IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case number: 21393/2017
In the matter between:
WHITECAT TECHNOLOGIES CC Plaintiff
and
MIANZO ASSET MANAGEMENT (PTY) LTD Defendant
Coram: Van Zyl, AJ
Heard on: 13-16 October 2025; 22 -23 October 2025; 13 March
2026; 25 March 2026
Judgment: 13 April 2026
Summary: Claim for payment under contract – absolution from the instance sought
at close of plaintiff’s case on basis that contract voidable at defendant’s instance
because of breach of director’s fiduciary duties towards defendant when concluding
the contract – attractive argument but plaintiff has adduced at least some evidence
that requires an answer from defendant – absolution refused
___________________________________________________________________
ORDER
1. The amendment to the defendant’s plea is granted, with no order as to
costs.
2. The defendant’s application for absolution from the instance is refused ,
with costs, including the costs of counsel on Scale B.
3. All other questions of costs stand over for later determination.
JUDGMENT
VAN ZYL, AJ:
Introduction
1. In this action, the plaintiff (”Whitecat”) has closed its case. The defendant
(“Mianzo”) does not believe that a prima facie case has been made out
against it, and therefore seeks absolution from the instance.
2. The two entities are essentially asset management firms. Whitecat’s claim
against Mianzo is based on a licensing agreement which it concluded with
Mianzo on 27 July 2010 for the exclusive use of a computer programme
known as the Tacit Asset Allocation System (“TAAS”). The cause of action is
founded on breach of contract , and its claim is for specific performance,
being payment of the amounts due to it under the licensing agreement
(some R7 million, plus value-added tax).
3. Whitecat has the onus to prove the existence and enforceability of the
licensing agreement, that Whitecat has performed in terms of the agreement,
that Mianzo has breached the agreement, causing Whitecat’s damages, and
the quantum of such damages. If it has adduced sufficient evidence to prove
these requirements, Whitecat has established a prima facie case and the
application for absolution must be refused.
4. On Mianzo’s argument at this point, however, Whitecat’s performance in
terms of the licensing agreement, Mianzo’s breach of the agreement,
Mianzo’s breach causing Whitecat’s damages, and the quantum of
Whitecat’s damages, are not proffered as reasons as to why the application
for absolution should be granted. This application for absolution from the
instance is not made on the basis that the evidence of the witnesses called
on behalf of Whitecat should be rejected on credibility , but is based on a
legal argument . The application turns on one issue only, namely the
enforceability of the licensing agreement.
5. The agreement was concluded while the Companies Act 61 of 1973 was in
effect. Consequently, the validity and legal consequences of the agreement
fall to be determined under the provisions of the 1973 Companies Act.1
6. In its plea, Mianzo denies the existence of the licensing agreement . In the
alternative, and if it is proven that the agreement was in fact concluded,
Mianzo pleads that the agreement is voidable at its (Mianzo ’s) instance.
Mianzo pleaded that:
“Baise was precluded from entering into such an agreement in terms of section 234
(read with sections 235 to 241) of the 1973 Companies Act (which was applicable at
the time) as he had a direct, alternatively indirect, interest in the Agreement which
was not disclosed in terms of the Act and the Agreement was not approved by an
ordinary resolution of shareholders of the Defendant.”
7. And:
“The Defendant denies that the Agreement was entered into and pleads that if it
was entered into it is voidable at the instance of the Defendant for the reasons set
out above and the Defendant asserts that the Agreement is void.”
8. Mianzo wishes to nip this matter in the bud on its alternative agreement. It
says that the court should find that the agreement is void because Mr Baise,
1 See section 12(2) of the Interpretation Act 33 of 1957.
the director who concluded it on Mianzo’s behalf, had breached his fiduciary
duties towards Mianzo. As the agreement is void in the circumstances, that
is the end of the matter.
The principles applicable to applications for absolution from the instance
9. There is no dispute between the parties as to the applicable principles. The
law regarding absolution is set out as follows in Harms Civil Procedure in the
Superior Courts:2
“The test to be applied by the court at this stage of the trial is: Is there evidence upon
which a court might reasonably find for the plaintiff? Another approach is to enquire
whether the plaintiff has made out a prima facie case . To the extent that the plaintiff
relies upon inferences, it is sufficient if the inference the plaintiff wishes to draw is a
reasonable one; it need not be the only reasonable inference.
