THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Appeal Case No: A187/2024
Case No: 466/15
Before the Hon. Justice s Dolamo et Mantame et Slingers
Hearing: 22 January 2025
Judgment Delivered: 17 March 2025
In the matter between:
CONCARGO (PTY) LTD Appellant
(first defendant a quo)
and
DAVID JOHNSON First Respondent
(first applicant a quo)
DAVID ALEXANDRA KRUYER Second Respondent
(third defendant a quo)
BEVERLY KRUYER Third Respondent
(fourth defendant a quo)
NKOSINATHI CHONCO Fifth Respondent
(fifth defendant a quo)
JANINE BERANDETTE CONRADIE Sixth Respondent
(sixth defendant a quo)
GREGORY BATHURST TIGHE Seventh Respondent
(seventh defendant a quo)
This judgment is handed down electron ically by c irculation to the parties’ legal
representatives’ email addresses. The date of hand -down is deemed to be 17 March
2025.
___________ _______ ___________________ _________________________ _____
JUDGMENT
__________ _____ _______________________________________ _____________
SLINGERS J
INTRODUCTION
[1] The appellant appeal s against an order and judgment granted by the court a
quo in terms whereof it had to pay R1 million rands, interest and costs to the
first respondent as restitution following the cancellation of an oral agreement.
In this appeal, the appellant raises numerous grounds. However, the
contentious issues turned on :
(i) whether the first respondent established which of the two
alternative agreements (sale of shares with the second
respondent or a subscri ption for shares with the appellant) was
the true agreement;
(ii) whether the first respondent discharged the onus of proving
either of the agreements he relied upon;
(iii) whether the judgment was correctly granted against the
appellant on the facts found by the co urt a quo; and
(iv) whether the acceptance of the first respondent’s evidence over
that of the second respondent who testified for the appellant in
the court a quo was a proper evaluation of the evidence led.
[2] The appeal is opposed by the first respondent .
BACK GROUND FACTS
[3] The first respondent met the second respondent , in 2009 whereafter their
respective companies conducted business together. Over time the first and
second respondent’s relationship developed from a business relationship into
a personal one, wi th the second respondent becoming one of the first
respondent’s best friends. They visited each other’s hom es, went for meals
and spent weekends staying in each other’s houses.
[4] Towards the end of 2012, the first and the second respondents started
discuss ions regarding the first respondent’s involvement in the appellant .
These discussions took place when the first and the second respondent would
meet and speak on the phone and as the first respondent testified, it ‘ just
developed’1. This was echoed by the second respondent who testified that he
and the first respondent had many, many conversations and that the y pieced
together in their minds how they would envisage a relationship and how they
would deal with one another and what opportunities the future m ay hold.
[5] The first respondent testified that he held a number of discussions with the
second respondent pertaining to him becoming a shareholder in the appellant .
During December 2012 the first respondent moved to Johannesburg on the
understanding that he would establish a branch and be a director of Concargo
Distribution , and that he would be representing the appellant in
Johannesburg.
[6] The first respondent testified that towards the end of April 2013 they had
agreed that he would invest one-million -rand (‘R1 million’ ) into the appellant
and in return he would be given a five percent (‘5%’) shareholding therein.
The first respondent assumed that this 5% shareholding would come from
either the second respondent or both the second respondent and his wife , as
they were , in his understanding , the existing shareholders of the appellant .
1 Vol 1, p age 66, ln 11- 18
[7] The first respondent testifi ed that d uring July 2013 he paid the R1 million rand
into the cheque account of the appellant . He also testified that payment into
this account was done on the second respondent’s instruction . The first
respondent testified that the second respondent had told him that he wou ld
receive 5% shareholding in exchange for the R1 million -rand investment ,
which he had no reason to disbelieve . However, notw ithstanding the payment
of the R1 million -rand investment , the first respondent did not receive the 5%
shareholding.
[8] The second respondent testified that it was his understanding that the
payment of R1 million rand was made with the objective of funding C oncargo
Distributions Johannesburg and that the money would be accounted for on a
managed – report basis on a monthly basis to see what the drawdown was.2
[9] The second respondent denied that he had told the first respondent to
deposit R1 million rand into the appellant’s account and assumed that he had
done so as that was the account number he had in hand. It was the second
respondent’s evidence that he understood that the Johannesburg office would
be operated at first respondent’s risk.3 It was never their agreement that the
first respondent would receive 5% shareholding in the appellant . The
payment of the R1 million rand was simply an at-risk investment.
