IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION – MAHIKENG
Case No: 4804 / 2024
In the matter between:
HENDRIK CHRISTOFFEL BREEDT 1 st APPLICANT
CHRISTO BREEDT 2 nd APPLICANT
CHRISTELLE MAREE (BORN BREEDT) 3 rd APPLICANT
And
LYNX INTELLIGENT SOLUTIONS (PTY) LTD 1 st RESPONDENT
JCQUES GENTLE 2 nd RESPONDENT
LYNX SECURE (PTY) LTD 3 rd RESPONDENT
JIMMY’S SECURITY CC 4 th RESPONDENT
BOALEMANG JIM MOLEFE 5 th RESPONDENT
WES TRANSV AAL SEKERHEIDSDIENSTE BK 6 th RESPONDENT
TUMELO ISAK MARCH 7 th RESPONDENT
CORNELIUS JACOB OOSTHUIZEN 8 th RESPONDENT
WTSS GUARDING (PTY) LTD 9 th RESPONDENT
MULTILAYER TRADING 444 CC 10th RESPONDENT
JAN CAREL DE BEER 11th RESPONDENT
THE COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION 12th RESPONDENT
CORAM: MAODI AJ
Date judgment reserved: 20 November 2025
Judgment is handed down electronically by distribution to the parties' legal
representatives by e-mail. The date that the judgment is deemed to be handed
down is 26 March 2026 at 1 Oh 00.
ORDER
1. Each party to pay their own costs in respect of part A
2. The application is granted in respect of prayers 1 to 9 of the amended
notice of motion.
3. The first and second respondents are ordered, jointly and severally
the o ne paying the o ther to be absolved, to pay costs o n scale C
including costs of counsel.
JUDGMENT
MAODIAJ
Introduction
[ 1] This is an application to declare certain contracts void ab initio and to have
members ' interest restored to the sellers. There are other ancillary orders
sought, amongst which is the delivery or return of certain assets. Only the
first, second, third, sixth, ninth and tenth respondents participated. I was
informed that the third respondent is a non-entity. The eighth and eleventh
respondents filed affidavits explaining their positions on the matter.
[2] The matter consisted of two parts, with part A being an urgent application
for an interdict and part B being the remedy sought. Part A was granted by
agreement between the parties on 21 October 2024. However, the costs of
part A were reserved for consideration in part B.
[3] The applicants' claim is set out in part B of the amended notice of motion
as follows:
" 1. That it be declared that the written agreements refe1Ted to as Annexures
"F A3 to "FA 7" to the founding affidavit are unenforceable and invalid from the
beginning (void ab initio ).
2. That the first, second and third respondents jointly (the one complying the
other to be absolved) be directed to deliver, within 14 days of this order, to the
applicants, or their representatives (duly authorised in writing):
(a) The assets contemplated in paragraph 1. 1 (including all the sub
paragraphs thereof) of the written agreement, (between Wes Transvaal
Sekerheidsdienste CC and Lynx Secure (Pty) Ltd (Annexure "F A6" to
the founding affidavit in this application).
(b) The assets contemplated in paragraph 1.1 (including all the sub-
paragraphs thereof) of the written agreement between WTSS Guarding
(Pty) Ltd and Lynx Secure (Pty) Ltd (Annexure “FA7” to the founding
affidavit in this application).
3. That the first applicant is entitled to submit the necessary documents to the
“Companies and Intellectual Property Commission of South Africa” (CIPC, the
twelve respondent) in order to have:
(a) his resignation as a member of the fourth respondent close
corporation (Jimmy’s Security CC) in the records of the CIPC reversed
and to have him reinstated as a member of that close corporation with a
49% membership interest; and
(b) the membership interest of Boalemang Jim Molefe (the fifth
respondent) in the latter close corporation amended from 100% to 51%.
4. That the first applicant is entitled to submit the necessary documents to the
CIPC in order to have:
(a) his resignation as a member of the sixth respondent close corporation
(Wes Transvaal Sekerheidsdineste CC) in the records of the CIPC
reversed and to have him reinstated as a member of that close
corporation with a 100% membership interest; and
(b) to have the names of second, seventh and eighth respondents
removed as members of that close corporation.
5. That the second and third applicants are entitled to submit the necessary
documents to the CIPC in order:
(a) to have their resignations as members of the tenth respondent close
corporation (Multilayer Trading 444 CC) I the records of the CIPC
reversed and to have them reinstated as members of that close
corporation each with a 50% membership interest, and
(b) to have the names of the second, eighth and eleventh respondents
removed as members of that close corporation.
6. That the second applicant is entitled to submit the necessary documents to the
CIPC in order:
(a) to have his resignation as a director of the ninth respondent company
WTSS Guarding (Pty) Ltd in the records of the CIPC reversed and to
WTSS Guarding (Pty) Ltd in the records of the CIPC reversed and to
have him reinstated as a director of that company; and
(b) to have the names of the second and eighth respondents removed as
directors of that company.
7. That the second, seventh, eighth and eleventh respondents be and are hereby
directed to sign all documents which are in law necessary to be signed by them
in order to give effect to the orders in the aforegoing paragraphs, within 7 days
from the date on which they are presented with the relevant documents and are
requested in writing by or on behalf of the applicants to sign same.
8. That, in so far as any of the respondents herein are ordered or directed to sign
any documents within a specified period of time and such respondents should
fail or refuse to sign such documents within the specified period of time, then
and in such event the Sheriff of the above Honourable Court be authorised and
directed to sign the relevant documents for and on behalf of the relevant
respondents.
9. That the CIPC, twelfth respondent, be authorised and directed to give effect
to the orders herein above in so far as they related to it.
10. That the first, second and third respondents pay the costs of this application
jointly and severally, the one paying, the other to be absolved and that, in the
event of any of the other respondents opposing this application, the opposing
respondents pay the costs of this application jointly and severally with the first,
second and third respondents, the one paying, the other to be absolved.
11. Further and/or alternative relief.
11A. In the alternative to the finding of invalidity in paragraphs 1 above,
and to the extent of it being found by the Honourable Court that the said
agreements are enforceable, then and in such event the applicants seek
the following orders:
11A.1 That it be declared that the said written agreements have been
duly cancelled.
11A.2 That the first, second and third respondents jointly (the one
complying the other to be absolved) be directed to deliver (within 14
days of this order, or such longer period that the applicants might agree
days of this order, or such longer period that the applicants might agree
to in writing) one thousand five hundred (1 500) monitoring clients of
the first, second or third respondents and all the accompanying
operational equipment, between Wes Transvaal Sekerheidsdienste CC
and Lynx Secure (Pty) Ltd (Annexure “FA6” to the founding affidavit
in this application) and in clause 9.7 of the written agreement between
WTSS Guarding (Pty) Ltd and Lynx Secure (Pty) Ltd (Annexure “FA7”
to the founding affidavit in this application).”
