Bonpure (Pty) Limited and Another v Parry and Others (10978/05) [2006] ZAWCHC 19 (17 May 2006)

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[2006] ZAWCHC 19
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Bonpure (Pty) Limited and Another v Parry and Others (10978/05) [2006] ZAWCHC 19 (17 May 2006)

REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO:
10978/05
In
the matter between:
BONPURE
(PTY) LIMITED
First Applicant
RAPHAEL-KATZ,
JOANNE
Second Applicant
and
PARRY,
SIMON JAMES
First Respondent
COX,
GAVIN
Second Respondent
BENFIELD,
MICHAEL JOHN
Third Respondent
WOMANS
PRIVATE EQUITY FUND ONE
Fourth Respondent
JUDGMENT
NTSEBEZA,
AJ:
INTRODUCTION
Joanne
Raphael-Katz, the Second Applicant is a Johannesburg-based
businesswoman who is a sole director of a Johannesburg private
company, Bonpure (Pty) Limited, the First Applicant (“Bonpure”).
Both Applicants (the Applicants) approached this Court as
a matter
of extreme urgency in an application filed on 27 October 2005, in
relation to which I heard hurried arguments on 15 November
2005. I
reserved judgment which I now hand down.
The
Applicants urged me to order, specifically, because on their
argument he was obligated to do so, - Simon James Parry, the First
Respondent (“Parry”) to furnish irrevocable financial guarantees
that were embodied in clause 9 of an agreement - (about which
later)
- concluded between the Applicants and Parry, signed by the
Applicants in Johannesburg on 7 September 2005. This agreement
was
signed at various times, at various places, by various people.
For
the sake of completeness, the agreement, styled “Heads of
Agreement” annexed to the Applicants’ affidavit as “JK 2”,
was signed in Johannesburg by the Second Applicant on 7 September
2005, on her own behalf as well as on behalf of her company,
Bonpure
(Proprietary) Limited. It was also signed by one Michael John
Benfield, Third Respondent (“Benfield”), against whom
no relief
is sought, and who is a businessman in Johannesburg, on the same day
as the Applicants, and by one Gavin Cox, Second
Respondent (“Cox”),
also a Johannesburg-based businessman, also against whom no order is
sought. Cox signed the agreement
on 14 September 2005. Exactly the
same agreement, annexed to the Founding Affidavit as
“JK 3”
was signed by Parry at Constantia, Cape Town on 9 September 2005.
Clause
9 of the agreement reads as follows:-
“
SP [Simon
Parry] agrees to furnish adequate irrevocable financial guarantees
issued by a registered commercial bank and/or financial
institution
whose identity is acceptable to the party in favour of whom the
guarantee is issued in respect of SP’s obligations
to BP as
described in 6 above, within 14 days of the date of signature of
these heads of agreement. These guarantees will be issued
in favour
of JK for the obligations referred to in 6.1, 6.2 and 6.3, in favour
of WPEF for the obligations referred to in 6.6 above
.”
Relying
on this clause, the Applicants, in essence moved this Court urgently
seeking an order for specific performance of an agreement
to pay
Bonpure the sum of R28,5 million rands in accordance with Clause 6
of the agreement over and above furnishing the guarantees
as
aforesaid. In paragraph 3 of their notice of motion, the Applicants
set out a timetable, in accordance with which Parry must
inject
funds contemplated in the agreement. According to the schedule,
some monies were supposed to have been paid “immediately”,
some
even before the case was argued – R8 million on 31 October 2005, -
which would have been barely 3 days after the Applicants
had filed
their papers for the very first time in the case.
The
Applicants claimed that the matter was being brought by way of
urgency, and on motion because “no dispute of fact exists or
is
reasonably anticipated”, and also because Parry’s “repudiation
of the agreement has catastrophic implications for the
Applicant”.
If the relief was not granted, so it was submitted, the Applicant
would fail as a viable business entity and would
be forced into
liquidation, with a number of parties being severely prejudiced.
Applicant’s business opportunity would be lost
forever. I was
urged to ensure, by granting the application, that Parry’s
“unconscionable” repudiation of the agreement
should not be
countenanced coming as it did at an inopportune time for the
Applicants, just as they were poised for tremendous
success in this
country and abroad, and for which venture, the injection of the
requisite funds and the furnishing of the guarantees
were the life
blood.
