and

CORAM:
MARITZ, A.J.

Heard
on: 1996-11-12 + 13 Delivered on: 1996-11-14

JUDGMENT

MARITZ.
A.J. This
matter, in which my brother Strydom, J.P'.,
had
issued a rule

nisi
coupled
with an interim interdict and an order allowing substituted service,
came before me on 12 November 1996 when the second respondent (the
owners of the MFV "Evgeney Polyakov" anticipated the
return day of 29 November 1996 on twenty four hours notice to the
applicant, Namibia Export Services CC. When the matter was called Mr
Koep, counsel for the second respondent, advanced a number of
submissions why the rule
nisi against
the second respondent should be discharged. Only after completion of
his argument Mr. Dicks, counsel for the applicant, rather belatedly,
moved an application from the bar for an extension of the
anticipated return day to allow the applicant sufficient time to
file a replying affidavit. The second respondent opposed that
application. In the absence of an application for such extension
properly brought on notice and supported by an affidavit furnishing
reasons why and for how long the extension was being sought, I was
only amenable to extent the anticipated return day to 13 November
1996. On that date the applicant brought an application on notice
for an order dismissing the second respondent's anticipation of the
return day and, in the alternative, for a further extension thereof
to file its replying affidavits.

The
principal ground on which the applicant attacked the second
respondent's right to anticipate the return day was based on the
apparent lack of authority of the deponent Roussanov to oppose the
application on behalf of the second respondent; and to depose to
affidavits in support of such opposition and, on the basis thereof,
anticipate the return day

After
the deponent's lack of authority had been raised in
limine by
Mr Dicks on behalf of the applicant, Mr. Koep's first submission was
that no such authority had to be alleged in the answering
affidavits. In addition he took the point that the applicant had
also failed to annex a resolution authorising the launching of the
application in the first instance.

The
law, as regards the required authority of artificial persons in
proceedings of this nature, has been clearly stated by Watermeyer,
J. in Mall
(Cape) (Pty) Ltd vs Merino Ko-operasie Bpk, 1957
(2) SA 347 (D) at 351 D to 352 B.

"/
proceed now to consider the case of an artificial person, like a
company or co­operative society. In such a case there is
judicial precedent for holding that objection may be taken if there
is nothing before the Court to show that the applicant has duly
authorised the institution of notice of motion proceedings (see for
example Royal Worcester Corset Co v Kesleris Stores, 1927 CPD 143;
Langeberg Ko-operasie Beperk v Folscher and Another, 1950 (2) SA 618
(C)). Unlike an individual, an artificial person can only function
through its agents and it can only take decisions by the passing of
resolutions in the manner provided by its constitution. An attorney
instructed to commence notice of motion proceedings by, say, the
secretary or general manager of a company would not necessarily know
whether the company had resolved to do so, nor whether the necessary
formalities had been complied with in regard to the passing of the
resolution. It seems to me, therefore, that in the case of an
artificial person there is more room for mistakes to occur and less
reason to presume that it is properly before the Court or that
proceedings which purport to be brought in its name have in fact
been authorised by it.

There
is a considerable amount of authority for the proposition that,
where a company commences proceedings by way of petition, it must
appear that the person who makes the petition on behalf of the
company is duly authorised by the company to do so (see for example
Lurie Brothers Ltd v Arcache, 1927 NPD 139, and the other cases
mentioned in Herbstein and van Winsen, Civil Practice of the
Superior Courts in South Africa at pp. 37, 38). This seems to me to
be a salutary rule and one which should apply also to notice of
motion proceedings where the applicant is an artificial person. In
such cases some evidence should be placed before the Court to show
that the applicant has duly resolved to institute the proceedings
and that the proceedings are instituted at its instance. Unlike the
case of an individual, the mere signature of the notice of motion by
an attorney and the fact that the proceedings purport to be brought
in the name of the applicant are in my view insufficient. The best
evidence that the proceedings have been properly authorised would be
provided by an affidavit made by an official of the company annexing
a copy of the resolution but I do not consider that that form of
proof is necessary in every case. Each case must be considered on
its own merits and the Court must decide whether enough has

been
placed before it to warrant the conclusion that it is the applicant
which is litigating and not some unauthorised person on its behalf."

