Caterers Ltd v Bell and Anders

• Jurisdiction: South Africa
• Judge: CJ Solomon JA, CG Maasdorp JA, Juta AJA and AFS Maasdorp Acting AJA
• Judgment Date: 24 November 1915
• Citation: 1915 AD 698
• Hearing Date: 16 November 1915
• Court: Appellate Division

Innes, C, J.:

The relief prayed in the declaration is of various kinds, but the third claim alone is pressed, so that the action is in substance only for the recovery of money alleged to have been paid under duress. The payment was made on January 26, and the circumstances which led up to it may be briefly stated. The defendants, a leading firm of solicitors, were employed by the Henley-on-Klip Township Company, whose chairman, Mr. Horace Kent, is a practising barrister, to pass transfer of a number of lots of ground to various purchasers. It had apparently been a condition of sale in each case that the vendor should pay the conveyancing charges and that the out-of-pocket expenses for stamps, etc., should fall on the vendee. But the duty of effecting transfer devolved in law upon the township company, and that company employed the conveyancers. Among the lots referred to, nine were to go to the plaintiff company. There seems to have been some difficulty in arranging the necessary preliminaries, but by November, 1914, transfer had in each case been effected in the Registrar's office and the deeds, which, in accordance with practice, were to go to each purchaser, had been duly prepared. The conveyancers, however, were unwilling to deliver them to the township company until their charges for the work had been paid or secured. A dispute then arose as to the amount of these charges, Rent asserting, and the defendants denying, that there had been an engagement to perform the work for a sum about £18 less than the total of the account submitted. Relations between the parties became strained, and on the 8th January summons was issued against the township company for £45 14s. 6d., and costs. Kent, who had been referred

Innes, C.J.

by the defendants to their Pretoria agents, proceeded on the same day to that place, taking with him Kennerly, his solicitor. They had two interviews with the Pretoria agents, from whom they learned that the deeds were still at Johannesburg.

Costs, consequent upon the preparation and issue of summons, had already been incurred; but these costs, together with the full amount claimed, Kent and Kennerly expressed their intention of paying, saying that they would return later for that purpose. That is the statement of the witness Reid, whose evidence, corroborated as it was by Kennerly, was accepted by the Trial Court. Kent stated that he did not pay because he could not obtain the deeds. A second interview did take place about an hour later. Kent then asked to see the summons and, after perusing it, made use of abusive language concerning the conveyancers and their Pretoria agents, and said they might "go ahead." The next move in the proceedings took the form of a letter written on 16th January by Kennerly to the Pretoria agents. After stating that his clients, Caterers Ltd desired to obtain possession of the transfer deed of their lots, the letter proceeded: "My clients have the authority of Henley-on-Klip Township Limited, which I enclose, for delivery of this deed to my clients, who are ready and willing to pay whatsoever sum may be demanded of them, as a condition to the delivery up to them of this deed, reserving to themselves the right, if the should be advised to do so, to have the amount properly payable on delivery thereof adjusted in a Court of law." The enclosure, signed by Kent, as chairman of the township company, was in the following terms: "We hereby authorise and request you to deliver to Caterers Ltd the transfer deed to them of lots. . . ., freed and discharged from any claim by us thereupon, upon their paying to you such sum as you claim to be entitled to recover as and for costs in respect of such transfer, or to discharge any lien you may consider you have upon such deed howsoever arising." On the 20th January the Pretoria agents replied that: "We beg to inform you that we are instructed that if you, on behalf of Caterers Ltd will pay the costs of transfer, amounting to £13 1s, and the costs in connection with the bond, amounting to £2 2s, as shown on the account of the 9th November, 1914, and further pay all other costs of suit, the titles referred to will be handed over to you." As already remarked, the actual payment was made on the 26th January. On that date the entire claim of the conveyancers

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against the township company was settled, but in two different sums. Purporting to act on behalf of Caterers Ltd., Kennerly enclosed the sum of £15 3s., being the total of the charges relating to their lots, in the following letter: "Referring to your letter of the 20th inst., my clients, Caterers Ltd are willing to pay £13 1s and £2 2s., and all costs of suit, reserving to themselves the right to debate the propriety of your demands, if so advised. I am delivering this personally with the cash, and also a further amount of £30 to cover your taxed costs." The last-mentioned sum it had been agreed between the parties should be deposited for the purpose stated. On the same day Kennerly wrote another letter on behalf of the township company, covering an amount of £30 14s 6d., which represented the balance of the account after deduction of the charges relating to the Caterer lots. Both these letters Kennerly, accompanied by Rent, delivered personally to the Pretoria agents on the same day.

It is important to note that Caterers Ltd had no knowledge whatever of these transactions, of the letters written, and the payments made ostensibly on its behalf. And it is necessary to refer to its position and constitution. It was a private company promoted by Kent, with a nominal capital of £100 in £1 shares, and with the minimum number of two shareholders, each holding one share. It had been floated with the object of running a small sanatorium, which was not proceeded with. It had elected no directors and appointed no manager, secretary or other officer, and, though its articles contained a clause purporting to invest the subscribers to the memorandum with all the powers of directors, no resolution had been taken thereunder. The company, therefore, was for practical purposes little more than a legal expression, and the use of its name by Kent, who was not even a shareholder, was wholly unauthorised. But steps were taken to breathe upon the dry bones. On January 27 one of the subscribed shares was acquired by Rent and the other by Mrs. Rent. A few days thereafter he made over his share to his wife, and one share each was allotted to Mrs. Rent and to Miss Christie, a member of the Rent household. Certain meetings were held, and a resolution taken to proceed against Bell and Anders. I refrain from commenting upon the minutes in view of the fact that the parties concerned have had no opportunity of tendering any explanation in regard to their contents.

Innes, C.J.

On February 5th summons was issued in the present suit. The costs in the...