This
application is resisted by Parry on several bases, principal amongst
which are what Parry understands as “five (5) conditions
precedent” to which the agreement itself is subject. The actual
payment of the money itself, as far as Parry is concerned, was
expressly made subject to the fulfilment of the five conditions
precedent. One of the issues I have to decide, therefore, is

whether Applicants have made out a case for the payment to them of
the R28,5 million, given the conditions and obligations embodied
in
the Heads of Agreement (the Agreement).
FACTUAL
BACKGROUND
The
Second Applicant claims that she set up Bonpure as a vehicle for the
exploitation of a chemical product in the domestic and
industrial
water cleaning business, claimed to be “
highly effective in
disinfecting and sanitizing water
”. The product is called
O2H. According to Raphael-Katz, the business would succeed only
with a substantial capital injection
from an outside investor.
Against that backdrop, Parry proposed an acquisition by him of 75,1%
of Bonpure’s shares for which
he would inject R28,5 million
capital into the business. A due diligence having been conducted
for Parry by Benfield, and Parry
having been satisfied with the
result thereof, the Agreement was concluded, clause 4 of which
mentioned the five conditions precedent.
According
to Raphael-Katz, she and Bonpure have complied with all of the
obligations imposed upon them by the Agreement, over and
above the
fact that the conditions precedent themselves had been fulfilled.
Before I look at the evidence in the papers, from
which I will have
to determine whether in fact the suspensive conditions were
fulfilled and whether the Applicants had indeed complied
with all of
the obligations imposed upon them by the Agreement, which they claim
they have, but which Parry denies, it is apposite
to reproduce the
five conditions precedent here before evaluating the evidence and
factoring in the arguments by Counsel before
me on the 15
th
November 2005.
THE
CONDITIONS PREDENCENT
Clause
4 of the Agreement expressly provided that the Agreement would be
subject to the following five conditions precedent, namely:-
That
Raphael-Katz purchase the 40% shareholding in Bonpure currently
held by the Fourth Respondent, the Womens Private Equity
Fund
(WPEF), for a consideration not exceeding R1,2 million, in terms of
a sale agreement to be concluded and signed prior to
all agreements
pertaining to this transaction being signed;
That
Raphael-Katz assign all patents relating to water purification to
Bonpure;
That
Raphael-Katz agree to a service agreement with Bonpure for the
position of marketing director for a fixed two-year term with
effect from 1 September 2005 to 31 August 2007, at a cost to the
company of R600 000,00 during the first year, increased by no
less
than CPI during the second year;
That
Second Respondent (Cox) and Third Respondent (Benfield) agree to
personal terms with Parry in relation to a shareholding
in Bonpure
of at least 10% each, and also agree with Parry as to the
mechanisms by which they can increase their shareholding
to
Bonpure; and
That
Cox and Benfield agreed to service contracts with Bonpure.
Counsel
for Applicants argued that the first three conditions, whose
fulfilment depended on Raphael-Katz herself, had been properly
fulfilled. For example, it was argued, the agreement to sell,
contemplated in 4.1 of the Agreement for the purchase of the
requisite
shares, (“
purchase
” being the operative word),
had been signed by both parties on 26 October 2005. Equally,
condition 2 had been fulfilled inasmuch
as there had been an
assignment made in writing, and the response by Parry that
Raphael-Katz had provided no proof of the fulfilment
of these
conditions, was merely seeking to create a dispute of fact that was
opportunistic and fanciful, and that Parry was clutching
at straws
in order to avoid his obligations under the Agreement.
Condition
3 had also been fulfilled, Raphael-Katz’s direct evidence as
deponent together with supporting documents being conclusive
of the
fact that the condition had been fulfilled. Mr Wynne, Counsel for
the Applicants, referred me to e-mail correspondence
between
Raphael-Katz, Benfield and Cox, between 27 September 2005 and 13
October 2005, from which it is clear, it was argued, that
the
service agreement contemplated in 4.3 of the agreement had been
agreed to, and that Parry was wrong in thinking that there
was a
business risk in the condition the nature of which warranted him
withdrawing his support from it.
