Costa NO v Arvum Exports (Pty) Ltd and Others

The late Alberto Costa was a farmer and one of three trustees of the Klein Botrivier Trust (KB Trust), which owned a farm. In July 2009, Costa concluded two agreements with companies in the Arvum/Unlimited Fruit group: a Production Loan Agreement (PLA) and a Supply and Marketing Agreement (SMA), purportedly on behalf of the KB Trust. These agreements provided for financing of fruit production and exclusive supply and marketing of fruit, including the Flavor Fall plum variety. After Costa’s death in 2011, the remaining trustees disputed that he had authority to bind the trust and refused further performance. The Fruit Group sought enforcement of the agreements or, alternatively, protection of alleged plant breeders’ rights in the Flavor Fall variety.

The appeal was upheld with costs. The order of the full court was set aside and replaced with an order dismissing the Fruit Group’s application, including claims based on the agreements and on alleged plant breeders’ rights.

The case clarifies the interpretation of trustee resolutions and confirms that authority of trustees must be clearly established for major commercial transactions. It reinforces the principle that ostensible authority cannot arise from representations made solely by an agent. The judgment also provides authoritative guidance on the scope of plant breeders’ rights, distinguishing between propagation of a plant variety and the commercial exploitation of its fruit.