Gardner and Another v Margo (549/04) [2006] ZASCA 36; [2006] 3 All SA 229 (SCA); 2006 (6) SA 33 (SCA) (28 March 2006)

Gardner and Another v Margo (549/04) [2006] ZASCA 36; [2006] 3 All SA 229 (SCA); 2006 (6) SA 33 (SCA) (28 March 2006)

The Supreme Court of Appeal held that the written mandate entitled Joubert only to 40 cents per share from the sale proceeds, not the full market value. The evidence supported the existence of oral terms whereby any excess over 40 cents per share was to be paid to OTR. Joubert had received all he was entitled to for the accounted shares, and thus Margo, as cessionary, had no claim for those shares. However, Gardner had in fact sold the unaccounted shares and failed to pay Joubert the agreed 40 cents per share for them, entitling Margo to R1,461,432. The guarantee by OTR did not contravene section 38(1) of the Companies Act, as its direct object was not to provide financial assistance for...

Citation
[2006] ZASCA 36
Parties
Appellant: Tony Ricky Gardner; Appellant: OTR Mining Ltd; Respondent: Roger Hugh Margo
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 March 2006
Case Number
549/04
Procedural Posture
Civil Appeal / Appeal From the Johannesburg High Court; Leave Granted by Court a Quo
Outcome
Appeal succeeded in part. Orders of the High Court set aside and replaced. Costs awarded to appellants on appeal; High Court costs order stands.
Judges
Scott, Zulman, Van Heerden, Maya, Cachalia
Legal Topics
Contract Interpretation, Company Guarantee, Financial Assistance, Mandate, Rectification, Unjust Enrichment
Commercial and Corporate Civil Procedure Contract Interpretation Company Guarantee Financial Assistance Mandate Rectification Unjust Enrichment

Case Brief

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Parties

Tony Ricky Gardner

Appellant

OTR Mining Ltd

Appellant

Roger Hugh Margo

Respondent

Procedural Posture

Civil Appeal / Appeal From the Johannesburg High Court; Leave Granted by Court a Quo

Legal Issues

  1. 1 Whether the mandate entitled Joubert to the full proceeds of the share sales or only 40 cents per share.
  2. 2 Whether oral terms supplemented the written mandate regarding proceeds in excess of 40 cents per share.
  3. 3 Whether OTR's guarantee to Joubert contravened section 38(1) of the Companies Act 61 of 1973.

Ratio Decidendi

The Supreme Court of Appeal held that the written mandate entitled Joubert only to 40 cents per share from the sale proceeds, not the full market value. The evidence supported the existence of oral terms whereby any excess over 40 cents per share was to be paid to OTR. Joubert had received all he was entitled to for the accounted shares, and thus Margo, as cessionary, had no claim for those shares. However, Gardner had in fact sold the unaccounted shares and failed to pay Joubert the agreed 40 cents per share for them, entitling Margo to R1,461,432. The guarantee by OTR did not contravene section 38(1) of the Companies Act, as its direct object was not to provide financial assistance for...

Court Disposition

Appeal succeeded in part. Orders of the High Court set aside and replaced. Costs awarded to appellants on appeal; High Court costs order stands.

Orders

  • Against the first defendant, payment of R1,461,432 plus interest at 15.5% per annum from 1 September 1998 to date of payment.
  • Against the second defendant, payment of R1,461,432 plus interest at 15.5% per annum from 1 September 1998 to date of payment, only to the extent that the first defendant fails to pay.