The
same principle applies when an artificial person seeks to oppose an
application. This does not mean that it is always necessary for an
artificial person to attach a resolution to its founding or
answering affidavits, as the case may be. This was held by Strydom,
J. in South West African
National Union vs
Tjozongoro
and Others, 1985
(1) SA 368 (SWA) at 381 D to E. It is only when there is a bona
fide challenge
to the authority of the deponent purporting to be acting on behalf
of the artificial person that it would, depending on the
circumstances of the case, be required to produce such a resolution.
See Nahrungsmittel GmbH
vs.
Otto,
1991
(4) SA 414 (C) at 418 D.

The
objection against the applicant's authority to initiate this
application raised by Mr Koep from the bar during the course of
argument yesterday, is without substance. In the first paragraph of
the applicant's founding affidavit, the deponent Taylor alleges that
he is a member of applicant; that he is duly authorised by the
applicant to bring the application and to make that affidavit on the
applicant's behalf. The second respondent did not deny that
allegation in the answering affidavit of Roussanov or the supporting
affidavit of Volkov. In the absence of such a challenge and faced
only with a bare complaint from the bar, I am satisfied that, the
statement of Taylor concerning his authority is good enough in the
circumstances.

The
situation as regards the second respondent's authority is, however,
different. I am unable to find any allegation in the answering
affidavit that Mr. Roussanov has been authorised to oppose the
application on behalf of the second respondent or, for that matter,
to anticipate the return day. It is clear from that affidavit that
neither Roussanov nor Volkov is the owner of the vessel. Roussanov,
at best, only alleges that he was authorised by Desgate Management
Ltd to depose to the affidavit. Desgate is not a party to the
proceedings and is merely the charterer of the vessel.

Mr
Koep sought to overcome this problem by handing up from the bar a
"Power of Attorney letter". In terms thereof, PPP
'Yugrybpoisk', represented by one Zintchenko, purported to give a
power of attorney to Desgate Management Ltd, represented by one S D
Rossanov, to "manage
and supervise common business operations provided by the Agreement
N1/7-29/26 of 29 July 1996, including juridical actions and Bank
transactions involving the PPP 'Yugrybpoisk' Bank account ... and to
go into contracts of value up to USD250 000 and ...to
represent the Agreement Signatories' interest before a third party
and in court etc." Mr
Dicks objected to the power of attorney being handed up without it
having been introduced on affidavit. That objection, it seems to me,
is sound for a number of reasons. The power of attorney is not
accompanied by a resolution of PPP "Yugrybpoisk"
authorising Zintchenko to sign or issue it. Moreover, nowhere in any
of the affidavits is it alleged that PPP "Yugrybpoisk" is
the owner of the vessel, MFV "Evgeney Polyakov". The power
of attorney only extends to the management and supervision of the
common business operations contemplated in a specific agreement. A
copy of that agreement is not before the Court and I am unable to
ascertain from the power of attorney whether that agreement relates
in any way to the charter of MFV "Evgeney Polyakov". In
the premises, the power of attorney is disallowed.

As
a last resort, Mr. Koep submitted that the point in
limine concerning
the second respondent's authority had been raised for the first time
less than an hour before the matter was called yesterday. He stated
that the requisite resolution could be obtained if an opportunity
would be afforded to the second respondent to amplify its answering
affidavits. Relying on Moosa
and Cassim NNO v Community Development Board, 1990
(3) SA 175 (A), he submitted that it was competent to ratify the
deponent's lack of authority in such a manner. To this Mr Dicks
objected, submitting without reference to any authority that, the
objection of locus
standi having
been taken in
limine, the
deponent's lack of authority cannot be cured by such ratification.

