Van der Hoven v Van der Westhuizen (A35/2018) [2020] ZAGPPHC 632 (16 October 2020)

Van der Hoven v Van der Westhuizen (A35/2018) [2020] ZAGPPHC 632 (16 October 2020)

The court held that the oral agreement between the appellant and respondent was not a pre-incorporation contract, as it was a direct agreement between two individuals and did not impose obligations on the company to be formed. The agreement was also not a stipulatio alteri, as it was not concluded for the benefit of a third party but rather for the mutual benefit of the parties. Furthermore, the Alienation of Land Act did not apply because the agreement did not entail the sale, exchange, or donation of immovable property; the property was intended as the respondent's contribution to the company for his shareholding. The particulars of claim disclosed a valid cause of action for...

Citation
[2020] ZAGPPHC 632
Parties
Appellant: HJH Van der Hoven; Respondent: DY Van der Westhuizen
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
16 October 2020
Case Number
A35/2018
Procedural Posture
Civil Appeal / Appeal Against Upholding of Exception; Unopposed
Outcome
Appeal upheld; exception dismissed; judgment and order of the court a quo set aside.
Judges
E.M Kubushi, P.M Mabuse, N. Skibi
Legal Topics
Exception Procedure, Pre Incoporation Contracts, Stipulatio Alteri, Alienation of Land Act, Repudiation, Restitution
Civil Procedure Commercial and Corporate Exception Procedure Pre Incoporation Contracts Stipulatio Alteri Alienation of Land Act Repudiation Restitution

Case Brief

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Parties

HJH Van der Hoven

Appellant

DY Van der Westhuizen

Respondent

Procedural Posture

Civil Appeal / Appeal Against Upholding of Exception; Unopposed

Legal Issues

  1. 1 Whether the oral agreement constitutes a pre-incorporation contract requiring ratification by the company.
  2. 2 Whether the oral agreement is a stipulatio alteri for the benefit of a third party.
  3. 3 Whether the Alienation of Land Act applies to the oral agreement, rendering it unenforceable if not in writing.

Ratio Decidendi

The court held that the oral agreement between the appellant and respondent was not a pre-incorporation contract, as it was a direct agreement between two individuals and did not impose obligations on the company to be formed. The agreement was also not a stipulatio alteri, as it was not concluded for the benefit of a third party but rather for the mutual benefit of the parties. Furthermore, the Alienation of Land Act did not apply because the agreement did not entail the sale, exchange, or donation of immovable property; the property was intended as the respondent's contribution to the company for his shareholding. The particulars of claim disclosed a valid cause of action for...

Court Disposition

Appeal upheld; exception dismissed; judgment and order of the court a quo set aside.

Orders

  • The appeal is upheld and costs are costs in the appeal.
  • The judgment and order of the court a quo are set aside and replaced by: 'The exception is dismissed with costs.'