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[2011] ZAFSHC 55
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Makwaba and Others v Sun International South Africa Ltd (A150/2010) [2011] ZAFSHC 55 (10 March 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Appeal No. : A150/2010
In
the appeal between:-
KWIDI CHRISTOPHER
MAKWABA
…................................
1
st
Appellant
MOLEFI SIMEON
LITHEKO
…...........................................
2
nd
Appellant
ETAPELE INVESTS
(PTY)(LTD)
….....................................
3
rd
Appellant
MATHABA BUSINESS
INVESTMENTS (PTY) LTD
….......
4
th
Appellant
TSELA TSHOEU
INVESTMENTS (PTY) LTD
….................
5
th
Appellant
UMYEZO LEISURE
INVESTMENTS (PTY) LTD
….............
6
th
Appellant
BELEGA
WOMAN’S INVESTMENTS (PTY) LTD
…...........
7
th
Appellant
and
SUN
INTERNATIONAL (SOUTH AFRICA) LTD
…..............
Respondent
_____________________________________________________
CORAM:
WRIGHT, J
et
EBRAHIM J
et
C.J. MUSI, J
_____________________________________________________
HEARD
ON:
24 JANUARY 2011
_____________________________________________________
JUDGMENT BY:
WRIGHT, J
DELIVERED ON:
10 MARCH 2011
INTRODUCTION:
[1] This is an appeal
against the judgment of and relief granted by the Honourable Ms
Justice Van Zyl in this Court on 15 February
2010. The court order is
attached as pages 621 to 622 of the record.
[2] Relief was granted to
the appellants to appeal to this Court by Judge Van Zyl, and the
appeal was heard on 24 January 2011.
[3] In this Court the
respondent is Sun International South Africa Ltd who was the
applicant in the original application. Seven
of the respondents in
the Court
a quo
are the appellants in this appeal to the Full
Bench of this Division. They will be referred to as the appellants.
[4] When the application
was originally lodged, the appellants filed a notice of intention to
oppose the application. But, before
the application was heard, the
legal representatives of the appellants and the respondent agreed to
an order substantially in accordance
with the relief provided for in
the notice of motion and which was then made an order of court on 31
January 2009. This order is
set out in paragraph [1] of the judgment
of the Court
a quo
.
CONCISE HISTORY OF
THE FACTS LEADING UP TO APPLICATION
[5] Prior to 1994 the
respondent obtained a gambling license and conducted a casino in
terms thereof in the vicinity of Thaba Nchu,
which was then situated
in an “independent state” or “homeland”,
Bophuthatswana. This casino, one can accept
or at least safely
assume, afforded a wealth of employment opportunities, and thereby
some financial relief for the inhabitants
of the rural area wherein
Thaba Nchu is situated.
[6] In the latter part of
the 1990’s and anticipating the changes which then were to take
place in South Africa and would,
inter alia
, entail the
legalisation of gambling, the respondent commenced with steps in
preparation of transferring its gambling license to
Bloemfontein.
[7] Considering the
effect which such transferral would have on the community, the
respondent chose to consult with leaders of the
Thaba Nchu Community
clearly in order to obtain support for his proposed application for a
gambling license in Bloemfontein. The
respondent obviously knew that
its application would be fortified if it could show that some of the
gains which would be obtained
by operating a casino in Bloemfontein,
will continue to reach and benefit the Thaba Nchu community.
[8] In order to achieve
this, the respondent planned to obtain a gambling licence in the name
of a separate company to grant shares
in such company to a trust
which would be established for the benefit of the community and to a
company whose shares would in turn
belong to several other companies
and whose shares would be held by individuals, approved by the Free
State Gambling Board, who
could receive profits emanating from the
gambling facilities in the form of dividends. Mangaung Sun (Pty) Ltd
(the tenth respondent
in the original application) became the
separate company and licensee and Thabo Community Trust, which holds
11.1% of its shares,
was established for the benefit of the
community, and plays no part in these proceedings.
[9] According to the
respondent it obtained the services of the first and second
respondents and a certain Dr. Mynhardt to implement
these plans. This
would be done by means of five companies which are the third, fourth,
fifth, sixth and seventh appellants and
which, according to
respondent, were “shelf” companies, and will also be
referred to in these proceedings as shelf
companies. According to the
plan the fourth, fifth, sixth and seventh appellants would each
receive a 25% share in the third appellant
which would directly
obtain certain shares in the company Mangaung Sun (Pty) Ltd, which
company, as mentioned previously, was the
tenth respondent in the
original application. It can also be noted that some of the shelf
companies originally had other names.