First to Third Applicants’ case (Applicants)
[4] The first respondent is a registered company , with the second respondent
being the sole director thereof. The second respondent is a business man
who conducts security business in Lichtenburg under the first respondent.
He is cited in his personal capacity, in his capacity as director of ninth
respondent as well as in his capacity as member of close corporations
referred to herein.
[5] The third respondent is an entity with whom the first applicant concluded
a sale agreement. The sale agreement refers to the third respondent as a
company with the same registration number as the first respondent.
However, the third respondent is in fact not registered under the said
registration number or at all with the CIPC as a company. The fourth
respondent is a registered close corporation. The fifth respondent is a
businessman, owner and holder of 51% membership interest in the fourth
respondent. Before the sale of his (first applicant’s) membership interest in
the fourth respondent, the first applicant and fifth respondent were the only
two members of the fourth respondent.
[6] The sixth respondent is a registered close corporation. By the time the
various agreements were entered into, the first applicant was the sole
member of the sixth respondent. However, relevant company documents
show that after the agreements were concluded on 31 August 2020 and the
first applicant resigned as member, the second, seventh and eighth
respondents were registered as members of the sixth respondent. The
seventh respondent is a businessman and holder of 51% membership
interest in sixth respondent. The eighth respondent is a businessman and
holder of 25% membership interest in the sixth respondent. The eighth
respondent is also a director of the ninth respondent and has membership
interests in sixth and tenth respondents.
[7] The ninth respondent is a registered company. By the time the various
agreements were entered into, the second applicant was the only director
of the ninth respondent. However, relevant company documents show that
after the agreements were concluded on 31 August 2020 and the second
applicant resigned as director, the second and eighth respondents were
registered as directors of the ninth respondent. The second applicant cannot
recall that he had resigned as director of the ninth respondent, but by the
time he was called to sign the relevant agreements, he was provided with
many documents and was told by the second respondent’s attorneys that
his signature was required on the said documents in order to give effect to
the said agreements. He therefore sign ed the documents without reading
same and in the bona fide belief that they were so required.
[8] The tenth respondent is a registered close corporation. By the time the
various agreements were entered into, the second and third applicants were
the only (equal) members of the tenth respondent. However, relevant
company documents show that after the agreements were concluded on 31
August 2020 and they both resigned as members, the second, eighth and
eleventh respondents were registered as members of the tenth respondent.
The second and third applicants cannot recall that they had resigned as
members of the tenth respondent, but by the time they were called to sign
the relevant agreements, they were provided with many documents and
were told by the second respondent’s attorneys that their signatures were
required on the said documents in order to give effect to the said
agreements. They therefore signed the documents without reading same
and in the bona fide belief that they were so required.
[9] The eleventh respondent is a businessman and holder of 33% membership
interest in the tenth respondent. The twelfth respondent is the Companies
and Intellectual Property Commission (the CIPC).
[10] The first applicant has, since approximately 1993 and over a period of
years, conducted a security business in the name of a number of legal
entities. During or about August 2020 he sold and transferred the business
(legal entities) and the assets thereof by means of five separate written
agreements. However, unbeknown to him, the agreements were, for a
number of reasons, null and void. On the other hand, the purchasers failed
to make full payment of the purchase price in terms of the agreements and
if the agreements are found not void ab initio, he cancels the agreements.
He seeks an order that the agreements be declared void ab initio, orders for
return of goods sold in terms of the agreements, interim relief and related
relief as sought in the notice of motion.
[11] In summary, the nature of his business is that contracts were entered into
with various businesses and owners of private as well as government
properties (the clients). The clients’ properties were connected to a security
system on computer in the control centre at his business premises where an
alarm system would indicate whenever there occurred any attempt to enter
unlawfully the premises of a client. In reaction to such alarm, armed
security personnel would then visit the client’s premises in an attempt to
prevent any unlawful entry to that property and to safeguard, in so far as
possible, the said property and people lawfully on it against any damage or
harm. Armed security guards were also provided to guard properties of
clients upon request. Clients compensated his business on an agreed fee.
[12] At all relevant times and up to the sale of the business, the first applicant
was the holder and owner of 49% membership interest in the fourth
respondent while the fifth respondent held 51% membership. The fourth
respondent was used as a vehicle to conduct his business with Wonderstone
Mine near Ottosdal since the client insisted on security services who are
“BEE compliant”. At all relevant times and up to the sale of the business,
the first applicant was the holder and owner of 100% membership intere st
in the sixth respondent. The bulk of his business was conducted through
the sixth respondent.
[13] The ninth respondent was registered in 2016 when the second applicant
joined first applicant in business. The second applicant was the only
director of the ninth respondent. The second and third applicants were
equal (50/50) holders of membership interests in the tenth respondent.
Although the third respondent was registered 50% membership interest in
the tenth respondent, she was not involved in the business and derived no
benefits or responsibilities. Her membership was supposed to be
transferred to first applicant but the business was sold before that could be
given effect to.
[14] During July or August 2020, the second respondent, who was conducting
a security business similar to that of the first applicant in Lichtenburg,
showed interest in buying the first applicant’s business. The purchaser was
to be the third respondent. Negotiations were conducted over a period of
time with the assistance of second respondent’s attorney, Mr Ruan Le
Roux. By August 2020 the negotiations culminated in the parties reaching
consensus on the terms of the proposed sale of the business to second
respondent and/or entities under his control.
[15] The terms of the agreement were set out in a letter attached to founding
affidavit as “FA2”. However, it was agreed that the second respondent’s
attorneys would prepare legal documents in line with the said letter. Shortly
thereafter, the first applicant received a bundle of documents amongst
which there were the five different written agreements he was told
represented the terms of sale. The said documents were also made available
to the second and third applicants for signature. He is not legally trained
and relied on the word of second respondent’s attorney by signing the
documents without reading them in the bona fide belief that they were in
order.
[16] Contract 1 was signed on 31 August 2020 and attached as “FA3”. This
agreement provides for the sale of 49% of his membership interest in fourth
respondent to the third respondent. In terms of clause 3 thereof, the
purchase price was R 3 million of which R 2 million was payable on or
before 15 September 2020 which was indeed paid. The balance of R 1
million was payable in instalments with the last payment to be made
on/before 31 October 2025.
[17] Contract 2 was signed on 31 August 2020 and attached as “FA4”. This
agreement was between the second respondent and the second applicant
together with the third applicant who were holders of membership interest
in the tenth respondent. In terms of the agreement, the second applicant
sold 50% membership to the second respondent. Clause 5.1 provided that
the purchase price was R3, 5 million payable in sixty monthly instalments
starting 30 September 2020.
[18] Contract 3 was signed on 31 August 2020 and attached as “FA5”. The
contract was between the third applicant and eighth respondent. The terms
of the contract are similar to contract number 2. Contract 4 was signed on
31 August 2020 and attached as “FA6”. This contract was between sixth
respondent represented by first applicant and third respondent represented
by second respondent. In terms of the contract, sixth respondent sold its
assets, (lis t provided), to third respondent. Clause 5.1 provided that t he
purchase price was R 182 532, 17 payable in instalments.
