Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others (470/2020) [2021] ZASCA 99; [2021] 3 All SA 647 (SCA); 2022 (1) SA 100 (SCA) (9 July 2021)

Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others (470/2020) [2021] ZASCA 99; [2021] 3 All SA 647 (SCA); 2022 (1) SA 100 (SCA) (9 July 2021)

The Supreme Court of Appeal held that the subscription agreement did not require Capitec Holdings' consent for Coral to sell its shares. Clause 8.3 of the agreement allowed Coral to sell its shares, but if the purchaser was not a qualifying black person, Capitec Holdings could require Coral to reacquire an equivalent number of shares. The text, context, and structure of the agreement did not impose a consent requirement. Prior conduct and business efficacy arguments were insufficient to override the clear terms of the contract. The court further held that good faith, while underpinning the law of contract, could not be used to create obligations not found in the agreement. The high court...

Citation
[2021] ZASCA 99
Parties
Appellant: Capitec Bank Holdings Limited; Appellant: Capitec Bank Limited; Respondent: Coral Lagoon Investments 194 (Pty) Ltd; Respondent: Ash Brook Investments 15 (Pty) Ltd; Respondent: Transnet Second Defined Benefit Fund; Respondent: Rorisang Basadi Investments (Pty) Ltd; Respondent: Lemoshanang Investments (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
9 July 2021
Case Number
470/2020
Procedural Posture
Civil Appeal / Appeal From the Gauteng Division of the High Court, Johannesburg
Outcome
Appeal upheld; high court orders set aside and replaced.
Judges
Ponnan, Makgoka, Mbatha, Goosen, Unterhalter
Legal Topics
Contract Interpretation, Good Faith in Contract, Shareholder Rights, Black Economic Empowerment, Parol Evidence Rule
Commercial and Corporate Civil Procedure Contract Interpretation Good Faith in Contract Shareholder Rights Black Economic Empowerment Parol Evidence Rule

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 10 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Capitec Bank Holdings Limited

Appellant

Capitec Bank Limited

Appellant

Coral Lagoon Investments 194 (Pty) Ltd

Respondent

Ash Brook Investments 15 (Pty) Ltd

Respondent

Transnet Second Defined Benefit Fund

Respondent

Rorisang Basadi Investments (Pty) Ltd

Respondent

Lemoshanang Investments (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From the Gauteng Division of the High Court, Johannesburg

Legal Issues

  1. 1 Was Capitec Holdings' consent required before Coral could sell the sale shares to the Fund.
  2. 2 Did Capitec Holdings owe duties of good faith and reasonableness to Coral, and was it breached by withholding consent.
  3. 3 Does the subscription agreement, properly interpreted, impose a requirement of consent for the sale of shares.

Ratio Decidendi

The Supreme Court of Appeal held that the subscription agreement did not require Capitec Holdings' consent for Coral to sell its shares. Clause 8.3 of the agreement allowed Coral to sell its shares, but if the purchaser was not a qualifying black person, Capitec Holdings could require Coral to reacquire an equivalent number of shares. The text, context, and structure of the agreement did not impose a consent requirement. Prior conduct and business efficacy arguments were insufficient to override the clear terms of the contract. The court further held that good faith, while underpinning the law of contract, could not be used to create obligations not found in the agreement. The high court...

Court Disposition

Appeal upheld; high court orders set aside and replaced.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • Paragraphs 4–8 of the order of the high court are set aside and replaced with: (a) The application under case number 30899/2019 is dismissed; (b) The applicants and the first and second Intervening Parties in case number 30899/2019 shall pay the costs of the first and second respondents, such costs to include the...