The court has a discretion to grant or refuse absolution from the instance. In the
exercise of this discretion it will normally not have regard to the credibility of
witnesses unless the plaintiff’s witnesses are so obviously lying or have so palpably
broken down that the court cannot reasonably place reliance upon them. The court
may also have regard to the possibility that the plaintiff’s case may be strengthened
by evidence emerging during the defendant’s case.”
10. In Gordon Lloyd Page and Associates v Rivera and another3 it was held that:
“The test for absolution to be applied by a trial court at the end of a plaintiff’s case
was formulated in Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A) at
409G-H in these terms:
‘... (W)hen absolution from the instance is sought at the close of plaintiff’s
case, the test to be applied is not whether the evidence led by plaintiff
establishes what would finally be required to be established, but whether
there is evidence upon which a Court applying its mind reasonably to such
evidence, could or might (not should, nor ought to) find for the plaintiff .
evidence, could or might (not should, nor ought to) find for the plaintiff .
(Gascoyne v Paul and Hunter 1917 TPD 170 at 173; Ruto Flour Mills (Pty)
2 At B39.7. Emphasis supplied.
3 2001 (1) SA 88 (SCA) at 92E-93A.
Ltd v Adelson (2) 1958 (4) SA 307 (T).)’
This implies that a plaintiff has to make out a prima facie case – in the sense that
there is evidence relating to all the elements of the claim – to survive absolution
because without such evidence no court could find for the plaintiff .. …. As far as
inferences from the evidence are concerned, the inference relied upon by the plaintiff
must be a reasonable one, not the only reasonable one …. The test has from time to
time been formulated in different terms, especially it has been said that the court
must consider whether there is “evidence upon which a reasonable man might find
for the plaintiff” … – a test which had its origin in jury trials when the “reasonable
man” was a reasonable member of the jury … . Such a formulation tends to cloud
the issue. The court ought not to be concerned with what someone else might think;
it should rather be concerned with its own judgment and not that of another
“reasonable” person or court. Having said this, absolution at the end of a plaintiff’s
case, in the ordinary course of events, will nevertheless be granted sparingly but
when the occasion arises, a court should order it in the interests of justice. …”
Onus, and facts within Mianzo’s knowledge
11. A court should refuse absolution where the onus rests on Mianzo, as
defendant, to prove particular issues . Absolution from the instance cannot
be decreed at the end of the plaintiff’s case where the plaintiff has first
adduced evidence because the burden of proving some of the issues was
on him, but the burden of proving other issues was on the defendant.4
12. The same principle applies where certain particulars facts fall within the
knowledge of the defendant. In such a case, the court should take this into
account and more readily refuse to grant absolution from the instance.5
Whitecat’s evidence is accepted as true
13. The evidence adduced by Whitecat, as plaintiff, must be accepted as true,
13. The evidence adduced by Whitecat, as plaintiff, must be accepted as true,
unless it is inherently unacceptable . It must be assumed that, in the
4 See the discussion in Van Loggerenberg et al Erasmus Superior Court Practice (Jutastat
online version, revision service 27, 2025, D1: Rule 39-18, and the authorities there cited.
5 Ibid.
absence of very special considerations, such as the inherent unacceptability
of the evidence adduced, the evidence is true. 6 Mianzo concedes that for
the purpose of this application, it must be accepted that the licensing
agreement exists. Whitecat’s sole member, Mr Paul Baise testified on all
facts surrounding the conclusion of the agreement. Therefore, the existence
of the agreement was proven, albeit prima facie.
