Brodsky Trading 224CC v Cronimet Chrome Mining SA (Pty) Ltd and Others

Brodsky Trading 224CC (the appellant) sued several respondents for payment of estate agent’s commission allegedly earned from facilitating the sale of a chrome mining operation. The appellant had previously operated as Brodsky Trading 224 (Pty) Ltd, which was converted into a close corporation in March 2006 in terms of the Close Corporations Act. The Estate Agency Affairs Board was not informed of this conversion. Fidelity fund certificates were issued in 2007 to the non‑existent company and to Mr Maree in his capacity as director of that company, not to the close corporation or to him as a member. The appellant claimed commission based on a mandate allegedly granted in March 2007 and an introduction said to have earned commission in May 2007. The transaction involved the sale of shares, immovable property and mining permits constituting a chrome mining business.

The appeal was dismissed with costs, including the costs of two counsel.

The judgment confirms strict compliance with the Estate Agency Affairs Act and rejects reliance on 'substantial compliance' where fidelity fund certificates are invalid. It clarifies the consequences of converting a company into a close corporation without informing the Estate Agency Affairs Board and underscores that certificates issued to non‑existent entities are void. The case also affirms that a share sale structured to acquire an entire operation may constitute the sale of a 'business undertaking' under the Act.