With
respect to the two remaining conditions, - and it was argued that
there was little the Applicants could do anything about those,
having been clearly inserted for the Parry’s benefit, - on a
proper evaluation of the evidence, there were indications that Parry
had conducted himself bound by agreements which could only be in
place because these conditions had been fulfilled. Parry had
paid
R1,5 million as contemplated in the Agreement, had apologised for
“
letting everyone down
”. In the light of these
indications, he had waived any right upon which he could rely for a
claim that the conditions precedent
had not been fulfilled. Given
the evidence indicating that he himself considered himself bound by
the agreements – the payments
and the apologies, and so on – it
could not be accepted that he should now contend that the conditions
had not been fulfilled.
It was argued that his conduct was such
that even if he had established non-fulfilment of the conditions,
this Court would be
justified in deeming them to have been
fulfilled. In any event, Mr Wynne argued, the conditions precedent,
whether or not they
had been fulfilled, had no relationship to the
obligation that Parry had under clause 9, which called upon him to
issue the requisite
guarantees within 14 days of the signature of
the Agreement. It was submitted that this obligation had to be
complied with, regardless
of whether the conditions precedent had
been fulfilled or not.
In
supplementary heads of argument handed up during argument, Mr Wynne
argued that the first three conditions had been proved to
have been
fulfilled on the unassailable” facts put up by the Applicants.
The facts were “
unassailable
” because, despite claims by
Parry that there was a massive dispute of fact, on a proper analysis
of the evidence, I would find
there was no “
bona fide
dispute of fact
”. Mr Wynne argued that with respect to the
first condition, the fact that the sale agreement contemplated
thereat, evidencing
the rights and obligations of the parties to
that sale may be subject to further revision and signature was
irrelevant. What was
germane was that the sale had taken place as
required by the clauses.
With
regard to the second condition, the evidence showed that patents had
been transferred as had been claimed by Raphael-Katz.
Parry’s
denial that this was so was dismissed as being “
unconvincing
”.
Parry’s evidence was that various documents had been provided
purporting to evidence assignments on 16 September 2005.
However,
Parry deposed, it was not apparent whether what was assigned was the
amended (non-combustible) product, consequent upon
which he could
not deal with the matter any further on the basis of the documents
provided.
With
regards to the service contract with Bonpure, it was argued that
Raphael-Katz had agreed with the terms thereof. It was not
necessary that this agreement should have been in writing. As for
the fourth condition that Cox and Benfield should agree personal
terms with Parry in relation to a shareholding in Bonpure, the
condition had either been fulfilled on the facts (despite denials
by
Cox and Parry), or it had been waived because of the clear and
unequivocal acknowledgements of the binding and unconditional
nature
of the obligations under the Agreement which had led Parry to
“
implement”
the Agreement and apologise “for letting
everyone down”.
Further,
on the facts, it was argued, the fifth condition that Cox and
Benfield “agree to service contracts with Bonpure”, had
also
been fulfilled. Parry himself had acknowledged that Cox and
Benfield were managers in Bonpure and held his “
proxy
”.
Benfield having failed to file an affidavit, and it being Parry who
relies on the failure of the fulfilment of this condition
as its
defence, it was up to them to put up convincing argument that
Parry’s conduct, in paying the R1,5 million, and in apologising
for his decision not to comply with the Agreement, was not conduct
from which I could reasonably infer that he had waived compliance
with the condition. It was conduct, I was told, that could only
have been consistent with an unequivocal intimation that Parry
intended to be bound by the contract, and to proceed with it.
For
these submissions, Mr Wynne relied on a speech by Marais J in
Westmore
v Crestanello and Others
1
in
which, in an analogous scenario, the learned judge had held that a
contract became “unconditional by means of a waiver of the
subject
to bond clause” after having found, in that case, that
“…
an unequivocal intimation that the
Applicant intended to be bound by the contract, and to proceed with
it”, even though, as a matter of fact, there had not been
compliance with the bond clause. However, in that case, the
Applicant had informed the Respondents that guarantees would be
furnished
by the due date. Marais J had held that in the
circumstances, the Applicant was entitled to enforce her bargain,
and that “there
is no reason in law or in equity not to order
specific performance”. In this case, Mr Wynne argued, I was
confronted with a
“
simple
case of a buyer’s remorse
”
who wishes to wriggle himself out of a contract validly entered
into, and for which I ought to order specific performance.
