Ravene Plantations Ltd v Estate Abrey and Others

• Jurisdiction: South Africa
• Judge: Solomon CJ, Wessels JA, Curlewis JA and Stratford JA
• Judgment Date: 18 October 1927
• Citation: 1928 AD 143
• Hearing Date: 30 September 1927
• Court: Appellate Division

Wessels, J.A.:

About the year 1910 a number of persons called the Ravene Estates Syndicate acquired a property near Inhambane in Portuguese East Africa. It was at that time managed by a Goanese called Pereira. He continued as the manager of the syndicate. About 1918 the syndicate became the Ravene Estates Ltd. The original syndicate held the bulk of the shares, but single shares were distributed to a few individuals so as to comply with the Natal laws regarding the registration of companies. Neither the members of the syndicate, nor of the company, interested themselves personally in the matter. Not one of them had been on the property since 1912. All their information came from Pereira who from time to time sent reports as regards his activities on the property. By 1914 the estate had cost the syndicate something in the neighbourhood of £14,000, but after that no money had been put into it either by the syndicate or the company. Pereira was left there to look after the property. He was paid no salary, but was entitled to make out of it what he could. The company derived no revenue from the estate. All that the directors of the company knew about the situation at Ravene was derived from such reports as Pereira chose to send them. It is therefore clear that the company held the Ravene estates not, for the purpose of deriving an annual income from it, but merely for the purpose of selling it if possible at a profit. There is no evidence that it was ever advertised for sale or that it was privately hawked about.

Wessels, J.A.

In 1924 an attorney named Leisegang who was then not in active practice and who was a friend of the son-in-law of the late H. Abrey, a director of the Ravene Estates, approached the latter as a prospective purchaser. He informed Abrey that he thought he might float a company to acquire the Ravene property, and asked for particulars. Abrey made it quite clear to Leisegang that neither he nor any of the directors had seen the property since 1912, and that all their information about it was derived from Pereira. He showed Leisegang reports from Pereira which purported to give an account of the cocoa-nut palms planted on the property. Before handing over these documents Abrey said to Leisegang: Leisegang, there has been nobody on the property since 1912 and there is no occasion for you to work in the dark. You go up and see for yourself." Abrey did not press Leisegang to buy, and told him that he could not bind his co-directors and could only speak for himself about granting an option. Leisegang then approached Harris of Messrs. Strickland & Harris to assist him in the promotion of a company it he exercised the option to buy the Ravene Estates, and suggested to them that they could become the secretaries of the new company. The price for the property suggested by Leisegang was £25,000, but Mr. Butcher, another director, refused to make it less than £30,000, and consequently an option to purchase was given for £30,000. Leisegang and Harris then proposed to inspect the Ravene Estate, but they wanted a letter of introduction so that there should be no difficulties when they arrived there. Liesegang saw Connal, the secretary of the Ravene Estates, and asked him for a letter of introduction. Connal wrote such a letter addressed to Pereira. This did not satisfy Leisegang: he refused to have Pereira's name on it. According to Mr. Connal, who was called for the plaintiffs, Leisegang did not want Pereira to know that he was going on the property. Connal then asked Leisegang to type a letter of introduction such as he wanted; and the following is the letter as typed by Leisegang:

"To whom it may concern:

This will serve to introduce Mr. C. G. Leisegang and friends who with our permission is making an inspection of the Ravene Estates, and we shall esteem it a favour if they are afforded any

Wessels, J.A.

and all information which they may require. They have also our permission to take any such samples as they may require, including samples of the soil on the estate.

For the Ravene Estates Ltd.

J. J. Beningfield.

Chairman of Directors."

Armed with this introduction Leisegang and Harris proceeded to the Ravene Estates. They met Pereira there, who took them to see whatever they desired. They remained a few days. They asked Pereira about the number of palms on the estate, and he informed them that according to his books he had planted 119,000 and that the failures could be put down at 10 per cent. According to Leisegang and Harris they made no real inspection, but relied entirely upon what Pereira told them. After their return...