No need to prove a balance of probabilities
14. Whitecat is not required to prove an actual preponderance of probability in
its favour. The court will only grant absolution if no reasonable inference can
be drawn from the evidence adduced. The test at this stage of the trial is
that the court will refuse the application for absolution unless it is satisfied
that no reasonable court could draw the inference for which the plaintiff
contends.7
Interpretation of contracts
15. Counsel for Whitecat points out that i f the question for consideration is the
interpretation of a contract, the court should not confine itself to the
interpretation that a reasonable court would give to the contract , but should
refuse absolution unless the proper interpretation of the contract is beyond
question.8
16. In the present matter, however, I do not think that the interpretation of the
licensing agreement is really in issue. The terms are fairly clear. It is,
rather, the effect of those terms upon which Mianzo relies for the purposes
its absolution application , and a director’s duties under the relevant
company law principles.
Fiduciary duties
6 Atlantic Continental Assurance Co of SA v Vermaak 1973 (2) SA 525 (E) at 527C–D.
7 Sinqobile Equestrian Security Services (Pty) Ltd v Marks Koko Latha [2023] ZANWHC 12
para 42.
8 Malcolm v Cooper 1974 (4) SA 52 (C) at 59D–E.
17. Mr Baise has testified that he concluded the agreement on behalf of both
Whitecat and Mianzo, as he was the sole director of Mianzo at that stage,
and the sole member of Whitecat.
18. Our company law does not prevent a person from acting in two
representative capacities when concluding an agreement on behalf of two
separate entities. The only proviso is that the party must be properly
authorised to act on behalf of each of the entities: “… it is in order for a
person acting as a representative of a company to contract with himself or
herself”.9
19. The parties are in agreement on this score. Mianzo has no objection to the
fact that the licencing agreement was concluded by Mr Baize on behalf of
both Whitecat and Mianzo. Where the trouble arises is whe n the person
who concludes the agreement fails to adhere to his or her fid uciary duties in
relation to one of the entities to the agreement. The position under the
common law10 is that a director has to act bona fide and in the best interests
of the company in all his dealings as representative of the company, even if
such person is the sole director. 11 The requirement is that the director,
having taken reasonably diligent steps to become informed, should
subjectively have believed that his or her decision was in the best interests
of the company, and such belief (on his or her part) must have a rational
basis.12
20. There is no magic in the term “ fiduciary duty”. The existence of such a duty,
by its nature and extent, are questions of fact to be adduced from a thorough
consideration of the substance of the relationship and any relevant
circumstances which affect the operation of that relationship. 13 In Volvo
9 Blackman et al Commentary on the Companies Act at p. 49B.
10 A director’s common law fiduciary duties, which includes a duty to act in the best interests of
the company, have now been codified in Section 76 of the New Companies Act:
the company, have now been codified in Section 76 of the New Companies Act:
11 Delport Henochsberg on the Companies Act 71 of 2008 at p. 289(9) to (11); Da Silva v CH
Chemicals (Pty) Ltd 2008 (6) SA 620 (SCA) para 18.
12 Delport Henochsberg on the Companies Act 71 of 2008 at p. 289(12).
13 Phillips v Fieldstone Africa (Pty) Ltd and another 2004 (3) SA 465 (SCA) at 477.
(Southern Africa) (Pty) Ltd v Yssel 14 the court stated that there is no closed
list of fiduciary relationships. This depends on the facts of the particular case.
There are certain characteristics that impart fiduciary qualities to a
relationship. Discretion, influence, vulnerability , and trust are some of the
factors to be taken into account. The kernel of the matter is whether one party
has relinquished his own self -interest and agreed to act solely on behalf of
the other party.15
21. The beneficiary's primary remedies entitle him to set aside all transactions
tainted with the fiduciary's self-interest, and to claim all profits obtained by the
fiduciary by use of his position or otherwise as a result of his breach of
fiduciary duty. Thus, they are directed at the fiduciary's gain rather than the
beneficiary's loss (if any). Their purpose is to “ deprive the fiduciary of any
inducement that will affect his absolute and disinterested loyalty ”.16 In Hely-
Hutchinson v Brayhead Ltd 17 Lord Denning MR said that “[n]on-disclosure
does not render the contract void or nullity. It renders the contract voidable at
the instance of the company and makes the director accountable for any
secret profit which he has made.”