[10] During January 2015 the first respondent instituted action proceedings against
the appellant and second to seventh respondents.4 He pleaded that he and
the appellant , who was duly represented by the seco nd respondent ,
concluded a verbal subscription agreement .
[11] In terms of this subscription agreement, the first respondent would pay the
appellant the amount of R1 million rand and in return he would receive 5% of
the total issued share d capital of the appellant.
2 Vol 3, page 275, ln 9 -15
3 Vol 3, page 279, ln 10 - 15
4 In the court a quo the first respondent was the plaintiff and the appellant was the first defendant.
[12] The first respondent duly paid the appellant the amount of R1 million rand but
was not issued with the 5% of the appellant’s total issued shar ed capital . It
was the first respondent ’s case that the failure to issue him with the shares
constituted a repudiation of the subscription agreement . The first respondent
elected to accept the appellant’s repudiation and to cancel the subscription
agreem ent. As the appellant failed and/or refused to return the amount of R1
million rand, the first respondent instituted action proceedings against the
appellant for payment thereof.
[13] On 26 February 2024, the court a quo found that:
‘40. In the premises, I fin d that Johnson has succeeded in establishing the
existence of an agreement with Concargo on the terms allege d. It is
common cause that Johnson paid the R1 million to Concargo but did
not receive the promised shares. He is accordingly entitled to
restitut ion of the amount he paid to Concargo.’
[14] On 31 May 2024 the court a quo granted the appellant leave to appeal to the
full court. It is this appeal which serves before us.
COMMON CAUSE FACTS
[15] The first and the second respondents were good friends who shared almost
all information when it came to business and their private lives.5 It is common
cause that they concluded an oral agreement . However, the terms and the
nature thereof are disputed. It is also common cause that the first respondent
paid an amount of R1 million rand into the appellant’s account.6 The first
respondent trusted the second respondent and there was no reason for him to
disbelieve the second respondent when he told him that he was a
shareholder.7
5 Vol 3, page 256, ln 16 -19
6 Vol 3, page 270
7 Vol 4, page 331, ln 10 -19
GROUNDS OF APPEAL
ONUS
[16] The appellant av ers that the court a quo erred and misdirected in finding that
the first respondent discharged the onus he b ore in order to obtain judgment
in his favour. Th is ground of appeal is based on the manner in which the first
respondent pleaded his cause of acti on. In the main he alleged the
conclusion of a subscription agreement and in the alternative he alleged a
contract of sale of shares . While both the subscription agreement and the
contract of sale of shares agreement result in the acquisition of shar es, they
differ in respect of the merx and identity of the seller.
[17] The second respondent testified that the cont ractual relationship with the first
respondent was finalised over tim e and that it was:
‘...based on many, many conversations with Mr Johnson, we so rt of pieced
together in our minds how would envisage or see a relationship. ... So we
were just putting down ideas of how we envisaged we would deal with each
other and what opportunities there may lie in the future.’8
[18] It is clear from the evidence, as ex hibited by the above excerpt , that the
parties adopted a flexible approach to the conclusion of the ir agreem ent and
that the exact terms and nature thereof were not foremost in their minds or
their primary concern .
[19] Consequently, i t fell to the court to det ermine whether the parties intended to
bind themselves and t he terms to which they intended to be bound.9 The
context and the factual matrix within which the agreement was concluded
were material to this determination.
8 Vol 3, page 257, ln 24 – page 258, ln 5
9 Novarti s SA (Pty) Ltd v Maphil Trading (Pty) Ltd 2016 (1) SA 518 (SCA)
[20] The oft repeated dictum of Lord Wr ight in Hillas & Co Ltd v Arcos Ltd 147 LTR
503 at 514 that:
‘Business men often record the most important a greements in crude and
summary fashion; modes of expression sufficient and clear to them in the
course of their business may appear to those unfamil iar with the business far
from complete or precise. It is accordingly the duty of the Court to construe
such documents fairly and broadly, without being too astute or subtle in
finding facts.’
seems appropriate to the facts of this case.
[21] Although the dict um referred to written agreements , it would equally be
applicable to verbal agreements. It is more likely t hat businessmen would be
less precise with their modes of expression when concluding verbal contracts.
Therefore, it would be the duty of the court to consider their expression s of the
agreement fairly and broadly, with a robust approach to factual findings.
[22] When the flexible approach adopted by the parties to their agreement is
considered together with the fact that the first and the second responde nt held
each other in a position of trust , then the court a quo cannot be faulted for
adopting a robust appr oach in making factual findings in respect of which
party’s version to accept.
[23] The court a quo correctly found that there was an irreconcilable c onflict of
versions in respect of the nature and terms of the oral agreement concluded.
