Davids NO and Another v Tai Ross Properties VDBP (Pty) Ltd (24523/2015) [2016] ZAGPPHC 97 (2 March 2016)

Davids NO and Another v Tai Ross Properties VDBP (Pty) Ltd (24523/2015) [2016] ZAGPPHC 97 (2 March 2016)

The court found that the loan agreement relied upon by the applicants was invalid and unenforceable because the trustees of the Greenlands Investment Trust did not act jointly in authorising the agreement. The relevant resolution (appendix 'B') was signed by only one trustee, and there was no evidence of a properly convened meeting or joint decision. Subsequent attempts to ratify the agreement through annexure 'BAD1' could not cure the original defect, as an ab initio invalid contract of agency cannot be retrospectively validated. Since the applicants' cause of action was based solely on the invalid agreement, the application for liquidation could not succeed. The court upheld the...

Citation
[2016] ZAGPPHC 97
Parties
Applicant: Brendan Arn Davids N.O.; Applicant: Riaan Winter N.O.; Respondent: Tai Ross Properties VDBP (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
2 March 2016
Case Number
24523/2015
Procedural Posture
Urgent Application / Application for Final Liquidation Order; Opposed Motion
Outcome
Application dismissed with costs; point in limine upheld.
Judges
Msimeki
Legal Topics
Company Liquidation, Trustee Authority, Resolution Validity, Ab Initio Invalidity
Commercial and Corporate Civil Procedure Company Liquidation Trustee Authority Resolution Validity Ab Initio Invalidity

Case Brief

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Parties

Brendan Arn Davids N.O.

Applicant

Riaan Winter N.O.

Applicant

Tai Ross Properties VDBP (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Application for Final Liquidation Order; Opposed Motion

Legal Issues

  1. 1 Whether the loan agreement between the Trust and the respondent was valid and enforceable.
  2. 2 Whether the trustees acted jointly and with proper authority in concluding the agreement.
  3. 3 Whether an ab initio invalid contract of agency can be ratified retrospectively.

Ratio Decidendi

The court found that the loan agreement relied upon by the applicants was invalid and unenforceable because the trustees of the Greenlands Investment Trust did not act jointly in authorising the agreement. The relevant resolution (appendix 'B') was signed by only one trustee, and there was no evidence of a properly convened meeting or joint decision. Subsequent attempts to ratify the agreement through annexure 'BAD1' could not cure the original defect, as an ab initio invalid contract of agency cannot be retrospectively validated. Since the applicants' cause of action was based solely on the invalid agreement, the application for liquidation could not succeed. The court upheld the...

Court Disposition

Application dismissed with costs; point in limine upheld.

Orders

  • The point in limine is upheld.
  • The application is dismissed with costs.