Mr.
Dicks' submission is not without some authority. In South
African Milling Co. (Pty) Ltd vs Reddy, 1980
(3) SA 431 (SE) Kannemeyer, J. held that, once an objection has been
taken on the ground of a lack of locus
standi, the
objector acquired a vested right to have that objection determined
and that a later unilateral ratification cannot cure the initial
lack of standing.

This
approach, notwithstanding the criticism expressed in later judgments
to which I shall refer to hereunder, was followed by Hattingh, J. in
Inter
Board SA (Pty) Ltd vs Van den Berg, 1989
(4) SA 166 (O) at 1068D-J and by Jansen, J. in South
African Allied Worker's Union and Others vs De Klerk NO and Others,
1990
(3) SA 425 at 432B-C.

In
Baeck
and Co SA (Pty) Ltd vs Van Zummeren and Another, 1982
(2) SA 112 (W),
Goldstone,
J. respectfully differed from and criticised the reasoning of
Kannemeyer, J.
in
the South
African Milling case.
He held (at 119 in
fine) that
"the
'right to move for the dismissal of the application on the ground of
lack of locus standi' is, with respect, hardly what one would
envisage as constituting a 'vested right". Dealing,
as he did, with a matter where the deponent incorrectly alleged that
he had authority to represent the applicant in application
proceedings, he concluded (on 119C-D):

"If
in law the deficiency in his authority can be cured by ratification
having retrospective operation, I am of the opinion that he should
be allowed to establish such ratification in his replying affidavit
in the absence of prejudice to the first respondent. It is clear
that in this case, subject to the question of ratification and
retrospectivity, the first respondent would not be prejudiced by
such an approach."

This
line of reasoning was approved and followed in Evangelical
Lutheran Church in Southern Africa (Western Diocese) vs Sepeng and
Another, 1980 (3) SA 958 (B) at 966A-C; Moosa and Cassim NNO vs
Community Development Board, supra
at 181A-B; Merlin
Gerin (Pty) Ltd vs All Current and Drive Centre (Pty) Ltd and
Another, 1994
(1) SA 659 (C) at 661E-F
and National
Co-op Dairies Ltd vs Smit, 1996
(2) SA 717 (N) at 719B-C.

I
find myself in respectful agreement with the latter line of
authorities and in particular with the opinion of Conradie, J.
in
Merlin Gerin (Pty)
Ltd vs All Current
and Drive
Centre
(Pty)
Ltd, supra
where he dealt as follows with the objector's so-called "vested
right" to move the dismissal of the application on the ground
of lack of locus
standi (at
660B-F).

"It
is, with respect, not clear to me what this 'right' is. It would
seem to be no more than a 'right' to take a point. The point which
is sought to be taken is that the application is fatally defective.
That point is only good if the Court refuses leave to the offending
party to supplement his papers. What the objecting party acquires is
therefore a 'right' to require the Court not to turn his good point
into a bad one. It is by the deprivation of this 'right' that the
respondent is said to be prejudiced. Since (retrospective)
ratification may not operate to the prejudice of a non-party, the
Court may, on this reasoning, not deprive the applicant of his point
by permitting supplementation.

That
the reasoning is fallacious is in my respectful opinion demonstrated
by the strange twists and turns into which it leads one. The
difficulty is, I venture to think, that the content of the 'right'
has been incorrectly analysed. The 'right' - if it is one - is a
respondent's right not to be subjected to the risk of litigating
against an ostensible applicant when the latter will not be bound by
orders made in the litigation, or when it is not clear that the
applicant's ostensible agent has authority to conduct the litigation
on its behalf. The right is the right to refuse to litigate under
such prejudicial circumstances. It is the fundamental right to a
fair trial. For the enforcement of this right, the respondent has
only one remedy, to move for dismissal of the application. Moving
for dismissal is not itself a right, but a remedy for the right not
to be unfairly proceeded against."

Although
Conradie, J. remarked on the rights and remedies of a respondent in
circumstances where the applicant's lack of authority had been
challenged, I am of the opinion that those remarks apply mutatis
mutandis to
the rights and remedies of an applicant when the respondent's
authority to oppose an application is being contested by the
applicant. In the result I find that it will be permissible for the
second respondent to pass a resolution ratifying the actions taken
by the deponent Roussanov in opposing the application and
anticipating the return day on its behalf.