[10] According to the
affidavit of Dr. Mynhardt, who conducted this process with the first
and second appellants, the following
was the position (although
disputed to some extent by the appellants):
“
3.2 Die
applikant het my, ter voorbereiding van die oordrag van die lisensie
vanaf Thaba Nchu na Bloemfontein, genader om onder
andere met
agtergeblewe gemeenskappe in Botshabelo en Thaba Nchu distrikte te
skakel ten einde by voormelde agtergeblewe gemeenskappe
vas te stel
wat die gemeenskapspersepsie is en sal wees rakende die oordrag en
verskuiwing van applikant se casino lisensie en
om aan applikant
aanbevelings te maak oor hoe die agtergeblewe gemeenskappe se
behoeftes en verwagtings aangespreek kan word.
3.3 In uitvoering van my opdrag het ek
gesprekvoering tussen die applikant en geselekteerde individue van
die Thaba Nchu-Botshabelo
gemeenskappe bewerkstellig en vir daardie
doel individue geïdentifiseer wat, op sterkte van hulle ervaring
in die gemeenskap,
sinvolle insette kon lewer.
3.4 Ek het onder andere die eerste en
tweede respondente as sodanige individue geïdentifiseer en hulle
is op my aanbeveling
deur die applikant na ‘n vergadering
genooi om voormelde doelstelling aan te spreek en te fasiliteer.
3.5 Die agtergeblewe gemeenskappe het
op ‘n demokratiese proses besluit wat ek kortliks ‘n
loodskomitee sal noem en
ek het besluit dat die eerste en tweede
respondente daarop moet dien.
3.6 Ek was saam met die eerste en
tweede respondente nou betrokke by die strukturering van die
verskillende entiteite wat die applikant
in konsultasie met die
agtergeblewe gemeenskappe en met hulle goedkeuring struktureer het
ten einde die oordrag van die casino
lisensie vanaf Thaba Nchu na
Bloemfontein te fasiliteer.”
[11] Whether a person
qualified to hold shares depended thereon whether such person passed
a probity test applied by the Free State
Gambling and Racing Board
(the third respondent in the original application) but, moreover,
such shareholders need to have been
black in order to comply with
black empowerment legislation and/or policies which the respondent
knew, or envisaged, would be in
place at the time when the
application for the transferral of the gambling licence was to be
considered.
[12] Although the first
and second respondents maintained that they were at least primarily
the representatives of the community,
it was initially agreed between
the respondent on the one hand and respectively the first appellant,
the second appellant and Mynhardt
on the other hand, that each of the
other three would as compensation, or part compensation for their
services, receive or be allocated
.9% of the shares of the company
which would hold the gambling license in Bloemfontein.
[13] However,
subsequently and in June 2004, the respondent paid R200 000,00 to
each of the said gentlemen (1
st
and 2
nd
respondents and Mynhardt) as a first instalment towards a total
payment of R400 000,00 and in October 2005, paid a further R200
000,00 to each of them.
[14] The respondent
mentions in its founding affidavit to the application the following,
which is strenuously denied by the appellants:
“
9.5 The
first and second respondents would, by donation, transfer the shares
in the companies to the shareholders who would be identified
and
qualified to obtain same.
9.6 The first and second respondents
would resign as directors of the shelf-companies and effectively
‘hand’ the shelf-companies
over to the shareholders.
9.7 The first and second respondents
would not no longer hold any shares in either Mangaung Sun or
Etapele, Mathabo, Tsela, Tshoeu,
Umyezo and Belega.”
[15] The appellants’
version is further succinctly summarised in paragraph [14] of the
court
a quo
’s judgment and their reply to respondent’s
main argument (set out in paragraphs [16] to [21] of the judgment) in
paragraphs
[22] to [25] of the judgment.
MAJOR DISPUTE
BETWEEN THE PARTIES
[16] The major dispute
between the parties relates to six documents, which are attached as
annexures “C1” to “C6”
to the founding
affidavit.
