Hangar and Others v Robertson (211/2015) [2016] ZASCA 102 (10 June 2016)

Hangar and Others v Robertson (211/2015) [2016] ZASCA 102 (10 June 2016)

The Supreme Court of Appeal held that the disputed clause in the consultancy agreement was not too vague to be enforceable. The clause entitled the respondent to 10% of the net increase in the value of the company, calculated at the termination of his contract, with payment deferred until value was realised, such as upon sale of the business or disposal of the appellants' interests. The court found that the parties intended the clause to be cumulative with the share option, not alternative, and that the respondent's entitlement did not lapse merely because value was not realised during the contract period. The court rejected the appellants' arguments that the clause was unenforceable or...

Citation
[2016] ZASCA 102
Parties
Appellant: Russel Hangar; Appellant: Garth Hangar; Appellant: Graham Oberholzer; Respondent: John Robertson
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
10 June 2016
Case Number
211/2015
Procedural Posture
Civil Appeal / Appeal From Kwa Zulu Natal Local Division of the High Court, Durban
Outcome
Appeal dismissed with costs.
Judges
Lewis, Leach, Pillay, Petse, Dambuza
Legal Topics
Contract Interpretation, Remuneration Clauses, Business Consultancy Agreements
Commercial and Corporate Contract Interpretation Remuneration Clauses Business Consultancy Agreements

Case Brief

Summary, issues, holding and outcome

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Parties

Russel Hangar

Appellant

Garth Hangar

Appellant

Graham Oberholzer

Appellant

John Robertson

Respondent

Procedural Posture

Civil Appeal / Appeal From Kwa Zulu Natal Local Division of the High Court, Durban

Legal Issues

  1. 1 Whether the disputed clause in the consultancy agreement entitling the respondent to 10% of the net increase in company value is enforceable.
  2. 2 Whether the clause is too vague to be enforced or is rendered inoperative by the lapse of the share option.
  3. 3 Whether payment under the clause is due only if value is realised during the currency of the agreement or also after termination.

Ratio Decidendi

The Supreme Court of Appeal held that the disputed clause in the consultancy agreement was not too vague to be enforceable. The clause entitled the respondent to 10% of the net increase in the value of the company, calculated at the termination of his contract, with payment deferred until value was realised, such as upon sale of the business or disposal of the appellants' interests. The court found that the parties intended the clause to be cumulative with the share option, not alternative, and that the respondent's entitlement did not lapse merely because value was not realised during the contract period. The court rejected the appellants' arguments that the clause was unenforceable or...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.
  • Costs order not to include a special order for senior counsel; taxing master to determine fees.