First up, Thabo Nqhome:
I agree with Allen West on his submission contained in an article published in GhostDigest Conveyancing News and Views on 29 May 2008, which submission is to the effect that "dispose of", in section 228 of the Companies Act 61 of 1973 ("the Act"), does not include "mortgage". However, my agreement is based on an additional, if not different, ground.
In my opinion, it was not the intention of the legislature, in section 228 of the Act, that "vervreem'' should include "mortgage", as contemplated by the common law. This is evident, in particular, from the Afrikaans text of paragraph (b) of Schedule 2 to the Act.
The English text of Schedule 2 to the Act provides, amongst other things, as follows:
"Included in the powers of every company ……………………are the following powers:
(b) to…………..mortgage, dispose of ………….its undertaking or all or any part of its property and assets;"
The Afrikaans text of Schedule 2 to the Act provides, amongst other things, as follows:
"By die bevoegdhede van elke maatskappy ………….. is die volgende gewone bevoegdhede ingesluit:
(b) om sy onderneming of al of enige deel van sy goed en bate ………. met verband te beswaar, te vervreem ……………;"
In the Act, the legislature, therefore, makes a clear distinction between "dispose of" and "mortgage", on the one hand, and "vervreem" and "met verband te beswaar", on the other hand.
Secondly Esther-Lana Housego writes:
Could you kindly refer Mr Allen West to page 442(1) of Henochsberg on the Companies Act.
Their view is that "dispose" does not include a mortgage bond:
It is submitted that passing a mortgage bond is not within the section (cf Advanced Seed Co (Edms) Bpk v Marrok Plase (Edms) Bpk 1974 (4) SA 127 (C) at 132; and see L Hodes op cit in the General Note at F7 - F9)...
Henochsberg on the Companies Act