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[2017] ZAGPPHC 489
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Pretorius v Beachy-Head (36428/2014) [2017] ZAGPPHC 489 (4 May 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
No: 36428/2014
Date:
4/5/2017
In
the matter between:
GERHARD
PRETORIUS
Plaintiff
and
JOHN
PETER BEACHY-HEAD
Defendant
JUDGMENT
D
S FOURIE, J:
[1]
The plaintiff claims payment from the defendant in the amount of R833
000.00. The plaintiff relies on an oral agreement which,
according to
him, was entered into between himself and the defendant on 6 December
2012, in terms whereof he lent and advanced
the amount of R833 000.00
to the defendant against transfer of 1% shareholding in a company
known as Cuperex (Pty) Ltd as
security for repayment
of the loan. According to the plaintiff this
agreement was amended during
February 2013 in terms whereof it was
agreed that the defendant was released from his obligation to provide
security and that he
would repay the said amount on or before 6
December 2013 with interest calculated at 9% per annum.
[2]
These allegations are denied by the defendant. According to him the
Pretorius Family Trust and Turncard Trading 120 (Pty) Ltd,
represented by the plaintiff and the defendant respectively,
entered into an oral agreement in terms whereof the Trust purchased
1% of Cuperex's shares from Turncard for the amount of R833 000.00.
It is also denied that an agreement was entered into during
February
2013 as alleged by the plaintiff.
[3]
It is common cause that on 3 December 2012 Cuperex concluded a
term loan agreement with Grindrod Bank in terms of which
Turncard
Trading was obliged to cede its shares in Cuperex to Grindrod Bank
in
securitatem debiti.
It is also not in dispute that the Cuperex
shares were not transferred to either the plaintiff or his family
trust and that the
amount of R833 000.00 has not been repaid.
[4]
The main issues between the parties are the following:
•
the nature of the
agreement concluded on 6 December 2012;
•
the parties to that
agreement;
•
the terms of the
agreement;
•
whether a further
agreement during February 2013 was entered into as alleged by the
plaintiff.
EVIDENCE
FOR THE PLAINTIFF
[5]
The plaintiff testified without calling any witnesses. According to
him the defendant approached him for a loan to finance another
project. He was willing to do so on condition that security be
provided. The security would be 1% of the defendant's shareholding
in
Cuperex which had a value of R833 000.00 during November 2012. On 6
December 2012 it was then orally agreed between them that
he would
lend and advance the amount of R833 000.00 to the defendant against
transfer of 1% of the defendant's shareholding in
Cuperex as security
for repayment of the loan. Later that same day he made an electronic
transfer of R833 000.00 from his account
to the defendant's account.
[6]
On 3 December 2012 the Grindrod transaction had already taken place.
In terms thereof an amount of R31 million was lent and
advanced by
the Grindrod Bank to Cuperex for which Turncard and the plaintiff's
trust (amongst others) had to sign a deed of suretyship
and perform a
session of shares in Cuperex as security for repayment of the loan to
the bank. On 4 February 2013
the plaintiff sent an
e-mail to the defendant and Mr Lake, the Chief Executive Officer of
Cuperex, with regard to their shareholder's
agreement. The following
was pointed out by the plaintiff:
"There
is
a
mistake with the issued share capital. In December the
GPFT Trust purchased 1% from Turncard for R833 000. Therefore, the
GPFT Trust
should have
27.
70% and Turncard
25.
70%."
[7]
Mr Lake then replied as follows in an e-mail
dated 5 February 2013:
"That
share sale has been agreed, and paid for. However,
as
we have
previously discussed, it cannot be put through until we have asked
for and received the approval of Grindrod (those shares
are currently
pledged and cannot be sold without their approval) and the
other shareholders (who need to waive their pre-emptive
rights). I
am
sure that both approvals will be easily and
readily given, but we still need to go through that process before
the share sale can
legally be executed and the transfer from John to
Gerhard takes place. The number of shares in the shareholder's
agreement is,
therefore, currently correct."
[8]
According to him he then told the defendant
"ons kan nie
hierdie sekuriteits ding doen nie, want ons 'shares' is gebind in
Grindrod. Leen die geld by my en betaal dit
die einde van die jaar
vir my terug met
9%
rente".
The defendant then
accepted this proposal because they had no other choice.
[9]
T
he plaintiff also
referred to a number of other e-mails exchanged between him and the
defendant. On 7 March 2014 he wrote to the
defendant saying that
"Last time we
spoke you wanted to
keep
your 1% share and said that you would like to give the money back
with interest at
a
feasible time".
On 9 March the
defendant responded by saying
"Right now I propose we stick
to the original deal".
On 13 March 2014 the plaintiff said
"I propose that we stick to the new deal that was made last
year whereby you will pay me back
the
R833
000
with
interest
at
9%
per
year''.
