Jordaan v Rajcic (2023/034165) [2024] ZAGPJHC 525 (31 May 2024)

Jordaan v Rajcic (2023/034165) [2024] ZAGPJHC 525 (31 May 2024)

The court found that the respondent, acting as promoter for a company to be formed, personally undertook to deliver a bank guarantee for the purchase price within 90 days of fulfilment of the last suspensive condition. The company was not incorporated within the stipulated period, and the respondent failed to deliver the guarantee and pay the agreed rental and associated costs. The technical defences raised by the respondent regarding the validity of the agreement were rejected, as the signed agreement was produced and acknowledged by the respondent. The respondent did not discharge the evidentiary burden to prove that the company was formed and had assumed liability. The court held that...

Citation
[2024] ZAGPJHC 525
Parties
Applicant: Allan Richard Jordaan; Respondent: Predrag Rajcic
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
31 May 2024
Case Number
2023/034165
Procedural Posture
Civil Application / Judgment After Opposed Motion
Outcome
Application granted in full; relief sought by the applicant is awarded.
Judges
Moshoana
Legal Topics
Pre Incorporation Contract, Specific Performance, Joint and Several Liability, Alienation of Land Act, Company Promoter Liability
Commercial and Corporate Land and Property Pre Incorporation Contract Specific Performance Joint and Several Liability Alienation of Land Act Company Promoter Liability

Case Brief

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Parties

Allan Richard Jordaan

Applicant

Predrag Rajcic

Respondent

Procedural Posture

Civil Application / Judgment After Opposed Motion

Legal Issues

  1. 1 Whether the promoter of a company to be formed is personally liable for breach of a pre-incorporation contract when the company is not incorporated within the stipulated period.
  2. 2 Whether the applicant is entitled to specific performance and payment of arrear rental and associated costs under the addendum agreement.
  3. 3 Whether technical defences regarding the validity of the sale agreement and addendum are sustainable.

Ratio Decidendi

The court found that the respondent, acting as promoter for a company to be formed, personally undertook to deliver a bank guarantee for the purchase price within 90 days of fulfilment of the last suspensive condition. The company was not incorporated within the stipulated period, and the respondent failed to deliver the guarantee and pay the agreed rental and associated costs. The technical defences raised by the respondent regarding the validity of the agreement were rejected, as the signed agreement was produced and acknowledged by the respondent. The respondent did not discharge the evidentiary burden to prove that the company was formed and had assumed liability. The court held that...

Court Disposition

Application granted in full; relief sought by the applicant is awarded.

Orders

  • The respondent is directed to forthwith deliver to the applicant a bank guarantee in the amount of R5,000,000 from a recognised financial institution.
  • The respondent is ordered to pay to the applicant an amount of R639,515.29 together with interest a tempore morae.