RESPONDENT’S
CASE
Mr
Dickerson, appearing for Parry, and relying also on Heads apparently
prepared by Mr Farlam (who apparently had been Junior Counsel
to Mr
Hodes), raised, in oral argument what I understood to be two
templates from which he launched his attack on the Applicant’s
case. The first position he took was that the Applicants must make
out a case that unequivocally demonstrates the fulfilment of
all
five conditions-precedent for them to succeed. This is a case that
must be made on proof that all five conditions were met.
By its
very nature, therefore, it is a case that cannot be made by reliance
on a “
fictional fulfilment
” of any of the conditions, or
by a resort to an argument based on a presumed “
waiver
”
of the conditions by Parry. If the facts showed there were
conditions that had not been fulfilled, either because no proof
could be proffered by the Applicants, or the facts relied upon by
them were disputed,
cadit quaestio
; the application
could not succeed.
I
must confess that I am inclined to agree with this argument. A
waiver is not a remedy that can be resorted to lightly, particularly
in application proceedings. Referring me to
Amler
,
2
Mr
Dickerson argued that waiver is a question of fact, with the party
relying on waiver having to allege and prove the waiver on
a balance
of probabilities.
[See:
Borstlap
v Spangenberg
.
3
]
In
assessing the probabilities, the factual presumption that a party is
not likely deemed to have waived his rights, should be borne
in mind
as clear evidence of a waiver is required.
[See:
Feinstein
v Niggli
.
4
]
In
my view, the upshot of this stringent test for alleging waiver of
rights is that a party that seeks to rely on waiver in application
proceedings must be reasonably confident that there will be no
bona
fide
dispute of facts. If there is or are disputes, as Mr Dickerson
argued, the law as commanded by
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
5
will apply.
It
is trite that the
Plascon-Evans
(supra)
case is authority – sometimes much abused – for the
proposition that where, as here, Applicants in motion proceedings
seek final
relief, the Courts accept Respondents’ version where
there is a
bona fide
dispute of fact. Insofar as the
Applicants justify their application for final relief by arguing
that there is no
bona fide
dispute of fact, I
therefore hold that the above statement of the law, as commanded by
Plascon-Evans
(
supra
) is common
cause between the litigants in this case.
The
question to be answered is therefore whether the evidence
indisputably shows all the conditions to have been fulfilled, or

whether there is a
bona fide
dispute, the nature of
which would bind me to follow
Plascon-Evans
(
supra
), and accept the Respondent’s version in the
event of such a dispute. Mr Dickerson argued that I would find such
a dispute,
over and above finding that, in any event, not all of the
conditions had been fulfilled. With regard to the notion of
fictional
fulfilment of a condition, Mr Dickerson argued that Mr
Wynne’s submissions thereanent could not be supported – neither
by the
facts nor by the application of legal principles. For legal
authority, he relied on
Amler
(
supra
)
where the learned author writes that a party alleging fictional
fulfilment of a condition must allege and prove:
the
non fulfilment of the condition; and
that
the breach of duty by the Defendant was committed with the intention
of frustrating that condition’s fulfilment.
[See:
Scott
v Poupard
.
6
]
The
second main plank from which Mr Dickerson launched his attack on the
Applicants’ case was that an order for specific performance
would
be inappropriate in this case. For one thing, there was no evidence
that would justify any of the prayers contemplated in
the timetable
set out by the Applicants in Prayer 3 of their Notice of Motion.
For another, as was acknowledged by the Applicants
themselves –
(although they were emphasizing another point) – some of the
conditions (Conditions 4 and 5) were
not
in the power of
Parry to fulfil, the cooperation of Cox and Raphael-Katz being key
to their fulfilment. In the circumstances,
an order for specific
performance as claimed was quite clearly inappropriate, it was
argued.
Mr
Wynne had earlier submitted that this Court, in a Full Bench
decision – (see:
Santos
Professional Football Club (Pty) Ltd v Igesund and Another
7
)
- had held that specific performance was a remedy invented in order
to meet cases where the ordinary remedy by an action for damages
is
not an adequate compensation for breach of contract. Whereas in
English common law specific performance was a supplementary
remedy,
Mr Wynne, on the strength of this authority, and in view of his
submission as to how the evidence showed that Parry was
reneging on
a commitment to be bound contractually because all the conditions
had been fulfilled and the Applicants’ obligations
in terms of the
agreement were all met, submitted that this was an appropriate case
in which I should order specific performance
as prayed and as a
primary remedy than as a supplementary one.