22. Mianzo argues that, on the evidence led on Whitecat’s behalf, Mr Baise
entered into the agreement when he was the sole director and shareholder of
Mianzo, as well as the sole member of Whitecat. Mr Baise had the fiduciary
duties which a director had in respect of a company which he was a director
of. Those included the duty to avoid conflicts of interest and to act in the best
interests of the company. the Agreement was one-sided against Mianzo, and
contained onerous provisions which were prejudicial towards it.
23. Mr Baise breached his fiduciary duties when he entered into the agreement,
both in respect of his duty to avoid conflicts of interest and to act in the best
interests of Mianzo. In addition, the evidence establishes that Mr Baise did
interests of Mianzo. In addition, the evidence establishes that Mr Baise did
14 2009 (6) SA 531 (SCA) at 16.
15 Hodgkin v Simms (1995) 117 DLR (4th) 161 at 176 - referred to with approval in Volvo v
Yssel supra.
16 Per Learned Hand J in Phelan v Middle States Oil Corporation 220 F (2d) 593 602 (1955).
17 [1968] 1 QB 549 585; [1967] 3 All ER 98 103 (CA).
not make the required disclosures of his personal interest in the agreement
before and when it was entered into in violation of the provisions of the 1973
Companies Act.
24. Accordingly, the agreement is voidable at Mianzo’s instance. That means that
there is no agreement on which Whitecat’s claim can be based. As a result,
Whitecat has not adduced prima facie evidence on which a claim against
Mianzo could be granted.
The 1973 Companies Act
25. As indicated, Mianzo relies on various provisions of the 1973 Companies
Act, in particular section 234 (alternatively section 238), and section 235.
26. Section 234(1) requires that a director who is in any way, whether directly or
indirectly, materially interested in a contract or proposed contract referred to
in section 234(2), “ shall declare his interest and full particulars thereof as
provided in this Act”. This provision, then, applies to all directors regardless of
whether or not they act (or acted) on behalf of the company in connection
with the contract.
27. Section 234(3)(a) provides for a manner of disclosure where the director is a
member of a specified company or firm and is to be regarded as interested in
any contract to be made with that company or firm. All other declarations of
interest must be made in the manner and at the time prescribed in section
235.
28. Section 236 provides that, notwithstanding that the articles permit resolutions
of the directors to take the form of written resolutions signed by each director,
any such resolution concerning a contract referred to in section 234 is invalid
unless the provisions of sections 234 and 235 are complied with.
29. Section 237(1) provides that an officer who is materially interested in any
proposed contract which he has been authorised by the board to enter into on
behalf of the company must (as must a director who is so authorised) declare
his interest in terms of section 235; and that such a director or officer must
make that disclosure before entering into the contract.
30. Section 238 requires full particulars of director’s material interest in a contract
to be contained in the notice convening a general meeting of the company
where the contract in question is to be placed before the general meeting for
its confirmation or authorisation.
31. Section 239 provides for the minuting of declarations of interest. Section 240
imposes a duty on the company to keep a register of declared interests in
contracts, and section 241 imposes a duty on the company’s auditor to satisfy
himself that that register is being kept as required by section 240.
32. Failure to comply with the declaration of interest provisions is an offence. The
offences in sections 234(4) and 237(4) are punishable by a fine or
imprisonment for a period not exceeding one year, or both such fine and such
imprisonment
33. In the English case of Neptune (Vehicle Washing Equipment) Ltd v
Fitzgerald,18 the court had to consider the interpretation and application of
section 317 of the UK Companies Act 1985, 19 and in particular, whether there
must or can be compliance, and if so how, in the case of a company with a
sole director. It was held that where a director is interested in a contract, the
statutory disclosure provisions secure that three things happen at a directors’
meeting. First, all the directors should know or be reminded of the interest;
second, the making of the declaration should be the occasion for a statutory
pause for thought about the existence of the conflict of interest and of their
duty to prefer the interests of the company to their own; third, the disclosure
or reminder must be a distinct happening at the meeting which therefore must
be recorded in the minutes of the meeting. The existence of this record
be recorded in the minutes of the meeting. The existence of this record
operates as a necessary caution to directors who might otherwise think that
18 [1995] 3 All ER 811.