[17] The first appellant
was involved in the first of these agreements as set out in annexure
“C1” to the founding affidavit,
and he signed this
document personally. The relevant part reads as follows:
“
We initially
agreed that you would be allocated a shareholding of 0,9% in Mangaung
Sun (Pty) Ltd (“the Company”) in
recognition of and
consideration for the services you had rendered in preparation of the
Company’s bid for a casino licence
at Bloemfontein.
We subsequently agreed. And it is
hereby confirmed, that you will relinquish any right or expectation
in respect of the aforesaid
or any other shareholding in the Company.
In stead, in recognition of and consideration for the aforesaid
services you had rendered,
we shall pay to you the sum of R400 000.00
(four hundred thousand rand) in two equal instalments, as follows:
R200 000.00 forthwith upon the final
and irreversible announcement of the approval of the Company’s
applications to the
Free State Gambling and Racing Board to conduct
a casino operation at Bloemfontein, following, if applicable, the
determination
in favour of the Company of any review, appeal or
other proceedings to which the said announcement may be subject; and
R200 000.00 forthwith upon the
opening by the Company of the aforesaid casino to paying members of
the public.
You undertake that neither you nor any
member of your immediate family, each of whom you hereby represent to
be authorised to bind
hereto, will seek to become a direct
or
indirect
shareholder of the Company, except by means of publicity
traded shares on a recognised stock exchange.”
(My
emphasis)
He also signed annexure
“C2” which contains the following:
“
In terms of
our letter of agreement dated 23 July 2003, payment of the first
instalment of R200 000,00 is now due to you following
the successful
outcome of Mangaung Sun’s application to conduct a casino
project at Bloemfontein.
We take the opportunity to confirm our
understanding that our agreement will furthermore entail that you
will henceforth have no
direct or indirect contact, communication or
liaison with any of the directors, trustees or other decisionmaking
structures of
our company or any of the legal entities which own form
part or are otherwise related or associated to us, in regard to any
aspect
of the business affairs of Mangaung Sun (Pty) Ltd.
Your failure to adhere to this could
jeopardise the second instalment which is still due to you, and also
lead to other steps being
taken against you.”
[18] On 7 October 2005 a
further letter was written on behalf of respondent to the first
appellant which was delivered by hand,
and this document is attached
as annexure “C3” to the founding affidavit. The relevant
portion reads as follows:
“
Attached
hereto is a copy of the letter of agreement entered into with you on
24 July 2003, in terms of which the second and final
instalment of
R200 000,00 will be paid in today or against receipt of your bank
account details.
We take this opportunity to remind you
of the terms of our agreement as set out in the attached letter, and
in particular the undertaking
on the part of you and your family not
to have any direct or indirect shareholder involvement with Mangaung
Sun (Pty) Ltd. We expect
this undertaking to be honoured and will
protect Mangaung Sun’s rights accordingly.”
[19] Similar written
agreements were concluded with the second respondent as will appear
from annexures “C4” and “C5”
and the letter
dated 7 October 2005 (annexure “C6”). It is also common
cause that the first and second respondents
indeed received payment
of the amount of R400 000,00 which amount was also paid to Dr.
Mynhardt.
[20] In the judgment of
the Court
a quo
the abovementioned documents are set out
completely, as well as the appellants’ version with regard to
these agreements as
set out in the opposing affidavit. According to
them the appellants would be entitled to retain their shares in the
shelf companies
and they only signed the documents in question
because if they did not sign, they would forfeit the last payment of
R200 000,00
which would be paid to them as a final payment. They
consequently alleged that there was no consensus between the parties
to the
agreement as set out by respondent. The Court
a quo
therefore, with reference to the three requisites for the granting of
a final interdict, the well-known judgments in
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(AD) at 634 H – 635 C and
COOPERS & LYBRAND AND
OTHERS v BRYANT
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 767 E – 768 E,
considered the various arguments with regard to the agreements relied
upon by the respondent. The Court
a quo
also took pains to
point out that other cases accentuated the fact that businessmen do
not always use language with the precision
which commends itself to
lawyers, and that sometimes the most important agreements are set out
in crude and summary fashion.
[21] The Court
a quo
then proceeded to exhaustively consider all the arguments raised by
the legal representatives of the parties with regard to these
agreements, and its conclusions cannot be faulted as most
(practically all) of these arguments were not repeated in either the
heads of argument filed in this appeal or in the arguments addressed
to the court in this appeal. It is unnecessary to deal with
all these
points, and this judgment will concentrate on the arguments on which
the appellants mainly relied during this appeal.
