dwp eNewsletter
Vol 1 : Ed 3 - July 2007
| mekanik |
| sale of land - trustees and ratification of authority |
The issue of whether or not the signature of a single trustee, in the absence of the written authority of the co-trustees, is sufficient to satisfy the requirements of the Alienation of Land Act, or whether the lack of authority could subsequently be ratified in writing, has been the subject of much debate. The Supreme Court of Appeal, in Thorpe and Others v Trittenwein and Another, has finally laid the issue to rest.
S 2 (1) of the Alienation of Land Act reads:
“No alienation of land after the commencement of this section shall, subject to the provisions of s 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”.
A trust consists of an ‘accumulation of assets and liabilities’, such assets and liabilities to be administered by the trustees. The court therefore held that trustees do not qualify as agents of the trust and, unless the trust deed provides to the contrary, trustees are to act jointly.
It was established that in the ‘absence of the joint decision of the co-trustees, the assent of a single trustee to a contract would not bind the trust’. The justification for this fact was found in the object of s 2 (1) of the Act, namely ‘on grounds of public policy to facilitate proof by requiring the authority to be in writing thereby avoiding needless litigation’. The use of the word ‘agent’ in s 2 (1) of the Act is seen as including the situation where a trustee, whose power to bind the trust is dependent upon the joint authority of the co-trustees, signs as a principal.
The final word is therefore that in the scenario where authority of the co-trustees is not obtained no subsequent ratification is possible.
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| info@dwp.co.za |
1st floor - cornerstone house, 16 loop street, cape town | docex 600, cpt | t, +27-21-4193733 | f, +27-21-4193743