19 This section is similar to section 234 of the 1973 Companies Act.
their interest might pass unnoticed if the contract falls to be scrutinised at
some later date; and it affords valuable information as to the existence of any
interest and its disclosure and, thereby, protection for shareholders and
creditors alike in case they later wish to investigate a contract.
34. It was further held that, in the context of legislation which specifically
authorises sole directorships,20 the legislature cannot have intended by use of
the word “meeting” in the sections to exclude sole directors from their ambit,
and hence from the achievement of the statutory object; and that this
conclusion is reinforced by the consideration that the concept of the holding
of a directors’ meeting in the case of a sole directorship is familiar to
company lawyers. Both the fact that the making of the declaration should be
the occasion at the meeting for a statutory pause for thought by the directors
(about the existence of the conflict of interest and their duty to prefer the
interests of the company to their own) and the requirement that the
declaration be recorded, must have enhanced value and importance in case
of a sole director, where there are no other directors to witness or police his
actions.
35. It was further held that in the case of a sole director, two different situations
may arise. The sole director may hold a meeting attended by himself alone or
he may hold a meeting attended by someone else, normally the company
secretary. When holding the meeting on his own, he must still make the
declaration to himself and have the statutory pause for thought, though it may
be that the declaration does not have to be made out loud, and he must
record that he made the declaration in the minutes. The court may well find it
difficult to accept that the declaration has been made if it is not so recorded. If
the meeting is attended by anyone else, the declaration must be made out
loud and in the hearing of those attending, and again should be recorded. In
loud and in the hearing of those attending, and again should be recorded. In
this case, if it is proved that the declaration was made, the fact that the
minutes do not record the making of the declaration will not preclude proof of
its making.
20 Such as section 200 of the 1973 Companies Act.
36. Neptune did not address the question of whether the contract is void or
merely voidable as a result of non -compliance with the statutory provision.
The case of Hely-Hutchinson v Brayhead Ltd is apposite in this regard.
37. There is force in Mianzo’s argument. It is clear from Mr Baise’s evidence
that he did not have regard to these statutory provisions when he concluded
the agreement. He thought it unnecessary in the circumstances. He
instructed an attorney who he knew only as “ Peter” to draft the agreement.
The agreement was drawn up and amended before a final version was
produced which was signed by Mr Baise. Mr Baise did not take any other
independent advice on Mianzo’s behalf in respect of the agreement. Mr
Baise did not have any meetings in Mianzo, nor did he record his decision to
enter into the agreement or his personal interest in the agreement. That was
also not contained in any register of directors or shareholders’ interests. Mr
Baise indicated that he did not believe he was required to make disclosures
nor have meetings as he was the sole member of Whitecat and the sole
shareholder and director of Mianzo at the time.
38. In cross -examination Mr Baise was taken to a number of contractual terms
which were, so counsel submitted, onerous and one -sided in the sense that
they seemingly protect Whitecat at the expense of Mianzo. Mr Baise
conceded that the agreement involved a large amount of money and was one
which was outside the normal course of business of Mianzo – although the
latter concession might be debatable given that the TAAS was licensed to
Mianzo specifically to assist it in the operation of its business.
39. Be that as it may, Whitecat’s counsel argued that t he 1973 Companies Act
does not find application in this matter , where a sole director is involved .
The fiduciary duties of a director of a company when concluding an
agreement in which he or she has an interest is governed solely by the
common law:
agreement in which he or she has an interest is governed solely by the
common law:
“It is submitted that s 234 and s 237 can have no application in the case of a
private company which has only one director (but cf Neptune (Vehicle Washing
Equipment) Ltd v Fitzgerald [1995] 3 All ER 811 (Ch)). His position in relation to his
having an interest in a contract with the company is accordingly regulated solely by
the common law…”21
40. Counsel pointed out that a lthough the English case of Neptune (Vehicle
Washing Equipment) Ltd v Fitzgerald (relied on by Mianzo and discussed
above), is mentione d in Henochsberg in his commentary on the 1973
Companies Act, there is no case authority in S outh Africa in which our
courts have applied the principles set out in such case or even referred to
such case.