[22] However mention must
be made of the following conclusions which the Court
a quo
came to:
(a) that there was no
distinction drawn between first and second respondents on the one
hand and Mynhardt on the other hand. It
is clear that Mynhardt was
prepared to accept the amount and was no longer involved in legal
proceedings against the respondent.
(b) With regard to the
argument that annexures “C1” to “C6” only
referred to the ,9% shareholding in Mangaung
Sun (the original tenth
respondent), the Court
a quo
specifically referred to the
following words:
“
We
subsequently agreed and it is hereby confirmed that you will
relinquish any right of expectation in respect of the aforesaid
or
any
other shareholding in the company
.”
(The Court
a
quo
’s
emphasis)
The Court
a quo
therefore came to the conclusion that to accept that the first and
second appellants will retain an indirect shareholding in the
company
(Mangaung Sun) by means of their shareholding in one of the shelf
companies would be inconsistent with the further paragraph
that they
will not in future seek to become indirect shareholders of Mangaung
Sun. It would also lead to an absurdity to interpret
paragraph 2 of
the 2003 agreements to mean, or to have result, that first and second
appellants would retain their indirect shareholding
in Mangaung Sun
because they can obviously not be shareholders in the shelf companies
but then not be allowed to have contact with
the directors etc. of
those companies.
(c) The Court
a
quo
also found confirmation of the aforesaid
interpretation from the relevant background circumstances from which
it was clear to her
that the contract concluded was to cause a
“clean-break” with the first and second appellants. She
then says the following:
“
Both the
representatives of the applicant on the one hand and the First and
Second Respondents on the other hand, at that stage
knew that First
and Second Respondents’ entitlement to a retainer has lapsed,
but that the other two (then still outstanding)
elements or forms of
benefits that were previously discussed and agreed upon to a certain
extent, were the direct and the indirect
shareholding in Mangaung
Sun. These are therefore matters that were probably present to the
minds of the parties when they concluded
these 2003 agreements. With
this in mind, and considering the further contents of the 2003
agreements, as well as that of the 2004
agreements, the words ‘any
other shareholding in the company’ can only be interpreted as
to mean that the parties intended
in that way to refer to the
indirect shareholding by means of the shareholding in Sixth to Ninth
Respondents.”
(d) The Court
a
quo
stated the following with regard to the
2004 agreements:
“
[47] With
regard to the interpretation of the
2004
agreements, I am of the view that the intention of the parties is
very clear from the pain and ordinary meaning of the words used
therein. It is also in no way contradictory to or destructive of the
terms of the
2003
agreements, because it specifically uses the word ‘
furthermore
’
which is indicative of the fact that this agreement with regard to an
undertaking not to have any contact in any manner
with the directors
etc. of
Mangaung
Sun
or
any of the legal entities related to
Mangaung
Sun
,
was a subsequent agreement in addition to the agreement concluded in
2003
.
At the same time it in any event also corresponds with and
constitutes an almost natural consequence of what was previously
agreed
in the
2003
agreements.”
(e) The Court
a
quo
specifically points out why the 2005
letters cannot only refer to the 2003 agreements and not to the 2004
agreements, and concludes
that the primary reason why reference was
made to the 2003 agreements, was to refresh first and second
appellants’ memory
as to why the second payment of R200 000,00
was then due and payable, and nothing more and nothing less.
(f) The Court
a
quo
consequently came to the conclusion that
the contracts in question could not be interpreted as the appellants
alleged in their opposing
affidavits and that appellants attempt to
rely on a lack of consensus with regard to the said agreements could
not be accepted.
(g) The Court
a
quo
also mentions the following with regard
to a possible defence based on undue influence:
“
Insofar as
First and Second Respondents purported to rely thereon that they
entered into the written agreements under undue influence,
they bore
a burden of proof that they are not bound by the terms and conditions
of the agreements on the strength thereof. Respondents
dismally
failed to show this and Mr Daffue, correctly so, conceded this during
his argument.”
[23] With regard to the
applicable company law principles this aspect was never referred to
in argument before this court, and the
Court
a quo
’s
conclusions with regard thereto, as set out in paragraphs 52 to 55 of
her judgement, can be accepted.