Furthermore, that this conflict had to be resolved by the application of the test
set out in Stellenbosch Farmers’ Winery Group Ltd v Martell et Cie (‘the
test’).
[24] After applying the test, the court a quo found in favour of the first respondent’s
version. An acceptance of th is version mean t that the court a quo accepted
the first respondent’s evidence that it was the parties’ intention that he pay the
appellant R1 mill ion rand in exchange for five percent of its total shareholding.
It matters not that the first respondent did not know who the seller was when
all his negotiations were conducted with the second respondent , who he
understood to be the shareholder and cont roller of the appellant.
[25] Therefore, there is no merit in the ground of appeal that the first respondent
failed to discharge his onus as a result of pleading both a subscription
agreement and the alternative of a contract of sale of shares.
INCORRECT PA RTY TO MAKE RESTITUTION
[26] The second ground of appeal is that the court a quo erred and misdirected
itself ‘in granting judgment against the appellant when, to the extent that the
court accepted any evidence as to the nature of the agreement, it was that the
agreement was the second alternative agreement, viz. an agreement of sale,
yet it held [that] the appellant liable to be liable, when the appellant could only
be held liable in terms of the first alternative agreement.’10
[27] The court a quo found that the first respondent had established the existence
of a subscription agreement and not a contract of the sale of shares
agreement. As correctly stated in the appellant’s heads of argument, in such
circumstances it is the appellant who would be liable.
[28] It is trit e that the pleadings establish the issues. No evidence need s to be
presented in respect of common cause fac ts and/or issues . To present
evidence on common cause issues and/or facts would serve no purpose other
than to incur unnecessary costs and to waste judicial resources. It is in
respect of disputed issue s and in respect of factual disputes that evidence
must be presented as these require judicial adjudication. A court is not called
upon to make findings in respect of common cause issues . Therefore, it is no t
required to lead evidence thereon.
10 Paragraph 25 of the appellant’s heads of argument.
[29] In paragraph 9 of the amended particulars of claim the first r espondent pleads
that:
‘During or about December 2012 and at Cape Town, the plaintiff, in his
personal capacity, and the first defendant, duly repre sented by the third
defendant (the third defendant also acting as a representative of a company
to be formed) concluded an oral agreement (“the first agreement ”).’
[30] In paragraph 11 of the ame nded particulars of claim the first respondent also
pleads that:
‘Contemporaneously with the negotiation and conclusion of the first
agreement, the plaintiff and the first de fendant, duly represented by the third
defendant , concluded a further oral agreement (“the subscription
agreement”). ’
[31] The first respondent proceeds to set out the express, alternatively tacit,
alternatively implied terms of the subscription agreement which include that
he would pay the appellant the amount of R1 million rand in respect of
subscription for 5% of the total issued share capital of the ap pellant.
[32] In pleading to paragraph 9 of the amended particulars of claim the appellant
admitted that it was represented by the third respondent when it concluded
the first agreement.11 The appellant denied the contents of paragraph 11 of
the amended particu lars of claim and went on to plead that:
‘10.2 The Defendants admit that during or about July 2013, the Plaintiff and
the First Defendant, represented by the Third Defendant, concluded an
oral agreement in terms whereof it was agreed that the Plaintiff wou ld
invest the sum of R1 million in the establishment of a subsidiary branch
of the First Defendant in Johann esburg, being the Second Defendant.’
11 Vol 1, page 47 , paragraph 9.1
[33] It is clear from the pleadings that although the appellant disputed the nature
and terms of the agreement, it d id not dispute the averment that the appellant
was duly represented by the third respondent in its business dealings with the
first respondent . Furthermore, the averment that the agreement was
concluded between the first respondent and the appellant was n ot disputed.
[34] In the circumstances, the submission that the court a quo erred in directing
the appellant to make restitution cannot be sustained.
THE REJECTION OF THE SECOND RESPONDENT’S VERSION AND THE
FINDING THAT THE SECOND RESPONDENT WAS UNRELIABLE
[35] The further grounds of appeal are that the court erred and misdirected itself in
rejecti ng the second respondent’s version and in finding that he was
unreliable. I deal with these grounds of appeal together in the judgment.