[19] Contract 5 was signed on 31 August 2020 and attached as “FA7”. The
contract was between ninth respondent represented by second applicant
and third respondent represented by second respondent. The ninth
respondent sold its assets to third respondent. Claus e 4 provided that the
purchase was R 968 250, 70 payable in instalments.
[20] By the time the agreements were entered into, all movable assets of the
respective entities were in the possession of the first applicant at his
business address. Pursuant to the sale agreements, all assets were delivered
to the second respondent. Neither the first, second or third applicant can
remember signing any document in terms of which they resigned as
members of directors of the entities. However, they established this fact at
some point. This is because many documents were placed before them and
they were under a bona fide belief that the said agreements were valid.
[21] The CIPC reports show that the first applicant resigned as member of
fourth respondent on 1 September 2020 and that the fifth respondent
remained the sole member (contract 1). This is wrong because in terms of
clause 2.2 ownership, risk and benefits attaching to membership interest
will pass to purchaser upon payment of consideration set out in clause 3.
In terms of clause 3 consideration will only be paid in 2025. His
membership as reflected on the CIPC report is premature and in conflict
with the agreement.
[22] In respect of tenth respondent, the CIPC report shows that the second
applicant and third applicant resigned as members on 25 January 2021 and
that the second respondent and eighth respondent became active members
whilst eleventh respondent became member on 17 February 2021 (contract
2).
[23] In respect of sixth respondent the CIPC report shows that the first applicant
resigned as member on 16 September 2020 and that second respondent
became member on the same date while eighth and eleventh respondents
became members on 1 December 2020 (contract 4). In terms of contract 4,
only assets were sold and not members interest. The first applicant’s
resignation is not in line with the agreement. In respect of ninth respondent
the CIPC report shows that the second applicant resigned on 25 January
2021 and that both second respondent and eighth respondent were
appointed as directors (contract 5).
[24] Pursuant to conclusion of the agreements up to 30 November 2023, the
second respondent made monthly payments into a bank account in the
names of first applicant in the amount of R 100 375, 63 and into a bank
account of second applicant in the sum of R 36 000, 00. Since December
2023 the second respondent made monthly payments of R 36 000, 00 into
second applicant’s account. In addition thereto, a monthly amount of R
3 042, 20 into the first applicant’s bank account instead of a full amount of
R 100 375, 63. There is a substantial amount due and payable.
[25] Paragraphs 15 and 16 of the applicants’ founding affidavit provide grounds
for stating that the agreements are void ab initio as follows:
“15.1 I did not, at the time of the signing of the agreements, know why it was
necessary to draw five agreements but that was the advice of the said Mr Ruan
Le Roux which advice the other applicants and I then accepted as correct.
However, the agreements are all linked to one another and were clearly drawn
in order to jointly achieve one purpose, namely to effect the sale and transfer of
my business to Mr Gentle or to entities under the latter’s control and that in the
event of one of the agreements falling away, then the entire group of agreements
would fall away.
15.2 In this regard I say that all agreements contain the following clause (I refer,
as an example, to clauses 6.3 and 6.3.1 to 6.3.5 of the said agreement number
1). The latter clauses provide as follows:
‘6.3 This agreement is complemented by 4 other agreements (totalling 5
agreement). The 5 agreements are generally and individually referred
to as:
6.3.1 the C Maree sale of membership interest agreement (Multilayer
CC);
6.3.2 the C Breedt sale of membership interest agreement (Multilayer
CC);
6.3.3 the Wes-Transvaal Securitisation Services (Pty) Ltd agreement;
6.3.4 the Wes-Transvaal Guarding agreement; and
6.3.5 the Jimmy Security CC agreement.’
15.3 Clause 6.4 of the agreement number 1 is also relevant in this context and
reads:
‘If a party to thus agreement breach any of his/her/its obligations in
terms hereof and the agreement is cancelled by the aggrieved party (as
regulated hereinabove), the aggrieved party is entitled to also, at
its/his/her sole and absolute discretion, cancel all the other contracts
referred to hereinabove. To this end, the parties agree that breach of
any of the party’s obligations in terms of this agreement will constitute
a breach of the terms of the other agreements.’
15.4 For the sake of clarity I reiterate that all the other agreements have
clauses (although differently numbered) which are identically worded as the
clauses referred to in the previous two sub-paragraphs mutatis mutandis to
provide for the relevant changes of parties etc.
15.5 I therefore say that the agreements, properly interpreted, provide that if
one of the agreements would fall away, the rest of the agreements would also
fall away.
16. Again acting on legal advice, I respectfully say that the said agreement
number 1, referred to above, is for at least three reasons invalid from its
beginning (void ab initio).
16.1 Firstly, in terms of this agreement I sold my 49% membership interest in
Jimmy’s Security CC to an entity described in the agreement as a company:
Lynx Secure (Pty) Ltd (the third respondent). In this regard I refer to the
following further facts:
16.1.1 A company is not in law entitled to hold any membership in a
close corporation. Section 29(1) of the Close Corporation Act, 1984 (Act
Number 69 of 1984) in this regard provides:
‘(1) Subject to subsection (1A) or (2)(b) and (c), only natural persons
may be members of a corporation and no juristic person or trustee of a
trust inter vivos in that capacity shall directly or indirectly (whether
through the instrumentality of a nominee or otherwise) hold a member’s
interest in a corporation.’
16.1.2 The exceptions referred to in sub-sections (1)(A) and 2(b) and
(c) of the latter section are not relevant for present purposes.
16.1.3 Consequently the third respondent company (Lynx) was not
capable in law to enter into that agreement which renders the agreement
null and void.
16.2 Secondly, there is a further reason why the said agreement number 1 is
null and void to which I now refer.
16.2.1 At the time when he agreement was entered into, Mr Jim Molefe
(5
th respondent) was the holder of 51% of the membership interest in the
said close corporation (Jimmy’s Security CC). This fact appears also
said close corporation (Jimmy’s Security CC). This fact appears also
from the relevant CIPC document (Annexure FA8 hereto).
16.2.2 Mr Molefe was not a party to that agreement and he also had not
consented to the sale of my 49% membership interest.
16.2.3 Section 37 of the said Close Corporation Act in this regard
provides as follows:
‘Every disposition by a member of a corporation of his or her interest,
or a portion thereof, in the corporation, other than a disposition
provided for in section 34, 35 or 36, whether to the corporation, any
other member or any other person qualifying for membership in terms
of section 29, shall be done –
(a) in accordance with the association agreements (if any); or
(b) with the consent of every other member of the corporation: Provided
that no member’s interest shall be acquired by the corporation
unless it has one or more other members.’
16.2.4 I confirm that no ‘association agreement’ as contemplated in the
latter section was entered into.
16.2.5 I am advised that our courts have ruled that a sale of membership
interest in conflict with the latter provisions is invalid, i.e null and void
ab initio.
16.3 Thirdly, the said contract number 1 is null and void for a further reason
to which I now refer.
