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Time is still of the essence

Written by  Cris Riego de Dios
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Time is still of the essence Time is still of the essence

Amid all the scuttle and commotion in the world of business, there remains a few things that one should appreciate, amongst them… TIME!

This is something that attorneys do not have the luxury of accumulating as one races against the clock with pen, laptop, voluminous documents and a copy of the Supreme Court Act or Rules in tow.

This can be no more evident than in the life of a particularly busy property law practitioner. My facts to my story are simple, and indeed a common occurrence in the sale of immovable property. My client was the purchaser of a house which was sold through a local realty company. At first, the transaction moved smoothly until my client sought to take earlier occupation (as allowed in the contract). Here began a series of complications relating to borer beetle infestation, non-compliance of electrical and plumbing certification, and intermittent damage to the house. It must be said that my client was fortunate not to have moved in before transfer.

Having been astute to the problems arising, my client attempted to resolve the issues through communication with the transferring attorney, realtor and the seller. I pause to add that the seller consisted of 4 individuals who had given authority to one of them to conclude the sale transaction. My client’s attempts of resolution were not successful and the seller’s ‘team’ glossed over the problems raised and was shuffling swiftly to the registration of transfer. At this point, my client decided to seek some legal counsel.

Firstly, we pressed and ensured the compliance of the requisite certification for the borer beetle, plumbing and electrical. Secondly, we delayed the date for the registration of transfer so as to resolve the issues raised. Finally, and after repeated requests, we obtained copies of the relevant authority or Power of Attorney (POA) issued to the seller’s representative. I noticed that the 3 sellers signing the POA did so in South Africa and England respectively.

What is the general law governing these instances?

Section 2 (1) of the Alienation of Land Act 68 of 1981 (the “Act”) states that “no alienation of land shall 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”. This section expressly states that the parties must have written authority at the time of entering into the sale agreement. It then struck me that the POA signed in England was concluded after the sale agreement was signed. The question begs: does it really matter? I was enjoined to look for further answers.

Professor AJ Kerr, a leading authority on the law of contact and agency, indicates that when a statute specifically sets out that an agent buying or selling land must have written authority, and such agent fails to obtain such authority, the agreement will be void and any subsequent obtaining of the authority will not have the effect of ratifying the agreement.

This intrigued me immensely. I again looked at the Act which does provide, in Section 2 (2) thereof, for a situation where an agreement of sale of land can be concluded by an agent without the necessary written authority. This is however limited to the instance where agents or trustees conclude agreements on behalf of a corporation yet to be formed. This was not relevant to my client’s case.

In looking at case law, a review of the legal position was expressed in the matter of S A I Investments v Van der Schyff N.O. & others 1999 (3) SA 340 (N). The court held that where an agreement to sell immovable property was concluded by an agent without the prior authority, any subsequent authority obtained is not sufficient. The agreement of sale was accordingly void ab initio. This principle was confirmed by a judgment of the Supreme Court of Appeal during 2006 in the matter of B S Thorpe, S Thorpe, A E R Dixon and Another v J A Trittenwein and Another. So, it was not that the act of signing the POA was in question, but the timing of such act.

The case law and commentary on this aspect shows a clear directive: beware concluding a deed of sale for immovable property on behalf of another without obtaining a written pre-authorization to act.

Cris Riego de Dios

Cris Riego de Dios

Cris Riego de Dios is a practising attorney based at the Cape Town office of STBB, of which he is a director. Cris joined Smith Tabata Inc in East London where he was made a director heading the High Court Litigation Cluster. His other passion is that of the world of academia; having been a lecturer at Rhodes University and the University of Fort Hare for over 7 years in both the English and Law Departments.