41. As Mianzo has relied squarely on the statutory provisions of the 1973
Companies Act in its plea, and not on the common law, Whitecat’s counsel
argued that it (Mianzo) could not make out a case under the common law for
the purposes of its absolution application. Although Mianzo’s counsel
expressed disagreement with the approach in Henochsberg on this score
(inter alia because no authority is cited in Henoch sberg for the proposition),
Whitecat’s objection nevertheless resulted in Mianzo ex abundanti cautela
seeking an amendment to its plea to incorporate express reliance on the
relevant common law principles . The amendment was not opposed, and
was accordingly granted.
Is the licensing agreement voidable?
42. Although Mianzo has denied the existence of the licensing agreement,
Whitecat’s version regarding the conclusion and terms of the agreement is
the only version before this court (through the pleadings and the evidence),
and is to be accepted as true. Such version does not, in my view, lead to the
unassailable conclusion sought by Mianzo in this application, which is that
the agreement is voidable.
43. In his evidence, Mr Baise conceded that certain clauses in the licensing
21 Delport Henochsberg on the Companies Act 61 of 1973 at p. 445.
agreement are onerous towards Mianzo. He provided an explanation as to
why that was the case: some of the clauses were onerous because Mianzo
was acquiring the use and enjoyment of a very valuable tool ( a Tactical
Asset Allocation System (“TAAS”)}, which would enable Mianzo to generate
a substantial amount of income and profit in due course. He testified that the
TAAS had in fact generated substantial income for Mianzo over the years.
44. Mr Baise also said that payment of all amounts due for the use and
enjoyment of the TAAS (under the licensing agreement) were deferred so as
to enable Mianzo to generate income prior to it having to make any
payments for using the system. This was because Mianzo was just starting
up at the time of the conclusion of the agreement . S ome of the clauses
were undeniably onerous so as to protect Whitecat’s interests in light of the
benefits that Mianzo stood to gain from its use – the TAAS was, after all,
Whitecat’s property.
45. Mr Baise testified that he took legal advice from an attorney 22 when the
licensing agreement was drawn up. Mr Baise was confused as regards
which entity he took the instructions for. I do not, however, have to make
any credibility findings at this stage. What is clear is that Mr Baise was
wearing two hats, acting on behalf of both entities.
46. Mr Baise also testified that he showed a draft version of the licensing
agreement to Mr Luvuyo Tyandela , Mianzo’s current director (the
circumstances and timing of his appointment are in dispute), prior to it being
signed, which points to a possibility that Mianzo in fact did have so me input
into the agreement . It also militates against the argument that Mr Bais e’s
personal interest in the licensing agreement, as sole member of Whitecat,
was not disclosed. Such evidence has not been challenged by way of
contradictory evidence as yet. Although it was put to Mr Baise that Mr
Tyandela will deny that a draft of the licensing agreement was shown to him,
Tyandela will deny that a draft of the licensing agreement was shown to him,
Mr Baise remained adamant that he did show Mr Tyandela such draft
22 Referred to, tongue in cheek, by counsel as “the mysterious Peter”.
agreement. Without evidence to the contrary, Mr Baise’s evidence on this
issue must be accepted as correct.
47. Mianzo’s counsel argued that Mr Tyandela would not be able to contribute
anything further to the debate, but that remains to be seen. He will have to
give evidence as to his involvement (or lack thereof) in the conclusion of the
agreement, and Whitecat will have the opportunity of cross-examining him.
48. What was required of Mr Baise was that he was to act in accordance with
his fiduciary duties when concluding the licensing agreement in two
representative capacities in respect of two separate entities. Mr Baise’s
testimony was that the licensing agreement was to the benefit of both
parties. Mianzo gained the use and enjoyment of the valuable TAAS, without
having to pay for such usage for an extensive period of time. Whitecat
gained an advantage in that it was protected in the event that Mianzo used
the TAAS and never paid for it or dissipated assets to the detriment of
Whitecat.