16.3.1 In terms of the agreement the purchaser is Lynx Secure (Pty) Ltd
with registration number 2017/207581/07, which I have referred to
herein above as the third respondent.
16.3.2 However, according to the relevant CIPC report (Annexure FA1
hereto) the latter registration number was allocated in respect of the first
respondent, being ‘Lynx Intelligent Solutions (Pty) Ltd’.
16.3.3 My said attorney could not find a registered company with the
name and number of the third respondent and it therefore appears as if
the third respondent was not, and is not in existence as a legal entity.
16.3.4 I am advised that where a party to an agreement does not exist at
the time when the agreement is entered into, the agreement is null and
void ab initio.
16.4 If it is indeed so that Lynx Secure (Pty) Ltd (the third respondent) has
void ab initio.
16.4 If it is indeed so that Lynx Secure (Pty) Ltd (the third respondent) has
not been duly registered as a company, then and in such event and for the
reasons stated in paragraph 16.3.4 above, the following agreements are also null
and void ab initio since they have also been concluded with Lynx Secure (Pty)
Ltd (which apparently does not exist):
(a) Agreement number 4 (the sale of the assets in WTSD)
(b) Agreement number 5 (the sale of the assets in WTSS Guard (Pty)
Ltd.
16.5 The applicants respectfully reiterate that they are not legally trained,
that, at the time when the said agreements were entered into, they were not
aware of the said illegal status of the agreements and that, had they been aware
thereof, they would not have entered into the agreements.”
[26] As the full payment had stopped, the applicants made several demands for
payment. However, there was no proper response to the demands. The
applicants have found out that some of the clients who were with second
respondent have terminated their contracts with him due to lack of proper
service. The applicant launched this application on urgent basis with the
fear that the second respondent would dispose of the assets once served
with the notice of motion.
First, Second, Sixth, Ninth to Tenth Respondents’ case (Respondents)
[27] Only these respondents filed an answering affidavit which is titled
combined answering affidavit. Purely from a commercial and costs
perspective, the respondents elected not to oppose the urgent relief under
part A, but requested that costs thereof be rese rved. It is the respondents’
view that there was no urgency and that part A was an abuse of court
process. The applicants did not comply with the provisions of rule 6(12)(a)
or (b).
[28] With regard to part B, prayer 1, only “FA3” could notionally be invalid ab
initio. With regard to “FA4” to “FA7”, not only were the agreements valid
but both sets of parties performed in full and the agreements were perfecta.
The applicants are estopped from raising any supposed invalidity in respect
thereof.
[29] In respect of prayer 2, the applicants do not have locus standi to claim the
assets as they were never owners or possessors of such assets. The sole
allegation applicants make is that the assets were in possession of the sixth
and ninth respondents. No assets were listed in any of the annexures in
clause 1.1 of the agreements. The applicants admitted to this in the rule
35(12) notice. The relief is accordingly unenforceable. In respect of assets
which were handed over to first respondent, same were han ded over
pursuant to a real agreement, as such ownership of the said assets was
transferred to first respondent. The applicants have no valid legal right to
it.
[30] There is no record of which monitoring clients were those of the sixth and
ninth respondents as they now belong to first respondent. There is no way
to identify same and they have been mixed with those already existing
clients of the first respondent. In the event of it being found that there is a
basis to order restitution the applicants have not tendered restitution of
money they have received by monthly payments, which, on their version
is R 5 572 695, 94 but on respondents’ version is R 6 451 037, 41. In
addition it is common cause that there was a cash deposit of R 2 000 000,
00 in contract 1. In respect of prayer 3, the applicants do not have locus
standi to act on behalf of fourth respondent. With regard to prayer 4 and
contract 4, the applicant and second respondent acting on behalf of himself,
seventh and eighth respondents entered into an oral agreement whereby the
membership interest of sixth respondent was transferred to second
respondent.
[31] With regard to prayers 5 and 7, paragraph 5.4 of applicants constitutes
repudiation. T he second respondent has been advised by the eighth
respondent that should contract 3 be declared void, the eighth respondent
accepts same and tenders return of members’ interest to third applicant and
to sign all documents necessary. The business relationship in terms of
which t he eleventh respondent received membership interest in tenth
respondent has ended and it is agreed that the eleventh respondent’s
membership interest be returned. The second respondent is to receive 17%
of the members’ interest while the third applicant is to receive 16%
members interest.
[32] In respect of prayers 6 and 7, subsequent to contract 5, the second applicant
and second respondent entered into an oral agreement whereby the shares
of the ninth respondent were transferred to the second respondent and for
the second applicant to resign as director. What the applicants seek is
contrary to the provisions of Companies Act 71 of 2008 and there is no
basis in law pleaded that justifies the relief claimed. Prayers 7 to 9 are
doomed to fail due to the previous relief’s demise.
[33] The second respondent denies conducting business under the first
respondent. The first respondent is the one conducting security business
under the name and style of Lynx Secure. There is no juristic person known
as Lynx Secure (Pty) Ltd. “Lynx Secure” is the trading name of the first
respondent. Notice to oppose was given purely out of an abundance of
caution so that the applicants could not invoke the provisions of rule 14. It
is denied that the applicants did not read the contracts that they signed. The
eleventh respondent no longer intends to be involved in the business of
tenth respondent.
[34] The respondents deny not having made full payment of the purchase price.
The applicants have sold and transferred ownership of the entities. With
regard to conclusion of the agreements, it appears that there was a great
deal of confusion by Mr Le Roux and his co -author by incorrectly
recording the first respondent’s trading name together with abbreviation
“(Pty) Ltd”. As a layman, the second respondent trusted that there was
nothing untoward by recording the trading name of the company following
the said abbreviations. The agreements were not drafted by Mr Le Roux
alone. The agreements were drafted by the son-in-law of the first applicant,
who is also the brother -in-law of the second applicant and husband to the
third applicant. The said son -in-law of the first applicant is a practising
advocate.
[35] The terms of “FA3” to “FA5” are admitted as pleaded. In respect of “FA6”,
the agreement was conclude between the sixth respondent and first
respondent trading as Lynx Secure. The error in the description of the first
respondent was incorporated into the agreement. After conclusion of
contract number 4 (FA6) no actual agreements with customers were
provided to the first respondent. The first applicant eventually provided
first respondent with the former accounting software, pastel and the alarm
monitoring software, listener, from which some of the customers of the
sixth respondent could be identified and approached to conclude new
contracts with first respondent.
[36] The first respondent uses Sage as its accounting program and en Watch
Manager as its alarm monitoring program and no longer has the former
programs used by the sixth respondent. Whichever clients were identified
and with whom subsequent contracts were concluded with first respondent
is impossible to identify. There is no way of knowing which of the clients
were previously the clients of sixth respondent as clients who were taken
over were mixed with first respondent’s clientele. Contracts are also
cancelled often, whether due to non -payment or because a customer no
longer wishes to make use of the services of first respondent. Save for two
repeaters, all of the computers and electronic equipment of the sixth
respondent had been replaced and updated and no longer exists or is in the
first respondent’s possession.
