HOW MANY SIGNATURES ARE ACTUALLY REQUIRED ON AN OTP WHEN A SELLER ACTS ON HIS OWN BEHALF AND ON BEHALF OF A CO-OWNER?
Mr and Mrs Smith co-own property. They get divorced and Mr Smith pays Mrs Smith R2 000 000 for her share in the property. In return, she agrees to transfer her share to Mr Smith. She also grants him power of attorney to sign all transfer documents her behalf, and/or a sale agreement, should he wish to rather sell the property someday, instead of taking transfer of her half share.
Mr Smith does not do anything to take transfer of her half share and some years later decides to sell the property. When he receives an offer, he adds his ex-wife’s name to the OTP as a co-seller (since her name still appears on the title deed as a half share owner), but he only signs once. He does not declare anywhere on the OTP that he signs “on my own behalf and on behalf of the co-owner by virtue of power of attorney”. In fact, he makes no mention on the OTP at all, of the fact that he is acting in a personal, AND in a representative capacity. He simply initials everywhere and then signs once on the last page.
The buyer defaults, is put to terms, and the sale is cancelled. The agency which assisted Mr Smith in selling, wants to now sue for commission. Do we have a valid sale agreement when the seller only signed once and failed to make any mention that he signs in a dual capacity?
The Alienation of Lands Act provides 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”.
With thanks to our former senior partner Milton Koumbatis, who assisted us, we were referred to a court case – Glen Comeragh (Pty) Ltd v Colibri (Pty) Ltd, from 1979, where the court referred to a law book entitled “Phipson on Evidence” (11th ed at 714 para 1635) and where this author stated the following: “Where a party executes a document in several different capacities, it is not necessary that he should sign more than once…” This judgment has been relied upon by various judgments ever since but for different reasons, so this is not at all necessarily the conclusive position in our law. Phipson is also a British author. I could also not find any other judgments amongst the 33 000 plus judgments which are available on our “Jutastat On-Line Law Reports”, which repeats this quote from Phipson!
I have however also found an article on Google which indicates that in France (https://frenchlaw.blog/2018/05/29/how-many-signatures-for-a-person-intervening-in-an-act-in-a-dual-capacity/) a person signing a contract in a dual capacity needs to only sign once, which lends further support to this argument though.
The end result is this – we cannot say for certain what a High Court in SA would say to this question, if ever it had to be argued before a Judge! What we can however tell you is that we may soon be taking such a matter to court and if we are successful, you will be the first to know. Until then our advice to the reader is simple: if you are going to wear two hats, make it clear on the OTP and rather just point it out, or, sign twice and use “pp” which means “on behalf of”! Better to be safe than sorry.
Miltons Matsemela Inc.