I
now turn to the question whether I should allow the second
respondent to supplement its answering affidavit in the
circumstances of this case. I am to consider that there is nothing
before the Court suggesting any pre-existing authority. The Court
only has the assurance of counsel for the second respondent that
such authority can and will be obtained. The basis on which such
assurance has been given to the Court, has not been disclosed. It
may have been given purely on the basis of Roussanov's instructions.
The possibility that such authority may not be forthcoming can
therefore, at this point in time, not be excluded. Moreover, the
second respondent chose to anticipate the return day with the
minimum period of notice prescribed by the Rules and, to that
extent, it has been the maker of the dilemma it now finds itself in.
On the other hand, the application was originally brought as one of
urgency and, given the nature of the rule
nisi issued
and interim relief granted, the second respondent is entitled to
have the matter adjudicated as soon as possible. It does not seem to
me that the applicant will be prejudiced in a manner which cannot be
cured by an appropriate order of costs, if I should allow the second
respondent to supplement its answering affidavit. As Conradie, J.
pointed out in the case of Merlin Gerin (Pty) Ltd, supra at 660G-I:

"An
applicant now has two options. If he had no authority to begin with,
he would attempt to defeat the remedy by obtaining authority by way
of ratification and by putting proof of that before the Court. Or he
might put better proof of pre­existing authority before the
Court. Once the applicant has done this, he will be bound by an
order for costs against him. In this way, ratification would not
harm but benefit the respondent, and so would unequivocal proof of
pre-existing authority.

Dismissal
and supplementation are two alternative ways open to the Court of
helping the respondent out of the dilemma in which the purported
agent's unauthorised proceedings or his inadequate proof of
authority has placed him. Which of the two ways will ultimately be
fair to the litigants will depend on all the circumstances.

A
Court may be disinclined to permit a
litigant
to raise the issue of ratification in reply because, for example, it
is likely to lead to a substantial new dispute. Where, however, as
in the present case, the resolution of the applicant's board has
only to be submitted to be accepted, there is really very little
harm in allowing an applicant to put his papers in order in this
way."

The
same holds true where the authority of a respondent is being
challenged. In the absence of prejudice to the applicant I am
inclined to consider the substance of this application rather than
preventing the second respondent from litigating its rights because
of deficiencies in form. I must, however, stress that these remarks
are not to be regarded as an invitation to slackness on the part of
litigants and practitioners in the preparation of affidavits. The
leave to supplement, which I propose to grant, is given in the
circumstances of this case and should not be regarded as a precedent
in matters where the introduction of such additional facts may raise
substantial new disputes on the papers.

The
second respondent is seeking what essentially amounts to an
indulgence from the Court. The applicant should not be prejudiced by
the second respondent's failure to pass the requisite resolutions
and make the necessary averments in the answering papers concerning
the deponent's authority.

In
the circumstances I make the following order:

1. 
   Leave
   is
   granted
   to
   the
   second
   respondent
   to
   supplement
   the
   answering
   affidavits
   filed
   or
   record
   within
   five
   days
   from
   the
   date
   of
   this
   order
   by
   putting
   proof
   before
   this
   Court
   that
   its
   opposition
   to
   this
   application
   has
   either
   been
   authorised
   or
   has
   been
   ratified.

   
   

2. 
   In
   the
   event
   that
   the
   second
   respondent
   so
   supplements
   the
   answering
   affidavit

   
   

3. 
   the
   applicant
   shall
   file
   its
   replying
   affidavit,
   if
   any,
   before
   or
   on
   26
   November
   1996;

   
   

4. 
   the
   anticipated
   return
   day
   will
   be
   extended
   until
   28
   November
   1996
   at
   10h00.

   
   

3. The
second respondent is to pay the costs occasioned by the proceedings
on
13 and 14 November 1996 .