[37] The first respondent, in a separate transaction, did acquire some bakkies on
1 March 2021 and the transaction was perfected. However, the said bakkies
have since been written off due to odometer readings in excess of
150 000km and are no longer in first r espondent’s possession. The first
respondent is in possession of the 21 firearms. The terms of “FA7” are
admitted except that there was no assets listed in the annexure. The
applicants were aware that they had to transfer their membership interests.
[38] It would be nonsensical for the business of fourth respondent to be
transferred together with membership interest, without the members to
whom it was transferred to be entitled to conduct its business as members.
Until the membership interest was paid for , the transfer constituted a
cession in securitatem debiti in the form of an out and out cession. On 2
September 2020 at Lichtenburg, the first applicant and second respondent
orally agreed that second respondent would acquire 100% members
interest in sixth respondent at a nominal amount in cash. The members
interest has since been transferred to seventh and eighth respondents. The
eighth respondent is in the process of transferring his membership interest
back to second respondent. A copy of the minutes of sixth respondent dated
2 September 2020 is attached as annexure “AA3”. An oral agreement was
also concluded between second applicant and second respondent where it
was agreed that second respondent would become sole shareholder of ninth
respondent.
[39] It is common cause that an amount of R 2 000 000, 00 deposit was paid in
respect of contract number 1. The first respondent and second respondent
still had to pay R 1 000 000, 00 in respect of contract number 1. In respect
of contract 2 an amount of R 3 500 000, 00. An amount of R 182 532, 17
in respect of contract 4. In respect of contract 5 an amount of R 968 375,
13. That gives a total of R 5 650 783, 04.
[40] On applicants’ own version, between the first respondent and second
respondent, they paid a total amount of R 5 572 695, 94 (38 instalments
from the first instalment due in September 2020, until 30 November 2023
equates to 38 payments of R 100 375, 63 and 48 instalments from the first
instalment due in September 2020 until September 2024 being the date of
the founding affidavit, equates to 48 payments of R 36 000, 00 and 10
instalments since December 2023 to date of R 3 042, 20). The respondents’
version is that the first respondent has paid first applicant an amount of R
6 451 037, 41. Not only was more paid to what the first and second
applicants were entitled to, but there is no tender for repayment of the
amount of R 8 451 037, 41.
[41] With regard to paragraphs 15.1 to 15.5 of the founding affidavit, the clauses
are limited to a breach of the terms thereof and do not pertain to any
voidness ab initio due to invalidity. In addition, the clause could only find
application in respect of instances where the aggrieved party is also a party
to the other contracts, otherwise that party would have no rights insofar as
that contract is concerned.
[42] The respondents admit paragraphs 16.1 and 16.2 of the founding affidavit.
With regard to 16.3 to 16.5, the respondents state that the contracts stand
to be rectified should the need arise. The parties were satisfied to perform
in terms of the contracts for a period of four years and applicants cannot
now, subsequent to representing their satisfaction, wish to have the fourth
and fifth agreements declared null and void ab initio. By the first and
second applicants delivering assets in respect of the sai d agreements and
accepting payment for over a period of four years, represented that they
would be bound by the said agreements.
[43] The first respondent accepted as correct, and duly acted on the correctness
of such representation and made payment in respect of such agreements to
its detriment in that, it shall be impoverished in the amounts set out above,
as well as other significant amounts, including R 65 000, 00 in respect of
the default judgment which second respondent had to service and also debit
orders to the tune of R 200 000, 00 shortly after the implementation of
contracts, which was the responsibility of first applicant at t he time.
[44] The aforesaid representation was negligently made (if negligence is a
requirement to a successful invocation of the doctrine of estoppel) as the
applicants were free to conduct a company search in respect of the first
respondent or the non-existent third respondent, but clearly failed to do so.
They were also free to record that the identity of the purchaser was a
material terms, but they did not. An error in persona on the erroneous
description of the first respondent was not material to the agreement and as
such, they are patently not void ab initio. To the extent required, the
applicants are estopped from relying on the misdescription of first
respondent as a basis to contend that the fourth and fifth contracts are void
ab initio.
Eighth respondent’s affidavit
[45] The eighth respondent consents to prayer 1 in part B in so far as it relates
to “FA5”. He also consents to prayers 5(a) and (b) in so far as it relates to
him. Should it be found that the agreement cannot be declared void and
that the third applicant’s ap plication constitutes repudiation of agreement
number 3, the eighth respondent accepts such repudiation and tenders
transfer of his membership back to third applicant. He has signed
documentation to transfer 50% of his membership to third applicant and
balance to second respondent. He did not make any payment in terms of
the void agreements.
Eleventh respondent’s affidavit
[46] The eleventh respondent states that he does not have substantial interest in
the litigation as he only became member of tenth respondent in 2021
through a separate agreement to which the applicants were not party. The
membership has formally been terminat ed by oral agreement, but has not
been formally reduced to writing and filed with CIPC. He does not have
objection if his membership in tenth respondent is transferred to whomever
as he has resigned.
Applicant’s reply
[47] The respondents have admitted that the agreement “FA3” is void ab initio.
The eighth respondent also has accepted that the agreement “FA5” is void
ab initio. The applicants deny the existence of any agreements other than
the written agreements referred to in the founding affidavit. The
agreements, specifically clause 8 of FA3, contains a whole agreement
clause. Other clauses provide that no amendment to the agreement is valid
unless reduced in writing.
[48] In respect of monitoring clients there were contracts in place before
transactions between the parties. The second respondent was provided with
the said contracts and is able to identify the clients. In the case of voidness
of the agreements, there is no duty on applicants to tender restitution. In
the case of the agreements found to be valid and enforceable, clause 6.8 of
FA3 states that in case of breach by purchaser of any of its obligations, all
amounts paid to the seller will be forfeited. The oth er agreements contain
the similar clauses.
[49] The first applicant denies that his son -in-law drafted the agreements and
attached an affidavit by Mr Le Roux who was the attorney for second
respondent who confirms having drafted the agreements after negotiations
between the parties. The first applicant has printed the contracts of clients
from his back- up computer that reflects approximately 1700 clients. This
printout can be made available to second respondent. The averments
relating to estoppel are denied as it was the second respondent who misled
the applicants by representing to them that the third respondent is a legal
entity as described in the agreements.
The authorities and reasons for judgment
[50] I will deal with each contract and legal principles applicable thereto. I will
refer to the contracts as cited in applicant’s papers. FA3 is contract 1. FA4
is contract 2. FA5 is contract 3. FA6 is contract 4. FA7 is contract 5.