THE APPELLANTS’
ARGUMENT RAISED ON APPEAL
[24] Mr. Van Rhyn, who
appeared on behalf of the appellants, argued that in deciding whether
there is sufficient doubt with regard
to respondent’s case, the
court must take cognisance of both parties’ conduct before and
after the agreement in question.
The court should not easily decide
the matter in one party’s favour where there is a factual
dispute which may raise some
doubt with regard to the respondent’s
version. In this regard he then referred to
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
,
supra
, as
confirmed by the Constitutional Court in
THINT (PTY) LTD v
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS AND OTHERS; ZUMA v NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS AND OTHERS
2009 (1) SA 1
(CC)
at p. 18 J, as well as
McCAIN FROZEN FOODS (PTY) LTD v
BEESTEPAN BOERDERY (PTY) LTD
2003 (3) SA 605
(TPD).
[25] Although the final
payments were made to the first and second appellants in October
2005, they were still dealing with the
shares at a much later date.
Mr. Van Rhyn referred in this regard to sub-paragraph 12.6 of the
appellants’ version as set
out in the opposing affidavit. He
also referred to the letter written by respondent on 24 April 2001,
and attached as annexure
“16” in volume 4 of the papers.
This document, however, more readily supports the respondent’s
version and is
dated 24 April 2001, that is before annexures “C1”
– “C6” were written.
[26] The respondent dealt
with this aspect when it became aware that the first and second
appellants were still holding meetings,
and mentions the following in
the founding affidavit:
“
40.2 The
applicant [referring to Sun International] only became aware of the
majority of the facts herein contained and the state
of affairs after
Laura Grobler had consulted with Phatshoane Henney Inc, with whom
Liebenberg is associated, on 16 July 2009. During
her consultation
with counsel on 16 July 2009, Liebenberg telephonically discussed and
pointed out the consequences to me. I immediately
requested a
memorandum setting out same, in order to afford the directors of the
applicant an opportunity to consider the applicant’s
position.
This memorandum was e-mailed to me on 16 July 2009 and it was only on
receipt thereof that the magnitude of matters were
fully realized and
appreciated.”
A good reason was,
therefore, given why no action was taken at an earlier date. Mr. Van
Rhyn however reiterated that this aspect
could only be resolved by
evidence, and therefore requested that if the court did not reject
respondent’s version on the
papers, the matter should have been
referred to oral evidence.
[27] With regard to the
submission in appellants’ heads of argument (though not
mentioned in argument) that Mynhardt would
have received a much
better deal from respondent than first and second appellants (because
he would not relinquish shares in the
third to seventh appellant),
this had been fully dealt with by the Court
a quo
in the
following paragraphs:
“
However,
this submission loses sight of the fact that it is evident from the
aforesaid annexures ‘13’, ‘14’
and ‘16’
that Applicant throughout its dealings and negotiations with the
three promoters, dealt with them on the exact
same footing. At no
stage was any distinction drawn between First and Second Respondents
on the one hand and
Mynhardt
on the other hand. This lack of distinction between them can probably
be explained by the fact that it appears that
Mynhardt
,
at that stage, also received benefits as a result of
Kgutso
Promotions’
indirect shareholding in
Mangaung
Sun
,
as he clearly was involved with
Kgutso
Promotions
,
as was,
inter
alia
,
evident from the following that was stated in annexure ‘14’:
‘
We note your
nomination of dr. Mynhardt as the new Kgotso representative. ... The
nomination of dr. Mynhardt presumably arises from
his participation
in Kgutso Promotions.’
[41] Therefore, in my view, the agreed
benefits (at that time) which the three promoters were to derive as a
result of their services
rendered to and on behalf of Applicant,
consisted, with regard to all three of them, of three elements, being
a retainer fee, promised
direct shareholding in
Mangaung Sun
and benefits via indirect shareholding in
Mangaung Sun
and/or
participation in a company which held or was to hold indirect
shareholding in
Mangaung Sun
.
