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[2015] ZAGPJHC 44
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Solomon v Graham and Others (22460/2014) [2015] ZAGPJHC 44 (4 March 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE NO: 22460/2014
DATE: 04 MARCH 2015
In the matter between
IVAN
SOLOMON
...............................................................................................................
APPLICANT
And
RICARDO GIOVANNI
GRAHAM
..................................................................
FIRST
RESPONDENT
EXECUTIVES ONLINE SOUTH AFRICA (PTY)
LTD
…......................
SECOND
RESPONDENT
EXECUTIVES ONLINE NORTH (PTY)
LTD
.............................................
THIRD
RESPONDENT
Contact - Sale of shares agreement -
claim for balance of purchase price of shares -addendum to agreement
concluded - acknowledgement
of debt signed -interpretation of -
defence raised - claim premature as notice period provided for in
lex commissoria not complied
with - time for performance in terms of
agreement by now expired - notice of motion constituting demand -
defence rejected - respondent
raising claims that would reduce
balance due - absence of bona fides in raising claims - no reason why
payment of amount due should
be further delayed -application granted
J U D G M E N T
VAN OOSTEN J:
[1] This application has its origin in
an agreement of sale of shares (in the second and third respondents)
concluded on 31 May
2012 between the applicant as seller and the
first respondent (the respondent) as purchaser (the agreement). The
agreement was
orally amended and an addendum thereafter concluded
together with an acknowledgement of debt signed by the respondent.
The applicant
in this application claims from the respondent payment
of the sum of R600 000-00, being the balance of the purchase price of
the
shares, together with interest thereon and costs. Only the first
respondent defends the claim on a narrow basis and relies on three
claims for a reduction of the purchase to which I shall revert.
[2] The background facts, which are
common cause between the parties, are briefly the following. The
agreement resulted from a break
down in the business relationship
between the applicant and the respondent conducted through the
vehicle of the second and third
respondents of which they were both
directors. The parties decided to part ways and after protracted
negotiations the agreement
was concluded. In terms thereof the
respondent purchased the applicant’s 50% ordinary shares in the
issued share capital
of the second and third respondents for a
purchase price of R1,5m, payable by way of three instalments, as
follows: R400 000-00
or before 1 June 2012, R800 000-000 on or before
5 July 2012 and R300 000-00 within a period of 18 months of the date
of signature
of the agreement. The respondent paid the first but
failed to pay the second instalment. Further negotiations ensued and
agreement
was eventually, in December 2012, orally amended to provide
for the payment of the second instalment by way of a payment of R500
000-00 on or before 18 December 2012 and the balance of R300 000-00
within 18 months of the date of signature of the agreement.
The first
payment of R500 000-00 was duly made on 18 December 2012. In the
meanwhile and in terms of the agreement, the applicant
commenced with
the transfer of his shareholding in the second and third respondents
to the respondent and he resigned as director
of both entities.
[3] On 10 December 2013 the parties
concluded a written addendum to the agreement, as well as an
acknowledgement of debt. In terms
of the addendum the purchase price
of the shares was reduced to R1,4m and the respondent would pay the
sum of R500 000-00 within
60 days of the date of its signature,
failing which the original purchase price of R1,5m, less the payments
that had already been
made, would become immediately due and payable.
In the acknowledgement of debt the respondent acknowledged his
indebtedness to
the applicant in the sum of
R500 000-00 payable within 60 days of
the date of signature thereof.
[4] It is the applicant’s case
that the respondent failed to pay the sum of R500 000-00 and that
consequently the original
purchase price of R1,5m revived in respect
of which the sum of R600 000-000 (R1,5m less payments totalling R900
000-00) became
due and payable
[5] This brings me to the defence of
the respondent. It is this: the applicant’s claim, being for
specific performance, was
instituted prematurely having regard to the
lex commissoria clauses contained in the agreement as well as in the
addendum thereto,
both providing for a 14 days’ notice period
to the respondent to purge his default before the full balance of the
purchase
price would become due and payable. Only 7 days’
notice was in fact given which, so the argument went, rendered the
applicant’s
claim premature. The defence should not detain me
for long: the contention overlooks firstly, that the notice of motion
in itself
was a demand for payment affording, in its effect, the
respondent a period for payment well in excess of 14 days and
secondly,
and decisively, that the time periods for payment provided
for in the agreements have all by now expired. I therefore do not
consider
it necessary to comment any further on this defence as it is
without merit and it falls to be rejected.