FA3 and FA5
[51] It is the applicant’s case that the third respondent does not exist and that even
if it existed, it cannot hold membership interest in a close corporation being
the fourth respondent. The respondents confirmed that the third respondent
does not exist and admitted to its non-compliance with the Close
Corporations Act. The respondents further admitted that FA3 (contract 1) is
void ab initio (paragraph 7.1.1 of answering affidavit). The third respondent
itself did not participate or file any affidavit in this matter. As such, there is
no version before me on behalf of the third respondent. I find that the
applicants have succeeded in terms of prayers 1; 3; 7; 8 and 9 in respect of
FA3.
[52] With regard to FA5, the eighth respondent was the only purchaser on FA5.
The second respondent was not party to this contract. It is not clear how he
(second respondent) acquired members interest in this contract. There is no
evidence of sale between second respondent and eighth respondent, except
what eighth respondent has stated in his affidavit filed as annexure “AA18”
to answering affidavit. The eighth respondent has further consented that
prayers 1; 5(a) and (b) of the notice of motion can be granted. I find that the
applicants have succeeded in terms of prayers 1; 5(a) and (b); 7; 8 and 9 in
respect of FA5.
FA4
[53] This is an agreement entered into by and between the second applicant and
second respondent. It seems, through a separate agreement to which the
second applicant was not a party, the eighth and eleventh respondents
obtained membership interests. The eighth and eleventh respondents have
filed affidavits in which they do not oppose the application, however, the
eighth respondent indicated that his membership interests be distributed to
include the second respondent. The second respondent has not filed any
counter application.
[54] The authorities are clear that where documents are interconnected, they form
a composite transaction and must be read as a whole to understand the full
scope of obligations. The primary source of negotiation seems to be the letter
FA2 and contract 1 which is FA3. All the contracts contain almost similar
clauses, although not numbered the same. The legal position when it comes
to interpretation was stated in the case of Natal Joint Municipal Pension
Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at par 18 by Wallis
JA as follows:
“[18] Over the last century there have been significant developments in the law
relating to the interpretation of documents, both in this country and in others
that follow similar rules to our own. It is unnecessary to add unduly to the
burden of annotations by trawling through the case law on the construction of
documents in order to trace those developments. The relevant authorities are
collected and summarised in Bastian Financial Services (Pty) Ltd v General
Hendrik Schoeman Primary School. The present state of the law can be
expressed as follows. Interpretation is the process of attributing meaning to the
words used in a document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading the particular
provision or provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence. Whatever the nature of
the document, consideration must be given to the language used in the light of
the ordinary rules of grammar and syntax; the context in which the provision
appears; the apparent purpose to which it is directed and the material known to
those responsible for its production. Where more than one meaning is possible
each possibility must be weighed in the light of all these factors. The process is
objective not subjective. A sensible meaning is to be preferred to one that leads
to insensible or unbusinesslike results or undermines the apparent purpose of
the document. Judges must be alert to, and guard against, the temptation to
the document. Judges must be alert to, and guard against, the temptation to
substitute what they regard as reasonable, sensible or businesslike for the words
actually used. To do so in regard to a statute or statutory instrument is to cross
the divide between interpretation and legislation. In a contractual context it is to
make a contract for the parties other than the one they in fact made. The
‘inevitable point of departure is the language of the provision itself’, read in
context and having regard to the purpose of the provision and the background
to the preparation and production of the document.” (Emphasis)
[55] From the history of the contracts, it seems the first applicant negotiated all
contracts on behalf of all applicants, although each applicant signed the
relevant contract in which they are stakeholders. One of the documents
relating to the coming into exis tence of the contracts is the letter written by
the respondents’ attorney and attached as FA2. This document must be read
together with the contracts and it shows that they were intended to be taken
as a whole in respect of the transaction negotiated. Therefore, the
businesslike position of these contracts is that one affects the others. I do not
think the applicants would have agreed to sell one business if the
respondents did not intend purchasing all other businesses. More so since
the third applicant wa s never involved in the business and it was intended
that the first applicant would take over her stake in the businesses. It is only
natural that if one contract collapsed, it would have an effect on the others.
[56] FA3 and FA5 are void ab initio. The third applicant was a member of the
tenth respondent. Clause 14.3 of FA4, (equivalent and verbatim to clause 6.3
of FA3), is very important and contains the words
“14.3 This agreement is complemented by 4 other agreements (totalling 5
agreements). The 5 agreements are generally and individually referred to as:
14.3.1 the MC Maree sale of membership interest agreement (Multilayer CC);
14.3.2 the C Breedt sale of membership interest agreement (Multilayer CC);
14.3.3 the Wes-Transvaal Securitisation Services (Pty) Ltd agreement;
14.3.4 the Wes-Transvaal Guarding agreement; and
14.3.5 the Jimmy Security CC agreement.”
[57] This together with clause 14.4, (equivalent and verbatim to clause 6.4 of
FA3), which states that:
“If a party to this agreement breach any of his/her/its obligations in terms hereof
and the agreement is cancelled by the aggrieved party (as regulated
hereinabove), the aggrieved party is entitled to also, at its/his/her sole and
absolute discretion, cancel all the other contracts referred to hereinabove. To
this end, the parties agree that breach of any of the party’s obligations in terms
of this agreement will constitute a breach of the terms of the other agreements.”
[58] The choice of words is very important to show what the parties intended. It
is clear that the 5 agreements have to complement each other and find
general application to each other. As individual as they are, they have a
general application to an extent. If we are to give commercial sense to these
agreements, they have to be read together. More so since they were
negotiated as a group and not individually. The contracts were drafted by
and negotiated by the second respondent’s own attorneys and therefore he
cannot easily be absolved from his attorneys actions. I therefore find that the
applicants have succeeded in terms of prayers 1; 6(a) and (b); 7; 8 and 9 in
respect of FA4.
FA6
[59] In this agreement the third respondent was the purchaser and bought
movable assets from sixth res pondent. The applicants want return of the
assets. The list of assets are identified on clause 1.1 of the agreement. I have
already found that the purchaser (third respondent) is non-existent and has
not participated in these proceedings. The r espondents have not sought
rectification of the contracts, despite making allegations to the effect that the
first respondent is the actual purchaser.
[60] Clause 9.3 of FA6, (equivalent and verbatim to clause 6.3 of FA3), is very
important and contains the words:
“9.3 This agreement is complemented by 4 other agreements (totalling 5
agreements). The 5 agreements are generally and individually referred to as:
9.3.1 the MC Maree sale of membership interest agreement (Multilayer CC);
9.3.2 the C Breedt sale of membership interest agreement (Multilayer CC);
9.3.3 the Wes-Transvaal Securitisation Services (Pty) Ltd agreement;
9.3.4 the Wes-Transvaal Guarding agreement; and
9.3.5 the Jimmy Security CC agreement.”
[61] This together with clause 9.4, (equivalent and verbatim to clause 6.4 of
FA3), which states that:
“If a party to this agreement breach any of his/her/its obligations in terms hereof
and the agreement is cancelled by the aggrieved party (as regulated
hereinabove), the aggrieved party is entitled to also, at its/his/her sole and
absolute discretion, cancel all the other contracts referred to hereinabove. To
this end, the parties agree that breach of any of the party’s obligations in terms
of this agreement will constitute a breach of the terms of the other agreements.”