[10]
In cross-examination he was requested to explain why his family trust
had become involved during February 2012. His answer
was that he
would have used his trust as a "vehicle" to keep the 1%
shares as security. He was then referred to the original
particulars
of claim before an amendment was effected. In terms thereof it was
pleaded that an agreement was entered into between
his family trust
and Turncard in terms whereof he would pay an amount of R833 000.00
to the defendant in turn for a transfer of
1% shareholding in
Cuperex. He conceded this, but replied it was not the
intention to involve the trust and Turncard
as parties to the
agreement. He also conceded that it would not have been impossible to
obtain the approval of Grindrod Bank, although
it would have been a
"schlep" to go through that process.
EVIDENCE
FOR THE DEFENDANT:
[11]
The defendant also testified
without calling any witnesses.
He was the Chairman of the
Board of Cuperex and through his family trust he owned 85% of the
shares in Turncard and Turncard owned
approximately 27% of the
shares in Cuperex. At some stage he wanted to sell some
of the shares in Cuperex
and this is how it came about that the
plaintiff became interested in buying shares
in Cuperex.
The value of 1%
of the shares was R833 000.00. Turncard
had to
sell and the Gerhard Pretorius Family Trust had to receive the
shares. There was no repayment as this was a share purchase which
was
agreed upon during December 2012. When it was time to do
the share transfer the company's secretary would have
approached
Grindrod to obtain their consent. Later during 2013 it transpired
that Cuperex was experiencing financial difficulties
as a result
whereof it had been put under business rescue. He also
said that
"if the business is producing even if it was
marginally and it was doing alright and it was solvent, I would have
certainly
have considered purchasing those shares back".
[12]
In cross-examination he confirmed that on 6 December 2012 an
agreement was concluded between the trust as represented by the
plaintiff and Turncard as represented by himself in terms whereof 1%
of the shares in Cuperex had been sold to the trust.
According
to him these shares would be subject to the same session if
Grindrod would be prepared to grant their approval
for the sale.
[13]
When it was put to him that there was no conceivable commercial logic
for the plaintiff to have entered into an agreement of
sale as
explained by the defendant, he replied as follows:
"A
conceivable business logic is very obvious, in that he believed the
business was going to be worth
a
lot more than R83 million by
the time he implemented the technology
... ".
[14]
It was also pointed out to him in cross-examination that he received
the money in his personal account, suggesting a loan agreement
was
entered into as alleged by the plaintiff. He responded by giving the
following explanation:
"The
physical cash transaction was received by me in person. The
accounting transaction which is absolutely verifiable and
I can
show you, went through Turncard to JBH Copper Trust, to JBH for
repayment of the loan of RB million, part payment
of the
loan of RB million which I had made
... ".
DISCUSSION:
[15]
During argument counsel for the plaintiff pointed out that this
is
a
case where there are "two mutually exclusive
possibilities" of what had transpired between the
parties.
He contended that in such a case the
probabilities should indicate what the outcome should be. He argued
that as the probabilities
favour the plaintiff, I should grant
judgment in favour of him.
[16]
Counsel for the defendant argued that there are no probabilities in
favour of the plaintiffs case. She argued that the documents
(to
which reference was made during the trial) do not support the
plaintiffs case but, at least to a certain extent, are in favour
of
the defendant. I should therefore, so it was argued, dismiss the
claim with costs.
[17]
This is a case where there are serious factual disputes to such an
extent that they can be regarded as mutually destructive.
An
assessment of the witnesses and the probabilities will therefore be
necessary. This was explained as follows in
National
Employers' General
Insurance
v
Jagers
1984 (4) SA 437
(E) at 4400-G:
"It
seems to me, with respect, that in any civil case,
as
in any
criminal case, the onus can ordinarily only be discharged by adducing
credible evidence to support the case of the party
on whom the onus
rests. In
a
civil case the onus is obviously not
as
heavy
as
it is in
a
criminal case, but nevertheless where the
onus rests on the plaintiff
as
in the present case, and
where there are two mutually destructive stories, he can only succeed
if he satisfied the Court on
a
preponderance of probabilities
that his version is true and accurate and therefore acceptable,
and that the other version
advanced by the defendant is therefore
false or mistaken and falls to be rejected. In deciding whether
that evidence is true
or not the Court will weigh up and test the
plaintiff's allegations against the general probabilities.
The estimate
of the credibility of
a
witness will therefore be
inextricably bound up with
a
consideration of the
probabilities of the case and, if the balance of probabilities
favours the plaintiff, then the Court will accept
his version
as
being probably true. If however the probabilities are evenly
balanced in the sense that they do not favour the plaintiff's case
any more than they do the defendant's, the plaintiff can only succeed
if the Court nevertheless believes him and is satisfied that
his
evidence is true and that the defendant's version is false."