Mr
Dickerson, however, countered this argument by pointing out that
although the Court will, as far as possible, give effect to
a
Plaintiff’s choice (Applicants in this case) to claim specific
performance, it has a discretion in a fitting case to refuse
to
decree specific performance and leave the Plaintiff, as it was held
in
Haynes
v Kingwilliamstown Municipality
,
8
“to claim and prove his
id
quod
interest”. As it was held in
Haynes
(
supra
),
the discretion, although exercised judicially, is not confined to
specific cases, nor is it circumscribed by rigid rules. Each
case
must be judged in the light of its own circumstances. Mr Dickerson
submitted that regard must be had to the evidence, but
more
importantly, to the case made out by the Applicants in their
founding papers. Applicants had relied principally, on a claim
that
all the suspensive conditions had been met that would justify the
order for specific performance; in answering these claims,
Parry had
actually exposed the hopelessness of the Applicant’s case, a case
which could not be cured by them seeking to make
out another case –
waiver, fictional fulfilment, and so on, - in reply. Under those
circumstances, to compel Parry to perform
as claimed would be, in
the words of the
Haynes
(
supra
)
case,
“
out
of all proportion to the corresponding benefit to the Plaintiff, and
the latter could equally be compensated by an award for
damages
”.
I
am in respectful agreement with these submissions. Indeed, Parry,
in my considered opinion, in his Answering Affidavit, successfully
undermined the basis of the Applicants’ case. I say so fortified
in my analysis by the fact that in the event of a clear
bona
fide
dispute of facts, I will be guided by the Respondent’s
version on the disputed facts.
In
the view that I have taken of the evidence, and the legal principles
applicable to the facts of this case, I do not intend to
dwell at
length on an analysis of the evidence that shows the weakness of the
Applicants’ case, save merely to mention some aspects
that stand
out. Firstly, the Applicants moved this Court for specific
performance on the basis that all five conditions precedent
had been
fulfilled, and that they had met all their obligations in terms of
the Agreement. However, even they (in reply) did not
persist that
all
the conditions were met, certainly the last two
conditions pertaining to agreements between Cox, Benfield and Parry,
and service
agreements between Cox, Benfield and Bonpure. When once
even they made the concession that one or more of the conditions had
not
been fulfilled, the case upon which they came to Court for an
order for specific performance cannot be sustained.
Nor
can it be permissible, further, for them to seek to make a different
case in reply in which they claim that Parry waived compliance
with
the fulfilment of the suspensive conditions. It just is not done.
[See
the very recent judgment of this Court in
Body
Corporate Shaftesbury v Rippert’s Estate
.
9
]
In
any event, that the last two remaining conditions have not been
fulfilled is manifest from the evidence. Cox had not signed
any
service agreement with Bonpure at the time this Court was moved, nor
was there any attempt to do so, neither had he seen any
draft. The
Agreement in clause 4.5 contemplates the conclusion of this
agreement as a condition precedent. His sworn testimony
in this
regard cannot be trumped by the Applicants, by them relying on an
inconclusive e-mail which in and of itself can never
be the basis
for me concluding that Cox read the contract (draft), let alone that
he signed it. He said under oath that he had
not been shown even
the draft contract appended to the founding papers.
Cox,
in his own words, did not conclude any agreement with Parry (or with
Benfield and Parry) regarding taking shares in Bonpure,
nor has he
any intention to do so, nor has he ever seen a draft shareholders’
agreement. Given that Cox was supposed to benefit
from the
inclusion of the conditions, and the fulfilment thereof, it cannot
be suggested, seriously, that he wilfully frustrated
their
fulfilment when that was evidently supposed to be for his own
benefit. The truth is, it seems to me, that the conclusion
of these
service contracts was something in relation to which he had an arms
length relationship, so to speak. He was a passive
investor, hence
he had given his proxy to Cox and Benfield to carry out all
management functions.