I find that the applicants have succeeded in terms of prayers 1; 2(a) and (b);
7; 8 and 9 in respect of FA6.
FA7
[62] In this agreement the third respondent was the purchaser and bought
movable assets from ninth respondent. The applicants want return of the
assets. The list of assets are identified on clause 1.1 of the agreement. I have
already found that the purchaser (third respondent) is non -existent and has
not participated in these proceedings. The responden ts have not sought
rectification of the contracts, despite making allegations to the effect that the
first respondent is the actual purchaser.
[63] Clause 9.3 of FA6, (equivalent and verbatim to clause 6.3 of FA3), is very
important and contains the words
“9.3 This agreement is complemented by 4 other agreements (totalling 5
agreements). The 5 agreements are generally and individually referred to as:
9.3.1 the MC Maree sale of membership interest agreement (Multilayer CC);
9.3.2 the C Breedt sale of membership interest agreement (Multilayer CC);
9.3.3 the Wes-Transvaal Securitisation Services (Pty) Ltd agreement;
9.3.4 the Wes-Transvaal Guarding agreement; and
9.3.5 the Jimmy Security CC agreement.”
[64] This together with clause 9.4, (equivalent and verbatim to clause 6.4 of
FA3), which states that:
“If a party to this agreement breach any of his/her/its obligations in
terms hereof and the agreement is cancelled by the aggrieved party
(as regulated hereinabove), the aggrieved party is entitled to also, at
its/his/her sole and absolute discretion, cancel all the other contracts
referred to hereinabove. To this end, the parties agree that breach of
any of the party’s obligations in terms of this agreement will
constitute a breach of the terms of the other agreements.”
I find that the applicants have succeeded in terms of prayers 1; 2(a) and (b);
7; 8 and 9 in respect of FA7.
[65] The assets were acquired through written agreements and are listed at
paragraphs 1.1 of FA6 and FA7 respectively. First applicant has pleaded that
the assets were in his possession at all material times at his business address.
The second respondent alludes to a separate agreement, but has not provided
proper evidence on this. The second respondent states that the assets are not
identifiable as they have been mixed with the first respondent’s assets.
However, the second respondent does not inform me when did it discontinue
the old programs. Where are the hardware and software? Have they been
destroyed or untraceable? Nothing is said on this. How do I know that it is
impossible to get this information. Be that as it may, the applicants have
stated that they have recovered the information on the assets from their back-
up computer systems. Therefore, it would not be impossible for respondents
to identify the assets.
Rectification
[66] The respondents have not sought or raised rectification as a defence or
counterclaim. Instead, the respondents indicated that rectification will be
sought at the relevant forum, should the need arise (par 29.2 of answering
affidavit). Amler’s Precedents of Pleadings, LTC Harms states as follows
on rectification:
“The object of rectification is to have a written contract conform to the common
intention of the parties. Rectification overrides the parol-evidence rule. A party
who wishes to rely on rectification must claim rectification in the particulars of
claim, the plea or a counterclaim. That party bears the onus of proof and must
prove its case clearly. A defendant may rely on rectification as a defence without
having to claim rectification. The facts necessary to establish rectification must
be alleged in the plea. The court is then asked to adjudicate the matter on the
contract as rectified”
Sixth and Ninth respondent
[67] The second respondent somehow obtained shares in the ninth respondent.
The sale agreements were only for fourth, sixth and tenth respondents in line
with FA3, FA4 and FA5. FA6 and FA7 relate to sale of assets and not
member interest. The second respondent states that this occurred pursuant to
a verbal agreement between the parties, which is denied by the applicants.
The second respondent has not filed a counterclaim on this aspect. The
documents annexed to respondents’ answering affidavit as AA1 to AA9 are
in respect of sixth respondent and not the ninth respondent. The applicant
has informed me that the said annexures AA1 to AA9 were signed to give
effect to the original agreements which have been found to be void ab initio.
I am therefore not satisfied that there was an oral agreement between the
parties in respect of these entities. I find that the applicants have succeeded
in terms of prayers 1; 4(a) and (b); 6(a) and (b); 7; 8 and 9 in respect of the
sixth and ninth respondents.
Restitution in contract law
[68] The respondents claim that the applicants seek to have the agreements
declared void ab initio without tendering restitution. The applicants claimed
breach in the alternative. My findings in casu are not based on breach but on
voidness of the contracts (main claim). The authorities are clear that in void
contracts, the remedy available to the aggrieved party is unjust enrichment.
Restitution is not available in such cases. This approach was postulated in
the case of Kudu Granite Operations (Pty) Ltd v C aterna Ltd 2003 (5) SA
193 (SCA) at par 15 where the court stated as follows:
"[15] Kudu's first contention is well-founded. There is a material difference
between suing on a contract for damages following upon cancellation for breach
by the other party (as in Baker v Probert 1985 (3) SA 429 (A), a judgment relied
on by the Court a quo) and having to concede that a contract in which the claim
had its foundation, which has not been breached by either party, is of no force
and effect. The first-mentioned scenario gives rise to a distinct contractual
remedy: Baker at 439 A, and restitution may provide a proper measure or
substitute for the innocent party's damages. The second situation has been
recognised since Roman times as one in which the contract gives rise to no
rights of action and such remedy as exists is to be sought in unjust enrichment,
an equitable remedy in which the contractual provisions are largely irrelevant.
As Van den Heever J said in Pucjlowski v Johnston's Executors 1946 WLD 1 at
6:
'The object of condiction is the recovery of property in which ownership has
been transferred pursuant to a juristic act which was ab initio unenforceable or
has subsequently become inoperative (causa non secuta; causa finita).'”
(Emphasis)
Contravention of the Companies Act 71 of 2008
[69] Although the respondents have alleged that what the applicants are doing is
in contravention of the Companies Act, they have failed to refer to a specific
article/section being contravened. I find that there is nothing in
contravention of the Companies Act in this matter.
Estoppel
[70] The respondents have raised estoppel , that to the extent required, the
applicants are estopped from relying on the misdescription of first
respondent as a basis to contend that the fourth and fifth contracts are void
ab initio. I find this defence not available to the respondents. This is because
the applicants always acted on the understanding and representation by the
respondents that the third respondent was an existing entity.