[36] It is trite that a n appeal court has limited power to interfere with a trial court’s
factual findings. This follows from the principle that a trial court’s factual
findings are presumed to be correct and may only be disregarded if the
recorded evidence shows them to be clearly wrong. Pu t differently, an appeal
court may interfere with a trial court’s factual findings if it committed
demonstrable and material mis-directions.12
[37] Similarly , in respect of credibility findings, an appeal court must be deferential
and slow to interfere with the trial court’s credibility findings, unless it is
convinced on a conspectus of the evidence that the trial co urt was clearly
wrong.13 It has repeatedly been said that the trial court is steeped in the
atmosphere of the trial and has had the advantage of obs erving , assessing
and evaluating the demeanour of the witnesses, which the appeal court does
not have.14
12 S v Monyane and Others 2008 (1) SACR 543 (SCA) a t para [15]
13 S v Pistorius 2014 (2) SACR 315 (SCA) at p ara [30]; see also S v Kebana [2010] 1 All SA 310
(SCA) at para [12]
14 ibid
[38] An appeal court may only reject the trial court’s assessments if it is convinced
that it erred in its assessments. Doubt on the part of the appeal cou rt is not
sufficient to overturn the trial court’s assessments. When determining
whether or not to overturn the trial court’s assessment, the appeal court must
not only consider the trial court’s findings but also its reasons for the
findings.15
[39] I turn now to the evidence.
[40] In both the appellant’s as well as the first respondent’s versions, it was agreed
that the first respondent would make payment of R1 million rand to the
appellant. It is clear from the second respondent’s evidence that he was
surprised when the first respondent deposit ed money into the appellant’s
account.16 Furthermore, the second respondent testified that the defendants
had not provided the first respondent with any instruction in respect of which
banking account to use in which to depo sit the R1 million rand.17 This
evidence is inconsistent with the pleaded case. On the appellant’s version the
first respondent would invest R1 million rand at risk . Therefore, even on this
version the appellant would have been expected to provide the fi rst
respondent with the necessary payment details and would have expected
payment of the R1 million rand. He would not have been surprised by it.
[41] The first respondent’s evidence was also inconsistent in respect of Concargo
Distribution Cape’s role in fund ing Concargo Distribution (Johannesburg). He
initially testified that there would be no demand on the head offices’ finances
as Concargo Distribution (Johannesburg) would operate financially
independently and that the first respondent had made a capital i njection to
cover all the expenses and disbursements in the foreseeable future.18 This
was inconsistent with his later evidence that Concargo Distribution Cape
would fund the Johannesburg office.19
15 Gijana and Another v S (CA 58/2017) [2018] ZAECMHC 47 ( 14 August 2018)
16 Vol 3, p age 270 ln 14 – page 271, ln2
17 Vol 3, page 271, ln 2 - ln 6; page, 275 ln 22
18 Vol 3, page 279, l n 2-7
19Vol 3, page 294 - 295
[42] During the first respondent’s cross examination it was put t o him that the
second respondent and his wife could never have been the sellers of shares
as they were not the owners thereof. However, it is clear from the second
respondent’s evidence that he did not consider his lack of ownership of
shares as a barrier to transferring equity to the first respondent .
[43] The second respondent readily admitted that he held the pro spect of the first
respondent becoming an equity partner as a carrot. 20 Furthermore , on 19
June 2014 the second respondent sent the first responden t a WhatsApp
message informing him that he would not entertain parting with equity.21 It is
implicit in this message that the second respondent could elect to part with
equity if he so chose and that he was not being prevented from doing so.
Furthermore, the second respondent testified that prior to July 2014, he would
have parted with equity but changed his mi nd as of July 2014.22 This
evidence supports the conclusion that he could have parted with equity, if he
wanted to and that it was within the second respondent’s ability to make the
first respondent a shareholder.23
[44] Even if the second respondent did not have the right to part with equity, he
certainly created the impression with the first respondent that he could part
with equity. This is eviden t from the email dated 25 September 2013 when
the second respondent wrote to the first respondent that ‘...I have committed
to sell you equity...’ 24
[45] During cross - examination, the first respondent testified that it was the second
respondent who decided on the f igure of 5% of the shares that would be given
to him in exchange for payment of the R1 million rand.25 This was not denied.
20 Vol 4 page 310, ln 3 - 19
21 Vol 6, page 561 , ln 29
22 Vol4, page 309 ln 8
23 Vol 4, page 342, ln 8 - 18
24 Vol 5, page 470
25 Vol 2
The determination of the figure of 5% of the shares is inconsistent with an at-
risk investment narrative .
[46] In my view it cannot be f ound that the court a quo committed any material or
demonstrable misdirections in respect of its factual and credibility findings and
there is no basis on which to overturn or interfere with it.
[47] Therefore, I would make the following order:
(i) the appeal is di smissed with costs, which costs shall be on scale B
_____________________
SLINGERS J
I agree. It is so ordered.
_____________________
DOLAMO , J
I agree.
____________________
MANTAME , J