#5215 - Bank Of Africa V. Cohen - Conflict of Laws BCL

Bank of Africa v. Cohen

Facts

The plaintiffs carried on business as bankers in London and in the Transvaal. The defendant was the wife of L. W. Cohen, the matrimonial domicil being English. In November, 1903, Mr. Cohen was heavily indebted to the plaintiffs and was desirous of obtaining further advances from them, and the defendant was the registered owner of two plots of land near Johannesburg, the title deeds of which were held by the plaintiffs for safe custody on her behalf.

By a power of attorney dated November 23, 1903, and executed by the defendant and her husband in London, after reciting that the plaintiffs had made advances to the defendant's husband and might from time to time make further advances to him, and that the defendant was desirous of securing the repayment of such sums as might from time to time be due to the plaintiffs by reason of the said advances and of giving to the plaintiffs for such purpose two mortgage bonds to be charged upon the two plots of land in question, the defendant, with the assistance and authority of her husband, as testified by his execution of the deed, appointed Alexander Wight, the manager of the bank at Johannesburg, or other the manager for the time being there, to be her attorney to represent her before any registrar of deeds or other proper authority in the Transvaal and acknowledge her indebtedness in such sums as he might fix and determine, and also for her to settle the terms and conditions as to the rate of interest, not exceeding 7 per cent. per annum…

On November 2, 1907, the plaintiffs obtained judgment against Cohen for 6538l. 19s. 1d., being the sum then due to them in respect of advances. The plaintiffs were unable to obtain registration in South Africa of the two plots of land in question by reason of the fact that neither of the above deeds sufficiently complied with the law of the Transvaal relating to married women, and the property still remained registered in the name of the defendant. The defendant subsequently repudiated her obligations under these deeds and demanded a return of the documents of title relating to the said property from the plaintiffs' manager at Johannesburg, and she threatened to take legal proceedings against the plaintiffs for their detention.

The plaintiffs then brought this action for (1.) specific performance of the agreement contained in the deed of December 4, 1906, for the transfer to the plaintiffs of the said property; (2.) an injunction restraining the defendant from taking proceedings in the Transvaal to recover possession of the documents of title; (3.) an injunction restraining the defendant from charging or disposing of the property otherwise than to the plaintiffs; (4.) alternatively damages.

Holding

The first question in this case is whether the bank can, by way of specific performance, clothe themselves with the character of mortgagees of the land in Johannesburg. Upon this question the relevant instrument is the bond dated December 4, 1906, by which the defendant declares that she renounces in favour of the bank the benefit of all rights whatsoever which the laws of the Transvaal grant her in relation to the land.

Relevant South African law: The relevant law of the Transvaal is in this Court a question of fact. The learned judge has found the fact, and I agree with him in his finding. The substance of it is that he finds that unless and until a married woman who does not fall within certain exceptions has gone through certain formalities she is under the Roman-Dutch law incapacitated and incapable of entering into a contract of suretyship for her husband.

If, on the other hand, renunciation before the contract is entered into is not essential, still the conditions under which the defendant would have become capable of contracting have not been satisfied, with the result, I think, that the contract, as one dealing with an immovable in the Transvaal, is not and cannot by way of specific performance be rendered binding upon her.

Mr. Dicey's language (Conflict of Laws, 2nd ed. p. 501) I think is correct, that a person's capacity to make a contract with regard to an immovable is governed by the lex situs.

Damages Claim

The second question is whether the defendant is liable in damages. Here it is necessary to consider also the bond of November 23, 1903. That bond did not exclude personal liability. The power in that case extended to allow the attorney to acknowledge the grantor's indebtedness to the bank in such sum as the attorney might fix. It seems to me, however, that that was superseded by the provision in the bond of 1906 which excluded personal liability. This question, therefore, again seems to me to fall to be determined only upon the bond of 1906. Here the question is as to liability in damages for breach of a contract relating wholly to acts to be done with reference to land in the Transvaal, acts which, if the previous portion of this judgment is right, were not done because the grantor was not capable of doing them. Here again the question is governed by absence of capacity. There can be no right to damages for not performing a promise to do an act which promise was not made because the promisor could not make it.

Kennedy LJ

The plaintiffs' claim is necessarily based upon the power of attorney given by the defendant to Mr. Wight, the manager of the plaintiffs' Johannesburg branch, on December 4, 1906. That instrument succeeded, and in my view superseded, an earlier instrument of November 23, 1903. It recites an agreement of the defendant with the plaintiffs to mortgage or transfer, as security for or in respect of advances made or to be made by the plaintiffs to the defendant's husband, certain real property of the defendant in the Transvaal, “but without incurring personal liability for the said advances.”

The reason of such invalidity is this: By the law which prevails in the Transvaal, as also, according to the judgment of the Privy Council in Mackellar v. Bond 27, in Natal, a married woman cannot be effectually bound as a surety for her...