[71] The principles on estoppel were discussed i n the case of Africast (Pty) Ltd
v Pangbourne Properties Ltd 2 All SA 574 (SGSJ) at paragraphs 44 to 45
the court held as follows:
“[44] Thus, so it is argued on defendant’s behalf there was no ‘deception’ that
misled the plaintiff, and without a deception and reasonableness in the estoppel
asserter’s reliance on the deception, there can be no room for estoppel to be
invoked. (See: Pan gbourne Properties Ltd v Basinview Properties (Pty) Ltd
(supra) at [16] and [17]; andRabie & Sonnekus, The Law of Estoppel in South
Africa, Butterworths (2nd Edition, 2000) at p 63, Para 5.1, where the authors
state:
“In general, the premise applicable in all circumstances is that the estoppel
assertor can only successfully rely on estoppel if the reasonable person in the
street, in the position of the estoppel assertor would also have been misled by
the conduct on which the estoppel is founded. To determine whether the
reasonable person would have been misled, it might be helpful to answer the
applicable question in the negative: The reasonable person would have been
misled if it can be ascertained that the circumstances were such that they would
have put the reasonable person on his guard and compelled him to ask more
questions before accepting the allegations or representations of the representor
at face value. If in reality the estoppel assertor had under the same circumstances
neglected to ask for further explanation or had not been on his guard due to the
fact that he tends to be more gullible than reasonable person would have been,
then the conduct of the representor is not to objectively be classified as
unreasonable or wrongful, and the reliance on estoppel must fail. It has already
been emphasised that the doctrine of estoppel cannot be misused to protect the
naïve or gullible against his own stupidity. Even the man in the street must take
cognisance of facts that may have a bearing on his legal position.
Formulated otherwise, this qualification is also referred to when it is said that
the reliance on representation must be reasonable.
The person who bases an estoppel on a representation made to him, must
establish that he reasonably understood the representation in the sense
contended for by him. It follows that he has to prove that his reliance on the
representation was reasonable. He will therefore have to show that he did not
know that the representation was untrue or incorrect, that he did not have
information which put him upon enquiry, or, if he did, that he exercised
reasonable care and diligence to learn the truth, and, generally that he was not
mislead by a lack of reasonable care on his part.”
(see too: LAWSA, Vol 9; 2
nd Ed, ( 2005) Estoppel (Rabie & Daniels): Para
657.)
[45] Moreover, in my view, it seems plain that a ‘misrepresentation’ that
qualifies to be a misrepresentation for the purposes of an estoppel must be a
misrepresentation of a fact; ie, the estoppel denier must be shown to have
initially told or insinuated by conduct, a falsehood or induced a reasonable belief
in a falsehood. In this case, no misrepresentation of a fact is relied upon; ie that
the suspensive condition was met. The defendant’s ‘belief’ that it had a binding
agreement, as evidenced by its common cause conduct, is invoked as the
‘misrepresentation’. This, in my view, is not good enough. An estoppel cannot
‘misrepresentation’. This, in my view, is not good enough. An estoppel cannot
be raised against a party who says that it thought it had a contract but, it turns
out that, in law, it was wrong to think so. In Hauptfleisch v Caledon Divisional
Council 1963 (4) SA 53 (C) at 56H – 57 D it was held:
“ The following statement of the doctrine of estoppel by Spencer
Bower Estoppel by Representation para. 15, was cited, apparently with
approval, by WATERMEYER, J.A. (as he then was) in Union Government v
Vianini Ferro-Concrete Pipes (Pty.) Ltd., supra at p. 49:
'Where one person (the representor) has made a representation to another person
(the representee) in words, or by acts and conduct, or (being under a duty to the
representee to speak or act) by silence or inaction, with the intention (actual or
presumptive), and with the result, of inducing the representee on the faith of
such representation to alter his position to his detriment, the representor, in any
litigation which may afterwards take place between him and the representee, is
estopped, as against the representee, from making, or attempting to establish by
evidence, any averment substantially at variance with his former representation,
if the representee at the proper time and in the proper manner objects thereto.'
In amplification of this statement it may be emphasized that the representation
must relate to a statement of an existing fact (see Baumann v Thomas, supra at
p. 436; Spencer Bower, pp. 39 - 48; Halsbury, 3rd ed. vol. 15 pp. 224 - 5) and
that a mere statement as to, for instance, a future intention will not found an
estoppel (see Kelsen v Imperial Tobacco Co. Ltd., 1957 (1) A.E.R. 343). The
representation may be made expressly or by conduct. It must be made with the
intention that it should be acted upon in the manner in which it was acted upon
or the conduct of the representor must be such as to lead a reasonable man to
take the representation to be true and believe that it was meant that he should
act upon it in that manner (see Halsbury, 3rd ed., vol. 15 p. 228; Service Motor
Supplies (1946) (Pty.) Ltd v Hyper Investments (Pty.) Ltd., 1961 (4) SA
842 (AD) at p. 849). The person to whom the representation was made must act
thereon in the manner intended and in doing so must alter his position to his
prejudice. He must act upon the representation believing it to be true. If he
knows, or believes, that the real facts are not as stated in the representation, he
cannot be heard to say that he was induced to act to his prejudice on the faith of
cannot be heard to say that he was induced to act to his prejudice on the faith of
the representation. (Spencer Bower, paras. 137, 138, 199; Halsbury, 3rd ed. vol.
15 pp. 229 - 30; cf. Angehrn & Piel v Federal Cold Storage Co. Ltd., 1908 T.S.
761).”
[72] The respondents’ defence of estoppel cannot succeed. I find that the
applicants have succeeded in all the claims in this matter. Only costs
remain for determination.
Costs
[73] I have to deal with the costs of part A. If part A was granted by agreement
the issue of urgency has fallen off. I do not know what influenced the
parties to agree as that affected urgency. Nothing much has been placed
before me in respect of argument on costs relating to part A. The
respondents state that the applicant s are not entitled to same while the
applicants state that the contracts provided that they can approach the court
on urgent basis. The fact that a contract states that a party can appro ach a
court on urgent basis does not mean the court will treat the matter as urgent.
Urgency is a determination that a court has to make. The order in part A
was granted by agreement between the parties. I therefore order each party
to pay their own costs in respect of part A.
[74] I t is common cause that the third respondent is non -existent and has not
participated in these proceedings. Therefore, making an order against it
would be a futile exercise. Courts must make orders which are practical
and executable . The other respondents raised defences on issues which
they could not succeed. Firstly, the contracts are interlinked and it should
have occurred to the respondents that one contract affects the others.
Secondly, the respondents relied on restitution in a case where unjust
enrichment could or might have been a better option. This without filing a
counter application. The respondent s also failed on their defence of
estoppel. On these basis I see no reason why costs should not follow the
suit.
Order
[75] I therefore make an order as follows:
1. Each party to pay their own costs in respect of part A.
2. The application is granted in respect of prayers 1 to 9 of the amended
notice of motion.
3. The first and second respondents are ordered, jointl y and severally the
one paying the other to be absolved, to pay costs on scale C including
costs of counsel.
J. T. MAODI
ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA,
NORTH WEST DIVISION, MAHIKENG
APPEARANCES
FOR THE APPLICANT:
Instructed by:
e-mail:
FOR THE RESPONDENT:
Instructed by:
e-mail:
Date judgment reserved:
Date of Judgment:
Adv J. H. F. Pistor SC
Maree & Maree Attorneys
magcourt@maree-mareeattorney s.co .za
Adv H.P . Van Nieuwenhuisen
Bosman & Bosman Attorneys
litigation 7@labuschagneatt.co .za
20 November 2025
26 March 2026