Law Reports

Thorpe v Trittenwein

Thorpe v Trittenwein [2006] SCA 30 (RSA) Agreement for sale of immovable property signed by one of three co-trustees - in absence of authority in trust deed, such a trustee to be regarded as an 'agent' within the meaning of s 2(1) of the Alienation of Land Act 68 of 1981.

Summary
Section 2(1) of the Act reads -
"No alienation of land after the commencement of this section shall, subject to the provisions of section 28, 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."

In delivering his judgement Scott JA said that:
"The object of this provision, as in the case of its predecessors, is undoubtedly to put the proof of such an 'alienation' of land beyond doubt and thereby in the public interest to avoid unnecessary litigation. See e.g. Philmatt (Pty) Ltd v Mosselbank Developments CC 1996 (2) SA 15 (A) at 25B-D and authorities there cited. The need for the authority of an agent to be in writing is no less necessary to achieve this object than the need for the deed to be in writing."

Was the authority present, in this case since, at [10]:
"The trust deed in the present case (a copy of which formed part of the record) makes provision for three trustees. In terms of clause 8.5 decisions of the trustees are to be taken on a majority vote, subject to certain exceptions. Clause 20.2 provides that 'any of the trustees shall be entitled to delegate all or any of his [or her] powers hereunder to any person approved by his [or her] co-trustees'. There is nothing, however, to suggest that a trustee may act on behalf of the other trustees without their authority. On the contrary, the deed clearly contemplates them acting jointly."

No, because it was apparent from what was said that "neither signed any of the three documents which the appellants contend constitute the deed of alienation contemplated in section 2(1) of the Act. It is also common cause that while both were party to the decision to enter into the agreement of sale and therefore authorized Thorpe to do so, the authority of neither was in writing."

Counsel for the appellant argued that:
"… first, that the term 'agents' in the section had to be strictly construed. Secondly, he argued that a distinction had to be drawn between the decision making process on the one hand and the function of signing the agreement of sale on the other. As far as the former is concerned, he contended that the joint action requirement of trust law required no more than that the co-trustees jointly take the decision to enter into the agreement. Thereafter, so it was argued, the trustee signing the agreement did so, not as an 'agent' of the co-trustees in the strict sense contemplated by the section, but as a 'functionary' of the trust."

This was not accepted because the point remains that, in the absence of a joint decision by the co-trustees (or a majority if that is what a trust deed requires), the assent of a single trustee to a contract will not bind the trust, because trustees must act jointly. And, as noted above, section 2(1) of the Alienation of Land Act requires the authority to be in writing, and whether or not one regards Thorpe as having acted as a functionary of the trust, whether either as a principal or as both a principal (as co-trustee) and agent of the other co-trustees, the result must be the same - no authority was given.

Full judgment

Leave a comment:

Security Picture (click to change)
Word shown in picture:
advert

Subscribe to our mailing list

menu close

Search Articles