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[2022] ZAGPJHC 635
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Matlala v Mmela Investment Holdings (PTY) Ltd and Others (25524/2019) [2022] ZAGPJHC 635 (11 July 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 25524/2019
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
1/07/2022
In
the matter between:
MATLALA,
MARY-ANNE PHUTI
Applicant
and
MMELA
INVESTMENT HOLDINGS (PTY) LTD
First Respondent
CLAIMS
ADMINISTRATION & RECOVERY
SERVICES
(PTY)
LTD
Second Respondent
MR
MOHOBI
RAMATSETSE
Third Respondent
Delivered:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation
to the
Parties / their legal representatives by email and by uploading it to
the electronic file of this matter on CaseLines. The
date of the
judgment is deemed to be 11 July 2022.
JUDGMENT
MALINDI
J
:
[1]
The parties are referred to as in the main action.
[2]
The plaintiff has filed a declaration consequent to the matter being
referred to trial.
The defendants filed an exception to the
declaration alleging that it does not disclose a cause of action in
contract against the
first and second defendants, alternatively, that
it is vague and embarrassing.
[3]
The plaintiff sues all three defendants on the basis that she entered
into a contract
with the third defendant to the effect that the first
and second defendants will be formed by the third defendant and that
the
two of them would hold shareholding and management positions in
the other two defendants. She pleads that the third respondent acted
on behalf of the first and second defendants. The basis of the
exception is that at the time that the plaintiff alleges to have
entered into the alleged contract with the third defendant, the first
and second defendant had not been formed and could therefore
not be
bound by such a contract. The defendants’ counsel has referred
to
Steenkamp
NO v Provincial Tender Board, Eastern Cape
[1]
which states the principle that an agent cannot lawfully enter into a
contract on behalf of an entity that does not exist. In the
alternative, that the plaintiff does not spell out how the first and
second defendants are to be held liable.
[4]
The plaintiff submits that the declaration, in particular, paragraphs
6, 14 and 16
provide details of the agreement between the plaintiff
and the third defendant that in terms of the agreement the first and
second
defendants will be formed for the purposes of carrying out
their agreement. In this regard the contract was entered into for the
benefit of the two defendants (
stipulatio alteri
) and the two
defendants bound themselves to carry out the agreement between the
plaintiff and the third defendant. The plaintiff
submits that this is
equivalent to a third party accepting the terms of a
stipulatio
alteri
.
[5]
Counsel for the defendants strenuously argued that the fact that the
first and second
defendant were not in existence at the time of the
contract between the plaintiff and the third defendant, there could
be no contract
between the plaintiff and the other two defendants
and/or furthermore that the contract was accepted as binding on them
after they
were formed.
[6]
The contract needs a brief scrutiny. The plaintiff and the third
defendant were acting
in their personal capacities when they entered
into a contract. They were not acting on behalf of an existing
company or companies.
They were the principal parties to the oral
agreement. They agreed to form entities through which they would
conduct business with
the Department of Justice and Correctional
Services (“DoJ”). In doing so none of them were acting as
agents of a third
entity and for its benefit or more properly, for
its availment to accept the opportunity under the contract. In other
words, the
first and second defendants were not contemplated to
benefit out of an existing company. They were the parent companies,
so to
speak, that were going to enter into contracts with the DoJ.
They were formed to benefit the plaintiff and the defendants in
proportions
agreed between them.
[7]
The Court need therefore decide whether the plaintiff has a cause of
action against
the two companies which have excluded her from such
benefit in the manner pleaded by her, including against the third
defendant,
who is a Director and Managing Director of the two
companies.
[8]
In my view, there is no third party involved in this contractual
relationship for
whose benefit a contract was entered into.
Therefore, it is a matter for evidence
[2]
for the plaintiff to prove the agreement with the third defendant to
form the first and second defendants for their mutual benefit
as
pleaded. The third defendant was not acting on behalf of the other
defendants because there was no pre-incorporation memorandum.
[9]
Even if I am wrong in this regard I am of the view that the
requirements for a
stipulatio
alteri
are
satisfied. If the plaintiff and the third defendant had a separate
agreement to form the first and second defendants for their
benefit
or availment to the opportunity to be part of such contract they
accepted the terms thereof when the terms agreed between
the
plaintiff and the third defendant were subsequently incorporated into
their founding documentation and, in particular, making
the plaintiff
a shareholder and director of the two entities as agreed between the
plaintiff and the third defendant. In other
words, they availed
themselves of the opportunity to conduct business with DoJ on the
terms that the plaintiff will be entitled
to their directorship and
commensurate benefits.
[3]
In
this regard the following was said by the SCA:
[4]
“
[9]
In such a case the policy holder (the ‘stipulans’)
contracts with the insurer (the ‘promittens’)
that an
agreed offer would be made by the insurer to a third party (the
‘beneficiary’) with the intention hat, on acceptance
of
the offer by that beneficiary, a contract will be established between
the beneficiary and the insurer. What is required is an
intention on
the part of the original contracting parties that the benefit, upon
acceptance by the beneficiary, would confer rights
that are
enforceable at the instance of the beneficiary against the insurer,
for that intention is at the ‘very heart of
the stipulatio
aleri’ (Ellison Kahn: ‘Extension Clauses in Insurance
Contracts’ [1952)
69 SALJ 53
at 56). Thus the beneficiary, by
adopting the benefit, becomes a party to the contract (see Total
South Africa (Pty) Ltd v Bekker
NO
[1991] ZASCA 183
;
1992 (1) SA 517
(A) at 625 D-G).”
[10]
By adopting the benefit conferred upon them by the plaintiff and
third defendant, the first and
second defendants became a party to
the contract that renders them liable to be sued as has happened in
this case.
[11]
As to the costs of the exception, the defendants were neither
unreasonable or reckless in pursing
the application. Had they not
done so and were victorious at the conclusion of the trial that might
have had an effect on the costs
order. I am of the view therefore
that although the application stands to be dismissed each party
should bear its own costs.
[12]
In the circumstances, the following order is made:
1.
The exception application is dismissed.
2.
Each party is to pay its own costs.
G
MALINDI
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
JOHANNESBURG
FOR
THE APPLICANT:
Adv G Shakoane
Adv K Maphwanya
INSTRUCTED
BY:
Prince Mudau & Associates Attorneys
COUNSEL
FOR RESPONDENTS:
Adv H A van der Merwe
Adv Magxaki
INSTRUCTED
BY:
Van der Merwe Dorning Maponya Associates
DATE
OF THE HEARING:
4 July 2022
DATE
OF JUDGMENT:
11 July 2022
[1]
2006
(3) SA 151
(SCA) at [48].
[2]
See:
McKelvey
v Cowan NO
1980
(4) SA 525 (Z).
[3]
Steenkamp
NO
at [48}: on the existence of a pre-incorporation agreement and
ratification of the contract.
[4]
Pieterse
v Shrosbree NO & Others
2005 (1) SA 309
(SCA) at [9].