[42] However, the Applicant avers that
subsequent to the aforesaid agreement and superseding that agreement,
it concluded an agreement
with all three the promoters with the
essential effect that in lieu of all the benefits the three promoters
would previously have
received, they agreed to each receive
R400
000.00
, payable in two payments, on condition that they no longer
have any involvement whatsoever with
Mangaung Sun
and/or Fifth
to Ninth Respondents. Considering that it is evident that First and
Second Respondents during the alleged conclusion
of this agreement,
were no longer receiving any retainer fee and at that stage they
would obviously not have started receiving
any dividends as a result
of their direct or indirect shareholding in
Mangaung Sun
,
Mynhardt’s
allegation to the effect that at that stage
First and Second Respondents were desirous to rather receive the
R400
000.00
instead of the benefits of shareholding, even to the
extent that they did not take up his suggestion that they demand
R500
000.00
, has in my view an inherent credibility to it.”
[28] With regard to the
Court
a quo
’s reliance on
NOVICK
AND ANOTHER v COMAIR HOLDINGS LTD AND OTHERS
1979
(2) SA 116
(W) at 131 A – D, appellants quote from the
following
LAMBONS (EDMS) BPK v BMW (SUID-AFRIKA) (EDMS)
BPK
[1997] ZASCA 51
;
1997 (4) SA 141
(SCA) at 154 C:
“
Ek vind dit
hoogs onwaarskynlik dat 'n groot organisasie soos die respondent so
'n belangrike en ingewikkelde ooreenkoms sommer
informeel met 'n
enkele opmerking oor die telefoon sou sluit.”
In their heads of
argument Mr. Wessels replied to this that the
BMW
matter referred to an oral agreement while the contracts involved in
this matter are in writing, and that the matter is therefore
distinguishable.
[29] All further relevant
arguments raised by appellants are dealt with in the remaining
paragraphs of this judgment.
RESPONDENT’S
REPLY TO THE APPELLANTS’ MAIN ARGUMENT
[30] Mr. Wessels, who
together with Mr. Gilliland, appeared for the respondent argued that
where there is no real, genuine or
bona fide
dispute of fact,
or where the facts which appear in the opposing affidavit are so
far-fetched or clearly untenable that the court
is justified in
rejecting them merely on the papers, the court has a duty to grant an
order in terms of the application. This is
especially so where the
respondent was obliged to approach the court to obtain the interdict.
[31] In this respect Mr.
Wessels referred to the matter of
WIGHTMAN t/a JW CONSTRUCTION
v HEADFOUR (PTY) LTD AND ANOTHER
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) where
the following paragraph is specifically of importance:
“
A real,
genuine and bona fide dispute of fact can exist only where the court
is satisfied that the party who purports to raise the
dispute has in
his affidavit seriously and unambiguously addressed the fact said to
be disputed. There will of course be instances
where a bare denial
meets the requirement because there is no other way open to the
disputing party and nothing more can therefore
be expected of him.
But even that may not be sufficient if the fact averred lies purely
within the knowledge of the averring party
and no basis is laid for
disputing the veracity or accuracy of the averment. When the facts
averred are such that the disputing
party must necessarily possess
knowledge of them and be able to provide an answer (or countervailing
evidence) if they be not true
or accurate but, instead of doing so,
rests his case on a bare or ambiguous denial the court will generally
have difficulty in
finding that the test is satisfied. I say
'generally' because factual averments seldom stand apart from a
broader matrix of circumstances
all of which needs to be borne in
mind when arriving at a decision. A litigant may not necessarily
recognise or understand the
nuances of a bare or general denial as
against a real attempt to grapple with all relevant factual
allegations made by the other
party. But when he signs the answering
affidavit, he commits himself to its contents, inadequate as they may
be, and will only
in exceptional circumstances be permitted to
disavow them. There is thus a serious duty imposed upon a legal
adviser who settles
an answering affidavit to ascertain and engage
with facts which his client disputes and to reflect such disputes
fully and accurately
in the answering affidavit. If that does not
happen it should come as no surprise that the court takes a robust
view of the matter.”
[32] Mr. Wessels also
argued that in an application of this nature, which essentially
entails an order for specific performance
of a prohibition, a
referral to oral evidence will serve no purpose as oral evidence will
most probably not contribute to the question
whether the court should
exercise its discretion to grant an order or specific performance. In
this respect he referred to
TROSKIE EN 'N ANDER v VAN DER WALT
1994 (3) SA 545
(O).
[33] In short, the
respondent argued that according to appellants there was no consensus
when the documents (annexure “C1
– “C6”) were
signed, but they do not explain or accurately reflect why there was
no consensus.
