are made with
a majority votes during a meeting of those vested with the powers and responsibilities.
If it were different, it would have been impossible to effectively differentiate between the
actions of the legal person and those of the natural persons who manage it.
Binns-Wards J ’the expression of the will of a close corporation is done by the decision that is
supported by a majority of the votes of its members.'
[17] The power of attorney by the first respondent was signed on 27 November
2023, which is the same day on which the main review application was
issued at court. Although the power of attorney was signed on the day the
application was issued and while it can be accepted that the said power of
attorney was in existence at the time the proceedings were launched, it
does not avail the first respondent nor the second respondent on the basis
that it was not done by the majority of those who hold majority
membership of the second respondent. Therefore, the said power of
attorney does not cure the defect faced by the first respondent in respect of
the second respondent.
[18] With regard to the issue of the first and second respondents having
changed attorneys of record, and their defence that the applicants’ first two
prayers (prayers [a] and [b]), fell off with the death of Mr PL Samuels , I
find that this is an untenable proposition or approach. Legal representation
is not restricted to a firm of attorneys but is universal on behalf of a
litigant. The authority of legal representation has been challenged by the
applicants. Perusal of the notice of motion para (ii) thereof refers to
“attorneys acting on behalf of the second respondent” and not a specific
“attorneys acting on behalf of the second respondent” and not a specific
firm of attorneys. Be that as it may, I have already found that the approach
by the respondents is untenable.
The first respondent in his personal capacity
[19] I am only ceased with the issue of authority to act on behalf of the second
respondent. The rule 7 (1) notice of motion is specifically directed at the
authority of the first respondent to act on behalf of the second respondent.
Nothing has been said about authority or capacity or locus standi of the
first respondent to act on his own. The main application shows that the first
respondent was nominated as valuer in line with the terms of engagement
between the first applicant and the second respondent . No attacks have
been levelled against the first respondent in his personal capacity. Whether
or not he has a case in the main review application, is something that I
have not been called to determine and cannot determine right now.
[20] Of common cause is the fact that the first respondent was nominated as the
“designated municipal valuer”. The applicants’ case against the first
respondent to act in his own capacity in the main application, might be
strong as set out in the replying affidavit, however, this was not the case
for the applicants in the rule 7 notice in front of me. The challenge was
only against authority in respect of the second respondent. The applicants
cannot be seen to make their case against the first respondent in replying
papers. The applicants cannot be granted that which they did not ask for.
The applicants have not filed any opposing or answering affidavit to the
main application. As such, I do not know what their defence against the
first respondent, in his personal capacity, is. More so given the provisions
of prayer 1.1 in the main application.
[21] The orders that I make are made only in respect of the second respondent
and are to be restricted and executed only against the second respondent,
except the costs issue, which is to be effected against the first respondent
only.
Costs
[22] As I have stated earlier, the effect of the orders is that they affect only the
second respondent, except the costs order. The applicants have vigorously
pursued the objection that the second respondent has not sanctioned the
decision, prosecution and appointment of attorneys in this matter. I do not
see any reason why, having found that the second respondent had nothing
to do with this matter, the second respondent should be mulct with costs
of this matter. It is clearly the perseverance of the first respondent alone,
which caused the matter to be before this Court and the manner in which
it was prosecuted thus far. There is no evidence before me what the
attitude of the majority membership holder of the second respondent , on
all issues canvassed in this matter , is. Therefore, the first respondent will
pay the costs of this matter alone.
Order
[23] I therefore make an order as follows:
1. In the main review application under case number M 676/2023, the
first respondent is not duly authorised to act on behalf of the second
respondent and the first respondent may not proceed to act on behalf
of the second respondent.
2. In the main review application under case number M 676/2023, the
attorneys acting on behalf of the second respondent are not duly
authorised by the second respondent to act on behalf of the second
respondent and the said attorneys may not proceed to act on behalf of
the second respondent.
3. The launching and continuation of the main review application under
case number M 676/2023 is not authorised by the second respondent,
to the extent only that it affects the second respondent.
4. The main review application under case number M 676/2023 is
dismissed, only against the second respondent.
5. The first respondent to pay costs on sca le B including costs of
counsel.
_________________________
J. T. MAODI
ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA,
NORTH WEST DIVISION, MAHIKENG
APPEARANCES
FOR THE FIRST TO
THIRD APPLICANTS: Adv N. G. Laubscher
Instructed by: M. E. Tlou Attorneys
e-mail: edwin@tlouattorneys.co.za
FOR THE FIRST AND
SECOND RESPONDENTS: Adv S. Ogunronbi
Instructed by: Sekgakala and Njau Attorneys
e-mail: info@zisiweattorneys.co.za
Date judgment reserved: 22 May 2026
Date of Judgment: 20 August 2026