(See
also in this regard SFW
Group Limited
&
Another v
Martell et Cie
&
Others
2003 (1) SA 11
(SCA) par 5.)
[18]
It is therefore not only desirable but also necessary, in a case like
this, to say something about the credibility and reliability
of the
witnesses. Such an assessment has to take into account the general
context, the witness' candour and demeanour in the witness
box,
internal and external contradictions and the probability or
improbability of particular aspects of his or her version, to
name
only a few considerations in this regard (SFW
Group Ltd
&
Another v Martell et Cie
&
Another, supra,
par 5).
Furthermore, one should distinguish between
bona fide
errors
and an intentional untruth. I have had the opportunity to observe the
demeanour of both the plaintiff and the defendant and
to listen
carefully to their evidence. I did not get the impression that anyone
of them intentionally tried to mislead the Court
or knowingly told an
untruth. It is possible that their evidence with regard to some
incidents is not so reliable and I shall refer
to that later again.
Notwithstanding my observations in this regard, I have no reason to
conclude that they were untruthful. This
is a matter that should be
decided on the evidence and the probabilities.
[19]
I turn now to consider, as a first step, the issues with regard to
the agreement concluded on 6 December 2012 and shall thereafter
consider the question whether a further agreement was concluded
during February 2013 as alleged by the plaintiff. It is the
plaintiff's
case that the first agreement was concluded between
himself and the defendant personally in terms whereof he lent and
advanced
the amount of R833 000.00 to the defendant against transfer
of 1% shareholding in Cuperex as security for repayment of the loan.
According to the defendant this was a sale agreement concluded
between the Trust and Turncard, represented by the plaintiff and
the
defendant respectively in terms whereof the Trust purchased 1% of
Cuperex shares from Turncard for the amount of R833 000.00.
No doubt,
the plaintiff bears the onus of proof.
[20]
In the amended particulars of claim (the final version thereof) it is
alleged that the parties entered into a loan agreement
and that the
transfer of 1% shareholding in Cuperex would be security for
repayment of the loan. This is also the evidence of the
plaintiff who
also demonstrated that the amount in question was transferred from
his account to that of the defendant. Save for
the transfer of the
capital amount, there are various difficulties with the version of
the plaintiff.
[21]
First, on 6 December 2012 when transfer of the capital amount was
made the plaintiff sent an e-mail to the defendant. It says
the
following: "Attached please find the proof of payment for the
purchase
of 1% share of your Cuperex shares" (Exh. "E"
p 13). Second, on 4 February 2013 the plaintiff raised a complaint
about the issued share capital in Cuperex. In an e-mail of even date
he pointed out that "in December the GPF
Trust purchased
1%
from
Tumcard
for R833 000.00" (Exh. "A" p 15).
This e-mail refers to a sale of shares between the Trust and Turncard
and not between
the plaintiff and defendant personally. Third, in a
notice of amendment dated 3 November 2014 the plaintiff indicated his
intention
to amend his particulars of claim (before the final
amendment). In paragraph 4.1 thereof the following was alleged: "On
6
December 2012 and at Johannesburg the Gerhard Pretorius Family
Trust represented by the plaintiff and Turncard Trading 21 (Pty)
Ltd
represented by the defendant entered into an oral sale of shares
agreement ..." (Exh. "D" p 7). Again, reference
was
made to an agreement of sale entered into between the Trust and
Turncard.
[22]
According to the evidence of the plaintiff it was never the intention
to involve the Trust and Turncard as parties to the first
agreement.
It was also submitted on his behalf that, on the probabilities, there
was no conceivable commercial logic for the plaintiff
to have entered
into an agreement of sale. This is supported by the fact, so it was
argued, that the capital amount was transferred
from the plaintiff's
personal account to the defendant's personal account.
[23]
Notwithstanding the fact that the capital amount
was transferred from one personal account to another, the
documentary
evidence does not support the submissions put forward. Furthermore,
the difference between a loan agreement and an
agreement of sale
should be obvious to a reasonable person who involves himself in the
business of a company such as Cuperex. The
reason for entering into
an agreement of sale was also explained by the defendant. According
to him the plaintiff believed that
the business was
going to be worth a lot more than R83 million by the time he would
implement the technology.
I have no reason to reject this
explanation, either because it is false or improbable. Having
regard to all these considerations,
I have to conclude that the
plaintiff was unable to prove his version of the agreement which was
entered into on 6 December 2012.
[24]
I shall now consider the question whether a second agreement was
entered into during February 2013 as alleged by the plaintiff.
It is
the plaintiff's case that the December 2012 agreement (as
alleged by him) was orally amended during February 2013 in
terms
whereof it was agreed that the defendant was released from his
obligation to provide security and that he would repay the
capital
amount on or before 6 December 2013 with interest calculated at 9%
per annum. These allegations are denied by the defendant.
Again, the
plaintiff bears the onus to prove the agreement that he relies on.