[34] As appears from a
letter written by respondent to the second appellant as early as 24
April 2001 it is set out that the first
and second appellants
received certain sums of money (the first appellant R430 000,00 and
second appellant R143 000,00) to cover
their costs and time (which is
set out in the documents). They also mentioned that they have
completed the period of promoter activity
and that the continuance of
any promoter activity, as well as any remuneration applicable, will
need to be approved by the respondents.
See annexure “16”
on page 283 of the record.
[35] It is also common
cause that the two amounts of R200 000,00 each were paid by the
respondent to first and second appellants
during June 2004 and
October 2005 respectively and that after termination by the
respondent of the promoter relationship with the
first appellant and
second appellant, the latter two could not have acted as promoters on
behalf of the respondents.
[36] The second
appellant’s resignation as the then sole director of Tsela
Tshoeu Investment and Umyezo Leisure Etapele Investments
took place
on 17 June 2003 and 23 October 2003 as appears from annexure “G1”
to the founding affidavit on p. 134 of
the papers, as well as
annexure “D2” thereto on p. 87 of the papers. The first
appellant also resigned as the then
sole director of Mathabo
Investments on 8 July 2003 as appears from annexure “F3”
on p. 102 of the papers. Reference
can also be made to the fact that
the submission of Mathabo Investments membership list to the Free
State Gambling Board, as attached
as annexure “F12” on
pp. 126 – 127, indicates that neither the first nor the second
appellant would be a member,
or a shareholder, of the latter company.
[37] The respondent is in
agreement with the argument raised by the appellants that the court
can look at the events which took
place before and after the
documents in question (annexure “C1” – “C6”)
to interpret these documents
and the abovementioned documents
(referred to in paragraph [36]) and the timing thereof (2003) confirm
the respondent’s version
with regard to what took place
immediately after the signing of the first agreement. (Annexure “C1”
and “C4”
were signed on 24 July 2003.) That was shortly
before the first and second appellants resignations as referred to
above.
[38] Mr. Wessels also
pointed out that the first and second appellants’ version loses
sight of the “Special Terms and
Conditions” attached to
the licence granted to Mangaung Sun, the result of which is that the
shareholding of the empowerment
companies can never be said to be the
appellants’ sole prerogative.
[39] The confirmation of
these aspects can also be inferred from the transferral of shares as
set out in annexure 18C to the opposing
affidavit on p. 294 of the
papers as well as paragraph 1.2 of annexure 26 to the opposing
affidavit on p. 305 of the papers. The
date of the latter document is
March 2007! It is quite clear that the shares had already been
transferred long ago.
[40] One gets the
impression that Mr. Wessels’s argument is correct that the
first and second appellants originally took steps
to implement
annexure “C1” – “C6”, but later changed
their minds and decided to see if they could
reap further benefits
from obtaining, or holding, shares in the companies in question.
[41] With regard to the
appellants’ second ground of appeal as set out in the notice of
appeal (and which was not proceeded
within argument), the respondent
argued that if the court finds that the agreements between the first
appellant and the second
appellant on the one hand and the respondent
on the other is valid and binding then, surely, the respondent may
prescribe the shareholding
of the empowerment company to the extent
and limited thereto that the first appellant and second appellant may
not be shareholders
thereof.
[42] The first and second
appellants’ lame explanation for (and bold and unsubstantiated
averment that) the payment of R400
000,00 and/or the second payment
of R200 000,00 was apparently, and to some extent, accepted under
duress, emphasises their inability
to explain the fact that they,
objectively spoken, and for a considerable period of time, accepted
the terms and conditions recorded
in the letters. The external
manifestation, and subsequent conduct of the parties, confirm the
conclusion of the agreement, for
example:
(a) the first and second
appellants’ resignation as directors of some or all the
empowerment companies; and
(b) the submission of a
members list (of the empowerment companies) which excluded the first
and second appellants.