It
has also been submitted that the Applicants’ argument that the
unfulfilled conditions were imposed solely for the benefit of
Parry,
who now must be deemed to have waived them, is untenable. Firstly,
they were not for Parry’s benefit. Secondly, no evidence
had been
referred to that Parry deliberately and consciously waived any
rights conferred upon him by the Agreement. Thirdly, condition
4.4
was manifestly for the benefit of Benfield and Cox. Fourthly, the
much relied upon payment of R1.5 million and apology as
indiciae
of a waiver of rights and an acknowledgement of being contractually
bound cannot be reasonably held to be indicative of an intent
by
Parry to abandon any of the rights he has under the Agreement.
I
agree.
Clear
proof of an intention to waive rights must be provided by the party
alleging such waiver. Insofar as Mr Wynne was urging
me to infer
waiver from Parry’s conduct – payment of the R1,5 million, and
so on – he must satisfy me that this conduct was
an unequivocal
pointer to an intention on Parry’s part to waive the fulfilment of
the conditions conceded by the Applicants not
to have been
fulfilled. Looking at Parry’s whole conduct, and not merely at an
element or two thereof, I am not satisfied that
the instances relied
upon manifest a behaviour on the basis of which I can conclude,
unequivocally, that Parry who must have known
what his rights were,
nonetheless intended to surrender them. I cannot, with respect, go
that far on the evidence before me.
[See
generally:
Road
Accident Fund v Mothupi
10
and
Victoria
Falls and Transvaal Power Co Ltd v Consolidated Langlaagte Mines
Ltd
.
11
]
Besides,
this Court has expressed its misgivings about the appropriateness of
deciding an issue such as waiver in application proceedings.
[See:
De
Villiers v Pyott
.
12
]
It
has also been submitted on behalf of Parry, that at least four of
the conditions were not satisfied, and that the Applicants
have in
any event not performed all their obligations under the agreement,
either timeously, or at all. Once again, in the view
that I have
taken of this case, it is unnecessary for me to make a detailed
analysis of the evidence in order to agree with the
submissions made
by Mr Dickerson in this regard. A cursory glance at the evidence, –
and the annexures, – for example, will
show that the agreement
contemplated in 4.1 of the Agreement, which envisages it being
concluded “
prior to all agreements pertaining to the
transaction being signed,
” had not yet been concluded or
signed when these proceedings were launched. The best that can be
said is that there was a first
draft in circulation. That is not by
a long way sufficient.
Equally,
the 40% of Bonpure shares from WPEF which Raphael-Katz was supposed
to have purchased had not been bought yet, nor had
there been any
delivery of either the guarantee or payment of any money
contemplated in the Agreement. Parry had himself stated
that he had
never been asked for any indemnity to protect any former WPEF
nominee directors on the Bonpure board from any claims
from Bonpure
creditors, as contemplated in the Agreement.
It
was further contended on behalf of Parry – and this in fact, was,
according to Mr Dickerson, the crux of the matter – that
it is
indisputably clear from the facts that the fixed two-year service
contract with Bonpure that was intended to be agreed to
by
Raphael-Katz had not happened, as required by clause 4.3 of the
Agreement. This is the clause that provided for Raphael-Katz
to
hold the position of marketing director at an agreed salary.
Contrary to Raphael-Katz’s contention that this condition had
been
fulfilled, the evidence showed that the agreement she annexed to the
Founding Affidavit as proof of fulfilment was merely
an unsigned
draft, incomplete in many ways. That agreement was not even capable
of being fulfilled in view of developments that
had led to a
suggestion that the Heads of Agreement should be altered to provide
for Raphael-Katz concluding a two-year
Consultancy
Agreement
(my emphasis), (as against her taking a position of marketing
director) with Bonpure on terms mutually acceptable to
her and
Parry. However, no such amendment of the agreement had taken place.
The upshot was that not only had the service agreement
not
been concluded as contemplated in clause 4.3; it was now not even
feasible under the new proposed terms.
