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[2012] ZAWCHC 318
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Mathee and Another v Aldes Alliance Business Brokers and Another (2424/2012) [2012] ZAWCHC 318 (21 September 2012)
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
Case Number: 2424/2012
In the matter between:
Michel Mathee
................................................................................................................
First
Applicant
Marinda Huysamer
...................................................................................................
Second
Applicant
And
Aldes Alliance Business Brokers
............................................................................
First
Respondent
Aides Business Brokers (Franchise)
Africa (PTY)
LTD
..................................................................................................
Second
Respondent
Meyer Nel
..........................................................................................................
First
Intervening Party
Frederick Van Aarde Nel
.............................................................................
Second
Intervening Party
JUDGMENT DELIVERED ON FRIDAY 21
SEPTEMBER 2012
Baartman,J
[1] On 13 June
2012, I dismissed an application to preserve R2 325 000
(the
purchase price)
pending
finalisation of litigation. My reasons for that order appear from
the judgment, I deal with it herein only to the
extent
necessary. At the time, the purchase price was in the respondents’
trust account.
[2] At the hearing, the intervening
parties led new evidence from which it appeared that the purchase
price was paid over to the
.intervening parties shortly after
judgment but before the applicants gave notice of their intention to
appeal. Therefore, the
intervening parties, have argued that the
matter has become moot Although the applicants accept the evidence,
they do not agree
that the matter has become moot. I deal below with
mootness before, dealing with the individual grounds of appeal.
THE MATTER HAS BECOME
MOO
[3] As
indicated above, the applicants sought, to preserve the purchase
price in the respondents’ trust account. The money
has since
been paid out. It follows that there is no longer an “existing
or live controversy which should exist if the
Court is to avoid
giving advisory : opinions on abstract propositions of law.”
(See
National Coalition for Gay and
Lesbian Equality and Others v Minister of Home Affairs and Others
2000 (2) SA 1
(CC) at paragraph
[21] footnote: 18).
[4]
Notwithstanding this factual situation, a court has discretion to
hear an application despite it being moot. The Constitutional
Court
has entertained matters that were moot in circumstances where the
issue to be determined had resulted in conflicting decisions
among
the different divisions and its judgment would have had practical
effect for a wide audience. (See
MEC
for Education, KwaZulu Natal, and Others v Pillay
[2007] ZACC 21
;
2008
(1) SA 474
(CC)
[5] This matter is distinguishable
from the matters in which the courts have exercised discretion and
entertained the matter despite
its; obvious mootness. The
applicants’ claim arose in the following
circumstances:(paragraphs 3-9 of my judgment)
-“[3]
Since December 2006, the applicants have operated a franchise
business through the Big Bay Fish Company (Pty)
(the
company),
in which they held all
the shares. On 12 October 2011, the applicants, acting on behalf of
the company, and the intervening parties
entered into an agreement
(the October agreement)
in
terms whereof the intervening parties acquired the restaurant
business from the company. The October, agreement was subject
to
suspensive conditions that had to be met by 1 November 2011, the
effective date.
[4] The
conditions were not met by 1 November 2011. The reasons for the
failure to have met the conditions are the subject of
dispute; I
deal with them only to the extent necessary for this judgment. It
w/as
common cause that by 1
November 2011, the franchisor had not agreed to the sale, which was
a material suspensive condition.
[5] On 4 November 2011, in an
attempt to overcome the difficulties experienced with the October
agreement, the applicants, now
acting in their personal capacity,
and the intervening parties entered into a share sale agreement in
terms whereof the intervening
parties brought the shares in the
company from the applicants.
[6] The November agreement
purported to be an addendum to the October agreement and provided:
“
This Addendum is made and
entered into by the parties to the Main Sale Agreement signed on the
12th October 2011, and attached
hereto, for the purchase of the Cape
Town Fish Market, Big Bay, Bloubergstrand.
[7] When the November agreement
was concluded, the October agreement was of no force and effect
because the suspensive conditions
had not been met by the effective
date: The signatories to the November agreement, despite purporting
to enter into an addendum
to the October agreement, did not amend
the effective date of the fatter agreement It is in .issue whether,
in law, the parties
in those circumstances revived the October
agreement
[8] On 4
November 2011, the intervening parties paid the balance
;
of
the purchase price. Despite the November attempt to give effect to
the sale of the restaurant business, the suspensive conditions
embodied in the October agreement had not been met; importantly, the
franchisor had not approved the;new owners therefore the
parties
were not able to give effect to the purchase agreement On 23
November 2011, the intervening parties withdrew from the
agreement.
[9] The
applicants and the intervening parties laid claim to the purchase
price
.
The respondents threatened to
pay the purchase price over to the intervening parties. Therefore,
on 13 February 2012, the applicants
approached the court on an
urgent basis without any notice to the intervening parties. They
obtained interim relief preserving
the purchase price. It follows
that the applicants had to have acted with the utmost good faith
:
when
they launched their application. It is in issue whether the
applicants acted with the utmost good faith. Below, I first deal
with the applicants' lack of candour."