[6] The respondent in addition asserts
three claims, in the total sum of R318 438-46, against the applicant,
which he contends should
be deducted from the amount claimed by the
applicant. The particulars of those claims are briefly the following.
The first relates
to an assessment of the third respondent by SARS on
7 January 2014, for which it became liable in respect of an
underpayment of
R394 840.19, by which amount the respondent maintains
the nett asset value of the third respondent, on which the purchase
price
in terms of the agreement was based, should be reduced. At 50%
of that amount R197 420.08 falls to be deducted. The second is a
claim of Conscript Africa, in the sum of R192 000-00, made against
the second respondent, which the respondent states he managed
to
settle at R70 000-00, which together with legal costs incurred, he
maintains, entitles him to a reduction of 50% of the total
expenditure, in the sum of R85 280-50. Lastly, the respondent claims
a reduction in the sum of R35 737-88 in respect of the applicant’s
alleged personal expenses which, after his resignation an director of
the entities, continued to be paid by way of bank debit order
by the
second and third respondents.
[7] Counsel for the respondent asked
for the matter to be referred for the hearing of oral evidence in
view of irreconcilable factual
disputes existing regarding the
respondent’s claims for a reduction. The agreement contains an
arbitration clause in terms
of which these claims may have to be
adjudicated. Counsel submitted that all the issues in this
application should be referred
to arbitration. Counsel for the
applicant, with ample justification, contended that the claims are
unsustainable and nothing but
a concocted afterthought. A more
fundamental reason, in my view, exists for disregarding the claims
for the purpose of this application.
The bona fides of the respondent
recede into oblivion if regard is had to the history of this matter
revealing several indulgences
for payment and an incentive of a
reduced purchase price that were negotiated and agreed upon. That the
claims emerged for the
first time only in a letter by the attorneys
acting for the respondent shortly before the filing of the
respondent’s answering
affidavit, is difficult, if not
impossible, to reconcile with the respondent’s promise, in an
email to the applicant, in
response to a demand by the applicant’s
attorneys to pay the outstanding balance, to ‘fulfil the
agreement’ and
requesting the applicant’s ‘patience
as a friend’, some 2 months prior to the launching of this
application.
The respondent’s claims have not been brought by
way of a counter application but merely in answer to the applicant’s
claim. Nothing of substance has been put forward that would justify
any further delay in the applicant being paid what is due to
him. In
these circumstances the respondent should not be afforded the
opportunity of further delaying the inevitable which is to
pay the
amount claimed by the applicant.
[8] Finally, in regard to the order I
propose to make, the mora date in respect of the running of interest,
is fixed at 9 February
2013, which was the final date for payment,
being 60 days after the date of signature of the addendum to the
agreement, as provided
for in clause 2 thereof. Attorney and own
client costs are provided for in the acknowledgement of debt.
[9] In the result the following order
is made:
1. The first respondent is ordered to
pay to the applicant the sum of R600 000-00, together with interest
thereon, at the rate of
9,5% per annum from 9 February 2014 to date
of final payment.
2. The first respondent is ordered to
pay the costs of the application on the scale as between attorney and
own client.
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
COUNSEL FOR APPLICANT ADV L
HOLLANDER
APPLICANT’S ATTORNEYS JEFF
AFRIAT INC
COUNSEL FOR FIRST RESPONDENT ADV C
VAN DER MERWE
FIRST RESPONDENT’S ATTORNEYS
WERKSMANS ATTORNEYS
DATE OF HEARING 26 FEBRUARY 2015
DATE OF JUDGMENT 4 MARCH 2015