Further,
the submission was made that in the absence of documentary or any
other evidence, Raphael-Katz was in no position to state
authoritatively that a condition that envisaged personal terms being
agreed between Parry, Cox and Benfield with regards to the
participation of Cox and Benfield in Bonpure had in fact been
fulfilled. If anything, contrary to Raphael-Katz’s
ipse
dixit
that the condition had been fulfilled, evidence proves
otherwise. Both Parry and Cox, under oath, have denied that any
service
agreements have been signed. Benfield himself has not even
deposed to an affidavit in these proceedings. Even when
Raphael-Katz
sought to “
confirm
” that indeed this
condition had been fulfilled, by referring to a “
shareholders
agreement
” (to be concluded between her, Parry and Bonpure,
and, potentially, Benfield), this agreement turned out to be a first
draft
for discussion purposes only. That is a position far removed
from one in relation to which a claim can be properly made, that a
condition precedent has been fulfilled.
I
have already referred to the fact that evidence by Cox, stated
unequivocally, is that not only has Cox not concluded any service
contract (between him and Bonpure or Benfield); he does not intend
to conclude any. The documents, once again, relied upon by

Applicants as proof of the conclusion of the service contracts,
turned out to be draft unsigned agreements, notably incomplete,
and
about which I need say no more in this judgment. In the Heads on
behalf of Parry, it is also submitted that Parry has stated
categorically that Raphael-Katz has not transferred any shares to
him, nor could she have tendered same because she had not yet
received transfer of WPEF’s 40% shareholding in Bonpure that would
have enabled her to transfer 75.1% of Bonpure shares to Parry.

Parry’s obligation to pay any money to Bonpure in terms of clause
6 of the agreement – or in terms of any provision in the
agreement
– is subject to the fulfilment of the five conditions precedent.
There can be no basis, therefore, for me ordering
Parry to act in
terms of his undertaking to pay R28,5 million to Bonpure.
Applicants cannot ask for Parry’s reciprocal obligations
to be
performed at this stage, when they have not met their side of the
bargain in the many ways indicated above. A contract has
no legal
effect if the suspensive conditions to which it is subject have not
been fulfilled.
In casu
, because the suspensive
conditions to which the agreement is subject have not been
satisfied, the agreement is still inchoate,
and thus devoid of legal
effect.
[See:
De
Villiers and Another NO v BOE Bank Ltd
.
13
]
In
the light of the conclusion that I have come to, it becomes
unnecessary for me to deal with other submissions in the First
Respondent’s
Heads, save only to state that I am in respectful
agreement with the sentiments stated therein as issues that have not
been addressed
by the Applicants in argument. As I stated at the
beginning of this judgment, I cannot fathom the basis of the demands
made in
paragraph 3 of the Applicants’ Notice of Motion. For
example, they demand that I should order Parry to pay R21 million
immediately
(whenever that is), R1 million in November 2005, R1
million in December 2005 and various amounts up to September 2007.
In the
end, Parry would end up paying R5,7 million more than the
R28,5 million contemplated in the agreement. How can I then order
specific
performance in such circumstances? The order would quite
clearly be incompetent, let alone that I have not been able to find
any
basis for ordering the payment of the monies demanded, and them
to be paid at the times stated in paragraph 3 of the Notice of

Motion.
CONCLUSION
In
all the circumstances of this case, I have come to the conclusion
that this application cannot succeed. The application is dismissed
with costs, such costs to include the costs consequent upon the
employment of two Counsel.
______________________________________________
D
B NTSEBEZA
Acting
Judge of the High Court of South Africa
Date
of Hearing: 15 NOVEMBER 2005
Date
of Judgment: 17 MAY 2006
For
the Applicants:
ADV G WYNNE
Instructed
by:
MARTINI & PATLANSKY
JOHANNESBURG
SMITH
TABATA BUCHANAN BOYES
CAPE
TOWN
For
the First Respondents:
ADV J DICKERSON SC
and
ADV PBJ
FARLAM
Instructed
by:
SONNENBERG HOFFMAN & GALOMBIK
CAPE TOWN
1
1995 (2) SA 733
(W) at 739 C-H
2
LTC Harms:
Amler’s Precedents of Pleadings
,
Fifth edition
3
1974 (3) SA 695
(A)
4
1981 (2) SA 684
(A)
5
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
6
1971 (2) SA 373
(A)
7
2003 (5) SA 73
(C)
8
1951 (2) SA 371
(A)
9
2003 (5) SA 1
(C)
10
2000 (4) SA 38
(SCA)
11
1915 AD 1
12
1947 (1) SA 381
(C) at 387
13
2004 (3) SA 1
SCA