[6] In my view, the matter has become
moot and leave to appeal should be refused on that ground alone. I
nevertheless deal with
the grounds of appeal in turn below:
THE GROUNDS OF APPEAL
First ground of appeal
“
The court erred and
misdirected itself by failing to hold that. the. addendum concluded
between the applicants and intervening
parties on November 4, 2011
constituted a binding agreement that
;
read with changes
required by the context incorporated in terms of the October
agreement and that the applicants by reason thereof
enjoyed a
protectable prima facie right ”
[7] The parties to the November
agreement were not the same as those: who concluded the October
agreement. It follows that the
November agreement could not have
included the terms of the October agreement- As the applicants were
not parties to the October
agreement, they have no basis , to claim,
relief based on that agreement. There is no merit in this ground of
appeal.
The second ground of appeal
“
The court erred and
misdirected itself in holding that the intervening parties were the
owners of the monies held by the respondents
in trust and that the
threat by the respondents to pay such monies to the intervening
parties did not on the part of the applicants
give rise to a
legitimate apprehension of irreparable harm to their protectable
rights under the November agreement entitling
them to interim
relief. ”
[8] It was common cause that the
intervening parties had paid the money into the respondents’
trust account pursuant to
an agreement to purchase the Big Fish
Company (Pty). The parties did not go through with the intended
transaction. Subject to
the terms of the failed contract, the
intervening parties remained the owners of the : money. In this
matter the contract contained
suspensive conditions which were not
met. It follows that that contract lapsed, therefore the intervening
parties remained the
owners of the money.
[9] When the applicants launched the
ex parte urgent application, they intended to issue summons against
the intervening parties.
There was no indication the intervening
parties would not have been able to settle any judgment which the
applicants might obtain
against them. In fact the papers indicated
that the first intervening party was a man of means. There is no
merit in this grolind
of appeal.
The third ground of appeal
"The
court erred and misdirected itself in holding that the applicants
did not make full disclosure of the facts upon
which they rely for interim relief
and that the disclosure .of rectification was a sine qua non for the
obtaining of interim relief
and that in any event in failing to hold
that the applicants enjoy reasonable prospects of succeeding on the
question of rectification.”
[10] The
applicants were parties only to the November agreement. It follows
that they needed rectification before they could rely
on the October
agreement. They did not disdose that fact in the ex
parte
application. The failure to have
disclosed the required rectification' was at issue not the prospect
of success in an application
for rectification. There is also no
merit in this ground of appeal.
The fourth ground of appeal
“
The court erred and
misdirected itself when -holding that the balance of convenience did
not favour the applicants by failing
to uphold the November
agreement and in particular give due weight to clause
:
17(b) incorporated
therein from the October agreement and by failing to give any
consideration and weight to the fact that the
intervening parties
had already agreed for the respondents to retain in trust the
purchase price of the shares and loan claims
acquired from the
applicants pending the final resolution of the matter, which the
main action seeks to achieve. ”
[11] The applicants tried to rely on
an agreement between the respondents and the intervening parties to
which they were not party.
There is no merit in this ground of
appeal.
The fifth ground of appeal
“
The court erred and
misdirected itseif in dismissing the application and especially by
failing to direct that the hearing of the
main action be expedited
whilst preserving the status quo in terms of the interdict sought by
the applicants
."
[12] At date of judgment the
pleadings had not yet closed, direction for an expedited hearing
would have been premaiture. There
is no merit in this ground of
appeal.
The sixth ground of appeal
“
The court erred and
misdirected itself in mulcting, the applicants with costs when the
more appropriate order would have been
to direct that the costs of
the application stand over for determination in the main action once
the outcome of that action had
been determined. ”
[13] I ordered that costs should
follow the result; the applicants have not suggested that I have
exercised my discretion improperly.
It follows that there is also no
merit in this ground of appeal.
COSTS
[14] At the hearing, the applicants
were surprised with an application to lead new evidence. It was
therefore necessary for the
hearing to be postponed to afford the
applicants an opportunity to deal with the application. I intend to
order the intervening
parties to pay the wasted costs occasioned by
that postponement.
[15] The applicants nevertheless on
the resumption of the hearing opposed the application. However, the
applicants’ representative
conceded that the intervening
parties had an obligation to have informed the court about the
changed circumstances. I intend
to direct that the applicants pay
the costs incurred in the application to lead new evidence on the
second day.
CONCLUSION
[16] I, for the reasons stated above,
am of the view that there is no reasonable prospect of another court
coming to a different
finding.
(a) The application for leave to
appeal to the Supreme Court of Appeal is dismissed with costs such
costs to include the costs
of 2 counsel, save that:
(i) The intervening, parties are to
pay the costs occasioned by the postponement of the matter on the
first day of the hearing.
(ii) The applicants are to pay the
costs incurred in respect of the second day of the application to
lead new evidence.
Baartman J