MEC for Economic Affairs, Environment and Tourism, Eastern Cape v Kruizenga 2008 6 SA 264 (Ck) MEC for Economic Affairs, Environment and Tourism, Eastern Cape v Kruizenga 2010 4 SA 122 (SCA) : recent case law

• Pages: 182-196
• Date: 01 January 2011
• DOI: 10.10520/EJC135349
• Published date: 01 January 2011
• Author: C.J. Pretorius

MEC for Economic Affairs, Environment and

Tourism, Eastern Cape v Kruizenga

2008 6 SA

264 (Ck)

MEC for Economic Affairs, Environment and

Tourism, Eastern Cape v Kruizenga

2010 4 SA

122 (SCA)

Ostensible authority, reliance and the implied authority of an attorney to

compromise a suit

1Introduction

Estoppel by representation is a flexible doctrine capable of application in

a variety of circumstances, including the question of contractual liability.

The courts have recognised that this doctrine may be employed to hold

a party bound to the impression created of assenting to a contract,

despite an absence of true agreement between the parties (

Van Ryn

Wine & Spirit Co v Chandos Bar

1928 TPD 417 422-424;

Peri-Urban

Areas Health Board v Breet

1958 3 SA 783 (T) 790; cf

Benjamin v

Gurewitz

1973 1 SA 418 (A) 425;

Saambou-Nasionale Bouvereniging v

Friedman

1979 3 SA 978 (A) 1002ff). Although over the years some

writers have strongly advocated the use of estoppel to maintain the

fiction of a contract in such instances (see De Wet and Van Wyk

Die Suid-

Afrikaanse Kontraktereg en Handelsreg

1

(1992) 22-23; cf De Vos

“Mistake in Contract” 1976

Acta Juridica

177 180-81), the fact is that the

need for estoppel has been greatly diminished by the rise of the doctrine

of quasi-mutual assent, a version of reliance-based liability giving rise to

an actual contract rather than the mere fiction of one (Rabie and

Sonnekus

The Law of Estoppel in South Africa

(2000) 196; Van der

Merwe

et al

Contract: General Principles

(2007) 36-37 41).

Nonetheless, while estoppel in all probability will not directly be used

to uphold a fictitious contract where consensus is in question, it has been

instrumental in determining contractual liability in another sense, and

that is where a principal has been held bound to a contract on the basis

of ostensible authority. In the latter situation a principal incurs

contractual obligations, despite a lack of actual authority on the part of

his representative, on the basis that the principal created the impression

that the representative actually had the requisite authority to conclude

the juristic act in question on behalf of the principal (Van der Merwe

et

al

256-57; Rabie and Sonnekus 156). In such instances estoppel, in the

guise of ostensible authority, is pivotal in affirming contractual liability.

The recent matter of

MEC for Economic Affairs, Environment and

Tourism, Eastern Cape v Kruizenga

2008 6 SA 264 (Ck);

MEC for

Economic Affairs, Environment and Tourism, Eastern Cape v Kruizenga

2010 4 SA 122 (SCA) provides an apt illustration of the working of

estoppel in this manner and also deals with the pressing question

whether an attorney has the implied authority to compromise a suit, a