The respondent, San Marcus Properties (Pty) Ltd, owned a single immovable property as its sole asset. Its sole shareholder was Monica Harris, and its sole director was her son, David Marcus Harris. In June 2007 the shareholder passed a written resolution under s 228 of the Companies Act 61 of 1973 authorising the disposal of the property and empowering Harris to conclude the sale and sign all necessary documents. On 11 September 2007 Harris concluded a written sale agreement with Simcha Properties 6 CC (the appellant), subject to a suspensive condition relating to the outcome of arbitration concerning a prior sale to JFS Properties. The agreement lapsed when the suspensive condition was not fulfilled by 31 October 2007. On 27 November 2007 the parties concluded a reinstatement agreement reviving the original sale and extending the suspensive condition date. The condition was fulfilled in December 2007, rendering the agreement unconditional. The appellant failed to perform, and resisted enforcement on the basis that Harris lacked authority under s 228 to conclude the reinstatement agreement and that later statutory amendments required a special resolution. The High Court enforced the agreement, and the appellant appealed to the Supreme Court of Appeal.
The appeal was dismissed with costs, including the costs of two counsel.
The case clarifies the application of s 228 of the Companies Act 61 of 1973 in the context of single‑shareholder companies. It confirms that a sole shareholder’s explicit written consent can validly authorise the disposal of all or substantially all of a company’s assets, and that such authorisation may extend to subsequent steps, including reinstatement of a lapsed agreement, without requiring fresh approval. The judgment also affirms the non‑retrospective application of amendments to s 228.