Comwezi Security Services (Pty) Ltd and Another v Cape Empowerment Trust Ltd (759/2011) [2012] ZASCA 126 (21 September 2012)

Comwezi Security Services (Pty) Ltd and Another v Cape Empowerment Trust Ltd (759/2011) [2012] ZASCA 126 (21 September 2012)

The Supreme Court of Appeal held that the power to relax the resolutive condition in clause 10.3 of the settlement agreement must be interpreted as including the power to extend the three-month period for conducting the due diligence investigation. The court reasoned that the power of relaxation was given for the sole benefit of CET and that restricting it to exclude extensions would render the clause inoperative. The language of the contract, read in context and considering the parties' conduct, supported the conclusion that CET could extend the period multiple times. The parties' acceptance of extensions and their conduct in implementing the agreement reinforced this interpretation. The...

Citation
[2012] ZASCA 126
Parties
Appellant: Comwezi Security Services (Pty) Ltd; Appellant: Mohammed Shaffie Mowzer NO (in his capacity as the trustee for the Grapsy Trust); Respondent: Cape Empowerment Trust Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
21 September 2012
Case Number
759/2011
Procedural Posture
Civil Appeal / Appeal From Western Cape High Court (louw J)
Outcome
Appeal dismissed with costs, including costs of two counsel where employed.
Judges
Cloete, Cachalia, Leach, Theron, Wallis
Legal Topics
Contract Interpretation, Resolutive Condition, Power of Relaxation, Settlement Agreement, Due Diligence, Waiver
Commercial and Corporate Civil Procedure Contract Interpretation Resolutive Condition Power of Relaxation Settlement Agreement Due Diligence Waiver

Case Brief

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Parties

Comwezi Security Services (Pty) Ltd

Appellant

Mohammed Shaffie Mowzer NO (in his capacity as the trustee for the Grapsy Trust)

Appellant

Cape Empowerment Trust Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Western Cape High Court (louw J)

Legal Issues

  1. 1 Whether the power to 'relax' the resolutive condition in the settlement agreement entitled CET to extend the period for conducting the due diligence investigation.
  2. 2 Whether the extensions granted by CET were effective or whether the settlement agreement lapsed after the initial three-month period.
  3. 3 Whether the conduct of the parties in implementing the agreement is admissible to interpret the contract.

Ratio Decidendi

The Supreme Court of Appeal held that the power to relax the resolutive condition in clause 10.3 of the settlement agreement must be interpreted as including the power to extend the three-month period for conducting the due diligence investigation. The court reasoned that the power of relaxation was given for the sole benefit of CET and that restricting it to exclude extensions would render the clause inoperative. The language of the contract, read in context and considering the parties' conduct, supported the conclusion that CET could extend the period multiple times. The parties' acceptance of extensions and their conduct in implementing the agreement reinforced this interpretation. The...

Court Disposition

Appeal dismissed with costs, including costs of two counsel where employed.

Orders

  • The appeal is dismissed with costs, such costs to include the costs of two counsel where two counsel were employed.
  • Comwezi is compelled to cooperate with CET in the due diligence investigation as per the High Court order.