[25]
It is common cause that on 3 December 2012 Cuperex concluded a term
loan agreement with the Grindrod Bank in terms of which,
inter
alia,
Turncard was obliged to cede its shares
in Cuperex to the bank
in securitatem debiti.
The
plaintiff testified that, as a result of this cession, it was agreed
between the parties not to proceed with the transfer of
shares in
Cuperex to him as security and that the defendant would repay the
capital amount by the end of December 2013 together
with 9% interest.
During March 2014 a few e-mails were exchanged between the parties
regarding this issue. The first is an e-mail
dated 7 March 2014 from
the plaintiff to the defendant with the subject indicated as "SALE
OF SHARE?" It reads as follows:
"I
forgot to
ask
you about the R833 000.00. My auditors need to
know what
is
happening with it to complete my financials for
February 2014. Last time we spoke you wanted to keep your 1% share
and said that
you would like to give the money back with interest at
a
feasible time? Can you please confirm this and give me an
indication of when you would be able to reimburse me".
[26]
On 9 March 2014 the defendant responded to this e-mail. He said the
following:
"Right
now I propose to stick to the original deal. I can arrange the 1%
transfer tomorrow if you would like. The
most
important thing
right now
is
trying to save this business. Any money that we
have or can scrape together should be focused here. Let's chat in the
morning. I
will send you the shareholders' resolution and proposal
later ..."
[27]
On 10 March the plaintiff replied by saying that: "I propose
that we stick to the new deal that was made last year whereby
you
will pay me back the R833 000.00 with interest at 9% per year".
A few days later the defendant replied by saying: "Can't
discuss
anything if you don't answer phone, SMS or e-mail". On 19 March
2014 another e-mail was sent by the plaintiff to the
defendant. The
subject was indicated as "R833 000.00" and the response was
"What do you propose?".
[28]
The defendant testified with regard to this alleged agreement that if
Cuperex as a business "is producing" and was
also solvent,
he would definitely have "considered purchasing those shares
back". When this was put to the plaintiff
in cross-examination
his reply was: "Ons almal het gehoop die besigheid gaan baie
geld maak, ons almal het ons geld daarin
bele, maar dat ons so 'n
gesprek gehad het, weet ek nie van nie". The fact that Turncard
Trading was obliged to cede its shares
in Cuperex to Grindrod Bank
already during December 2012 was also addressed by the defendant. He
testified that Grindrod would
not have been in a different position,
because "it was just swapping a name on a share and there would
be no value change,
or no value dissolution for Grindrod". Put
differently, they would have had exactly the same shares under
pledge, some of
them registered in a different name if the transfer
had taken place.
[29]
It was argued on behalf of the defendant that there is no prove of an
agreement as alleged by the plaintiff. I am inclined
to agree with
this submission. Taking into account the evidence referred to above,
it seems to me that the plaintiff is confronted
with the following
difficulties: The e-mail of the plaintiff dated 7 March 2014 does not
refer to an agreement at all. The fact
that it refers to the
defendant who wanted to keep his 1% share and that he is
requested to confirm this, creates a
serious doubt
whether the parties had come to an agreement. This is
exacerbated by the fact that the plaintiff
was unable to deny
the defendant's version about this conversation, i.e. that
he would have
considered
purchasing back those shares. It was
only thereafter, on 10 March 2014, that the plaintiff was
referring to a
"new deal that was made last
year whereby you will pay me back the R833 000.00 with interest at 9%
per year".
It is important to take into account, as far as this
allegation is concerned, that the plaintiff's e-mail of 7 March 2014
only
refers to "with interest
at a
feasible
time", not mentioning the interest rate (of 9%) or a
date for repayment, whereas he testified
that the
loan would be repaid by the end of 2013.
[30]
Usually, to ascertain whether there has been agreement one has to
look for an offer and an acceptance of that offer. It is
trite that
instead of signifying acceptance of an offer by written or spoken
words, acceptance may also be inferred from conduct.
Having regard to
the contents of the e-mails and the evidence of the plaintiff and the
defendant with regard to the alleged agreement,
it is difficult to
conclude that, on a preponderance of probabilities, the parties in
fact came to an agreement. Taking into account
all the evidence and
the surrounding circumstances, I am unable to conclude that the
plaintiff has discharged the onus to prove
the existence of the
agreement as alleged by him.
ORDER
:
In
the result I make the following order:
(1)
Absolution from the instance is granted to the defendant on the
plaintiff's claim
as set out in the amended particulars of claim
dated 30 October 2015;
(2)
The plaintiff shall pay the costs of suit.
_______________________
D
S FOURIE
JUDGE
OF THE HIGH COURT
PRETORIA
Date:
4
May 2017
G
P!lETORIUS
'J
8EACHY HEAD_JUOGl,IEN.T_MAY 2017