[43] Mr. Wessels argued
further that the meetings held later (and mainly after 2005) were
unilaterally convened by first appellant
and second appellant to
hijack the empowerment companies. Confirmation thereof is to be
found, according to Mr. Wessels, in the
following:
(a) Paragraphs of the
founding affidavit which read as follows:
“
23.1 I
respectfully refer the Honourable Court to annexure ‘F11’
hereto, being a copy of a letter addressed to the General
Manager:
Free State Operations of the Windmill Casino and Entertainment Centre
(thus the Tenth Respondent). In paragraph 7 of the
letter it is
clearly indicated that one
Fezile
Flip Wetes
is disqualified to be a shareholder of Mathabo Business Investments
(Pty) Ltd. When annexure ‘F9’ and ‘F10’
are
read in conjunction and in context, it is clear that
Fezile
Flip Wettes
was awarded a share in Mathabo. This is but a single example of the
chaos which the First Respondent has and is in the process
of
causing, since the issue of shares to
Wettes
was in disregard of the fact that he never qualified to hold shares
in Mathabo. Such conduct no only prejudiced the Applicant but,
jeopardised the validity of the casino license awarded to the Tenth
Respondent by the Board as the conditions for the license have
thereby been breached.
23.2 To compound the problem, the
First Respondent retained shares in Mathabo despite informing the
Board, as per annexure ‘F12’,
which was an annexure to
Mathabo’s business history disclosure form and which formed
part of Mangaung Sun’s casino
license application, that he
would not be a shareholder of Mathabo. The result thereof is that the
First Respondent was never probed
to qualify to become a shareholder
by the Board, which is a prerequisite for shareholding in Mathabo
(due to the fact that it has
an interest in the gambling industry).
This fact further contravenes the Tenth Respondent’s obligation
to comply with the
casino license conditions.
23.3 Moreover, the First Respondent
has caused himself to be an indirect shareholder of Mangaung Sun, as
he is a shareholder of
Mathabo which, in turn, holds shares in
Etapele which, in turn, holds shares in Mangaung Sun. He also, as a
consequence, has ‘
indirect contact, communication or liaison
with any of the directors, trustees or other decision making
structures of our company
(the Applicant) or any of the legal
entities which own, form part of or are otherwise related or
associated to us (the Applicant),
in regard to any aspect of the
business or affairs of Mangaung Sun (Pty) Ltd
’.”
(b) The second appellant
resigned as a director of Tsela Tshoeu Investments on 8 July 2003.
The second appellant’s contention
therefore that he, during
July 2009, was the sole shareholder of Tsela Tshoeu Investments
despite the terms of his agreement with
respondent, justified the
order that he be prohibited from contravening a meeting of
shareholders of Tsela Tshoeu Investments.
(c) The same argument
applies to second appellant’s involvement in the convening of
meetings of shareholders of Imyezo Leisure
Investments and Belega
Women’s Investments.
[44] Mr. Wessels
therefore argued that the first and second appellants’ role in
convening the meetings, justified the respondent’s
steps to
prohibit any further meetings of the empowerment companies, which
prohibition is clearly aimed at unlawful meetings until
the
shareholding in or of the empowerment companies has been established
by an order of court.
[45] The above
contentions, which can generally be accepted, overwhelmingly refute
the second appellant’s contentions with
regard to the signing
of annexure “C1” – “C6”, and also
confirm that the Court
a quo
was correct in rejecting first
and second appellants’ version as false and untenable, and that
it was entitled to adjudicate
the application on the evidence
presented by the respondent. Although it is not necessary to decide,
as Mr. Wessels contends, that
first and second appellants have (or
attempted to) hijack the shelf companies, it can be concluded that
when considering the facts
and circumstances before and after the
annexure C agreements were concluded, there is no reason to doubt
that these agreements
are binding, and the appeal can therefore not
succeed.
COSTS AND ORDER
[46] Mr. Wessels argued
that the application is voluminous and involved both, in respect of
the facts and the applicable legal principles,
and that the
respondent’s employment of two counsel was therefore prudent.
This was not disputed by Mr. Van Rhyn.
[47] The following order
is therefore made:
1. The appeal is
dismissed with costs.
2. The respondent is
entitled to the costs of two counsel.
______________
G.F. WRIGHT, J
I concur.
_____________
S. EBRAHIM, J
I concur.
___________
C.J. MUSI, J
On
behalf of appellants: Adv. A.J.R. van Rhyn SC
Instructed
by:
Matsepes
Inc
BLOEMFONTEIN
(Ref:
Mr C M du Plooy)
On
behalf of respondent: Adv. M.H. Wessels SC
With
him:
Adv.
J.G. Gilliland
Instructed
by:
Phatsoane
Henney Inc
BLOEMFONTEIN
(Ref:
S Addinal)
/sp