49. I agree with Whitecat’s counsel that w hat the common law required was that
Mr Baise had to comply with his fiduciary duties to act bona fide and in the
best interests of Mianzo when the licensing agreement was concluded. The
evidence at this stage does not necessarily prove that Mr Baise acted in
breach of his fiduciary duties when he concluded the licensing agreement as
sole director of Mianzo. Evidence to the contrary needs to be led by Mianzo
to reach such a conclusion.
50. Even if Mianzo is correct in its assertions that the licensing agreement is
one- sided and prejudicial towards Mianzo, the fact remains that the
agreement is not void, but instead voidable on the part of Mianzo. It is not
sufficient for Mianzo simply to plead that the licensing agreement is voidable
at its instance .23 Mianzo bears the onus as regards the voidability of the
agreement, and I think that its evidence in this regard is required to answer
23 Peters NO v Schoeman 2001 (1) SA 872 (SCA) para 12.
the evidence given by Mr Baize in this respect.
51. I agree with Whitecat’s counsel’s submission that Mr Baise’s evidence
showed that the identified onerous clauses are not necessarily evidence that
the licensing agreement is one -sided or prejudicial. Further evidence might
well show that the agreement strikes a balance between the substantial
benefit that Mianzo would gain from using the TAAS, without having to pay
for its use for the first seven years, whilst ensuring that Whitecat’s interests
were protected should Mianzo (or its directors) use the TAAS but fail to
make payment for doing so.
52. The court has not heard from Mianzo’s director or employees as to the use
to which the TAAS has been put over the years, and the benefits is has
brought to Mianzo. Accepting for the sake of the argument that the matter
does include an aspect of contractual interpretation, it cannot be said at this
stage that a proper interpretation of the agreement leads to only one
conclusion, namely, that the licensing agreement is so onerous and one -
sided against Mianzo that it should be declared voidable at Mianzo’a
instance. The only way that the court will be able to make a determination
on the issue is once Mianzo’s witnesses testify on the agreement, its role
and purpose within Mianzo’s business, and on the use to which the TAAS
has been put.24
Conclusion
53. For these reasons, I do not think that Mianzo has satisfied the requirement
“that no reasonable court could draw the inference for which the plaintiff
contends” – at least not at this stage.
24 Fujitsu Services Core (Pty) Limited v Schenker South Africa (Pty) Ltd 2023 (6) SA 327 (CC)
para 48: “As I understand Endumeni, the language used in the document should be given its
grammatical and ordinary meaning unless this would result in some absurdity, repugnancy or
inconsistency with the rest of the instrument. The mode of construction, however, should
inconsistency with the rest of the instrument. The mode of construction, however, should
never be to interpret the particular word or phrase in isolation. It is remiss to focus on
individual aspects of the agreement and to read the entire agreement in a piecemeal fashion.
The purpose of the impugned clauses requires a court to counterpoise the purpose of the
agreement, on the one hand, on the other to ensure that the contextual approach to the
proper interpretation of the exemption clause is not ignored.”
54. Mianzo’s argument is an attractive one which will no doubt require careful
consideration again in due course in the context of both parties’ evidence.
The applicability of the 1973 Companies Act in a situation such as the
present, and in particular whether Neptune should be followed in our law (in
relation to which I make no finding at this point ) will require scrutiny at the
hand of all of the relevant facts, and on consideration of both parties’
evidence as to how the conclusion of the agreement came about.
Costs
55. There is no reason to deviate from the general rule that costs should follow
the result. Counsel were agreed that their fees should be taxed on Scale B
because although not simple, the issues were not so complex as to warrant
fees on Scale C.
56. These costs relate only to the application for absolution. All other costs
stand over for later determination.
Order
57. In the circumstances, I grant the following orders:
1. The amendment to the defendant’s plea is granted, with no order as to
costs.
2. The defendant’s application for absolution from the instance is refused,
with costs, including the costs of counsel on Scale B.
3. All other questions of costs stand over for later determination.
P. S. VAN ZYL
Acting Judge of the High Court
Appearances:
For the plaintiff: Mr J. K. Felix
Instructed by: Dunsters Attorneys
For the defendant: Mr D. van Reenen
Instructed by: Herold Gie Attorneys